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1998 04 07 RDAT4t!t 4 4Q" Redevelopment Agency Agenda CITY COUNCIL CHAMBER 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting April 7, 1998 - 3:00 P.M. CALL TO ORDER a. Roll Call PUBLIC COMMENT Beginning Res. No. RA 98-01 This is the time set aside for public comment on any matter not scheduled for a public hearing. Please complete a "request to speak" form and limit your comments to three minutes. Please watch the timing device on the podium. CONFIRMATION OF AGENDA APPROVAL OF MINUTES a. Approval of Minutes of March 171 1998 BUSINESS SESSION 1. CONSIDERATION OF ACTIONS RELATING TO REFUNDING OF BONDS: A. APPROVAL OF MEMORANDUM OF UNDERSTANDING AND AGREEMENT BY AND BETWEEN THE COUNTY OF RIVERSIDE AND THE LA QUINTA REDEVELOPMENT AGENCY, PERTAINING TO LA QUINTA REDEVELOPMENT PROJECT NO. 2. 1) MINUTE ORDER ACTION. B. ADOPTION OF RESOLUTION AUTHORIZING THE ISSUANCE OF TAX ALLOCATION PARITY REFUNDING BONDS FOR THE LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 AND MAKING CERTAIN DETERMINATIONS RELATING THERETO. 1) RESOLUTION ACTION. C. ADOPTION OF RESOLUTION AUTHORIZING THE ISSUANCE OF TAX ALLOCATION REFUNDING BONDS FOR LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 AND MAKING CERTAIN DETERMINATIONS RELATING THERETO. 1) RESOLUTION ACTION. 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 APRIL 7, 1998. 2. APPROVAL OF A SETTLEMENT AGREEMENT AND MUTUAL RELEASE BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND WASHINGTON/ADAMS L. P., FOR THE COMPLETION OF IMPROVEMENTS STIPULATED IN THE OWNER PARTICIPATION AGREEMENT BETWEEN THE AGENCY AND WASHINGTON/ADAMS L. P. DATED MARCH 5, 1991, FOR THE ONE ELEVEN LA QUINTA SHOPPING CENTER. STUDY SESSION - None DEPARTMENT REPORTS - None CHAIR AND BOARD MEMBERS' ITEMS Page 2 PUBLIC HEARINGS - 7:00 pm There are no public hearings scheduled. CLOSED SESSION NOTE: TIME PERMITTING, THE AGENCY BOARD MAY CONDUCT CLOSED SESSION DISCUSSIONS DURING THE DINNER RECESS. ADDITIONALLY, PERSONS IDENTIFIED AS NEGOTIATING PARTIES WHERE THE AGENCY IS CONSIDERING ACQUISITION OF THEIR PROPERTY ARE NOT INVITED INTO THE CLOSED SESSION MEETING. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND OR DISPOSITION OF REAL PROPERTY LOCATED AT THE NORTHWEST CORNER OF 48TH AVENUE AND JEFFERSON STREET. APPLICANT: CATELLUS RESIDENTIAL. ADJOURNMENT DECLARATION OF POSTING I, Saundra L. Juhola, Secretary of the La Quinta Redevelopment Agency, do hereby declare that the foregoing agenda for the Redevelopment Agency meeting of April 7, 1998 was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the bulletin board at the La Quinta Chamber of Commerce and at Albertson's, 78-630 Highway 1 1 1, on Friday, April 3, 1998. Dat : April 3, 1998 AUNDRA L. JUHOLA, Secretary La Quinta Redevelopment Agency PUBLIC NOTICE The La Quinta 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. Page 3 00101JJ T4194 s4&Q" COUNCIL/RDA MEETING DATE: April 7, 1998 ITEM TITLE: Consideration of 1) Approval of a Memorandum of Understanding and Agreement by and between the County of Riverside and the La Quinta Redevelopment Agency pertaining to La Quinta Redevelopment Project No. 2 2) Adoption of a Resolution authorizing the issuance of tax allocation parity refunding bonds for the La Quinta Redevelopment Project Area No. 1 and making certain determinations relating thereto, and 3) Adoption of a Resolution authorizing the issuance of tax allocation refunding bonds for La Quinta Redevelopment Project No. 2 and making certain determinations relating thereto RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: I CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the attached Memorandum of Understanding and Resolutions, and authorize the Chair and Executive Director to execute the documents and certificates necessary to facilitate the issuance of these bonds. FISCAL IMPACT: The Memorandum of Understanding (MOU) would require the payment of $800,000 to the County of Riverside from Project No. 2 refunding bond proceeds. This payment would reduce the outstanding balance of County General Fund tax increment revenue the Agency has retained since 1990. The other provisions in the MOU do not increase the amount of tax increment revenue the Agency must pay the County, but instead restructures the payment schedule contained in the existing Agency/County agreement. Refunding the two existing bond issues will result in the expenditure of additional tax increment revenue to fund debt service costs. For Project No. 1, the refunding bonds will require an additional 14 years of debt service payments, for a total debt services cost of $34.7 million versus $12.9 million for the 1991 Bonds. On a net present value basis, this equates to $5.4 million in additional debt services cost. However, this increase is offset by the receipt of $6.52 million in new bond proceeds. The Project No. 2 refunding bonds will also increase debt service costs. The new debt service schedule will extend the bond payment term by 11 years and increase overall debt service cost by $4.8 million. As with the Project No. 1 refunding bonds, this increase is offset by the receipt of $1.7 million in new bond proceeds. On a net present value basis, this equates to $885,000 in additional debt service expenditures. BACKGROUND AND OVERVIEW: In January 1998 the Redevelopment Agency Board received a report on the status of Redevelopment Agency revenues and expenditures. As part of that presentation, staff reviewed a proposal to refund the 1991 Project No.1 and the 1992 Project No. 2 Tax Allocation Bonds. The purpose, to take advantage of lower tax exempt bond interest rates and generate additional funds that the Agency could invest in new redevelopment and economic development initiatives. The Agency Board directed staff to refund these bonds. The bond refunding team anticipates that refunding the Project No. 1 bonds will generate approximately $6.522 million in new money, and refunding the Project No. 2 bonds will generate approximately $1.7 million in new money. Memorandum of Understanding. As part of the refunding activities, both Agency and Underwriter Bond Counsels have reviewed the various fiscal mitigation agreements the Agency has with taxing agencies that receive property tax revenue from both Redevelopment Projects. Review of the Project No. 1 Agreement did not generate any concerns regarding the ability to refund the 1991 Bonds. Their review of the Project No. 2 Cooperation Agreement with the County of Riverside, however, surfaced ambiguities regarding whether or not certain payments are subordinate to bond debt service. This Agreement provides that the Agency may retain 50% of the tax increment revenue attributable to the County General Fund property tax levy (approximately 25%) until total annual tax increment reaches $5.0 million. Thereafter, the Agency may not receive this revenue, and must also commence making 10 annual payments to repay the County General Fund revenue retained as of that date. As of June 1997, the Agency has retained $1.8 million in County General Fund revenue. The MOU (Attachment No. 1) restructures and clarifies the repayment provisions related to the County General Fund monies accrued to date. In order to ensure that there is sufficient revenue to fund both bond debt service and County payments, the repayment schedule has been restructured to extend the term by four years and lower the annual payments; these payments would also be subordinate to bond debt service. In addition, the Agency will retain less County General Fund revenue by providing a $800,000 payment from bond proceeds to reduce the accrued balance, and by reducing the amount of County General Fund revenue the Agency receives during the next three years. Staff anticipates that the $5.0 million annual tax increment revenue threshold will be achieved in three years; thus the graduated reduction in County General Fund revenue retained by the Agency will have minimal impact on net Agency revenues. 002 In March, Agency staff transmitted the proposal embodied in the MOU to County staff. Their initial reaction was favorable, and they subsequently have indicated that will proceed with Board consideration. Details related to the discount rate and payment schedule are still, however, under review and will be distributed upon completion of negotiations. In order to expedite this transaction, staff is recommending that the Agency Board approve the MOU. It will then be forwarded to the County as an indication of the Agency's desire to conclude this transaction. The Project No. 2 bonds cannot be refunded without County/Agency agreement on the MOU. Resolutions. Attached are two resolutions (Attachment No. 2 and 3) that authorize the issuance of the refunding bonds. The first authorizes the issuance of up to $16 million of Project No. 1 refunding bonds. These bonds will be on a parity basis with the 1994 Project No. 1 Bonds, meaning that both bonds have an equal standing. The second authorizes the issuance of $8.0 million of Project No. 2 refunding bonds, provided that the original issue discount (or the amount of proceeds used to buy down the interest rate to increase yields to investors) shall not exceed 1 % and the net interest cost (or the effective interest cost of the bond financing taking into account the interest rates, yield, original issue discount, and underwriter's discount) shall not exceed 5.5%. (Similar original issue discount and net interest cost provisions for the Project No. 2 financing are included in the La Quinta Financing Authority resolution.) Both of these resolutions provide that the refunding bonds will be sold through the La Quinta Financing Authority and reference supporting documents which are as follows: Project Area No. 1 - $15 million Bond Purchase Contract (Attachment No. 4) Project Area No. 1 - Escrow Deposit and Trust Agreement with US Bank Trust National Association (Attachment No. 5) Project Area No. 1 - Preliminary Official Statement (Attachment No. 6) Project Area No. 1 - Continuing Disclosure Agreement (Attachment No. 7) Project Area No. 2 - Bond Purchase Contract (Attachment No. 8) Project Area No. 2 - Indenture of Trust with US Bank Trust National Association (Attachment No. 9) Project Area No. 2 - Preliminary Official Statement (Attachment No. 10) Project Area No. 2 - Continuing Disclosure Agreement (Attachment No. 11 The Agency is pursuing bond insurance for both of these issues. If the Agency Board, City Council and Financing Authority all approve their respective actions, then the bond financing team will proceed with document submittal to bond insurance companies. The team anticipates insurance commitments by April 13tn, the bond sale on April 20tn, and the closing and receipt of funds by May 13tn 003 V (� FINDINGS AND ALTERNATIVES: Alternatives to the recommended action are: 1 . Approve the MOU and the two resolutions for the issuance of bonds; 2. Do not approve the issuance of refunding the bonds. j John Falconer J Director of Finance Attachments: Memorandum of Understanding Resolutions No. 1, No. 2 & No. 3 Resolutions No. 4 thru 11 are provided for review in the City Clerk's Office. Staff will provide a separate copy of said attachments upon request. r ATTACHMENT NO. 1 DRAFT Memorandum of Understanding and Agreement By and Between the County of Riverside and the La Quinta Redevelopment Agency Pertaining to the Interpretation and Implementation of the Cooperation Agreement for the Redevelopment Plan for Project Area No. 2 This Memorandum of Understanding is made and entered into this day of 1998 by and among the County of Riverside (the "County"), the Riverside County Free Library District ("Library District"), the Riverside County Structural Fire District ("Structural Fire District") collectively the "County Entities", and the La Quinta Redevelopment Agency (the "Agency") collectively (the "Parties"). WHEREAS, the Parties entered into that certain Cooperation Agreement entitled "Agreement By and Between the County of Riverside and the La Quinta Redevelopment Agency Pertaining to the Redevelopment Plan for Redevelopment Project No. 2" dated July 5, 1989 (the "Cooperation Agreement"); and WHEREAS, the Parties agree that the Cooperation Agreement contains certain ambiguities with respect to whether a pledge of tax increment was created in Section 2 and, if a pledge was created, the extent and application of the subordination provision in Section 3; and WHEREAS, it is the desire of all Parties to clarify the intent of the Cooperation Agreement and provide specific direction to the Parties in relation to interpretation and implementation of the payment and subordination obligations set forth in the Cooperation Agreement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and conditions contained herein, the Parties hereto agree as follows: SECTION 1. The above recitals are hereby found to be true and correct and incorporated as specific findings by each party. SECTION 2. All Capitalized Terms unless defined in this Memorandum shall have the same meaning as set out in the Cooperation Agreement. v05 , 1 -, t � �i `1 li J u DRAFT SECTION 3. The Parties agree that the ambiguities stated above may be best clarified and forever resolved by agreeing to a specific monetary schedule for the repayment of the Retained Portion originally retained by the Agency pursuant to the Cooperation Agreement until the Project Area Tax Increment reaches the annual level of Five -Million Dollars. The repayment schedule shall be as follows: YEAR PROPOSED REPAYMENT 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 :11 1/1 100,000 100,000 100,000 100,000 100,000 100,000 150,000 200,000 200,000 200,000 250,000 300,000 300,000 350,000 2,650,000 006 Cvvt;u;� DRAFT SECTION 4. The Pass -Through Portion of the County Portion shall be increased according to the following schedule: 75% of the County Portion in 1998-1999; 90% of the County Portion in 1999-2000 and 100% of the County Portion in 2000-2001 and thereafter. SECTION 5. The Retained Portion, and the Repayment Amount, as modified herein, are and will continue to be subordinate to all existing and future bonded indebtedness regardless of the level of Project Area Tax Increment paid to the Agency. The Pass -Through portion, as modified herein, is expressly pledged to the County and is a payment obligation of the Agency not subordinate to any bonded indebtedness. SECTION 6. This Memorandum of Understanding is conditioned on the restructuring of the outstanding 1992 bonds for this Project Area and therefore it shall only be effective upon the successful close of the 1998 Project Area No.2 Tax Allocation Bonds for the Redevelopment Agency contemplated in Resolution No. RA-98, IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. Dated: COUNTY OF RIVERSIDE Bv: Chairman, Board of Supervisors APPROVED AS TO FORM CITY OF LA QUINTA ATTEST Agency Secretary APPROVED AS TO FORM By: Chair of the Redevelopment Agency u07 ATTACHMENT NO. 2 RESOLUTION NO. RA RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION PARITY REFUNDING BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF NOT TO EXCEED SIXTEEN MILLION DOLLARS ($16,000,000) TO FINANCE A PORTION OF THE COST 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") and 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") and 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") and 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 111994 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 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 parity with the Series 1994 Bonds for such purpose; and WHEREAS, the corporate purposes of the Agency will be accomplished by issuing at this time tax allocation parity 124/015610-0012/3149957.2 a04/02/98 — 1 — L�tJt,i�� 008 refunding bonds in a principal amount of not to exceed Sixteen Million Dollars ($16,000,000) pursuant to this Resolution and a supplement hereto to be designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Parity Refunding Bonds, Series 1998 (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 Miller & Schroeder Financial, Inc. (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 Public 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 Sixteen Million Dollars ($16,000,000) 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 a Supplement to Resolution to be prepared by Bond Counsel to the Agency and executed by the Chairman or Executive Director or Finance Director and Secretary of the Agency (herein "Chairman" and "Secretary" respectively), which Supplement to Resolution shall be substantially in the form attached hereto as Exhibit A, 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 Supplement to Resolution. Capitalized terms used in this Resolution which are not defined herein have the meaning ascribed to them in the form of the Supplement to Resolution attached hereto as Exhibit A. However, if determined appropriate by the Executive Director and approved by Bond Counsel, an Indenture of Trust, in a form substantially similar to the 1994 Indenture and approved as to form and contents by the Executive Director and Bond Counsel, may be utilized in place of the Supplement to the Resolution and shall contain, among others, those terms and conditions specified herein to be included in the Supplement to the Resolution. The Chairman, the Executive Director, the Finance Director, the Secretary, or their designees are hereby authorized and directed to execute and deliver any Indenture of Trust. 124/015610-0012/3149957.2 a04/02/98 - 2 - j f -1 : � 0,J�►cJ 9 SECTION 3. The Bonds shall be executed on behalf of the Agency by the manual or facsimile signature of the Chairman or Executive Director and attested with the manual or facsimile signature of the Secretary. SECTION 4. The covenants set forth in the Supplement to Resolution 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 Supplement to Resolution 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 Fiscal Agent, Registrar and Transfer Agent or, if determined appropriate by the Executive Director, as Trustee for the Bonds. In said event, all references to "Fiscal Agent" in the Supplement to Resolution or in any Indenture of Trust shall change to "Trustee". The Executive Director of the Agency, or his written designee, is hereby authorized to enter into an agreement with the Fiscal Agent or 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 Supplement to Resolution 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. Escrow Agreement. The form of the Escrow Deposit and Trust Agreement (the "Escrow Agreement") on file with the Secretary is hereby approved. Subject to the execution of the Purchase contract, the Executive Director or Finance Director is hereby authorized and directed for and in the name of the Authority to execute the Escrow Agreement in substantially the form hereby approved, with such additions thereto and changes therein as the officers executing the same may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 8. The Chairman 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 124/015610-001213149957.2 a04/02/98 - 3 - 010 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 9. 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 (referred to in the Supplement to Resolution 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 Supplement to Resolution 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 Chairman 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 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 Supplement to Resolution. In the event that the Chairman or Executive Director is/are unavailable to sign any document authorized for execution herein, the Finance Director to sign such document. Any document authorized herein to be signed by the Secretary may be signed by a duly appointed deputy secretary. ADOPTED AND APPROVED this 7th day of April, 1998. LA QUINTA REDEVELOPMENT AGENCY Chairman ATTEST: Secretary 124/015610-0012/3149957.2 a04/02/98 - 4- ;J v 1 :l O 1 1 STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. RE ADOPTION OF RESOLUTION COUNTY OF RIVERSIDE ) I, SAUNDRA L. JUHOLA, 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 7th day of April, 1998, and that the same was passed and adopted by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: Secretary of La Quinta Redevelopment Agency (SEAL) STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. OF AUTHENTICATION COUNTY OF RIVERSIDE ) I, SAUNDRA L. JUHOLA, 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: May , 1998 Secretary of La Quinta Redevelopment Agency (SEAL) 124/015610-0012/3149957.2 a04/02/98 — S J r� 012 FOO*9Ne 0WWA1 Form of Supplement to Resolution No. RA 98- 124/015610-0012/3149957.2 a04/02/98 013 SUPPLEMENT TO RESOLUTION NO. RA- OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION PARITY REFUNDING BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF NOT TO EXCEED SIXTEEN MILLION DOLLARS ($16,000,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 124/015610-0012/3149957.2 a04/02/98 014 u 1, TABLE OF CONTENTS Page Section 1. Definitions 1 Section 2. Amount, Issuance and Purpose of Bonds 6 Section 3. Nature of Bonds 6 Section 4. Description of Bonds 8 Section 5. Interest 8 Section 6. Place of Payment 9 Section 7. Forms of Bonds 9 Section 8. Execution of Bonds 10 Section 9. Registration and Exchange of Bonds 11 Section 10. Bond Register 11 Section 11. Call and Redemption of Bonds Prior to 11 Maturity A. Terms of Redemption 11 B. Call and Redemption 12 C. Notice of Redemption 12 D. Redemption Fund 14 E. Partial Redemption of Bonds 15 F. Effect of Redemption 15 G. Purchase of Bonds 15 Section 12. Funds 15 Section 13. Sale of Bonds; Disposition of Bond Proceeds; 16 Redevelopment Fund Section 14. Tax Revenues 17 Section 15. Special Fund 18 Section 16. Deposit and Investment of Moneys in Funds 23 Section 17. Issuance of Parity Bonds 24 1241015610-0012/3149957.2 a04/02/98 — 1— 1! t'• 01 J Page Section 18. Covenants of the Agency 25 Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan 25 Covenant 2. Use of Proceeds, Management and Operation of Properties 26 Covenant 3. No Priority 26 Covenant 4. Punctual Payment 26 Covenant 5. Payment of Taxes and Other Charges 26 Covenant 6. Books and Accounts; Financial Statements 27 Covenant 7. Eminent Domain 27 Covenant 8. Disposition of Property 27 Covenant 9. Statement of Indebtedness 28 Covenant 10. Protection of Security and Rights of Bondowners 28 Covenant 11. Federal Tax Covenants 28 Section 19. Taxation of Leased Property 29 Section 20. Fiscal Agent 30 Section 21. Rebate Fund 32 Section 22. Lost, Stolen, Destroyed or Mutilated Bonds 35 Section 23. Cancellation of Bonds 35 Section 24. Amendments 35 A. Calling Bondowners' Meeting 36 B. Notice of Meeting 36 C. Voting Qualifications 37 D. Issuer -Owned Bonds 37 E. Quorum and Procedure 37 F. Vote Required 37 124/015610-0012/3149957.2 a04/02/98 -ii- GJvl�l.� 016 Pacae G. Consent Without a Meeting 38 Section 25. Proceedings Constitute Contract; Events of Default and Remedies of Bondowners 39 A. Events of Default 39 B. Application of Funds upon Acceleration 40 C. Certain Remedies of Bondowners 41 D. Non -Waiver 42 E. Actions by Fiscal Agent as 42 Attorney -in -Fact F. General 43 Section 26. CUSIP Numbers 43 Section 27. Severability 43 Section 28. Notices to Agency and Fiscal Agent 43 Section 29. Effective Date 44 Section 30. Rights of the Bond Insurer 44 Exhibit A. (Form of Bond) 124/015610-0012/3149957.2 a04/02/98 — 1 1 1 — i SUPPLEMENT TO RESOLUTION NO. RA- OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION PARITY REFUNDING BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT NOT TO EXCEED SIXTEEN MILLION DOLLARS ($16,000,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 Section 1. Definitions. As used in this Resolution, the following terms shall have the following meanings, unless the context otherwise requires: (a) "Annual Debt Service" means the sums obtained for any Bond Year after the computation is made, by totaling the following for each such Bond Year: (1) The principal amount of all serial Bonds and serial Parity Bonds, if any, payable in such Bond Year; and (2) The amount of Minimum Sinking Fund Payments, if any, for any Term Bonds or term Parity Bonds to be made in such Bond Year in accordance with the applicable schedule or schedules of Minimum Sinking Fund Payments; and/or (3) The interest which would be due during such Bond Year on the aggregate principal amount of Bonds and Parity Bonds which would be outstanding in such Bond Year if the Bonds and Parity Bonds outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedule or schedules for the serial Bonds and serial Parity Bonds and the schedule or schedules of Minimum Sinking Fund Payments for any Term Bonds or term Parity Bonds. At the time and for the purpose of making such computation, the amount of Term Bonds and term Parity Bonds already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon. (4) Excluding the principal and interest due on any Bonds that are defeased as provided in Section 3 hereof and any Parity Bonds that are defeased as provided in the resolution of issuance of such Parity Bonds. (b) "Authorized Representative" means the Executive Director of the Agency or such other person designated in writing by the Chairman of the Agency. (c) "Bond" or "Bonds" means the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Refunding Bonds, Series 1998," authorized by this Resolution in a principal amount of Million Hundred Thousand Dollars 124/015610-0012/3149957.2 a04/02/98 - 1 (d) "Bond Insurer" means the issuer of the Financial Guaranty Insurance Policy on the Bonds and the issuer of the Debt Service Reserve Surety Bond to satisfy the Reserve Requirement. (e) "Bond Year" means.the year beginning September 1st and ending on the next following August 31st during the time any Bonds are outstanding except that the initial Bond Year shall commence on the Delivery Date and end on. August 31, 1992. (f) "Bondowner" or "Owner of Bonds, It 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, or the City, directly or indirectly, as shall upon request be certified to the Fiscal Agent, shall not be counted. (g) "City" means the City of La Quinta, California. (h) "Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, notices, announcements, and other releases of the United States Treasury, Department or Internal Revenue Service interpreting and construing it. (i) "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including any rating agency fees, municipal bond insurance premiums, the acceptance and initial annual fees and expenses of the Fiscal Agent, 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 Certificate of the Executive Director or Treasurer.' (j) "Delivery Date" means the date the Bonds are issued to the initial purchaser thereof. (k) "Escrow Agreement" means that Escrow Deposit and Trust Agreement, dated as of April 1, 1998, by and between the Agency and the Escrow Bank. (1) "Escrow Bank" means U.S. Bank Trust National Association. (m) "Federal Securities" means direct obligations of the United States of America or bonds or other obligations for which the full faith and credit of the United States is pledged for the payment of principal and interest. (n) "Financial Guaranty Insurance.Policy" means the municipal bond insurance policy issued by the Bond Insurer guaranteeing the payment of the principal of and the interest oh the Bonds. 124/015610-0012/3149957.2 a04/02/98 - 2 - i (o) "Fiscal Agent" means the fiscal agent appointed by the Agency pursuant to Section 20 hereof, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in this Resolution. (p) "Fiscal Year" means the year beginning July 1st and ending on the next following June 30th. (q) "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: (1) is in fact independent and not under domination of the Agency; and (2) does not have any substantial interest, direct or indirect, with the Agency; and (3) is not connected with the Agency as an officer or employee of the,Agency, but who may be regularly retained to make reports to the Agency. (r) 111994 Indenture" means the Indenture of Trust, dated as of May 1, 1994, by and between the Agency and Bank of America National Trust and Savings Association. (s) "Law" means the Community Redevelopment Law of the State of California as cited in the recitals hereof and Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, and all amendments thereto. (t) "Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year. (u) "Minimum Sinking Fund Payments" means the amount of money to be deposited into the Bond Payment Fund to be used to redeem Term Bonds or term Parity Bonds, at the principal amounts thereof, in the amounts and at the times set forth in the schedule or schedules of Minimum Sinking Fund Payments contained in this Resolution or in a supplemental resolution adopted for the purposes of establishing said schedule or in any resolution providing for the issuance of Parity Bonds. (v) "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 124/015610-0012/3149957.2 a04/02/98 -3- JU'jl213 U4.0 certificate or opinion or representation with respect to the matters upon which his opinion may be based, as aforesaid, is erroneous. (w) "Parity Bonds" means any Outstanding Series 1989 Bonds, Series 1990 Bonds, Series 1991 Bonds, Series 1994 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 Section 17 of this Resolution which are on a parity with the Bonds. (x) "Participating Underwriter" shall have the meaning ascribed thereto in the applicable Continue Disclosure Certificate. (y) "Pledged Tax Revenue's" means Tax Revenues less the Tax Revenues set aside as provided in Sections 33334.2 and 33334.3 of the Health and Safety Code of the State of California and, pursuant to certain agreements, paid to certain other taxing agencies in the County of Riverside. (z) "Rebate Regulations" means the Proposed and Temporary Treasury Regulations issued under Section 148(f) of the Code. (aa) "Record Date" means the fifteenth day of the month preceding any interest payment date. (bb) "Redevelopment Agency" or "Agency" means the La Quinta Redevelopment Agency. (cc) "Redevelopment Plan" means the "Redevelopment Plan for La Quinta Redevelopment Project," approved and adopted by the City by Ordinance No. 43, and includes any amendment thereof heretofore or hereafter made pursuant to the Law. (dd) "Redevelopment Project" means the La Quinta Redevelopment Project. (ee) "Redevelopment Project Area" means the project area described and defined in the Redevelopment Plan. (ff) "Regulations" means regulations adopted by the Department of Treasury from time to time. (gg) "Reserve Requirement" means, so long as the Series 1994 Bonds are outstanding, an amount equal to Maximum Annual Debt Service on the Bonds, as such term is defined in Resolution No. RA 94- , but not to exceed 100 of the Bond proceeds, which Reserve Requirement may be maintained in cash, invested as provided in Section 16, or by an alternate security as provided in Section 15(c) hereof. (hh) "Resolution" means Resolution No. RA adopted by the Agency on April 7, 1998, together with this Supplement to 124/015610-0012/3149957.2 a04/02/98 - 4 - 0 U J l) 1J '=r Resolution. All references herein and in any document referring to Resolution No. RA shall be deemed for all purposes to refer to said Supplement to Resolution. (ii) "Resolution No. RA 85-5" means the Resolution of the La Quinta Redevelopment Agency adopted July 30, 1985, authorizing the issuance of La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1985. (jj) "Resolution No. RA 88-14" means the Resolution of the La Quinta Redevelopment Agency adopted December 20, 1988, authorizing the issuance of La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1988. (kk) "Resolution No. RA 90-4" means the Resolution of the La Quinta Redevelopment Agency adopted on April 25, 1990, authorizing the issuance of La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1990. (11) "Resolution No. RA 91-12" means the Resolution of the La Quinta Redevelopment Agency adopted in October 9, 1991, authorizing the issuance of La Quinta Redevelopment Agency, La Quinta Redevelopment Tax Allocation Bonds, Series 1991. (mm) "Resolution No. RA 94- " means the Resolution of the La Quinta Redevelopment Agency adopted on , 1994 authorizing the issuance of La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Bonds, Series 1994 and approving the 1994 Indenture. (nn) "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden Center, New York 11530, Fax- (516) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Trust Company Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex-(215) 496-5058; and, in accordance with the current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trust. (oo) "Series 1985 Bonds" means the $20,000,000 original principal amount of the La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1985. (pp) "Series 1989 Bonds" means the $8,000,000 original principal amount of the La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1989. (qq) "Series 1990 Bonds" means the $19,695,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Refunding Bonds, Series 1990. 124/015610-0012/3149957.2 a04/02/98 - 5 - .- (rr) "Series 1991 Bonds" means the $8,700,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1991. (ss) "Series 1994 Bonds" means the $26,665,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1994. (tt) "Six -Month Period" means, with respect to a particular issue of Bonds or Parity Bonds, the period of time beginning on the Delivery Date and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the applicable Bond or Parity Bond issue (and any bonds that refund the particular bond issue). (uu) "Tax Certificate" means that certain Tax Certificate executed on the Delivery Date by the District with respect to the Certificates. (vv) "Tax Revenues" means that portion of taxes levied upon taxable property in the Redevelopment Project Area and received by the Agency on or after the date of the adoption of the ordinance approving the redevelopment plan of the Agency pursuant to Article 6 of Chapter 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California plus State reimbursed amounts, to the extent actually received, all as more particularly set forth hereafter in this Resolution. (ww) "Term Bonds" means the Bonds maturing in the year 2028. (xx) "Treasurer" or "Treasurer of the Agency" means the officer who is then performing functions of Treasurer of the Agency. Section 2. Amount, Issuance and Purpose of Bonds. Under and pursuant to the Law and under and pursuant to this Resolution, Bonds of the Agency in a principal amount of Million Hundred Thousand Dollars ($ ) shall be issued by the Agency for the corporate purposes of financing a portion of the cost of implementing the Redevelopment Plan which constitutes a "redevelopment activity" as such term is defined in Section 33678 of the Law and paying the Costs of Issuance; and such issue of Bonds is hereby created. Section 3. Nature of Bonds. The Bonds shall be and are special obligations of the Agency and are secured by an irrevocable pledge of, and are payable as to principal, interest thereon and premium, if any, from, Pledged Tax Revenues and other funds as hereinafter provided. The Bonds, interest thereon and premium, if any, are not a debt of the City, the State of California or any of its political subdivisions, and neither said City, said State nor any of its Political subdivisions is liable on them. In no event shall the Bonds, interest thereon and premium, if any, be payable out of any funds or properties other than those of the Agency as set forth in this Resolution. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the 124/015610-0012/3149957.2 a04/02198 - 6 - Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. The Bonds shall be and are equally secured, by an irrevocable pledge of the Pledged Tax Revenues and other funds as hereinafter provided, without priority for number, maturity, date of sale, date of execution or date of delivery, except as expressly provided herein. In consideration of the acceptance of the Bonds by those who shall hold the same from time to time, this Resolution shall be deemed to be and shall constitute a contract between the Agency and the Owners from time to time of the Bonds and Parity 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 and Parity Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds and Parity Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. The validity of the Bonds is not and shall not be dependent upon: (a) the completion of the Redevelopment Project or any part thereof, or (b) the performance of any person's obligations relative to the Redevelopment Project, or (c) the proper expenditures of the proceeds of the Bonds. Nothing in this Resolution shall preclude: (a) the payment of the Bonds from the proceeds of refunding bonds issued pursuant to the Law, or (b) the payment of the Bonds from any legally available funds. Nothing in this Resolution shall prevent the Agency from making advances of its own funds, howsoever derived, to any of the uses and purposes mentioned in this Resolution. If the Agency shall pay or cause to be paid, or shall have made provision to pay upon maturity or upon redemption prior to maturity, to the Owners of any of the Bonds (the "Refunded Bonds"), the principal of, premium, if any, and interest to become due thereon, through setting aside trust funds or setting apart in a reserve fund or special trust account created pursuant to this Resolution or otherwise, or through the irrevocable segregation for that purpose in some sinking fund or other fund or trust account with a fiscal agent or otherwise, moneys sufficient therefore, including, but not limited to, interest earned or to be earned on Federal Securities, then the lien of this Resolution for the payment of the Bonds, including, without limitation, the pledge of the Pledged Tax Revenues, and all other rights granted hereby, shall thereupon cease, terminate and become void and be discharged and satisfied, and the principal of, premium, if any, and interest on the Bonds shall no longer be deemed to be outstanding and unpaid; provided, however, that nothing in this Resolution shall require the deposit of more than such Federal Securities as may be sufficient, taking into account both the principal amount of such Federal Securities and the interest to become due thereon, to implement the refunding of the Bonds. In the event of such a defeasance of the Bonds, the Fiscal Agent shall cause an accounting for such period or periods as shall be 124/015610-0012/3149957.2 a04/02/98 — 7] G t t� IIJ u~' 024 requested by the Agency to be prepared and filed with the Agency, and the Fiscal Agent, upon the request of the Agency, shall release the rights of the Bondowners under this Resolution and execute and deliver to the Agency all such instruments as may be desirable to evidence such release, discharge and satisfaction, and the Fiscal Agent shall pay over or deliver to the Agency all moneys or securities held by it pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption after payment of amounts due the Fiscal Agent pursuant to Section 20 hereof. Provision shall be made by the Agency, satisfactory to the Fiscal Agent, for the mailing of a notice to the Owners of the Bonds stating that such Bonds have been refunded and moneys are so available for such payment. Section 4. Description of Bonds. The Bonds shall be in a principal amount of Million Hundred Thousand Dollars ($ ) and shall be designated "LA QUINTA REDEVELOPMENT AGENCY, LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1, TAX ALLOCATION REFUNDING BONDS, SERIES 1998." The Bonds shall be initially issued in the form of fully registered Serial Bonds and Term Bonds in the denomination of $5,000 each, or any whole multiple thereof. The Bonds shall bear the dated date of May 1, 1998. The Bonds shall mature on September 1, of the years and in the amounts and shall be payable as to interest at the rate or rates and on the dates as hereafter set forth in a resolution to be adopted by the Agency at the time of the sale by the Agency of the Bonds to the original purchasers thereof. Section 5. Interest. The Bonds shall bear interest at the rates hereafter set forth payable semiannually on March 1 and September I of each year, commencing September 1, 1998. Serial Bonds maturing in the amounts, on the dates and at the interest rates set forth below, shall be issued: Date Principal Interest Rate Term Bonds maturing on September 1, (subject to the mandatory sinking fund redemption provisions herein set forth) bearing interest at the rate of o per annum shall be issued in an aggregate principal amount of $ Each Bond shall bear interest until the principal sum thereof has been paid; provided, however, that if funds are available for the payment thereof in full in accordance with the terms of this Resolution, said Bond shall then cease to bear interest. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. The Bonds shall be numbered by the Fiscal Agent as the Fiscal Agent shall determine and shall be dated as of the date of authentication thereof, except that Bonds issued upon exchanges 1241015610-0012/3149957.2 a04/02/98 0Ili uI�?3 025 and transfers of other Bonds shall be dated so that no gain or loss of interest shall result from such exchange or transfer. Each fully registered Bond shall bear interest from the interest payment date next preceding the date thereof unless (i) it is dated prior to the first Record Date, in which event from the date of issuance of the Bonds, (ii) it is dated as of an interest payment date, in which event it shall bear interest from that interest payment date, or (iii) it is dated after a Record Date and before the following interest payment date, and the Agency does not default in the payment of interest due on such interest payment date, in which event it shall bear interest from such interest payment date. Interest on Bonds shall be paid by the Fiscal Agent (out of the appropriate funds) by check mailed by first-class mail or wire transfer to the registered owner as his name and address appear on the register kept by the Fiscal Agent at the close of business on the Record Date preceding the interest payment date or upon request in writing made before the Record Date preceding the interest payment date by the owner of $1,000,000 or more of the Bonds shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated by such Bondowner. Section 6. Place of Payment. The Bonds and any premiums upon the redemption thereof prior to maturity shall be payable upon presentation and surrender thereof in lawful money of the United States of America and shall be payable at the corporate trust office of the Fiscal Agent in Los Angeles, California. Section 7. Form of Bonds. The Bonds shall be substantially in the form attached hereto and by this reference incorporated herein as Exhibit "A". Such form is hereby approved and adopted as the form of such Bonds, and of the redemption, exchange, registration and assignment provisions pertaining thereto, with necessary or appropriate variations, omissions and insertions as permitted or required by this Resolution and by any subsequent supplemental resolution of the Agency. Any Bonds issued pursuant to this Resolution may be initially issued in temporary form exchangeable for definitive Bonds when the same are ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Agency, shall be without coupons and may contain such reference to any of the provisions of this or any supplemental resolution as may be appropriate. Every temporary Bond shall be executed by the Agency and be issued by the Fiscal Agent upon the same conditions and in substantially the same form and 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 at the principal office of the Fiscal Agent in Los Angeles, California, or at such other place in California as the Agency may approve, and the Fiscal Agent shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations 124/015610-0012/3149957.2 a04/02/98 - 9 - of this same issue. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds of this same issue delivered hereunder, except that any interest which has accrued thereon shall not be paid until the exchange has been accomplished. Section 8. Execution of Bonds. The Bonds shall be signed on behalf of the Agency by its Chairman or Executive Director by his or her manual or facsimile signature and by its Secretary by his or her manual or facsimile signature. The foregoing officers are hereby authorized and directed to sign the Bonds in accordance with this Section. If any Agency member or officer whose manual or facsimile signature appears on the Bonds ceases to be such member or officer before delivery of Bonds, his or her signature is as effective as if he or she had remained in office. The Fiscal Agent shall date and authenticate on registration and/or exchange to effectuate the registration and exchange provisions set forth in Sections 7 and 9, and only such of the Bonds as shall have endorsed thereon a certificate of authentication, substantially in the form set forth in Exhibit A, duly executed by the Fiscal Agent, shall be entitled to any rights, benefits or security under this Resolution. No Bonds shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Fiscal Agent, and such certificate of the Fiscal Agent, upon any such Bond, shall be conclusive and the only evidence that such Bond has been duly authenticated and delivered under this Resolution. The Fiscal Agent's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized signatory of the Fiscal Agent, but it shall not be necessary that the same signatory sign the Certificate of authentication on all of the Bonds that may be issued hereunder at any one time. Section 9. Registration and Exchange of Bonds. The Bonds shall be issued only in fully registered form. Bonds may be exchanged for other Bonds of equal aggregate denominations of the same maturity. Transfer of ownership of a Bond shall be made by exchanging the same for a new Bond. All of such exchanges shall be made in such manner and upon such reasonable terms and conditions at may from time to time be determined and prescribed by the Agency. The Agency shall pay any costs or charges in connection therewith which shall be established by the Fiscal Agent. The person, firm or corporation requesting such exchange ;hall pay any tax or governmental charge that may be imposed in connection with such exchange. Each Bond issued pursuant to this Resolution shall be of a denomination which is $5,000 or a whole multiple thereof and shall be of the same issue. The Fiscal Agent shall not be required to register the transfer or exchange of any Bond during 15 days preceding selection of Bonds for redemption and as to any Bond selected for redemption. 124/015610-0012/3149957.2 a04/02/98 - 1 0-0.1 j V "i j 0 0 ^ Section 10. Bond Register. The Fiscal Agent will keep or cause to be kept at its principal office in the City of Los Angeles, California, or at such other place in California as the Agency may approve, sufficient books for the registration and transfer of the Bonds, which shall upon reasonable prior notice at all times be open to inspection by the Agency; and, upon presentation for such purpose, the Fiscal Agent shall under such reasonable regulations as it may prescribe, register or transfer, or cause to be registered or transferred, on said register, the Bonds as hereinbefore provided. Section 11. Call and Redemption of Bonds Prior to Maturity. A. Terms of Redemption. (1) Optional Redemption. The Bonds maturing on or before September 1, shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after September 1, 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, , or any Interest Payment Date thereafter, prior to maturity in inverse order of maturity and by lot within a 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, 2007 thru August 31, 2008 1020 September 1, 2008 thru August 31, 2009 1010 September 1, 2009 and thereafter 1000 (2) Mandatory Sinking Fund Redemption. The Term Bond maturing on September 1, 2028 shall be subject to mandatory redemption in part, by lot, on September 1, 2013 and on each September 1 thereafter to and including September 1, 2028 from Minimum Sinking Fund Payments on hand in the Bond Payment Fund, at the principal amount of such Bonds to be prepaid, without premium, plus accrued but unpaid interest. The principal amount of such Bonds to be so prepaid and the dates therefor shall be as set forth below: Date Principal Minimum Sinking Fund Payments for any Term Bond redeemed pursuant to Section 11A(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 Fiscal Agent in such amounts as funds are available therefor and 124/015610-0012/3149957.2 a04/02/98 028 shall give notice to the Fiscal Agent 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 Fiscal Agent not less than thirty (30) nor more than sixty (60) days prior to such redemption date. In the case of refunding, notice shall also be given as provided in Section 3 hereof. 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. 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 Fiscal Agent 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 Fiscal Agent 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 11C(a) 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 identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. A certificate by the Fiscal Agent that notice of redemption has been given as herein provided shall be conclusive as against 124/015610-0012/3149957.2 a04/02/98 - 1 2 - 6 '3 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 notice of call and redemption. D. Redemption Fund. There is hereby created with the Fiscal Agent a special trust fund called the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Bonds, Series 1998, 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 Resolution, the Bonds designated in such notice of redemption to be redeemed as provided in this Section 11A(1). Said moneys must be set aside in the Redemption Fund solely for that purpose and shall be transferred to the Fiscal Agent to be applied 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 11A(2) shall be deposited in the Bond Payment 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 1989 Bonds and the Series 1990 Bonds and the Series 1994 Bonds then subject to mandatory sinking fund redemption, if necessary, from the Special Fund upon presentation and surrender thereof. E. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the Agency shall execute and the Fiscal Agent 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 Fiscal Agent shall be released and discharged from all.liability to the extent of such payment. F. 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 124/015610-0012/3149957.2 a04/02/98 - 1 3- 030 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. G. Purchase of Bonds. In lieu of redemption, the Fiscal Agent, at the written direction of the Agency, shall purchase Bonds 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 12. Funds. There was created by Resolution No. RA 85-5 with the Treasurer a special trust fund called the "La Quinta Redevelopment Project Fund" (hereinafter sometimes called the "Redevelopment Fund"), which Redevelopment Fund is continued for the purpose of this Resolution. There has heretofore been created with the Fiscal Agent pursuant to Resolution No. RA 85-5 a special trust fund called the "La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1985, Special Fund". The Fiscal Agent shall create within the Special Fund special trust funds to be contained therein and to be used solely for purposes of the Bonds, to be known as the Bond Interest Fund, Bond Payment Fund, the Debt Service Reserve Fund and the Debt Service Special Fund. There has heretofore been created with the Fiscal Agent pursuant to Resolution No. RA 85-5 a special trust fund called the "Holding Fund". So long as any of the Bonds herein authorized, or any interest thereon, remain unpaid, the moneys in the foregoing Funds shall be used for no purposes other than those required or permitted by this Resolution and the Law. Section 13. Sale of Bonds; Disposition of Bond Proceeds• Redevelopment Fund. The Agency may provide by resolution for the sale of the Bonds in the manner provided by the Law. A. The Fiscal Agent, on behalf of the Agency, shall receive the proceeds from the sale of the Bonds, upon the delivery of the Bonds to the purchasers thereof, and shall dispose of such proceeds and moneys as follows: (1) Deposit in the Bond Interest Fund accrued interest and premium, if any, paid by the purchasers of the Bonds; (2) Deposit in the Debt Service Reserve Fund an amount which will be equal to the Reserve Requirement; (3) Deposit in the Escrow Fund created pursuant to the Escrow Agreement the amount of $ ; and (4) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be transferred from 124/015610-001213149957.2 a04/02/98 - 1 4_ 031 the Special Fund to the Treasurer who shall place the same in the Redevelopment Fund. B. The moneys set aside in the Redevelopment Fund shall remain therein until from time to time expended solely for the purpose of financing a portion of the costs of the Redevelopment Project and other costs related thereto, and also including in such costs: (1) The payment, in any year during which the Agency owns the property in the Redevelopment Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt, an amount of money in lieu of taxes as authorized by Section 33401 of the Law; and (2) The cost of any lawful purposes in connection with implementation of the Redevelopment Project, including, without limitation, those purposes authorized by Section 33445 of the Law; and (3) The Costs of Issuance and any necessary expenses in connection with the issuance and sale of the Bonds and fees of the Fiscal Agent and paying agents. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for which said Bonds were issued, said sum shall be transferred to the Special Fund. Disposition of Redevelopment Fund moneys may be further specified by supplemental resolution of the Agency. All of the above uses constitute a "redevelopment activity" as such term is defined in Section 33678 of the Law. Section 14. Tax Revenues. As provided in the Redevelopment Plan, pursuant to Article 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable property in the Redevelopment Project Area each year by or for the benefit of the State of California, any city, county, city and county, district, or other public corporation (herein sometimes collectively called "taxing agencies") after the effective date of the Ordinance approving the Redevelopment Plan (being Ordinance No. 43 of the City of La Quinta, which became effective on December 29, 1983) shall be divided as follows: (a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the Redevelopment Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency last equalized prior to December 29, 1983 ("base assessment roll"), shall be allocated to and when collected shall be paid into the funds of the respective taxing 124/015610-0012/3149957.2 a04/02198 - 1 cJ - 0' u1�331 032 �� agencies as taxes by or for the taxing agencies on all other property are paid; and (b) That portion of said levied taxes each year in excess of such amount shall be allocated to and when collected by the Agency shall be paid into the following funds: (i) into the low and moderate income housing fund held by the Agency the amount required by the Law to be deposited into said fund, (ii) the amount required to be paid by the Agency pursuant to pass -through agreements of the Agency; and (iii) the balance into the Special Fund of the Agency. The Pledged Tax Revenues received by the Agency on or after the date of issue of the Bonds are hereby irrevocably pledged to the payment of the principal of, premium, if any, and interest on the Series 1989 Bonds, the Series 1990 Bonds, the Series 1994 Bonds, and the Bonds, and any Parity Bonds, without preference, and until all of the Bonds and all interest thereon, have been paid (or until moneys for that purpose have been irrevocably set aside), the Pledged Tax Revenues (subject to the exception set forth in Section 15(d) shall be applied solely to the payment of the Series 1994 Bonds, and the Bonds and any Parity Bonds plus premium if any, and the interest thereon as provided in this Resolution. This allocation and pledge is for the exclusive benefit of the Owners of the Series 1994 Bonds, and the Bonds and shall be irrevocable. Annually, on or before each September 1, the Agency shall certify to the Fiscal Agent that it has transferred to the Fiscal Agent Pledged Tax Revenues as required by this Section 14. The foregoing provisions of this Section are a portion of the provisions of said Article 6 of the Law as applied to the Bonds and shall be interpreted in accordance with said Article 6 of the Law, and the further provisions and definitions contained in said Article 6 of the Law are hereby incorporated herein by reference and shall apply. Section 33645 of the Health and Safety Code provides, in applicable part as follows: "The resolution, trust indenture, or mortgage shall provide that tax increment funds allocated to an agency pursuant to Section 33670 shall not be payable to a trustee on account of any issued bonds when sufficient funds have been placed with the trustee to redeem all outstanding bonds of the issue." This Resolution is presently in compliance with the above quoted provision and shall be so construed. Section 15. Special Fund. All Pledged Tax Revenues, and other moneys identified herein, deposited in the Special Fund in accordance with Section 14 hereof shall be allocated as provided herein and as provided in the 1994 Indenture. The interest on the Bonds until maturity shall be paid by the Fiscal Agent from the Bond Interest Fund. After all interest then due on the Bonds on the next interest payment date has been paid or provided for, 124/015610-001213149957.2 a04/02/98 - 1 6- 033 o' 0636 moneys in the Special Fund shall be applied to the payment of the principal, including Minimum Sinking Fund Payments, of the Bonds. Without limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Pledged Tax Revenues accumulated in the Special Fund shall be used in the following priority; provided, however, that to the extent that deposits have been made in any of the Funds referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Bond Interest Fund. Deposits shall be made into the Bond Interest Funds for the Series 1994 Bonds and the Bond Interest Fund created herewith on or before the last day in February and on or before August 31 of each Bond Year so that the amount in each of said Funds on said date shall be equal to the aggregate amount of interest becoming due and payable on the then outstanding Series 1994 Bonds and the Bonds on the next succeeding interest payment date. Moneys in the Bond Interest Fund shall be used for the payment of interest on the Bonds as the same becomes due. (b) Bond Payment Fund. After the deposits have been made pursuant to subparagraph (a) above, deposits shall next be made into the Bond Payment Funds for the Series 1994 Bonds and the Bond Payment Fund created herewith so that the balance in each of said Funds on or before August 31 of each Bond Year is equal to the principal coming due on the then outstanding Series 1994 Bonds and the Bonds, including Minimum Sinking Fund Payments, on the next succeeding September 1. (c) Debt Service Reserve Fund. After deposits have been made pursuant to subparagraphs (a) and (b) above, deposits shall be made to the Debt Service Reserve Funds established for the Series 1994 Bonds and under this Resolution from available Pledged Tax Revenues, if necessary, pro rata in order to cause the amounts on deposit therein to equal the Reserve Requirement. Money in the Debt Service Reserve Fund shall be transferred to the Bond Interest Fund and/or the Bond Payment Fund to pay interest on and principal of the Bonds, including Minimum Sinking Fund Payments, as they become due to the extent Pledged Tax Revenues are insufficient therefor. Any portion of the Debt Service Reserve Fund which is in excess of the Reserve Requirement shall be transferred to the Bond Interest Fund, semiannually on or before the last day in February and on or before August 31. The Agency may elect to maintain the Reserve Requirement by obtaining (i) a letter of credit, (ii) a surety bond, or (iii) a policy of insurance in an amount which will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement 124/015610-0012/3149957.2 a04/02/98 - 1 7 - 034 is needed for transfer to the Bond Interest Fund and/or the Bond Payment Fund as hereinbefore stated, provided that the letter of credit bank is rated in the top two rating categories by Moody's Investor's Service, Inc. and Standard & Poor's Corporation and that upon the expiration of the letter of credit, if not extended, the Agency shall obtain a substitute letter of credit, a surety bond or a policy of insurance as hereinafter provided, or shall deposit cash in the Debt Service Reserve Fund, and further provided that the issuer of any surety bond or insurance policy shall be rated in the top three rating categories by Moody's Investor's Service, Inc. and Standard & Poor's Corporation. The Agency shall acquire such alternate security and shall direct the Fiscal Agent to pay from money in the Debt Service Reserve Fund the letter of credit fees, the cost of a surety bond, or the insurance policy premium, as the case may be. Any money in the Debt Service Reserve Fund after the Agency acquires the alternate security and pays the appropriate costs as herein provided shall be transferred to the Agency for deposit into the Redevelopment Fund. (d) Holding Fund. The Fiscal Agent shall transfer from the Special Fund and deposit into the Holding Fund all moneys then remaining in the Special Fund after the above mentioned transfers have taken place; provided however, that if 1200 of Annual Debt Service was placed in the Special Fund in such Bond Year, and the Agency is not in default under the Resolution, and the Debt Service Reserve Funds established for the Series 1994 Bonds and under this Resolution are equal to the respective Reserve Requirements, then all money then remaining in the Holding Fund may be returned to the Agency for any lawful purpose. Except as set forth in the preceding sentence, all money in the Holding Fund shall be used and withdrawn by the Fiscal Agent for the purpose of replenishing the Bond Interest Funds established for the Series 1994 Bonds and under this Resolution, pro rata, the Bond Payment Funds established for the Series 1994 Bonds and under this Resolution, pro rata, and the Debt Service Reserve Funds established for the Series 1994 Bonds and under this Resolution, pro rata, in such order, in the event of any deficiency at any time in such Funds, or for the purpose of paying the interest on or redemption premiums, if any, on the Series 1994 Bonds or the Bonds, in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all the Series 1994 Bonds or the Bonds then outstanding, or, so long as the Agency is not in default hereunder, and, at the request of the Agency, for the purchase or redemption of the Series 1994 Bonds or the Bonds. Section 16. Deposit and Investment of Moneys in Funds. All moneys held by the Fiscal Agent in the Special Fund, the Holding Fund, the Redemption Fund or the Rebate Fund shall be (i) invested at the written direction of the Agency in Federal Securities, or (ii) held in trust accounts, time or demand deposits, including 124/015610-0012/3149957.2 a04/02/98 - 1 8- G'D V 63 V 0 3 5 certificates of deposit, in any commercial bank or trust company authorized to accept deposits of public funds (including the banking department of the Fiscal Agent) which are fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation or are secured at all times by Federal Securities, or secured at all times by bonds or other obligations which are authorized by law as security for public deposits, of a market value at least equal to the amount required by law, or (iii) invested in a taxable government money market portfolio restricted to obligations with maturities of one year or less, issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States or repurchase agreements collateralized by such obligations. If the Fiscal Agent receives no written directions from the Agency as to the investment of moneys held in any Fund or Account, the Fiscal Agent shall, pending receipt of instructions, invest such moneys in a taxable government money market portfolio as described in (iii) above. (a) Moneys in the Redevelopment Fund may be invested in any investment authorized by law for the investment of Agency money, which will by their terms mature not later than the date the Agency estimates the moneys represented by the particular investment will be needed for withdrawal from such Fund. (b) Moneys in the Bond Interest Fund and the Bond Payment Fund shall be invested only in obligations which will by their terms mature on such dates as to ensure that before each interest payment date and principal payment date there will be in such Funds, from matured obligations and other moneys already in such Funds, cash equal to the interest and principal payable on the respective payment dates. (c) Except as provided in Section 15(c) hereof, moneys in the Debt Service Reserve Fund shall be invested in obligations which will by their terms mature prior to the date which is the final maturity date of the Bonds. Except as otherwise provided herein, obligations purchased as an investment of moneys in any of said Funds shall be deemed at all times to be a part of such respective Fund and the interest accruing thereon and any gain realized from such investment shall be credited to such Fund and any loss resulting from any such authorized investment shall be charged to such Fund without liability to the Agency or the members and officers thereof or to the Fiscal Agent. The Agency or the Fiscal Agent, as the case may be, shall sell at the best price obtainable or present for redemption any obligation so purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such Fund as required by this Resolution. The investment constituting a part of such Fund shall be valued at the then estimated or appraised market value of such investment or face amount thereof, which ever is lower; provided, however, that 124/015610-0012/3149957.2 a04/02/98 - 1 9 ( J 0A 3 036 36 investments in the Bond Interest Fund and the Bond Payment Fund shall be valued at the face amount thereof. Section 17. Issuance of Parity Bonds. The Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed for the Redevelopment Project purposes. The issuance and sale of any Parity Bonds shall be subject to the following conditions precedent: (a) The Agency shall be in compliance with all covenants in this Resolution; (b) The Parity Bonds shall be on such terms and conditions as may be set forth in a supplemental resolution, which shall provide for (i) bonds substantially in accordance with the Resolution, (ii) the deposit of a portion of the Parity Bond proceeds into the Debt Service Reserve Fund, or the acquisition of an alternate security as provided in Section 15(c) hereof, in an amount sufficient, together with the balance of the Debt Service Reserve Fund, to equal the Maximum Annual Debt Service on all Bonds expected to be outstanding including the outstanding Bonds and Parity Bonds, (iii) the disposition of surplus Pledged Tax Revenues in substantially the same manner as Section 15(d) hereof; (c) Receipt of a certificate of an Independent Financial Consultant showing: (i) The current and each future Bond Year the Annual Debt Service for each such Bond Year with respect to all Bonds and Parity Bonds reasonably expected to be outstanding following the issuance of such Parity Bonds; (ii) For the then current Bond Year, (A) the Pledged Tax Revenues including revenue attributable to utility property to be received by the Agency based upon the most recent assessed valuation of taxable property in the Redevelopment Project Area received in writing from the appropriate officer of the County of Riverside (or any value attributable to assessment of utility property received from the appropriate party) plus (B) additional Pledged Tax Revenues to be received by the Agency due to expected increases in assessed valuation of taxable property in the Redevelopment Project Area resulting from construction which has been completed but the assessed value of which is not yet included on the assessment roll (or any supplemental roll) as estimated and certified by an Independent Redevelopment Consultant; and (iii) That for the then current Bond Year, the Pledged Tax Revenues computed on the basis of Pledged 124/015610-0012/3149957.2 a04/02/98 - 2 0 - Cun 03'7 Tax Revenues referred to in item (ii)(A) and (B) above are at least equal to 1.20 times the Maximum Annual Debt Service referred to in item (i) above. (d) Such Parity Bonds shall mature on September 1 and interest thereon shall be payable on March 1 and September 1, subject to such dates being changed by a supplemental resolution of the Agency. Section 18. Covenants of the Agency. As long as the Bonds are outstanding and unpaid, the Agency shall (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions contained in this Resolution or in any Bond issued hereunder, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that said Covenants do not require the Agency to expend any funds other than the Tax Revenues: Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan. The Agency covenants and agrees that it will diligently carry out and continue to completion, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan and in a sound and economical manner. The Redevelopment Plan may be amended as provided in the Law but no amendment shall be made unless it will not substantially impair the security of the Bonds or the rights of the Bondowners, as shown by an Opinion of Counsel, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 2. Use of Proceeds, Management and Operation of Properties. The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in this Resolution and any supplemental resolution and that it will manage and operate all properties owned by it comprising any part of the Redevelopment Project in a sound and businesslike manner. Covenant 3. No Priority. The Agency covenants and agrees that it will not issue any obligations payable, either as to principal or interest, from the Pledged Tax Revenues which have, or purport to have, any lien upon the Pledged Tax Revenues prior or superior to the lien of the Bonds herein authorized. Except as permitted by Section 17 hereof, it will not issue any obligations, payable as to principal or interest, from the Pledged Tax Revenues, which have, or purport to have, any lien upon the Pledged Tax Revenues on a parity with the Bonds herein authorized. Notwithstanding the foregoing, nothing in this Resolution shall prevent the Agency (i) from issuing and selling pursuant to law, refunding obligations payable from and having any lawful lien upon the Pledged Tax Revenues, if such refunding obligations are issued for the purpose of, and are sufficient for the purpose of, 124/015610-0012/3149957.2 a04/02/98 — 2 1 — C '`� �) kJ 039 refunding all of the outstanding Bonds or Parity Bonds, or (ii) from issuing and selling obligations which have, or purport to have, any lien upon the Pledged Tax Revenues which is junior to the Bonds or (iii) from issuing and selling bonds or other obligations which are payable in whole or in part from sources other than the Pledged Tax Revenues. As used herein obligations shall include, without limitation, bonds, notes, interim certificates, debentures or other obligations. Covenant 4. Punctual Payment. The Agency covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds issued hereunder on the date, at the place and in the manner provided in the Bonds. Covenant 5. Payment of Taxes and Other Chartres. The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Redevelopment Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of said properties, revenues or income or which might impair the security of the Bonds or the use of Pledged Tax Revenues or other legally available funds to pay the principal of and interest thereon, all to the end that the priority and security of the Bonds shall be preserved; provided, however, that nothing in this Covenant shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity thereof. Covenant 6. Books and Accounts; Financial Statements. The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries shall be made of all transactions relating to the Redevelopment Project and the Pledged Tax Revenues and other funds relating to said Project, and will prepare within one hundred and eighty (160) days after the close of each of its Fiscal Years a complete financial statement or statements for such year in reasonable detail covering such Redevelopment Project and the Pledged Tax Revenues and other funds, accompanied by an opinion of an Independent Certified Public Accountant appointed by the Agency, and will furnish a copy of such statement or statements to the Fiscal Agent, the original purchasers) of the Bon s (in the case of a syndicate, the manager thereof), and any rating agency which maintains a rating on the Bonds, and, upon written request, to any Bondowner. Each annual budget that may be prepared by the Agency shall be sent to the Bond Insurer following adoption. Covenant 7. Eminent Domain. The Agency covenants and agrees that if all or any part of the Redevelopment Project Area should be taken from it without its consent, by eminent domain 124/015610-0012/3149957.2 a04/02/98 — 2 2— , ;J 0 '� 4 039 proceedings or other proceedings authorized by law, for any public or other use under which the property will be tax exempt, the Agency will use its best efforts to have the base assessment roll reduced by the amount of the assessment of said property as shown on said base assessment roll. Covenant S. Disposition of Property. The Agency covenants and agrees that it will not dispose of more than ten percent (10%) of the land area in the Redevelopment Project Area (except property shown in the Redevelopment Plan in effect on the date this Resolution is adopted as planned for public use, or property to be used for public streets, public offstreet parking, sewage facilities, parks, easements or right-of-way for public utilities, or other similar uses) to public bodies or other persons or entities whose property is tax exempt, unless such disposition will not result in the security of the Bonds or the rights of Bondowners being substantially impaired, as shown by an opinion of Counsel, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 9. Statement of Indebtedness. The Agency covenants and agrees to file annually with the County Auditor a statement of indebtedness as provided in Section 33675 of the Law. Covenant 10. Protection of Security and Rights of Bondowners. The Agency covenants and agrees to preserve and protect the security of the Bonds and the rights of the Bondowners and to defend their rights under all claims and demands of all persons. Without limiting the generality of the foregoing, the Agency covenants and agrees to contest by court action or otherwise (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) that the Tax Revenues pledged hereunder cannot be paid to the Agency for the debt service on the Bonds, or (b) any other action affecting the validity of the Bonds or diluting the security therefor, or (c) any assertion by the United States of America or any department or agency thereof or any other person that the interest received by the Bondowners is taxable under federal income tax laws by reason of any action of the Agency. The Agency covenants and agrees to take no action which, in the Opinion of Counsel would result in the Pledged Tax Revenues being withheld unless the withholding thereof is being contested in good faith. Covenant 11. Federal Tax Covenants. 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 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: 124/015610-0012/3149957.2 a04/02198 — 2 3 — �JU 4 040 (1) Private Activity. The Agency has not taken and shall not take or permit any other person to take, any action within its control, which would cause the Bonds to constitute "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1966, as amended. (2) Arbitrage. The Agency will make no use of the proceeds of the Bonds or 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 or Parity Debt to be "arbitrage bonds" within the meaning of Section 148 of the Code; (3) Federal Guaranty. The Agency will make no use of the proceeds of the Bonds or Parity Debt or take or omit to take any action that would cause the Bonds or the Parity Debt to be "federally guaranteed" within the meaning of Section 149(b) of the Code; (4) 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; (5) Hedge Bonds. The Agency will make no use of the proceeds of the Bonds or the 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 or the Parity Debt 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 and the Parity Debt for federal income tax purposes; and (6) Miscellaneous. The Agency will take no action inconsistent with its expectations stated in that certain Tax Certificate executed on the Closing Date by the Agency in connection with each issuance of Bonds and Parity Debt and will comply with the covenants and requirements stated therein and incorporated by reference herein. Section 19. Taxation of Leased Property. Whenever any property in the Redevelopment Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than a public agency) or whenever the Agency leases real property in the Redevelopment Project Area to any person or persons (other than a public agency) for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property, as required by Section 33673 of the Law, and the lease or contract shall provide (a) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest, and (b) that if for any reason the taxes levied on such property 124/015610-0012/3149957.2 a04/02/98 - 2 4 - ''J 041 in any year during the term of the lease or contract are less than the taxes which would have been levied if the entire property had been assessed and taxed in the same manner as privately owned property, the lessee shall pay such difference to the Agency within thirty (30) days after the taxes for such year become payable to the taxing agencies and in no event later than the delinquency date of such taxes established by law. All such payments shall be treated as Tax Revenues, and when received by the Agency shall be transferred to the Fiscal Agent for deposit in the Special Fund. Section 20. Fiscal Agent. The Agency hereby appoints U.S. Bank Trust National Association as Fiscal Agent hereunder, to act as the fiscal agent, bond registrar and paying agent of the Agency for the purpose of receiving Pledged Tax Revenues and other funds in trust as provided in this Resolution, to hold, allocate, use and apply the Pledged Tax Revenues and other funds in trust as provided in this Resolution, and to perform the other duties and powers of the Fiscal Agent as are prescribed in this Resolution. The Agency agrees to pay the Fiscal Agent its reasonable fees and expenses incurred in fulfilling its duties as set forth in this Resolution. The Fiscal Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the Agency a written acceptance thereof; and, by executing and delivering such acceptance, the Fiscal Agent shall be deemed to have accepted such duties and obligations, but only upon the terms and conditions set forth in this Resolution. The Agency may, so long as the Agency shall not be.in default hereunder, with or without cause, remove the Fiscal Agent initially appointed, or any successor, following a breach by the Fiscal Agent of its duties hereunder. Upon the removal of the Fiscal Agent, the Agency shall forthwith appoint a successor thereto, but any successor shall be a commercial bank or trust company doing business and having an office in the City of San Francisco or the City of Los Angeles and having a combined capital (exclusive of borrowed capital) and surplus of at least $75,000,000 and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent or any substituted Fiscal Agent may at any time resign by filing written notice thereof with the Agency. Upon a resignation in writing, the Agency shall forthwith appoint a substitute Fiscal Agent, and the resignation shall become effective upon appointment. In the event that the Fiscal Agent or any successor becomes incapable of acting as such, the Agency shall forthwith appoint a substitute Fiscal Agent. Any bank or 124/015610-0012/3149957.2 a04/02/98 - 2 5 - GUiJv4:1 449 trust company into which the Fiscal Agent may be merged or with which it may be consolidated shall become the Fiscal Agent without action of the Agency. The Fiscal Agent may become the owner of any of the Bonds authorized by this Resolution with the same rights it would have had if it were not the Fiscal Agent. The Fiscal Agent shall have no duty or obligation to enforce the collection of or to exercise diligence in the enforcement of the collection of funds assigned to it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for the funds that it actually receives. The recitals of fact and all promises, covenants and agreements herein and in the Bonds shall be taken as statements, promises, covenants and agreements of the Agency, and the Fiscal Agent assumes no responsibility for the correctness of them, and makes no representations as to the validity or sufficiency of this Resolution or of the Bonds, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or default. The Fiscal Agent shall be obligated to perform only such duties as are specifically set forth in this Resolution and no implied duties or obligations shall be read into this Resolution against the Fiscal Agent. No provision in this Resolution shall require the Fiscal Agent to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not assured to it. In accepting its duties hereunder, the Fiscal Agent acts solely as Fiscal Agent for the Owners and under no circumstances shall the Fiscal Agent be liable in its individual capacity for the principal, premium, if any, or interest due on the Bonds. The Fiscal Agent shall not be accountable for the use or application by the Agency of any funds which the Fiscal Agent has released under this Resolution. The Agency agrees to pay the Fiscal Agent for its services (this payment shall not be limited by any provision of law affecting the compensation of a Fiscal Agent). Further, the Agency shall pay or reimburse the Fiscal Agent upon its request for all reasonable expenses of the Fiscal Agent, including the reasonable compensation and the expenses of its counsel. The Agency agrees to indemnify and hold harmless the Fiscal Agent against all claims, demands, losses, damages, liabilities or 124/015610-001213149957.2 a04/02/98 - 2 6 - 6-00U-%4 0 u expenses (including, but not limited to reasonable attorneys' fees) relating to (i) Fiscal Agent exercising its rights or performing its duties under this Resolution, or (ii) Fiscal Agent being appointed and serving as such under this Resolution, or (iii) otherwise relating to this Resolution or the Bonds, except to the extent resulting from Fiscal Agent's own negligence or willful misconduct. Section 21. Rebate Fund. (a) Establishment of Rebate Fund. With respect to each issue of Bonds and Parity Debt, unless the small issuer exception of Section 148(f)(4)(C) of the Code is applicable to the particular bond issue, as provided in the applicable Tax Certificate, the Fiscal Agent shall establish a special fund with respect to the particular bond issue designated as the "Rebate Fund" (the "Rebate Fund"), and within the particular Rebate Fund shall establish a Rebate Account (the "Rebate Account") and comply with the requirements of the Code. All money at any time deposited in each Rebate Fund shall be held by the Agency in trust, for payment to the United States Treasury. All amounts on deposit in each Rebate Fund shall be governed by this Section 21, and the applicable Tax Certificate, unless the Agency obtains an opinion of Bond Counsel that the exclusion from gross income of interest on the applicable Bonds or Parity Debt will not be adversely affected for federal income tax purposes if such requirements are not satisfied. (b) Disposition of Unexpended Funds. Any funds remaining in each Rebate Fund after redemption and payment of the applicable Bonds or issue of Parity Debt and any required payments 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 Resolution to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds and the Parity Debt. Section 22. Lost, Stolen, Destroyed or Mutilated Bonds. In the event that any Bond is lost, stolen, destroyed or mutilated, the Agency will cause to be issued a new Bond(s) on reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the Agency or Fiscal Agent deems such surety bond necessary. Such new Bond shall be signed and authenticated in such manner as determined by this resolution. Section 23. Cancellation of Bonds. All Bonds surrendered to the Fiscal Agent for payment at the maturity thereof or, in the case of call and redemption prior to maturity, at the redemption date, shall upon payment therefor be cancelled immediately and destroyed by the, Fiscal Agent and a certificate of destruction 124/015610-001213149957.2 a04/02/98 - 2 7 - 044 shall at the request of the Agency be transmitted to the Treasurer. Any Bonds purchased by the Fiscal Agent as aforesaid shall be cancelled immediately and destroyed as aforesaid. Section 24. Amendments. This Resolution, and the rights and obligations of the Agency and of the Owners of the Bonds issued hereunder, may be modified or amended at any time by supplemental resolution adopted by the Agency: (a) for any purpose at any time prior to the sale of the Bonds; (b) without the consent of Bondowners, if such modification or amendment is for the purpose of adding covenants and agreements to further secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make notifications not affecting any outstanding series of Bonds only with the consent of the Fiscal Agent, for the purpose of curing any ambiguities, defects or inconsistent provisions in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary and desirable to accomplish the same, provided that such modifications or amendments do not adversely affect the rights of the Owners of any outstanding Bonds; (c) for any purpose with the consent of the Bondowners owning sixty percent (60a) in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the Agency or the City, and obtained as hereinafter set forth; provided, however, that no such modification or amendment shall, without the express consent of the registered owner of the Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable thereon, extend its maturity or the times for paying interest thereon, change the monetary medium in which principal and interest is payable, or create a mortgage, pledge or lien upon the revenues superior to or, other than as provided in this Resolution, on a parity with the pledge and lien created for the Bonds and any Parity Bonds or reduce the percentage of consent required for amendment or modification, and provided further that no amendment shall be made pursuant to (c) above without the prior written consent of the Bond Insurer, which consent will not be unreasonably withheld. Any act done pursuant to a modification or amendment so consented to shall be binding upon the Owners of all of the Bonds and shall not be deemed an infringement of any of the provisions of this Resolution or of the Law, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this Resolution, and after such consent relating to such specified matters has been given, no Bondowner or Owner shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the Agency or any officer thereof from taking any action pursuant thereto. A. Calling Bondowners' Meeting. If the Agency shall desire to obtain any such consent it shall duly adopt a resolution calling a meeting of the Bondowners for the purpose of considering the action the consent to which is desired. 124/015610-0012/3149957.2 a04/02/98 - 2 S- 045 45 B. Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be mailed by the Agency, postage prepaid, to the respective registered owners of the Bonds as their addresses appear on the registration books of the Fiscal Agent. The place, date and hour of holding such meeting and the date or dates of mailing such notice shall be determined by the Agency in its discretion. Such notice shall set forth the nature of the proposed action to which consent is desired. The place, date and hour of holding such meeting and ,the date or dates of mailing such notice shall be determined by the Agency in its discretion. The actual receipt by any Bondowner of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of any proceedings at such meeting. A certificate by the Secretary of the Agency approved by resolution of the Agency, that the meeting has been called and that notice thereof has been given as herein provided, shall be conclusive as against all parties and it shall not be open to any Bondowner to show that he failed to receive actual notice of such meeting. C. Voting Qualifications. The Fiscal Agent shall prepare and deliver to the chairman of the meeting a statement of the names and addresses of the registered owners of Bonds, such statement to show maturities, serial numbers and the principal amounts so that voting qualifications can be determined. No Bondowners shall be entitled to vote at such meeting unless their names appear upon such statement. No Bondowners shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against their names on such statement. D. Issuer -Owned Bonds. The Agency covenants that it will present at the meeting a certificate, signed and verified by one member thereof and by the Treasurer, stating the serial numbers, maturities and principal amounts of all Bonds owned by, or held for account of, the Agency or the City, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any Bond appearing upon such certificate, or any Bond which it shall be established at or prior to the meeting is owned by the Agency or the City, directly or indirectly, and no such Bond (in this Resolution referred to as "issuer -owned Bonds") shall be counted in determining whether a quorum is present at the meeting. E. Ouorum and Procedure. A representation of at least sixty percent (600) in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds, if any) shall be necessary to constitute a quorum at any meeting of Bondowners, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been held by a quorum or by less than a quorum. The Agency shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the 124/015610-0012/3149957.2 a04/02198 - 2 9 - meeting shall be organized by the election of a permanent chairman and secretary. At any meeting each Bondowner shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be qualified to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The Agency and/or the Fiscal Agent by their duly authorized representatives and counsel, may attend any meeting of the Bondowners, but shall not be required to do so. F. Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the Bondowners a statement of the proposed action consent to which is desired, and if such action shall be consented to and approved by Bondowners holding at least sixty percent (600) in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) the chairman and secretary of the meeting shall so certify in writing to the Agency, and such certificate shall constitute complete evidence of consent of the Bondowners under the provision of this Resolution. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. C. Consent Without a Meeting. If the Agency should desire to obtain the consent of the Owners to any proposed amendment hereto without a meeting of the Owners, the Agency may, by resolution, propose the amendment to which consent is desired. A copy of such resolution, together with a request to Owners for their consent to the amendment proposed therein, shall be mailed by the Fiscal Agent, at the expense of the Agency, first-class mail, postage prepaid, to each registered Owner at such Owner's address as it appears on the Bond Register. The lack of actual receipt by any owner of such resolution and request for consent and any defects in such resolution and request for consent shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by the Agency Secretary, approved by resolution of the Agency, that said resolution and request for consent have been delivered as herein provided shall be conclusive as against all parties. Any such written consent shall be binding upon the Owner giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or by the subsequent Owner. To be effective, any revocation of consent before the adoption of the resolution accepting consents as hereinafter provided. After the Owners of at least sixty percent (60s) in aggregate principal amount of the Bonds then Outstanding (exclusive of Agency -owned Bonds) shall have consented in writing, the Agency 124/015610-001213149957.2 a04/02/98 — 3 0 — Gvv°6,"�(1 447 shall adopt a resolution accepting such consents and such resolution shall constitute complete evidence of the consent of Owners under this Section. Notice specifying the amendment that has received the consent of Owners as required by this Section shall be mailed by the Fiscal Agent, at the expense of the Agency, first-class mail, postage prepaid, not more than 60 days following the final action in the proceedings for the obtaining of such consent, to each registered Owner at such Owner's address as it appears on the Certificate Register. Said notice is only for the information of Owners, and failure to mail such notice or any defect therein shall not affect the validity of the proceedings theretofore taken in the obtaining of such consent. Section 25. Proceedings Constitute Contract; Events of Default and Remedies of Bondowners. The provisions of this Resolution, of the resolutions providing for the sale of the Bonds and awarding the Bonds and fixing the interest rate or rates thereon, and of any other resolution supplementing or amending this Resolution, shall constitute a contract between the Agency and the Bondowners, and the provisions thereof shall be enforceable by any Bondowner for the equal benefit and protection of all Bondowners similarly situated by ,mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in Any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the State of California. The following provisions shall not limit the generality of the foregoing. A. Events of Default. Each of the following shall constitute an event of default. (1) Default in the due and punctual payment of any installment of interest on any Bond or any Parity Bond when and as such interest installment shall become due and payable and such default shall have continued for a period of thirty (30) days: (2) Default in the due and punctual payment of the principal of any Bond or any Parity Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the covenants, agreements or conditions contained in this Resolution or in Resolution No. 94- or in the Bonds or any Parity Bond, and such default shall have continued for a period of thirty (30) days following written notice to the Agency; or 124/015610-0012/3149957.2 a04102/98 - 3 1 - ) 1 (4) The Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; In each and every event of default described in (1) or (2) above the Fiscal Agent shall, with the consent of the Bond Insurer, and in each and every case of default described in (3) or (4) above, the Fiscal Agent may, with the consent of the Bond Insurer, and shall, with the consent of the Bond Insurer, if so requested by the owners of not less than a majority in aggregate principal amount of the Bonds and the Parity Bonds at the time outstanding (such request to be in writing to the Fiscal Agent and the Agency), the Fiscal Agent shall at the direction of the Bond Insurer, declare the principal of all of the Bonds and the Parity Bonds then outstanding and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Resolution or Resolution No. RA 94- or in the Bonds and the Parity Bonds to the contrary notwithstanding. Such declaration may be rescinded by the owners of not less than a majority of the Bonds and the Parity Bonds then outstanding provided the Agency cures such default or defaults including the deposit with the Fiscal Agent of a sum sufficient to pay all principal on the Bonds and the Parity Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds and the Parity Bonds then outstanding, with interest at the rate of twelve percent (120) per annum on such overdue installments of principal and, to the extent such payment of interest on interest is lawful at that time, on such overdue installments of interest, so that the Agency is currently in compliance with all payment, deposit and transfer provisions of this Resolution, Resolution No. RA 94- , and an amount sufficient to pay any expenses incurred by the Fiscal Agent in connection with such default. Immediately upon becoming aware of the occurrence of an event of default, the Fiscal Agent shall give notice of such event of default to the Agency by telephone confirmed in writing. Such notice shall also state whether the principal of the Bonds shall have been declared to be or have immediately become due and payable. The Fiscal Agent shall also give such notice to the owners of the Bonds by first class mail, postage prepaid. B. Application of Funds upon Acceleration. All of the Pledged Tax Revenues and all sums in the Funds provided for in 1241015610-0012/3149957.2 a04/02/98 — 3 2— 049 VJ� this Resolution, and Resolution No. RA 94-_ upon the date of the declaration of acceleration as provided in this Section 25, and all sums thereafter received by the Fiscal Agent hereunder, shall be applied by the Fiscal Agent in the order following upon presentation and surrender of the Bonds and any Parity Bonds. First, to the payment of (i) the costs and expenses of the Fiscal Agent and (ii) of the Bondowners and the owners of any Parity Bonds in declaring such event of default, including reasonable compensation to its or their agents, attorneys and counsel; Second, in case the principal of the Bonds and any Parity Bonds shall not have become due and shall not then be due and payable,, to the payment of the interest in default in the order of the maturity of the installments of such interest, with interest on the overdue installments at the rate of twelve percent (120) per annum on the Bonds and any Parity Bonds (to the extent that such interest on overdue installments shall have been collected), such payments to be made ratably to the persons entitled thereto without discrimination or preference; Third, in case the principal of the Bonds and any Parity Bonds shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon the Bonds and any Parity Bonds for principal and interest, with interest on the overdue principal and installments of interest at the rate of twelve percent (12a) per annum on the Bonds and any Parity Bonds (to the extent that such interest on overdue installments of 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 and any Parity 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. C. Certain Remedies of Bondowners. Any Bondowner, with the consent of the Bond Insurer, and the owners of any Parity Bonds, at the direction of the Bond Insurer, shall have the right, for the equal benefit and protection of all Bondowners similarly situated— (1) by mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Resolution, and Resolution No. Resolution No. 94- , in the Bonds and any Parity Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; 124/015610-0012/3149957.2 a04/02/98 - 3 3 - , r- ,, L115 i1 'JU`va•a (2) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of the rights of any of the Bondowners or owners of Parity Bonds; or (3) upon the happening of any event of default (as defined in this Section), by suit, action or proceeding in any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were the,trustees of an express trust. D. Non -Waiver. Nothing in this Section or in any other provisions of this Resolution, or in Resolution No. RA 94-_, or in the Bonds or any Parity Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Bonds and any Parity Bonds to the respective Owners of the Bonds and any Parity Bonds at the respective dates of maturity, as herein provided, or affect or impair the right, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds or any Parity Bonds. No remedy conferred hereby upon any Bondowner or owner of Parity Bonds is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law of the State of California. No waiver of any default or breach of any duty or contract by any Bondowner or owner of Parity Bonds shall affect any subsequent default or breach of any duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any Bondowner or owner of Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Bondowners or owner of Parity Bonds may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or owner of Parity Bonds, then, and in every such case, the Agency and the Bondowners or owner of Parity Bonds shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. E. Actions by Fiscal Aclent as Attorney -in -Fact. Any suit, action or proceeding which any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Fiscal Agent for the equal benefit and protectics;-1 of all Owners of Bonds or Parity Bonds similarly situated and the Fiscal Agent is hereby appointed (and the successive respective registered owners of the Bonds or Parity Bonds issued hereunder, by taking and holding the same, shall be yyt�r}}- , 051 124/015610-OO12/3149957.2 a04/02/98 — 3 4— J V G V 1i conclusively deemed so to have appointed it) the true and lawful attorney -in -fact of the respective registered owners of the Bonds or Parity Bonds for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective registered owners of the Bonds or Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Fiscal Agent as such attorney -in - fact. F. General. After the issuance and delivery of the Bonds or Parity Bonds, this Resolution, and any supplemental resolutions hereto, shall be irrepealable, but shall be subject to modification or amendment to the extent and in the manner provided n r in this Resolution o greater but to e e extent and in no other g manner. Section 26. CUSIP Numbers. CUSIP identification numbers will be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and no liability shall hereafter attach to the Agency or any of the officers or agents thereof because of or on account of said numbers. Any error or omission with respect to said numbers shall not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. Section 27. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Resolution, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Resolution and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected, and this Resolution and the Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under this Resolution and the Constitution and the laws of the State of California. If the provisions relating to the appointment and duties of a Fiscal Agent are held to be unconstitutional, invalid or unenforceable, said duties shall be performed by the Treasurer. Section 28. Notices to Agency and Fiscal Agent. All notices to the Agency and the Fiscal Agent shall be personally delivered or sent by first class mail, postage prepaid, addressed as follows: (1) If to the Agency, to La Quinta Redevelopment Agency, 78-495 Calle Tampico, La Quinta, California 92253 Attention: Finance Director. (2) If to the Fiscal Agent, to U.S. Bank Trust National Association, 124/015610-0012/3149957.2 a04/02/98 -35- JOvJ,� Section 29. Continuing Disclosure. The Agency hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the Agency to comply with the Continuing Disclosure certificate shall not be considered an Event of Default; however, any Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. Section 30. Book Entry System. (a) The Bonds shall be initially delivered in the form of a separate single certificated fully registered Bond for each of the series and maturities set forth in Section 203 hereof. Upon initial delivery, the ownership of each Bond shall be registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC. Except as provided in this Resolution all of the Outstanding Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the registration books kept by the Fiscal Agent in the name of Cede & Co., as nominee of DTC, the Agency and the Fiscal Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond, as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than an Owner of a Bond, as shown in the registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The Agency and the Fiscal Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Fiscal Agent as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Fiscal Agent shall pay all principal of, premium, if any, and interest on the Bonds' only to or upon the order of the respective Owners of the Bonds, as shown in the registration books kept by the Fiscal Agent, as provided in Section 209 of this Resolution, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Agency's obligations with respect to payment of principal of, premium, 124/015610-0012/3149957.2 a04/02/98 - 3 6 - 053 if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the registration books kept by the Fiscal Agent, shall receive a certificated Bond evidencing the obligation of the Agency to make payments of principal, premium, if any, and interest pursuant to this Resolution. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to Record Dates, the word "Cede & Co." in this Resolution shall refer to such new nominee of DTC. (c) The delivery of the Representation Letter by the Agency and the Fiscal Agent shall not in any way limit the provisions of Section 30(b) hereof or in any other way impose upon the Agency or the Fiscal Agent any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners of Bonds, as shown on the registration books kept by the Fiscal Agent. The Fiscal Agent shall take all action necessary to comply with all representations in the Representation Letter with respect to the Fiscal Agent. (d) (i) DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Agency and the Fiscal Agent and discharging its responsibilities with respect thereto under applicable law. (ii) The Agency, in its sole discretion and without the consent of any other person, may terminate the services of DTC with respect to the Bonds if the Agency determines that: (A) DTC is unable to discharge its responsibilities with respect to the Bonds, or (B) a continuation of the requirement that all of the Outstanding Bonds be registered in the registration books kept by the Fiscal Agent in the name of Cede & Co., or any other nominee of-DTC, is not in the best interest of the beneficial owners of the Bonds. (iii) Upon the termination of the services of DTC with respect to the Bonds pursuant to subsection 30(d)(ii)(B) hereof, or upon the discontinuance or termination of the services of DTC with respect to the Certificates pursuant to subsection 30(d)(i) or subsection 30(d)(ii)(A) hereof after which no substitute securities depository willing to undertake the functions of DTC hereunder can be found which, in the opinion of the Agency, is willing and able to undertake such functions upon reasonable and customary terms, the Agency is obligated to deliver the Bonds at the expense of the beneficial owners of the Bonds, as described in 124/015610-0012/3149957.2 a04/02/98 - 3 7 - this Resolution and the Bonds shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names of Owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of this Resolution. (e) Notwithstanding any other provisions of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Representation Letter. Section 31. Effective Date. This Supplement to Resolution shall take effect upon adoption. Section 32. Rights of the Bond Insurer. The Bond Insurer is a third party beneficiary hereunder and the terms, conditions and obligations set forth herein which benefit the Bond Insurer are specifically ' enforceable by the Bond Insurer. At such times that the Bond Insurer is not obligated under the Financial Guaranty Insurance policy, the provisions herein relating to the Bond Insurer shall cease to be in effect. 1241015610-0012/3149957.2 a04/02/98 055 L�UvJu EXECUTED the day of May, 1998. Chairman of the La Quinta Redevelopment Agency ATTEST: Secretary of La Quinta Redevelopment Agency 124/015610-0012/3149957.2 a04/02/98 _ 3 9_ 056 , G;���,5: EXHIBIT A (FORM OF BOND) UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS, SERIES 1998 INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE CUSIP May 1, 1998 PRINCIPAL AMOUNT: REGISTERED OWNER: The LA QUINTA REDEVELOPMENT AGENCY (hereinafter sometimes call the "Agency"), a public body, corporate and politic, duly organized and existing under the laws of the State of California, for value received, hereby promises to pay (but solely out of the funds hereinafter mentioned) to the registered owner of this Bond as shown above or registered assigns (herein sometimes referred to as "registered owner"), subject to the right of prior redemption hereinafter mentioned, the principal sum specified above on the maturity date specified above, and to pay such registered owner on each interest payment date by check mailed by first-class mail to him as his name and address appear on the register kept by the Fiscal Agent at the close of business on the fifteenth (15th) day of the month preceding each interest payment date (the "record date") or upon request in writing made before the record date preceding the interest payment date by the owner of $1,000,000 or more of the Bonds shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated by such Bondowner, interest on such principal sum from the interest payment date next preceding the date hereof (unless (i) it is dated on or prior to the first record date in which event from May 1, 1998, or (ii) the date hereof is on an interest payment date, in which event from that interest payment date, or (iii) it is dated after a record date but before the following interest payment date and if the Agency shall not default in the payment of interest due on such interest payment date, in which event it shall bear interest from such interest payment date) until the principal hereof shall have been paid or provided for in accordance with the Resolution hereinafter referred to, at the interest rate specified above payable semiannually on March 1 and September 1 in each year commencing on September 1, 1998. Both principal and interest and any premium upon the redemption prior to maturity of all or part hereof are payable in lawful money of 124/015610-0012/3149957.2 a04/02/98 A - ] 057 the United States of America, and (except for interest which is payable by check as stated above) are payable upon presentation and surrender thereof at the corporate trust office of U.S. Bank Trust National Association, Fiscal Agent for the Agency, in Los Angeles, California. Interest shall be calculated on the basis of a 360-day year of twelve 30-day months. This Bond, the interest hereon and any premium due upon the redemption of this Bond prior to maturity are not a debt of the City of La Quinta, the State of California or any of its political subdivisions, and neither the City, the State nor any of its political subdivisions (other than the Agency) is liable hereon, nor in any event shall this Bond, said interest or said premium be payable out of any funds or properties other than the funds of the Agency as set forth in the Resolution hereinafter mentioned. This Bond does not constitute an indebtedness within the meaning of any' constitutional or statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing this Bond are liable personally on this Bond by reason of its issuance. This Bond is one of a duly authorized issue of Bonds of the Agency designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998" (herein called the "Bonds"), in an aggregate principal amount of $ , all of like tenor (except for bond numbers, interest rates, amounts and maturity) and all of which have been issued pursuant to and in full conformity with the Constitution and laws of the State of California and particularly the Community Redevelopment Law (Part I of Division 24 of the Health and Safety Code of the State of California) for the purpose of aiding.in the financing of the Redevelopment Project referred to above. The Bonds are authorized by and issued pursuant to Resolution No. RA , adopted by the Agency on April 7, 1998 and a Supplement to Resolution approved thereby, copies of which are on file with the Secretary of the Agency and the Fiscal Agent (said Resolution No. RA and Supplement to Resolution being herein collectively referred to as the "Resolution"). All of the Bonds are equally secured in accordance with the terms of the Resolution, reference to which is hereby made for a specific description of the security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants and agreements made for the benefit of the Bondowners, and for a statement of the rights of the Bondowners. The principal of this Bond and the interest hereon are secured by an irrevocable pledge of, and are payable solely out of, the Pledged Tax Revenues (as such term is defined in said Resolution) and certain other funds, all as more particularly set forth in the Resolution. Said Resolution is adopted under and this Bond is issued under and is to be construed in accordance with the laws of the State of California. By the acceptance of this Bond the registered owner hereof consents to all of the terms, conditions and provisions of said Resolution. In the manner provided in the Resolution, said Resolution and the rights 124/015610-0012/3149957.2 a04/02/98 A — 2 C'j U1�J. 058 and obligations of the Agency and of the Bondowners may (with certain exceptions as stated in said Resolution) be modified or amended with the consent of the Owners of sixty percent (600) in aggregate principal amount of outstanding Bonds, exclusive of issuer -owned Bonds, unless the modification or amendment is for the purpose of curing ambiguities, defects or inconsistent provisions, in which case no Bondowners' consent is required. The Bonds maturing on or before September 1, shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after September 1, 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, , or any Interest Payment Date thereafter, prior to maturity in inverse order of maturity and by lot within a 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, 2007 thru August 31, 2008 1020 September 1, 2008 thru August 31, 2009 1010-o September 1, 2009 and thereafter 1000 The Term Bonds maturing on September 1, 2028 shall be subject to mandatory redemption in part, by lot, on September 1, 2013 and on each September 1 thereafter to maturity from Minimum Sinking Fund Payments on hand in the Bond Payment Fund, at the principal amount of such Bonds to be prepaid, without premium, plus accrued interest. The principal amount of such Bonds to be so prepaid and the dates therefor shall be as set forth in the Resolution. Notice of call and redemption prior to maturity shall be given as provided in the Resolution. In lieu of redemption, the Agency may direct the Fiscal Agent to purchase any Bond subject to redemption at any time 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 the purchase. This Bond is issued in fully registered form and is negotiable upon proper transfer of registration. 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 Fiscal Agent in the City of Los Angeles, California, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, upon surrender and cancellation of this Bond. Upon such transfer a new Bond of any authorized denomination or denominations for the same aggregate principal amount and maturity of the same issue will be issued to the transferee in exchange therefor. 124/015610-0012/3149957.2 a04/02/98 A - 3 Uv" q C�U The Fiscal Agent shall not be required to register the transfer or exchange of any Bond during the period 15 days preceding selection of Bonds for redemption and as to any Bond selected for redemption. The Agency and the Fiscal Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Agency and the Fiscal Agent shall not be affected by any notice to the contrary. This Bond shall not be entitled to any benefit under the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Fiscal Agent. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of California. IN WITNESS WHEREOF, the Redevelopment Agency of the City of La Quinta has caused this Bond to be signed on its behalf by the facsimile signature of its Executive Director and by the manual or facsimile signature of its Secretary, and the seal of said Agency to be reproduced hereon, all as of the 1st day of May, 1998. 124/015610-0012/3149957.2 a04/02/98 A-4 Executive Director of the La Quinta Redevelopment Agency Secretary of the La Quinta Redevelopment Agency nGn (FORM OF CERTIFICATE OF AUTHENTICATION OF BONDS) This is one of the Bonds described in the within mentioned Resolution. U.S. BANK TRUST NATIONAL ASSOCIATION, Fiscal Agent By Authorized Signatory (FORM OF ASSIGNMENT OF BONDS) For value received hereby sells, assigns and transfers unto (Tax Identification No. ) the within -mentioned Bonds and hereby irrevocably constitutes and appoints , attorney, to transfer the same on the books of the Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed NOTE: The signature to this assignment must correspond with the name as written on the face of the within Bond in every particular, without alterations or enlargement or any change whatsoever. 124/015610-0012/3149957.2 a04/02/98 A -j 0 (J'61 ATTACHMENT NO. 3 RESOLUTION NO. RA - RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION REFUNDING BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF NOT TO EXCEED EIGHT MILLION DOLLARS ($8,000,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 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. 2" has been adopted and approved by Ordinance No. 139 of the City of La Quinta, which became effective on June 15, 1989, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan have been duly complied with; and WHEREAS, the Agency has issued its $5,845,000 Tax Allocation Bonds, Issue 1992 (the 111992 Bonds"); and WHEREAS, in order to raise funds for the implementation of the Redevelopment Plan, the Agency deems it necessary at this time to issue tax allocation refunding bonds for such purpose; and WHEREAS, the corporate purposes of the Agency will be accomplished by issuing at this time tax allocation refunding bonds in a principal amount of not to exceed Eight Million Dollars ($8,000,000) pursuant to this Resolution to be designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 (the "Bonds") to, among other things, advance refund the 1992 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 n , 124/016150-0012/3149954.1 a03/31/98 1 i U Z Article 4 of Chapter 5 of Division 7 of Title 1 (commencing at Section 6584) of the California Government Code (the "Act"); and WHEREAS, there has been created pursuant to Chapter 5, Division 7, Title 1, commencing at Section 5500 of the Government Code of the State of California (the "Act"), a joint powers entity designated the "La Quinta Financing Authority" (the "Authority") with authority to acquire the Agency's bonds as provided in Section 6588 of the Government Code of the State of California; and WHEREAS, Miller & Schroeder Financial, Inc. prepared a Preliminary Official Statement setting forth matters relating to the Agency and the issuance of the Bonds, copies of which was presented to this Board of Directors on April 7, 1998 and approved by said Board of Directors; and WHEREAS, this Board of Directors desires to proceed to issue the Bonds; and WHEREAS, this Board of Directors has determined in accordance with Government Code Section 6588 that a negotiated sale of the Bonds to the Authority in accordance with the terms of the Purchase Contract by and between the Agency and the Authority (the "Authority Purchase Contract") will result in a lower overall cost to the Agency than a public sale; and WHEREAS, this Board of Directors also desires to approve the simultaneous sale of the Bonds by the Authority to Miller & Schroeder Financial, Inc. (the "Underwriter") and to authorize the execution by the Agency of a Purchase Contract by and among the Agency, the Authority and the Underwriter (the "Underwriter Purchase Contract"); and WHEREAS, the Agency has determined that "significant public benefits" as defined in Section 6586 of the Act will be derived by the Agency in undertaking the issuance of the Bonds and their sale to the Authority and resale to the Underwriter, in furtherance of the corporate purposes of the Agency; 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 $8,000,000 is hereby authorized. The total amount of Bonds to be sold will be determined by the Finance Director based on the rating of the Bonds and whether municipal bond insurance will be obtained. The Bonds shall mature on the dates, pay interest at the rates and shall be subject to redemption as set forth in the Purchase Contract to be 011) 0 G 6 1 124/016150-0012/3149954.1 a03/30/98 — 2 — �:� executed on behalf of the Agency in accordance with Section 5 hereof. All other provisions of the Bonds shall be governed by the terms and conditions set forth in an Indenture of Trust and Escrow Deposit and Trust Agreement to be prepared by Bond Counsel to the Agency and executed by the Chairman or Executive Director and Secretary of the Agency, which Indenture of Trust and Escrow Deposit and Trust Agreement shall be substantially in the form on file with the Secretary 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 of Trust and Escrow Deposit and Trust Agreement. Capitalized terms used in this Resolution which are not defined herein have the meaning ascribed to them in the form of the Indenture of Trust and Escrow Deposit and Trust Agreement. SECTION 3. The Bonds shall be executed on behalf of the Agency by the manual or facsimile signature of the Chairman or Executive Director and attested with the manual or facsimile signature of the Secretary. SECTION 4. The covenants set forth in the Indenture of Trust 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 of Trust 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 and the Executive Director or Finance Director of the Agency, or his written designee, is hereby authorized to enter into an agreement with the Trustee to provide such services to the Agency. The Purchase Contract and the Preliminary Official Statement, and Continuing Disclosure Agreement relating thereto, presented at this meeting are hereby approved and the Chairman or Executive Director or Finance Director is hereby authorized and directed to execute the Purchase Contract provided, however, the maximum Underwriter's discount, exclusive of Original Issue discount, shall not exceed 1.00-. of the principal amount of the Bonds and the net interest cost shall not exceed 5.50%. The Chairman or Executive Director is authorized to execute a final Official Statement, and Continuing Disclosure Agreement relating thereto, in substantially the form of the Preliminary Official Statement 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 Official Statement to purchasers of the Bonds. The Executive Director or Finance Director is hereby authorized to sign a certificate pursuant to Rule 15c2-12 promulgated under the () G 4 124/016150-0012/3149954.1 a03/30/98 - 3 - P Securities Exchange Act of 1934 relating to the Preliminary Official Statement. SECTION 6. 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 (referred to in the Indenture of Trust 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, Finance Director, or his written designee, is authorized to pay for such Costs of Issuance with Bond proceeds deposited to the Redevelopment Fund established pursuant to the Indenture of Trust without further approval of this Board of Directors. SECTION 7. 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 Chairman 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 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 of Trust. In the event that the Chairman is unavailable to sign any document authorized for execution herein, the Executive Director or Finance Director are authorized to sign such document. Any document authorized herein to be signed by the Secretary may be signed by a duly appointed deputy secretary. ADOPTED AND APPROVED this 7th day of April, 1998. LA QUINTA REDEVELOPMENT AGENCY Chairman ATTEST: Secretary () 0,) Q— 7 124/016150-0012/3149954.1 a03/30/99 — 4 — STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. RE ADOPTION OF RESOLUTION COUNTY OF RIVERSIDE ) I, SAUNDRA L. JUHOLA, 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 7th day of April, 1998, and that the same was passed and adopted by the following vote to wit: AYES: NOES: ABSENT: ABSTAIN: Secretary of the La Quinta Redevelopment Agency (SEAL) 124/016150-0012/3149954.1 a03/30/98 - 5 - STATE OF CALIFORNIA ) SECRETARY'S CERTIFICATE )ss. OF AUTHENTICATION COUNTY OF RIVERSIDE ) 1, SAUNDRA L. JUHOLA, 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. RA 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: May , 1998 Secretary of the La Quinta Redevelopment Agency (SEAL) GJ0t11,0 0S7 124/016150-0012/3149954.1 a03/30/98 - 6 - ATTACHMENT NO. 4 $15,000,000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 BOND PURCHASE CONTRACT April _, 1998 La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 La Quinta Financing Authority 78-495 Calle Tampico La Quinta, California 92253 Ladies and Gentlemen: Miller & Schroeder Financial, Inc. (the "Underwriter"), acting not as fiduciary or agent for you, but on behalf of itself, hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the La Quinta Redevelopment Agency (the "Issuer") and the La Quinta Financing Authority (the "Authority") for the purchase and sale from the Authority simultaneously with the purchase by the Authority from the Issuer, of the Issuer's La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998 (the "Bonds"). This offer is made subject to acceptance thereof by the Authority and the Issuer prior to 9:00 a.m., Pacific time, on the date hereof, and upon such acceptance, as evidenced by the respective signatures of the Executive Director of the Issuer and by an officer of the Authority in the spaces provided below, this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the Issuer, the Authority and the Underwriter. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations and agreements herein set forth, (i) the Authority hereby agrees to purchase from the Issuer, but only to the extent the Underwriter is obligated hereunder to purchase from the Authority, for offering to the Underwriter and the Issuer hereby agrees to sell to the Authority for such purpose, and (ii) the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter all (but not less than all) of the Issuer's $15,000,000* aggregate principal amount of La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998, at a discount of %, original issue discount of $ , plus accrued interest of $ . The Preliminary, subject to change. 068 Bonds will mature and bear interest as set forth in Appendix A and will be subject to redemption according to the terms set forth in the Indenture. The Bonds will be authorized and issued pursuant to an Indenture of Trust dated as of April 1, 1998 (the "Indenture") by and between the Issuer and U.S. Bank Trust National Association, Los Angeles, California (the "Trustee"), and in accordance with the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) (the "Law"), and the Constitution and other applicable laws of the State of California (the "State"). The Bonds are being issued on a parity basis with the Issuer's 1994 Bonds issued pursuant to the 1994 Indenture. The Bonds will be purchased and sold by the Authority pursuant to the provisions of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code (the "JPA Act"). The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering price set forth in the Official Statement; however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the Official Statement prepared in connection with the Bonds. The Underwriter also agrees to notify the Issuer in writing of the "end of the underwriting period" as defined in Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"). Terms defined in the Official Statement are used herein as so defined. 2. Official Statement. The Issuer shall deliver, or cause to be delivered, to the Underwriter two (2) executed copies of the final Official Statement prepared in connection with the Bonds, in such form as shall be approved by the Issuer and the Underwriter and such additional conformed copies thereof as the Underwriter may reasonably request. The Issuer deems the Preliminary Official Statement (the "Preliminary Official Statement") to be "final" as of its date for purposes of Rule 15c2-12. By acceptance of this Purchase Contract, the Issuer hereby authorizes the use of copies of the Official Statement in connection with the public offering and sale of the Bonds, and ratifies and approves the distribution by the Underwriter of the Preliminary Official Statement. 3. Delivery of the Bonds. At approximately 9:00 a.m., Pacific time, on May _, 1998, or at such earlier or later time or date, as shall be agreed upon by the Issuer, the Authority and the Underwriter (such time and date herein referred to as the "Closing Date"), the Issuer shall deliver to the Underwriter, acting on its own behalf and as agent for the Authority at a location to be designated by the Underwriter, in New York, New York, or such other place as designated by the Underwriter, the Bonds in definitive form and authenticated by the Trustee. The Underwriter, acting on its own behalf, shall accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by same day funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Underwriter not later than the second business day before the Closing Date for purposes of inspection and packaging. The Bonds shall be delivered as registered bonds in the name of Cede & Co., Inc. 4. Representations and Agreements of the Issuer. The Issuer represents and agrees that: (a) The Issuer is a public body, corporate and politic, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the Law and the JPA Act, and has, and at the date of the Closing will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriter, acting on its own behalf and 2 �G9 as agent for the Authority, as provided herein, (iii) to adopt the Resolution approving the Indenture, and (iv) to carry out and to consummate the transactions contemplated by this Purchase Contract, the Indenture, the Escrow Deposit and Trust Agreement between the Issuer and the Trustee as Escrow Bank (the "Escrow Agreement"), the Continuing Disclosure Agreement (the "Disclosure Agreement") between the Issuer and the Trustee as Dissemination Agent with respect to the Bonds and the Official Statement; (b) The Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (c) The Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (d) The Issuer to the best of its knowledge has complied, and will at the Closing Date be in compliance, in all respects with the Law, the JPA Act and any other applicable laws of the State; (e) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (f) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Issuer to the best of its knowledge is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Issuer is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; the execution and delivery of the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject; and, except as described in the Official Statement, the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the revenues and amounts pledged pursuant to, or subject to the lien of, the Indenture; (g) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to adoption of the resolution approving the Indenture, execution and delivery by the Issuer of the Escrow Agreement, the Disclosure Agreement, the Indenture and this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (h) The Bonds when issued, authenticated and delivered in accordance with the Indenture will be validly issued, and will be valid and binding, obligations of the Issuer; (i) To the best of its knowledge the terms and provisions of the Indenture comply in all respects with the requirements of the Law and the JPA Act, and the Indenture, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, when properly executed and delivered by the respective parties thereto and hereto, will constitute the valid, legal and binding obligations of the Issuer enforceable in accordance with their respective terms, except as enforcement may by limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); 0) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Issuer, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract or the consummation of the transactions contemplated thereby and hereby, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the power or authority of the Issuer to issue the Bonds, to adopt the resolution approving the Indenture or to execute and deliver the Indenture or this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Issuer or the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract; (k) Any certificate signed by an authorized officer or official of the Issuer and delivered to the Underwriter shall be deemed a representation of the Issuer to the Underwriter as to the statements made therein; (1) Each of the Bonds shall be secured in the manner and to the extent set forth in the Indenture under which each such Bond is to be issued; (m) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Issuer shall not be required to consent to service of process outside of California; (n) The Issuer will apply the proceeds of the Bonds in accordance with the Indenture and all other applicable documents and as described in the Official Statement; (o) The Issuer shall provide or cause to be provided to the Underwriter not more than 200 copies of the Preliminary Official Statement in order to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution to each potential customer, upon request, of a copy of a Preliminary Official Statement and not later than seven (7) business days after the date of this Purchase Contract, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to a purchaser of the Bonds, 200 copies of the final Official Statement to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution of the final Official Statement; 4 071 (p) The Issuer will not invest or otherwise use proceeds of the Bonds in any manner which would cause the Bonds to be considered arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"); and (q) The Issuer will, at the Underwriter's request, take any action reasonably necessary to assure or maintain the exclusion from gross income for purposes of federal income taxes of interest on the Bonds and will not take any action, or permit any action to be taken with respect to which it may exercise control, which would result in the loss of that exclusion. 5. Representations and Afzreements of the Authority. The Authority represents and agrees that: (a) The Authority is a joint powers authority, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the JPA Act, with full legal right, power and authority to purchase and sell the Bonds and to execute, deliver and perform its obligations under this Purchase Contract and to carry out and consummate the transactions contemplated by this Purchase Contract; (b) The Authority to the best of its knowledge has complied, and will at the Closing be in compliance, in all respects with the JPA Act and any other applicable laws of the State; (c) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Authority to the best of its knowledge is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and, the execution and delivery of this Purchase Contract, and compliance with the provisions thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject; and, except as described in the Official Statement, the Authority has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the assets or property of the Authority; (e) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to the execution and delivery by the Authority of this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (0 This Purchase Contract, when properly executed and delivered by the respective parties hereto, will constitute the valid, legal and binding obligations of the Authority enforceable in accordance with its respective terms, except as enforcement may be limited by t;'`? 1 bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); (g) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Authority, threatened, against the Authority, affecting the existence of the Authority or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of this Purchase Contract or the consummation of the transactions contemplated hereby, or contesting the power or authority of the Authority to purchase the Bonds from the Issuer or to sell the Bonds to the Underwriter or to execute and deliver this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Authority or the validity or enforceability of this Purchase Contract; and (h) Any certificate signed by an authorized officer of the Authority and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter as to the statements made therein. 6. Representations of the Underwriter. The Underwriter represents that it has full right, power, and authority to enter into this Purchase Contract. 7. Covenants re Official Statement. The Issuer and the Authority each covenant with the Underwriter that so long as the Underwriter, or dealers, if any, are participating in the distribution of the Bonds which constitute the whole or a part of their unsold participations, if an event known to the Issuer or the Authority occurs affecting the Issuer or the Authority, as applicable, or the transactions contemplated by the Indenture and the issuance of the Bonds, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer or the Authority, as applicable, shall notify the Underwriter and if in the opinion of the Issuer, the Authority, the Underwriter or Bond Counsel, such event requires an amendment or supplement to the Official Statement, the Issuer will amend or supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter, and the Issuer will bear the cost of making and printing such amendment or supplement to the Official Statement and distributing such amendment or supplement to Owners of the Bonds. The obligations of the Issuer and the Authority under this Section 7 shall terminate on the earlier of (a) ninety (90) days from the "end of the underwriting period," as defined in Rule 15c2-12, or (b) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty-five (25) days following the end of the underwriting period. Unless otherwise notified by the Underwriter pursuant to Section 1 hereof not later than thirty (30) days after the Closing Date, the Issuer and the Authority may assume that the end of the underwriting period is the Closing Date. 8. Conditions to Obligations of Underwriter. The Underwriter has entered into this Purchase Contract in reliance upon the representations and agreements of the Issuer and the Authority contained herein and upon the accuracy of the statements to be contained in the documents, opinions, and instruments to be delivered at the Closing. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, accept delivery of, and pay 6 ��� for the Bonds on the Closing Date is subject to the performance by the Issuer and the Authority of their respective obligations hereunder at or prior to the Closing. The following additional conditions precedent relate to the Closing, in connection with the Underwriter's obligation to purchase the Bonds: (a) At the time of the Closing, (i) the representations of the Issuer and the Authority contained herein to the best of their knowledge shall be true, complete and correct; and (ii) the Indenture shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (b) The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing, (i) legislation shall have been enacted (or indenture or resolution passed) by or introduced or pending legislation amended in the Congress of the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling shall have been made or indenture shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or State authority, with respect to State taxation upon interest on obligations of the general character of the Bonds or with respect to the security pledged to pay debt service on the Bonds, that, in the Underwriter's reasonable judgment, materially adversely affects the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (ii) there shall exist any event that, in the Underwriter's reasonable judgment, either (A) makes untrue or incorrect in any material respect any statement or information in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws, the effect of which on the financial markets of the United States will be such as in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices of securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of determination by that Exchange or by order of the Securities and Exchange Commission of the United States or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (v) a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and be in force that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (vi) legislation shall be enacted or be proposed or actively considered for enactment, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission of the United States or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any obligations of the general character of the Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or of the Trust Indenture Act of 1939, as amended and as then in effect, or otherwise are or would be in violation of any provision of the federal securities laws, or (vii) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or materially increase any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters, or (viii) there shall have been any materially adverse change in the affairs of the 7 +� A Issuer or the Authority which in the Underwriter's reasonable judgment materially adversely affects the market for the Bonds, or (ix) general political, economic or market conditions which, in the sole opinion of the Underwriter, shall not be satisfactory to permit the sale of the Bonds; and (c) At or prior to the Closing, the Underwriter and the Issuer shall receive the following: (1) The unqualified approving opinion of Rutan & Tucker, LLP, Costa Mesa, California, bond counsel (the "Bond Counsel"), in form and substance acceptable to the Underwriter, addressed to the Issuer, dated the date of the Closing; (2) A supplemental opinion of Bond Counsel, addressed to the Underwriter and the Issuer in form and substance acceptable to each of them, dated the date of Closing, to the following effect: (i) The Issuer has duly authorized, executed and delivered the Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract. The Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract constitute the legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles when equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (ii) The Official Statement has been duly authorized, executed and delivered by the Issuer; (iii) The statements and information contained or summarized in the Preliminary Official Statement and Official Statement under the headings "THE BONDS," "SECURITY FOR THE BONDS," "THE INDENTURE," "CONCLUDING INFORMATION — Legal Opinion," "Tax Exemption," and "ContH-wing Disclosure," the Cover Page and "INTRODUCTORY STATEMENT," and "APPENDIX A —Definitions" (but not including any statistical or financial information set forth under such headings, as to which no opinion need be expressed) insofar as such statements purport to summarize certain provisions of the Law, the Bonds, the Indenture, the Disclosure Agreement, the Escrow Agreement and the opinion of such Bond Counsel concerning certain federal and state tax matters relating to the Bonds, are accurate in all material respects; (iv) The Bonds are exempt from registration under the Securities Act of 1933, as amended; (v) The Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (vi) The lien of the 1991 Bonds with respect to the Pledged Tax Revenues has been discharged; (3) The opinion of counsel to the Issuer, addressed to the Underwriter and the Issuer, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Issuer is a public body, corporate and politic, duly organized and validly existing under and by virtue of the Constitution and the laws of the State; (ii) The Indenture has been duly approved by a resolution of the Issuer adopted at a regular meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the Issuer was continuously present; (iii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Issuer to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds or the execution and delivery by the Issuer of, or the performance by the Issuer of its obligations under the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; or (d) if determined adversely to the Issuer or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Issuer; (iv) The Issuer has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer for the valid authorization, issuance and delivery by the Issuer of the Bonds; and (v) The statements and information contained in the Preliminary Official Statement and Official Statement under the headings, "PROPERTY TAXATION IN CALIFORNIA," "THE PROJECT AREA," "PLEDGED TAX REVENUES," "CONCLUDING INFORMATION —No Litigation" and "Legality for Investment in California" and "SUPPLEMENTAL INFORMATION —The City of La Quinta" (excluding therefrom any financial statements and statistical data as to which no opinion need be expressed) are accurate in all material respects; (4) The opinion of counsel to the Authority, addressed to the Underwriter and the Authority, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Authority is a joint powers authority, duly created and validly existing under and by virtue of the Constitution and the laws of the State; (ii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Authority to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds, the adoption or effectiveness of the Indenture, or the execution and delivery by the Authority of, or the performance by the Authority of its obligations under, the Purchase Contract; or (d) if determined adversely to the Authority or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Authority; (iii) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Purchase Contract does not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound; 9 ` (iv) The Authority has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer required for the valid purchase and sale by the Authority of the Bonds; and (v) The statements and information contained in the Official Statement under the heading "THE AUTHORITY" are accurate in all material respects; (5) A certificate dated the date of the Closing, signed by the Executive Director or appropriate officer of the Issuer, to the effect that to the best of his knowledge: (i) the representations and covenants of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Issuer has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; (iii) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (iv) the Indenture remains in full force and effect and has not been amended in any respect, except as approved in writing by the Underwriter, since the date of the Indenture; (6) A certificate dated the date of the Closing, signed by an officer of the Authority, to the effect that to the best of his knowledge: (i) the representations and covenants of the Authority contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Authority has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; and (iii) no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement of information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; (7) A certificate of the Trustee dated the date of the Closing, to the effect that: (i) the Trustee is organized and existing as a national banking association under and by the virtue of the laws of the United States of America, having full power and being qualified and duly authorized to perform the duties and obligations of the Trustee, the Escrow Bank and the Dissemination Agent under and pursuant to the Indenture, the Escrow Agreement and the Disclosure Agreement; (ii) the Trustee has agreed to perform the duties and obligations of the Trustee as set forth in the Indenture, the Escrow Agreement and the Disclosure Agreement; (iii) to the best of its knowledge, compliance with the provisions on the Trustee's part contained in the Indenture, the Escrow Agreement and the Disclosure Agreement will not conflict with or constitute a breach of or default under any material law, administrative regulation, judgment, decree, loan agreement, indenture, resolution, bond, note, agreement or other instrument to which the Trustee is a party or is otherwise subject, as a result of which the Trustee's ability to perform its obligations under the Indenture would be impaired, nor will any such compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, agreement or other instrument, except as provided by the Indenture, the Escrow Agreement, the Disclosure Agreement; and (iv) to the best of the knowledge of the Trustee, the Trustee has not been served in any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending nor is any such action, suit, proceeding, inquiry or investigation threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or 10 4 seeking to prohibit, restrain or enjoin the delivery of the Bonds issued under the Indenture or the collection of revenues pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds issued under the Indenture, the Escrow Agreement, the Disclosure Agreement, or the pledge thereof, or in any way contesting the powers of the Trustee or its authority to enter into or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture, the Escrow Agreement, the Disclosure Agreement; (8) Two (2) copies of this Purchase Contract duly executed and delivered by the parties thereto; (9) Two (2) copies of the Official Statement, executed on behalf of the Issuer by the Executive Director of the Issuer; (10) One (1) certified copy of the Indenture, the Escrow Agreement, the Disclosure Agreement and all resolutions of the Issuer, the Authority and the City relating to the issuance of the Bonds; (11) A certificate dated the date of the Closing, signed by the Underwriter, to the effect that statements and information contained in the Preliminary Official Statement and the Official Statement under the heading "CONCLUDING INFORMATION — Underwriting" is accurate in all material respects; (12) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the Authority; (13) An opinion of counsel to the Bond Insurer to the effect that (i) the Municipal Bond Insurance Policy is valid, binding and enforceable against the Bond Insurer in accordance with its terms, except as such enforceability may be limited by laws affecting the enforcement of creditors' rights generally, and (ii) the statements and information contained in the Official Statement under the heading "CONCLUDING INFORMATION —Bond Insurer" and "APPENDIX B—Specimen Municipal Bond Insurance Policy" are accurate in all material respects; (14) Rating letters from Standard & Poor's Ratings Group and Moody's Investors Services, Inc. confirming the ratings on the Bonds; (15) All pertinent documents relating to the Municipal Bond Insurance Policy including a true copy of the Municipal Bond Insurance Policy; (16) A report of a certified public accountant as to (i) the sufficiency of the amount deposited in the Escrow Fund and such other opinions and certificates reasonably required to demonstrate that the lien of the 1991 Bonds with respect to the Pledged Tax Revenues has been discharged and (ii) the "yield" on the Bonds, the "yield" on certain obligations in the Escrow Fund and other related matters considered by Bond Counsel in support of the conclusion that the Bonds are not "arbitrage bonds" within the meaning of the Code. (17) A letter, dated the date of the Closing and addressed to the Underwriter and the Issuer, of Disclosure Counsel, to the effect that based upon its participation in the preparation of the Official Statement and without having undertaken to determine independently the accuracy or completeness of the statements in the Official Statement such Counsel has no reason to believe that, as of the date of Closing, the Official Statement (except for financial, statistical and numerical data included in the Official Statement, as to which no view need be expressed) contains any untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (18) A copy of the report or reports of Rosenow Spevacek Group, Inc. with respect to Pledged Tax Revenues for the Project Area; and (19) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Bond Counsel or Disclosure Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the Authority. The Issuer and the Authority will furnish the Underwriter with such conformed copies of such opinions, certificates, letters and documents as the Underwriter may reasonably request. If the Issuer and the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter, the Authority or the Issuer shall have any further obligations hereunder, except as provided in Section 9 hereof. However, the Underwriter may in its discretion waive one or more of the conditions imposed by this Purchase Contract for the protection of the Underwriter and proceed with the related Closing. 9. Expenses. The Underwriter shall be under no obligation to pay, and the Issuer shall pay from its available funds or from the proceeds of the Bonds, certain expenses set forth in this Section, including but not limited to: (i) all expenses in connection with the preparation, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) all expenses in connection with the printing, issuance and delivery of the Bonds, (iii) the fees and disbursements of Bond Counsel and Disclosure Counsel in connection with the Bonds, (iv) the fees and disbursements of counsel to the Issuer and counsel to the Authority in connection with the Bonds, (v) the disbursements of the Issuer and the Authority in connection with the issuance of the Bonds, (vi) the fees and disbursements of the Trustee, and (vii) rating agencies' fees and the Bond Insurance Premium. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 10. Notice. Any notice or other communication to be given to the Issuer under this Purchase Contract may be given by delivering the same in writing at the address set forth above. Any such notice or communication to be given to the Underwriter may be given by delivering the same in writing to: Miller & Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075-0819 Attention: Ms. Robin M. Thomas r 12 11. Governing Law. This Purchase Contract shall be governed by the laws of the State of California. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof except as provided in Section 11 hereof. Respectfully submitted, MILLER & SCHROEDER FINANCIAL, INC. By Its: Senior Vice President Accepted as of the date first stated above: LA QUINTA REDEVELOPMENT AGENCY By Its: Executive Director LA QUINTA FINANCING AUTHORITY By Its: Executive Director 13 0b0 APPENDIX A MATURITY SCHEDULE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 Maturity Date Interest September 1 of Principal Rate Price Total A-1 1� 47 _t ATTACHMENT NO. 5 ESCROW DEPOSIT AND TRUST AGREEMENT by and between the LA QUINTA REDEVELOPMENT AGENCY and U.S. BANK TRUST NATIONAL ASSOCIATION as Escrow Bank and 1991 Bond Fiscal Agent Dated as of April 1, 1998 N LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS, SERIES 1998 124/015610-0012/3150573.1 a03/30/98 �� c? TABLE OF CONTENTS Paae Section 1. Definitions . . . . . . . . . . . . . . . . . 2 Section 2. Appointment of Escrow Bank . . . . . . . . . . 2 Section 3. Establishment of Escrow Funds . . . . . . . . 2 Section 4. Deposit and Application of Funds . . . . . . . 2 Section 5. Deposit and Application of Other Funds . . . . 3 Section 6. Instructions as to Application of Deposit . . 3 Section 7. Investment of Any Remaining Moneys . . . . . . 3 Section 8. Substitution or Withdrawal of Federal Securities . . . . . . . . . . . . . . . . . . 3 Section 9. Application of Certain Terms of the 1990 Indenture . . . . . . . . . . . . . . . . . . 4 Section 10. Liability of Escrow Bank . . . . . . . . . . . 4 Section 11. Compensation to Escrow Bank . . . . . . . . . 4 Section 12. Resignation and Removal . . . . . . . . . . . 5 Section 13. Limited Liability of Escrow Bank; Reliance on Opinions and Documents . . . . . . . . . . 5 Section 14. Amendment Hereof . . . . . . . . . . . . . . . 5 Section 15. Execution in Counterparts . . . . . . . . . . 6 i� U 1241015610-0012/3150573.1 a03130/98 i ESCROW DEPOSIT AND TRUST AGREEMENT This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into as of the 1st day of April, 1998, by and between the LA QUINTA REDEVELOPMENT AGENCY, a redevelopment agency 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, as Escrow Bank hereunder (the 111998 "Fiscal Agent" and "Escrow Bank") and as successor fiscal agent with respect to the Agency's $5,485,000 La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 1991 (the 111991 Bonds"). WITNESSETH: WHEREAS, the Agency has executed and delivered its 1991 Bonds pursuant to Resolution No. RA 91-12 (the 111991 Resolution"); and WHEREAS, the Agency has adopted Resolution No. RA 98- (the 111998 Resolution"), pursuant to which Bonds (the 111998 Bonds") of the Agency have been issued to provide funds to advance refund the 1991 Bonds; and WHEREAS, the Escrow Bank acts as Successor Fiscal Agent under the 1991 Resolution for the 1991 Bonds (hereinafter referred to in any such capacity as the 111991 Bonds Fiscal Agent"); and WHEREAS, pursuant to the 1991 Resolution, the 1991 Bonds shall no longer be deemed to be outstanding and unpaid if the Agency shall have caused to be deposited with the 1991 Bonds Fiscal Agent, in trust, Qualified Investments (as herein defined) in such amount as, in the opinion of an independent certified public accountant, will, together with the interest to accrue thereon, be fully sufficient to pay and discharge the 1991 Bonds (including all principal, interest and redemption premiums), at or before their respective maturity dates, then the 1991 Resolution and all rights granted thereby, shall thereupon cease, terminate and become void and be discharged and satisfied; and WHEREAS, the firm of McGladrey & Pullen, LLP has prepared and delivered to the Agency and the 1998 Fiscal Agent a verification report verifying the mathematical accuracy of the amount of said deposit, upon which the Agency and 1009 Fiscal Agent have relied; and WHEREAS, the Agency wishes to make such a deposit with the Escrow Bank and to enter into this Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform 124/015610-0012/3150573.1 a03/30/98 - 1 - the duties and obligations to be undertaken pursuant to the Agreement; NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows: Section 1. Definitions. As used herein, the term "Qualified Investments" shall mean United States Treasury notes, bonds, bills or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest. Terms not herein defined shall be as defined in the 1998 Resolution. Section 2. Appointment of Escrow Bank. The Agency hereby appoints the Escrow Bank as escrow holder for all purposes of this Agreement and in accordance with the terms and provisions of this Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. The Escrow Bank hereby agrees to establish and maintain an irrevocable escrow fund to be designated the 111991 Bonds Escrow Fund", ("Refunding Escrow Fund") which shall be held by the Escrow Bank in trust as security for the payment of the principal of, redemption premiums and interest on the 1991 Bonds. If at any time the Escrow Bank shall receive actual knowledge that the moneys and Qualified Investments in the Refunding Escrow Fund will not be sufficient to make any payment required by Section 5 hereof, the Escrow Bank shall notify the Agency of such fact and the Agency shall immediately cure such deficiency. Section 4. Deposit and Application of Funds. Concurrently with delivery of the 1998 Bonds, the Agency shall cause to be transferred by the 1998 Fiscal Agent to the Escrow Bank for deposit in the Refunding Escrow Fund the amount of $ derived by the Agency from the proceeds of the 1998 Bonds, and the amount of $ transferred by the 1991 Bonds Fiscal Agent established under the 1991 Resolution. Any amounts held by the 1991 Bond Fiscal Agent, or which at some future time may be held by teh 1991 Bond Fiscal Agent subsequent to this transfer, shall be transferred, to the 1998 Fiscal Agent for deposit in the Project Fund. The amount deposited by the Agency with the Escrow Bank in the Refunding Escrow Fund pursuant to this Section 4 shall be applied by the Escrow Bank on the date hereof in the amount of $ , to acquire the Qualified Investments described in Exhibit "A" attached hereto and by this reference incorporated herein (the "Original Federal Securities") and the remaining amount of $ shall be held uninvested. 124/015610-001213150573.1 a03130/98 - 2 - Section 5. Instructions as to Application of Deposit. The Original Federal Securities deposited pursuant to Section 4 hereof shall be deemed to be and shall constitute the deposit permitted to be made by the Agency pursuant to the 1991 Resolution. The Agency hereby instructs the Escrow Bank to apply the payments received from the Original Federal Securities, together with the cash deposited to: (a) pay all principal of and the interest on the 1991 Bonds coming due and payable on and through , and (b) to redeem on at a price of 102.00' plus accrued interest thereon to the date of redemption of all of the then outstanding 1991 Bonds maturing on and thereafter; all pursuant to and in accordance with the provisions of the 1991 Resolution on the dates and in the amounts set forth in' Exhibit "B" attached hereto and by this reference incorporated herein. Section 6. Investment of Any Remaining Moneys. The proceeds received from any of the Original Federal Securities shall be held uninvested until applied as required pursuant to Section 6. The Escrow Bank is hereby authorized and empowered to deposit uninvested monies held hereunder from time to time in demand deposit accounts, without payment for interest thereon as provided hereunder, established at commercial banks that are corporate affiliates of the Escrow Bank. Section 7. Substitution or Withdrawal of Federal Securities. The Agency may at any time direct the Escrow Bank to substitute non -callable Qualified Investments for any or all of the Original Federal Securities then deposited in the Escrow Fund, or to withdraw from the Escrow Fund and transfer to the Authority any Federal Securities or portions thereof, provided that any such direction and substitution or withdrawal shall be accompanied with a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions, which individual or firm carries -errors and omissions insurance, and is not the underwriter, bond counsel or financial advisor in relation to the 1991 Bonds or the 1998 Bonds that the Federal Securities then to be so deposited in the Escrow Fund, or in the case of any such withdrawal, in either case together with interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 5 hereof and, further, to be accompanied with an opinion of nationally recognized bond counsel that: (a) the substitution or withdrawal is permitted under this Agreement, and (b) the substitution will not affect the exemption from federal income taxes of the interest on the 1991 Bonds or the 1998 Bonds. In the event that, following any such substitution or withdrawal of Federal Securities pursuant to this Section 7, there is an amount of moneys or Federal Securities in excess of an amount sufficient to make the payments required by Section 5 hereof, such excess shall be paid to the Agency. I 124/015610-0012/3150573.1 a03/30/98 - 3 - Section S. Application of Certain Terms of the 1991 Resolution. All of the terms of the 1991 Resolution relating to the making of payments or principal and interest on the 1991 Bonds are incorporated in this Agreement as if set forth in full herein. The Escrow Bank is hereby directed to provide timely notice of redemption of all 1991 Bonds. Said notice shall be mailed by the 1991 Bonds Fiscal Agent in accordance with the provisions of the 1991 Resolution. The notices so mailed shall contain the information specified in the 1991 Resolution. This paragraph shall constitute notice by the Agency to the 1991 Bonds Fiscal Agent of the redemption of the 1991 Bonds on Section 9. Liability of Escrow Bank. The Escrow Bank undertakes to perform such duties and only such duties specifically set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Escrow Bank. The Agency further agrees to indemnify the Escrow Bank from any and all claims, losses or expenses arising from the performance of its duties hereunder except that the Escrow Bank shall not be indemnified for any claim, loss or expense arising from its negligence or willful misconduct. No provision of this Agreement shall require the Escrow Bank to risk or advance its own funds and the Escrow Bank's sole responsibility is to administer the amounts deposited hereunder in accordance with the terms of this Agreement. Such indemnity shall survive termination of this Agreement or resignation or removal of the Escrow Bank. Section 10. Compensation to Escrow Bank. The Agency shall pay the Escrow Bank full compensation for its duties under this Agreement, including out-of-pocket costs such as publication costs, redemption expenses, legal fees and other costs and expenses relating hereto and, in addition, fees, costs and expenses relating to the purchase of any Federal Securities after the date hereof, pursuant to separate agreement between the Agency and the Escrow Bank. Under no circumstances shall amounts deposited in the Escrow Funds be deemed to be available for said purposes. Section 11. Resignation and Removal. The provisions of the 1991 Resolution as it relates to the 1991 Bonds relating to the resignation and removal of the 1991 Fiscal Agent are also incorporated in this Agreement as if set forth in full herein and shall be the procedure to be followed with respect to any resignation or removal of the Escrow Bank hereunder. Section 12. Limited Liability of Escrow Bank; Reliance on Opinions and Documents. The Escrow Bank shall not be responsible for any of the recitals or representations contained herein. The Escrow Bank shall not be liable for the accuracy of any calculations provided as to the sufficiency of the moneys or the securities deposited with it to pay the principal or interest represented by the 1991 Bonds. The Escrow Bank shall not be liable for any act or omission of the Agency under this Agreement. t.) 124/015610-0012/3150573.1 a03/30/98 — 4 — 1 �' The Escrow Bank may conclusively rely, as to the truth and accuracy of the statements and the correctness of the opinions and calculations provided, and shall be protected and indemnified, in acting, or refraining from acting, upon any written notice, instruction, request, certificate, document or opinion furnished to the Escrow Bank and reasonably believed by the Escrow Bank to have been signed or presented by the proper party, and it need not investigate any fact or matter stated in such notice, instruction, request, certificate, document or opinion. Whenever in the administration of this Agreement the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be deemed to be conclusively proved and established by a certificate of an authorized representative of the Agency, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be full warrant to the Escrow Bank for any action taken or suffered by it under the provisions of this Agreement upon the faith thereof. Section 13. Amendment Hereof. This Agreement may not be amended by the parties hereto unless there shall first have been filed with the Agency and the Escrow Bank a written opinion of nationally -recognized bond counsel stating that such amendment will not adversely affect the exemption from federal income taxation or the exclusion from gross income under federal tax law, as applicable, of interest on the 1991 Bonds or the 1998 Bonds. Section 14. Execution in Counterparts. This Escrow Deposit and Trust Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. 1241015610-0012/3150573.1 a03/3O/98 - 5 - IN WITNESS WHEREOF, the Agency and the Escrow Bank have each caused this Agreement to be executed by their duly authorized officers all as of the date first above written. LA QUINTA REDEVELOPMENT AGENCY Its: Executive Director U.S. BANK TRUST NATIONAL ASSOCIATION, as Escrow Bank Its: Authorized Signatory op 124/015610-0012/3150573.1 a03/30/98 - 6 - EXHIBIT A Date Principal Coupon Interest SLGS P+I TOTAL 1.) 0 1 Z 124/015610-0012/3150573.1 a03130/98 - 7 - EXHIBIT B Principal Redemption Date Principal Interest Redeemed Premium Total 124/015610-0012/3150573.1 a03/30/98 - 8 - ATTACHMENT NO. 6 PRELIMINARY OFFICIAL STATEMENT DATED APRIL , 1998 Standard & Poor's: "AAA" Moody's Investors Service: "Aaa" NEW ISSUE - FULL BOOK -ENTRY ( Insured —See "Ratings" herein) In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, and assuming continuing compliance with covenants of the La Quinta Redevelopment Agency (the "Agency') intended to preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, such interest is also exempt from present State of California personal income taxes. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to he sold to the public) and the stated redemption price at maturity is original issue discount. See "TAX EXEMPTION" herein fora discussion of the effect of certain provisions of the Code on Owners of the Bonds. $1590009000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 Dated: April 15, 1998 Due: September 1, as shown below The Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers ("Beneficial Owners") in the denomination of $5,000, or any integral multiple thereof, under the book -entry system maintained by DTC. Beneficial Owners will not be entitled to receive delivery of bonds representing their ownership interest in the Bonds. The principal of, premium, if any, and semiannual interest (due March 1 and September 1 of each year, commencing September 1, 1998) on the Bonds will be payable by U.S. Bank Trust National Association, Los Angeles, California, as Trustee, to DTC for subsequent disbursement to DTC participants, so long as DTC or its nominee remains the registered owner of the Bonds (see "THE BONDS —Book -Entry System" herein). The Bonds are subject to mandatory redemption from minimum sinking account payments, in part by lot, on September 1, 2013 and on each September 1 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The Bonds are subject to optional redemption prior to maturity, in whole or in part, on September 1, 2007 and on each Interest Payment Date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. plus a premium, as described herein. MATURITY SCHEDULE* $15,000,000 — % Term Bonds due September 1, 2028 Yield — % (Plus accrued interest) The Bonds are being issued for the purpose of refinancing the Agency's $8,700,000 Tax Allocation Bonds, Series 1991 of v,hich $7,460,000 are currently outstanding (the "1991 Bonds"). The Bonds are payable from and secured by the Pledged Tax Revenues as defined herein to be derived from the Project Area on a parity with the Agency's previously issued $26,665,000 La Quinta Redevelopment Project, Tax Allocation Refunding Bonds, Series 1994 (Project Area No. 1) of which $24,125,000 are currently outstanding (the "1994 Bonds"). Taxes levied on the property within the Project Area on that portion of the taxable valuation over and above the taxable valuation of the base year property roll (Fiscal Year 1983-84) to the extent they constitute Pledged Tax Revenues shall be deposited in the Special Fund and administered by the Trustee for the payment of the principal of and interest on the Bonds and the 1994 Bonds. In addition, payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by simultaneously with the delivery of the Bonds. The Bonds are being issued for sale to the La Quinta Financing Authority (the "Authority"). The Authority will resell the Bonds to the Underwriter. This cover page of the Official Statement contains information for quick reference only. It is not a complete summary of the Bonds. Investors should read the entire Official Statement to obtain information essential to making an informed investment decision. Attention is hereby directed to certain Risk Factors more fully described herein. The Bonds are 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 or any of its political subdivisions is liable therefor. The principal of and interest on the Bonds are payable solely from the Pledged Tax Revenues allocated to the Agency from the Project Area as defined herein and in the Indenture. The Bonds are offered when, as and if issued, subject to the approval of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel. Certain legal matters will be passed on for the Agency by Stradling, Yocca, Carlson & Routh, A Professional Corporation, Newport Beach, California, Disclosure Counsel. It is anticipated that the Bonds will be available for delivery to DTC in New York, New York on or about May 13, 1998. 9 Miller & Schroeder Financial, Inc. The Date of this Official Statement is May _, 1998. *Preliminary, subject to change. LA QUINTA REDEVELOPMENT AGENCY LA QUINTA, CALIFORNIA LA QUINTA REDEVELOPMENT AGENCY Ronald Perkins, Chairman Stanley Sniff, Vice Chairman John J. Pena, Member Terry Henderson, Member Don Adolph, Member CITY OF LA QUINTA John J. Pena, Mayor Terry Henderson, Mayor Pro Tem Ronald Perkins, Council Member Stanley Sniff, Council Member Don Adolph, Council Member STAFF Thomas P. Genovese, Executive Director/City Manager Jerold Herman, Community Development Director John Falconer, Finance Director Dawn Honeywell, Esquire, City/Authority Attorney Bond Counsel Rutan & Tucker LLP Costa Mesa, California Disclosure Counsel Stradling Yocca Carlson & Rauth A Professional Corporation Newport Beach, California Trustee/Escrow Bank U.S. Bank Trust National Association Los Angeles, California Fiscal Consultant Rosenow Spevacek Group, Inc. Santa Ana, California U� TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ...................................... I SOURCE AND USES OF FUNDS.....................................2 THE REFUNDING PROGRAM........................................3 THEBONDS................................................................3 Authority for Issuance............................................3 Description of the Bonds........................................3 Book -Entry System................................................4 Redemption and Purchase of Bonds.......................6 SECURITY FOR THE BONDS.........................................6 THE RESOLUTION.......................................................7 Allocation of Bond Proceeds.................................7 Pledged Tax Revenues -Application .......................8 Investment of Moneys in Funds and Accounts .... 10 Issuance of Parity Bonds......................................10 Covenants of the Agency ..................................... I I Events of Default and Remedies ..........................15 Amendments........................................................17 THE AUTHORITY.......................................................18 THE LA QUINTA REDEVELOPMENT AGENCY ............ 18 Members and Officers..........................................18 AgencyPowers....................................................19 Fiscal Consultant..................................................19 Tax Increment Financing.....................................19 Housing Set-Aside...............................................19 Factors Affecting Redevelopment Agencies Generally...........................................20 RISKFACTORS..........................................................21 Limitations on Remedies......................................21 Reduction of Pledged Tax Revenues ...................21 Limited Obligations.............................................22 Development Risks..............................................22 Levy and Collection.............................................22 Reduction in Inflationary Rate .............................22 Bankruptcy and Foreclosure................................23 Property Held By FDIC.......................................23 Educational Revenue Augmentation Fund ........... 24 Other Changes in Redevelopment Law................24 PROPERTY TAXATION IN CALIFORNIA ......................24 Page Property Tax Collection Procedures ....................24 Supplemental Assessments..................................25 Property Tax Administrative Costs......................25 Unitary Property ...................................................25 Article XIIIA of the State Constitution ................26 Appropriations Limitation -Article XIIIB.............26 Personal Property Tax Special Subventions ......... 26 Future Initiatives..................................................27 Appeals of Assessed Values.................................27 THE PROJECT AREA..................................................27 Background..........................................................27 Location and Surrounding Area ...........................28 Controls, Land Use and Building Restrictions ..... 28 Agreements with Various Taxing Agencies ......... 29 Largest Local Secured Taxpayers ........................29 PLEDGED TAX REVENUES........................................30 Historical Tax Revenues......................................30 Projected Pledged Tax Revenues and Debt Service Coverage..............................................30 Annual Debt Service............................................31 CONCLUDING INFORMATION....................................3 I Underwriting........................................................31 LegalOpinion......................................................32 Tax Exemption.....................................................32 NoLitigation........................................................33 Legality for Investment in California...................33 Verification of Mathematical Computations ........ 33 Continuing Disclosure..........................................34 Bond Insurer.........................................................35 Ratings.................................................................35 Miscellaneous....................................................... 35 SUPPLEMENTAL INFORMATION - THE CITY OF LA QUINTA......................................36 APPENDIX A - Definitions ..................................... A-1 APPENDIX B - Redevelopment Fiscal Consultant's Tax Increment Projections ................................. B- I APPENDIX C - Specimen Municipal Bond Insurance Policy.................................................C-1 For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, the Preliminary Official Statement and the Official Statement, as of their respective dates, are deemed final by the Agency, provided, however, that pricing, underwriting and other information contained in the Preliminary Official Statement is subject to completion or amendment in accordance with Rule 15c2-12. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the Agency. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Agency or the Project Area since the date hereof. The information set forth herein has been obtained from the Agency and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation of the Agency. 0n (This Page Left Intentionally Blank) OFFICIAL STATEMENT $ 15,000,000- LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 INTRODUCTORY STATEMENT This Official Statement, including the cover page, is provided to furnish information in connection with the sale by the La Quinta Redevelopment Agency (the "Agency") of $15,000,000* aggregate principal amount of the Agency's La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998 (the "Bonds"). The Bonds are being issued pursuant to the Constitution and laws of the State of California (the "State"), including the Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000 of the Health and Safety Code of the State) (the "Law") and Resolution No. _ (the "Resolution") approved by the Agency on April _, 1998 (the "Resolution") and in conformity with the Indenture of Trust dated as of May 1, 1994 (the "1994 Indenture") by and between the Agency and the Trustee for the 1994 Bonds. The Bonds will be sold to the La Quinta Financing Authority (the "Authority") pursuant to the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 (commending with Section 6484) of the California Government Code (the "JPA Law"). The Bonds purchased by the Authority will be resold immediately to Miller & Schroeder Financial, Inc. (the "Underwriter"). The City of La Quinta (the "City") is located 127 miles east of Los Angeles and 20 miles south of Palm Springs in Riverside County (the "County"). The City was originally a general law city incorporated on May 1, 1982, became a charter city in November, 1996 and provides for a Council -Manager form of government made up of five Council Members. The Mayor is directly elected by the citizens. The City encompasses an area of approximately 31.18 square miles and the 1997 population is estimated to be 18,950. The Agency was established on July 5, 1983 by the City Council of the City with the adoption of Ordinance No. 34, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all the rights, powers, duties and privileges of the Agency. The Redevelopment Plan for the La Quinta Redevelopment Project Area No. 1 (the "Redevelopment Plan") was approved by Ordinance No. 43 adopted by the City Council on December 29, 1983. The La Quinta Redevelopment Project Area No. 1 (the "Project Area") encompasses approximately 17.5 square miles (11,200 acres) of commercial, public and residential properties. The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the "base year" valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency Preliminary, subject to change. may be pledged to the payment of agency obligations. Generally, tax increment revenues from one project area may not be used to repay indebtedness incurred for another project area. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS." The Bonds are being issued to refinance the Agency's $8,700,000 La Quinta Redevelopment Project Area No. 1, Tax Allocation Bonds, Series 1991 of which $7,460,000 are currently Outstanding (the "1991 Bonds"). The Bonds are payable from and are secured by a pledge of the Pledged Tax Revenues (described herein under the section entitled "SECURITY FOR THE BONDS") on a parity with the Agency's previously issued $26,665,000 La Quinta Redevelopment Project, Tax Allocation Refunding Bonds, Series 1994 (Project Area No. 1) of which $24,125,000 are currently Outstanding (the "1994 Bonds"). The Agency has received a commitment from (" it or the "Bond Insurer") to issue, effective as of the date the Bonds are delivered, a policy of insurance guaranteeing the payment, when due, of the principal of and interest on the Bonds. The insurance extends for the life of the Bonds and cannot be canceled by the Bond Insurer. Brief descriptions of the Bonds, the Indenture, the Agency and the City are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Resolution, the Indenture, the Law, the Constitution and the laws of the State as well as the proceedings of the Agency and the City are qualified in their entirety by reference to such documents. References herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture and the information with respect thereto included herein, copies of which are all available for inspection at the offices of the Agency. During the period of the offering of the Bonds, copies of the forms of all documents are available at the offices of Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Solana Beach, California 92075 and thereafter from the City Clerk's office, City of La Quinta, 78-495 Calle Tampico, La Quinta, California 92253. SOURCES AND USES OF FUNDS The estimated sources and uses of funds, excluding accrued interest on the Bonds, is summarized as follows: Sources Principal Amount of Bonds ................................................... 1991 Bonds Special Fund and Accounts ............................... Less: Original Issue Discount ............................................... Total Sources................................................................... Uses Underwriter's Discount.......................................................... Reserve Account (1).............................................................. EscrowFund (2).................................................................... Costs of Issuance Fund (3).................................................... Redevelopment Fund............................................................. TotalUses........................................................................ $15,000,000.00- (1) An amount equal to the Maximum Annual Debt Service on the Bonds (the "Reserve Requirement"). (2) The Escrow Fund will be funded in an amount necessary to provide for the purchase of Federal Securities and/or cash necessary for the payment of the principal, interest and redemption premium, if any, on the 1991 Bonds through and including September 1, 1999. (3) Includes the Municipal Bond Insurance Policy premium. Preliminary, subject to change. THE REFUNDING PROGRAM Pursuant to a Resolution of Issuance approved on October 9, 1991 (the "Prior Resolution"), the Agency issued the 1991 Bonds. Under the Prior Resolution, the Agency pledged the Pledged Tax Revenues of the Project Area to the repayment of the 1991 Bonds. On the Delivery Date, a portion of the proceeds of the Bonds, together with certain other funds, will be deposited in trust with U.S. Bank Trust National Association, Los Angeles, California, as escrow holder (the "Escrow Bank") pursuant to the Indenture and an escrow deposit and trust agreement dated April 1, 1998, between the Agency and the Escrow Bank (the "Escrow Agreement"). The deposit will be in an amount sufficient to pay principal and interest on the 1991 Bonds through and including September 1, 1999 and to pay the redemption price with respect to the remaining 1991 Bonds on September 1, 1999. The lien of the 1991 Bonds created by the Prior Resolution, including, without limitation, the pledge of the Pledged Tax Revenues pursuant to the Prior Resolution, will be discharged, terminated and of no further force and effect upon the deposit with the Escrow Bank of the amounts required pursuant to the Escrow Agreement. THE BONDS Authority for Issuance The La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998, in an aggregate principal amount of $15,000,000' (the "Bonds"), were authorized for issuance pursuant to the Resolution and in conformity with the 1994 Indenture. Pursuant to the Resolution and the 1994 Indenture, if at any time the Agency determines it needs to do so, the Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed. Prior to the delivery of the Bonds, the Agency will certify its compliance with the requirements of the 1994 Indenture. Description of the Bonds The Bonds will be issued as one fully registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all Bonds. See "Book -Entry System" below. The initially issued Bonds will be dated April 15, 1998 and mature on September 1 in the years and in the amounts shown on the cover page of this Official Statement. The Bonds will bear interest at the rates shown on the cover page of this Official Statement, payable semiannually on March 1 and September 1 in each year, commencing on September 1, 1998, by check mailed by first class mail on each Interest Payment Date to the registered owners thereof or upon the request of the Owners of $1,000,000 or more in principal amount of Bonds, by wire transfer to an account which shall be designated by such Owner to the Trustee on or before the Regular Record Date preceding the Interest Payment Date. Preliminary, subject to change. U%. Book -Entry System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully - registered bonds registered in the name of Cede & Co. (DTC's partnership nominee). One fully - registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities bonds. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchasers of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owners") is in turn recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of' their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identit\ of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to an issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal, sinking fund and interest payments with respect to the Bonds will be made to DTC. DTC's practice is to credit Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the date payable. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, the Authority or the Agency, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Agency or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. The Agency cannot and does not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the registered owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Agency is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to Beneficial Owners with respect to the Bonds or an error or delay relating thereto. The foregoing description of the procedures and record -keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in such Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Discontinuance of Book -Entry. DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Trustee and discharging its responsibilities with respect thereto under applicable law or the Agency may terminate participation in the system o t' book -entry transfers through DTC or any other securities depository at any time. In the event that the book -entry system is discontinued, the Agency will execute, and the Trustee will authenticate and make available for delivery, replacement Bonds in the form of registered bonds. In addition, the following provisions would apply: the principal of and redemption premium, if any, on the Bonds will be payable at the principal corporate trust office of the Trustee, and interest on the Bonds will be payable by check mailed on each Interest Payment Date to the Owners thereof as shown on the registration books of the Trustee as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable Interest Payment Date, or by wire transfer to Owners of $1,000,000 or more in aggregate principal amount of Bonds, upon request, as provided in the Indenture. The Bonds will be transferable and exchangeable on the terms and conditions provided in the Indenture. Transfer Fees. For every transfer and exchange of Bonds, Owners may be charged a sum sufficient to cover any tax, governmental charge or transfer fees that may be imposed in relation thereto, which charge may include transfer fees imposed by the Trustee, DTC or the DTC Participant in connection with such transfers or exchanges. I t► Redemption and Purchase of Bonds Optional Redemption. The Bonds are subject to redemption at the option of the Agency, in whole or in part, in inverse order of maturity and by lot within a maturity, from the proceeds of refunding bonds or other available funds, on September 1, 2007 or on any Interest Payment Date thereafter prior to maturity. Bonds called for redemption will be redeemed at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date: Redemption Date Redemption Price September 1, 2007 and March 1, 2008 102% September 1, 2008 and March 1, 2009 101 September 1, 2009 and thereafter 100 Sinking Account Redemption. The Term Bonds maturing on September 1, 2028, will be subject to mandatory redemption, on each September 1, commencing on September 1, 2013, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking account payments made by the Agency in the years and amounts as follows: Year Amount* Year Amount* 2013 $620,000 2021 $ 935,000 2014 655,000 2022 985,000 2015 690,000 2023 1,035,000 2016 725,000 2024 1,090,000 2017 760,000 2025 1,150,000 2018 800,000 2026 1,210,000 2019 845,000 2027 1,270,000 2020 890,000 2028 (maturity) 1,340,000 Notice of Redemption. As provided in the Resolution, notice of redemption will be given by first class mail, postage prepaid not less than thirty (30) nor more than sixty (60) days prior to the redemption date, to the registered owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice or any defect in the notice so mailed will affect the sufficiency of the proceedings for redemption. In lieu of redemption or otherwise, the Agency is authorized to purchase Bonds on the open market at any time and the Trustee will, upon written direction of the Agency, settle these purchases from moneys deposited by the Agency with the Trustee at a price not to exceed the principal amount of Bonds plus the applicable premium and accrued interest, if any, to the date of purchase plus brokerage fees, if any. SECURITY FOR THE BONDS As provided in the Redevelopment Plan, pursuant to Article 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable property in the Redevelopment Project Area each year by or for the benefit of the State of California, any city, county, city and county, district, or other public corporation (herein sometimes collectively called "taxing agencies") after the effective date of the ordinance approving the Redevelopment Plan (being Ordinance No. 43 of the City of La Quinta, which became effective on December 29, 1983) will be divided as follows: * Preliminary, subject to change. (a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the Redevelopment Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency last equalized prior to December 29, 1983 (being the effective date of Ordinance No. 43. referred to above) shall be allocated to and when collected shall be paid into the funds of the respective taxing agencies as taxes by or for the taxing agencies on all other property are paid; and (b) That portion of said levied taxes each year in excess of such amount shall be allocated to and when collected by the Agency shall be paid into the following funds: (i) into the low and moderate income housing fund held by the Agency and the amount required by the Law to be deposited into such fund, (ii) the amount required to be paid by the Agency pursuant to pass -through agreements of the Agency, and (iii) the balance into the Debt Service Fund of the Agency. The Bonds are payable from and are specifically secured by an irrevocable pledge of the Pledged Tax Revenues derived from the Project Area, and interest earnings on funds held on deposit in trust for the Bondowners by the Trustee on a parity basis with the 1994 Bonds. The Agency has no power to levy and collect taxes, and various factors beyond its control could affect the amount of Pledged Tax Revenues available in any year to pay the principal of and interest on the Bonds and the 1994 Bonds. (See "RISK FACTORS" herein.) The Bonds are 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 or any of its political subdivisions is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. THE RESOL UTION The following is a summary of certain provisions of the Resolution and does not purport to be complete. Reference is hereby made to the Resolution and to Appendix A for the definition of certain terms used herein. Copies of the Resolution are available from the Agency upon request. All capitalized terms used herein and not otherwise defined shall have the same meaning as used in the Resolution. Allocation of Bond Proceeds Upon the delivery of the Bonds to the purchasers thereof, the Trustee, on behalf of the Agency, will receive the proceeds from the sale of the Bonds, and will deposit such proceeds and transfers as follows: (1) Deposit in the Interest Account an amount equal to $ representing accrued interest on the Bonds; (2) Deposit in the Reserve Account an amount equal to the Reserve Requirement, initially $ ; (3) Deposit in the Escrow Fund an amount equal to $ to be held and expended pursuant to the Escrow Agreement; and (4) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be deposited in the Redevelopment Fund. Except as provided in the Resolution, any moneys set aside in the Redevelopment Fund kkill remain there until from time to time expended for the purpose of financing a portion of the costs of the Project Area and other related costs, and also including in such costs: (1) The payment, in any year during which the Agency owns the property in the Redevelopment Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt, an amount of money in lieu of taxes as authorized by Section 33401 of the Law; (2) The cost of any lawful purposes in connection with implementation of the Redevelopment Project, including, without limitation, those purposes authorized by Section 33445 of the Law; and (3) The Costs of Issuance and any necessary expenses in connection with the issuance and sale of the Bonds and fees of the Fiscal Agent and paying agents. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for which said Bonds were issued, said sum shall be transferred to the Special Fund. Disposition of Redevelopment Fund moneys may be further specified by supplemental resolution of the Agency. Pledged Tax Revenues - Application All Pledged Tax Revenues, and other moneys identified in the Resolution, deposited in the Special Fund in accordance with the Resolution shall be allocated as provided in the Resolution. The interest on the Bonds and the 1994 Bonds until maturity shall be paid by the Fiscal Agent from the Bond Interest Fund. After all interest then due on the Bonds and the 1994 Bonds on the next Interest Payment Date has been paid or provided for, moneys in the Special Fund shall be applied to the payment of the principal, including Minimum Sinking Fund Payments, of the Bonds and the 1994 Bonds. Without limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Pledged Tax Revenues accumulated in the Special Fund will be used in the following priority; provided, however, that to the extent that deposits have been made in any of the Funds referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Bond Interest Fund. Deposits shall be made into the Bond Interest Fund for the Bonds on or before the last day in February and on or before August 31 of each Bond Year so that the amount in said Fund on said date shall be equal to the aggregate amount of interest becoming due and payable on the then Outstanding Bonds and the 1994 Bonds on the next succeeding Interest Payment Date. Moneys in the Bond Interest Fund shall be used for the payment of interest on the Bonds and the 994 Bonds as the same becomes due. (b) Bond Payment Fund. After the deposits have been made pursuant to subparagraph (a) above, deposits shall next be made into the Bond Payment Fund so that the balance in said Fund on or before August 31 of each Bond Year is equal to the principal coming due on the then Outstanding Bonds and the 1994 Bonds, including Minimum Sinking Fund Payments, on the next succeeding September 1. (c) Debt Service Reserve Fund. After deposits have been made pursuant to subparagraphs (a) and (b) above, deposits shall be made to the Debt Service Reserve Fund established for the Bonds under the Resolution from available Pledged Tax Revenues, :if necessary, pro rata in order to cause the amounts on deposit therein to equal the Reserve Requirement. Money in the Debt Service Reserve Fund shall be transferred to the Bond V-J ,f Interest Fund and/or the Bond Payment Fund to pay interest on and principal of the Bonds and the 1994 Bonds, including Minimum Sinking Fund Payments, as they become due to the extent Pledged Tax Revenues are insufficient therefor. Any portion of the Debt Service Reserve Fund which is in excess of the Reserve Requirement shall be transferred to the Bond Interest Fund, semiannually on or before the last day in February and on or before August 31. The Agency may elect to maintain the Reserve Requirement by obtaining (1) a letter of credit, (ii) a surety bond, or (iii) a policy of insurance in an amount which will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement is needed for transfer to the Bond Interest Fund and/or the Bond Payment Fund as stated in the Resolution, provided that the letter of credit bank is rated in the top two rating categories by Moody's Investors Service, Inc. and Standard & Poor's Ratings Group and that upon the expiration of the letter of credit, if not extended, the Agency shall obtain a substitute letter of credit, a surety bond or a policy of insurance as provided in the Resolution, or shall deposit cash in the Debt Service Reserve Fund, and further provided that the issuer of any surety bond or insurance policy shall be rated in the top three rating categories by Moody's Investors Service, Inc. and Standard and Poor's Ratings Group. The Agency shall acquire such alternate security and shall direct the Fiscal Agent to pay from money in the Debt Service Reserve Fund the letter of credit fees, the cost of a surety bond, or the insurance policy premium, as the case may be. Any money in the Debt Service Reserve Fund after the Agency acquires the alternate security and pays the appropriate costs as provided in the Resolution shall be transferred to the Agency for deposit into the Redevelopment Fund. (d) Holding Fund. The Fiscal Agent shall transfer from the Special Fund and deposit into the Holding Fund all moneys then remaining in the Special Fund after the above mentioned transfers have taken place; provided however, that if 120% of Annual Debt Service was placed in the Special Fund in such Bond Year, and the Agency is not in default under the Resolution, and the Debt Service Reserve Fund established for the Bonds under the Resolution are equal to the respective Reserve Requirements, then all money then remaining in the Holding Fund may be returned to the Agency for any lawful purpose. Except as set forth in the preceding sentence, all money in the Holding Fund shall be used and withdrawn by the Fiscal Agent for the purpose of replenishing the Bond Interest Funds established for the Bonds under the Resolution, rp o rata, the Bond Payment Funds established for the Bonds under the Resolution, pro rats, and the Debt Service Reserve Funds established for the Bonds under the Resolution, pro rats, in such order, in the event of any deficiency at any time in such Funds, or for the purpose of paying the interest on or redemption premiums, if any, on the Bonds or the 1994 Bonds, in the event that no other money of the Agency is lawfully available therefor, or for the retirement of all the Bonds or the 1994 Bonds then Outstanding. or, so long as the Agency is not in default under the Resolution, and, at the request of the Agency, for the purchase or redemption of the Bonds or the 1994 Bonds. (e) Rebate Fund. With respect to each issue of Bonds and Parity Bonds, unless the small issuer exception of Section 148(f)(4)(C) of the Code is applicable to the particular bond issue, as provided in the applicable Tax Certificate, the Fiscal Agent shall establish a special fund with respect to the particular bond issue designated as the "Rebate Fund" (the "Rebate Fund"), and within the particular Rebate Fund shall establish a Rebate Account (the "Rebate Account") and comply with the requirements of the Code. All money at any time deposited in each Rebate Fund shall be held by the Agency in trust, for payment to the United States Treasury. All amounts on deposit in each Rebate Fund shall be governed by the Resolution, and the applicable Tax Certificate, unless the Agency obtains an opinion of Bond Counsel that the exclusion from gross income of interest on the applicable Bonds or Parity Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied. OIX Investment of Moneys in Funds and Accounts All moneys held by the Fiscal Agent in the Special Fund, the Holding Fund, the Redemption Fund or the Rebate Fund shall be (i) invested at the written direction of the Agency in Federal Securities, or (ii) held in trust accounts, time or demand deposits, including certificates of deposit, in any commercial bank or trust company authorized to accept deposits of public funds (including the banking department of the Fiscal Agent) which are fully insured by the Federal Deposit Insurance Corporation or are secured at all times by Federal Securities, or secured at all times by bonds or other obligations which are authorized by law as security for public deposits, of a market value at least equal to the amount required by law, or (iii) invested in a taxable government money market portfolio restricted to obligations with maturities of one year or less, issued or guaranteed as to payment of principal and interest by the full faith and credit of the United States or repurchase agreements collateralized by such obligations. If the Fiscal Agent receives no written directions from the Agency as to the investment of moneys held in any Fund or Account, the Fiscal Agent shall, pending receipt of instructions, invest such moneys in a taxable government money market portfolio as described in (iii) above. (a) Moneys in the Redevelopment Fund may be invested in any investment authorized by law for the investment of Agency money, which will by their terms mature not later than the date the Agency estimates the moneys represented by the particular investment will be needed for withdrawal from such Fund. (b) Moneys in the Bond Interest Fund and the Bond Payment Fund shall be invested only in obligations which will by their terms mature on such dates as to ensure that before each interest payment date and principal payment date there will be in such Funds, from matured obligations and other moneys already in such Funds, cash equal to the interest and principal payable on the respective payment dates. (c) Except as provided in the Resolution, moneys in the Debt Service Reserve Fund shall be invested in obligations which will by their terms mature prior to the date which is the final maturity date of the Bonds. Except as otherwise provided in the Resolution, obligations purchased as an investment of moneys in any of said Funds shall be deemed at all times to be a part of such respective Fund and the interest accruing thereon and any gain realized from such investment shall be credited to such Fund and any loss resulting from any such authorized investment shall be charged to such Fund without liability to the Agency or the members and officers thereof or to the Fiscal Agent. The Agency or the Fiscal Agent, as the case may be, shall sell at the best price obtainable or present for redemption any obligation so purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such Fund as required by the Resolution. The investment constituting a part of such Fund shall be valued at the then estimated or appraised market value of such investment or face amount thereof, whichever is lower; provided, however, that investments in the Bond Interest Fund and the Bond Payment Fund shall be valued at the face amount thereof. Issuance of Parity Bonds The Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed for the Redevelopment Project purposes. The issuance and sale of any Parity Bonds shall be subject to the following conditions precedent: 10 , (a) The Agency will be in compliance with all covenants in the Resolution and the 1994 Indenture; (b) The Parity Bonds will be on such terms and conditions as may be set forth in a supplemental resolution, which will provide for (i) bonds substantially in accordance with the Resolution, (ii) the deposit of a portion of the Parity Bond proceeds into the Debt Service Reserve Fund, or the acquisition of an alternate security as provided in the Resolution, in an amount sufficient, together with the balance of the Debt Service Reserve Fund, to equal the Maximum Annual Debt Service on all Bonds expected to be Outstanding including the Outstanding Bonds and Parity Bonds, and (iii) the disposition of surplus Pledged Tax Revenues in substantially the same manner as set forth in the Resolution; (c) Receipt of a certificate of an Independent Financial Consultant showing: (i) For the current and each future Bond Year the Annual Debt Service for each such Bond Year with respect to all Bonds and Parity Bonds reasonably expected to be Outstanding following the issuance of such Parity Bonds; (ii) For the then current Bond Year, (A) the Pledged Tax Revenues including revenue attributable to utility property to be received by the Agency based upon the most recent assessed valuation of taxable property in the Redevelopment Project Area received in writing from the appropriate officer of the County of Riverside (or any value attributable to assessment of utility property received from the appropriate party) plus (B) additional Pledged Tax Revenues to be received by the Agency due to expected increases in assessed valuation of taxable property in the Redevelopment Project Area resulting from construction which has been completed but the assessed value of which is not yet included on the assessment roll (or any supplemental roll) as estimated and certified by an Independent Redevelopment Consultant; and (iii) That for the then current Bond Year, the Pledged Tax Revenues computed on the basis of Pledged Tax Revenues referred to in items (ii)(A) and (B) above are at least equal to 1.20 times the Maximum Annual Debt Service referred to in item (i) above. (d) Such Parity Bonds shall mature on September 1 and interest thereon shall be payable on March 1 and September 1, subject to such dates being changed by a supplemental resolution of the Agency. Covenants of the Agency As long as the Bonds are Outstanding and unpaid, the Agency will (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Resolution or in any Bond issued under the Resolution, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that said covenants do not require the Agency to expend any funds other than the Tax Revenues: Covenant 1. Plan. The Agency covenants and agrees that it will diligently carry out and continue to completion, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan and in a sound and economical manner. The Redevelopment Plan may be amended as provided in the Law but no amendment will be made I � 6, unless it will not substantially impair the security of the Bonds and the 1994 Bonds or the rights of the Bondowners, as shown by an Opinion of Counsel, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 2. Use of Proceeds; Management and Operation of Properties. The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in the Resolution and any supplemental resolution and that it will manage and operate all properties owned by it comprising any part of the Redevelopment Project in a sound and businesslike manner. Covenant 3. No Priority. The Agency covenants and agrees that it will not issue any obligations payable, either as to principal or interest, from the Pledged Tax Revenues which have, or purport to have, any lien upon the Pledged Tax Revenues prior or superior to the lien of the Bonds authorized in the Resolution or the 1994 Bonds. Except as permitted in the Resolution, it will not issue any obligations, payable as to principal or interest, from the Pledged Tax Revenues, which have, or purport to have, any lien upon the Pledged Tax Revenues on a parity with the Bonds authorized in the Resolution or the 1994 Bonds. Notwithstanding the foregoing, nothing in the Resolution will prevent the Agency (i) from issuing and selling pursuant to law, refunding obligations payable from and having any lawful lien upon the Pledged Tax Revenues, if such refunding obligations are issued for the purpose of, and are sufficient for the purpose of, refunding all of the Outstanding Bonds or Parity Bonds, (ii) from issuing and selling obligations which have, or purport to have, any lien upon the Pledged Tax Revenues which is junior to the Bonds or the 1994 Bonds, or (iii) from issuing and selling bonds or other obligations which are payable in whole or in part from sources other than the Pledged Tax Revenues. As used in the Resolution, obligations shall include, without limitation, bonds, notes, interim certificates, debentures or other obligations. Covenant 4. Punctual Payment. The Agency covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds and the 1994 Bonds issued under the Resolution on the date, at the place and in the manner provided in the Bonds and the 1994 Bonds. Covenant 5. Payment of Taxes and Other Charges. The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of said properties, revenues or income or which might impair the security of the Bonds and the 1994 Bonds or the use of Pledged Tax Revenues or other legally available funds to pay the principal of and interest thereon, all to the end that the priority and security of the Bonds and the 1994 Bonds will be preserved; provided, however, that nothing in this Covenant will require the Agency to make any such payment so long as the Agency in good faith shall contest the validity thereof. Covenant 6. Books and Accounts, Financial Statements. The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries will be made of all transactions relating to the Redevelopment Project and the Pledged Tax Revenues and other funds relating to said Project and will prepare within one hundred eighty (180) days after the close of each of its Fiscal Years a complete financial statement or statements for such year in reasonable detail covering such Redevelopment Project and the Pledged Tax Revenues and other funds, accompanied by an opinion of an Independent Certified Public Accountant appointed by the Agency, and will furnish a copy of such statement or statements to the Fiscal Agent, the original purchasers of the Bonds (in the case of a syndicate, the manager thereof) and any rating agency which maintains a rating on the Bonds and the 1994 Bonds and, upon written request, to any Bondowner. Each annual budget that may be prepared by the Agency shall be sent to the Bond Insurer following adoption. 12 07 Covenant 7. Eminent Domain. The Agency covenants and agrees that if all or any part of the Redevelopment Project Area should be taken from it without its consent, by eminent domain proceedings or other proceedings authorized by law, for any public or other use under which the property will be tax exempt, the Agency will use its best efforts to have the base assessment roll reduced by the amount of the assessment of said property as shown on said base assessment roll. Covenant 8. Disposition of Property. The Agency covenants and agrees that it will not dispose of more than ten percent (10%) of the land area in the Redevelopment Project Area (except property shown in the Redevelopment Plan in effect on the date the Resolution is adopted as planned for public use, or property to be used for public streets, public offstreet parking, sewage facilities, parks, easements or right-of-way for public utilities, or other similar uses) to public bodies or other persons or entities whose property is tax exempt, unless such disposition will not result in the security of the Bonds and the 1994 Bonds or the rights of Bondowners being substantially impaired, as shown by an Opinion of Counsel, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 9. Statement of Indebtedness. The Agency covenants and agrees to file annually with the County Auditor a statement of indebtedness as provided in Section 33675 of the Law. Covenant 10. Protection of Security and Rights of Bondowners. The Agency covenants and agrees to preserve and protect the security of the Bonds and the 1994 Bonds and the rights of the Bondowners and to defend their rights under all claims and demands of all persons. Without limiting the generality of the foregoing, the Agency covenants and agrees to contest by court action or otherwise (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) that the Pledged Tax Revenues pledged under the Resolution cannot be paid to the Agency for the debt service on the Bonds and the 1994 Bonds, or (b) any other action affecting the validity of the Bonds or diluting the security therefor, or (c) any assertion by the United States of America or any department or agency thereof or any other person that the interest received by the Bondowners is taxable under federal income tax laws by reason of any action of the Agency. The Agency covenants and agrees to take no action which, in the Opinion of Counsel would result in the Pledged Tax Revenues being withheld unless the withholding thereof is being contested in good faith. Covenant 11. Federal Tax Covenants. Notwithstanding any other provision of the Resolution, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Bonds and Parity Bonds 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 has not taken and shall not take or permit any other person to take, any action within its control, which would cause the Bonds to constitute "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1966, as amended; (b) Arbitrage. The Agency will make no use of the proceeds of the Bonds or Parity Bonds 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 or Parity 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 Parity Bonds or take or omit to take any action that would cause the Bonds or Parity Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code; 13 (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 the Parity Bonds 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 or the Parity 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 and the Parity Bonds for federal income tax purposes; and (f) Miscellaneous. The Agency will take no action inconsistent with its expectations stated in that certain Tax Certificate executed on the Closing Date by the Agency in connection with each issuance of Bonds and Parity Bonds and will comply with the covenants and requirements stated therein and incorporated by the Resolution. Covenant 12. Taxation of Leased Prov=. Whenever any property in the Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than a public agency) or whenever the Agency leases real property in the Project Area to any person or persons (other than a public agency) for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property, as required by Section 33673 of the Law, and the lease or contract shall provide (a) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest, and (b) that if for any reason the taxes levied on the property in any year during the term of the lease or contract are less than the taxes which would have been levied if the entire property had been assessed and taxed in the same manner as privately owned property, the lessee shal! pay such difference to the Agency within thirty (30) days after the taxes for the year become payable to the taxing agencies and in no event later than the delinquency date of such taxes established by law. All such payments shall he treated as Pledged Tax Revenues, and when received by the Agency shall be used as provided in the Indenture. As an alternative to payment to the Agency pursuant to (b) above, the new owner or owers of property becoming exempt from taxation may elect to make payment to the Agency in a single sum equal to the amount estimated by an Independent Financial Consultant to be receivable by the Agency from taxes on said property from the date of said payment to the maturity date of the Bonds, less a reasonable discount value. All such single sum payments in lieu of taxes shall he treated as Pledged Tax Revenues and shall be transferred to the Trustee for deposit in the Special Fund. Covenant 13. Compliance with Law. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Pledged Tax Revenues including, without limitation, the timely filing of any necessary statements of indebtedness with appropriate officials of the County, and shall forward information copies of each such filing to the Trustee. The Agenc,, further covenants and agrees that, except for the Pass -Through Agreements, it has not entered into any agreements with other tax entities as of the date of the Resolution for the pass -through of and Pledged Tax Revenues to such entities and will not hereafter enter into any such agreement which requires payment to such taxing entities prior to deposit of Pledged Tax Revenues in the Special Fund. Covenant 14. Limitation on Indebtedness. The Agency covenants and agrees that is has not and will not incur any loans, obligations or indebtedness repayable from Pledged Tax Revenues such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and after the date of adoption of the Redevelopment Plan, when added to any predecessor debt, the total aggregate debt service on the Bonds, the 1994 Bonds and any Parity Bonds, will exceed the maximum amount of Pledged Tax Revenues to be divided and allocated to the Agency pursuant to the Redevelopment Plan. 14 1 A 0 0 Covenant 15. Further Assurances. The Agency covenants and agrees to adopt, make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Resolution, and for the better assuring and confirming unto the Owners of the Bonds, the 1994 Bonds and any Parity Bonds of the rights and benefits provided therein. Events of Default and Remedies Each of the following shall constitute an Event of Default: (1) Default in the due and punctual payment of any installment of interest on any Bond or any Parity Bond when and as such interest installment shall become due and payable and such default shall have continued for a period of thirty (30) days; (2) Default in the due and punctual payment of the principal of any Bond or any Parity Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the of the covenants, agreements or conditions contained in the Resolution or in the Bonds or any Parity Bond, and such default shall have continued for a period of thirty (30) days following written notice to the Agency; or (4) The Agency shall file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property. In each and every Event of Default described in (1) or (2) above the Fiscal Agent will, with the consent of the Bond Insurer, and in each and every case of default described in (3) or (4) above, the Fiscal Agent may, with the consent of the Bond Insurer and shall, with the consent of the Bond Insurer, if so requested by the owners of not less than a majority in aggregate principal amount of the Bonds and the Parity Bonds at the time Outstanding (such request to be in writing to the Fiscal Agent and the Agency), the Fiscal Agent shall at the direction of the Bond Insurer, declare the principal of all of the Bonds and the Parity Bonds then Outstanding and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in the Resolution or in the Bonds and the Parity Bonds to the contrary notwithstanding. Such declaration may be rescinded by the Owners of not less than a majority of the Bonds and the Parity Bonds then Outstanding provided the Agency cures such default or defaults including the deposit with the Fiscal Agent of a sum sufficient to pay all principal on the Bonds and the Parity Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds and the Parity Bonds then Outstanding, with interest at the rate of twelve percent (12%) per annum on such overdue installments of principal and, to the extent such payment of interest on interest is lawful at that time, on such overdue installments of interest, so that the Agency is currently in compliance with all payment, deposit and transfer provisions of the Resolution, and an amount sufficient to pay any expenses incurred by the Fiscal Agent in connection with such default. 15 �� Immediately upon becoming aware of the occurrence of an Event of Default, the Fiscal Agent shall give notice of such Event of Default to the Agency by telephone confirmed in writing. Such notice shall also state whether the principal of the Bonds shall have been declared to be or have immediately become due and payable. The Fiscal Agent shall also give such notice to the owners of the Bonds by first class mail, postage prepaid. Application of Funds upon Acceleration. All of the Pledged Tax Revenues and all sums in the Funds provided for in the Resolution upon the date of the declaration of acceleration as provided in the Resolution, and all sums thereafter received by the Fiscal Agent under the Resolution, shall be applied by the Fiscal Agent in the order following upon presentation and surrender of the Bonds and any Parity Bonds: First, to the payment of (i) the costs and expenses of the Fiscal Agent and (ii) of the Bondowners and the owners of any Parity Bonds in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys and counsel; Second, in case the principal of the Bonds and any Parity Bonds shall not have become due and shall not then be due and payable, to the payment of the interest in default in the order of the maturity of the installments of such interest, with interest on the overdue installments at the rate of twelve percent (12%) per annum on the Bonds and any Parity Bonds (to the extent that such interest on overdue installments shall have been collected), such payments to be made ratably to the persons entitled thereto without discrimination or preference; and Third, in case the principal of the Bonds and any Parity Bonds shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon the Bonds and any Parity Bonds for principal and interest, with interest on the overdue principal and installments of interest at the rate of twelve percent (12%) per annum on the Bonds and any Parity Bonds (to the extent that such interest on overdue installments of 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 and any Parity 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. Certain Remedies of Bondowners. Any Bondowner, with the consent of the Bond Insurer, and the owners of any Parity Bonds, at the direction of the Bond Insurer, shall have the right, for the equal benefit and protection of all Bondowners similarly situated: (1) by mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in the Resolution, in the Bonds and any Parity Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; (2) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation the rights of any of the Bondowners or owners of Parity Bonds; or (3) upon the happening of any Event of Default (as defined in the Resolution), by suit, action or proceeding to any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were the trustees of an express trust. Non -Waiver. Nothing in the Resolution, or in the Bonds or any Parity Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Bonds, the 1994 Bonds and any Parity Bonds to the respective Owners of the Bonds, 16 f i the 1994 Bonds and any Parity Bonds at the respective dates of maturity, as provided in the Resolution, or affect or impair the right, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds, the 1994 Bonds or any Parity Bonds. No remedy conferred by the Resolution upon any Bondowner or owner of Parity Bonds is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law of the State of California. No waiver of any default or breach of any duty or contract by any Bondowner or owner of Parity Bonds shall affect any subsequent default or breach of any duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any Bondowner or owner of Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the Bondowners or owners of Parity Bonds may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or owners of Parity Bonds, then, and in every such case, the Agency and the Bondowners or owners of Parity Bonds shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Actions by Fiscal Agent as Attorney -in -Fact. Any suit, action or proceeding which any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any right or remedy under the Resolution may be brought by the Fiscal Agent for the equal benefit and protection of all Owners of Bonds or Parity Bonds similarly situated and the Fiscal Agent is hereby appointed (and the successive respective registered owners of the Bonds or Parity Bonds issued under the Resolution, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in -fact of the respective registered Owners of the Bonds or Parity Bonds for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective registered Owners of the Bonds or Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Fiscal Agent as such attorney -in -fact. General. After the issuance and delivery of the Bonds or Parity Bonds, the Resolution, and any supplemental resolutions thereto, shall be irrepealable, but shall be subject to modification or amendment to the extent and in the manner provided in the Resolution, but to no greater extent and in no other manner. Amendments The Resolution, and the rights and obligations of the Agency and of the Owners of the Bonds issued thereunder, may be modified or amended at any time by supplemental resolution adopted b� the Agency: (a) for any purpose at any time prior to the sale of the Bonds; (b) without the consent of Bondowners, if such modification or amendment is for the purpose of adding covenants and agreements to further secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make notifications not affecting any outstanding series of Bonds only with the consent of the Fiscal Agent, for the purpose of curing any ambiguities, defects or inconsistent provisions in the Resolution or to insert such provisions clarifying matters or questions arising under the Resolution as are necessary and desirable to accomplish the same, provided that such modifications or amendments do not adversely affect the rights of the Owners of any Outstanding Bonds; (c) for any purpose with the consent of the Bondowners owning sixty percent (60%) in aggregate principal amount of the Outstanding Bonds. exclusive of Bonds, if any, owned by the Agency or the City, and obtained as set forth in the Resolution; provided, however, that no such modification or amendment will, without the express 17 consent of the registered Owner of the Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable thereon, extend its maturity or the times for paying interest thereon, change the monetary medium in which principal and interest are payable, or create a mortgage, pledge or lien upon the revenues superior to or, other than as provided in the Resolution, on a parity with the pledge and lien created for the Bonds and any Parity Bonds or reduce the percentage of consent required for amendment or modification, and provided further that no amendment shall be made to (c) above without the prior written consent of the Bond Insurer, which consent will not be unreasonably withheld. Any act done pursuant to a modification or amendment so consented to shall be binding upon the Owners of all of the Bonds and shall not be deemed an infringement of any of the provisions of the Resolution or of the Law, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of the Resolution, and after such consent relating to such specified matters has been given, no Bondowner or shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the Agency or any officer thereof from taking any action pursuant thereto. THE A UTHORITY The La Quinta Financing Authority (the "Authority") was created by a Joint Exercise of Powers Agreement, dated November 3, 1988, by and between the City and the Agency. Such agreement was entered into pursuant to the provisions of Articles 1, 2 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code. The Authority was created for the purpose of assisting the financing or refinancing of certain public capital facilities within the City. Under the JPA Law, the Authority has the power to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale. The Authority is governed by a five -member Board of Directors (the "Board") which consists of the members of the City Council of the City of La Quinta. The Mayor acts as the Chairman of the Authority, the City Manager as its Executive Director, the City Clerk as its Secretary and the Finance Director of the City as the Treasurer of the Authority. LA QUINTA REDEVELOPMENT AGENCY The Agency was established on July 5, 1983 by the City Council of the City with the adoption of Ordinance No. 34, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all the rights, powers, duties and privileges of the Agency. Members and Officers The members and officers of the Agency and the expiration dates of their terms are as follows: Name and Office Ronald Perkins, Chairman Stanley Sniff, Vice Chairman John J. Pena, Member Terry Henderson, Member Don Adolph, Member 18 Expiration of Term November, 2001 November, 1999 November, 1999 November, 2001 November, 1999 Agency Powers All powers of the Agency are vested in its governing body. Pursuant to the Law, the Agency is a separate public body which may exercise broad governmental functions and authority to accomplish its purposes, including, but not limited to, the right of eminent domain, the right to issue bonds or notes and expend their proceeds and the right to acquire, sell, rehabilitate, develop, administer or lease property. The Agency may demolish buildings, clear land and cause to be constructed certain improvements including streets, sidewalks, and public utilities. The Agency may not construct or develop buildings, with the exception of public facilities and housing, but must sell or lease cleared property to redevelopers for construction and development in accordance with the Redevelopment Plan. Fiscal Consultant The Agency retained Rosenow Spevacek Group, Inc. (RSG), to serve as both redevelopment implementation and fiscal consultant. RSG provides redevelopment, planning, and financial services to local governments throughout California. Frank Spevacek, Principal of RSG, is assigned to the Agency to provide administrative support. In this capacity he has been assisting the Agency in formulating and implementing many of its redevelopment programs. Tax Increment Financing The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency may be pledged to the payment of agency obligations. Generally, tax increment revenues from one project area may not be used to repay indebtedness incurred for another project area. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS." The Law authorizes redevelopment agencies to make payments to school districts and other taxing agencies to alleviate any financial burden or detriments to such taxing agencies caused by a redevelopment project. The Agency has entered into a number of agreements for this purpose. See "THE PROJECT AREA —Agreements with Various Taxing Agencies." Housing Set -Aside In accordance with Section 33334.2 of the Law, not less than twenty percent (20%) of all taxes which are allocated to the Agency shall be used by the Agency for purposes of improving, increasing and preserving the City's supply of housing for persons and families of low or moderate income. This requirement is applicable unless the Agency makes the finding that: No need for such housing exists in the City; 2. Less than twenty percent (20%) is sufficient to meet such housing needs of the City; or 19 114 3. A substantial effort is presently being carried out with other funds (either local, State or federal) and that such efforts are equivalent in impact to twenty percent (20%) of all taxes which are allocated to the Agency. Both the "no need" finding (item 1 above) and the "less than 20% finding" (item 2 above) must apply to very low income as well as low and moderate income households, must be consistent with the housing element of the community's general plan and the annual report of its planning agency, and do not become effective until after certain filings have been made with the State Department of Housing and Community Development ("HCD"). Neither finding can be made unless the housing element is in proper form and up to date and has been filed with HCD. The "equivalent effort" finding (item 3 above) must apply to the community's share of regional housing needs as well as its own existing and projected needs. After June 30, 1993, no agency may make this finding unless it can show evidence that it is required in order to meet contractual obligations to bondholders or other private entities incurred prior to May 1, 1991 and made in reliance on the ability to make the finding. Funds available from the twenty percent (20%) requirement may be used outside the Project Area on a finding by the Agency and the City Council that such use will be of benefit to the Project Area. See "THE PROJECT AREA —Limitations and Requirements of the Redevelopment Plan." The Law also permits agencies with more than one project area to set aside less than twenty percent (20%) of the taxes allocated to the agency from one project area if the difference is made up from another project area in the same year and if the agency and the legislative body of the community find that such use of funds will benefit such other project area. Factors Affecting Redevelopment Agencies Generally Other features of California law which bear on redevelopment agencies include general provisions which require public agencies to let contracts for construction only after competitive bidding. The Law provides that construction in excess of $5,000 undertaken by the Agency shall be done only after competitive bidding. California statutes also provide for offenses punishable as felonies which involve direct or indirect interest of a public official in a contract made by such official in his official capacity. In addition, the Law prohibits any Agency or City official or employee who, in the course of his duties, is required to participate in the formulation or approval of plans or policies, from acquiring any interest in property in the Project Area. Under a State initiative enacted in 1974, public officials are required to make extensive disclosures regarding their financial interests by filing such disclosures as public records. As of the date of this Official Statement, the members of the City Council and the Agency, and other City and Agency officials have made the required filings. California also has strict laws regarding public meetings (known as the Ralph M. Brown Act) which generally makes all Agency and City meetings open to the public. Filing of Statement of Indebtedness. Section 33675 of the Law provides for the filing not later than the first day of October of each year with the County Auditor of a statement of indebtedness certified by the chief fiscal officer of the Agency for each redevelopment plan which provides for the allocation of taxes. The statement of indebtedness is required to contain the date on which the bonds were delivered, the principal amount, term, purposes and interest rate of the bonds and the outstanding balance and amount due on the bonds. Similar information must be given for each loan, advance or indebtedness that the Agency has incurred or entered into which is payable from tax increment. 20 i .. Section 33675 also provides that payments of tax increment revenues from the County Auditor to the Agency may not exceed the amounts shown on the Agency's statement of indebtedness. The Section further provides that the statement of indebtedness is prima facie evidence of the indebtedness of the Agency, but that the County Auditor may dispute the amount of indebtedness shown on the statement in certain cases and the disputed amount may be withheld from allocation and payment to the Agency. Provision is made for time limits under which the dispute can be made by the County Auditor as well as provisions for a determination by the Superior Court in a declaratory relief action of the proper disposition of the matter. The issue in any such action shall involve only the amount of the indebtedness and not the validity of any contract or debt instrument, or any expenditures pursuant thereto. Payments to a trustee under a bond indenture or indenture or payments to a public agency in connection with payments by such public agency pursuant to a bond issue shall not be disputed in any action under Section 33675. RISK FACTORS Limitations on Remedies The enforceability of the rights and remedies of the Owners of the Bonds and the Trustee and the obligations incurred by the Agency may be subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise of the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitations or modification of their rights. Reduction of Pledged Tax Revenues Pledged Tax Revenues allocated to the Agency (which constitute the ultimate source of payments of principal and interest on the Bonds, as discussed herein) are determined by the amount of incremental valuation of taxable property in the Project Area, the current rate or rates at which property in the Project Area is taxed and the percentage of taxes collected in the Project Area. Although the Agency believes the projections of Pledged Tax Revenues contained herein are reasonable, several types of events which are beyond the control of the Agency could occur and cause a reduction in available Pledged Tax Revenues. First, a reduction of taxable values of property or tax rates in the Project Area or a reduction of the rate of increase in taxable values of property in the Project Area caused by economic or other factors beyond the Agency's control (such as a relocation out of the Project Area by one or more major property owners, successful appeals by property owners for a reduction in a property's assessed value, a reduction of the general inflationary rate, a reduction in transfers of property, construction activity or other events that permit reassessment of property at lower values, or the destruction of property caused by natural or other disasters, including earthquake) could occur, thereby causing a reduction in Pledged Tax Revenues. The risk increases in proportion to the percent of total assessed value attributable to any single assessee in the Project Area. Second, the State electorate or Legislature could adopt limitations with the effect of reducing Pledged Tax Revenues payable to the Agency. Third, a reduction in the tax rate applicable to property in the Project Area by reason of discontinuation of certain override tax levies in excess of the 1% basic levy, will reduce Pledged Tax Revenues available to pay debt service. Such override can be expected to decline over time until it reaches the 1% basic levy and may be discontinued at any time, which may cause a reduction in Pledged Tax Revenues. Fourth, delinquencies in the payment of property taxes by the owners of land in the Project Area could have an adverse effect on the Agency's ability to make timely debt service payments. The Agency believes the historical delinquency experience in the Project Area has not been greater than the City- wide historical experience. Any reduction in Pledged Tax Revenues, whether for any of the foregoing reasons or any other reason, could have an adverse effect on the Agency's ability to pay the principal of and interest on the Bonds or to issue refunding bonds to refund the Bonds at or prior to maturity. Limited Obligations The Bonds are special obligations of the Agency secured by and solely payable from Pledged Tax Revenues and amounts on deposit in the indicated Funds and Accounts established under the Indenture. The Bonds are not a debt, liability or obligation of the City, the State or any political subdivisions thereof (except the Agency) and neither the City, the State nor any political subdivisions thereof (except the Agency) are liable for payment on the Bonds. The Bonds do not constitute an indebtedness within the meaning of any State constitutional or statutory debt limitation. Development Risks The Agency's collection of Pledged Tax Revenues is directly affected by the economic strength of the Project Area. Projected additional development within the Project Area will be subject to all the risks generally associated with real estate development projects, including unexpected delays, disruptions and changes. Real estate development operations may be adversely affected by changes in general economic conditions, fluctuations in real estate market and interest rates, unexpected increases in development costs and other similar factors. Further, real estate development operations within the Project Area could be adversely affected by future governmental regulations or policies, including governmental regulations or policies to restrict or control development. If projected development in the Project Area is delayed or halted, the economy of the Project Area could be affected, causing a reduction in Pledged Tax Revenues available to pay debt service on the Bonds. Levy and Collection The Agency has no power to levy and collect property taxes. Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the Pledged Tax Revenues, and accordingly, could have an adverse effect on the ability of the Agenc} to pay debt service on the Bonds. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the Agency's ability to make timely debt service payments. Reduction in Inflationary Rate As described in greater detail below, Article XIIIA of the California Constitution provides that the full cash value base of real property used in determining taxable value may be adjusted from year to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction in the consumer price index or comparable local data. Such measure is computed on a calendar year basis. In January 1996, the State Board of Equalization reported an actual annual inflation rate of 1.11%. This marked only the third time since the adoption of Article XIIIA in 1978 that the actual inflation rate has been less than 2%. Should the assessed value of secured property not increase at the estimated annual rates incorporated herein, the Agency's receipt of future Pledged Tax Revenues may be adversely affected. 22 i Bankruptcy and Foreclosure On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be "administrative expenses" of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclosure on the property and retain all the proceeds of the sale except the amount of the pre -petition taxes. According to the court's ruling, as administrative expenses, post -petition taxes would be paid if the debtor had sufficient assets to do so after all authorized payment to secured creditors. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would at that time become subject to current ad valorem taxes. Glasply is controlling precedent on bankruptcy courts in the State of California. The lien date for property taxes in California is the March 1 preceding the fiscal year for which the taxes are levied. Therefore, under Glasply, a bankruptcy petition filing by an owner of property in the Project Area would prevent the lien for property taxes levied in subsequent fiscal years to attach so long as the property was part of the estate in bankruptcy. The rule of Glasply has limited application, however, if the bankruptcy case of the property owner was filed on or after October 22, 1994. In any bankruptcy case filed on or after October 22, 1994, a statutory amendment authorizes the creation or perfection of a statutory lien for an ad valorem property tax (which generally would not include assessments) imposed by a political subdivision of a state, if the tax comes due after the filing of the petition. Property Held By FDIC The ability of the Agency to receive Tax Revenues derived from delinquent taxes may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation ("FDIC") has or obtains an interest. In the event that any financial institution making any loan which is secured by real property within the Project Area is taken over by the FDIC and prior thereto or thereafter, the tax installments go into default, the ability of the County to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid taxes may be limited. The FDIC's policy statement regarding the payment of State and local real property taxes (the "Policy Statement") provides that the FDIC intends to pay valid real property taxes, interest and penalties, in accordance with State law, on property which at the time of the tax levy is owned by institutions in an FDIC receivership, unless abandonment of the FDIC interest is determined to be appropriate. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, it will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will it pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes. The Agency is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel within the Project Area in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. 23j' Educational Revenue Augmentation Fund The State budget for Fiscal Year 1993-94 transferred $2.6 billion to school districts from cities, counties and other local governments, including redevelopment agencies. As part of the budget's transfer of moneys to school districts, the State Legislature required redevelopment agencies to transfer approximately $65 million to the Educational Revenue Augmentation Fund in both Fiscal Years 1993-94 and 1994-95. Such a transfer was not part of the State budget for Fiscal Year 1995-96 or 1996-97 and is not in the State budget for Fiscal Year 1997-98. However, there can be no assurance that the Legislature will not require similar or increased deposits in future years to deal with budget deficits. Other Changes in Redevelopment Law There can be no assurance that the California electorate will not at some future time adopt initiatives or that the State Legislature will not enact legislation that will amend the Redevelopment Law or other laws or the Constitution of the State resulting in a reduction of Pledged Tax Revenues. and consequently, have an adverse effect on the Agency's ability to pay debt service on the Bonds. PROPERTY TAXATION IN CALIFORNIA Property Tax Collection Procedures In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens on the secured property arising pursuant to State law, regardless of the time of the creation of other liens. Secured and unsecured property are entered separately on the assessment roll maintained bN the county assessor. The method of collecting delinquent taxes is substantially different for the tw o classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. The taxing authority has four ways of collecting unsecured personal property taxes: (i) initiating a civil action against the taxpayer, (ii) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer, (iii) filing a certificate of delinquency for record in the count% recorder's office to obtain a lien on certain property of the taxpayer, and (iv) seizing and selling personal property, improvements or possessory interests belonging or assessed to the assessee. A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is sold to the State on or about March 30 of each fiscal year. Such property may thereafter be redeemed b�, payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to delinquent taxes with respect to property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The valuation of property is determined as of the January 1 lien date as equalized in August of each year and equal installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due January 1 and become delinquent August 31. 24 119 Historically, tax payment practices by the County provided for payment to the agencies of approximately 50% of the secured taxes by the third week in January of each year, an additional 50% of the secured taxes in early May of each year. In accordance with the County's current policy, the Agency expects to receive approximately 50% of the secured taxes by the third week in January of each year and approximately 50% of the secured taxes in early May of each year. Supplemental Assessments California Revenue and Taxation Code Section 75.70 provides for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Prior to the enactment of this law, the assessment of such changes was permitted only as of the next tax lien date following the change, and this delayed the realization of increased property taxes from the new assessments for up to 14 months. This statute provides increased revenue to redevelopment agencies to the extent that supplemental assessments of new construction or changes of ownership occur within the boundaries of redevelopment projects subsequent to the January 1 lien date. To the extent such supplemental assessments occur within the Project Area, Pledged Tax Revenues may increase. Property Tax Administrative Costs In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions in proportion to the tax -derived revenues allocated to each. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. For Fiscal Year 1996-97 the County's administrative charge to the Agency was $146,505. Unitary Property AB 454 (Statutes of 1987, Chapter 921) provides the method of reporting and allocating property tax revenues generated from most State -assessed unitary properties. Under AB 454, the State reports to each county auditor -controller only the county -wide unitary taxable value of each utility, without an indication of the distribution of the value among tax rate areas. AB 454 provides two formulas for auditor -controllers to use in order to determine the allocation of unitary property taxes generated by the county -wide unitary value, which are: (i) for revenue generated from the 1 % tax rate, each jurisdiction is to receive up to 102% of its prior year unitary property tax increment revenue; however, if county -wide revenues generated from unitary properties are greater that 102% of prior year revenues, each jurisdiction receives a percentage share of the excess unitary revenues equal to the percentage of each jurisdiction's share of secured property taxes; (ii) for revenue generated from the application of the debt service tax rate to county -wide unitary taxable value, each jurisdiction is to receive a percentage share of revenue based on the jurisdiction's annual debt service requirements and the percentage of property taxes received by each jurisdiction from unitary property taxes. The provisions of AB 454 apply to all State -assessed property, except railroads and non - unitary properties the valuation of which will continue to be allocated to individual tax rate areas. AB 454 allows, generally, valuation growth or decline of State -assessed unitary property to be shared by all jurisdictions within a county. Litigation contesting the State Board of Equalization's procedures for determining the valuation of the seven largest utilities in the State resulted in a settlement between the State Board of Equalization and the utilities which provided that the valuation of the seven largest utilities would decrease by a total of 10.5%, which decrease was phased over Fiscal Years 1992-93, 1993-94 and 1994-95. 25 �.1 Due to the limited amount of unitary property within the Project Area, the Agency does not expect the impact of AB 454 or the settlement agreement to have an adverse effect on the Agency's ability to pay debt service on the Bonds. Article XIIIA of the State Constitution Article XIIIA limits the amount of ad valorem taxes on real property to 1 % of "full cash value" of such property, as determined by the county assessor. Article XIIIA defines "full cash value" to mean "the County Assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value,' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." Furthermore, the "full cash value" of all real property may be increased to reflect the rate of inflation, as shown by the consumer price index, not to exceed 2% per year, or may be reduced. Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster and in other special circumstances. Article XIIIA (i) exempts from the 1 % tax limitation taxes to pay debt service on (a) indebtedness approved by the voters prior to July 1, 1978 or (b) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition; (ii) requires a vote of two-thirds of the qualified electorate to impose special taxes, or certain additional ad valorem taxes; and (iii) requires the approval of two-thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. The validity of Article XIIIA has been upheld by both the California Supreme Court and the United States Supreme Court. Appropriations Limitation - Article XIIIB Article XIIIB limits the annual appropriations of the State and its political subdivisions to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the government entity. The "base year" for establishing such appropriations limit is the 1978/79 fiscal year, and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Section 33678 of the Redevelopment Law provides that the allocation of taxes to a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or indebtedness shall not be deemed the receipt by an agency of proceeds of taxes levied by or on behalf of an agency within the meaning of Article XIIIB, nor shall such portion of taxes be deemed receipt of proceeds of taxes by, or an appropriation subject to the limitation of, any other public body within the meaning or for the purpose of the Constitution and laws of the State, including Section 33678 of the Redevelopment Law. The constitutionality of Section 33678 has been upheld in two California appellate court decisions. On the basis of these decisions, the Agency has not adopted an appropriations limit. Personal Property Tax Special Subventions Government Code Section 16112.7 generally provides that on or after July 31, 1990, no redevelopment agency shall pledge special personal property tax subvention payments as security for payments of the principal and interest on bonds. 26 -� ? Future Initiatives Article XIIIA, Article XIIIB and certain other propositions affecting property tax levies were each adopted as measures which qualified for the ballot pursuant to California's initiative process. From time to time other initiative measures could be adopted, further affecting Agency revenues or the Agency's ability to expand revenues. Appeals of Assessed Values Pursuant to California law, a property owner may apply for a reduction of the property tax assessment for such owner's property by filing a written application, in a form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In the County, a property owner desiring to reduce the assessed value of such owner's property in any one year must submit an application to the County Assessment Appeals Board (the "Appeals Board"). Applications for any tax year must be submitted by September 15 of such tax year. Following a review of each application by the staff of the County Assessor's Office, the staff makes a recommendation to the Appeals Board on each application which has not been rejected for incompleteness or untimeliness or withdrawn. The Appeals Board holds a hearing and either reduces the assessment or confirms the assessment. The Appeals Board generally is required to determine the outcome of appeals within two years of each appeal's filing date. Any reduction in the assessment ultimately granted applies only to the year for which application is made and during which the written application is filed. The assessed value increases to its pre -reduction level for fiscal years following the year for which the reduction application is filed. However, if the taxpayer establishes through proof of comparable values that the property continues to be overvalued (known as "ongoing hardship"), the Assessor has the power to grant a reduction not only for the year for which application was originally made, but also for the then current year as well. Appeals for reduction in the "base year" value of an assessment, which generally must be made within three years of the date of change in ownership or completion of new construction that determined the base year, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. Moreover, in the case of any reduction in any one year of assessed value granted for "ongoing hardship" in the then current year, and also in any cases involving stipulated appeals for prior years relating to base year and personal property assessments, the Agency's tax increment attributable to such properties will be reduced in the then current year. In practice, such a reduced assessment may remain in effect beyond the year in which it is granted. See "THE PROJECT AREA —Largest Local Secured Taxpayers" for information regarding the assessed valuations of the top ten property owners within the Project Area. THE PROJECT AREA Background On November 29, 1983, following requisite studies and hearing by the Planning Commission and the Agency, the City Council passed Ordinance No. 43 which approved and adopted Redevelopment Plan No. 1. The Ordinance became effective December 29, 1983. Redevelopment Plan No. 1 provides for the elimination of blight and deterioration which were found to exist in Project Area No. 1. In December, 1994 and March, 1995, the Agency amended Redevelopment Plan No. 1 in order to better address infrastructure and economic development needs within Project Area No. 1. The Plan Amendment (a) increased the aggregate tax increment limit for Project Area No. 1 to $2 billion and the outstanding bonded indebtedness limit to $200 million, (b) expanded the list of infrastructure and public facility projects the Agency may fund with tax increment revenues and (c) established new time frames within which the Agency may incur indebtedness for Project 27 1 '7- Area No. 1, use eminent domain for property acquisition and undertake redevelopment projects, and receive tax increment revenue. As amended, Redevelopment Plan No. 1 terminates on November 29, 2023, with the Agency collecting tax increment revenues through November 29, 2033 in compliance with Section 33333.6 of the Redevelopment Law. Bonded Indebtedness Cumulative Amount Final Date to Incur New Debt Tax Increment Cumulative Limit Final Date to Collect Tax Increment Location and Surrounding Area Project Area No. 1 Redevelopment Plan Limit $200,000,000 January 1, 2004 $2,000,000,000 November 29, 2033 Project Area No. 1 encompasses approximately 17.5 square miles (11,200 acres) accounting for approximately fifty-six percent (56%) of the total current corporate area of the City. Controls, Land Use and Building Restrictions All real property in Project Area No. 1 is subject to the controls and restrictions of Redevelopment Plan No. 1. The Redevelopment Plan requires that new construction shall comply with all applicable State statutes and local laws in effect, including the City zoning ordinances and City codes for building, electrical works, heating, ventilating, housing and plumbing. The Redevelopment Plan further provides that no new improvement or addition to an existing building shall be substantially modified, altered, repaired or rehabilitated except in accordance with architectural, landscape and site plans submitted to and approved by the Agency. Redevelopment Plan No. 1 allows commercial, residential, public and institutional uses within the Project Area but specifies the particular land use area in which such use is permitted. The Agency may permit an existing but nonconforming use to remain so long as the existing building is in good condition and is generally compatible with other surrounding development uses. The owner of such property must be willing to enter into a participation agreement and abide by any reasonable restriction deemed necessary to protect the development and use of Project Area No. 1. The owner - participant must receive prior authorization and approval from the Agency to make additions, repairs, alternations or other improvements to his nonconforming use structure. Within the limits, restrictions and controls established in Redevelopment Plan No. 1, the Agency is authorized to establish heights of buildings, land coverage, setback requirements, design criteria, traffic circulation, traffic access and other development and design controls necessary for proper development of both private and public segments within the Project Area. Under certain circumstances, the Agency is authorized to permit a variation from the limits, restrictions and controls granted which changes a basic land use or which permits other than a minor departure from the Redevelopment Plan provisions. In permitting a variation, the Agency shall impose such conditions as are necessary to protect the public health, safety or welfare and to assure compliance with the purposes of the Redevelopment Plan. Any variation permitted by the Agency shall not supersede any other approval required under City codes and ordinances. The Agency currently has several developments under construction or plan approval process in the Project Area. These developments are described in "APPENDIX B—Redevelopment Fiscal Consultant's Tax Increment Projections" herein. Agreements with Various Taxing Agencies Pursuant to the Law, the Agency has entered into tax sharing agreements with affected taxing agencies in the Project Area. These Pass -Through Agreements are summarized in "APPENDIX B—Redevelopment Fiscal Consultant's Tax Increment Projections" herein and involve the Agency and the following taxing agencies: (1) County of Riverside; (2) Coachella Valley Unified School District; (3) Desert Sands Unified School District; (4) Desert Community College; (5) Coachella Valley Mosquito Abatement District; (6) Coachella Valley Water District; (7) Riverside County Superintendent of Schools; (8) Coachella Valley Public Cemetery; (9) Coachella Valley Recreation and Park District; (10) Coachella Valley Resource Conservation District; and (11) City of La Quinta Largest Local Secured Taxpayers Set forth below are the ten largest local secured taxpayers in the Project Area based on the 1997-98 secured property tax roll. These taxpayers represent approximately 24.9% of the total secured valuation in the Project Area of $1,369,291,933. Taxpayer 1. KSL Desert Resorts 2. Sunrise Desert Partners 3. La Quinta Golf Properties, Inc. 4. Capital Pacific Holdings LLC 5. GMS Realty 6. Sunrise La Quinta Co. 7. Santa Rosa Cove Association 8. Tradition Club Associates LLC 9. PGA West Residential Association, Inc. 10. La Quinta Orchards Partners Total Top Ten Taxpayers 1997-98 Secured Valuation $220,827,036 53,262,122 15,488,921 12,829,284 8,705,268 7,417,074 7,152,876 6,972,851 5,267,540 5,205,856 $343,128,828 Source: Transamerica Information Management/Metroscan Secured Assessment Roll. Percent of Total 16.1% 3.9 0.9 0.6 0.5 0.5 0.5 0.4 0.4 24.9.% PLEDGED TAX REVENUES Pledged Tax Revenues (as described in the section "SECURITY FOR THE BONDS" herein) are to be deposited in the Special Fund, administered by the Trustee and applied to the payment of the principal of and interest on the Bonds. Historical Tax Revenues The following table is a schedule of the taxable valuations and resulting Tax Revenues in the La Quinta Redevelopment Project for the Fiscal Years 1994-95 through 1997-98. The base year valuation for the Project Area was established in Fiscal Year 1983-84. Secured Valuation Unsecured Valuation Nonunitary Utility Total Valuation Base Year Valuation Incremental Valuation Incremental Revenues (1) Unitary Revenues/Adjustments Tax Revenues 1994-95 1995-96 1996-97 1997-98(2) $1,290,637,350 $1,332,883,469 $1,297,020,107 $1,369,291,933 17,110,909 8,979,426 13,821,291 13,157,051 $1,307,748,259 (199,398,233) $1,108,350,026 $ 11,314,037 144,716 $ 11,458,752 $1,341,862,895 (199,398,233) $1,142,464,662 $ 11,432,871 111,225 $ 11,544,096 $1,310,841,398 (199,398,233) $1,11 1,443,165 $ 11,116,245 82,106 $ 11,198,351 (1) Incremental Revenues are based on a one percent (1 %) tax rate. (2) Tax Revenues for Fiscal Year 1997-98 are estimated. Source: Riverside County Auditor -Controller's Office report of net assessed values. Projected Pledged Tax Revenues and Debt Service Coverage $1,382,448,984 (199,398,233) $1,183,050,751 $ 11,830,508 161,774 $ 11,992,282 The Agency has retained Rosenow Spevacek Group, Inc. of Santa Ana, California to provide projections of taxable valuation and Pledged Tax Revenues from developments in the Project Area. The Agency believes the assumptions (set forth in "APPENDIX B" herein) upon which the projections are based are reasonable; however, some assumptions may not materialize and unanticipated events and circumstances may occur (see "RISK FACTORS"). Therefore, the actual Pledged Tax Revenues received during the forecast period may vary from the projections and the variations may be material. Set forth below is the estimated debt service coverage of the Bonds using projected Fiscal Year 1998-99 through 2001-02 Pledged Tax Revenues. Fiscal Pledged Year Revenues 1998-99 $ 9,868,950 1999-00 10,322,452 2000-01 10,73 5,140 2001-02 11,162,272 Maximum Annual Debt Service (1) $3,441,825 3,441,825 3,441,825 3,441,825 Maximum Annual Debt Service Coveratye 2.87x 3.00x 3.12x 3.24x Maximum Annual Debt Service on the Bonds is payable in the year 2007 as shown on the following page. Source: Rosenow Spevacek Group, Inc. 30 Annual Debt Service Set forth below is the annual debt service (assuming minimum sinking account payments) for the term of the Bonds. La Quinta Redevelopment Project Area No. 2 Annual Debt Service Maturity Date 1994 Bonds 1998 Bonds Total September 1 of Debt Service Principal Interest Debt Service (1) Debt Service 1998 $ 2,649,652.50 $ 297,500.00 $ 297,500.00 $ 2,947,152.50 1999 2,651,007.50 787,500.00 787,500.00 3,438,507.50 2000 2,653,385.00 787,500.00 787,500.00 3,440,885.00 2001 2,651,385.00 787,500.00 787,500.00 3,438,885.00 2002 2,654,245.00 787,500.00 787,500.00 3,441,745.00 2003 2,652,465.00 787,500.00 787,500.00 3,439,965.00 2004 2,651,465.00 787,500.00 787,500.00 3,438,965.00 2005 2,652,815.00 787,500.00 787,500.00 3,440,315.00 2006 2,652,585.00 787,500.00 787,500.00 3,440,085.00 2007 2,654,325.00 787,500.00 787,500.00 3,441,825.00 2008 2,652,305.00 787,500.00 787,500.00 3,439,805.00 2009 2,651,160.00 787,500.00 787,500.00 3,438,660.00 2010 2,650,160.00 787,500.00 787,500.00 3,437,660.00 2011 2,653,575.00 787,500.00 787,500.00 3,441,075.00 2012 2,650,310.00 787,500.00 787,500.00 3,437,810.00 2013 $ 620,000.00 787,500.00 1,407,500.00 1,407,500.00 2014 655,000.00 754,950.00 1,409,950.00 1,409,950.00 2015 690,000.00 720,562.50 1,410,562.50 1,410,562.50 2016 725,000.00 684,337.50 1,409,337.50 1,409,337.50 2017 760,000.00 646,275.00 1,406,275.00 1,406,275.00 2018 800,000.00 606,375.00 1,406,375.00 1,406,375.00 2019 845,000.00 564,375.00 1,409,375.00 1,409,375.00 2020 890,000.00 520,012.50 1,410,012.50 1,410,012.50 2021 935,000.00 473,287.50 1,408,287.50 1,408,287.50 2022 985,000.00 424,200.00 1,409,200.00 1,409,200.00 2023 1,035,000.00 372,487.50 1,407,487.50 1,407,487.50 2024 1,090,000.00 318,150.00 1,408,150.00 1,408,150.00 2025 1,150,000.00 260,925.00 1,410,925.00 1,410,925.00 2026 1,210,000.00 200,550.00 1,410,550.00 1,410,550.00 2027 1,270,000.00 137,025.00 1,407,025.00 1,407,025.00 2028 1,340,000.00 70,350.00 1,410,350.00 1,410,350.00 Total $39,780,840.00 $15,000,000.00 $18,863,862.50 $33,863,862.50 $73,644,702.50 (1) The Bonds debt service is based on an estimated net interest rate of 5.323%. CONCL UDING INFORMATION Underwriting The Bonds have been sold at a net interest rate of %. The original purchase price to be paid is $ for the Bonds, plus accrued interest. The Underwriter intends to offer the Bonds to the public initially at the price or yields set forth on the cover page of this Official Statement, plus accrued interest from April 15, 1998, which price or yields may subsequently change without any requirement of prior notice. 31 The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. In reoffering Bonds to the public, the underwriter may overallocate or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. Legal Opinion The opinion of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel, approving the validity of the Bonds and stating that interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is also exempt from personal income taxes of the State of California under present State income tax laws, will be furnished to the purchaser at the time of delivery of the Bonds at the expense of the Agency. Compensation for Bond Counsel's services is entirely contingent upon the sale and delivery of the Bonds. A copy of such opinion, certified by an officer of the Agency by his facsimile signature, will be printed on the back of each definitive Bond. No charge will be made to the purchaser for such printing or certification. The legal opinion is only as to legality and is not intended to be nor is it to be interpreted or relied upon as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. In addition, certain legal matters will be passed on for the Agency by Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, Disclosure Counsel. Tax Exemption In the opinion of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is exempt from present State of California personal income taxes, is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, Bond Counsel notes that, with respect to corporations (as defined for federal income tax purposes), interest on the Bonds will be included in determining adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. The difference between the initial offering prices to the public (excluding bond houses and brokers) at which the Bonds are sold and the amount payable at maturity thereof constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. Such discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the paragraphs above. The original issue discount accrues over the term to maturity of each such maturity of each Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bonds. The Internal Revenue Code of 1986, as amended, contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax 32 consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes. Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the Agency, the Underwriter and others and is subject to the condition that the Agency complies with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements could cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Agency has covenanted to comply with all such requirements. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. Bond Counsel's opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions taken or events are taken or do occur. Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the Agency continues to comply with certain requirements of the Code, the accrual or receipt of interest (and original issue discount) on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds. No Litigation There is no action, suit or proceeding known to the Agency to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of the foregoing or any proceedings of the Agency taken with respect to any of the foregoing. Legality for Investment in California The Law provides that obligations authorized and issued under the Law shall be legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Law. The Superintendent of Banks of the State of California has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in California. Verification of Mathematical Computations Execution and delivery of the Bonds will be subject to the delivery by McGladrey & Pullen, LLP, Minneapolis, Minnesota, of a report of the mathematical accuracy of certain computations, contained in schedules provided to them by the Underwriter, relating to (a) the adequacy of the maturing principal amount of the Federal Securities held under the 1991 Bonds Escrow Agreement, interest earned thereon and certain other uninvested cash to pay principal of, and interest and 33 j premiums with respect to the 1991 Bonds, and (b) the computations of actuarial yields relied upon by Bond Counsel to support its conclusion that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Code. Continuing Disclosure Pursuant to a Continuing Disclosure Certificate (the "Disclosure Certificate"), the Agency has agreed to provide, or cause to be provided, to each nationally recognized municipal securities information repository and any public or private repository or entity designated by the State as a state repository for purposes of Rule 15c2-12(b)(5) (the "Rule") adopted by the Securities and Exchange Commission (each, a "Repository") certain annual financial information and operating data, including its audited financial statements and information of the type set forth in this Official Statement under the heading "PLEDGED TAX REVENUES." In addition, the Agency has agreed to provide, or cause to be provided, to each Repository in a timely manner notice of the following "Listed Events" if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) modifications to rights of Owners of Bonds; (4) Bond calls; (5) defeasances; (6) rating changes; (7) adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds; (8) unscheduled draws on the Reserve Account reflecting financial difficulties; (9) unscheduled draws on the Insurance Policy reflecting financial difficulties; (10) substitution of the provider of the Insurance Policy, or any failure by the Bond Insurer to perform thereon; and (11) release, substitution or sale of property securing repayment of the Bonds. These covenants have been made in order to assist the Underwriter in complying with the Rule. The Agency has never failed to comply in all material respects with any previous undertakings with regard to the Rule to provide annual reports or notices of material events. The Agency may amend the Disclosure Certificate, and any provision of the Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the providing of annual reports, the contents of annual reports or a delinquency in the payment of principal or interest on the Bonds, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings in the Disclosure Certificate, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of the Trustee or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. In addition, the Agency's obligations under the Disclosure Certificate shall terminate upon the defeasance or payment in full of all of the Bonds. The provisions of the Disclosure Certificate are intended to be for the benefit of the Owners and shall be enforceable by the Trustee on behalf of such Owners, provided that any enforcement action by any such person shall be limited to a right to obtain specific enforcement of the Agency's obligations under the Disclosure Certificate and any failure by the Agency to comply with the provisions thereof shall not be an event of default under the Indenture. 34 Bond Insurer [INFORMATION TO FOLLOW] Ratings Standard & Poor's Ratings Group and Moody's Investors Service, Inc. have assigned their respective municipal ratings of "AAA" and "Aaa" to this issue of Bonds with the understanding that upon delivery of the Bonds, a policy insuring the payment when due of the principal of and interest on the Bonds will be issued by . The ratings reflect only the views of the respective rating organization, and explanation of the significance of the ratings may be obtained from Standard & Poor's Ratings Group, 25 Broadway, New York, New York 10004 (212) 208-8000 or Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, (212) 553-0300. There is no assurance that the ratings will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the respective rating agency, if in the judgment of the rating agency circumstances so warrant. Any such downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. Miscellaneous All of the preceding summaries of the Indenture, the Law, other applicable legislation, the Redevelopment Plan for the Project Area, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. This Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of this Official Statement by its Chairman has been duly authorized by the Agency. LA QUINTA REDEVELOPMENT AGENCY By: /s/ Chairman 35 t SUPPLEMENTAL INFORMATION THE CITY OF LA QUINTA The following information concerning the City of La Quinta (the "City'), Riverside County (the "County') and the State of California (the "State') is presented as general background data. The Bonds are not an obligation of the City, the County or the State and the taxing power of the City, the County and the State is not pledged to the payment of the Bonds. General Background For centuries before Columbus discovered America, the area which is now La Quinta was the winter home of the Cahuilla Indians. The history of modern La Quinta began with the construction of the La Quinta Hotel in 1926, and La Quinta became a retreat for discriminating seclusion -seekers from Hollywood and around the world. It was incorporated as a City in 1982 encompassing an area of 18.36 square miles and a population of approximately 4,500, and today encompasses an area of approximately 31.18 square miles, with a population of approximately 18,950. La Quinta is one of California's fastest growing cities. Surrounded by the Santa Rosa Mountains, La Quinta is home to the PGA West Golf Resort. The Coachella Valley attracts a high - end market of over 2 million tourists each year, all with substantial disposable income and the time to shop. As a year-round multi -recreational resort community, it attracts golf and tennis enthusiasts from all over the world. Location Located in the eastern portion of the County known as the Coachella Valley, La Quinta is 20 miles from Palm Springs and 127 miles from Los Angeles. The City motto is "The Gem of the Desert." Climate Period CITY OF LA QUINTA Climate Average Temperature Rain Humidity Min.' Mean' Max.' Inches Daily Average January 37.8 54.1 70.4 .5 38 April 57.0 72.3 87.5 .1 32 July 76.9 92.1 107.2 .12 37 October 58.7 75.5 92.2 .23 37 Annual 57.2 73.1 89.0 3.38 36 Prevailing winds: Northwest 7 mph. Source: National Weather Service. 36 City Government and Administration The City of La Quinta was originally incorporated on May 1, 1982 and became a charter city in November, 1996 with a council/manager form of government. The City Council is comprised of a Mayor and four Council Members. The Mayor is elected for a two-year term and the Council Members are elected for four-year terms. Budgetary Policies Each year, the City's Department Directors submit their respective budgets to the Chief Administrative Officer (City Manager) by the end of April. The CAO goes over each budget with the individual Director. The CAO then puts all the individual budgets together and presents a draft to the City Council, usually by the first part of June. The Council reviews the budget, conducts budget meetings with citizens, the CAO and Directors and approves the final budget prior to August 1 st of each year. Economic Growth and Trends La Quinta is a resort -oriented community featuring a major resort hotel, several country clubs and several golf courses. Developments currently .being planned are lake and golf -course oriented. Outdoor recreation activities such as hiking and camping are also enjoyed in the area. The community is expanding rapidly as evidenced by the completion of three major country clubs and a fourth under construction. All four projects include a range of housing types, retail, hotels, golf and tennis facilities. Retail trade is expanding; a small shopping center has been completed with a grocery store, drug store, several small shops and two restaurants. An additional 60-acre retail shopping center with a diverse tenant mix is being developed which will have approximately 620,000 square feet total retail space when complete. The following charts shows a population estimate for the City of La Quinta, County of Riverside and the State of California during the past six years. Population The City's population has increased each year since incorporation in 1982. The following table sets forth population estimates for the City of La Quinta: CITY OF LA QUINTA ESTIMATED POPULATION Year (January 1) 1992 1993 1994 1995 1996 1997 City of La Quinta 14,700 15,600 16,650 17,600 18,050 18,950 Source: State of California Department of Finance. 37 The following sets forth the County of Riverside and the State of California population estimates from 1992 to January 1, 1997: RIVERSIDE COUNTY AND STATE OF CALIFORNIA ESTIMATED POPULATION Year (January 1) 1992 1993 1994 1995 1996 1997 Riverside County 1,281,000 1,323,500 1,332,000 1,355,600 1,381,900 1,380,000 Source: State of California Department of Finance. Commercial Activity State of California 30,982,000 31,522,000 31,661,000 31,910,000 32,223,000 32,609,000 Commercial activity has proven to be an important factor in the regional economy. Between 1989 and 1996, total taxable sales declined in Coachella Valley but increased in the City. The general decline in sales in the County since 1990 is attributable to the decline in the building industry, particularly in the development of new single-family homes which, historically have accounted for significant sales in building materials and home furnishings. Much of the County's commercial activity is concentrated in central business districts or in small neighborhood commercial centers in the cities. There are eight conventional regional shopping centers: Riverside Plaza, Galleria at Tyler Mall (Riverside), Palm Springs Mall, Indio Fashion Mall, Hemet Valley Mall, Palm Desert Town Center, Canyon Springs Mall and Moreno Valley Mall. There are over 20 area centers distributed throughout the cities and over 17 in other areas of the County. In addition, all major auto makers are represented. The County is served by a number of major banks. They include Bank of America National Trust and Savings Association, Wells Fargo Bank and Union Bank. There are savings and loan associations in the County, with Home Savings of America and California Federal having the largest number of branch offices. 38 The following table demonstrates the level of taxable sales transactions in the Countv of Riverside: Apparel Stores General Merchandise Stores Specialty Stores Food Stores Package Liquor Stores Eating and Drinking Places Home Furnishing and Appliances; Second -Hand Merchandise Building Materials and Farm Implements Service Stations Automotive Miscellaneous TOTAL ALL OUTLETS COUNTY OF RIVERSIDE Taxable Sales Transactions 1993 1994 1995 1996 $ 395,084 $ 406,973 $ 421,007 $ 474,384 1,267,249 1,350,233 1,391,979 1,429,338 604,328 649,285 676,978 790,183 653,556 648,486 657,598 696,627 57,368 53,418 53,928 53,700 849,961 884,970 919,233 979,535 267,674 299,746 327,517 337,433 654,377 708,056 723,896 787,905 739,399 741,435 767,675 836,767 1,227,707 1,3 88,614 1,475,603 1,617,189 2,558,573 2,683,317 2,885,204 2,574,989 $9,275,276 $9,814,533 $10,320,618 11,138,861 The following table demonstrates the growth in the number of business permits and taxable transactions in the City of La Quinta: CITY OF LA QUINTA TAXABLE TRANSACTIONS (in thousands) Retail Stores Number of Taxable Year Permits Transactions 1996 146 $95,852 1995 147 87,366 1994 112 78,171 1993 107 70,859 1992 84 48,008 1991 59 34,140 Source: State Board of Equalization. Total Outlets Number of Taxable Permits Transactions 361 $132,892 367 121,428 309 110,861 305 102,994 263 76,178 203 63,286 39 Building Activity The following presents the residential building permit valuations for the City of La Quinta for the calendar years 1994 through 1997: RESIDENTIAL BUILDING PERMIT VALUATIONS CITY OF LA QUINTA (Valuation in 000) 1994 1995 1996 1997 Single Family $79,419 $60,812 $81,058 $62,993 Multifamily Dwelling 0 0 5,922 1,285 Alterations/Additions 901 944 0 0 Total Residential $80,320 $61,756 $86,980 $64,277 Source: California Building Permit Activity, Economic Sciences Corporation; City of La Quinta Building & Safety Department. General Plan/Zoning The land within the City of La Quinta is approximately zoned as follows: Industrial: Institutional: Commercial: Residential: Industry 0 acres 120 acres 1,240 acres 12,320 acres La Quinta contains two major commercial areas. It is currently creating master development plans for the first, a 100-acre downtown area. Approximately 50% of this area has yet to undergo actual development. Additionally there remains approximately 680 undeveloped acres of commercial property on Highway 11 I between Palm Springs and Indio. Top Taxpayers The largest local secured taxpayers in the City are as follows: Property Owner KSL La Quinta Hotel Corp. 2. KSL PGA West Corporation 3. Sunrise Desert Partners 4. KSL Landmark Corporation 5. KSL Land Corporation 6. KSL La Quinta Corporation 7. TD Desert Development 8. La Quinta Golf Properties, Inc. 9. M&H Realty Partnership 10. Washington Adams Partnership Source: City of La Quinta. Land Use Hotel Residences Condominium Vacant Land Residential Land Golf Courses Residential Land Golf Course Shopping Centers Commercial M1 Labor Force As of June 30, 1997, the sixty-two non -management City -government employees of the City of La Quinta are eligible for membership in the La Quinta Employee's Association. In July, 1987, the City Council adopted Resolution No. 85-86 originally acknowledging the formation of the Association. The Resolution was amended in March, 1994. The City Finance Director, John Falconer, currently serves as the employee relations officer. The following listing sets forth the top employers in the City of La Quinta and the surrounding area: CITY OF LA QUINTA Major Employers and Number of Employees (As of June, 1997) Approximate Employer No. of Employees Type of Business La Quinta Hotel and Golf Resort 1,500 Resort Hotel PGA West 1,100 Golf Resort Wal-Mart 250 Retailer Albertson's 126 Groceries Vons 103 Groceries Ralph's 100 Groceries City of La Quinta 74 Municipal Government Simon Motors 65 Auto Dealer Cliff House 65 Restaurant Red Robin 50 Restaurant Source: City of La Quinta 41 As of June, 1997, employers located in the County that employed more than 500 employees were reported to be as follows: RIVERSIDE COUNTY Largest Employers (June 1997) Company Location Product/Service Employees Rohr, Inc. Riverside Aircraft Parts 2900 City of Riverside Riverside Government 2100 Host Marriott Corporation Palm Desert Resort Hotel 1700 Eisenhower Medical Center Rancho Mirage Hospital 1600 Desert Hospital Corporation Palm Springs Hospital 1591 La Quinta Hotel, Golf and Tennis Resort La Quinta Resort Hotel 1500 Riverside General Hospital Riverside Hospital 1500 Kaiser Foundation Hospitals Riverside Hospital 1500 Valley Health System Hemet Hospital 1400 Riverside Sheriffs Association, Inc. Riverside Law Enforcement 1400 Riverside Community College District Riverside Community College 1200 Sun World, Inc. Coachella Fruit (Fresh) Packing 1192 State of California Norco Rehabilitation Center 1 188 Riverside Community Hospital Riverside Hospital 1100 University of California Riverside University 1000 United States Department of Defense Corona Government/Defense 1000 Press Enterprise Co. Riverside Newspapers 1000 Parkview Community Hospital Medical Center Riverside Hospital 1000 KSL Recreation Corporation La Quinta Golf /Tennis Resort 1000 Directors Mortgage Loan Corporation Riverside Mortgage Companies 950 Advanced Cardiovascular Systems Temecula Surgical Instruments 900 Val Verde Union School District Perris School District 800 The Toro Company Riverside Irrigation 800 Nationwide Executive Security Services Riverside Security Guard Service 750 California Dept. of Corrections, Chuckawalla Blythe Prison 750 County of Riverside Riverside Government 700 Consolidated Freightways Mira Loma Trucking 700 Mt. San Jacinto College San Jacinto Community College 680 Stouffer Hotel Management Corp. Palm Springs Resort Hotel 650 Starcrest Products of California Perris Mail Order 650 Fleetwood Holidays, Inc. Riverside Motor Home Rental 630 United States Department of Defense Riverside Hospital 600 TLS Partnership Rancho Mirage Resort Hotel 600 International Rectifier Corp. Temecula Semiconductors 600 Fleetwood Enterprises, Inc. Riverside Prefabricated Buildings 600 Dyncorp Norco Data Processing 600 Westin Hotel Company Rancho Mirage Resort Hotel 550 Desert Community College District Palm Desert Community College 550 Source: Strategic Mapping, Inc. 42 li �i Employment and Industry Employment data is not separately reported on an annual basis for the City but is compiled for the Riverside/San Bernardino PMSA, which includes all of Riverside and San Bernardino Counties. In addition to varied manufacturing employment, the PMSA has large and growing commercial and service sector employment, as reflected in the table below. Overall, in the past five years, total employment rose approximately 22.8%, while population increased approximately 7.78% in the County of Riverside. As of June, 1997, unemployment in the PMSA was 7.0%. The City estimates that unemployment rate in La Quinta is similar to that shown in the following table for the Riverside/San Bernardino Primary Metropolitan Statistical Area ("PMSA") as a whole: Agriculture Mining Construction Transportation & Public Utilities Manufacturing Wholesale & Retail Trade Finance, Insurance & Real Estate Services Government Total All Industries(2) Riverside -San Bernardino Labor Market Area 1995 1996 1997 (1) 21,800 22,900 33,100 1,100 1,200 1,300 43,100 46,400 50,700 40,800 42,000 43,400 94,400 99,200 102,800 205,900 209,900 216,400 29,400 29,700 30,000 202,600 211,700 218,700 162,600 167,400 174,900 801,700 830,400 871,300 Total Civilian Labor Force(3) 1,293,300 1,313,200 1,356,700 Total Unemployment 112,000 100,700 95,200 Unemployment Rate 8.7% 7.7% 7.0% (1) As of June, 1997. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. (3) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. Source: State Employment Development Department, Labor Market Information Division. 43 13 The following table presents estimated household income distributions for the City and Coachella Valley: HOUSEHOLD INCOME DISTRIBUTIONS CITY OF LA QUINTA AND COACHELLA VALLEY 1990 ESTIMATE 1995 ESTIMATE LA QUINTA Number % of Total Number % of Total Under $15,000 606 15.5% 962 18.8% $15,000424,999 469 12.0% 599 11.7% $25,000-$34,999 585 14.9% 865 16.9% $35,000-$49,999 769 19.6% 1,038 20.3% $50,000-$74,999 866 22.1 % 909 17.7% $75,000499,999 254 6.5% 279 5.4% $100,000-$149,999 169 4.3% 261 5.1 % $150,000+ 200 5.1 % 212 4.1 % Total Households 3,918 100.0% 5,125 100.0% Median Household Income $39,622 $36,840 1990 ESTIMATE 1995 ESTIMATE COACHELLA VALLEY Number % of Total Number % of Total Under $15,000 12,096 20.9% 14,119 19.6% $15,000-$24,999 10,075 17.4% 9,937 13.8% $25,000-$34,999 9,315 16.1% 11,688 16.2% $35,000-$49,999 9,543 16.5% 12,125 16.8% $50,000-$74,999 8,917 15.4% 12,298 17.1 % $75,000-$99,999 3,305 5.7% 5,107 7.1 % $100,000-$149,999 2,329 4.0% 3,980 5.5% $150,000+ 2,260 3.9% 2,833 3.9% Total Households 57,840 100.0% 72,087 100.0% Median Household Income $31,833 $35,337 Source: Urban Decision Systems, Inc.: Robert Charles Lesser & Co. 44 �! Utilities The main utility providers in the City are as follows: Electricity: Imperial Irrigation District Gas: Southern California Gas Company Telephone: General Telephone Water: Coachella Valley Water District Sewer Service: Coachella Valley Water District Transportation Access to job opportunities in Riverside County, San Bernardino County, Orange County and Los Angeles County has been one of the major factors in Riverside County's employment and population growth. Several major freeways and highways provide access between Riverside County and all parts of Southern California. U.S. Highways 10 and 64 extend in an east -west direction through the northern portion of the County, Intrastate Highway 91 extends in an east -west direction through the central portion of the county until connecting with U.S. Highway 15, and U.S. Highways 15 and 215 extend in a north -south direction through the central portion of the County, each linking the major cities in the County to other parts of the County and to the Los Angeles, San Bernardino and Orange metropolitan areas and to San Diego County. Local bus service is provided by Sunline Transit and by Greyhound Bus Lines. Passenger service is also provided by AMTRAK, which makes train trips daily each way through the County. Southern Pacific Railroad and Santa Fe Railway handle most of the freight movement in the County. The County seat in the City of Riverside is within a 1-1/2 hour drive of La Quinta. It is a 1- 1 /2 hour drive to the Ontario Airport and a 3 hour drive to LAX and Orange County. Numerous major truck lines serve the City of La Quinta, making available overnight delivery service to major California cities. Education The educational needs of La Quinta are met by three public elementary schools, two junior high schools and four high schools, all a part of the Desert Sands Unified School District and the Coachella Valley Unified School District. Post -secondary education is served by Desert Community College, Chapman University, California State University, San Bernardino Extension, Ambition Computer Technology, Propper College and Professional Career College. Community Services La Quinta has two Immediate Care facilities and a senior citizens' center within the City limits, with approved plans for expanding medical services to the City. A 112-bed general hospital is located in Indio, 8 miles to the northeast. The City is served by three churches, seven radio stations, three local TV channels, one TV cable system, one savings and loan bank and two full -service banks. Recreational facilities include major resort hotels, several country clubs, several golf courses and Lake Cahuilla Regional Park. The La Quinta Arts Festival is held annually in March. The Bob Hope Chrysler Classic and the Skins Game are nationally acclaimed golfing events which are held yearly in the City. 45 Direct and Overlapping Bonded Indebtedness Set forth below is information prepared by California Municipal Statistics, Inc. and dated April 1, 1998. This information is included for general information purposes only. The Agency has not reviewed this information and makes no representations as to its completeness or accuracy. The information generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the Agency in whole or in part. Such long term obligations are not payable from the revenues of the Agency. In many cases long term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. 1997-98 Assessed Valuation: $ incremental valuation). (after deducting $ DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Coachella Valley County Water District, I.D. No. 55 Coachella Valley County Water District, I.D. No. 58 City of La Quinta 1915 Act Bonds TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT: Riverside County Board of Education Certificates of Participation Riverside County Building Authorities Desert Community College District Certificates of Participation Desert Sands Unified School District Authority Coachella Valley County Water District, I.D. No. 71 Storm Water Unit Certificates of Participation City of La Quinta TOTAL GROSS OVERLAPPING LEASE OBLIGATION DEBT Less: Riverside County Building Authorities - Blythe County Administrative Building (Secured by Tax Allocation Revenues) TOTAL DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT redevelopment PERCENT DEBT APPLICABLE (1) Excludes tax a ocation on s to a sold. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease obligations. Ratios to Assessed Valuation: DirectDebt........................................................................................ % Total Direct and Overlapping Tax and Assessment Debt ................ % Gross Combined Total Debt.............................................................. % Net Combined Total Debt.................................................................. % STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/96: $0 Source: California Municipal Statistics, Inc. 46 1 4 1 APPENDIX A DEFINITIONS 14 , 1 (This Page Left Intentionally Blank) 14 r DEFINITIONS The following are definitions of certain terms contained in the Resolution and the 1994 Indenture and used in this Official Statement. Agency means the La Quinta Redevelopment Agency. Alternative Reserve Account Security means one or more letters of credit, surety bonds 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. or Bond Insurer means Annual Debt Service means the sums obtained for any Bond Year after the computation is made, by totaling the following for each such Bond Year: (1) The principal amount of all serial Bonds and serial Parity Bonds, if any, payable in such Bond Year; (2) The amount of Minimum Sinking Fund Payments, if any, for any Term Bonds or term Parity Bonds to be made in such Bond Year in accordance with the applicable schedule or schedules of Minimum Sinking Fund Payments; and/or (3) The interest which would be due during such Bond Year on the aggregate principal amount of Bonds and Parity Bonds which would be outstanding in such Bond Year if the Bonds and Parity Bonds Outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedule or schedules for the serial Bonds and serial Parity Bonds and the schedule or schedules of Minimum Sinking Fund Payments for any Term Bonds or term Parity Bonds. At the time and for the purpose of making such computation, the amount of Term Bonds and term Parity Bonds already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon; (4) Excluding the principal and interest due on any Bonds that are defeased as provided in the Resolution and any Parity Bonds that are defeased as provided in the resolution of issuance of such Parity Bonds. Authorized Representative means the Executive Director of the Agency or such other person designated in writing by the Chairman of the Agency. Bond or Bonds means the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998," authorized by the 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 Year means the year beginning September 1 and ending on the next following August 31 during the time any Bonds are Outstanding except that the initial Bond Year shall commence on the Delivery Date and end on August 31, 1998. A-1 1 4 , 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. Book -Entry Depository means DTC or any successor as Book -Entry Depository for the Bonds. Business Day means a day of the year other than (i) a Saturday, Sunday, legal holiday or day on which banking institutions in the city in which the corporate trust office of the Trustee is located are required or authorized to remain closed, or (ii) a day on which the Federal Reserve System is closed. Certificate or Certificate of the Agency means a certificate signed by the Chairman or Acting Executive Director of the Agency or their respective deputies. Chairman means the chairman of the Agency appointed pursuant to Section 33113 of the Health and Safety Code of the State of California, or other duly appointed officer of the Agency authorized by the Agency by resolution or bylaw 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. 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 Delivery Date and ending on September 30, 1998 and each September 30 thereafter until there are no longer any Bonds Outstanding. Continuing Disclosure Certificate means the certificate by that name of the Agency dated the Delivery 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 any rating agency fees, municipal bond insurance premiums, the acceptance and initial annual fees and expenses of the Fiscal Agent, 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 Certificate of the Executive Director or Treasurer. County means the County of Riverside, California. Delivery Date means the date the Bonds are issued to the initial purchaser thereof. DTC means The Depository Trust Company, New York, New York, and its successors and assigns. Escrow Agreement means the Escrow Deposit and Trust Agreement dated as of April 1, 1998 by and between the Agency and the Escrow Bank. Escrow Bank means U.S. Bank Trust National Association, Los Angeles, California, as escrow holder under the Escrow Agreement and any successor thereto. A-2 I . ) Escrowed Bonds means the principal amount of the Bonds equal to the amount held in the Redevelopment Escrow Fund. Federal Securities means direct obligations of the United States of America or bonds or other obligations for which the full faith and credit of the United States is pledged for the payment of principal and interest. Finance Director means the Finance Director of the City and the Agency. Fiscal Agent means the fiscal agent appointed by the Agency pursuant to the Resolution, its successors and assigns and any other corporation or association which may at any time be substituted in its place, as provided in the Resolution. Fiscal Year means any twelve (12) month period beginning on July 1st and ending on the next following June 30th. Government Obligations means direct general 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. 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 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 September 1, 1998. Law means the Community Redevelopment Law of the State of California as cited in the recitals of the Resolution and Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, and all amendments thereto. Maximum Annual Debt Service means the largest Annual Debt Service for any Bond Year. A-3 1 Minimum Sinkiniz Fund Payments means the amount of money to be deposited into the Bond Payment Fund to be used to redeem Term Bonds or term Parity Bonds, at the principal amounts thereof, in the amounts and at the times set forth in the schedule or schedules of Minimum Sinking Fund Payments contained in the Resolution or in a supplemental resolution adopted for the purposes of establishing said schedule or in any resolution providing for the issuance of Parity Bonds. Moody's means Moody's Investors Service, Inc., New York, New York, and its successors and assigns. 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. 1991 Bonds means the $8,700,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1991. 1994 Bonds means the $26,665,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1994. 1994 Indenture means the Indenture of Trust dated as of May 1, 1994, authorizing the 1994 Bonds. 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. Outstanding, when used as of any particular time with reference to Bonds, means subject to the provisions of the Indenture, all Bonds except: (a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid pursuant to the Indenture; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture or any Supplemental Indenture. Parity Bonds means the Outstanding 1994 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 Resolution which are on a parity with the Bonds. Participating Underwriter shall have the meaning ascribed thereto in the applicable Continuing Disclosure Certificate. Pass -Through Aereements 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 A-4 4 Community College District, (v) County of Riverside Superintendent of Schools; (vi) Coachella Valley Mosquito Abatement District; and (vii) Coachella Valley Recreation and Park District. Paving Anent means any paying agent appointed by the Agency pursuant to the Indenture. Permitted Investments means any of the following: (a) direct, non -callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"); (b) direct obligations and fully guaranteed certificates of beneficial interest of the Export -Import Bank of the United States; senior debt obligations of the Federal Home Loan Banks; debentures of the Federal Housing Administration; guaranteed mortgage - backed bonds and guaranteed pass -through obligations of the Government National Mortgage Corporation; guaranteed Title XI financing of the U.S. Maritime Administration; mortgage -backed securities and senior debt obligations of the Federal National Mortgage Association; and participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation (collectively, "Agency Obligations"); provided, however, not more than 10% of the unexpended Certificate proceeds may be invested in Agency Obligations; (c) direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (d) commercial paper rated "Prime -I" by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (e) obligations rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (f) time or interest bearing deposit accounts, including certificates of deposit, federal funds or bankers acceptances of any domestic bank (including Trustee), including a branch office of a foreign bank which branch office is located in the United States, provided if it is a branch of a foreign bank, legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such foreign bank, which: (i) has an unsecured, uninsured and unguaranteed obligation rated "Prime-1" or "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group, or (ii) is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting the rating requirements in (i) above; A-5 (g) deposits of any bank (including Trustee) or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation, (h) investments in a money-market fund rated "AA" or "Al" or better by Standard & Poor's Ratings Group or "Aa" or better by Moody's Investors Service, if such funds are rated by Moody's Investors Service, or which invest solely in securities in clauses (a) and (b) above including funds for which First Interstate Bancorp, its affiliates or subsidiaries provide investment advisory or other management services; (i) repurchase agreements with a term of one year or less with any institution with debt rated "AA" by Standard & Poor's Ratings Group or "Aa" by Moody's Investors Service or commercial paper rated "AA" by Standard & Poor's Ratings Group or "Aa" by Moody's Investors Service; 0) repurchase agreements collateralized by Direct Obligations or Agency Obligations with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank, if such unguaranteed obligation is rated "Prime -I" or "Aa" or better by Moody's Investors Service, and "AA" or better by Standard & Poor's Ratings Group, provided: (i) a master repurchase agreement or specific written, repurchase agreement governs the transaction; and (ii) the securities are held by the Trustee or an independent third party acting solely as agent for the Trustee free and clear of any lien, and such third party is (a) a Federal Reserve Bank, (b) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $25 million; and (iii) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Trustee; and (iv) the repurchase agreement has a term of thirty days or less; and (v) the repurchase agreement matures at least ten days (or other appropriate liquidation period) prior to a debt service payment date; and (vi) the market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 100%. and (k) investment agreements with a bank, insurance or financial institution company which has an unsecured and uninsured obligation (or claims -paying ability) rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group, or is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting such rating requirements, provided: (i) interest is paid at least semiannually at a fixed rate during the entire term of the agreement, consistent with Interest Payment Dates; and A-6 14 9, (ii) moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon notice (provided such notice may be amended or canceled at any time prior to the withdrawal date); and (iii) the agreement is not subordinated to any other investment agreements of such insurance company or bank; and (iv) the same guaranteed interest rate will be paid on any future deposits made to restore the reserve to its required amount; and (v) the Trustee received an opinion of counsel that such agreement is an enforceable obligation of such insurance company or bank. (1) time or interest bearing deposit accounts with banks (including the Trustee), provided that either such accounts are fully insured by the Federal Deposit Insurance Corporation or if not so insured, such accounts are collateralized in the manner required for the deposit of public funds. Pledged Tax Revenues means Tax Revenues less the Tax Revenues set aside as provided in Sections 33334.2 and 33334.3 of the Health and Safety Code of the State of California and. pursuant to certain agreements, paid to certain other taxing agencies in the County of Riverside. Prior Resolution means the Resolution of Issuance approved on October 9, 1991, between the Agency and prior trustee, pursuant to which the 1991 Bonds were issued. Project means the implementation of the Redevelopment Plan, including the refunding of the 1992 Bonds which proceeds were expended to pay costs to implement the Redevelopment Plan. Rebate Regulations means the final, proposed and temporary Treasury Regulations promulgated under Section 148(f) of the Code. Record Date means the fifteenth day of the month preceding any Interest Payment Date. Redevelopment Plan means the Redevelopment Plan for the La Quinta Redevelopment Project, approved and adopted by the City by Ordinance No. 43, and includes any amendment thereof, heretofore or hereafter made pursuant to the Law. Redevelopment Proiect Area, Redevelopment Proiect, or Proiect Area means the project area defined and described in the Redevelopment Plan. Report means a document in writing signed by an Independent Financial Consultant and including: (a) A statement that the person or firm making or giving such Report has read the pertinent provisions of the Indenture to which such Report relates; (b) A brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) A statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. A-7 t+ Reserve Requirement means, so long as the Series 1994 Bonds are Outstanding, an amount equal to Maximum Annual Debt Service on the Bonds, as such term is defined in the Resolution, but not to exceed 10% of the Bond proceeds, which Reserve Requirement may be maintained in cash or invested as provided in the Resolution. Resolution means Resolution No. RA adopted by the Agency on April 7, 1998, together with the Supplement to Resolution. 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. 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, Fax (215) 496-5058; and, in accordance with the current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Agency may designate in a Certificate of the Agency delivered to the Trustee. SLG means U.S. Treasury Securities State and Local Government Series. Standard & Poor's or S&P means Standard & Poor's Ratings Group, New York, New York, and its successors and assigns. State means the State of California. Supplemental Indenture or 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. Tax Certificate means that certain Tax Certificate executed in connection with the issuance of the Bonds or any Parity Bonds. 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 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 year 2028. Treasurer or Treasurer of the Agency means the officer who is then performing the functions of Treasurer of the Agency. Trustee means the trustee appointed by the Agency pursuant to the Indenture, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in the Indenture. A-8 151 APPENDIX B REDEVELOPMENT FISCAL CONSULTANT'S TAX INCREMENT PROJECTIONS 50- (This Page Left Intentionally Blank) �5� APPENDIX C SPECIMEN MUNICIPAL BOND INSURANCE POLICY ATTACHMENT NO. 7 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 $15,000,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998 (the "Bonds"). The Bonds are being issued pursuant to a Resolution of Issuance, dated as of April 1, 1998 between the Agency and U.S. Bank Trust National Association, as Trustee (the "Resolution"). 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. Attu: Kenny Repository Service 65 Broadway, 16th Floor New York, NY 10006 (212) 770-4595 FAX (212) 797-7994 576615.1\22338.0051 i 'w DPC Data Inc. One Executive Drive Fort Lee, NJ 07024 (201) 346-0701 FAX (201) 947-0107 E-mail: nrmslr@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@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 Disclosure 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 1997/1998 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 Section 5(c). 576615.1\22338.0051 -2- (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: (1) 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 (11) 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: (1) 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 "LA QUINTA REDEVELOPMENT PROJECT - Largest Local Secured Taxpayers" of the Official Statement; (11) 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 "- Pledged Tax Revenues and Debt Service Coverage" of the Official Statement. (111) 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. 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 576615.1\22338.0051 -3 - 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. Reportint. 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: (1) Principal and interest payment delinquencies. (11) Non-payment related defaults. (111) 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. (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 Bonds. (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 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. 576615.1\22338.0051 -4- 1 5 Section 6. Termination of Reporting Obli ag tion. 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 not 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 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 576615.1\22338.0051 -5- 159 (c) the proposed amendment or waiver either (1) 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 (11) 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 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. 576615.1\22338.0051 -6- 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: May _, 1998 LA QUINTA REDEVELOPMENT AGENCY M. Executive Director U.S. BANK TRUST NATIONAL ASSOCIATION, as Dissemination Agent Authorized Signatory 576615.1\22338.0051 -7- 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: $15,000,000 La Quinta Redevelopment Project No. I Tax Allocation Refunding Bonds Series 1998 Date of Issuance: May_, 1998 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 April 1, 1998, 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: , 1998 cc: U.S. Bank Trust National Association LA QUINTA REDEVELOPMENT AGENCY By:_ Title: 576615.1 \2233 8.0051 A-1 _I U _.. ATTACHMENT NO. 8 $7,500,000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO.2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 BOND PURCHASE CONTRACT April _, 1998 La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 La Quinta Financing Authority 78-495 Calle Tampico La Quinta, California 92253 Ladies and Gentlemen: Miller & Schroeder Financial, Inc. (the "Underwriter"), acting not as fiduciary or agent for you, but on behalf of itself, hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the La Quinta Redevelopment Agency (the "Issuer") and the La Quinta Financing Authority (the "Authority") for the purchase and sale from the Authority simultaneously with the purchase by the Authority from the Issuer, of the Issuer's La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 (the "Bonds"). This offer is made subject to acceptance thereof by the Authority and the Issuer prior to 9:00 a.m., Pacific time, on the date hereof, and upon such acceptance, as evidenced by the respective signatures of the Executive Director of the Issuer and by an officer of the Authority in the spaces provided below, this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the Issuer, the Authority and the Underwriter. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations and agreements herein set forth, (i) the Authority hereby agrees to purchase from the Issuer, but only to the extent the Underwriter is obligated hereunder to purchase from the Authority, for offering to the Underwriter and the Issuer hereby agrees to sell to the Authority for such purpose, and (ii) the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter all (but not less than all) of the Issuer's $7,500,000* aggregate principal amount of La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998, at a discount of %, original issue discount of $ , plus accrued interest of Preliminary, subject to change. aU $ . The Bonds will mature and bear interest as set forth in Appendix A and will be subject to redemption according to the terms set forth in the Indenture. The Bonds will be authorized and issued pursuant to an Indenture of Trust dated as of April 1, 1998 (the "Indenture") by and between the Issuer and U.S. Bank Trust National Association, Los Angeles, California (the "Trustee"), and in accordance with the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) (the "Law"), and the Constitution and other applicable laws of the State of California (the "State"). The Bonds will be purchased and sold by the Authority pursuant to the provisions of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code (the "JPA Act"). The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering price set forth in the Official Statement; however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the Official Statement prepared in connection with the Bonds. The Underwriter also agrees to notify the Issuer in writing of the "end of the underwriting period" as defined in Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"). Terms defined in the Official Statement are used herein as so defined. 2. Official Statement. The Issuer shall deliver, or cause to be delivered, to the Underwriter two (2) executed copies of the final Official Statement prepared in connection with the Bonds, in such form as shall be approved by the Issuer and the Underwriter and such additional conformed copies thereof as the Underwriter may reasonably request. The Issuer deems the Preliminary Official Statement (the "Preliminary Official Statement") to be "final" as of its date for purposes of Rule 15c2-12. By acceptance of this Purchase Contract, the Issuer hereby authorizes the use of copies of the Official Statement in connection with the public offering and sale of the Bonds, and ratifies and approves the distribution by the Underwriter of the Preliminary Official Statement. 3. Delivery of the Bonds. At approximately 9:00 a.m., Pacific time, on May 1998, or at such earlier or later time or date, as shall be agreed upon by the Issuer, the Authority and the Underwriter (such time and date herein referred to as the "Closing Date"), the Issuer shall deliver to the Underwriter, acting on its own behalf and as agent for the Authority at a location to be designated by the Underwriter, in New York, New York, or such other place as designated by the Underwriter, the Bonds in definitive form and authenticated by the Trustee. The Underwriter, acting on its own behalf, shall accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by same day funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Underwriter not later than the second business day before the Closing Date for purposes of inspection and packaging. The Bonds shall be delivered as registered bonds in the name of Cede & Co., Inc. 4. Representations and Agreements of the Issuer. The Issuer represents and agrees that: (a) The Issuer is a public body, corporate and politic, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the Law and the JPA Act, and has, and at the date of the Closing will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriter, acting on its own behalf and as agent for the Authority, as provided herein, (iii) to adopt the Resolution approving the 2 U Indenture, and (iv) to carry out and to consummate the transactions contemplated by this Purchase Contract, the Indenture, the Escrow Deposit and Trust Agreement between the Issuer and the Trustee as Escrow Bank (the "Escrow Agreement"), the Continuing Disclosure Agreement (the "Disclosure Agreement") between the Issuer and the Trustee as Dissemination Agent with respect to the Bonds and the Official Statement; (b) The Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (c) The Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (d) The Issuer to the best of its knowledge has complied, and will at the Closing Date be in compliance, in all respects with the Law, the JPA Act and any other applicable laws of the State; (e) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (f) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Issuer to the best of its knowledge is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Issuer is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; the execution and delivery of the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject; and, except as described in the Official Statement, the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the revenues and amounts pledged pursuant to, or subject to the lien of, the Indenture; (g) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to adoption of the resolution approving the Indenture, execution and delivery by the Issuer of the Escrow Agreement, the Disclosure Agreement, the Indenture and this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; J U ., (h) The Bonds when issued, authenticated and delivered in accordance with the Indenture will be validly issued, and will be valid and binding, obligations of the Issuer; (i) To the best of its knowledge the terms and provisions of the Indenture comply in all respects with the requirements of the Law and the JPA Act, and the Indenture, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, when properly executed and delivered by the respective parties thereto and hereto, will constitute the valid, legal and binding obligations of the Issuer enforceable in accordance with their respective terms, except as enforcement may by limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); 0) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Issuer, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract or the consummation of the transactions contemplated thereby and hereby, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the power or authority of the Issuer to issue the Bonds, to adopt the resolution approving the Indenture or to execute and deliver the Indenture or this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Issuer or the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract; (k) Any certificate signed by an authorized officer or official of the Issuer and delivered to the Underwriter shall be deemed a representation of the Issuer to the Underwriter as to the statements made therein; (1) Each of the Bonds shall be secured in the manner and to the extent set forth in the Indenture under which each such Bond is to be issued; (m) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Issuer shall not be required to consent to service of process outside of California; (n) The Issuer will apply the proceeds of the Bonds in accordance with the Indenture and all other applicable documents and as described in the Official Statement; (o) The Issuer shall provide or cause to be provided to the Underwriter not more than 200 copies of the Preliminary Official Statement in order to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution to each potential customer, upon request, of a copy of a Preliminary Official Statement and not later than seven (7) business days after the date of this Purchase Contract, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to a purchaser of the Bonds, 200 copies of the final Official Statement to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution of the final Official Statement; 4 Av (p) The Issuer will not invest or otherwise use proceeds of the Bonds in any manner which would cause the Bonds to be considered arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"); and (q) The Issuer will, at the Underwriter's request, take any action reasonably necessary to assure or maintain the exclusion from gross income for purposes of federal income taxes of interest on the Bonds and will not take any action, or permit any action to be taken with respect to which it may exercise control, which would result in the loss of that exclusion. 5. Representations and Agreements of the Authority. The Authority represents and agrees that: (a) The Authority is a joint powers authority, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the JPA Act, with full legal right, power and authority to purchase and sell the Bonds and to execute, deliver and perform its obligations under this Purchase Contract and to carry out and consummate the transactions contemplated by this Purchase Contract; (b) The Authority to the best of its knowledge has complied, and will at the Closing be in compliance, in all respects with the JPA Act and any other applicable laws of the State; (c) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Authority to the best of its knowledge is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and, the execution and delivery of this Purchase Contract, and compliance with the provisions thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject; and, except as described in the Official Statement, the Authority has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the assets or property of the Authority; (e) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to the execution and delivery by the Authority of this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (f) This Purchase Contract, when properly executed and delivered by the respective parties hereto, will constitute the valid, legal and binding obligations of the Authority enforceable in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); (g) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Authority, threatened, against the Authority, affecting the existence of the Authority or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of this Purchase Contract or the consummation of the transactions contemplated hereby, or contesting the power or authority of the Authority to purchase the Bonds from the Issuer or to sell the Bonds to the Underwriter or to execute and deliver this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Authority or the validity or enforceability of this Purchase Contract; and (h) Any certificate signed by an authorized officer of the Authority and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter as to the statements made therein. 6. Representations of the Underwriter. The Underwriter represents that it has full right, power, and authority to enter into this Purchase Contract. 7. Covenants re Official Statement. The Issuer and the Authority each covenant with the Underwriter that so long as the Underwriter, or dealers, if any, are participating in the distribution of the Bonds which constitute the whole or a part of their unsold participations, if an event known to the Issuer or the Authority occurs affecting the Issuer or the Authority, as applicable, or the transactions contemplated by the Indenture and the issuance of the Bonds, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer or the Authority, as applicable, shall notify the Underwriter and if in the opinion of the Issuer, the Authority, the Underwriter or Bond Counsel, such event requires an amendment or supplement to the Official Statement, the Issuer will amend or supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter, and the Issuer will bear the cost of making and printing such amendment or supplement to the Official Statement and distributing such amendment or supplement to Owners of the Bonds. The obligations of the Issuer and the Authority under this Section 7 shall terminate on the earlier of (a) ninety (90) days from the "end of the underwriting period," as defined in Rule 15c2-12, or (b) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty-five (25) days following the end of the underwriting period. Unless otherwise notified by the Underwriter pursuant to Section 1 hereof not later than thirty (30) days after the Closing Date, the Issuer and the Authority may assume that the end of the underwriting period is the Closing Date. 8. Conditions to Obligations of Underwriter. The Underwriter has entered into this Purchase Contract in reliance upon the representations and agreements of the Issuer and the Authority contained herein and upon the accuracy of the statements to be contained in the documents, opinions, and instruments to be delivered at the Closing. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, accept delivery of, and pay 6 a �. for the Bonds on the Closing Date is subject to the performance by the Issuer and the Authority of their respective obligations hereunder at or prior to the Closing. The following additional conditions precedent relate to the Closing, in connection with the Underwriter's obligation to purchase the Bonds: (a) At the time of the Closing, (i) the representations of the Issuer and the Authority contained herein to the best of their knowledge shall be true, complete and correct; and (ii) the Indenture shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (b) The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing, (i) legislation shall have been enacted (or indenture or resolution passed) by or introduced or pending legislation amended in the Congress of the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling shall have been made or indenture shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or State authority, with respect to State taxation upon interest on obligations of the general character of the Bonds or with respect to the security pledged to pay debt service on the Bonds, that, in the Underwriter's reasonable judgment, materially adversely affects the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (ii) there shall exist any event that, in the Underwriter's reasonable judgment, either (A) makes untrue or incorrect in any material respect any statement or information in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws, the effect of which on the financial markets of the United States will be such as in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices of securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of determination by that Exchange or by order of the Securities and Exchange Commission of the United States or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (v) a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and be in force that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (vi) legislation shall be enacted or be proposed or actively considered for enactment, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission of the United States or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any obligations of the general character of the Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or of the Trust Indenture Act of 1939, as amended and as then in effect, or otherwise are or would be in violation of any provision of the federal securities laws, or (vii) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or materially increase any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters, or (viii) there shall have been any materially adverse change in the affairs of the 7 it Issuer or the Authority which in the Underwriter's reasonable judgment materially adversely affects the market for the Bonds, or (ix) general political, economic or market conditions which, in the sole opinion of the Underwriter, shall not be satisfactory to permit the sale of the Bonds; and (c) At or prior to the Closing, the Underwriter and the Issuer shall receive the following: (1) The unqualified approving opinion of Rutan & Tucker, LLP, Costa Mesa, California, bond counsel (the "Bond Counsel"), in form and substance acceptable to the Underwriter, addressed to the Issuer, dated the date of the Closing; (2) A supplemental opinion of Bond Counsel, addressed to the Underwriter and the Issuer in form and substance acceptable to each of them, dated the date of Closing, to the following effect: (i) The Issuer has duly authorized, executed and delivered the Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract. The Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract constitute the legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles when equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (ii) The Official Statement has been duly authorized, executed and delivered by the Issuer; (iii) The statements and information contained or summarized in the Preliminary Official Statement and Official Statement under the headings "THE BONDS," "SECURITY FOR THE BONDS," "THE INDENTURE," "CONCLUDING INFORMATION — Legal Opinion," "Tax Exemption," and "Continuing Disclosure," the Cover Page and "INTRODUCTORY STATEMENT," and "APPENDIX A —Definitions" (but not including any statistical or financial information set forth under such headings, as to which no opinion need be expressed) insofar as such statements purport to summarize certain provisions of the Law, the Bonds, the Indenture, the Disclosure Agreement, the Escrow Agreement and the opinion of such Bond Counsel concerning certain federal and state tax matters relating to the Bonds, are accurate in all material respects; (iv) The Bonds are exempt from registration under the Securities Act of 1933, as amended; (v) The Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (vi) The lien of the 1992 Bonds with respect to the Pledged Revenues has been discharged; (3) The opinion of counsel to the Issuer, addressed to the Underwriter and the Issuer, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Issuer is a public body, corporate and politic, duly organized and validly existing under and by virtue of the Constitution and the laws of the State; (ii) The Indenture has been duly approved by a resolution of the Issuer adopted at a regular meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the Issuer was continuously present; (iii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Issuer to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds or the execution and delivery by the Issuer of, or the performance by the Issuer of its obligations under the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; or (d) if determined adversely to the Issuer or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Issuer; (iv) The Issuer has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer for the valid authorization, issuance and delivery by the Issuer of the Bonds; and (v) The statements and information contained in the Preliminary Official Statement and Official Statement under the headings, "PROPERTY TAXATION IN CALIFORNIA," "THE PROJECT AREA," "PLEDGED REVENUES," "CONCLUDING INFORMATION —No Litigation" and "Legality for Investment in California" and "SUPPLEMENTAL INFORMATION —The City of La Quinta" (excluding therefrom any financial statements and statistical data as to which no opinion need be expressed) are accurate in all material respects; (4) The opinion of counsel to the Authority, addressed to the Underwriter and the Authority, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Authority is a joint powers authority, duly created and validly existing under and by virtue of the Constitution and the laws of the State; (ii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Authority to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds, the adoption or effectiveness of the Indenture, or the execution and delivery by the Authority of, or the performance by the Authority of its obligations under, the Purchase Contract; or (d) if determined adversely to the Authority or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Authority; (iii) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Purchase Contract does not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound; 9 (iv) The Authority has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer required for the valid purchase and sale by the Authority of the Bonds; and (v) The statements and information contained in the Official Statement under the heading "THE AUTHORITY" are accurate in all material respects; (5) A certificate dated the date of the Closing, signed by the Executive Director or appropriate officer of the Issuer, to the effect that to the best of his knowledge: (1) the representations and covenants of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Issuer has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; (iii) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (iv) the Indenture remains in full force and effect and has not been amended in any respect, except as approved in writing by the Underwriter, since the date of the Indenture; (6) A certificate dated the date of the Closing, signed by an officer of the Authority, to the effect that to the best of his knowledge: (i) the representations and covenants of the Authority contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Authority has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; and (iii) no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement of information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; (7) A certificate of the Trustee dated the date of the Closing, to the effect that: (i) the Trustee is organized and existing as a national banking association under and by the virtue of the laws of the United States of America, having full power and being qualified and duly authorized to perform the duties and obligations of the Trustee, the Escrow Bank and the Dissemination Agent under and pursuant to the Indenture, the Escrow Agreement and the Disclosure Agreement; (ii) the Trustee has agreed to perform the duties and obligations of the Trustee as set forth in the Indenture, the Escrow Agreement and the Disclosure Agreement; (iii) to the best of its knowledge, compliance with the provisions on the Trustee's part contained in the Indenture, the Escrow Agreement and the Disclosure Agreement will not conflict with or constitute a breach of or default under any material law, administrative regulation, judgment, decree, loan agreement, indenture, resolution, bond, note, agreement or other instrument to which the Trustee is a party or is otherwise subject, as a result of which the Trustee's ability to perform its obligations under the Indenture would be impaired, nor will any such compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, agreement or other instrument, except as provided by the Indenture, the Escrow Agreement, the Disclosure Agreement; and (iv) to the best of the knowledge of the Trustee, the Trustee has not been served in any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending nor is any such action, suit, proceeding, inquiry or investigation threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or 10 seeking to prohibit, restrain or enjoin the delivery of the Bonds issued under the Indenture or the collection of revenues pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds issued under the Indenture, the Escrow Agreement, the Disclosure Agreement, or the pledge thereof, or in any way contesting the powers of the Trustee or its authority to enter into or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture, the Escrow Agreement, the Disclosure Agreement; (8) Two (2) copies of this Purchase Contract duly executed and delivered by the parties thereto; (9) Two (2) copies of the Official Statement, executed on behalf of the Issuer by the Executive Director of the Issuer; (10) One (1) certified copy of the Indenture, the Escrow Agreement, the Disclosure Agreement and all resolutions of the Issuer, the Authority and the City relating to the issuance of the Bonds; (11) A certificate dated the date of the Closing, signed by the Underwriter, to the effect that statements and information contained in the Preliminary Official Statement and the Official Statement under the heading "CONCLUDING INFORMATION — Underwriting" is accurate in all material respects; (12) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the Authority; (13) An opinion of counsel to the Bond Insurer to the effect that (i) the Municipal Bond Insurance Policy is valid, binding and enforceable against the Bond Insurer in accordance with its terms, except as such enforceability may be limited by laws affecting the enforcement of creditors' rights generally, and (ii) the statements and information contained in the Official Statement under the heading "CONCLUDING INFORMATION —Bond Insurer" and "APPENDIX B—Specimen Municipal Bond Insurance Policy" are accurate in all material respects; (14) Rating letters from Standard & Poor's Ratings Group and Moody's Investors Services, Inc. confirming the ratings on the Bonds; (15) All pertinent documents relating to the Municipal Bond Insurance Policy including a true copy of the Municipal Bond Insurance Policy; (16) A report of a certified public accountant as to (i) the sufficiency of the amount deposited in the Escrow Fund and such other opinions and certificates reasonably required to demonstrate that the lien of the 1992 Bonds with respect to the Pledged Revenues has been discharged and (ii) the "yield" on the Bonds, the "yield" on certain obligations in the Escrow Fund and other related matters considered by Bond Counsel in support of the conclusion that the Bonds are not "arbitrage bonds" within the meaning of the Code. (17) A letter, dated the date of the Closing and addressed to the Underwriter and the Issuer, of Disclosure Counsel, to the effect that based upon its participation in the preparation of the Official Statement and without having undertaken to determine independently the accuracy or completeness of the statements in the Official Statement such Counsel has no reason to believe that, as of the date of Closing, the Official Statement (except for financial, statistical and numerical data included in the Official Statement, as to which no view need be expressed) contains any untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (18) A copy of the report or reports of Rosenow Spevacek Group, Inc. with respect to Pledged Revenues for the Project Area; and (19) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Bond Counsel or Disclosure Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the Authority. The Issuer and the Authority will furnish the Underwriter with such conformed copies of such opinions, certificates, letters and documents as the Underwriter may reasonably request. If the Issuer and the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter, the Authority or the Issuer shall have any further obligations hereunder, except as provided in Section 9 hereof. However, the Underwriter may in its discretion waive one or more of the conditions imposed by this Purchase Contract for the protection of the Underwriter and proceed with the related Closing. 9. Expenses. The Underwriter shall be under no obligation to pay, and the Issuer shall pay from its available funds or from the proceeds of the Bonds, certain expenses set forth in this Section, including but not limited to: (i) all expenses in connection with the preparation, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) all expenses in connection with the printing, issuance and delivery of the Bonds, (iii) the fees and disbursements of Bond Counsel and Disclosure Counsel in connection with the Bonds, (iv) the fees and disbursements of counsel to the Issuer and counsel to the Authority in connection with the Bonds, (v) the disbursements of the Issuer and the Authority in connection with the issuance of the Bonds, (vi) the fees and disbursements of the Trustee, and (vii) rating agencies' fees and the Bond Insurance Premium. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 10. Notice. Any notice or other communication to be given to the Issuer under this Purchase Contract may be given by delivering the same in writing at the address set forth above. Any such notice or communication to be given to the Underwriter may be given by delivering the same in writing to: Miller & Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075-0819 Attention: Ms. Robin M. Thomas 12 ` 11. Governing Law. This Purchase Contract shall be governed by the laws of the State of California. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof except as provided in Section 11 hereof. Respectfully submitted, MILLER & SCHROEDER FINANCIAL, INC. By Its: Senior Vice President Accepted as of the date first stated above: LA QUINTA REDEVELOPMENT AGENCY By Its: Executive Director LA QUINTA FINANCING AUTHORITY By Its: Executive Director 13' APPENDIX A MATURITY SCHEDULE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 Maturity Date September 1 of 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2018 2028 Total Interest Principal Rate Price A-1 �� ESCROW DEPOSIT AND TRUST AGREEMENT by and among the LA QUINTA REDEVELOPMENT AGENCY U.S. BANK TRUST NATIONAL ASSOCIATION as Escrow Bank and 1998 Bonds Trustee and BNY WESTERN TRUST COMPANY as 1992 Bonds Trustee Trustee Dated as of April 1, 1998 LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2, TAX ALLOCATION REFUNDING BONDS, ISSUE 1998 124/016150-0012/3149959.1 a03/18/98 li t TABLE OF CONTENTS Page Section 1. Definitions . . . . . . . . . . . . . . . . . 2 Section 2. Appointment of Escrow Bank . . . . . . . . . . 2 Section 3. Establishment of Escrow Funds . . . . . . . . 2 Section 4. Deposit and Application of Funds . . . . . . . 2 Section 5. Deposit and Application of Other Funds . . . . 3 Section 6. Instructions as to Application of Deposit . . 3 Section 7. Investment of Any Remaining Moneys . . . . . . 3 Section 8. Substitution or Withdrawal of Federal Securities . . . . . . . . . . . . . . . . . . 3 Section 9. Application of Certain Terms of the 1990 Indenture . . . . . . . . . . . . . . . . . . 4 Section 10. Liability of Escrow Bank . . . . . . . . . . . 4 Section 11. Compensation to Escrow Bank . . . . . . . . . 4 Section 12. Resignation and Removal . . . . . . . . . . . 5 Section 13. Limited Liability of Escrow Bank; Reliance on Opinions and Documents . . . . . . . . . . 5 Section 14. Amendment Hereof . . . . . . . . . . . . . . . 5 Section 15. Execution in Counterparts . . . . . . . . . . 6 124/016150-0012/3149959.1 i ESCROW DEPOSIT AND TRUST AGREEMENT This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into as of the 1st day of April, 1998, by and among the LA QUINTA REDEVELOPMENT AGENCY, a redevelopment agency organized and existing under the laws of the State of California (the "Agency"), BNY WESTERN TRUST COMPANY, a state banking association organized and existing under the laws of the State of California, (the 111992 Bonds Trustee") as successor trustee with respect to the Agency's $5,485,000 La Quinta Redevelopment Project Area No. 2, Tax Allocation Bonds, Issue 1992 (the 111992 Bonds") and U.S. Bank Trust National Association, a national banking association organized and existing under the law of the United States (the "Escrow Bank" and 111998 Bonds Trustee"). WITNESSETH: WHEREAS, the Agency has executed and delivered its 1992 Bonds pursuant to an Indenture of Trust Agreement as of December 1, 1992 by and between the Agency and the predecessor of the 1992 Trustee (the 111992 Trust Agreement"); and WHEREAS, the 1998 Trustee and the Agency have entered into an Indenture of Trust, dated as of April 1, 1998 (the 111998 Trust Agreement"), pursuant to which Bonds (the 111998 Bonds") of the Agency have been issued to provide funds to advance refund the 1992 Bonds; and WHEREAS, pursuant to the 1992 Trust Agreement, the 1992 Bonds shall no longer be deemed to be outstanding and unpaid if the Authority shall have caused to be deposited with the 1992 Bonds Trustee, in trust, Qualified Investments (as herein defined) in such amount as, in the opinion of an independent certified public accountant, will, together with the interest to accrue thereon, be fully sufficient to pay and discharge the 1992 Bonds (including all principal, interest and redemption premiums), at or before their respective maturity dates, then the 1992 Trust Agreement and all rights granted thereby, shall thereupon cease, terminate and become void and be discharged and satisfied; and WHEREAS, the firm of prepared and delivered to the Agency and the verification report verifying the mathematical amount of said deposit, upon which the Agency relied; and has 1998 Trustee a accuracy of the and Trustee have WHEREAS, the Agency wishes to make such a deposit with the Escrow Bank and to enter into this Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform iP-7 124/016150-0012/3149959.1 a03/18/98 - 1 - 3 1 9 the duties and obligations to be undertaken pursuant to the Agreement; NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows: Section 1. Definitions. As used herein, the term "Qualified Investments" shall mean United States Treasury notes, bonds, bills or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest. Terms not herein defined shall be as defined in the 1998 Indenture. Section 2. Appointment of Escrow Bank. The Agency hereby appoints the Escrow Bank as escrow holder for all purposes of this Agreement and in accordance with the terms and provisions of this Agreement, and the Escrow Bank hereby accepts such appointment. Section 3. Establishment of Escrow Fund. The Escrow Bank hereby agrees to establish and maintain an irrevocable escrow fund to be designated the "1992 Bonds Escrow Fund", ("Refunding Escrow Fund") which shall be held by the Escrow Bank in trust as security for the payment of the principal of, redemption premiums and interest on the 1992 Bonds. If at any time the Escrow Bank shall receive actual knowledge that the moneys and Qualified Investments in the Refunding Escrow Fund will not be sufficient to make any payment required by Section 5 hereof, the Escrow Bank shall notify the Agency of such fact and the Agency shall immediately cure such deficiency. Section 4. Deposit and Application of Funds. Concurrently with delivery of the 1998 Bonds, the Agency shall cause to be transferred by the 1998 Trustee to the Escrow Bank for deposit in the Refunding Escrow Fund the amount of $ derived by the Authority from the proceeds of the 1998 Bonds, and the amount of $ transferred by the 1992 Bonds Trustee established under the 1992 Trust Agreement. The amount deposited by the Agency with the Escrow Bank in the Refunding Escrow Fund pursuant to this Section 4 shall be applied by the Escrow Bank on the date hereof in the amount of $ , to acquire the Qualified Investments described in Exhibit "A" attached hereto and by this reference incorporated herein (the "Original Federal Securities") and the remaining amount of $ shall be held uninvested. Section 5. Instructions as to Application of Deposit. The Original Federal Securities deposited pursuant to Section 4 hereof shall be deemed to be and shall constitute the deposit permitted to be made by the Authority pursuant to the 1992 Trust Agreement and of the Sublease. The Agency hereby instructs the Escrow Bank to 124/016150-001213149959.1 a03/18/98 - 2 - �J� apply the payments received from the Original Federal Securities, together with the cash deposited to: (a) pay all principal of and the interest on the 1992 Bonds coming due and payable on and through , and (b) to redeem on at a price of 102.00* plus accrued interest thereon to the date of redemption of all of the then outstanding 1992 Bonds maturing on and thereafter; all pursuant to and in accordance with the provisions of the 1992 Trust Agreement on the dates and in the amounts set forth in Exhibit "B" attached hereto and by this reference incorporated herein. Section 6. Investment of Any Remaining Moneys. The proceeds received from any of the Original Federal Securities shall be held uninvested until applied as required pursuant to Section 6. The Escrow Bank is hereby authorized and empowered to deposit uninvested monies held hereunder from time to time in demand deposit accounts, without payment for interest thereon as provided hereunder, established at commercial banks that are corporate affiliates of the Escrow Bank. Section 7. Substitution or Withdrawal of Federal Securities. The Agency may at any time direct the Escrow Bank to substitute non -callable Qualified Investments for any or all of the Original Federal Securities then deposited in the Escrow Fund, or to withdraw from the Escrow Fund and transfer to the Authority any Federal Securities or portions thereof, provided that any such direction and substitution or withdrawal shall be accompanied with a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions, which individual or firm carries errors and omissions insurance, and is not the underwriter, bond counsel or financial advisor in relation to the 1992 Bonds or the 1998 Bonds that the Federal Securities then to be so deposited in the Escrow Fund, or in the case of any such withdrawal, in either case together with interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 5 hereof and, further, to be accompanied with an opinion of nationally recognized bond counsel that: (a) the substitution or withdrawal is permitted under this Agreement, and (b) the substitution will not affect the exemption from federal income taxes of the interest on the 1992 Bonds or the 1998 Bonds. In the event that, following any such substitution or withdrawal of Federal Securities pursuant to this Section 7, there is an amount of moneys or Federal Securities in excess of an amount sufficient to make the payments required by Section 5 hereof, such excess shall be paid to the Agency. Section 8. Application of Certain Terms of the 1993 Indenture. All of the terms of the 1992 Trust Agreement relating to the making of payments or principal and interest on the 1992 Bonds are incorporated in this Agreement as if set forth in full herein. 124/016150-0012/3149959.1 a03/I8/98 - 3 - 10-11 The Escrow Bank is hereby directed to provide timely notice of redemption of all 1992 Bonds. Said notice shall be mailed by the 1992 Bonds Trustee in accordance with the provisions of the 1992 Trust Agreement. The notices so mailed shall contain the information specified in the 1992 Trust Agreement. This paragraph shall constitute notice by the Agency to the 1992 Bonds Trustee of the redemption of the 1992 Bonds on Section 9. Liability of Escrow Bank. The Escrow Bank undertakes to perform such duties and only such duties specifically set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Escrow Bank. The Agency further agrees to indemnify the Escrow Bank from any and all claims, losses or expenses arising from the performance of its duties hereunder except that the Escrow Bank shall not be indemnified for any claim, loss or expense arising from its negligence or willful misconduct. No provision of this Agreement shall require the Escrow Bank to risk or advance its own funds and the Escrow Bank's sole responsibility is to administer the amounts deposited hereunder in accordance with the terms of this Agreement. Such indemnity shall survive termination of this Agreement or resignation or removal of the Escrow Bank. Section 10. Compensation to Escrow Bank. The Agency shall pay the Escrow Bank full compensation for its duties under this Agreement, including out-of-pocket costs such as publication costs, redemption expenses, legal fees and other costs and expenses relating hereto and, in addition, fees, costs and expenses relating to the purchase of any Federal Securities after the date hereof, pursuant to separate agreement between the Agency and the Escrow Bank. Under no circumstances shall amounts deposited in the Escrow Funds be deemed to be available for said purposes. Section 11. Resignation and Removal. The provisions of the 1993 Trust Agreement as it relates to the 1992 Bonds relating to the resignation and removal of the 1992 Bonds Trustee are also incorporated in this Agreement as if set forth in full herein and shall be the procedure to be followed with respect to any resignation or removal of the Escrow Bank hereunder. Section 12. Limited Liability of Escrow Bank; Reliance on Opinions and Documents. The Escrow Bank shall not be responsible for any of the recitals or representations contained herein. The Escrow Bank shall not be liable for the accuracy of any calculations provided as to the sufficiency of the moneys or the securities deposited with it to pay the principal or interest represented by the 1992 Bonds. The Escrow Bank shall not be liable for any act or omission of the Agency under this Agreement. The Escrow Bank may conclusively rely, as to the truth and accuracy of the statements and the correctness of the opinions and calculations provided, and shall be protected and indemnified, in acting, or refraining from acting, upon any written notice, instruction, request, certificate, document or opinion furnished to A n 124/016150-0012/3149959.1 - 4 - A (_4. the Escrow Bank and reasonably believed by the Escrow Bank to have been signed or presented by the proper party, and it need not investigate any fact or matter stated in such notice, instruction, request, certificate, document or opinion. Whenever in the administration of this Agreement the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be deemed to be conclusively proved and established by a certificate of an authorized representative of the Agency, and such certificate shall, in the absence of negligence or willful misconduct on the part of the Escrow Bank, be full warrant to the Escrow Bank for any action taken or suffered by it under the provisions of this Agreement upon the faith thereof. Section 13. Amendment Hereof. This Agreement may not be amended by the parties hereto unless there shall first have been filed with the Agency and the Escrow Bank a written opinion of nationally -recognized bond counsel stating that such amendment will not adversely affect the exemption from federal income taxation or the exclusion from gross income under federal tax law, as applicable, of interest on the 1992 Bonds or the 1998 Bonds. Section 14. Execution in Counterparts. This Escrow Deposit and Trust Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. 124/016150-0012/3149959.1 - 5 - J IN WITNESS WHEREOF, the Agency, the Escrow Bank, and the 1992 Bonds Trustee have each caused this Agreement to be executed by their duly authorized officers all as of the date first above written. LA QUINTA REDEVELOPMENT AGENCY Its: Executive Director BNY WESTERN TRUST COMPANY, as 1992 Bonds Trustee ZZ Its: Authorized Signatory U.S. BANK TRUST NATIONAL ASSOCIATION, as Escrow Bank and 1998 Bonds Trustee M Its: Authorized Signatory 124/016150-0012/3149959.1 - 6 - 184 EXHIBIT A Date Principal Coupon Interest SLGS P+I TOTAL 3 124/016150-0012/3149959.1 - % - Date Principal Interest EXHIBIT B Principal Redeemed Redemption Premium Total 1,0) 124/016150-0012/3149959.1 - S ATTACHMENT NO. 9 LA QUINTA REDEVELOPMENT AGENCY KNE U.S. BANK TRUST NATIONAL ASSOCIATION as Trustee INDENTURE OF TRUST SECURING $ LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BONDS, ISSUE OF 1998 Dated as of April 1, 1998 124/016150-0012/3149955.1 a03/18/98 iV TABLE OF CONTENTS Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . Granting Clauses . . . . . . . . . . . . . . . . . . . . . . ARTICLE I Section 1.01. Definitions . . . . . . . . . . . . . . . . . . Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14. Section 2.15. ARTICLE II THE BONDS Amount, Issuance and Purpose of Bonds. . . . Nature of Bonds . . . . . . . . . . . . . . . . Description of Bonds . . . . . . . . . . . . . Interest. Place of Payment . . . . . . . . . . . . . . Form of Bonds . . . . . . . . . . . . . . . . . Execution of Bonds . . . . . . . . . . . . . . Registration and Exchange. . . . . . . . . . . Bond Register . . . . . . . . . . . . . . . . . Delivery of the Bonds . . . . . . . . . . . . . Lost, Stolen, Destroyed or Mutilated Bonds. Cancellation of Bonds . . . . . . . . . . . . . Validity of the Bonds . . . . . . . . . . . . . Issuance of Parity Bonds. . . . . . . . . . . Book Entry System . . . . . . . . . . . . . . . ARTICLE III REVENUES AND FUNDS Section 3.01. Source of Payment of Bonds. . . . . . . . . . Section 3.02. Creation of Funds and Accounts. . . . . . . . Section 3.03. Sale of Bonds; Disposition of Bond Proceeds; Redevelopment Escrow Fund; Redevelopment Fund . . . . . . . . . . . . . . . Section 3.04. Final Balances. . . . . . . . . . . . . . . . Section 3.05. Security of Funds . . . . . . . . . . . . . . . Section 3.06. Non -Presentment of Bonds. . . . . . . . . . . Section 3.07. Moneys to be Held in Trust. . . . . . . . . . Page 1 2 0 13 13 14 14 15 15 15 16 16 16 17 18 18 18 19 22 22 22 24 24 24 24 124/016150-0012/3149955.1 a03/18/98 +;F ARTICLE IV REVENUES AND APPLICATION Section 4.01. Pledged Revenues. . . . . . . . . . . . . . . Section 4.02. Special Fund. . . . . . . . . . . . Section 4.03. Payments of Principal, Premium and Interest. Section 4.04. Revenues to be Held for All Bondowners; Certain Exceptions . . . . . . . . . . . . . . . ARTICLE V INVESTMENT OF MONEYS 25 26 28 Wl Section 5.01. Rebate Fund . . . . . . . . . . . . . . . . . . 28 Section 5.02. Investment of Moneys in Funds and Accounts. 30 Section 5.03. Investments . . . . . . . . . . . . . . . . . 31 ARTICLE VI REDEMPTION OF BONDS BEFORE MATURITY Section 6.01. Limitation on Redemption. . . . . . . . . . . 31 Section 6.02. Optional Redemption . . . . . . . . . . . . . . 31 Section 6.03. Call and Redemption; Notice of Redemption. 32 Section 6.04. Redemption Fund . . . . . . . . . . . . . . . . 33 Section 6.05. Partial Redemption of Bonds. . . . . . . . . . 33 Section 6.06. Effect of Redemption. . . . . . . . . . . . . 33 Section 6.07. Purchase of Bonds . . . . . . . . . . . . . . . 34 ARTICLE VII PAYMENT; COVENANTS OF THE AGENCY Section 7.01. Payment of Principal or Redemption Price of and Interest on Bonds. . . . . . . . . . . . 34 Section 7.02. Covenants of the Agency. . . . . . . . . . . . 34 Section 7.03. Compliance with Indenture, Contracts, Laws and Regulations . . . . . . . . . . . . . . 39 ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDOWNERS Section 8.01. Defaults . . . . . . . . . . . . . . . . . . . 40 Section 8.02. Application of Funds Upon Acceleration. . . . 43 3 124/016150-0012/3149955,1 a03/18/98 B — 1 1 ARTICLE IX THE TRUSTEE AND THE PAYING AGENT Section 9.01. Appointment, Duties, Immunities and Liabilities of Trustee . . . . . . . . . . . . . 44 Section 9.02. Liability of Trustee. 47 Section 9.03. Right of Trustee to Rely on Documents. . . . . 48 Section 9.04. Intervention by Trustee . . . . . . . . . . . 48 Section 9.05. Designation and Successor of Paying Agent; Agreement with Paying Agent. . . . . . . . . . 49 ARTICLE X SUPPLEMENTAL INDENTURES Section 10.01. Amendments: Supplemental Indentures. . . . . 49 ARTICLE XI DEFEASANCE Section 11.01. Defeasance. . . . . . . . . . . . . . . . . . 52 ARTICLE XII MISCELLANEOUS Section 12.01. Consents, Etc. of Bondowners. . . . . . . . . Section 12.02. Limitation of Rights . . . . . . . . . . . . . Section 12.03. Severability. . . . . . . . . . . . . . . . . Section 12.04. CUSIP Numbers. . . . . . . . . . . . . . . . Section 12.05. Successor is Deemed Included in All References to Predecessor. . . . . . . . . . . Section 12.06. Counterparts . . . . . . . . . . . . . . . . . Section 12.07. Applicable Law . . . . . . . . . . . . . . . . Section 12.08. Captions . . . . . . . . . . . . . . . . . . . Section 12.09. Compliance Certificates and Opinions. . . . . Section 12.10. Conflict with Trust Indenture Act of 1939 Section 12.11. Successors. . . . . . . . . . . . Section 12.12. Execution of Documents and Proof of Ownership by Bondowners. . . . . . . . . . . . Section 12.13. Waiver of Personal Liability. . . . . . . . . Section 12.14. Notices. . . . . . . . . . . . . . . . . . . 54 55 55 55 55 55 56 56 56 56 56 57 57 57 124/016150-0012/3149955.1 a03/18/98 B — i i 1 THIS INDENTURE OF TRUST, dated as of April 1, 1998, is entered into between the La Quinta Redevelopment Agency, a public body corporate and politic (the "Agency"), and U.S. Bank Trust National Association, a national banking association organized under the laws of the United States of America, as trustee (the "Trustee). R E C I T A L S WHEREAS, 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 or notes for any of its corporate purposes; and WHEREAS, the Redevelopment Plan for a redevelopment project known and designated as the "La Quinta Redevelopment Project Area No. 2" has been adopted and approved by Ordinance No. 139 of the City of La Quinta on May 16, 1989, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan, as amended, have been duly complied with; and WHEREAS, the Agency has issued its $5,845,000 La Quinta Redevelopment Project Area No. 2 Tax Allocation Bonds, Issue 1992 (the "Prior Bonds"); and WHEREAS, for the corporate purposes of the Agency, the Agency deems it necessary to issue at this time tax allocation bonds in a principal amount of Million Hundred Thousand Dollars ($ ) (the "Bonds"), and to irrevocably set aside a portion of the proceeds of such Bonds in a separate segregated trust fund which will be used to advance refund the Prior Bonds, finance a portion of the costs of implementing the Redevelopment Plan, including the refunding of loans made by the City of La Quinta to the Agency which money was expended to pay costs to implement the Redevelopment Plan, to pay costs in connection with the issuance of the Bonds and to make certain other deposits as required by this Indenture; and WHEREAS, the purposes stated above will be accomplished by issuing at this time such tax allocation bonds pursuant to this Indenture and that certain resolution of the Agency adopted on April 7, 1998 providing for the issuance of "La Quinta Redevelopment Agency, Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998"; WHEREAS, the Agency hereby certifies that the execution and delivery of the Bonds and of the Indenture have been duly authorized and all things necessary to make the Bonds, when 124/016150-0012/3149955.1 a03/18/98 - _L - executed by the Agency and authenticated by the Trustee, valid and binding legal obligations of the Agency and to make this Indenture a valid and binding legal instrument for the security of the Bonds, have been done. NOW, THEREFORE, THIS INDENTURE OF TRUST WITNESSETH: That the Agency, in consideration of the premises, the acceptance by the Trustee of the trusts hereby created, the purchase and acceptance of the Bonds by the purchasers thereof, and of other good and valuable consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the principal of, premium, if any, and interest on all Bonds Outstanding hereunder from time to time, according to their tenor and effect, and to secure the observance and performance by the Agency of all the covenants expressed or implied herein and in the Bonds, does hereby convey, pledge and assign unto the Trustee, and unto its successors and assigns forever and does hereby grant to it and them a security interest, together with all right, title and interest of the Agency, in: GRANTING CLAUSE FIRST The Pledged Revenues (as hereinafter defined) together with all other revenues, and all moneys and securities held by the Trustee in any Fund or Account together with investment earnings thereon established pursuant to the terms of this Indenture and any and all other property of each name and nature from time to time hereafter by delivery or by writing of any kind pledged or assigned as and for additional security hereunder, by anyone, to the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof (the "Trust Estate"). TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or hereafter acquired, unto the Trustee and its respective successors in said trusts and assigns forever. IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security and protection of all present and future owners of the Bonds, from time to time issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds. PROVIDED, HOWEVER, that if the Agency, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the interest and premium, if any, due or to become due thereon, at the times and in the manner mentioned in the Bonds, according to the true intent and meaning thereof, and shall cause the payments to be made into the Special Fund as required hereunder or shall provide, as permitted by Article XI hereof, for the payment thereof, and shall well and 124/016150-0012/3149955.1 a03/18/98 - 2 - 10 �2 truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee and all Paying Agents all sums of money due or to become due to them in accordance with the terms and provisions hereof, then this Indenture and the rights hereby granted shall cease, determine and be void, otherwise this Indenture is to be and remain in full force and effect. THIS INDENTURE OF TRUST FURTHER WITNESSETH, and it is expressly declared, that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and the Revenues hereby assigned and pledged are to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed, and the Agency has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective holders from time to time of the Bonds, as follows: A U 124/016150-0012/3149955.1 a03/18/98 - 3 - ARTICLE I DEFINITIONS Section 1.01. Definitions. (A) For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) "This Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof. (2) All references in this Indenture to designated "Articles", "Sections" and other subdivisions are to the designated Articles, Sections and other subdivisions of this Indenture. The words "herein", "hereof", "hereto", "hereby", and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. (3) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular. (4) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with applicable generally accepted accounting principles as in effect from time to time. (5) Every "request", "order", "demand", "application", "appointment", "notice", "statement", "certificate", "consent", or similar action hereunder by the Agency shall, unless the form thereof is specifically provided, be in writing signed by a duly authorized officer or agent of the Agency with a duly authorized signature. (B) For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: "Agency" means the La Quinta Redevelopment Agency. "Alternate Reserve Account Security" means one or more letters of credit, surety bonds, 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 any Bond Year, the principal and interest payable on the Outstanding Bonds in such Bond Year. 1241016150-001213149955.1 a03/18/98 - 4 - "Authorized Officer of the Agency" means the Acting Executive Director or the Treasurer or such other person so designated by the Agency. "Bond" or "Bonds" means the "La Quinta Redevelopment Agency, Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 199811, authorized by this 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. "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 of any Outstanding Bond. For the purpose of Bondowners' voting rights or consents, Bonds owned by or held for the account of the Agency, or the City, directly or indirectly, shall not be counted. "Bond Year" means the twelve September 2 of each year, provided extend from the Delivery Date to (12) month period commencing on that the first Bond,Year shall "Business Day" means a day of the year other than (i) a Saturday, Sunday, legal holiday or day on which banking institutions in the City in which the corporate trust office of the Trustee is located are required or authorized to remain closed, or (ii) a day on which the Federal Reserve system is closed. "Certificate" or "Certificate of the Agency" means a Certificate signed by the Chairman or Acting Executive Director of the Agency or their respective deputies. "Chairman" means the chairman of the Agency appointed pursuant to Section 33113 of the Health and Safety Code of the State of California, or other duly appointed officer of the Agency authorized by the Agency by resolution or bylaw 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. "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. 4 124/016150-0012/3149955.1 03/18/98 - 5 - A� "Computation Year" means the period beginning on the Delivery Date and ending on and each September 30 thereafter until there are no longer any Bonds Outstanding. "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds including the acceptance and initial fees and expenses of the Trustee, the premium for a municipal bond insurance policy, legal fees and expenses of the Trustee and the Agency, costs of printing the Bonds and Official Statement, fees of financial consultants and other fees and expenses set forth in a Certificate of the Agency. "County" means the County of Riverside, California. "Delivery Date" means the date the Bonds are delivered to the original purchaser thereof. "Escrow Agreement" means that Escrow Deposit and Trust Agreement, dated as of April 1, 1998, by and between the Agency and the Trustee as Escrow Bank. "Escrow Bank" means U.S. Bank Trust National Association. "Escrowed Bonds" means the principal amount of the Bonds equal to the amount held in the Redevelopment Escrow Fund. "Event of Default" means any of the events described in section 801 hereof. "Finance Director" means the Finance Director of the City and the Agency. "Fiscal Year" means any twelve (12) month period beginning on July 1st and ending on the next following June 30th. "Government Obligations" means direct general obligations (including obligations issued or held in book entry form on the books of the Department of the Treasury) of the United States of America. "Indenture" means this Indenture of Trust between the Agency and the Trustee, as originally adopted or as it may be amended or supplemented by any Supplemental Indenture entered into pursuant to the provisions hereof. "Independent Financial Consultant," "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/her opinion or certificate will be given, and: (1) Is in fact independent and not under domination of the Agency; ri k� 124/016150-0012/3149955.1 a03/18/98 - 6 - '1 k4'- (2) Does not have any substantial interest, direct or indirect, with the Agency; and (3) Is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Interest Payment Date" means March 1 and September 1 of each year commencing September 1, 1998. "Law" means the Community Redevelopment Law of the State of California (commencing with Health and Safety Code Section 33000). "Maximum Annual Debt Service" means the largest of the sums obtained for any Bond Year after the computation is made, by totaling the following for each such Bond Year: (1) The principal amount of all Serial Bonds and Serial Parity Bonds, if any, and the amount of minimum sinking account payments on the Term Bonds payable in such Bond Year; and (2) The interest which would be due during such Bond Year on the aggregate principal amount of Bonds and Parity Bonds which would be outstanding in such Bond Year if the Bonds and Parity Bonds outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedules for the serial Bonds and serial Parity Bonds. At the time and for the purpose of making such computation, the amount of term Bonds and term Parity Bonds already retired in advance of the above - mentioned schedules shall be deducted pro rata from the remaining amounts thereon. "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. "Outstanding", when used as of any particular time with reference to Bonds, means, subject to the provisions of Article XI, all Bonds except: (a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid pursuant to Section 1101 and Section 306 hereof; and 124/016150-0012/3149955.1 a03/18/98 — % — (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture or any Supplemental Indenture. "Parity Bonds" means any additional tax allocation bonds (including, without limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Agency as permitted by Section 214 of this Indenture payable out of Pledged Revenues and ranking 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) Coachella Valley Community College District; (v) County of Riverside Superintendent of Schools; (vi) Coachella Valley Mosquito Abatement District; and (vii) Coachella Valley Recreation and Park District. "Paying Agent" means any paying agent appointed by the Agency pursuant to this Indenture. "Permitted Investments." The term "Permitted Investments" means any of the following: (1) direct, non -callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"); (2) direct obligations and fully guaranteed certificates of beneficial interest of the Export -Import Bank of the United States; senior debt obligations of the Federal Home Loan Banks; debentures of the Federal Housing Administration; guaranteed mortgage -backed bonds and guaranteed pass -through obligations of the Government National Mortgage Corporation; guaranteed Title XI financing of the U.S. Maritime Administration; mortgage -backed securities and senior debt obligations of the Federal National Mortgage Association; and participation. certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation (collectively, "Agency obligations"); provided, however, not more than 100 of the unexpended Certificate proceeds may be invested in Agency Obligations; (3) direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's 40s, 124/016150-0012/3149955.1 a03/18/98 J -8- Corporation, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Corporation; (4) commercial paper rated "Prime-1" by Moody's Investors Service or "AA" or better by Standard & Poor's Corporation; (5) obligations rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Corporation; (6) time or interest bearing deposit accounts, including certificates of deposit, federal funds or bankers acceptances of any domestic bank (including Trustee), including a branch office of a foreign bank which branch office is located in the United States, provided if it is a branch of a foreign bank, legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such foreign bank, which: (a) has an unsecured, uninsured and unguaranteed obligation rated "Prime -III or "Aa" or better by Moody's Investors Service or a "AA" or better by Standard & Poor's Corporation, or (b) is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting the rating requirements in (a) above; (7) deposits of any bank (including Trustee) or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation; (8) investments in a money-market fund rated "AA" or "A1" or better by Standard & Poor's Corporation or "Aa" or better by Moody's Investors Service, if such funds are rated by Moody's Investors Service, or which invest solely in securities in clauses (1) and (2) above including funds for which First Interstate Bancorp, its affiliates or subsidiaries provide investment advisory or other management services; (9) repurchase agreements with a term of one year or less with any institution with debt rated "AA" by Standard & Poor's Corporation or "Aa" by Moody's Investors Service or commercial paper rated "AA" by Standard & Poor's Corporation or "Aa" by Moody's Investors Service; (10) repurchase agreements collateralized by Direct Obligations or Agency Obligations with any registered broker/dealer subject to the Securities Investors' Protection 124/016150-0012/3149955A a03/18/98 - 9 - 1 � c Corporation jurisdiction or any commercial bank, if such unguaranteed obligation is rated "Prime -ill or "Aa" or better by Moody's Investors Service, and "AA" or better by Standard & Poor's Corporation, provided: a. a master repurchase agreement or specific written, repurchase agreement governs the transaction; and b. the securities are held by the Trustee or an independent third party acting solely as agent for the Trustee free and clear of any lien, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $25 million; and C. a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Trustee; and d. the repurchase agreement has a term of thirty days or less; and e. the repurchase agreement matures at least ten days (or other appropriate liquidation period) prior to a debt service payment date, and f. the market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 1000; and (11) investment agreements with a bank, insurance or financial institution company which has an unsecured and uninsured obligation (or claims -paying ability) rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Corporation, or is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting such rating requirements, provided: a. interest is paid at least semiannually at a fixed rate during the entire term of the agreement, consistent with Interest Payment Dates, and b. moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon notice (provided such notice may be amended or canceled at any time prior to the withdrawal date), and C. the agreement is not subordinated to any other investment agreements of such insurance company or bank, and 124/016150-0012/3149955.1 a03/18/98 - 1 0 - d. the same guaranteed interest rate will be paid on any future deposits made to restore the reserve to its required amount, and e. the Trustee received an opinion of counsel that such agreement is an enforceable obligation of such insurance company or bank. (12) time or interest bearing deposit accounts with banks (including the Trustee), provided that either such accounts are fully insured by the Federal Deposit Insurance Corporation or if not so insured, such accounts are collateralized in the manner required for the deposit of public funds: "Pledged Revenues" means the Tax Revenues, less the Tax Revenues set aside as provided in Sections 33334.2 and 33334.3 of the Health and Safety Code of the State of California and less amounts payable or required to be set aside by the Agency under the Pass -Through Agreements. "Project" means the implementation of the Redevelopment Plan, including the refunding of loans made by the City of La Quinta to the Agency which money was expended to pay costs to implement the Redevelopment Plan. "Rebate Regulations" means the final, proposed and temporary Treasury Regulations promulgated under Section 148(f) of the Code. "Redemption Fund" shall have the meaning set forth in Section 606 hereof. "Redevelopment Plan" means the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2, approved and adopted by the City Council of the City by Ordinance No. 139 on May 16, 1989 and includes any amendment thereof, hereafter or heretofore made pursuant to the Law. "Redevelopment Project Area", "Redevelopment Project", or "Project Area" means the project area defined and described in the Redevelopment Plan. "Regular Record Date" means the close of business on February 15 or August 15, preceding each Interest Payment Date, as applicable. "Report" means a document in writing signed by an Independent Financial 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; 124/016150-OO12/3149955.1 a03/18/98 (b) A brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) A statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. "Reserve Requirement" means, as of the date of computation of the Bonds, an amount, as calculated by the Agency, equal to the lesser of (i) 10% of the original principal amount of the Bonds, (ii) Maximum Annual Debt Service on the Bonds or (iii) 125% of the average annual debt service on the Bonds. "Revenues" means the Pledged Revenues together with all other moneys held by the Trustee in any Fund or Account and the interest earnings thereon. "Securities Depositories" means the Depository Trust Company, 711 Stewart Avenue, Garden Center, New York 11530, Fax- (516) 227-4039 or 4190; Midwest Securities Trust Company, Capital Structures -Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex-(215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Serial Bonds" means the Bonds maturing in the years 1998 to and including the year 2008. "Special Fund" means the Fund by that name established and held by the Trustee pursuant to Section 302. "Standard & Poor's" means Standard-& Poor's Corporation, New York, New York, and its successors and assigns. "State" means the State of California. "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 or 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 this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. 124/016150-0012/3149955.1 a03/18/98 - 1 2 - "Tax Certificate" means that certain Tax Certificate executed in connection with the issuance of the Bonds or any Parity Bonds. "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 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 year 2017. "Treasurer" or "Treasurer of the Agency" means the officer who is then performing the functions of Treasurer of the Agency. "Trustee" means the trustee appointed by the Agency pursuant to Section 901 hereof, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in this Indenture. ARTICLE II THE BONDS Section 2.01. Amount, Issuance and Purpose of Bonds. Under and pursuant to the Law and under and pursuant to this Indenture, Bonds of the Agency in a principal amount of Million Hundred Thousand Dollars ($ ) shall be issued by the Agency for the corporate purposes of the Agency by providing funds for the financing of a portion of the costs of implementing the Redevelopment Plan which constitutes a "redevelopment activity" as such term is defined in Health and Safety Code Section 30678; and such issue of Bonds is hereby created and authorized. Section 2.02. Nature of Bonds. The Bonds shall be and are special obligations of the Agency and are secured by an irrevocable pledge (which pledge shall be effected in the manner and to the extent hereinafter provided) of, and are payable as to principal and interest from Pledged Revenues and other funds as hereinafter provided in Section 401. The Bonds and interest thereon are not a debt of the City, the State of California or any of its political subdivisions, and neither the City, the State nor any of its political subdivisions is liable on them in no event shall the Bonds or interest thereon be payable out of any funds or properties other than those of the Agency as set forth in this Indenture. The Bonds do not constitute an 124/016150-0012/3149955.1 a03/18/98 - 1 3 - indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. The Bonds shall be and are equally secured by an irrevocable pledge of the Pledged Revenues and other funds as hereinafter provided, without priority for number, date of sale, date of execution or date of delivery, except as expressly provided herein. The validity of the Bonds is not and shall not be dependent upon: (a) the completion of the Project Area or any part thereof; (b) the performance by anyone of his/her obligations relative to the Project Area; or (c) the proper expenditure of the proceeds of the Bonds. Nothing in this Indenture shall preclude: (a) the payment of the Bonds from the proceeds of refunding bonds issued pursuant to the Law; or (b) the payment of the Bonds from any legally available funds. Nothing in this Indenture shall prevent the Agency from making advances of its own funds, however derived, to any of the uses and purposes mentioned in this Indenture. Section 2.03. Description of Bonds. The Bonds shall be issued in an aggregate principal amount Million Hundred Thousand Dollars ($ ) and shall be designated "LA QUINTA REDEVELOPMENT AGENCY, LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2, TAX ALLOCATION REFUNDING BONDS, ISSUE OF 1998". Except as provided in Section 215 hereof, the Bonds shall be issued in the form of fully registered bonds in denominations of $5,000 each or any whole multiple thereof. The Bonds shall be initially dated as of May 1, 1998 and shall be lettered and numbered in the Trustee's discretion. The Bonds shall mature on September 1 of the year and in the amounts and shall bear interest at the rates per annum as follows: Maturity Date Principal Interest September 1 of Amount Rate The Bonds maturing in the years 1998 to 2008, inclusive are sometimes referred to as the "Serial Bonds". The Bonds maturing on September 1, 2028 are sometimes referred to as the "Term Bonds". Section 2.04. Interest. The Bonds shall bear interest at the rates set forth above per annum, payable semiannually on March 1 and September 1 of each year, commencing September 1, 124/016150-0012/3149955.1 a03/18/98 - 1 4 - 1998. Each Bond shall bear interest until its principal sum has been paid; provided, however, that if funds are available for the payment thereof in full accordance with the terms of this Indenture, the Bond shall then cease to bear interest. Interest on the Bonds shall be calculated on the basis of a 360-day year of twelve (12) 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless: (i) it is authenticated as of an Interest Payment Date, in which event it shall bear interest from that Interest Payment Date; (ii) it is authenticated after a Regular Record Date and before the following Interest Payment Date, and if the Agency shall not be in default in the payment of interest due on such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (iii) it is authenticated prior to August 15, 1998, in which event it shall bear interest from May 1, 1998. Interest on the Bonds shall be paid by the Trustee (out of the appropriate funds) by check mailed by first class mail, postage prepaid on the Interest Payment Date to the registered owner as his/her name and address appears on the register kept by the Trustee at the close of business on the Regular Record Date preceding the Interest Payment Date or, upon request in writing made before the Regular Record Date preceding the Interest Payment Date by a Bondowner of $1,000,000 or more in principal amount of Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated by such Bondowner to the Trustee. Should payment come due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day without accruing additional interest from the Interest Payment Date. Section 2.05. Place of Payment. The Bonds and the interest thereon shall be payable in lawful money of the United States of America and the Bonds shall be payable upon presentation at the corporate trust office of the Trustee in Los Angeles, California or such other location as designated by the Trustee (except interest which shall be payable by check as provided in Section 204) or any other location so designated by the Trustee. Section 2.06. Form of Bonds. The Bonds shall be substantially in the form attached hereto and by this reference incorporated herein as Exhibit "A". This form is hereby approved and adopted as the form of the Bond, and of the exchange, registration and assignment provisions pertaining thereto, with necessary or appropriate variations, omissions and insertions as permitted or required by this Indenture. Any Bonds issued pursuant to this Indenture may be initially issued in temporary form exchangeable for definitive Bonds when the same are ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Agency, shall be without coupons and may contain references to any of the 2-5 124/016150-0012/3149955.1 a03/18/98 - 1 5 - provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Agency and authenticated and delivered by the Trustee upon the same conditions and in substantially the same form and 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 at the corporate trust office of the Trustee in Los Angeles, California, or at such other location as designated by the Trustee. The Trustee shall deliver in exchange for the surrendered temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations of this same issue. Until exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds of this same issue. Section 2.07. Execution of Bonds. The Bonds shall be signed on behalf of the Agency by its Chairman or by its Executive Director, by manual or facsimile signature. The foregoing officers are hereby authorized and directed to sign the Bonds in accordance with this Section. If any Agency member or officer whose manual or facsimile signature appears on the Bonds ceases to be a member or,officer before delivery of the Bonds, his/her signature is as effective as if he or she had remained in office. The Trustee shall authenticate the Bonds on registration and/or exchange to effectuate the registration and exchange provisions set forth in Section 208, and only those Bonds that have endorsed on them a certificate of authentication, substantially in the form set forth in Exhibit A, duly executed by the Trustee, shall be entitled to any rights, benefits or security under this Indenture. No Bonds shall be valid or obligatory for any purpose unless and until the certificate of authentication has been duly executed by the Trustee. The certificate of the Trustee upon any Bond shall be conclusive and the only evidence that the Bond has been duly authenticated and delivered under this Indenture. The Trustee's certificate of authentication on any Bond shall be deemed to have been duly executed if manually signed by an authorized signatory of the Trustee, but it shall not be necessary that the same signatory sign the certificate of authentication on all of the Bonds that may be issued hereunder. Section 2.08. Registration and Exchange. The Bonds shall be issued only in fully registered form. The Bonds may be exchanged for other Bonds of equal aggregate denominations. Transfer of ownership of a Bond or Bonds shall be made by exchanging the same for a new Bond or Bonds. All exchanges shall be made in such a manner and upon such reasonable terms and conditions as may be determined and prescribed by the Agency. No transfer or exchange of Bonds shall be made during the period established by the Trustee for selection of Bonds for redemption or as to any Bond selected for redemption. The person, firm or corporation requesting the registration or exchange shall pay any 124/016150-0012/3149955.1 a03/18/98 tax or governmental charge that may be imposed in connection with the registration or exchange. The Agency shall pay all other registration and exchange costs and charges including the cost of printing new Bonds. Section 2.09. Bond Register. The Trustee will keep at its corporate trust office in Los Angeles, California, or at such other place as the Trustee may designate, sufficient books for the registration and transfer of the Bonds. The books shall be open to inspection by the Agency at all times during regular business hours; 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 register, the Bonds as hereinbefore provided. The Trustee and Agency may conclusively rely upon the registration books of the Trustee as to the registered owners and will not be affected by any notice to the contrary. Section 2.10. Delivery of the Bonds. Upon the execution and delivery of this Indenture, the Agency shall execute and deliver to the Trustee, and the Trustee shall authenticate the Bonds and deliver them or make them available for pickup to the purchasers as directed by the Agency as provided in this Section 210. Prior to the delivery by the Trustee of any of the Bonds there shall have been filed with the Trustee: (1) A copy, duly certified by the Secretary of the Agency, of resolutions of the Agency authorizing the issuance of the Bonds and the execution and delivery of this Indenture; (2) Original executed counterparts of this Indenture; (3) An Opinion of Counsel that the issuance of the Bonds and the execution of this Indenture have been duly and validly authorized, that all requirements under this Indenture precedent to the delivery of the Bonds have been satisfied and that the Bonds and the Indenture are valid and binding obligations, enforceable against the Agency in accordance with their terms (subject to any applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the enforcement of creditor's rights generally and subject also to the application of equitable principles if equitable remedies are sought); (4) A request and authorization to the Trustee on behalf of the Agency to authenticate and deliver the Bonds to the purchasers therein identified upon payment to the Trustee, but for the account of the Agency, of a sum specified in such request and authorization. The proceeds of such payment shall be transferred and deposited pursuant 124/016150-0012/3149955.1 n03/18/98 - 1 % — L' to Article III hereof and as indicated in such request and authorization; (5) An original executed counterpart of the certification of the Agency establishing expectations to the effect that the Bonds will not be "arbitrage bonds" within the meaning of Section 148 of the Code; and (6) Any additional agreements, certificates, documents or other items or matters authorized or required by the provisions of the resolution. Section 2.11. Lost, Stolen Destroyed or Mutilated Bonds. Should any Bond become mutilated or be lost or destroyed, the Agency shall cause to be executed, and the Trustee shall authenticate and deliver, a new Bond of like outstanding principal amount and maturity in exchange and substitution for, and upon cancellation of, such mutilated Bond or in lieu of and in substitution for such lost or destroyed Bond; provided, however, that the Agency and the Trustee shall so execute, authenticate and deliver only if the Bondowner has paid the reasonable expenses and charges of the Trustee in connection therewith and, in the case of a lost or destroyed Bond, has furnished to the Trustee evidence of such loss or destruction and indemnity satisfactory to it. If any such Bond shall have matured, instead of issuing a new Bond the Trustee may pay the same without surrender thereof upon receipt of the aforementioned indemnity. Section 2.12. Cancellation of Bonds. All Bonds surrendered to the Trustee for payment at maturity or, in the case of call and redemption prior to maturity, at the redemption date, shall upon payment therefor be cancelled immediately and destroyed by the Trustee. A certificate of destruction shall forthwith be transmitted to the Treasurer. Any Bonds purchased by the Agency shall be transferred to the Trustee and shall be cancelled immediately and destroyed. Section 2.13. Validity of the Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Agency or the Trustee. The recital contained in the Bonds that they are issued in accordance with the Constitution and laws of the State and the laws of the Agency shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance. Section 2.14. Issuance of Parity Bonds. If at any time the Agency determines it needs to do so, the Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed. The issuance and sale of any Parity Bonds shall be subject to the following conditions precedent: 124/016150-0012/3149955.1 a03/18/98 - 1 8 - (a) The Agency shall be in compliance with all covenants in this Indenture; (b) The Parity Bonds shall be on such terms and conditions as may be set forth in a supplemental resolution or indenture, which shall provide for (i) bonds substantially in accordance with this Indenture, (ii) the deposit of moneys into the Reserve Account in an amount (which may be represented by an Alternate Reserve Account Security described in Section 402(c)) sufficient, together with the balance of the Reserve Account, to equal the Reserve Requirement on all Bonds expected to be outstanding including the Outstanding Bonds and Parity Bonds, and (iii) the disposition of surplus Pledged Revenues in substantially the same manner as Section 402(d) hereof; (c) Receipt of a certificate or opinion of an Independent Financial Consultant showing: (i) For the current and each future Bond Year the debt service for each such Bond Year with respect to all Bonds and Parity Bonds reasonably expected to be outstanding following the issuance of the Parity Bonds; (ii) For the then current Fiscal Year, the Pledged Revenues to be received by the Agency based upon the most recent assessed valuation of taxable property in the Project Area provided by the appropriate officer of the County exclusive of any anticipated business inventory subvention revenues; and (iii) That for the then current Fiscal Year, the Pledged Revenues referred to in item (ii) are at least equal to the sum of 1100 of the Maximum Annual Debt Service referred to in item (i) above (excluding debt service with respect to any portion of the Parity Bonds deposited in an escrowed proceeds account to the extent such debt service is paid from earnings on the investment of such funds) and 1000 of Annual Debt Service with respect to any subordinated debt, and that the Agency is entitled under the Law and the Redevelopment Plan to receive taxes under Section 33670 of the Law in an amount sufficient to meet expected debt service with respect to all Bonds and Parity Bonds. (d) The Parity Bonds shall mature on and interest shall be payable on the same dates as the Bonds (except the first interest payment may be from the date of the Parity Bonds until the next succeeding June 1 or September 1). If all or a portion of the proceeds of the Parity Bonds or the Bonds are to be applied under Sections 33334.2 of the Law, Pledged Revenues for purposes of this Section 214 shall include 124/016150-0012/3I49955.] a03/18/98 - 1 9 - a... that portion of taxes allocated under Section 33670 of the Law for payment of the Bonds or the Parity Bonds which are applied for the purposes of Sections 33334.2 and specifically pledged to the repayment of such Parity Bonds, to the maximum extent permitted by the Law. Notwithstanding the foregoing, if the Agency is in compliance with all covenants set forth in this Indenture, the Agency may issue and sell obligations pursuant to the Law, having a lien on the Pledged Revenues which is junior to the Bonds and which shall be payable solely from surplus as then declared or which may thereafter be declared pursuant to Section 402(d) of this Indenture (as used herein "obligations" shall include, without limitation, bonds, notes, interim certificates, debenture or other obligations, loans, advances or other forms of indebtedness incurred by the Agency). Section 2.15. Book Entry System. (a) The Bonds shall be initially delivered in the form of a separate single certificated fully registered Bond for each of the series and maturities set forth in Section 203 hereof. Upon initial delivery, the ownership of each Bond shall be registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC. Except as provided in Section 215 of this Indenture, all of the Outstanding Bonds shall be registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC. (b) With respect to Bonds registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC, the Agency and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond, as shown in the registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than an Owner of a Bond, as shown in the registration books kept by the Trustee, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The Agency and the Trustee may treat and consider the person in whose name each Bond is registered in the registration books kept by the Trustee as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices of redemption, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds' only to or upon the order of the respective Owners of the .^� 1 f- 124/016150-0012/3149955.1 a03/18/98 - 2 0 - - t Bonds, as shown in the registration books kept by the Trustee, as provided in Section 209 of this Indenture, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Agency's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the registration books kept by the Trustee, shall receive a certificated Bond evidencing the obligation of the Agency to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to Record Dates, the word "Cede & Co." in this Indenture shall refer to such new nominee of DTC. (c) The delivery of the Representation Letter by the Agency and the Trustee shall not in any way limit the provisions of Section 215(b) hereof or in any other way impose upon the Agency or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners of Bonds, as shown on the registration books kept by the Trustee. The Trustee shall take all action necessary to comply with all representations in the Representation Letter with respect to the Trustee. (d) (i) DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Agency and the Trustee and discharging its responsibilities with respect thereto under applicable law. (ii) The Agency, in its sole discretion and without the consent of any other person, may terminate the services of DTC with respect to the Bonds if the Agency determines that: (A) DTC is unable to discharge its responsibilities with respect to the Bonds, or (B) a continuation of the requirement that all of the Outstanding Bonds be registered in the registration books kept by the Trustee in the name of Cede & Co., or any other nominee of-DTC, is not in the best interest of the beneficial owners of the Bonds. (iii) Upon the termination of the services of DTC with respect to the Bonds pursuant to subsection 215(d)(ii)(B) hereof, or upon the discontinuance or termination of the services of DTC with respect to the Certificates pursuant to subsection 215(d)(i) or subsection 215(d)(ii)(A) hereof after which no 124/016150-0012/3149955.1 a03/18/98 - 2 1 — 4— 114 substitute securities depository willing to undertake the functions of DTC hereunder can be found which, in the opinion of the Agency, is willing and able to undertake such functions upon reasonable and customary terms, the Agency is obligated to deliver the Bonds at the expense of the beneficial owners of the Bonds, as described in this Indenture and the Bonds shall no longer be restricted to being registered in the registration books kept by the Trustee in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or names of Owners of Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of this Indenture. (e) Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, in the manner provided in the Representation Letter. ARTICLE III REVENUES AND FUNDS Section 3.01. Source of Payment of Bonds. The Bonds and all payments required of the Agency hereunder are not general obligations of the Agency but are limited obligations as described in Section 202 hereof. The Pledged Revenues and all moneys held in the Special Fund or any of the Accounts thereunder and the Redemption Fund are hereby conveyed, pledged and assigned absolutely and as a first lien pledge as security for the equal and ratable benefit of the owners of the Bonds and shall be used for no other purpose than payment of the principal of, premium (if any) and interest on the Bonds, except as may be otherwise expressly authorized in this Indenture. Section 3.02. Creation of Funds and Accounts. There is hereby created with the Trustee a trust fund called the "La Quinta Redevelopment Project Area No. 2, Special Fund" with special trust accounts contained therein known as the "Interest Account", the "Principal Account", and the "Reserve Account", a trust fund called the "La Quinta Redevelopment Project Area No. 2, Redevelopment Fund" (the "Redevelopment Fund"), a trust fund called the "La Quinta Redevelopment Project Area No. 2, Escrow Fund" (the "Escrow Fund"), and a trust fund called the "La Quinta Redevelopment Project Area No. 2, Rebate Fund" (the "Rebate Fund"). Notwithstanding any other provision of this Indenture, neither the Rebate Fund nor amounts credited or properly creditable thereto shall be deemed to be pledged to secure the 124/016150-0012/3149955.1 a03/18/98 - 2 2 - Bonds. Article VI of this Indenture creates the Redemption Fund described therein. So long as any of the Bonds, or any interest on them, remain unpaid, the Agency shall not have any beneficial right or interest in the Pledged Revenues except as provided in this Indenture and the moneys in the foregoing Funds and Accounts shall be used for no purposes other than those required or permitted by this Indenture and the Law and the foregoing Funds and Accounts on deposit with the Trustee shall be pledged to the payment of the Bonds. Each Fund and Account shall be maintained by the Trustee as a separate and distinct trust fund or account to be held, managed, invested, disbursed and administered as provided in this Indenture. All moneys deposited in the Funds and Accounts shall be used solely for the purposes set forth in this Indenture. The Trustee shall keep and maintain adequate records pertaining to each Fund and Account and all disbursements therefrom. Section 3.03. Sale of Bonds; Disposition of Bond Proceeds; Redevelopment Escrow Fund; Redevelopment Fund. The Agency may provide by resolution for the sale of the Bonds in the manner provided by the Law. A. Upon the delivery of the Bonds to the purchasers thereof, the Trustee, on behalf of the Agency, shall receive the proceeds from the sale of the Bonds and shall deposit such proceeds and transfers as follows: (1) Deposit in the Interest Account an amount equal to $ representing accrued interest on the Bonds; (2) Deposit in the Reserve Account an amount equal to the Reserve Requirement, initially $ ; (3) Agreement; Deposit in the Escrow Fund an amount equal to to be held and expended pursuant to the Escrow (4) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be deposited in the Redevelopment Fund. B. Except as hereinafter provided, the moneys set aside in the Redevelopment Fund shall remain there until from time to time expended for the purpose of financing a portion of the costs of the Project Area and other related costs, and also including in such costs: (1) The payment of an amount of money in lieu of taxes as authorized by Section 33401 of the Law in any year during which the Agency owns property in the Project Area, to any city, county, city and county, district or other public 124/016150-0012/3149955.1 a03/18/98 - 2 3 - 4- A corporation -which would have levied a tax upon such property had it not been exempt; (2) The cost of any lawful activities in connection with the implementation of the Project Area, including, without limitation, those activities authorized by Section 33445 of the Law; and (3) The moneys in the Redevelopment Fund shall be applied exclusively to pay the costs of the Project ("Project Costs") and any Costs of Issuance. Amounts for Costs of Issuance and Project Costs shall be disbursed by the Trustee upon receipt of a Written Requisition in the form attached hereto as Exhibit B of the Treasurer, or his designee, or such other person as is designated in writing to the Trustee by the Agency stating the amount due, the nature of the services rendered and the name of the payee. All interest and income earned on money in the Redevelopment Fund shall be retained therein until transferred as hereinafter provided. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for which the Bonds were issued as determined by the Agency, that sum shall be transferred by the Trustee for deposit in the Rebate Fund or the Special Fund pursuant to written instructions from the Agency. If any sum remains in the Redevelopment Fund after September 16, 1995, it shall be invested at a yield not exceeding the yield on the Bonds as defined in the Tax Certificate. All of the above uses constitute a "redevelopment activity" as that term is defined in Health and Safety Code Section 33678. Section 3.04. Final Balances. Trustee of moneys sufficient to pay any, and interest on the Bonds, and claims against the Agency hereunder, and expenses of the Trustee and any properly due and payable hereunder, adequate provisions for the payment hereby, all moneys remaining in all paid to the Agency. Upon the deposit with the all principal of, premium, if upon satisfaction of all including all fees, charges Paying Agent which are or upon the making of of such amounts as permitted Funds and Accounts shall be Section 3.05. Security of Funds. All moneys deposited with the Trustee or with any agent of the Trustee appointed pursuant to Section 905 of this Indenture shall be held in trust and (except for moneys held by the Trustee, as paying agent, or remitted to any Paying Agent for the payment of the principal of, premium, if any, and interest on the Bonds) shall, while held by the Trustee, constitute part of the Trust Estate and shall be and remain entitled to the benefit and shall be subject to the security of this Indenture for the equal and proportionate benefit of the owners of all Outstanding Bonds. 124/016150-0012/3149955.1 a03/18/98 - 2 4 - Section 3.06. Non -Presentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof, if moneys sufficient to pay such Bond shall have been deposited in the Special Fund or Redemption Fund, as applicable, all liability of the Agency to the owner thereof for the payment of such Bond shall forthwith cease, terminate and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such moneys in trust subject to the limitation set forth in Section 1101, without liability for interest thereon, for the benefit of the owner of such Bond who shall thereafter be restricted exclusively to such moneys, for any claim of whatever nature on his or her part under this Indenture -or on, or with respect to, said Bond. Section 3.07. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee under any provisions of this Indenture shall be held by the Trustee in trust and applied for the purposes herein specified. ARTICLE IV REVENUES AND APPLICATION Section 4.01. Pledged Revenues. As provided in the Redevelopment Plan, pursuant to Article 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable property in the Redevelopment Project Area each year by or for the benefit of the State of California, any city, county, city and county, district, or other public corporation (herein sometimes collectively called "taxing agencies") after the effective date of the ordinance approving the Redevelopment Plan (being Ordinance No. 139 of the City of La Quinta, which became effective on June 15, 1989), shall be divided as follows: (a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the Redevelopment Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency last equalized prior to June 15, 1989 (being the effective date of Ordinance No. 139, referred to above), shall be allocated to and when collected shall be paid into the funds of the respective taxing agencies as taxes by or for the taxing agencies on all other property are paid; and (b) That portion of said levied taxes each year in excess of such amount shall be allocated to and when collected by the Agency shall be paid into the following funds: (i) into the low and moderate income housing fund held by the Agency and the amount required by the Law to be A 124/016150-0012/3149955.1 a03/18/98 - 2 5 - deposited into said fund, (ii) the amount required to be paid by the Agency pursuant to pass -through agreements of the Agency, and (iii) the balance into the Debt Service Fund of the Agency. The foregoing provisions of this Section are a portion of the provisions of Article 6 of the Law as applied to the Bonds and shall be interpreted in accordance with Article 6, and the further provisions and definitions contained in Article 6 are incorporated by reference herein and shall apply. The Pledged Revenues received on or after the date of issue of the Bonds shall be deposited in the Debt Service Fund held by the Agency and are hereby irrevocably pledged to the payment of the principal of, premium, if any, and interest on the Bonds, any Parity Bonds; provided, however, if on each September 2, commencing September 2, , there has been paid to the Trustee the amounts required to be paid for the preceding Bond Year as provided in Section 402 hereof, money in the Debt Service Fund may be used for any lawful purpose of the Agency. Section 33645 of the Health and Safety Code provides, in applicable part as follows: "The resolution, trust indenture, or mortgage shall provide that tax increment funds allocated to an agency pursuant to Section 33670 shall not be payable to a trustee on account of any issued bonds when sufficient funds have been placed with the trustee to redeem all Outstanding Bonds of the issue." This Indenture is intended to comply with the above - quoted provision and shall be so construed. Section 4.02. Special Fund. The Agency shall pay or cause to be paid to the Trustee for deposit in the Special Fund in accordance with this Section and Section 401 hereof Pledged Revenues in the amounts and within the times set forth herein. The interest on the Bonds until maturity shall be paid by the Trustee on behalf of the Agency from the Interest Account of the Special Fund. At the maturity of the Bonds, and after all interest then due on the Bonds then Outstanding has been paid or provided for, moneys remaining in the Special Fund shall be applied to the payment of the principal of any of such Bonds. Without limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Pledged Revenues accumulated in the Special Fund shall be used in the following priority; provided, however, to the extent that deposits have been made in any of the Accounts referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Interest Account. Deposits shall be made into the Interest Account so that the balance in the Account at least five (5) days prior to each Interest Payment Date shall be equal to interest due and payable on the then outstanding Bonds on such Interest Payment Date. Moneys in the Interest 124/016150-0012/3149955.1 a03/18/98 — 2 6 — �"" Account shall be used solely for the payment of interest on the Bonds as interest becomes due, including accrued interest on any Bonds purchased or redeemed prior to maturity. (b) Principal Account. After the deposits have been made pursuant to subparagraph (a) above, deposits shall next be made into the Principal Account so that the balance in the Account at least five (5) days prior to each September 1 is equal to the principal coming due on such date on the then outstanding Serial Bonds or the amount of the minimum sinking account payments due on the Term Bonds on such date. All monies in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying principal and minimum sinking account payments on the Bonds as they shall become due and payable. (c) Reserve Account.. After deposits have been made pursuant to subparagraphs (a) and (b) above, deposits shall be made to the Reserve Account, if necessary, in order to cause the amount on deposit therein to equal the Reserve Requirement. Moneys in the Reserve Account shall be transferred to•the Interest Account or the Principal Account to pay interest on and principal of the Bonds either (i) as it becomes due to the extent moneys on deposit are insufficient therefor or (ii) at the final maturity of the Bonds. Any portion of the Reserve Account which is in excess of the Reserve Requirement shall be transferred at least semiannually upon written instructions from the Agency to the Trustee first to the Rebate Fund to the extent said money represents Rebatable Arbitrage and the balance to the Interest Account. The Agency may, without the prior written consent of the Owners of the Bonds, elect to maintain the Reserve Requirement for the Bonds and any Parity Bonds by obtaining (i) a letter of credit, (ii) a surety Bond, or (iii) a policy of insurance in an amount which will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement is needed for transfer to the Bond Interest Account and/or Principal Account as hereinbefore stated, provided that the letter of credit bank or its guarantor, the surety bond provider or the insurance company is rated in the top two rating categories by Moody's Investor's Service, Inc. and Standard & Poor's Corporation and that upon the expiration of the letter of credit, if not extended, the Agency shall obtain a substitute letter of credit, a surety bond or a policy of insurance as hereinafter provided, or shall deposit cash in the Reserve Account, and further provided that the issuer of any surety Bond or insurance policy shall be rated in the top two rating categories by Moody's Investor's Service, Inc. and Standard and Poor's Corporation all as shown in a certificate of the Agency to the Trustee. If the Agency acquires such Alternate Reserve Account Security to the extent that the amount on deposit in the 124/016150-0012/3149955.1 a03/18/98 - 2 % - Reserve Account is in excess of the Reserve Requirement after giving effect to such Alternate Reserve Account Security (which shall be valued at the full amount available to be paid or drawn thereunder), the Agency may by written certificate direct the Trustee to pay from such excess money in the Reserve Account the letter of credit fees, the cost of a surety Bond, or the insurance policy premium, as the case may be. Any money in the Reserve Account in excess of the Reserve Requirement after the Agency acquires the Alternate Reserve Account Security and pays the appropriate costs as herein provided shall be deposited into the Redevelopment Fund at the written direction of the Agency. (d) Surplus. It is the intent of this Indenture: (i) that the deposits in subparagraphs (a) and (b) above to the Interest Account and the Principal Account, respectively, shall be made as scheduled, and (ii) that the deposits in subparagraph (c) above to the Reserve Account shall be made as necessary to maintain a balance equal to the Reserve Requirement, if and only if the Pledged Revenues are sufficient therefor. Should it be necessary to defer all or part of any deposits referred to in subparagraph (c) above, such deferred deposits shall be cumulative and shall be made when the Pledged Revenues are sufficient to make the deposits required by subparagraphs (a) and (b) and thereafter make the deposits required by subparagraph (c). If, on September 2 of each year, commencing on September 2, 1993, the above transfers have been made during the preceding Bond Year so that the required amounts as of that time are or were in the above mentioned Accounts and the required transfer has been made to the Rebate Fund as calculated by the Agency and set forth in a certificate of the Agency delivered to the Trustee, any balances in the Special Fund may be used and applied by the Trustee at the written direction of the Agency, for any lawful purpose, including without limitation, the purchase and/or call and redemption of Bonds and Parity Bonds. Section 4.03. Payments of Principal, Premium and Interest. The Trustee shall make available to the Paying Agent, if any, from the Pledged Revenues, sufficient amounts to pay the principal of, premium, if any, and interest on, the Bonds as the same become due and payable. Section 4.04. Revenues to be Held for All Bondowners; Certain Exceptions. The Revenues shall, until applied as provided in this Indenture, be held by the Trustee for the benefit of the owners of all Outstanding Bonds, except as provided in Section 302 hereof and except that any portion of the Revenues held pursuant to Section 306 hereof representing principal or redemption price of and interest on, any Bonds previously called for redemption in accordance with Article VI of this Indenture or previously matured shall be held for the benefit of the owners of such Bonds only and shall not be ter 124/016150-0012/3149955.1 a03/18/98 - 2 8 - deposited or invested pursuant to Article V hereof, notwithstanding any provision of Article V. ARTICLE V INVESTMENT OF MONEYS Section 5.01. Rebate Fund. The Trustee shall establish the Rebate Fund and the Agency shall comply with the requirements below. All money at any time deposited in the Rebate Fund 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 applicable Tax Certificate, unless the Agency obtains an opinion of Bond Counsel that the exclusion from gross income of interest an the Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied. (1) Excess Investment Earnings (i) Annual Computation. Within 55 days of the end of each Computation Year with respect to the Bonds, the Agency shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-2 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), for this purpose treating the last day of the applicable Computation Year as a computation date, within the meaning of Section 1.148-8(b) of the Rebate Regulations (the "Rebatable Arbitrage"). The Agency shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Annual Transfer. Within 55 days of the end of each applicable Computation Year with respect to the Bonds, upon the Treasurer's written direction, an amount shall be deposited to the Rebate Fund by the Trustee from any legally available funds, including the other funds and accounts established herein, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this Section 501(1). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon written instructions from the Treasurer, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Special Fund. •? I C, i... J 124/016150-0012/3149955.1 a03/18/98 - 2 9 - (iii) Payment to the Treasury. In accordance with the Agency's written direction to the Trustee, the Trustee shall pay to the United States Treasury, out of amounts in the Rebate Fund. (X) Not later than 60 days after the end of (A) the fifth Computation Year with respect to the Bonds, and (B) each applicable fifth Computation Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Computation 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 Computation 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 Fund, the amount in the Rebate Fund 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 transfer to Trustee for deposit an amount received from any legally available source, including the other funds and accounts established herein, equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Subsection 501(1)(iii) 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 accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. (2) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in Section 501(1)(iii), may be transferred by the Trustee to the Agency at the written direction of the Treasurer and utilized in any manner by the Agency. (3) Survival of Defeasance. Notwithstanding anything in this Section 501 or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds and any Parity Bonds. (4) Trustee Responsible. The Trustee shall have no obligations or responsibilities under this Section other than to follow the written directions of the Treasurer. Section 5.02. Investment of Moneys in Funds and Accounts. Moneys in the Special Fund and the Accounts therein, the Redevelopment Fund, the Escrow Fund and the Redemption Fund shall 124/016150-0012/3149955.1 43/18/98 - 3 0 - A be invested and reinvested by the Trustee in Permitted Investments, as directed by an Authorized Officer of the Agency in writing, provided that such investments mature by their terms on or prior to the date on which such moneys are required to be paid out hereunder. Such investments shall,be made in specific investments meeting the requirements of this section as directed in writing by an Authorized Officer of the Agency (such written request to be received by 12:00 noon two (2) Business Days prior to such investment) or, in the absence of such written direction, by the Trustee in Permitted Investments described in part (8) or (12) of the definition thereof. The Trustee shall be protected from any liability in acting in accordance with this section or the Agency's direction. Moneys in the Rebate Fund shall be invested in Government Obligations which mature before the date such amounts are required to be paid to the United States. Obligations purchased as an investment of moneys in any Fund or Account held by the Trustee hereunder shall be deemed to be part of such Fund or Account. Any or all interest or gain received from such investments of moneys in any Fund or Account shall be deposited by the Trustee in the respective Fund or Account and any loss incurred in connection with such investments shall be debited against the Fund or Account from which the investment was made. Notwithstanding the foregoing the Trustee may commingle money in the Funds and Accounts for investment purposes provided that such Funds and Accounts are accounted for separately. The investment constituting a part of any Fund or Account shall be valued at the lower of cost or the then estimated or appraised market value of the investment. The Trustee shall have no liability or responsibility for any loss resulting from any investment made in accordance with the provisions of this Section 502. Section 5.03. Investments. The Trustee may make any and all investments permitted by the provisions of Section 502 hereof and the Tax Certificate delivered on the Delivery Date, through its own bond or investment department; provided, however, that the Trustee shall establish to the satisfaction of the Agency that such investments have been made at market value. As and when any amount invested pursuant to this Article may be needed for disbursement, the Trustee may cause a sufficient amount of such investments to be sold and reduced to cash to the credit of such Funds or Accounts. ARTICLE VI REDEMPTION OF BONDS BEFORE MATURITY Section 6.01. Limitation on Redemption. The Bonds shall be subject to redemption prior to maturity only as provided in this Article VI. 124/016150-0012/3149955.1 a03/18/98 - 3 1 -� Section 6.02. A. Optional Redemption. The Bonds maturing on or before September 1, , are not subject to call and redemption prior to maturity. The Bonds maturing on or after September 1, , may be called before maturity and redeemed at the option of the Agency, in whole or in part from proceeds of refunding bonds or other available funds, on September 1, or on any Interest Payment Date thereafter, prior to maturity, in inverse order of maturity and by lot within any maturity. The Interest Payment Date oh which Bonds are to be presented for redemption is sometimes referred to as the "redemption date." 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 followingable: Redemption Dates Redemption Price September 1, 2007 and March 1, 2008 1020 September 1, 2008 and March 1, 2009 1010 September 1, 2009 and thereafter 1000 B. Sinking Account Redemption. The Term Bonds maturing on September 1, 2028 shall be subject to mandatory redemption from minimum sinking account payments, by lot, at a redemption price equal to 1000 of the principal amount thereof, plus accrued interest, if any, to the redemption date without premium, on September 1 in each of the following years and amounts: Year Principal Amount Principal Year Amount Section 6.03. Call and Redemption; Notice of Redemption. The Agency may by resolution direct the call and redemption prior to maturity of Bonds by the Trustee pursuant to Section 602(A) and (B) hereof in such amounts as there are funds available for redemption and shall give notice to the Trustee of the redemption at least seventy-five (75) days prior to the redemption date. Notice of redemption prior to maturity shall be given by first class mail, postage prepaid not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the registered owner of each such Bond at the address shown on the registration books of the Trustee. Neither the failure to receive such notice nor any defect in any notice mailed shall affect the sufficiency of the proceedings for the redemption of any Bonds. The notice of redemption shall: (a) state the 124/016150-0012/3149955.1 a03/18/98 — 3 2 — �� 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 Bond numbers and the principal portion thereof to be redeemed; (e) state that interest on the principal portion of the Bonds designated for redemption shall cease to accrue from and after the redemption date and that on the redemption date there shall become due and payable on each of such Bonds the redemption price for each Bond; and (f) state that the redemption of the Bonds is subject to there being on deposit with the Trustee at the time of such redemption, moneys sufficient to redeem the portion of the Bonds as set forth in the Notice. The actual receipt by the Bondowner or notice of redemption shall not be a condition precedent to redemption, and failure to receive notice shall not affect the validity of the proceedings for the redemption of the Bonds or the cessation of interest on the redemption date. Notice of redemption of Bonds shall be given by the Trustee on behalf of the Agency and at the request and expense of the Agency. A certificate by the Trustee that notice of redemption has been given in accordance with this Indenture shall be conclusive as against all parties, and no Bondowner whose Bond is called for redemption may object to the redemption or the cessation of interest on the redemption date by claiming or showing that it failed to receive actual notice of call and redemption. For the purpose of selecting Bonds by lot, Bonds in excess of $5,000 will be assigned a separate number for each $5,000 of principal they represent. Section 6.04. Redemption Fund. The Trustee shall establish, maintain and hold in trust a separate fund which is hereby created for the purpose of this Indenture entitled "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 Redemption Fund" (hereinafter referred to as the "Redemption Fund"). There shall be deposited in the Redemption Fund moneys (or Government Obligations as provided in Section 1101(c)) for the purpose of and sufficient to redeem, at the premiums, if any, payable as provided in this Indenture, the Bonds designated in the notice of redemption. The moneys must be set aside in the Redemption Fund (or other special trust fund pursuant to Section 1101) and pledged solely for that purpose and shall be applied on or after the redemption date to the payment (principal, interest and premium, if any) of the Bonds to be redeemed upon presentation and surrender of the Bonds. Section 6.05. 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 124/016150-0012/3149955.1 u03/18/98 - 3 3 - '� owner, 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. A partial redemption shall be valid upon payment of the amount required to be paid to the registered owner and the Agency and the Trustee shall be released and discharged from all liability to the extent of such payment. Section 6.06. Effect of Redemption. Notice of redemption having been duly given as provided above, and moneys for payment of the principal of, premium, if any, and interest payable upon redemption of the Bonds being set aside as provided above, the Bonds, or parts thereof, called for redemption shall, on the redemption date, become due and payable at the redemption price specified in the notice. Interest on the Bonds, or parts thereof, as the case may be, called for redemption shall cease to accrue and be payable from and after the redemption date. The Bonds, or parts thereof redeemed, shall cease to be entitled to any lien, benefit or security under this Indenture, and the Owners of the Bonds shall have no rights except to receive payment of the redemption price upon surrender of the Bonds, and, in the case of partial redemption of Bonds, also to receive a new Bond or Bonds for the unredeemed balance as provided above. All Bonds, or parts thereof, as the case may be, redeemed pursuant to the provisions hereof shall be cancelled upon surrender thereof and delivered to, or destroyed upon the order of the Agency. Section 6.07. Purchase of Bonds. In lieu of redemption or otherwise, the Agency is hereby authorized to purchase Bonds on the open market prior to the selection of Bonds for redemption and the Trustee will upon written direction of the Agency settle these purchases from moneys deposited by the Agency with the Trustee in the Redemption Fund at a price not to exceed the principal amount of Bonds plus the applicable premium and accrued interest, if any, to the date of purchase plus brokerage fees, if any. ARTICLE VII PAYMENT; COVENANTS OF THE AGENCY Section 7.01. Payment of Principal or Redemption Price of and Interest on Bonds. The Agency shall promptly pay or cause the Trustee to pay the principal or redemption price of, and the interest on, every Bond issued hereunder according to the terms thereof, but shall be required to make such payment or cause such payment to be made only out of Revenues. Section 7.02. Covenants of the Agency. As long as the Bonds are Outstanding and unpaid, the Agency shall (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions 124/016150-0012/3149955.1 a03/18/98 - 3 4 - contained in this Indenture or in any Bond issued hereunder, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that the Covenants do not require the Agency to expend any funds other than amounts credited to the Redevelopment Fund to the extent required to fulfill the Agency objectives with respect to Covenant 1 and Covenant 2, Pledged Revenues and the income thereon: Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan. The Agency covenants and agrees that it will diligently carry out and continue to completion in a sound and economical manner, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan. The Redevelopment Plan may be amended as provided in the Law but no amendment shall be made unless it will not substantially impair the security of the Bonds or the rights of the Bondowners, as shown by an Opinion of Counsel, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 2. Use of Proceeds, Management and Operation of Properties. The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in this Indenture and that it will manage and operate all properties owned by it comprising any part of the Project Area in a sound and businesslike manner consistent with the Redevelopment Plan. Covenant 3. No Priority. The Agency covenants and agrees that it will not issue any obligations payable, either as to principal or interest, from the Pledged Revenues which have any lien upon Pledged Revenues prior to or superior to the lien of the Bonds or any Parity Bonds. Except as permitted by Section 214 hereof, it will not issue any obligations, payable as to principal or interest, from the Pledged Revenues which have any lien upon the Pledged Revenues on a parity with the Bonds or any Parity Bonds. Notwithstanding the foregoing, nothing in this Indenture shall prevent the Agency: (i) from issuing and selling pursuant to law, refunding obligations payable from and having any lawful lien upon the Pledged Revenues, if such refunding obligations are issued for the purpose of, and are sufficient for the purpose of, refunding all of the Outstanding Bonds or Parity Bonds; (ii) from issuing and selling obligations which have, or purport to have, any lien upon the Pledged Revenues which is junior to the Bonds or any Parity Bonds; or (iii) from issuing and selling bonds or other obligations which are payable in whole or in part from sources other than the Pledged Revenues. As used herein "obligations" shall include, without limitation, bonds, notes, interim certificates, debentures or other obligations, loans, advances, or other forms of indebtedness incurred by the Agency. 124/016150-0012/3149955.1 a03/18/98 - 3j - Covenant 4. Punctual Payment. The Agency covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds on the date, at the place and in the manner provided in the Bonds. Covenant S. Payment of Taxes and Other Charges. The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of the properties, revenues or income or which might impair the security of the Bonds or the use of Pledged Revenues or other legally available funds to pay the principal of and interest on the Bonds, all to the end that the priority and security of the Bonds and any Parity Bonds shall be preserved; provided, however, that nothing in this Covenant shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of the payment. Covenant 6. Books and Accounts; Financial Statements. The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries shall be made of all transactions relating to the Redevelopment Project and the Pledged Revenues and other funds relating to the Redevelopment Project. The Agency will prepare within one hundred eighty (180) days after the close of each of its Fiscal Years a complete financial statement or statements.for such year, in reasonable detail covering the Pledged Revenues and other funds, accompanied by an opinion of an Independent Certified Public Accountant appointed by the Agency, and will furnish a copy of the statement or statements to the Trustee, the Bond Insurer and any rating agency which maintains a rating on the Bonds and, upon written request, to any Bondowner. The Trustee shall have no duty to review the Agency's financial statements. Covenant 7. Eminent Domain Proceedings. The Agency covenants and agrees that if all or any part of the Project Area should be taken from it without its consent, by eminent domain proceedings or other proceedings authorized by law, for any public or other use under which the property will be tax exempt, it shall take all steps necessary to adjust accordingly the base year valuation of the Project Area. Covenant 8. Disposition of Property. The Agency covenants and agrees that it will not dispose of more than ten percent (100) of the land area in the Project Area (except property shown in the Redevelopment Plan in effect on the date this Indenture is adopted as planned for public use, or property to be used for public streets, public offstreet parking, sewage facilities, 124/016150-0012/3149955.1 s03/18/98 - 3 6 - parks, easements or right-of-way for public utilities, or other similar uses) to public bodies or other persons or entities whose property is tax exempt, unless such disposition will not result in the security of the Bonds or the rights of Bondowners being substantially impaired, as shown by an Opinion of Counsel addressed to the Agency and the Trustee, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 9. Protection of Security and Rights of Bondowners. The Agency covenants and agrees to preserve and protect the security of the Bonds and any Parity Bonds and the rights of the Bondowners and any Parity Bondowners and to contest by court action or otherwise: (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) that the Pledged Revenues pledged hereunder cannot be paid to the Agency for the debt service on the Bonds, or (b) any other action affecting the validity of the Bonds or diluting the security therefor. The Agency covenants and agrees to take no action which, in the Opinion of Counsel would result in: (a) the Pledged Revenues being withheld unless the withholding is being contested in good faith; and (b) the interest received by the Bondowners becoming includable in gross income under federal income tax laws. Covenant 10. 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 Bonds 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: (1) 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 Bonds or of any other monies or property which would cause the Bonds or any Parity Bonds to be "private activity bonds" within the meaning of Section 141 of the Code; (2) Arbitrage. The Agency will make no use of the proceeds of the Bonds or any Parity Bonds 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 or any Parity Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code; 124/016150-0012/3149955.1 a03/18/98 - 3 i - (3) Federal Guaranty. The Agency will make no use of the proceeds of the Bonds or any Parity Bonds or take or omit to take any action that would cause the Bonds or any Parity Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code; (4) 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; (5) Hedge Bonds. The Agency will make no use of the proceeds of the Bonds or any Parity Bonds 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 or any Parity 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 and any Parity Bonds for federal income tax purposes; and (6) 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 Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein. Covenant 11. Taxation of Leased Property. Whenever any property in the Project Area name been redeveloped and thereafter is leased by the Agency to any person or persons (other than a public agency), or whenever the Agency leases real property in the Project Area to any person or persons (other than a public agency) for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property, as required by Section 33673 of the Law, and the lease or contract shall provide: (a) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest; and (b) that if for any reason the taxes levied on the property in any year during the term of the lease or contract are less than the taxes which would have been levied if the entire property had been assessed and taxed in the same manner as privately owned property, the lessee shall pay such difference to the Agency within thirty (30) days after the taxes for the year become payable to the taxing agencies and in no event later than the delinquency date of such taxes established by law. All such payments shall be treated as Pledged Revenues, and when received by the Agency shall be used as provided herein. As an alternative to payment to the Agency pursuant to (b) above, the new owner or owners of property becoming exempt from taxation may elect to make payment to the 124/016150-0012/3149955.1 a03/18/98 - 3 8 - �' Agency in a single sum equal to the amount estimated by an Independent Financial Consultant to be receivable by the Agency from taxes on said property from the date of said payment to the maturity date of the Bonds, less a reasonable discount value. All such single sum payments in lieu of taxes shall be treated as Pledged Revenues and shall be transferred to the Trustee for deposit in the Special Fund. Covenant 12. Compliance With Law. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Pledged Revenues including, without limitation, the timely filing of any necessary statements of indebtedness with appropriate officials of the County, and shall forward information copies of each such filing to the Trustee. The Agency further covenants and agrees that, except for the Pass -Through Agreements, it has not entered into any agreements with other tax entities as of the date of this Indenture for the pass -through of any Pledged Revenues to such entities and will not hereafter enter into any such agreement which requires payment to such taxing entities prior to deposit of Pledged Revenues in the Special Fund. Covenant 13. Limitation on Indebtedness. The Agency covenants and agrees that it has not and will not incur any loans, obligations or indebtedness repayable from Pledged Revenues such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and after the date of adoption of the Redevelopment Plan, when added to any predecessor debt, the total aggregate debt service on the Bonds and any Parity Bonds, will exceed the maximum amount of Pledged Revenues to be divided and allocated to the Agency pursuant to the Redevelopment Plan. Covenant 14. Further Assurances. The Agency covenants and agrees to adopt, make, execute and deliver any and all such further indentures, instruments and assurances as. may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits provided therein. Section 7.03. Compliance with Indenture, Contracts, Laws and Regulations. The Agency shall faithfully observe and perform all the covenants, conditions and requirements of this Indenture, shall not issue any Bonds in any manner other than in accordance with this Indenture, and shall not exercise its discretion in any way that might materially weaken, diminish or impair the security intended to be given pursuant to this Indenture. Subject to the limitations and consistent with the covenants, conditions and requirements contained in this Indenture, the Agency shall comply with the terms, covenants and provisions, express or implied, of all contracts concerning or affecting the application of proceeds of the Bonds or the Pledged Revenues. The Agency shall comply promptly, fully and faithfully with and abide by any statute, 124/016150-0012/3149955.1 a03/18/98 - 3 9 - law, ordinance, order, rule or regulation, judgment, decree, direction or requirement now in force or hereafter enacted, adopted, prescribed, imposed or entered by any competent governmental authority or agency applicable to or affecting the Redevelopment Project. Section 7.04. Continuing Disclosure. The Agency hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the Agency to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, any Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. ARTICLE VIII DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE AND BONDOWNERS Section 8.01. Defaults A. Events of Default. Each of the following shall constitute an Event of Default: (1) Default in the due and punctual payment by the Agency of any installment of interest on any Bond or any Parity Bond when the interest installment becomes due and payable; (2) Default in the due and punctual payment by the Agency of the principal and premium, if any, of any Bond or any Parity Bond when the principal becomes due and payable, whether at maturity, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the other covenants, agreements or conditions contained in this Indenture or in the Bonds or the Parity Bonds, where the default continues for a period of thirty (30) days following written notice to the Agency by the Trustee or by a majority of the Bondowners; or (4) The Agency or arrangement under other applicable law a court of competent filed with or without reorganization under other applicable law under the provisions of debtors, any court files a petition seeking reorganization the federal bankruptcy laws or any of the United States of America, or if jurisdiction shall approve a petition, the consent of the Agency, seeking the federal bankruptcy laws or any of the United States of America, or if, of any other law for the relief or aid of competent jurisdiction shall assume 124/016150-0012/3149955.1 a03/18/98 - 4 0 - custody or control of the Agency or of the whole or any substantial part of its property. In each Event of Default described in (1) or (2) above the Trustee shall, and in each Event of Default described in (3) or (4) above, the Trustee shall upon written request of the Owners of not less than a majority of the aggregate principal amount of the Bonds and Parity Bonds at the time outstanding, (such request to be in writing to the Trustee and to the Agency), the Trustee shall declare the principal of all of the Bonds and Parity Bonds then outstanding and the interest accrued thereon, to be due and payable immediately. Upon any such declaration the Bonds and Parity Bonds shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds and Parity Bonds to the contrary notwithstanding. The declaration may be rescinded by the Owners of tot less than a majority of the Bonds and Parity Bonds then outstanding provided the Agency cures the default or defaults and deposits with the Trustee a sum sufficient to pay all,principal on the Bonds matured prior to the declaration and all matured installments of interest (if any) upon all the Bonds and Parity Bonds, with interest at the rate of twelve percent (120) per annum on the overdue installments of principal and, to the extent the payment of interest on interest is lawful at that time, on such overdue installments of interest, so that the Agency is currently in compliance with all payment, deposit and transfer provisions of this Indenture, and has paid or provided for the payment of any expenses incurred by the Trustee in connection with the default. B. Certain Remedies of Bondowners. Any Bondowner shall have the right, for the equal benefit and protection of all Bondowners similarly situated— (1) by mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; (2) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bondowners' rights; or (3) upon the happening of any event of default (as defined in this Section), by suit, action or proceeding in any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were the trustees of an express trust. z_JL 124/016150-0012/3149955.1 a03/18/98 - 4 1 - C. Non -Waiver. Nothing in this Section or in any other provisions of this Indenture, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at the date of maturity, as herein provided, or affect or impair the right, which is also absolute and unconditional, of the owners to institute suit to enforce the payment by virtue of the contract embodied in the Bonds. No remedy conferred upon any Bondowner or Trustee by the Indenture is intended to be exclusive of any other remedy, but each remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law of the State of California. No waiver of any default or breach of any duty or contract by,any Bondowner or Trustee shall affect any subsequent default or breach of any duty or contract or shall impair any rights or remedies on the subsequent default or breach. No delay or omission of any Bondowner or Trustee to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any default or acquiescence therein. Every substantive right and every remedy conferred upon the Bondowners or,Trustee may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right, or exercise any remedy, shall be brought and should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or Trustee, then, and in every such case, the Agency, Trustee or the Bondowners shall be restored to their former positions, rights and remedies as if the suit, action or proceeding had not been brought or taken. D. Actions by Trustee as Attorney -in -Fact. Any suit, action or proceeding which any Bondowner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in -fact of the respective Owners of the Bonds for the purpose of bringing any suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as attorney -in -fact; provided, however, the Trustee shall not be required to act hereunder pursuant to this subsection D unless and until it shall receive indemnification satisfactory to it for the reimbursement of all fees and expenses (including its reasonable attorneys fees and expenses) to which it may be put and to protect it against all liability, except liability which is to be adjudicated to have resulted from its gross negligence or willful misconduct in connection with any action so taken. 124/016150-0012/3149955.1 a03/18/98 - 4 2 - E. General. After the issuance and delivery of the Bonds, this Indenture, and any supplemental indentures hereto, shall be irrepealable, but shall be subject to modification or amendment to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner. Section 8.02. Application of Funds Upon Acceleration. Upon any acceleration of the Bonds, the Trustee shall, following payment of the fees, costs and expenses (including compensation to their agents, attorneys and counsel) of the Trustee.and the Bondowners in declaring such Event Of Default, transfer first to the Interest Account an amount equal to (i) the interest due on the Bonds to the date of acceleration minus the amount of moneys then held by the Trustee in the Interest Account and then to the Principal Account all of the moneys held in the Reserve Account and any other moneys held in the Special Fund and the Accounts therein or in the Redemption Fund. If such deposits are insufficient to pay the principal of and interest on the Bonds, the Trustee shall file a claim for payment with the Bond Insurer pursuant to Section 804 and apply the proceeds of such draw to the Interest Account and Principal Account, as appropriate. After the above transfers have been made, all sums in the Special Fund and the Accounts therein upon the date of the declaration of acceleration as provided in Section 801, and all sums thereafter received by the Trustee hereunder, shall be applied by the Trustee to the payment of all other outstanding fees and expenses of the Trustee and thereafter in the following order upon presentation of the Bonds, and the stamping thereon of the payment if only partially paid, ar upon the surrender thereof if fully paid: First, moneys in the Principal Account, if any, shall be applied to the payment in full of the principal of the Outstanding Bonds; Second, moneys in the Interest Account shall be applied to the payment of interest coming due and payable on the Bonds as of the date of acceleration; and Third, any moneys remaining in the Special Fund and Accounts therein shall be applied to the payment of any amounts due and owing by the Agency to the Bond Insurer which are identified in a written certificate executed by a representative of the Bond Insurer and filed with the Trustee. ARTICLE IX THE TRUSTEE AND THE PAYING AGENT Section 9.01. Appointment, Duties, Immunities and Liabilities of Trustee. 0 f1 ,,, --, 124/016150-0012/3149955.1 a03/18/98 - 4 3 - (a) The Agency hereby appoints U.S. Bank Trust National Association as Trustee, Registrar, Dissemination Agent, and Paying Agent, such appointment to remain in effect until notice of change is filed with the Trustee. The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default (which has not been cured), exercise such of the rights and powers vested in it by this Indenture. All references to the Trustee in this Article IX include references to the Trustee when it is acting as Paying Agent and bond registrar. (b) The Agency may remove the Trustee for breach of its duties hereunder at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Bondowners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with subsection (e) of this Section, or shall. become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the 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 by giving written notice of such removal to the Trustee, and thereupon 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 the Bondowners, by first class mail. 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 only upon acceptance of appointment by the successor Trustee. Promptly upon such acceptance, the Agency shall notify the Bondowners in writing. If no successor Trustee shall have been appointed and have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee, any Bondowner (on behalf of himself and all other Bondowners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Agency and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, .1 -4) . iz4ioib1so-ooizi31499ss.i ,osn alga - 4 4 - _u properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the request of the Agency or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Agency shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. The Trustee's rights to indemnification hereunder and to payment of its fees and expenses shall survive its resignation or removal and the final payment or defeasance of the Bonds. (e) Any Trustee appointed under the provisions of this Section in succession to the Trustee shall be a trust company or commercial bank having trust powers and having a corporate trust office located within or without the State, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. (f) Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (e) of this Section, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. (g) The permissive right of the Trustee to do things numerated or contemplated by this Indenture shall not be construed as a duty and the Trustee shall not be liable in the performance of its obligations hereunder except for its gross negligence or willful misconduct. s 12$/016150-0012/3149955.1 a03/18/98 - 4 5 - (h) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder or be deemed to have notice of any Event of Default hereunder unless and until an officer thereof shall have actual knowledge except the Trustee shall have such knowledge if the Agency shall fail to make or cause to be made any of the payments to the Bondowners required to be made by Article IV or XI hereof, or if, the Trustee shall be specifically notified in writing of such Event of Default by the Agency or by the Registered Owners of at least twenty-five percent (250) in aggregate principal amount of all Bonds then Outstanding. (i) The Trustee shall not be required to give any bond or surety in respect of the execution of its trusts and powers hereunder. (j) Before taking any action under Article VIII hereof, except the declaration of acceleration, or this Section at the request of the Bondowners, the Trustee may require that a satisfactory indemnity bond be furnished by the Bondowners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its gross negligence or willful misconduct in connection with any action so taken. (k) All moneys received by the Trustee or any Paying Agent shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received and shall not be commingled with the general funds of the Trustee or any Paying Agent, but need not be segregated from other funds except to the extent required by law. (1) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) This subsection shall not be construed to limit the effect of subsection (a) of this Section; (2) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the owners of a majority in aggregate principal amount of the Bonds Outstanding relating to the time, method and place of conducting any proceeding or any remedy available to the Trustee, or the exercise of any trust or power conferred upon the Trustee, under this Indenture; and (3) 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. 124/016150-0012/3149955.1 a03/18/98 - 4 6 - 3 G (m) The Agency agrees to pay the reasonable fees, costs and expenses of the Trustee pursuant to this Indenture, as set forth in the fee schedule delivered to the Agency from time to time. (n) The immunities extended to the Trustee also extend to its officers, directors, employees and agents. Section 9.02. Liability of Trustee. The recitals, statements And representations by the Agency contained in this Indenture or in the Bonds shall be taken and construed as made by and on the part of the Agency, and not the Trustee, and the Trustee does not assume, and shall not have, any responsibility or obligations for the correctness of any thereof. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee undertakes to perform such duties, and only such duties as are specifically set forth in this Indenture and no implied duties or obligations shall be read into this Indenture against the Trustee. In accepting the trust hereby created, the Trustee acts solely as Trustee for the Bondowners and not in its individual capacity. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds. The Trustee shall not be accountable for the use or application by the Agency or any other party of any funds which the Trustee has released under this Indenture. The Agency covenants to the extent permitted by law to indemnify the Trustee and to hold it harmless against any loss, liability, expenses or advances, including, but not limited to fees and expenses of counsel and other experts, incurred or made without negligence or willful misconduct on the part of the Trustee: (i) in the exercise and performance of any of the powers and duties hereunder by the Trustee; (ii) relating to.or arising out of the Redevelopment Project, or the conditions, occupancy, use, possession, conduct or management of, or work done in or about, or from the planning, design, acquisition, installation or construction of the Redevelopment Project or any part thereof; or (iii) arising out of material fact or omission or alleged omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of the Bonds, including the costs and expenses of defending itself against any claim of liability arising under this Indenture. The Trustee shall have no liability with respect to any in any offering memorandum or or distributed with respect to responsibility, opinion or information, statement or recital, other disclosure material prepared the issuance of the Bonds. 124/016150-0012/3149955.1 a03/18/98 - 4 % - Section 9.03. Right of Trustee to Rely on Documents. The Trustee shall be protected hereunder in acting in good faith upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties, including, without limitation, all funding and disbursement requisitions and notices. 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 satisfactorily established, if disputed. Whenever in the administration of the trusts imposed upon it by this Indenture, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to,be conclusively proved and established by a certificate of the Agency, and such certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 9.04. Intervention by Trustee. In any judicial proceedings to which the Agency is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the interest of owners of the Bonds, the Trustee may in its discretion intervene on behalf of Bondowners and, upon being indemnified to its satisfaction therefor, shall do so if requested in writing by the owners of a majority in aggregate principal amount of all Bonds then Outstanding. Section 9.05. Designation and Successor of Paying Agent; Agreement with Paying Agent. The Trustee shall be the Paying Agent for the Bonds. Any Successor Paying Agent appointed under the provisions of this Section shall be a commercial bank or trust company eligible to act as Trustee hereunder. The Trustee may remove or replace any Paying Agent by written instrument, which removal or replacement shall not require any consents or approvals. The Trustee shall notify all Bondowners by first- class mail of and upon appointment, removal or replacement of the Paying Agent, such notice to include the name and address of the then appointed Paying Agent, if any. Any commercial bank or trust company with or into which any Paying Agent may be merged or consolidated, or to which the assets and business of such Paying Agent may be sold, shall be deemed the successor of such Paying Agent for the purposes of this Indenture. If the position of Paying Agent shall become vacant for any reason, the Agency may appoint a bank or trust company as such Paying Agent to fill such vacancy. The Paying 4"s 124/016150-0012/3149955.1 a03/18/98 - 4 8 - Agent shall enjoy the same protective provisions in the Performance of its duties hereunder as are specified in Sections 901, 902, 903 and 904 hereof with respect to the Trustee insofar as such provisions may be applicable. ARTICLE X SUPPLEMENTAL INDENTURES Section 10.01. Amendments: Su-oplemental Indentures. This Indenture, and the rights and obligations of the Agency and of the Owners of the Bonds issued hereunder, may be modified or amended at any time by Supplemental Indenture adopted by the Agency with the consent of the Bond Insurer: (a) without the consent of Bondowne:rs, if the modification or amendment is for the purpose of preserving the exclusion of interest on the Bonds (or any refunding obligations therefor) from gross income for federal income tax purposes or if the modifications or amendment is for the purpose of adding covenants and agreements further to secure Bond payment., to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make modifications not affecting any Outstanding series of Bonds only with the consent of the Trustee, for the purpose of curing any ambiguities, defects or inconsistent provisions in this Indenture or to insert such provisions clarifying matters or questions arising under this Indenture as are necessary and desirable to accomplish the same, provided that the modifications or amendments do not adversely affect the rights of the Owners of any Outstanding Bonds; or (b) for any purpose with the consent of the Bondowners holding not less than sixty percent (600) in aggregate principal amount of the Outstanding Bonds, exclusive of Bonds, if any, owned by the Agency or the City, and obtained as hereinafter set forth; provided, however, that no modification or amendment shall, without the express consent of the Bondowner or registered owner of the Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable on it, extend its maturity or the times for paying interest, change the monetary medium in which principal and interest is payable, or create a mortgage pledge or lien upon the Pledged Revenues superior to or on a parity (except as provided in Section 214) with the pledge and lien created for the Bonds and any Parity Bonds or reduce the percentage of consent required for amendment or modification and provided further, that no amendments affecting the duties, obligations or rights of the Trustee shall take affect without the consent of the Trustee. Any act done pursuant to a modification or amendment permitted by this Section 1001 shall be binding upon the Owners of all of the Bonds, and shall not be deemed an infringement of any of the provisions of this Indenture or of the Law, whatever the character of the act may be, and may be done And performed as 124/016150-0012/3149955.1 a03/18/98 — 4 9 — t� v fully and freely as if expressly permitted by the original terms of this Indenture and after consent as required in Section 1001(b) above has been given, no Bondowner shall have any right or interest to object to the action, to question its propriety or to enjoin or restrain the Agency or its officers from taking any action pursuant to such modification or amendment. The Trustee may obtain an opinion of counsel that any such Supplemental Indenture complies with the provisions of this Article X and the Trustee may conclusively rely upon such opinion. A. Calling Bondowners' Meeting. If the Agency shall desire to obtain the Bondowners' consent, it shall duly adopt a resolution calling a meeting of the Bondowners for the purpose of considering the action for which consent is desired. B. Notice of Meeting. Notice specifying the purpose, place, date and hour of a Bondowners' meeting shall be mailed, postage prepaid by the Agency, to the respective registered owners at their addresses appearing on the bond register as maintained by the Trustee. The notice shall set forth the nature of the proposed action for which consent is desired. The place, date and hour of the meeting and the date or dates of.mailing the notice shall be determined by the Agency in its discretion; provided that such notice shall be mailed at least 15 days prior to the date of the Bondowners' meeting. The actual receipt by any Bondowner of notice of any Bondowners' meeting shall not be a condition precedent to the holding of the meeting, and failure to receive notice shall not affect the validity of the proceedings at the meeting. A certificate by the Secretary of the Agency approved by resolution of the Agency, that the meeting has been called and that notice has been given as provided herein, shall be conclusive as against all parties and no Bondowner shall have the right to show that he failed to receive actual notice of the meeting. C. Voting Qualifications. The Trustee shall prepare and deliver to the chairman of the meeting a statement of the names and addresses of the registered Owners of Bonds. This statement shall show maturities, serial numbers and principal amounts so that voting qualifications can be determined. No Bondowners shall be entitled -to -vote at the meeting unless their names appear upon the statement. No Bondowners shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against their names on the statement. D. Issuer -Owned Bonds. The Agency covenants that it will present at the meeting a certificate, signed and verified by one of its members and by the Treasurer, stating the Bond numbers and principal amounts of all Bonds owned by, or held for account of, the Agency or the City, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any Bond appearing upon the certificate, or any Bond which is established at or prior to the meeting to be owned by the Agency 124/016150-0012/3149955.1 a03/18/98 - 5 0 - or the City, directly or indirectly, and no such Bond (in this Indenture referred to as "issuer -owned Bonds") shall be counted in determining whether a quorum is present at the meeting. E. Quorum and Procedure. A representation of at least sixty percent (60a) in aggregate principal amount of the Bonds then Outstanding (exclusive of issuer -owned Bonds, if any) shall be necessary to constitute a quorum at any meeting of Bondowners, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, whether such adjournment shall have been held by a quorum or by less than a quorum. The Agency shall, by an instrument in writing, appoint a temporary chairman of the meeting,- and the meeting shall be organized by the election of a permanent chairman and secretary. At any meeting each Bondowner shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be qualified to vote as set forth above, and the vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The Agency and/or the Trustee by their duly authorized representatives and counsel, may attend any meeting of the Bondowners, but shall not be required to do so. F. Vote Required. At any Bondowners meeting there shall be submitted for the consideration and action of the Bondowners a statement of the proposed action for which consent is desired. If the action is consented to and approved by Bondowners holding at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of issuer -owned Bonds), the chairman and secretary of the meeting shall so certify in writing to the Agency. The certificate shall constitute complete evidence of consent of the Bondowners under the provisions of this Indenture. A certificate signed and.verified by the chairman and the secretary of any Bondowners meeting shall be conclusive evidence and the only competent evidence of matters stated in the certificate relating to proceedings taken at the meeting. ARTICLE XI DEFEASANCE Section 11.01. Defeasance. If the Agency shall pay or cause to be paid, or there shall be otherwise paid or provisions for payment made to or for the holders and owners of the Bonds, or any portion thereof, the principal, premium, if any, and interest due or to become due thereon at the time and in the manner stipulated therein, and if the Agency shall keep, perform and observe all and singular the covenants and promises in the Bonds and in this Indenture expressed as to be kept, performed and observed by it or on its part, and shall pay or cause to be paid to the Trustee all sums of money due or to become due 124/016150-0012/3149955.1 a03/I8/98 - 5 l - according to the provisions hereof including fees and expenses of the Trustee, then this Indenture and the lien, rights and interest created hereby shall cease, determine and become null and void (except as to any surviving rights of registration, transfer or exchange of Bonds herein provided for and except for the rights of the Trustee to receive compensation and indemnification in accordance with Article IX hereof), whereupon the Trustee shall cancel and discharge this Indenture, and execute and deliver to the Agency such instruments in writing as shall be requested by the Agency -and requisite to discharge this Indenture, and release, assign and deliver unto the Agency any and all the estate, right, title and interest in and to any and all right assigned or pledged to the Trustee or otherwise subject to this Indenture, except moneys or securities held by the Trustee for the payment of the principal of, premium, if any, and interest on the Bonds. The lien of the Indenture shall be discharged, if the Agency shall pay and discharge the entire indebtedness on all Bonds Outstanding 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 all Bonds Outstanding, together with all amounts due the Trustee as and when the same become due and payable; (b) By depositing with the Trustee, in a special trust fund created for such purpose, at or before maturity, moneys which, together with moneys then on deposit in the Special Fund and Accounts therein, is fully sufficient to pay all Bonds Outstanding, including all principal, interest and redemption premiums together with all amounts due the Trustee; or (c) By depositing with the Trustee, in a special trust created for such purpose, moneys invested in non -callable Government obligations in such amount as an Independent Financial Consultant shall determine will, together with the interest to accrue thereon without reinvestment and moneys then on deposit in the Special Fund and Accounts therein, be fully sufficient to pay and discharge any indebtedness on all Bonds (including all principal, interest, redemption premiums) at or before maturity; then, at the option of the Agency, and notwithstanding that all Bonds shall not have been surrendered for payment, the pledge of the Pledged Revenues and other funds provided for in this Indenture and all other obligations of the Agency under this Indenture with respect to all Bonds Outstanding shall cease and terminate, except only the obligation of the Agency to pay or cause to be paid to the owners of the Bonds not so surrendered and paid all sums due thereon, and the rights of the Trustee to indemnification and.payment of fees and expenses under Article IX hereof. Notice of the exercise of such option together with the verification report of an 124/016150-0012/3149955.1 u03/18/98 - rj 2 - Independent Financial Consultant and the defeasance opinion of a Bond Counsel shall be filed with the Trustee. Any funds held by the Trustee after discharge of the lien of the Indenture including any funds which have not been claimed by the person entitled thereto within two (2) years of the date upon which such funds were scheduled to be paid, or which are not required for said purpose, shall be paid over to the Agency and thereafter Bondowners shall look only to the Agency for payment. Notwithstanding the discharge of this Indenture with respect to the lien of the Bonds, the provisions of Article V of this Indenture will continue in full force and effect until all required payments under Article v hereof have been made. In the event of a defeasance of the Bonds in accordance with Article XI, the Trustee, upon the request of the Agency, shall release the rights of the Bondowners under this Indenture except: (i) the rights of the Trustee to receive compensation and indemnification pursuant to Article IX; and (ii) the right to receive interest and principal payments. In the event of such a defeasance, the Trustee shall execute and deliver to the Agency all such instruments as may be desirable to evidence such release, discharge and satisfaction, and upon written request of the Agency the Trustee shall pay over or deliver to the Agency all moneys or securities held by it pursuant to this Indenture which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption and the Trustee's fees and expenses. The Agency shall prepare notice, satisfactory to the Trustee, to the Owners of such Bonds to be mailed by first class mail postage prepaid, that such moneys are so available for such payment. ARTICLE XII MISCELLANEOUS Section 12.01. Consents, Etc. of Bondowners. Any consent, approval, direct -ion or other instrument required by this Indenture to be signed and executed by the Bondowners may be in any number of concurrent writings of similar tenor and may be signed or executed by such Bondowners in person or by agent appointed in writing. Proof of the execution of any such consent, approval, direction or other instrument or of the writing appointing any such agent, if made in the following manner, shall be sufficient for any of the purposes of this Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken under such request or other instrument, namely: 43 124/016150-0012/3149955.1 a03/18/98 - 5 3 - (a) The fact and date of the execution by any person of any such instrument or writing may be proved by the certificate of any officer in any jurisdiction who by law has power to take acknowledgments within such jurisdiction that the person signing such instrument or writing acknowledged before him the execution thereof, or by affidavit of any witness to such execution; and (b) The fact of ownership of Bonds and the amount or amounts, numbers and other identification of such Bonds, and the date of holding the same shall be proved by the registration books maintained by the Trustee pursuant to Section 209 thereof. Section 12.02. Limitation of Rights. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds is intended or shall be construed to give to any person other than the parties hereto, and the owners of the Bonds any legal or equitable right, remedy or claim under or in respect to this Indenture. This Indenture and all of the covenants, conditions and provisions hereof are intended to be and are for the sole and exclusive benefit of the parties hereto, and the owners of the Bonds as herein provided. Section 12.03. Severability. If any provision of this Indenture shall be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or Sections in this Indenture contained, shall not affect the remaining portions of this Indenture, or any part thereof. Section 12.04. CUSIP Numbers. CUSIP identification numbers will be imprinted on the Bonds, but numbers shall not constitute a part of the contract evidenced by the Bonds and no liability shall attach to the Trustee or Agency or any of the officers or agents because of or on account of said numbers. Any error or omission with respect to the numbers shall not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. Section 12.05. 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 44 124/016150-0012/3149955.1 v03n s/9s - 5 4 - 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 inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 12.06. Counterparts. This Indenture may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 12.07. Applicable Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California. Section 12.08. Captions. The captions or headings in this Indenture are for convenience only and in no way define, limit, or describe the scope or intent of any provisions or sections of this Indenture. Section 12.09. Compliance Certificates and Opinions. Every certificate (except the certificate provided for in Section 212.) or opinion with respect to compliance with a condition or covenant provided.for in this Indenture shall include: (a) A statement that the person or persons making such certificate or opinion have read such covenant or condition and the definitions herein relating thereto; (b) A brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) A statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) A statement as to whether or not, in the opinion of the signers, such condition or covenant has been complied with. Section 12.10. Conflict with Trust Indenture Act of 1939. If this Indenture is qualified under the Trust Indenture Act of 1939, as amended (the 111939 Act") and any provision of the 1939 Act limits, qualifies or conflicts with another provision hereof which is required to be included in this,Indenture by any of the provisions of the 1939 Act, such required provision shall control. Section 12.11. Successors. Whenever in this Indenture either the Agency or the Trustee is named or referred to, such 124/016150-0012/3149955.1 a03/19/98 - 5 5 - 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 12.12. Execution of Documents and Proof of Ownership by Bondowners. Any request, declaration or other instrument which this Indenture may require or permit to be executed by Bondowners may be in one or more instruments of similar tenor, and shall be executed by the Bondowners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by,any Bondowner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be provided by the certificate of any notary public or other office r 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. Except as otherwise herein expressly provided, the amount of Bonds transferable by delivery held by any such person executing such request, declaration or other instrument or writing as a Bondowner, and the numbers thereof, and the date of his owning such Bonds, may be proved by the registration books to be maintained pursuant to Section 209. The Trustee may nevertheless in its discretion require further or other proof in cases where it deems the same desirable. The ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the aforesaid registration books. Any request, declaration or other instrument or writing of the Bondowner of any Bond shall bind all future Owners of such Bonds in respect of anything done or suffered to be done by the Agency or the Trustee in good faith and in accordance therewith. Section 12.13. Waiver of Personal Liability. No member, officer, agent or employee of the Agency shall be individually or personally liable for the payment of the principal of or interest on the 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 12.14. Notices. All written notices to be given under this Indenture shall be given by mail or personal delivery to the party entitled thereto at its address set forth below, or at such other address as the party may provide to the other parties in writing from time to time. Notice shall be effective 124/016150-0012/3149955.1 a03/18/98 - 5 6 upon receipt or, in the case of personal delivery, upon delivery to the address set forth below: If to the Agency: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 Attn: Executive Director If to the Trustee: U.S. Bank Trust National Association Section 12.15. Accounting Records and Reports. The Trustee shall at all times keep proper books of record and accounts in which complete and accurate entries shall be made of all transactions relating to the proceeds of Bonds and all funds and accounts established pursuant to this Indenture. Not later than the 15th day of each month, the Trustee shall prepare and file with the Agency a report setting forth for the previous month: (i) amounts withdrawn from and deposited into each fund and account maintained by the Trustee under this Indenture; (ii) the balance on deposit in each fund and account as of the Interest Payment Date for which such report is prepared, and (iii) a brief description of all obligations held as investments in each fund and account. Copies of such reports may be mailed or delivered to any owner of any Bond upon the Owner's written request at a cost not to exceed the Trustee's actual costs of duplication and mailing of delivery. The Trustee agrees to cooperate with any consultant hired by the Agency to certify compliance with any State or Federal tax requirements and to provide any information requested on a timely basis. 1241016150-0012/3149955.1 a03/18/98 - 5 7 - IN WITNESS WHEREOF, the La Quinta Redevelopment Agency, California has caused these presents to be signed in its name and on its behalf by its Executive Director and attested by its Secretary and to evidence its acceptance of the trusts hereby created the Trustee has caused these presents to be signed in its name and behalf by one of its duly authorized officers all as of the 1st day of April, 1998. ATTEST: Secretary LA QUINTA REDEVELOPMENT AGENCY Executive Director U.S. BANK TRUST NATIONAL ASSOCIATION Its: Authorized Signatory 124/016150-0012/3149955.1 a03/18/98 - S 8 - EXHIBIT A (FORM OF BOND) UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BOND ISSUE OF 1998 Interest Rate Maturity Date Date of Issuance CUSIP No. May 1, 1997 REGISTERED OWNER: PRINCIPAL SUM: The LA QUINTA REDEVELOPMENT AGENCY (hereinafter sometimes called the "Agency"), a public body, corporate and politic, duly organized and existing under the laws of the State of California, for value received, hereby promises to pay (but solely out of the funds hereinafter mentioned) to the registered owner specified above or registered assigns (herein sometimes referred to as "registered owner") the principal sum stated above on the date stated above and to pay the registered owner on each March 1 and September 1, commencing on March 1, 1998 (each such date an "Interest Payment Date") by check mailed on the Interest Payment Date to him by first class mail, postage prepaid as his name and address appear on the register kept by the Trustee (defined below) as of the close of business on the fifteenth (15th) day of the month next preceding each Interest Payment Date (the "Regular Record Date"), interest on the principal sum from the Interest Payment Date next preceding the date of authentication hereof (unless (i) the date of authentication hereof is an Interest Payment Date, in which event from that Interest Payment Date, (ii) the date of authentication hereof is after the Regular Record Date and prior to the next succeeding Interest Payment Date, and if the Agency shall not default in the payment of interest due on said Interest Payment Date, from said Interest Payment Date, or (iii) the date of authentication hereof is prior to August 15, 1998, in which event from May 1, 1998) until the principal hereof shall have been paid or provided for in accordance with the Indenture hereinafter referred to, at the rate per annum set forth above; provided that upon written request made before the Regular Record Date preceding the Interest Payment Date by a Bondowner of $1,000,000 or more in principal amount of Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated by such Bondowner to the Trustee. Both 4'$C, 124/010150-0012/3149955.1 u03/18/98 A - 1 4. 11 �; principal and interest on this Bond are payable in lawful money of the United States of America, and (except for interest which is payable as stated above) are payable upon presentation of this Bond at the corporate trust office of U.S. Bank Trust National Association, as Trustee (the "Trustee") in Los Angeles, California. This Bond, the interest hereon and any premium due upon the redemption of this Bond prior to maturity are 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, said interest or said premium be payable out of any funds or properties other than the funds of the Agency as set forth in the Indenture hereinafter mentioned. This Bond does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the members of the Agency nor any persons executing the Bond are liable personally on this Bond by reason of its issuance. This Bond is one of a duly authorized issue of bonds of the Agency designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998" (hereinafter called "Bonds") in aggregate principal amount of $ all of like tenor (except for bond numbers, maturity dates and differences, if any, in interest rates) and all of which have been issued pursuant to and in full conformity with the Constitution and laws of the State of California and particularly the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of California) for the purpose of financing a portion of the costs of implementing the Redevelopment Plan and are authorized by and issued pursuant to an Indenture of Trust entered into by and between the Agency and the Trustee dated as of April 1, 1998 (the "Indenture") and all of the Bonds are equally secured in accordance with the terms of the Indenture, reference to which is hereby made for a specific description of the security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants, and agreements made for the benefit of the Bondowners, and for a statement of the rights of the Bondowners, and by the acceptance of this Bond the registered owner hereof assents to all of the terms, conditions and provisions of said Indenture. In the manner provided in the Indenture, said Indenture and the rights and obligations of the Agency and of the Bondowners, may (with certain exceptions as stated in said Indenture) be modified or amended with the consent of the Owners of sixty percent (600) in aggregate principal amount of outstanding Bonds, exclusive of issuer -owned bonds, unless such modification or amendment is for the purpose of curing ambiguities, defects, etc., in which case no Bondowner's consent is required. 124/016150-0012/3149955.1 a03/18/98 A - 2 The principal of this Bond and the interest hereon are secured by an irrevocable pledge of, and are payable solely from, the Pledged Revenues (as such term is defined in said Indenture) and certain other funds, all as more particularly set forth in the Indenture. Said Indenture is adopted under and this Bond is issued under and is to be construed in accordance with the laws of the State of California. The outstanding Bonds maturing on or after September 1, 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 other available funds on September 1, , or on any Interest Payment Date thereafter prior to maturity. if less than all of the Bonds outstanding are to be -redeemed at any one time, the Bonds to be redeemed shall be redeemed in inverse order of maturity, and by lot within a maturity. Bonds called for redemption shall be redeemed at a redemption price (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 Dates Redemption Price September 1, 2007 and March 1, 2008 1020 September 1, 2008 and March 1, 2009 1010 September 1, 2009 and thereafter 1000 For the purpose of selecting Bonds by lot, Bonds in excess of $5,000 will be assigned a separate number for each $5,000 of principal they represent. Commencing on September 1, 2009, the Term Bonds maturing on September 1, 2028 are also subject to mandatory redemption from minimum sinking account payments as provided in the Indenture. This; Bond is issued in fully registered form and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue, all as more fully set forth in the Indenture. 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 Los Angeles, California, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, upon surrender and cancellation of this Bond. Upon such transfer a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue will be issued to the transferee in exchange therefor. The Agency, the Trustee and any Paying Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Agency, the Trustee and any Paying Agent shall not be affected by any notice to the contrary. 124/016150-0012/3149955.1 a03/18/98 A - 3 This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Trustee. It is hereby recited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and laws of the State of California. IN WITNESS WHEREOF, the La Quinta Redevelopment Agency has caused this Bond to be signed on its behalf by its Executive Director by manual or facsimile signature and by its Secretary by manual or facsimile signature. Executive Director of the La Quinta Redevelopment Agency Secretary of the La Quinta Redevelopment Agency 124/016150-0012/3149955.1 a03/18/98 A - 4 [FORM OF CERTIFICATE OF AUTHENTICATION ON FULLY REGISTERED BONDS] This is one of the fully registered Bonds described in the within -mentioned Indenture. Date of Authentication: U.S. BANK TRUST NATIONAL ASSOCIATION Trustee Authorized Signatory [FORM OF ASSIGNMENT OF FULLY REGISTERED BONDS] For value received hereby sells, assigns and transfers unto (I.D. or Social Security Number ) the within - mentioned Bond and hereby irrevocably constitutes and appoints attorney, to transfer the same on the books of the Trustee with full power of substitution in the premises. Dated: Signature guaranteed by: NOTE: The signature to this Assignment must correspond with the name as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. 124/016150-0012/3149955.1 a03/18/98 B - 1 EXHIBIT "B" Requisition No. CERTIFICATE PERTAINING TO PAYMENT OF PROJECT COSTS AND COSTS OF ISSUANCE U.S. Bank Trust National Association is hereby requested to pay from the Redevelopment Fund established by the Indenture of Trust dated as of April 1, 1998, by and between Trustee and La Quinta Redevelopment Agency (the "Indenture") to the person or corporation designated below,as payee, the sum set forth below such designation, in payment of the Project Costs and/or Cost of Issuance described below. Description of Project Cost and/or Costs of Issuance Purpose Amount Payee (i) the amounts to be disbursed constitute Project Costs or Cost of Issuance as said terms are defined in the Indenture, and that said amounts are not being paid in advance of the time, if any, fixed for payment; (ii) no amount set forth in this certificate was included in any certificate requesting disbursement previously filed with Trustee pursuant to the Indenture; and I hereby certify that I am an Authorized Officer of Agency as defined in the Indenture. Date: La Quinta Redevelopment Agency Title. 124/016150-001213149955.1 a03/18/98 B - 2 ATTACHMENT NO. 10 PRELIMINARY OFFICIAL STATEMENT DATED APRIL _, , Standard & Poor's: "AAA" Moody's Investors Service: "Aaa" NEW ISSUE - FULL BOOK -ENTRY ( Insured --See "Ratings" herein) In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, and assuming continuing compliance with covenants of the La Quinta Redevelopment Agency (the 'Agency') intended to preserve the exclusion from gross income for federal income tax purposes of interest on the Bonds, interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, such interest is also exempt from present State of California personal income taxes. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity is original issue discount. See "TAX EXEMPTION" herein for a discussion of the effect of certain provisions of the Code on Owners of the Bonds. $795009000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO.2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 Dated: April 15, 1998 Due: September 1, as shown below The Bonds will be delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers ("Beneficial Owners") in the denomination of $5,000, or any integral multiple thereof, under the book -entry system maintained by DTC. Beneficial Owners will not be entitled to receive delivery of bonds representing their ownership interest in the Bonds. The principal of, premium, if any, and semiannual interest (due March 1 and September I of each year, commencing September 1, 1998) on the Bonds will be payable by U.S. Bank Trust National Association, Los Angeles, California, as Trustee, to DTC for subsequent disbursement to DTC participants, so long as DTC or its nominee remains the registered owner of the Bonds (see "THE BONDS —Book -Entry System" herein). The Term Bonds maturing on September 1, 2018 and September 1, 2028 are subject to mandatory redemption from minimum sinking account payments, in part by lot, on September 1, 2009 and September 1, 2019, respectively, and on each September I thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The Bonds maturing on or after September 1, 2008 are subject to optional redemption prior to maturity, in whole or in part, on September 1, 2007 and on each Interest Payment Date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, plus a premium, as described herein. MATURITY SCHEDULE* Maturity Date Principal Interest September 1 of Amount Rate 1998 $335,000 1999 115,000 2000 120,000 2001 125,000 2002 130,000 2003 135,000 Maturity Date Yield September 1 of 2004 2005 2006 2007 2008 Principal Interest Amount Rate $140,000 145,000 150,000 155,000 165,000 Yield $2,170,000 — % Term Bonds due September 1, 2018 Yield — % $3,615,000 — % Term Bonds due September 1, 2028 Yield — % (Plus accrued interest) The Bonds are being issued for the purpose of refinancing the Agency's $5,845,000 Tax Allocation Bonds, Issue of 1992 of which $5,380,000 are currently outstanding (the "1992 Bonds"). The Bonds are payable from and secured by the Pledged Revenues as defined herein to be derived from the Project Area. Taxes levied on the property within the Project Area on that portion of the taxable valuation over and above the taxable valuation of the base year property roll (Fiscal Year 1988-89) to the extent they constitute Pledged Revenues shall be deposited in the Special Fund and administered by the Trustee for the payment of the principal of and interest on the Bonds. In addition, payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by simultaneously with the delivery of the Bonds. The Bonds are being issued for sale to the La Quinta Financing Authority (the "Authority"). The Authority will resell the Bonds to the Underwriter. This cover page of the Official Statement contains information for quick reference only. It is not a complete summary of the Bonds. Investors should read the entire Official Statement to obtain information essential to making an informed investment decision. Attention is hereby directed to certain Risk Factors more fully described herein. The Bonds are 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 or any of its political subdivisions is liable therefor. The principal of and interest on the Bonds are payable solely from the Pledged Revenues allocated to the Agency from the Project Area as defined herein and in the Indenture. The Bonds are offered when, as and if issued, subject to the approval of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel. Certain legal matters will be passed on for the Agency by Stra ling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, Disclosure Counsel. It is anticipated that the Bonds will be available for delivery to DTC in New York, New York on or about May 13, 1998. ItMiller & Schroeder Financial, Inc. The Date of this Official Statement is May _, 1998. *Preliminary, subject to change. INTRODUCTORY STATEMENT. SOURCE AND USES OF FUNDS THE REFUNDING PROGRAM... THE BONDS TABLE OF CONTENTS Page 2 3 3 ................................................................ Authority for Issuance............................................3 Description of the Bonds........................................3 Book -Entry System................................................3 Redemption and Purchase of Bonds.......................5 SECURITY FOR THE BONDS.........................................6 THE INDENTURE.........................................................7 Allocation of Bond Proceeds.................................7 Pledged Revenues -Application ..............................8 Investment of Moneys in Funds and Accounts ....10 Issuance of Parity Bonds......................................10 Covenants of the Agency ..................................... I I Events of Default and Remedies ..........................14 Amendments........................................................16 THE AUTHORITY.......................................................17 THE LA QUINTA REDEVELOPMENT AGENCY ............ 17 Members and Officers..........................................17 Agency Powers....................................................17 Fiscal Consultant..................................................18 Tax Increment Financing.....................................18 Housing Set-Aside...............................................18 Factors Affecting Redevelopment Agencies Generally...........................................19 RISK FACTORS..........................................................20 Limitations on Remedies......................................20 Reduction of Pledged Revenues ...........................20 Limited Obligations.............................................20 Development Risks..............................................21 Levy and Collection.............................................21 Reduction in Inflationary Rate .............................21 Bankruptcy and Foreclosure................................21 Property Held By FDIC.......................................22 Educational Revenue Augmentation Fund ........... 22 Other Changes in Redevelopment Law................22 PROPERTY TAXATION IN CALIFORNIA ......................23 Page Property Tax Collection Procedures ....................23 Supplemental Assessments..................................23 Property Tax Administrative Costs......................24 Unitary Property ...................................................24 Article XIIIA of the State Constitution ................24 Appropriations Limitation -Article XIIIB.............25 Personal Property Tax Special Subventions ......... 25 Future Initiatives..................................................25 Appeals of Assessed Values.................................25 THE PROJECT AREA..................................................26 Background.......................................................... 26 Location...............................................................27 Controls, Land Use and Building Restrictions ..... 27 Agreements with Various Taxing Agencies ......... 27 Largest Local Secured Taxpayers ........................28 PLEDGED REVENUES................................................28 Historical Tax Revenues......................................28 Projected Pledged Revenues and Debt Service Coverage........................................................... 29 Annual Debt Service............................................30 CONCLUDING INFORMATION....................................3 1 Underwriting........................................................31 Legal Opinion......................................................31 Tax Exemption.....................................................31 No Litigation........................................................32 Legality for Investment in California...................32 Verification of Mathematical Computations ........ 33 Continuing Disclosure..........................................33 Bond Insurer.........................................................34 Ratings.................................................................34 Miscellaneous.......................................................34 SUPPLEMENTAL INFORMATION - THE CITY OF LA QUINTA......................................3 5 APPENDIX A - Definitions ..................................... A-1 APPENDIX B - Redevelopment Fiscal Consultant's Tax Increment Projections ................................. B- I APPENDIX C - Specimen Municipal Bond Insurance Policy.................................................C-1 For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, the Preliminary Official Statement and the Official Statement, as of their respective dates, are deemed final by the Agency, provided, however, that pricing, underwriting and other information contained in the Preliminary Official Statement is subject to completion or amendment in accordance with Rule 15c2-12. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the Agency. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Agency or the Project Area since the date hereof. The information set forth herein has been obtained from the Agency and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation of the Agency. (This Page Left Intentionally Blank) n J OFFICIAL STATEMENT $7,500,000- LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 INTRODUCTORY STATEMENT This Official Statement, including the cover page, is provided to furnish information in connection with the sale by the La Quinta Redevelopment Agency (the "Agency") of $7,500,000* aggregate principal amount of the Agency's La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 (the "Bonds"). The Bonds are being issued pursuant to the Constitution and laws of the State of California (the "State"), including the Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000 of the Health and Safety Code of the State) (the "Law") and an Indenture of Trust, dated April 1, 1998 (the "Indenture") between the Agency and U.S. Bank Trust National Association, Los Angeles, California, as trustee (the "Trustee") approved by a resolution adopted by the Agency on April _, 1998 (the "Resolution"). The Bonds will be sold to the La Quinta Financing Authority (the "Authority") pursuant to the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 (commending with Section 6484) of the California Government Code (the "JPA Law"). The Bonds purchased by the Authority will be resold immediately to Miller & Schroeder Financial, Inc. (the "Underwriter"). The City of La Quinta (the "City") is located 127 miles east of Los Angeles and 20 miles south of Palm Springs in Riverside County (the "County"). The City was originally a general law - city incorporated on May 1, 1982, became a charter city in November, 1996 and provides for a Council -Manager form of government made up of five Council Members. The Mayor is directly elected by the citizens. The City encompasses an area of approximately 31.18 square miles and the 1997 population is estimated to be 18,950. The Agency was established on July 5, 1983 by the City Council of the City with the adoption of Ordinance No. 34, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all the rights, powers, duties and privileges of the Agency. The Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the "Redevelopment Plan") was approved by Ordinance No. 139 adopted by the City Council on May 16, 1989. The La Quinta Redevelopment Project Area No. 2 (the "Project Area") encompasses 3,116 acres of commercial, public and residential properties. The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the "base year" valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion produced by applying then current tax rates to the increase in Preliminary, subject to change. 2J3 r !1 valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency may be pledged to the payment of agency obligations. Generally, tax increment revenues from one project area may not be used to repay indebtedness incurred for another project area. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS." The Bonds are being issued to refinance the Agency's $5,845,000 La Quinta Redevelopment Project Area No. 2, Tax Allocation Bonds, Issue of 1992 of which $5,380,000 are currently Outstanding (the "1992 Bonds"). The Bonds are payable from and are secured by a pledge of the Pledged Revenues (described herein under the section entitled "SECURITY FOR THE BONDS"). The Agency has received a commitment from (" if or the "Bond Insurer") to issue, effective as of the date the Bonds are delivered, a policy of insurance guaranteeing the payment, when due, of the principal of and interest on the Bonds. The insurance extends for the life of the Bonds and cannot be canceled by the Bond Insurer. Brief descriptions of the Bonds, the Indenture, the Agency and the City are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Resolution, the Indenture, the Law, the Constitution and the laws of the State as well as the proceedings of the Agency and the City are qualified in their entirety by reference to such documents. References herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture and the information with respect thereto included herein, copies of which are all available for inspection at the offices of the Agency. During the period of the offering of the Bonds, copies of the forms of all documents are available at the offices of Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Solana Beach, California 92075 and thereafter from the City Clerk's office, City of La Quinta, 78-495 Calle Tampico, La Quinta, California 92253. SOURCES AND USES OF FUNDS The estimated sources and uses of funds, excluding accrued interest on the Bonds, is summarized as follows: Sources Principal Amount of Bonds ................................................... $7,500,000.00- 1992 Bonds Special Fund and Accounts ............................... Less: Original Issue Discount ............................................... Total Sources................................................................... $ Uses Underwriter's Discount.......................................................... $ Reserve Account (1).............................................................. EscrowFund (2).................................................................... Costs of Issuance Fund (3).................................................... Redevelopment Fund............................................................. TotalUses........................................................................ $ (1) An amount equal to the Maximum Annual Debt Service on the Bonds (the "Reserve Requirement"). (2) The Escrow Fund will be funded in an amount necessary to provide for the purchase of Federal Securities and/or cash necessary for the payment of the principal and interest and redemption premium, if any, on the 1992 Bonds through and including December 1, 1999. (3) Includes the Municipal Bond Insurance Policy premium. Preliminary, subject to change. 9 THE REFUNDING PROGRAM Pursuant to an Indenture of Trust dated as of December 1, 1992 (the "Prior Indenture"), the Agency issued the 1992 Bonds. Pursuant to the Prior Indenture, the Agency pledged the Pledged Revenues of the Project Area to the repayment of the 1992 Bonds. On the Delivery Date, a portion of the proceeds of the Bonds, together with certain other funds, will be deposited in trust with U.S. Bank Trust National Association, Los Angeles, California, as escrow holder (the "Escrow Bank") pursuant to the Indenture and an escrow deposit and trust agreement dated April 1, 1998, between the Agency and the Escrow Bank (the "Escrow Agreement"). The deposit will be in an amount sufficient to pay principal and interest on the 1992 Bonds through and including December 1, 1999 and to pay the redemption price with respect to the remaining 1992 Bonds on December 1, 1999. The lien of the 1992 Bonds created by the Prior Indenture, including, without limitation, the pledge of the Pledged Revenues pursuant to the Prior Indenture, will be discharged, terminated and of no further force and effect upon the deposit with the Escrow Bank of the amounts required pursuant to the Escrow Agreement. THE BONDS Authority for Issuance The La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998, in an aggregate principal amount of $7,500,000' (the "Bonds"), were authorized for issuance pursuant to the Indenture approved by the Resolution. Description of the Bonds The Bonds will be issued as one fully registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"), as registered owner of all Bonds. See "Book -Entry System" below. The initially issued Bonds will be dated April 15, 1998 and mature on September 1 in the years and in the amounts shown on the cover page of this Official Statement. The Bonds will bear interest at the rates shown on the cover page of this Official Statement, payable semiannually on March 1 and September 1 in each year, commencing on September 1, 1998, by check mailed by first class mail on each Interest Payment Date to the registered owners thereof or upon the request of the Owners of $1,000,000 or more in principal amount of Bonds, by wire transfer to an account which shall be designated by such Owner to the Trustee on or before the Regular Record Date preceding the Interest Payment Date. Book -Entry System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully - registered bonds registered in the name of Cede & Co. (DTC's partnership nominee). One fully - registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as Preliminary, subject to change. transfers and pledges, in deposited securities through electronic computerized book -entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities bonds. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. Purchasers of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owners") is in turn recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to an issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the Record Date (identified in a listing attached to the Omnibus Proxy). Principal, sinking fund and interest payments with respect to the Bonds will be made to DTC. DTC's practice is to credit Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the date payable. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, the Authority or the Agency, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest 61 to DTC is the responsibility of the Agency or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. The Agency cannot and does not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the registered owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Agency is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to Beneficial Owners with respect to the Bonds or an error or delay relating thereto. The foregoing description of the procedures and record -keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in such Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Discontinuance of Book -Entry. DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Trustee and discharging its responsibilities with respect thereto under applicable law or the Agency may terminate participation in the system of book -entry transfers through DTC or any other securities depository at any time. In the event that the book -entry system is discontinued, the Agency will execute, and the Trustee will authenticate and make available for delivery, replacement Bonds in the form of registered bonds. In addition, the following provisions would apply: the principal of and redemption premium, if any, on the Bonds will be payable at the principal corporate trust office of the Trustee, and interest on the Bonds will be payable by check mailed on each Interest Payment Date to the Owners thereof as shown on the registration books of the Trustee as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable Interest Payment Date, or by wire transfer to Owners of $1,000,000 or more in aggregate principal amount of Bonds, upon request, as provided in the Indenture. The Bonds will be transferable and exchangeable on the terms and conditions provided in the Indenture. Transfer Fees. For every transfer and exchange of Bonds, Owners may be charged a sum sufficient to cover any tax, governmental charge or transfer fees that may be imposed in relation thereto, which charge may include transfer fees imposed by the Trustee, DTC or the DTC Participant in connection with such transfers or exchanges. Redemption and Purchase of Bonds Optional Redemption. The Bonds maturing on or before September 1, 2007, will not be subject to call and redemption prior to maturity. The Bonds maturing on or after September 1, 2008, are subject to redemption at the option of the Agency, in whole or in part, in inverse order of maturity and by lot within a maturity, from the proceeds of refunding bonds or other available funds, on September 1, 2007 or on any Interest Payment Date thereafter prior to maturity. Bonds called for redemption will be redeemed at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date: Redemption Date Redemption Price September 1, 2007 and March 1, 2008 102% September 1, 2008 and March 1, 2009 101 September 1, 2009 and thereafter 100 n i 1- 4- Sinking Account Redemption. The Term Bonds maturing on September 1, 2018, will be subject to mandatory redemption, on each September 1, commencing on September 1, 2009, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking account payments made by the Agency in the years and amounts as follows: Year Amount` Year Amount* 2009 $170,000 2014 $220,000 2010 180,000 2015 230,000 2011 190,000 2016 245,000 2012 200,000 2017 255,000 2013 210,000 2018 (maturity) 270,000 The Term Bonds maturing on September 1, 2028, will be subject to mandatory redemption, on each September 1, commencing on September 1, 2019, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking account payments made by the Agency in the years and amounts as follows: Year Amount* Year Amount* 2019 $285,000 2024 $365,000 2020 300,000 2025 385,000 2021 315,000 2026 405,000 2022 330,000 2027 430,000 2023 350,000 2028 (maturity) 450,000 Notice of Redemption. As provided in the Indenture, notice of redemption will be given by first class mail, postage prepaid not less than thirty (30) nor more than sixty (60) days prior to the redemption date, to the registered owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice or anv defect in the notice so mailed will affect the sufficiency of the proceedings for redemption. In lieu of redemption or otherwise, the Agency is authorized to purchase Bonds on the open market at any time and the Trustee will, upon written direction of the Agency, settle these purchases from moneys deposited by the Agency with the Trustee at a price not to exceed the principal amount of Bonds plus the applicable premium and accrued interest, if any, to the date of purchase plus brokerage fees, if any. SECURITY FOR THE BONDS As provided in the Redevelopment Plan, pursuant to Article 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California, taxes levied upon taxable property in the Redevelopment Project Area each year by or for the benefit of the State of California, any city. county, city and county, district, or other public corporation (herein sometimes collectively called "taxing agencies") after the effective date of the ordinance approving the Redevelopment Plan (being Ordinance No. 139 of the City of La Quinta, which became effective on June 15, 1989) will be divided as follows: (a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the Redevelopment Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency Preliminary, subject to change. last equalized prior to June 15, 1989 (being the effective date of Ordinance No. 139, referred to above) shall be allocated to and when collected shall be paid into the funds of the respective taxing agencies as taxes by or for the taxing agencies on all other property are paid; and (b) That portion of said levied taxes each year in excess of such amount shall be allocated to and when collected by the Agency shall be paid into the following funds: (i) into the low and moderate income housing fund held by the Agency and the amount required by the Law to be deposited into such fund, (ii) the amount required to be paid by the Agency pursuant to pass -through agreements of the Agency, and (iii) the balance into the Debt Service Fund of the Agency. The Bonds are payable from and are specifically secured by an irrevocable pledge of the Pledged Revenues derived from the Project Area, and interest earnings on funds held on deposit in trust for the Bondowners by the Trustee. The Agency has no power to levy and collect taxes, and various factors beyond its control could affect the amount of Pledged Revenues available in any year to pay the principal of and interest on the Bonds. (See "RISK FACTORS" herein.) The Bonds are 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 or any of its political subdivisions is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. THE INDENTURE The following is a summary of certain provisions of the Indenture and does not purport to be complete. Reference is hereby made to the Indenture and to Appendix A for the definition of certain terms used herein. Copies of the Indenture are available from the Agency upon request. All capitalized terms used herein and not otherwise defined shall have the same meaning as used in the Indenture. Allocation of Bond Proceeds Upon the delivery of the Bonds to the purchasers thereof, the Trustee, on behalf of the Agency, will receive the proceeds from the sale of the Bonds, and will deposit such proceeds and transfers as follows: (1) Deposit in the Interest Account an amount equal to $ representing accrued interest on the Bonds; (2) Deposit in the Reserve Account an amount equal to the Reserve Requirement, initially $ ; (3) Deposit in the Escrow Fund an amount equal to $ and expended pursuant to the Escrow Agreement; and to be held (4) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be deposited in the Redevelopment Fund. Except as provided in the Indenture, any moneys set aside in the Redevelopment Fund will remain there until from time to time expended for the purpose of financing a portion of the costs of the Project Area and other related costs, and also including in such costs: n t+ (1) The payment of an amount of money in lieu of taxes as authorized by Section 33401 of the Law in any year during which the Agency owns property in the Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt; (2) The cost of any lawful activities in connection with the implementation of the Project Area, including, without limitation, those activities authorized by Section 33445 of the Law; and (3) The moneys in the Redevelopment Fund shall be applied exclusively to pay the costs of the Project ("Project Costs") and any Costs of Issuance. Amounts for Costs of Issuance and Project Costs shall be disbursed by the Trustee upon receipt of a Written Requisition of the Treasurer, or his designee, or such other person as is designated in writing to the Trustee by the Agency stating the amount due, the nature of the services rendered and the name of the payee. All interest and income earned on money in the Redevelopment Fund shall be retained therein until transferred as provided in the Indenture. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for the Bonds were issued as determined by the Agency, that sum shall be transferred by the Trustee for deposit in the Rebate Fund or the Special Fund pursuant to written instructions from the Agency. If any sum remains in the Redevelopment Fund after April 15, 2001, it shall be invested at a yield not exceeding the yield on the Bonds as defined in the Tax Certificate. Pledged Revenues - Application The Agency will pay or cause to be paid to the Trustee for deposit in the Special Fund in accordance with the Indenture all Pledged Revenues in the amounts and within the times set forth in the Indenture. The interest on the Bonds until maturity will be paid by the Trustee on behalf of the Agency from the Interest Account of the Special Fund. At the maturity of the Bonds, and after all interest then due on the Bonds then Outstanding has been paid or provided for, moneys remaining in the Special Fund will be applied to the payment of the principal of any of such Bonds. Without limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Pledged Revenues accumulated in the Special Fund will be used in the following priority; provided, however, to the extent that deposits have been made in any of the Accounts referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (1) Interest Account. Deposits will be made into the Interest Account so that the balance in the Account at least five (5) days prior to each Interest Payment Date will be equal to interest due and payable on the then Outstanding Bonds on such Interest Payment Date. Moneys in the Interest Account will be used solely for the payment of interest on the Bonds as interest becomes due, including accrued interest on any Bonds purchased or redeemed prior to maturity. (2) Principal Account. After the deposits have been made pursuant to (1) above, deposits will next be made into the Principal Account so that the balance in the Account at least five (5) days prior to each September 1 is equal to the principal coming due on such date on the then outstanding Serial Bonds or the amount of the minimum sinking account payments due on the Term Bonds on such date. All moneys in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying principal and minimum sinking account payments on the Bonds as they shall become due and payable. #, f .- 4 0 r (3) Reserve Account. After deposits have been made pursuant to (1) and (2) above, deposits will be made to the Reserve Account, if necessary, in order to cause the amount on deposit therein to equal the Reserve Requirement. Moneys in the Reserve Account will be transferred to the Interest Account or the Principal Account to pay interest on and principal of the Bonds either (i) as it becomes due to the extent moneys on deposit are insufficient therefor; or (ii) at the final maturity of the Bonds. Any portion of the Reserve Account which is in excess of the Reserve Requirement will be transferred at least semiannually upon written instructions from the Agency to the Trustee first to the Rebate Fund to the extent said money represents Rebatable Arbitrage and the balance to the Interest Account. The Agency may, without the prior written consent of the Owners of the Bonds, elect to maintain the Reserve Requirement for the Bonds and any Parity Bonds by obtaining (i) a letter of credit, (ii) a surety bond, or (iii) a policy of insurance in an amount which will guarantee to the Agency the full amount of the Reserve Requirement at such times as all or any portion of the Reserve Requirement is needed for transfer to the Bond Interest Account and/or Principal Account as stated in the Indenture, provided that the letter of credit bank or its guarantor, the surety bond provider or the insurance company is rated in the top two rating categories by Moody's Investors Service, Inc. and Standard & Poor's Ratings Group and that upon the expiration of the letter of credit, if not extended, the Agency shall obtain a substitute letter of credit, a surety bond or a policy of insurance as provided in the Indenture, or shall deposit cash in the Reserve Account, and further provided that the issuer of any surety bond or insurance policy shall be rated in the top two rating categories by Moody's Investors Service, Inc. and Standard and Poor's Ratings Groups all as shown in a certificate of the Agency to the Trustee. If the Agency acquires such Alternate Reserve Account Security to the extent that the amount on deposit in the Reserve Account is in excess of the Reserve Requirement after giving effect to such Alternate Reserve Account Security (which shall be valued at the full amount available to be paid or drawn thereunder) the Agency may by written certificate direct the Trustee to pay from such excess money in the Reserve Account the letter of credit fees, the cost of a surety bond, or the insurance policy premium, as the case may be. Any money in the Reserve Account in excess of the Reserve Requirement after the Agency acquires the Alternate Reserve Account Security and pays the appropriate costs as herein provided shall be deposited into the Redevelopment Fund at the written direction of the Agency. (4) Surplus. It is the intent of the Indenture that: (i) the deposits in (1) and (2) above to the Interest Account and the Principal Account, respectively, will be made as scheduled, and (ii) that the deposits in (3) above to the Reserve Account will be made as necessary to maintain a balance equal to the Reserve Requirement if, and only if, the Pledged Revenues are sufficient therefor. Should it be necessary to defer all or part of any deposits referred to in (3) above, such deferred deposits will be cumulative and will be made when the Pledged Revenues are sufficient to make the deposits required by (1) and (2) and thereafter make the deposits required by (3). If, on September 2 of each year, commencing on September 2, 1998, the above transfers have been made during the preceding Bond Year so that the required amounts as of that time are or were in the above mentioned Accounts and the required transfer has been made to the Rebate Fund as calculated by the Agency and set forth in a certificate of the Agency delivered to the Trustee, any balances in the Special Fund may be used and applied by the Trustee at the written direction of the Agency, for any lawful purpose, including without limitation, the purchase and/or call and redemption of Bonds and Parity Bonds. L-u Investment of Moneys in Funds and Accounts Moneys in the Special Fund and the Accounts therein, the Redevelopment Fund, the Escrow Fund the Redemption Fund shall be invested and reinvested by the Trustee in Permitted Investments, as directed by an Authorized Officer of the Agency in writing, provided that such investments mature by their terms on or prior to the date on which such moneys are required to be paid out under the Indenture. Such investments shall be made in specific investments meeting the requirements of the Indenture as directed in writing by an Authorized Officer of the Agency (such written request to be received by 12:00 noon two (2) Business Days prior to such investment) or, in the absence of such written direction, by the Trustee in Permitted Investments described in part (g) or (k) of the definition thereof. The Trustee shall be protected from any liability in acting in accordance with the Indenture or the Agency's direction. Moneys in the Rebate Fund shall be invested in Government Obligations which mature before the date such amounts are required to be paid to the United States. Obligations purchased as an investment of moneys in any Fund or Account held by the Trustee under the Indenture shall be deemed to be part of such Fund or Account. Any or all interest or gain received from such investments of moneys in any Fund or Account shall be deposited by the Trustee in the respective Fund or Account and any loss incurred in connection with such investments shall be debited against the Fund or Account from which the investment was made. Notwithstanding the foregoing the Trustee may commingle money in the Funds and Accounts for investment purposes provided that such Funds and Accounts are accounted for separately. The investment constituting a part of any Fund or Account shall be valued at the lower of cost or the then estimated or appraised market value of the investment. The Trustee shall have no liability or responsibility for any loss resulting from any investment made in accordance with the provisions of the Indenture. Issuance of Parity Bonds If at any time the Agency determines it needs to do so, the Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed. The issuance and sale of any Parity Bonds will be subject to the following conditions precedent set forth in the Indenture: (a) The Agency will be in compliance with all covenants set forth in the Indenture; (b) The Parity Bonds will be on such terms and conditions as may be set forth in a supplemental resolution or indenture, which will provide for (i) bonds substantially in accordance with the Indenture, (ii) the deposit of moneys into the Reserve Account in an amount (which may be represented by an Alternative Reserve Account Security described in the Indenture) sufficient, together with the balance of the Reserve Account, to equal the Reserve Requirement on all Bonds expected to be outstanding including the Outstanding Bonds and Parity Bonds, and (iii) the disposition of surplus Pledged Revenues in substantially the same manner as set forth in the Indenture; (c) Receipt of a certificate or opinion of an Independent Financial Consultant showing: (i) For the current and each future Bond Year the debt service for each such Bond Year with respect to all Bonds and Parity Bonds reasonably expected to be Outstanding following the issuance of the Parity Bonds; (ii) For the then current Fiscal Year, the Pledged Revenues to be received by the Agency based upon the most recent assessed valuation of taxable property in the Project Area provided by the appropriate officer of the County exclusive of any anticipated business inventory subvention revenues; and 10 (iii) That for the then current Fiscal Year, the Pledged Revenues referred to in item (ii) are at least equal to the sum of 125% of the Maximum Annual Debt Service referred to in item (i) above (excluding debt service with respect to any portion of the Parity Bonds deposited in an escrowed proceeds account to the extent such debt service is paid from earnings on the investment of such funds), and 100% of Annual Debt Service with respect to any subordinated debt, and that the Agency is entitled under the Law and the Redevelopment Plan to receive taxes under Section 33670 of the Law in an amount sufficient to meet expected debt service with respect to all Bonds and Parity Bonds. (d) The Parity Bonds shall mature on and interest shall be payable on the same dates as the Bonds (except the first interest payment may be from the date of the Parity Bonds until the next succeeding March 1 or September 1). If all or a portion of the proceeds of the Parity Bonds or the Bonds are to be applied under Section 33334.2 of the Law, Pledged Revenues for purposes of the Indenture shall include that portion of taxes allocated under Section 33670 of the Law for payment of the Bonds or the Parity Bonds which are applied for the purposes of Section 33334.2 and specifically pledged to the repayment of such Parity Bonds, to the maximum extent permitted by the Law. Notwithstanding the foregoing, if the Agency is in compliance with all covenants set forth in the Indenture, the Agency may issue and sell obligations pursuant to the Law, having a lien on the Pledged Revenues which is junior to the Bonds and which shall be payable solely from surplus as then declared or which may thereafter be declared pursuant to the Indenture (as used in the Indenture, "obligations" shall include, without limitation, bonds, notes, interim certificates, debenture or other obligations, loans, advances or other forms of indebtedness incurred by the Agency). Covenants of the Agency As long as the Bonds are Outstanding and unpaid, the Agency will (through its proper members, officers, agents or employees) faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture or in any Bond issued under the Indenture, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that the covenants do not require the Agency to expend any funds other than amounts credited to the Redevelopment Fund to the extent required to fulfill the Agency objectives with respect to Covenant 1 and Covenant 2, Pledged Revenues and the income thereon: Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan. The Agency covenants and agrees that it will diligently carry out and continue to completion in a sound and economical manner, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan. The Redevelopment Plan may be amended as provided in the Law but no amendment will be made unless it will not substantially impair the security of the Bonds or the rights of the Bondowners, as shown by an Opinion of Counsel, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 2. Use of Proceeds; Management and Operation of Properties. The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in the Indenture and that it will manage and operate all properties owned by it comprising any part of the Project Area in a sound and businesslike manner consistent with the Redevelopment Plan. Covenant 3. No Priority. The Agency covenants and agrees that it will not issue any obligations payable, either as to principal or interest, from the Pledged Revenues which have any lien upon the Pledged Revenues prior or superior to the lien of the Bonds or any Parity Bonds. Except as permitted in the Indenture, it will not issue any obligations, payable as to principal or interest, from the Pledged Revenues, which have any lien upon the Pledged Revenues on a parity with the Bonds or any Parity Bonds. Notwithstanding the foregoing, nothing in the Indenture will prevent the Agency (i) from issuing and selling pursuant to law, refunding obligations payable from and having any lawful lien upon the Pledged Revenues, if such refunding obligations are issued for the purpose of, and are sufficient for the purpose of, refunding all of the Outstanding Bonds or Parity Bonds, (ii) from issuing and selling obligations which have, or purport to have, any lien upon the Pledged Revenues which is junior to the Bonds or any Parity Bonds, or (iii) from issuing and selling bonds or other obligations which are payable in whole or in part from sources other than the Pledged Revenues. As used in the Indenture, "obligations" shall include, without limitation, bonds, notes, interim certificates, debentures or other obligations, loans, advances, or other forms of indebtedness incurred by the Agency. Covenant 4. Punctual Payment. The Agency covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds on the date, at the place and in the manner provided in the Bonds. Covenant 5. Payment of Taxes and Other Charges. The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of the properties, revenues or income or which might impair the security of the Bonds or the use of Pledged Revenues or other legally available funds to pay the principal of and interest on the Bonds, all to the end that the priority and security of the Bonds and any Parity Bonds will be preserved; provided, however, that nothing in this Covenant will require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of the payment. Covenant 6. Books and Accounts, Financial Statements. The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries will be made of all transactions relating to the Redevelopment Project and the Pledged Revenues and other funds relating to the Redevelopment Project. The Agency will prepare within one hundred eighty (180) days after the close of each of its Fiscal Years a complete financial statement or statements for such year in reasonable detail covering the Pledged Revenues and other funds, accompanied by an opinion of an Independent Certified Public Accountant appointed by the Agency, and will furnish a copy of the statement or statements to the Trustee, the Bond Insurer and any rating agency which maintains a rating on the Bonds and, upon written request, to any Bondowner. The Trustee shall have no duty to review the Agency's financial statements. Covenant 7. Eminent Domain Proceedings. The Agency covenants and agrees that if all or any part of the Project Area should be taken from it without its consent, by eminent domain proceedings or other proceedings authorized by law, for any public or other use under which the property will be tax exempt, it will take all steps necessary to adjust accordingly the base year valuation of the Project Area. Covenant 8. Disposition of Property. The Agency covenants and agrees that it will not dispose of more than ten percent (10%) of the land area in the Project Area (except property shown in the Redevelopment Plan in effect on the date the Indenture is adopted as planned for public use, or property to be used for public streets, public offstreet parking, sewage facilities, parks, easements or right-of-way for public utilities, or other similar uses) to public bodies or other persons or entities 12 whose property is tax exempt, unless such disposition will not result in the security of the Bonds or the rights of Bondowners being substantially impaired, as shown by an Opinion of Counsel addressed to the Agency and the Trustee, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 9. Protection of Security and Rights of Bondowners. The Agency covenants and agrees to preserve and protect the security of the Bonds and any Parity Bonds and the rights of the Bondowners and any Parity Bondowners and to contest by court action or otherwise (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) that the Pledged Revenues pledged under the Indenture cannot be paid to the Agency for the debt service on the Bonds, or (b) any other action affecting the validity of the Bonds or diluting the security therefor. The Agency covenants and agrees to take no action which, in the Opinion of Counsel would result in (a) the Pledged Revenues being withheld unless the withholding is being contested in good faith; and (b) the interest received by the Bondowners becoming includable in gross income under federal income tax laws. Covenant 10. 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 the Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Bonds and any Parity Bonds 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 Bonds or of any other monies or property which would cause the Bonds or any Parity Bonds to be "private activity bonds" within the meaning of Section 141 of the Code; and (b) Arbitrage. The Agency will make no use of the proceeds of the Bonds or any Parity Bonds 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 or any Parity 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 Bonds or take or omit to take any action that would cause the Bonds or any Parity 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 Bonds 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 or any Parity 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 and any Parity Bonds for federal income tax purposes; and 13 (f) 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 Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein. Covenant 11. Taxation of Leased Property. Whenever any property in the Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than a public agency) or whenever the Agency leases real property in the Project Area to any person or persons (other than a public agency) for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property, as required by Section 33673 of the Law, and the lease or contract shall provide (a) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest, and (b) that if for any reason the taxes levied on the property in any year during the term of the lease or contract are less than the taxes which would have been levied if the entire property had been assessed and taxed in the same manner as privately owned property, the lessee shall pay such difference to the Agency within thirty (30) days after the taxes for the year become payable to the taxing agencies and in no event later than the delinquency date of such taxes established by law. All such payments shall be treated as Pledged Revenues, and when received by the Agency shall be used as provided in the Indenture. As an alternative to payment to the Agency pursuant to (b) above, the new owner or owners of property becoming exempt from taxation may elect to make payment to the Agency in a single sum equal to the amount estimated by an Independent Financial Consultant to be receivable by the Agency from taxes on said property from the date of said payment to the maturity date of the Bonds, less a reasonable discount value. All such single sum payments in lieu of taxes shall be treated as Pledged Revenues and shall be transferred to the Trustee for deposit in the Special Fund. Covenant 12. Comvliance with Law. The Agency shall comply with all requirements of the Law to insure the allocation and payment to it of the Pledged Revenues including, without limitation, the timely filing of any necessary statements of indebtedness with appropriate officials of the County, and shall forward information copies of each such filing to the Trustee. The Agency further covenants and agrees that, except for the Pass -Through Agreements, it has not entered into any agreements with other tax entities as of the date of the Indenture for the pass -through of any Pledged Revenues to such entities and will not hereafter enter into any such agreement which requires payment to such taxing entities prior to deposit of Pledged Revenues in the Special Fund. Covenant 13. Limitation on Indebtedness. The Agency covenants and agrees that is has not and will not incur any loans, obligations or indebtedness repayable from Pledged Revenues such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and after the date of adoption of the Redevelopment Plan, when added to any predecessor debt, the total aggregate debt service on the Bonds and any Parity Bonds, will exceed the maximum amount of Pledged Revenues to be divided and allocated to the Agency pursuant to the Redevelopment Plan. Covenant 14. Further Assurances. The Agency covenants and agrees to adopt, make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of the Indenture, and for the better assuring and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits provided therein. Events of Default and Remedies Each of the following shall constitute an Event of Default: (1) Default in the due and punctual payment by the Agency of any installment of interest on any Bond or any Parity Bond when the interest installment becomes due and payable; 14 ." 4 (2) Default in the due and punctual payment by the Agency of the principal and premium, if any, of any Bond or any Parity Bond when the principal becomes due and payable, whether at maturity, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the other Covenants, agreements or conditions contained in the Indenture or in the Bonds or the Parity Bonds, where the default continues for a period of thirty (30) days following written notice to the Agency by the Trustee or by a majority of the Bondowners; or (4) The Agency files a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property. In each Event of Default described in (1) or (2) above the Trustee will, and in each Event of Default described in (3) or (4) above, the Trustee will upon written request of the Owners of not less than a majority of the aggregate principal amount of Bonds and Parity Bonds at the time Outstanding (such request to be in writing to the Trustee and to the Agency) declare the principal of all of the Bonds and Parity Bonds then Outstanding and the interest accrued thereon, to be due and payable immediately. Upon any such declaration the Bonds and Parity Bonds shall become and shall be immediately due and payable, anything in the Indenture or in the Bonds and Parity Bonds to the contrary notwithstanding. The declaration may be rescinded by the Owners of not less than a majority of the Bonds and Parity Bonds then Outstanding provided the Agency cures the default or defaults and deposits with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to the declaration, and all matured installments of interest (if any) upon all the Bonds and Parity Bonds, with interest at the rate of twelve percent (12%) per annum on the overdue installments of principal and, to the extent the payment of interest on interest is lawful at that time, on such overdue installments of interest, so that the Agency is currently in compliance with all payment, deposit and transfer provisions of the Indenture, and has paid or provided for the payment of any expenses incurred by the Trustee in connection with the default. Any Bondowner shall have the right, for the equal benefit and protection of all Bondowners similarly situated: (1) by mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in the Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; (2) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bondowners' rights; or (3) upon the happening of any Event of Default (as defined in the Indenture), by suit, action or proceeding in any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were trustees of an express trust. 4 h 15 Application of Funds Upon Acceleration. Upon any acceleration of the Bonds, the Trustee shall, following payment of the fees, costs and expenses (including compensation to their agents, attorneys and counsel) of the Trustee and the Bondowners in declaring such Event of Default, transfer first to the Interest Account an amount equal to (i) the interest due on the Bonds to the date of acceleration minus the amount of moneys then held by the Trustee in the Interest Account and then to the Principal Account all of the moneys held in the Reserve Account and any other moneys held in the Special Fund and the Accounts therein or in the Redemption Fund. If such deposits are insufficient to pay the principal of and interest on the Bonds, the Trustee shall file a claim for payment with the Bond Insurer pursuant to the Indenture and apply the proceeds of such draw to the Interest Account and Principal Account, as appropriate. After the above transfers have been made, all sums in the Special Fund and the Accounts therein upon the date of the declaration of acceleration as provided in the Indenture, and all sums thereafter received by the Trustee, shall be applied by the Trustee to the payment of all other outstanding fees and expenses of the Trustee and thereafter in the following order upon presentation of the Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First, moneys in the Principal Account, if any, shall be applied to the payment in full of the principal of the Outstanding Bonds; Second, moneys in the Interest Account shall be applied to the payment of interest coming due and payable on the Bonds as of the date of acceleration; and Third, any moneys remaining in the Special Fund and Accounts therein shall be applied to the payment of any amounts due and owing by the Agency to the Bond Insurer which are identified in a written certificate executed by a representative of the Bond Insurer and filed with the Trustee. Amendments The Indenture, and the rights and obligations of the Agency and of the Owners of the Bonds may be modified or amended at any time by supplemental indenture adopted by the Agency with the consent of the Bond Insurer: (a) without the consent of Bondowners, if the modification or amendment is for the purpose of preserving the exclusion of interest on the Bonds (or any refunding obligations therefor) from gross income for federal income tax purposes or if the modification or amendment is for the purpose of adding covenants and agreements further to secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make modifications not affecting any Outstanding series of Bonds only with the consent of the Trustee, for the purpose of curing any ambiguities, defects or inconsistent provisions in the Indenture or to insert provisions clarifying matters or questions arising under the Indenture as are necessary and desirable to accomplish the same, provided that the modifications or amendments do not adversely affect the rights of the Owners of any Outstanding Bonds; or (b) for any purpose with the written consent of the Bondowners holding not less than sixty percent (60%) in aggregate principal amount of the Outstanding Bonds (exclusive of Bonds, if any, owned by the Agency or the City and obtained as set forth in the Indenture) provided, however, that no modification or amendment will, without the express consent of the Bondowner affected or registered Owner of the Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable thereon, extend its maturity or the times for paying interest thereon, change the monetary medium in which principal and interest is payable, or create a mortgage pledge or lien on the Pledged Revenues superior to or on a parity (except as provided in the Indenture) with the pledge and lien created for the 16 4.' i Bonds and any Parity Bonds or reduce the percentage of consent required for amendment or modification and provided further, that no amendments affecting the duties, obligations or rights of the Trustee shall take affect without the consent of the Trustee. THE A UTHORITY The La Quinta Financing Authority (the "Authority") was created by a Joint Exercise of Powers Agreement, dated November 3, 1999, by and between the City and the Agency. Such agreement was entered into pursuant to the provisions of Articles 1, 2 and 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code. The Authority was created for the purpose of assisting the financing or refinancing of certain public capital facilities within the City. Under the JPA Law, the Authority has the power to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale. The Authority is governed by a five -member Board of Directors (the "Board") which consists of the members of the City Council of the City of La Quinta. The Mayor acts as the Chairman of the Authority, the City Manager as its Executive Director, the City Clerk as its Secretary and the Finance Director of the City as the Treasurer of the Authority. THE LA QUINTA REDEVELOPMENT AGENCY The Agency was established on July 5, 1983 by the City Council of the City with the adoption of Ordinance No. 34, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all the rights, powers, duties and privileges of the Agency. Members and Officers The members and officers of the Agency and the expiration dates of their terms are as follows: Name and Office Ronald Perkins, Chairman Stanley Sniff, Vice Chairman John J. Pena, Member Terry Henderson, Member Don Adolph, Member Agency Powers Expiration of Term November, 2001 November, 1999 November, 1999 November, 2001 November, 1999 All powers of the Agency are vested in its governing body. Pursuant to the Law, the Agency is a separate public body which may exercise broad governmental functions and authority to accomplish its purposes, including, but not limited to, the right of eminent domain, the right to issue bonds or notes and expend their proceeds and the right to acquire, sell, rehabilitate, develop, administer or lease property. The Agency may demolish buildings, clear land and cause to be constructed certain improvements including streets, sidewalks, and public utilities. The Agency may not construct or develop buildings, with the exception of public facilities and housing, but must sell or lease cleared property to redevelopers for construction and development in accordance with the Redevelopment Plan. 17 2 "7 4 Fiscal Consultant The Agency has retained Rosenow Spevacek Group, Inc. (RSG), to serve as both redevelopment implementation and fiscal consultant. RSG provides redevelopment, planning, and financial services to local governments throughout California. Frank Spevacek, Principal of RSG, is assigned to the Agency to provide administrative support. In this capacity he has been assisting the Agency in formulating and implementing many of its redevelopment programs. Tax Increment Financing The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation. Assuming the taxable valuation never drops below the base year level, the taxing agencies thereafter receive that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency is allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency may be pledged to the payment of agency obligations. Generally, tax increment revenues from one project area may not be used to repay indebtedness incurred for another project area. Redevelopment agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See "RISK FACTORS." The Law authorizes redevelopment agencies to make payments to school districts and other taxing agencies to alleviate any financial burden or detriments to such taxing agencies caused by a redevelopment project. The Agency has entered into a number of agreements for this purpose. See "THE PROJECT AREA —Agreements with Various Taxing Agencies." Housing Set -Aside In accordance with Section 33334.2 of the Law, not less than twenty percent (20%) of all taxes which are allocated to the Agency shall be used by the Agency for purposes of improving, increasing and preserving the City's supply of housing for persons and families of low or moderate income. This requirement is applicable unless the Agency makes the finding that: No need for such housing exists in the City; 2. Less than twenty percent (20%) is sufficient to meet such housing needs of the City; or 3. A substantial effort is presently being carried out with other funds (either local, State or federal) and that such efforts are equivalent in impact to twenty percent (20%) of all taxes which are allocated to the Agency. Both the "no need" finding (item 1 above) and the "less than 20% finding" (item 2 above) must apply to very low income as well as low and moderate income households, must be consistent with the housing element of the community's general plan and the annual report of its planning agency, and do not become effective until after certain filings have been made with the State Department of Housing and Community Development ("HCD"). Neither finding can be made unless the housing element is in proper form and up to date and has been filed with HCD. 18 The "equivalent effort" finding (item 3 above) must apply to the community's share of regional housing needs as well as its own existing and projected needs. After June 30, 1993, no agency may make this finding unless it can show evidence that it is required in order to meet contractual obligations to bondholders or other private entities incurred prior to May 1, 1991 and made in reliance on the ability to make the finding. Funds available from the twenty percent (20%) requirement may be used outside the Project Area on a finding by the Agency and the City Council that such use will be of benefit to the Project Area. See "THE PROJECT AREA —Limitations and Requirements of the Redevelopment Plan." The Law also permits agencies with more than one project area to set aside less than twenty percent (20%) of the taxes allocated to the agency from one project area if the difference is made up from another project area in the same year and if the agency and the legislative body of the community find that such use of funds will benefit such other project area. Factors Affecting Redevelopment Agencies Generally Other features of California law which bear on redevelopment agencies include general provisions which require public agencies to let contracts for construction only after competitive bidding. The Law provides that construction in excess of $5,000 undertaken by the Agency shall be done only after competitive bidding. California statutes also provide for offenses punishable as felonies which involve direct or indirect interest of a public official in a contract made by such official in his official capacity. In addition, the Law prohibits any Agency or City official or employee who, in the course of his duties, is required to participate in the formulation or approval of plans or policies, from acquiring any interest in property in the Project Area. Under a State initiative enacted in 1974, public officials are required to make extensive disclosures regarding their financial interests by filing such disclosures as public records. As of the date of this Official Statement, the members of the City Council and the Agency, and other City and Agency officials have made the required filings. California also has strict laws regarding public meetings (known as the Ralph M. Brown Act) which generally makes all Agency and City meetings open to the public. Filing of Statement of Indebtedness. Section 33675 of the Law provides for the filing not later than the first day of October of each year with the County Auditor of a statement of indebtedness certified by the chief fiscal officer of the Agency for each redevelopment plan which provides for the allocation of taxes. The statement of indebtedness is required to contain the date on which the bonds were delivered, the principal amount, term, purposes and interest rate of the bonds and the outstanding balance and amount due on the bonds. Similar information must be given for each loan, advance or indebtedness that the Agency has incurred or entered into which is payable from tax increment. Section 33675 also provides that payments of tax increment revenues from the County Auditor to the Agency may not exceed the amounts shown on the Agency's statement of indebtedness. The Section further provides that the statement of indebtedness is prima facie evidence of the indebtedness of the Agency, but that the County Auditor may dispute the amount of indebtedness shown on the statement in certain cases and the disputed amount may be withheld from allocation and payment to the Agency. Provision is made for time limits under which the dispute can be made by the County Auditor as well as provisions for a determination by the Superior Court in a declaratory relief action of the proper disposition of the matter. The issue in any such action shall involve only the amount of the indebtedness and not the validity of any contract or debt instrument, or any expenditures pursuant thereto. Payments to a trustee under a bond indenture or indenture or payments to a public agency in connection with payments by such public agency pursuant to a bond issue shall not be disputed in any action under Section 33675. RISK FA CTORS Limitations on Remedies The enforceability of the rights and remedies of the Owners of the Bonds and the Trustee and the obligations incurred by the Agency may be subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise of the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitations or modification of their rights. Reduction of Pledged Revenues Pledged Revenues allocated to the Agency (which constitute the ultimate source of payments of principal and interest on the Bonds, as discussed herein) are determined by the amount of incremental valuation of taxable property in the Project Area, the current rate or rates at which property in the Project Area is taxed and the percentage of taxes collected in the Project Area. Although the Agency believes the projections of Pledged Revenues contained herein are reasonable, several types of events which are beyond the control of the Agency could occur and cause a reduction in available Pledged Revenues. First, a reduction of taxable values of property or tax rates in the Project Area or a reduction of the rate of increase in taxable values of property in the Project Area caused by economic or other factors beyond the Agency's control (such as a relocation out of the Project Area by one or more major property owners, successful appeals by property owners for a reduction in a property's assessed value, a reduction of the general inflationary rate, a reduction in transfers of property, construction activity or other events that permit reassessment of property at lower values, or the destruction of property caused by natural or other disasters, including earthquake) could occur, thereby causing a reduction in Pledged Revenues. The risk increases in proportion to the percent of total assessed value attributable to any single assessee in the Project Area. Second, the State electorate or Legislature could adopt limitations with the effect of reducing Pledged Revenues payable to the Agency. Third, a reduction in the tax rate applicable to property in the Project Area by reason of discontinuation of certain override tax levies in excess of the 1 % basic levy, will reduce Pledged Revenues available to pay debt service. Such override can be expected to decline over time until it reaches the 1 % basic levy and may be discontinued at any time, which may cause a reduction in Pledged Revenues. Fourth, delinquencies in the payment of property taxes by the owners of land in the Project Area could have an adverse effect on the Agency's ability to make timely debt service payments. The Agency believes the historical delinquency experience in the Project Area has not been greater than the City-wide historical experience. Any reduction in Pledged Revenues, whether for any of the foregoing reasons or any other reason, could have an adverse effect on the Agency's ability to pay the principal of and interest on the Bonds or to issue refunding bonds to refund the Bonds at or prior to maturity. Limited Obligations The Bonds are special obligations of the Agency secured by and solely payable from Pledged Revenues and amounts on deposit in the indicated Funds and Accounts established under the Indenture. The Bonds are not a debt, liability or obligation of the City, the State or any political 20 '� 'j subdivisions thereof (except the Agency) and neither the City, the State nor any political subdivisions thereof (except the Agency) are liable for payment on the Bonds. The Bonds do not constitute an indebtedness within the meaning of any State constitutional or statutory debt limitation. Development Risks The Agency's collection of Pledged Revenues is directly affected by the economic strength of the Project Area. Projected additional development within the Project Area will be subject to all the risks generally associated with real estate development projects, including unexpected delays, disruptions and changes. Real estate development operations may be adversely affected by changes in general economic conditions, fluctuations in real estate market and interest rates, unexpected increases in development costs and other similar factors. Further, real estate development operations within the Project Area could be adversely affected by future governmental regulations or policies, including governmental regulations or policies to restrict or control development. If projected development in the Project Area is delayed or halted, the economy of the Project Area could be affected, causing a reduction in Pledged Revenues available to pay debt service on the Bonds. Levy and Collection The Agency has no power to levy and collect property taxes. Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the Pledged Revenues, and accordingly, could have an adverse effect on the ability of the Agency to pay debt service on the Bonds. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the Agency's ability to make timely debt service payments. Reduction in Inflationary Rate As described in greater detail below, Article XIIIA of the California Constitution provides that the full cash value base of real property used in determining taxable value may be adjusted from year to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction in the consumer price index or comparable local data. Such measure is computed on a calendar year basis. In January 1996, the State Board of Equalization reported an actual annual inflation rate of 1.11 %. This marked only the third time since the adoption of Article XIIIA in 1978 that the actual inflation rate has been less than 2%. Should the assessed value of secured property not increase at the estimated annual rates incorporated herein, the Agency's receipt of future Pledged Revenues may be adversely affected. Bankruptcy and Foreclosure On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be "administrative expenses" of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclosure on the property and retain all the proceeds of the sale except the amount of the pre -petition taxes. According to the court's ruling, as administrative expenses, post -petition taxes would be paid if the debtor had sufficient assets to do so after all authorized payment to secured creditors. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would at that time become subject to current ad valorem taxes. 21 27J Glasply is controlling precedent on bankruptcy courts in the State of California. The lien date for property taxes in California is the March 1 preceding the fiscal year for which the taxes are levied. Therefore, under Glasply, a bankruptcy petition filing by an owner of property in the Project Area would prevent the lien for property taxes levied in subsequent fiscal years to attach so long as the property was part of the estate in bankruptcy. The rule of Glasply has limited application, however, if the bankruptcy case of the property owner was filed on or after October 22, 1994. In any bankruptcy case filed on or after October 22, 1994, a statutory amendment authorizes the creation or perfection of a statutory lien for an ad valorem property tax (which generally would not include assessments) imposed by a political subdivision of a state, if the tax comes due after the filing of the petition. Property Held By FDIC The ability of the Agency to receive Tax Revenues derived from delinquent taxes may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation ("FDIC") has or obtains an interest. In the event that any financial institution making any loan which is secured by real property within the Project Area is taken over by the FDIC and prior thereto or thereafter, the tax installments go into default, the ability of the County to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid taxes may be limited. The FDIC's policy statement regarding the payment of State and local real property taxes (the "Policy Statement") provides that the FDIC intends to pay valid real property taxes, interest and penalties, in accordance with State law, on property which at the time of the tax levy is owned by institutions in an FDIC receivership, unless abandonment of the FDIC interest is determined to be appropriate. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, it will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will it pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes. The Agency is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel within the Project Area in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Educational Revenue Augmentation Fund The State budget for Fiscal Year 1993-94 transferred $2.6 billion to school districts from cities, counties and other local governments, including redevelopment agencies. As part of the budget's transfer of moneys to school districts, the State Legislature required redevelopment agencies to transfer approximately $65 million to the Educational Revenue Augmentation Fund in both Fiscal Years 1993-94 and 1994-95. Such a transfer was not part of the State budget for Fiscal Year 1995-96 or 1996-97 and is not in the State budget for Fiscal Year 1997-98. However, there can be no assurance that the Legislature will not require similar or increased deposits in future years to deal with budget deficits. Other Changes in Redevelopment Law There can be no assurance that the California electorate will not at some future time adopt initiatives or that the State Legislature will not enact legislation that will amend the Redevelopment Law or other laws or the Constitution of the State resulting in a reduction of Pledged Revenues, and consequently, have an adverse effect on the Agency's ability to pay debt service on the Bonds. 22 ti PROPERTY TAXATION IN CALIFORNIA Property Tax Collection Procedures In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens on the secured property arising pursuant to State law, regardless of the time of the creation of other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. The taxing authority has four ways of collecting unsecured personal property taxes: (i) initiating a civil action against the taxpayer, (ii) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer, (iii) filing a certificate of delinquency for record in the county recorder's office to obtain a lien on certain property of the taxpayer, and (iv) seizing and selling personal property, improvements or possessory interests belonging or assessed to the assessee. A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is sold to the State on or about March 30 of each fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to delinquent taxes with respect to property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The valuation of property is determined as of the January 1 lien date as equalized in August of each year and equal installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due January I and become delinquent August 31. Historically, tax payment practices by the County provided for payment to the agencies of approximately 50% of the secured taxes by the third week in January of each year, an additional 50% of the secured taxes in early May of each year. In accordance with the County's current policy, the Agency expects to receive approximately 50% of the secured taxes by the third week in January of each year and approximately 50% of the secured taxes in early May of each year. Supplemental Assessments California Revenue and Taxation Code Section 75.70 provides for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Prior to the enactment of this law, the assessment of such changes was permitted only as of the next tax lien date following the change, and this delayed the realization of increased property taxes from the new assessments for up to 14 months. This statute provides increased revenue to redevelopment agencies to the extent that supplemental assessments of new construction or changes of ownership occur within the boundaries of redevelopment projects subsequent to the January 1 lien date. To the extent such supplemental assessments occur within the Project Area, Pledged Revenues may increase. 23 o Property Tax Administrative Costs In 1990, the Legislature enacted SB 2557 (Chapter 466, Statutes of 1990) which allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions in proportion to the tax -derived revenues allocated to each. SB 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. For Fiscal Year 1996-97 the County's administrative charge to the Agency was $46,418. Unitary Property AB 454 (Statutes of 1987, Chapter 921) provides the method of reporting and allocating property tax revenues generated from most State -assessed unitary properties. Under AB 454, the State reports to each county auditor -controller only the county -wide unitary taxable value of each utility, without an indication of the distribution of the value among tax rate areas. AB 454 provides two formulas for auditor -controllers to use in order to determine the allocation of unitary property taxes generated by the county -wide unitary value, which are: (i) for revenue generated from the 1 % tax rate, each jurisdiction is to receive up to 102% of its prior year unitary property tax increment revenue; however, if county -wide revenues generated from unitary properties are greater that 102% of prior year revenues, each jurisdiction receives a percentage share of the excess unitary revenues equal to the percentage of each jurisdiction's share of secured property taxes; (ii) for revenue generated from the application of the debt service tax rate to county -wide unitary taxable value, each jurisdiction is to receive a percentage share of revenue based on the jurisdiction's annual debt service requirements and the percentage of property taxes received by each jurisdiction from unitary property taxes. The provisions of AB 454 apply to all State -assessed property, except railroads and non - unitary properties the valuation of which will continue to be allocated to individual tax rate areas. AB 454 allows, generally, valuation growth or decline of State -assessed unitary property to be shared by all jurisdictions within a county. Litigation contesting the State Board of Equalization's procedures for determining the valuation of the seven largest utilities in the State resulted in a settlement between the State Board of Equalization and the utilities which provided that the valuation of the seven largest utilities would decrease by a total of 1.0.5%, which decrease was phased over Fiscal Years 1992-93, 1993-94 and 1994-95. Due to the limited amount of unitary property within the Project Area, the Agency does not expect the impact of Ala 454 or the settlement agreement to have an adverse effect on the Agency's ability to pay debt service on the Bonds. Article XIIIA of the State Constitution Article XIIIA limits the amount of ad valorem taxes on real property to 1% of "full cash value" of such property, as determined by the county assessor. Article XIIIA defines "full cash value" to mean "the County Assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value,' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Furthermore, the "full cash value" of all real property may be increased to reflect the rate of inflation, as shown by the consumer price index, riot to exceed 2% per year, or may be reduced. �u 24 Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster and in other special circumstances. Article XIIIA (i) exempts from the 1% tax limitation taxes to pay debt service on (a) indebtedness approved by the voters prior to July 1, 1978 or (b) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition; (ii) requires a vote of two-thirds of the qualified electorate to impose special taxes, or certain additional ad valorem taxes; and (iii) requires the approval of two-thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. The validity of Article XIIIA has been upheld by both the California Supreme Court and the United States Supreme Court. Appropriations Limitation - Article XIIIB Article XIIIB limits the annual appropriations of the State and its political subdivisions to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the government entity. The "base year" for establishing such appropriations limit is the 1978/79 fiscal year, and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. Section 33678 of the Redevelopment Law provides that the allocation of taxes to a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or indebtedness shall not be deemed the receipt by an agency of proceeds of taxes levied by or on behalf of an agency within the meaning of Article XIIIB, nor shall such portion of taxes be deemed receipt of proceeds of taxes by, or an appropriation subject to the limitation of, any other public body within the meaning or for the purpose of the Constitution and laws of the State, including Section 33678 of the Redevelopment Law. The constitutionality of Section 33678 has been upheld in two California appellate court decisions. On the basis of these decisions, the Agency has not adopted an appropriations limit. Personal Property Tax Special Subventions Government Code Section 16112.7 generall redevelopment agency shall pledge special personal for payments of the principal and interest on bonds. Future Initiatives y provides that on or after July 31, 1990, no property tax subvention payments as security Article XIIIA, Article XIIIB and certain other propositions affecting property tax levies were each adopted as measures which qualified for the ballot pursuant to California's initiative process. From time to time other initiative measures could be adopted, further affecting Agency revenues or the Agency's ability to expand revenues. Appeals of Assessed Values Pursuant to California law, a property owner may apply for a reduction of the property tax assessment for such owner's property by filing a written application, in a form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. 25 u In the County, a property owner desiring to reduce the assessed value of such owner's property in any one year must submit an application to the County Assessment Appeals Board (the "Appeals Board"). Applications for any tax year must be submitted by September 15 of such tax year. Following a review of each application by the staff of the County Assessor's Office, the staff makes a recommendation to the Appeals Board on each application which has not been rejected for incompleteness or untimeliness or withdrawn. The Appeals Board holds a hearing and either reduces the assessment or confirms the assessment. The Appeals Board generally is required to determine the outcome of appeals within two years of each appeal's filing date. Any reduction in the assessment ultimately granted applies only to the year for which application is made and during which the written application is filed. The assessed value increases to its pre -reduction level for fiscal years following the year for which the reduction application is filed. However, if the taxpayer establishes through proof of comparable values that the property continues to be overvalued (known as "ongoing hardship"), the Assessor has the power to grant a reduction not only for the year for which application was originally made, but also for the then current year as well. Appeals for reduction in the "base year" value of an assessment, which generally must be made within three years of the date of change in ownership or completion of new construction that determined the base year, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. Moreover, in the case of any reduction in any one year of assessed value granted for "ongoing hardship" in the then current year, and also in any cases involving stipulated appeals for prior years relating to base year and personal property assessments, the Agency's tax increment attributable to such properties will be reduced in the then current year. In practice, such a reduced assessment may remain in effect beyond the year in which it is granted. See "THE PROJECT AREA —Largest Local Secured Taxpayers" for information regarding the assessed valuations of the top ten property owners within the Project Area. THE PROJECT AREA Background On May 16, 1989, following requisite studies and hearing by the Planning Commission and the Agency, the City Council passed Ordinance No. 139 which approved and adopted the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2. The Ordinance became effective June 16, 1989. The Redevelopment Plan provides for the elimination of physical blight and economic obsolescence which was found to exist in the Project Area. The Redevelopment Plan provides for a maximum aggregate tax increment limit of $400 million and a maximum outstanding bonded indebtedness limit of $100 million, subject to certain inflationary adjustments as described below. In December, 1994, the Agency amended the Redevelopment Plan to establish May 16, 2029 as the termination date of the plan, provided that the plan may continue in effect until May 16, 2039 for the purposes of repaying bonded indebtedness of the Agency. Project Area No. 2 Redevelopment Plan Limit Bonded Indebtedness Cumulative Limit (Subject to Inflation) (1) $126,113,131 Cumulative Limit (Maximum) 100,000,000 Final Date to Incur New Debt May 16, 2009 Tax Increment Cumulative Limit (Subject to Inflation) $504,452,524 Cumulative Limit (Maximum) 400,000,000 Final Date to Collect Tax Increment May 16, 2039 (1) The Redevelopment Plan contains financial limitations which are subject to changes in the Consumer Price Index (CPI), with maximum limits as shown. The April, 1995 CPI for all urban consumers (CPI- U) in the Los Angeles -Anaheim -Riverside metropolitan area is 154.7, which is approximately 21% above the 1989 average CPI-U of 128.3. This factor has been applied to the limits indicated above. 26 ,-, > Location The Project Area encompasses approximately 4.9 square miles (3,116 acres) accounting for approximately sixteen percent (16%) of the total corporate area of the City. Controls, Land Use and Building Restrictions All real property in the Project Area is subject to the controls and restrictions of the Redevelopment Plan. The Redevelopment Plan requires that new construction shall comply with all applicable State statutes and local laws in effect from time to time, including the City zoning ordinances and City codes for building, electrical works, heating, ventilating, housing and plumbing. The Redevelopment Plan further provides that no new improvement shall be constructed and no existing building shall be substantially modified, altered, repaired or rehabilitated except, in each case, in accordance with architectural, landscape and site plans submitted to and approved by the Agency. The Redevelopment Plan allows commercial, residential and public uses within the Project Area and specifies the specific land use in which such uses are permitted. The Agency may permit an existing but nonconforming use to remain so long as the existing building is in good condition and such use is generally compatible with existing and proposed developments and uses in the Project Area. The Agency may authorize additions, alterations, repairs or other improvements in the Project area for uses which do not conform to the Redevelopment Plan where such improvements would be compatible with surrounding uses and development in the Project Area. Within the limits, restrictions and controls established in the Redevelopment Plan, the Agency is authorized to establish heights of buildings, land coverage, setback requirements, design criteria, traffic circulation, traffic access and other development and design controls necessary for proper development of both private and public segments within the Project Area. Under certain circumstances, the Agency is authorized to permit variations from the limits, restrictions and controls established by the Redevelopment Plan. In permitting a variation, the Agency is required to impose such conditions as are necessary to protect the public health, safety or welfare and to assure compliance with the purposes of the Redevelopment Plan. Any variation permitted by the Agency shall not supersede any other approval required under City codes and ordinances. The Agency currently has several developments under construction or plan approval process in the Project Area. These developments are described in "APPENDIX B—Redevelopment Fiscal Consultant's Tax Increment Projections" herein. Agreements with Various Taxing Agencies Pursuant to the Law, the Agency has entered into tax sharing agreements with affected taxing agencies in the Project Area. These Pass -Through Agreements are summarized in "APPENDIX B—Redevelopment Fiscal Consultant's Tax Increment Projections" herein and involve the Agency and the following taxing agencies: (1) County of Riverside; (2) Coachella Valley Community College District; (3) Riverside County Superintendent of Schools; (4) Coachella Valley Water District; (5) Coachella Valley Recreation and Park District; (6) Desert Sands Unified School District; and (7) Coachella Valley Mosquito Abatement District. 27 2 3 ', Largest Local Secured Taxpayers Set forth below are the ten largest local secured taxpayers in the Project Area based on the 1997-98 secured property tax roll. These taxpayers represent approximately 16.6% of the total secured valuation in the Project Area of $482,144,963. Taxpayer 1. TD Desert Development, Ltd. 2. Washington Adams Partnership 3. Wal-Mart Stores 4. La Quinta Wilma 5. Albertsons 6. Stamko Development 7. Eagle Hardware & Garden, Inc. 8. Simon Family Partnership 9. Credit Suisse Leasing 92 LP 10. Robert N. & Betty A. Grimes Total Top Ten Taxpayers 1997-98 Secured Valuation Percent of Total $23,971,085 5.0% 12,036,501 2.5 11,853,904 2.5 9,029,208 1.9 5,253,789 1.1 5,058,324 1.0 4,172,820 0.9 2,972,826 0.6 2,958,510 0.6 2,562,738 0.5 $79,869,705 16.6% Source: Transamerica Information Management/Metroscan Secured Assessment Roll. PLEDGED REVENUES Pledged Revenues (as described in the section "SECURITY FOR THE BONDS" herein) are to be deposited in the Special Fund, administered by the Trustee and applied to the payment of the principal of and interest on the Bonds. Historical Tax Revenues The following table is a schedule of the taxable valuations and resulting Tax Revenues in the La Quinta Redevelopment Project Area No. 2 for the Fiscal Years 1994-95 through 1997-98. The base year valuation for the Project Area was established in Fiscal Year 1988-89. Secured Valuation Unsecured Valuation Utility Valuation Total Valuation Base Year Valuation Incremental Valuation Incremental Revenues (1) Unitary Revenues/Adjustments Tax Revenues 1994-95 1995-96 1996-97 $336,210,131 $384,410,268 $419,135,799 2,466,873 3,797,538 3,521,574 $338,677,004 $388,207,806 $422,657,373 (95,182,755) (95,182,755) (95,182,755) $243,494,249 $293,025,051 $327,474,618 $ 2,485,589 $ 2,938,609 $ 3,279,226 42,974 107,089 185,174 $ 2,528,563 $ 3,045,698 $ 3,464,400 (1) Incremental Revenues are based on a one percent (1 %) tax rate. (2) Tax Revenues for Fiscal Year 1997-98 are estimated. Source: Riverside County Auditor -Controller's Office report of net assessed values. 1997-98 (2) $482,144,963 4,484,841 $486,629,804 (95,182,755) $391,447,049 $ 3,914,470 177,242 $ 4,091,712 28 -- �+ Projected Pledged Revenues and Debt Service Coverage The Agency has retained Rosenow Spevacek Group, Inc. of Santa Ana, California to provide projections of taxable valuation and Pledged Revenues from developments in the Project Area. The Agency believes the assumptions (set forth in "APPENDIX B" herein) upon which the projections are based are reasonable; however, some assumptions may not materialize and unanticipated events and circumstances may occur (see "RISK FACTORS"). Therefore, the actual Pledged Revenues received during the forecast period may vary from the projections and the variations may be material. Set forth below is the estimated debt service coverage of the Bonds using projected Fiscal Year 1998-99 through 2001-02 Pledged Revenues. Maximum Annual Fiscal Pledged Annual Debt Debt Service Year Revenues Service (1) Coverage 1998-99 $809,966.00 $476,162.50 1.70x 1999-00 695,775.00 476,162.50 1.46x 2000-01 608,214.00 476,162.50 1.28x 2001-02 636,910.00 476,162.50 1.34x (1) Maximum Annual Debt Service on the Bonds is payable in the year 2002 as shown on the following page. Source: Rosenow Spevacek Group, Inc. 1) Q ,-` 29 4.0D Annual Debt Service Set forth below is the annual debt service (assuming minimum sinking account payments) for the term of the Bonds. Maturity Date September 1 of 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total La Quinta Redevelopment Project Area No. 2 Annual Debt Service Principal $ 335,000.00 115,000.00 120,000.00 125,000.00 130,000.00 135,000.00 140,000.00 145,000.00 150,000.00 155,000.00 165,000.00 170,000.00 180,000.00 190,000.00 200,000.00 210,000.00 220,000.00 230,000.00 245,000.00 255,000.00 270,000.00 285,000.00 300,000.00 315,000.00 330,000.00 350,000.00 365,000.00 385,000.00 405,000.00 430,000.00 450,000.00 $7,500,000.00 Interest $ 140,762.83 360,212.50 355,842.50 351,162.50 346,162.50 340,832.50 335,162.50 329,212.50 322,977.50 316,377.50 309,402.50 301,812.50 293,057.50 283,787.50 274,002.50 263,702.50 252,887.50 241,557.50 229,712.50 217,095.00 203,962.50 189,787.50 174,825.00 159,075.00 142,537.50 125,212.50 106,837.50 87,675.00 67,462.50 46,200.00 23,625.00 $7,192,922.83 Total Debt Service (1) $ 475,762.83 475,212.50 475,842.50 476,162.50 476,162.50 475,832.50 475,162.50 474,212.50 472,977.50 471,377.50 474,402.50 471,812.50 473,057.50 473,787.50 474,002.50 473,702.50 472,887.50 471,557.50 474,712.50 472,095.00 473,962.50 474,787.50 474,825.00 474,075.00 472,537.50 475,212.50 471,837.50 472,675.00 472,462.50 476,200.00 473,625.00 $14,692,922.83 (1) The Bonds debt service is based on an estimated net interest rate of 5.255%. 30 �. 7: CONCL UDING INFORMA TION Underwriting The Bonds have been sold at a net interest rate of %. The original purchase price to be paid is $ for the Bonds, plus accrued interest. The Underwriter intends to offer the Bonds to the public initially at the price or yields set forth on the cover page of this Official Statement, plus accrued interest from April 15, 1998, which price or yields may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. In reoffering Bonds to the public, the underwriter may overallocate or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. Legal Opinion The opinion of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel, approving the validity of the Bonds and stating that interest on the Bonds is excluded from gross income for. federal income tax purposes and such interest is also exempt from personal income taxes of the State of California under present State income tax laws, will be furnished to the purchaser at the time of delivery of the Bonds at the expense of the Agency. Compensation for Bond Counsel's services is entirely contingent upon the sale and delivery of the Bonds. A copy of such opinion, certified by an officer of the Agency by his facsimile signature, will be printed on the back of each definitive Bond. No charge will be made to the purchaser for such printing or certification. The legal opinion is only as to legality and is not intended to be nor is it to be interpreted or relied upon as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. In addition, certain legal matters will be passed on for the Agency by Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, Disclosure Counsel. Tax Exemption In the opinion of Rutan & Tucker LLP, Costa Mesa, California, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is exempt from present State of California personal income taxes, is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, Bond Counsel notes that, with respect to corporations (as defined for federal income tax purposes), interest on the Bonds will be included in determining adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. The difference between the initial offering prices to the public (excluding bond houses and brokers) at which the Bonds are sold and the amount payable at maturity thereof constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. Such discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof 31 subject to the limitations described in the paragraphs above. The original issue discount accrues over the term to maturity of each such maturity of each Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straightline interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bonds. The Internal Revenue Code of 1986, as amended, contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Bonds who purchase the Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes. Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the Agency, the Underwriter and others and is subject to the condition that the Agency complies with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements could cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The Agency has covenanted to comply with all such requirements. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. Bond Counsel's opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions taken or events are taken or do occur. Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the Agency continues to comply with certain requirements of the Code, the accrual or receipt of interest (and original issue discount) on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds. No Litigation There is no action, suit or proceeding known to the Agency to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of the foregoing or any proceedings of the Agency taken with respect to any of the foregoing. Legality for Investment in California The Law provides that obligations authorized and issued under the Law shall be legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Law. The Superintendent of Banks of the State of California has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in California. 32 Verification of Mathematical Computations Execution and delivery of the Bonds will be subject to the delivery by McGladrey & Pullen, LLP, Minneapolis, Minnesota, of a report of the mathematical accuracy of certain computations, contained in schedules provided to them by the Underwriter, relating to (a) the adequacy of the maturing principal amount of the Federal Securities held under the 1992 Bonds Escrow Agreement, interest earned thereon and certain other uninvested cash to pay principal of, and interest and premiums with respect to the 1992 Bonds, and (b) the computations of actuarial yields relied upon by Bond Counsel to support its conclusion that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Code. Continuing Disclosure Pursuant to a Continuing Disclosure Certificate (the "Disclosure Certificate"), the Agency has agreed to provide, or cause to be provided, to each nationally recognized municipal securities information repository and any public or private repository or entity designated by the State as a state repository for purposes of Rule 15c2-12(b)(5) (the "Rule") adopted by the Securities and Exchange Commission (each, a "Repository") certain annual financial information and operating data, including its audited financial statements and information of the type set forth in this Official Statement under the heading "PLEDGED REVENUES. In addition, the Agency has agreed to provide, or cause to be provided, to each Repository in a timely manner notice of the following "Listed Events" if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) modifications to rights of Owners of Bonds; (4) Bond calls; (5) defeasances; (6) rating changes; (7) adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds; (8) unscheduled draws on the Reserve Account reflecting financial difficulties; (9) unscheduled draws on the Insurance Policy reflecting financial difficulties; (10) substitution of the provider of the Insurance Policy, or any failure by the Bond Insurer to perform thereon; and (11) release, substitution or sale of property securing repayment of the Bonds. These covenants have been made in order to assist the Underwriter in complying with the Rule. The Agency has never failed to comply in all material respects with any previous undertakings with regard to the Rule to provide annual reports or notices of material events. The Agency may amend the Disclosure Certificate, and any provision of the Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the providing of annual reports, the contents of annual reports or a delinquency in the payment of principal or interest on the Bonds, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings in the Disclosure Certificate, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of the Trustee or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. 33 In addition, the Agency's obligations under the Disclosure Certificate shall terminate upon the defeasance or payment in full of all of the Bonds. The provisions of the Disclosure Certificate are intended to be for the benefit of the Owners and shall be enforceable by the Trustee on behalf of such Owners, provided that any enforcement action by any such person shall be limited to a right to obtain specific enforcement of the Agency's obligations under the Disclosure Certificate and any failure by the Agency to comply with the provisions thereof shall not be an event of default under the Indenture. Bond Insurer [INFORMATION TO FOLLOW] Ratings Standard & Poor's Ratings Group and Moody's Investors Service, Inc. have assigned their respective municipal ratings of "AAA" and "Aaa" to this issue of Bonds with the understanding that upon delivery of the Bonds, a policy insuring the payment when due of the principal of and interest on the Bonds will be issued by . The ratings reflect only the views of the respective rating organization, and explanation of the significance of the ratings may be obtained from Standard & Poor's Ratings Group, 25 Broadway, New York, New York 10004 (212) 208-8000 or Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, (212) 553-0300. There is no assurance that the ratings will continue for any given period of time or that it will not be revised downward or withdrawn entirely by the respective rating agency, if in the judgment of the rating agency circumstances so warrant. Any such downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. Miscellaneous All of the preceding summaries of the Indenture, the Law, other applicable legislation, the Redevelopment Plan for the Project Area, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. This Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of this Official Statement by its Chairman has been duly authorized by the Agency. LA QUINTA REDEVELOPMENT AGENCY By: /s/ Chairman 34 % SUPPLEMENTAL INFORMATION THE CITY OF LA QUINTA The following information concerning the City of La Quinta (the "City"), Riverside County (the "County') and the State of California (the "State") is presented as general background data. The Bonds are not an obligation of'the City, the County or the State and the taxing power of the City, the County and the State is not pledged to the payment of the Bonds. General Background For centuries before Columbus discovered America, the area which is now La Quinta was the winter home of the Cahuilla Indians. The history of modern La Quinta began with the construction of the La Quinta Hotel in 1926, and La Quinta became a retreat for discriminating seclusion -seekers from Hollywood and around the world. It was incorporated as a City in 1982 encompassing an area of 18.36 square miles and a population of approximately 4,500, and today encompasses an area of approximately 31.18 square miles, with a population of approximately 18,950. La Quinta is one of California's fastest growing cities. Surrounded by the Santa Rosa Mountains, La Quinta is home to the PGA West Golf Resort. The Coachella Valley attracts a high - end market of over 2 million tourists each year, all with substantial disposable income and the time to shop. As a year-round multi -recreational resort community, it attracts golf and tennis enthusiasts from all over the world. Location Located in the eastern portion of the County known as the Coachella Valley, La Quinta is 20 miles from Palm Springs and 127 miles from Los Angeles. The City motto is "The Gem of the Desert." Climate Period CITY OF LA QUINTA Climate Average Temperature Rain Humidity Min.° Mean° Max.° Inches Daily Average January 3 7.8 54.1 70.4 .5 38 April 57.0 72.3 87.5 .1 32 July 76.9 92.1 107.2 .12 37 October 58.7 75.5 92.2 .23 37 Annual 57.2 73.1 89.0 3.38 36 Prevailing winds: Northwest 7 mph. Source: National Weather Service. 2042, 35 City Government and Administration The City of La Quinta was originally incorporated on May 1, 1982 and became a charter city in November, 1996 with a Council/Manager form of government. The City Council is comprised of a Mayor and four Council Members. The Mayor is elected for a two-year term and the Council Members are elected for four-year terms. Budgetary Policies Each year, the City's Department Directors submit their respective budgets to the Chief Administrative Officer (City Manager) by the end of April. The CAO goes over each budget with the individual Director. The CAO then puts all the individual budgets together and presents a draft to the City Council, usually by the first part of June. The Council reviews the budget, conducts budget meetings with citizens, the CAO and Directors and approves the final budget prior to August 1 st of each year. Economic Growth and Trends La Quinta is a resort -oriented community featuring a major resort hotel, several country clubs and several golf courses. Developments currently being planned are lake and golf -course oriented. Outdoor recreation activities such as hiking and camping are also enjoyed in the area. The community is expanding rapidly as evidenced by the completion of three major country clubs and a fourth under construction. All four projects include a range of housing types, retail, hotels, golf and tennis facilities. Retail trade is expanding; a small shopping center has been completed with a grocery store, drug store, several small shops and two restaurants. An additional 60-acre retail shopping center with a diverse tenant mix is being developed which will have approximately 620,000 square feet total retail space when complete. The following charts shows a population estimate for the City of La Quinta, County of Riverside and the State of California during the past six years. Population The City's population has increased each year since incorporation in 1982. The following table sets forth population estimates for the City of La Quinta: CITY OF LA QUINTA ESTIMATED POPULATION Year (January 1) 1992 1993 1994 1995 1996 1997 Source: State of California Department of Finance. City of La Quinta 14,700 15,600 16,650 17,600 18,050 18,950 36 `7 0 The following sets forth the County of Riverside and the State of California population estimates from 1992 to January 1, 1997: RIVERSIDE COUNTY AND STATE OF CALIFORNIA ESTIMATED POPULATION Year (January 1) 1992 1993 1994 1995 1996 1997 Riverside County 1,281,000 1,323,500 1,332,000 1,355,600 1,381,900 1,380,000 Source: State of California Department of Finance. Commercial Activity State of California 30,982,000 31,522,000 31,661,000 31,910,000 32,223,000 32,609,000 Commercial activity has proven to be an important factor in the regional economy. Between 1989 and 1996, total taxable sales declined in Coachella Valley but increased in the City. The general decline in sales in the County since 1990 is attributable to the decline in the building industry, particularly in the development of new single-family homes which, historically have accounted for significant sales in building materials and home furnishings. Much of the County's commercial activity is concentrated in central business districts or in small neighborhood commercial centers in the cities. There are eight conventional regional shopping centers: Riverside Plaza, Galleria at Tyler Mall (Riverside), Palm Springs Mall, Indio Fashion Mall, Hemet Valley Mall, Palm Desert Town Center, Canyon Springs Mall and Moreno Valley Mall. There are over 20 area centers distributed throughout the cities and over 17 in other areas of the County. In addition, all major auto makers are represented. The County is served by a number of major banks. They include Bank of America National Trust and Savings Association, Wells Fargo Bank and Union Bank. There are savings and loan associations in the County, with Home Savings of America and California Federal having the largest number of branch offices. 37 �� .� The following table demonstrates the level of taxable sales transactions in the Countv of Riverside: COUNTY OF RIVERSIDE Taxable Sales Transactions 1993 1994 1995 1996 Apparel Stores $ 395,084 $ 406,973 $ 421,007 $ 474,384 General Merchandise Stores 1,267,249 1,350,233 1,391,979 1,429,338 Specialty Stores 604,328 649,285 676,978 790,183 Food Stores 653,556 648,486 657,598 696,627 Package Liquor Stores 57,368 53,418 53,928 53,700 Eating and Drinking Places 849,961 884,970 919,233 979,535 Home Furnishing and Appliances; Second -Hand Merchandise 267,674 299,746 327,517 337,433 Building Materials and Farm Implements 654,377 708,056 723,896 787,905 Service Stations 739,399 741,435 767,675 836,767 Automotive 1,227,707 1,388,614 1,475,603 1,617,189 Miscellaneous 2,558,573 2,683,317 2,885,204 2,574,989 TOTAL ALL OUTLETS $9,275,276 $9,814,533 $10,320,618 11,138,861 The following table demonstrates the growth in the number of business permits and taxable transactions in the City of La Quinta: Year 1996 1995 1994 1993 1992 1991 CITY OF LA QUINTA TAXABLE TRANSACTIONS (in thousands) Retail Stores Number of Taxable Permits Transactions 146 $95,852 147 87,366 112 78,171 107 70,859 84 48,008 59 34,140 Source: State Board of Equalization. Total Outlets Number of Taxable Permits Transactions 361 $132,892 367 121,428 309 110,861 305 102,994 263 76,178 203 63,286 38 Building Activity The following presents the residential building permit valuations for the City of La Quinta for the calendar years 1994 through 1997: RESIDENTIAL BUILDING PERMIT VALUATIONS CITY OF LA QUINTA (Valuation in 000) 1994 1995 1996 1997 Single Family $79,419 $60,812 $81,058 $62,993 Multifamily Dwelling 0 0 5,922 1,285 Alterations/Additions 901 944 0 0 Total Residential $80,320 $61,756 $86,980 $64,277 Source: California Building Permit Activity, Economic Sciences Corporation; City of La Quinta Building & Safety Department. General Plan/Zoning The land within the City of La Quinta is approximately zoned as follows: Industrial: Institutional: Commercial: Residential: Industry 0 acres 120 acres 1,240 acres 12,320 acres La Quinta contains two major commercial areas. It is currently creating master development plans for the first, a 100-acre downtown area. Approximately 50% of this area has yet to undergo actual development. Additionally there remains approximately 680 undeveloped acres of commercial property on Highway I I I between Palm Springs and Indio. Top Taxpayers The largest local secured taxpayers in the City are as follows: Property Owner KSL La Quinta Hotel Corp. 2. KSL PGA West Corporation 3. Sunrise Desert Partners 4. KSL Landmark Corporation 5. KSL Land Corporation 6. KSL La Quinta Corporation 7. TD Desert Development 8. La Quinta Golf Properties, Inc. 9. M&H Realty Partnership 10. Washington Adams Partnership Source: City of La Quinta. 39 Land Use Hotel Residences Condominium Vacant Land Residential Land Golf Courses Residential Land Golf Course Shopping Centers Commercial .-)0- �.�5 Labor Force As of June 30, 1997, the sixty-two non -management City -government employees of the City of La Quinta are eligible for membership in the La Quinta Employee's Association. In July, 1987, the City Council adopted Resolution No. 85-86 originally acknowledging the formation of the Association. The Resolution was amended in March, 1994. The City Finance Director, John Falconer, currently serves as the employee relations officer. The following listing sets forth the top employers in the City of La Quinta and the surrounding area: CITY OF LA QUINTA Major Employers and Number of Employees (As of June, 1997) Approximate Employer No. of Employees Type of Business La Quinta Hotel and Golf Resort 1,500 Resort Hotel PGA West 1,100 Golf Resort Wal-Mart 250 Retailer Albertson's 126 Groceries Vons 103 Groceries Ralph's 100 Groceries City of La Quinta 74 Municipal Government Simon Motors 65 Auto Dealer Cliff House 65 Restaurant Red Robin 50 Restaurant Source: City of La Quinta 40 /1 n ..y As of June, 1997, employers located in the County that employed more than 500 employees were reported to be as follows: RIVERSIDE COUNTY Largest Employers (June 1997) Company Location Product/Service Employees Rohr, Inc. Riverside Aircraft Parts 2900 City of Riverside Riverside Government 2100 Host Marriott Corporation Palm Desert Resort Hotel 1700 Eisenhower Medical Center Rancho Mirage Hospital 1600 Desert Hospital Corporation Palm Springs Hospital 1591 La Quinta Hotel, Golf and Tennis Resort La Quinta Resort Hotel 1500 Riverside General Hospital Riverside Hospital 1500 Kaiser Foundation Hospitals Riverside Hospital 1500 Valley Health System Hemet Hospital 1400 Riverside Sheriffs Association, Inc. Riverside Law Enforcement 1400 Riverside Community College District Riverside Community College 1200 Sun World, Inc. Coachella Fruit (Fresh) Packing 1192 State of California Norco Rehabilitation Center 1188 Riverside Community Hospital Riverside Hospital 1100 University of California Riverside University 1000 United States Department of Defense Corona Govemment/Defense 1000 Press Enterprise Co. Riverside Newspapers 1000 Parkview Community Hospital Medical Center Riverside Hospital 1000 KSL Recreation Corporation La Quinta Golf /Tennis Resort 1000 Directors Mortgage Loan Corporation Riverside Mortgage Companies 950 Advanced Cardiovascular Systems Temecula Surgical Instruments 900 Val Verde Union School District Perris School District 800 The Toro Company Riverside Irrigation 800 Nationwide Executive Security Services Riverside Security Guard Service 750 California Dept. of Corrections, Chuckawalla Blythe Prison 750 County of Riverside Riverside Government 700 Consolidated Freightways Mira Loma Trucking 700 Mt. San Jacinto College San Jacinto Community College 680 Stouffer Hotel Management Corp. Palm Springs Resort Hotel 650 Starcrest Products of California Perris Mail Order 650 Fleetwood Holidays, Inc. Riverside Motor Home Rental 630 United States Department of Defense Riverside Hospital 600 TLS Partnership Rancho Mirage Resort Hotel 600 International Rectifier Corp. Temecula Semiconductors 600 Fleetwood Enterprises, Inc. Riverside Prefabricated Buildings 600 Dyncorp Norco Data Processing 600 Westin Hotel Company Rancho Mirage Resort Hotel 550 Desert Community College District Palm Desert Community College 550 Source: Strategic Mapping, Inc. 41 Employment and Industry Employment data is not separately reported on an annual basis for the Citv but is compiled for the Riverside/San Bernardino PMSA, which includes all of Riverside and San Bernardino Counties. In addition to varied manufacturing employment, the PMSA has large and growing commercial and service sector employment, as reflected in the table below. Overall, in the past five years, total employment rose approximately 22.8%, while population increased approximately 7.78% in the County of Riverside. As of June, 1997, unemployment in the PMSA was 7.0%. The City estimates that unemployment rate in La Quinta is similar to that shown in the following table for the Riverside/San Bernardino Primary Metropolitan Statistical Area ("PMSA") as a whole: Agriculture Mining Construction Transportation & Public Utilities Manufacturing Wholesale & Retail Trade Finance, Insurance & Real Estate Services Government Total All Industries(2) Riverside -San Bernardino Labor Market Area 1995 1996 1997 (1) 21,800 22,900 33,100 1,100 1,200 1,300 43,100 46,400 50,700 40,800 42,000 43,400 94,400 99,200 102,800 205,900 209,900 216,400 29,400 29,700 30,000 202,600 211,700 218,700 162,600 167,400 174,900 801,700 830.400 871,300 Total Civilian Labor Force(3) 1,293,300 1,313,200 1,356,700 Total Unemployment 112,000 100,700 95,200 Unemployment Rate 8.7% 7.7% 7.0% (1) As of June, 1997. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. (3) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. Source: State Employment Development Department, Labor Market Information Division. 42 c. v The following table presents estimated household income distributions for the City and Coachella Valley: HOUSEHOLD INCOME DISTRIBUTIONS CITY OF LA QUINTA AND COACHELLA VALLEY 1990 ESTIMATE 1995 ESTIMATE LA QUINTA Number % of Total Number % of Total Under $15,000 606 15.5% 962 18.8% $15,000424,999 469 12.0% 599 11.7% $25,000-$34,999 585 14.9% 865 16.9% $35,000-$49,999 769 19.6% 1,038 20.3% $50,000474,999 866 22.1 % 909 17.7% $75,000-$99,999 254 6.5% 279 5.4% $100,000-$149,999 169 4.3% 261 5.1 % $150,000+ 200 5.1 % 212 4.1 % Total Households 3,918 100.0% 5,125 100.0% Median Household Income $39,622 $36,840 COACHELLA VALLEY Under $15,000 $15,000-$24,999 $25,000-$34,999 $35,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000-$149,999 $150,000+ Total Households Median Household Income 1990 ESTIMATE Number % of Total 12,096 20.9% 10,075 17.4% 9,315 16.1% 9,543 16.5% 8,917 15.4% 3,305 5.7% 2,329 4.0% 2,260 3.9% 57,840 100.0% $31,833 Source: Urban Decision Systems, Inc.: Robert Charles Lesser & Co. 1995 ESTIMATE 14,119 9,937 11,688 12,125 12,298 5,107 3,980 2,833 $35,337 19.6% 13.8% 16.2% 16.8% 17.1% 7.1% 5.5% 3.9% 43 Utilities The main utility providers in the City are as follows: Electricity: Imperial Irrigation District Gas: Southern California Gas Company Telephone: General Telephone Water: Coachella Valley Water District Sewer Service: Coachella Valley Water District Transportation Access to job opportunities in Riverside County, San Bernardino County, Orange County and Los Angeles County has been one of the major factors in Riverside County's employment and population growth. Several major freeways and highways provide access between Riverside County and all parts of Southern California. U.S. Highways 10 and 60 extend in an east -west direction through the northern portion of the County, Intrastate Highway 91 extends in an east -west direction through the central portion of the county until connecting with U.S. Highway 15, and U.S. Highways 15 and 215 extend in a north -south direction through the central portion of the County, each linking the major cities in the County to other parts of the County and to the Los Angeles, San Bernardino and Orange metropolitan areas and to San Diego County. Local bus service is provided by Sunline Transit and by Greyhound Bus Lines. Passenger service is also provided by AMTRAK, which makes train trips daily each way through the County. Southern Pacific Railroad and Santa Fe Railway handle most of the freight movement in the County. The County seat in the City of Riverside is within a 1-1 /2 hour drive of La Quinta. It is a 1- 1/2 hour drive to the Ontario Airport and a 3 hour drive to LAX and Orange County. Numerous major truck lines serve the City of La Quinta, making available overnight delivery service to major California cities. Education The educational needs of La Quinta are met by three public elementary schools, two junior high schools and four high schools, all a part of the Desert Sands Unified School District and the Coachella Valley Unified School District. Post -secondary education is served by Desert Community College, Chapman University, California State University, San Bernardino Extension, Ambition Computer Technology, Propper College and Professional Career College. Community Services La Quinta has two Immediate Care facilities and a senior citizens' center within the City limits, with approved plans for expanding medical services to the City. A 112-bed general hospital is located in Indio, 8 miles to the northeast. The City is served by three churches, seven radio stations, three local TV channels, one TV cable system, one savings and loan bank and two full -service banks. Recreational facilities include major resort hotels, several country clubs, several golf courses and Lake Cahuilla Regional Park. The La Quinta Arts Festival is held annually in March. The Bob Hope Chrysler Classic and the Skins Game are nationally acclaimed golfing events which are held yearly in the City. 44 `-) t� J ;, Direct and Overlapping Bonded Indebtedness Set forth below is information prepared by California Municipal Statistics, Inc. and dated April 1, 1998. This information is included for general information purposes only. The Agency has not reviewed this information and makes no representations as to its completeness or accuracy. The information generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the Agency in whole or in part. Such long term obligations are not payable from the revenues of the Agency. In many cases long term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. 1997-98 Assessed Valuation: $ incremental valuation). (after deducting $ DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Coachella Valley County Water District, I.D. No. 55 Coachella Valley County Water District, I.D. No. 58 City of La Quinta 1915 Act Bonds TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT: Riverside County Board of Education Certificates of Participation Riverside County Building Authorities Desert Community College District Certificates of Participation Desert Sands Unified School District Authority Coachella Valley County Water District, I.D. No. 71 Storm Water Unit Certificates of Participation City of La Quinta TOTAL GROSS OVERLAPPING LEASE OBLIGATION DEBT Less: Riverside County Building Authorities - Blythe County Administrative Building (Secured by Tax Allocation Revenues) TOTAL DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT redevelopment PERCENT DEBT APPLICABLE (1) Excludes tax allocation bonds to be sold. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease obligations. Ratios to Assessed Valuation: DirectDebt........................................................................................ % Total Direct and Overlapping Tax and Assessment Debt ................ % Gross Combined Total Debt.............................................................. % Net Combined Total Debt.................................................................. % STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/96: $0 Source: California Municipal Statistics, Inc. 45 (This Page Left Intentionally Blank) APPENDIX A DEFINITIONS 0, r tj (This Page Left Intentionally Blank) DEFINITIONS The following are definitions of'certain terms contained in the Indenture and used in this Official Statement. Agency means the La Quinta Redevelopment Agency. Alternative Reserve Account Security means one or more letters of credit, surety bonds 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. or Bond Insurer means Annual Debt Service means, for any Bond Year, the principal and interest payable on the Outstanding Bonds in such Bond Year. Authorized Officer of the Agency means the Acting Executive Director or the Treasurer or such other person so designated by the Agency. Bond or Bonds means the "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998," authorized by the 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. 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 of any Outstanding Bond. For the purpose of the Bondowners' voting rights or consents, Bonds owned by or held for the account of the Agency, or the City, directly or indirectly, shall not be counted. Bond Year means the twelve (12) month period commencing on September 2 of each year, provided that the first Bond Year shall extend from the Delivery Date to September 1. 1998. Book -Entry Depository means DTC or any successor as Book -Entry Depository for the Bonds. Business Day means a day of the year other than (i) a Saturday, Sunday, legal holiday or day on which banking institutions in the city in which the corporate trust office of the Trustee is located are required or authorized to remain closed, or (ii) a day on which the Federal Reserve System is closed. Certificate or Certificate of the Agency means a certificate signed by the Chairman or Acting Executive Director of the Agency or their respective deputies. Chairman means the chairman of the Agency appointed pursuant to Section 33113 of the Health and Safety Code of the State of California, or other duly appointed officer of the Agency authorized by the Agency by resolution or bylaw to perform the functions of the chairman in the event of the chairman's absence or disqualification. A-1 City means the City of La Quinta, California. 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 Delivery Date and ending on September 30, 1998 and each September 30 thereafter until there are no longer any Bonds Outstanding. Continuing Disclosure Certificate means the certificate by that name of the Agency dated the Delivery 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 the acceptance and initial fees and expenses of the Trustee, the premium for a Municipal Bond Insurance Policy, legal fees and expenses of the Trustee and the Agency, costs of printing the Bonds and Official Statement, fees of financial consultants and other fees and expenses set forth in a Certificate of the Agency. County means the County of Riverside, California. Delivery Date means the date the Bonds are delivered to the original purchaser thereof. DTC means The Depository Trust Company, New York, New York, and its successors and assigns. Escrow Agreement means the Escrow Deposit and Trust Agreement dated as of April 1, 1998 between the Agency and the Escrow Bank relating to the 1992 Bonds. Escrow Bank means U.S. Bank Trust National Association, Los Angeles, California, as escrow holder under the Escrow Agreement and any successor thereto. Escrowed Bonds means the principal amount of the Bonds equal to the amount held in the Redevelopment Escrow Fund. Finance Director means the Finance Director of the City and the Agency. Fiscal Year means any twelve (12) month period beginning on July 1 st and ending on the next following June 30th. Government Obligations means direct general 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. Indenture means the Indenture of Trust between the Agency and the Trustee, as originally adopted or as it may be amended or supplemented by any Supplemental Indenture entered into pursuant to the provisions hereof. Independent Financial Consultant, 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/her opinion or certificate will be given, and: A-2 (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 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 September 1, 1998. Law means the Community Redevelopment Law of the State of California (commencing with Health and Safety Code Section 33000). Maximum Annual Debt Service means the largest of the sums obtained for any Bond Year after computation is made, by totaling the following for each such Bond Year: (a) The principal amount of all Serial Bonds and serial Parity Bonds, if any, and the amount of minimum sinking account payments on the Term bonds payable in such Bond Year; and (b) The interest which would be due during such Bond Year on the aggregate principal amount of Bonds and Parity Bonds which would be Outstanding in such Bond Year if the Bonds and Parity Bonds Outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedules for the Serial Bonds and serial Parity Bonds. At the time and for the purpose of making such computation, the amount of Term Bonds and term Parity Bonds already retired in advance of the above - mentioned schedules shall be deducted pro rata from the remaining amounts thereon. Moody's means Moody's Investors Service, Inc., New York, New York, and its successors and assigns. 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. 1992 Bonds or Prior Bonds means the Agency's $5,845,000 aggregate principal amount of "La Quinta Redevelopment Project Area No. 2, Tax Allocation Bonds, Issue of 1992," issued under the Prior Indenture. 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 A-3 n ,� i %: ,�, 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. Outstanding, when used as of any particular time with reference to Bonds, means subject to the provisions of the Indenture, all Bonds except: (a) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds paid or deemed to have been paid pursuant to the Indenture; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the Agency pursuant to the Indenture or any Supplemental Indenture. Parity Bonds means 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 payable out of Pledged Revenues and ranking on a parity with the Bonds. 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. Paving Agent means any paying agent appointed by the Agency pursuant to the Indenture. Permitted Investments means any of the following: (a) direct, non -callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, provided that the full faith and credit of the United States of America must be pledged to any such direct obligation or guarantee ("Direct Obligations"); (b) direct obligations and fully guaranteed certificates of beneficial interest of the Export -Import Bank of the United States; senior debt obligations of the Federal Home Loan Banks; debentures of the Federal Housing Administration; guaranteed mortgage - backed bonds and guaranteed pass -through obligations of the Government National Mortgage Corporation; guaranteed Title XI financing of the U.S. Maritime Administration; mortgage -backed securities and senior debt obligations of the Federal National Mortgage Association; and participation certificates and senior debt obligations of the Federal Home Loan Mortgage Corporation (collectively, "Agency Obligations"); provided, however, not more than 10% of the unexpended Certificate proceeds may be invested in Agency Obligations; (c) direct obligations of any state of the United States of America or any subdivision or agency thereof whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings A-4 Group, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (d) commercial paper rated "Prime-1 " by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (e) obligations rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group; (f) time or interest bearing deposit accounts, including certificates of deposit, federal funds or bankers acceptances of any domestic bank (including Trustee), including a branch office of a foreign bank which branch office is located in the United States, provided if it is a branch of a foreign bank, legal opinions are received to the effect that full and timely payment of such deposit or similar obligation is enforceable against the principal office or any branch of such foreign bank, which: (i) has an unsecured, uninsured and unguaranteed obligation rated "Prime-1" or "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group, or (ii) is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting the rating requirements in (i) above; (g) deposits of any bank (including Trustee) or savings and loan association which has combined capital, surplus and undivided profits of not less than $3 million, provided such deposits are fully insured by the Bank Insurance Fund or the Savings Association Insurance Fund administered by the Federal Deposit Insurance Corporation; (h) investments in a money-market fund rated "AA" or "Al" or better by Standard & Poor's Ratings Group or "Aa" or better by Moody's Investors Service, if such funds are rated by Moody's Investors Service, or which invest solely in securities in clauses (a) and (b) above including funds for which First Interstate Bancorp, its affiliates or subsidiaries provide investment advisory or other management services; (i) repurchase agreements with a term of one year or less with any institution with debt rated "AA" by Standard & Poor's Ratings Group or "Aa" by Moody's Investors Service or commercial paper rated "AA" by Standard & Poor's Ratings Group or "Aa" by Moody's Investors Service; 0) repurchase agreements collateralized by Direct Obligations or Agency Obligations with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank, if such unguaranteed obligation is rated "Prime-1" or "Aa" or better by Moody's Investors Service, and "AA" or better by Standard & Poor's Ratings Group, provided: (i) a master repurchase agreement or specific written, repurchase agreement governs the transaction; and A-S (ii) the securities are held by the Trustee or an independent third party acting solely as agent for the Trustee free and clear of any lien, and such third party is (a) a Federal Reserve Bank, (b) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $25 million; and (iii) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Trustee; and (iv) the repurchase agreement has a term of thirty days or less; and (v) the repurchase agreement matures at least ten days (or other appropriate liquidation period) prior to a debt service payment date; and (vi) the market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 100%; and (k) investment agreements with a bank, insurance or financial institution company which has an unsecured and uninsured obligation (or claims -paying ability) rated "Aa" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group, or is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting such rating requirements, provided: (i) interest is paid at least semiannually at a fixed rate during the entire term of the agreement, consistent with Interest Payment Dates; and (ii) moneys invested thereunder may be withdrawn without any penalty, premium, or charge upon notice (provided such notice may be amended or canceled at any time prior to the withdrawal date); and (iii) the agreement is not subordinated to any other investment agreements of such insurance company or bank; and (iv) the same guaranteed interest rate will be paid on any future deposits made to restore the reserve to its required amount; and (v) the Trustee received an opinion of counsel that such agreement is an enforceable obligation of such insurance company or bank. (1) time or interest bearing deposit accounts with banks (including the Trustee), provided that either such accounts are fully insured by the Federal Deposit Insurance Corporation or if not so insured, such accounts are collateralized in the manner required for the deposit of public funds. Pledged Revenues means the Tax Revenues, less the Tax Revenues set aside as provided in Sections 33334.2 and 33334.3 of the Health and Safety Code of the State of California and less amounts payable or required to be set aside by the Agency under the Pass -Through Agreements. Prior Indenture means the Indenture of Trust dated as of December 1, 1992, between the Agency and prior trustee, pursuant to which the 1992 Bonds were issued. A-6 31 Proiect means the implementation of the Redevelopment Plan, including the refunding of the 1992 Bonds which proceeds were expended to pay costs to implement the Redevelopment Plan. Rebate Regulations means the final, proposed and temporary Treasury Regulations promulgated under Section 148(f) of the Code. Redevelopment Plan means the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2, approved and adopted by the City Council of the City by Ordinance No. 139 on May 16, 1989 and includes any amendment thereof, hereafter or heretofore made pursuant to the Law. Redevelopment Project Area, Redevelopment Project, or Project Area means the project area defined and described in the Redevelopment Plan. Regular Record Date means the close of business on February 15 or August 15, preceding each Interest Payment Date, as applicable. Report means a document in writing signed by an Independent Financial Consultant and including: (a) A statement that the person or firm making or giving such Report has read the pertinent provisions of the Indenture to which such Report relates; (b) A brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) A statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. Reserve Requirement means, as of the date of computation of the Bonds, an amount, as calculated by the Agency, equal to the lesser of (i) 10% of the original principal amount of the Bonds, (ii) Maximum Annual Debt Service on the Bonds or (iii) 125% of the average Annual Debt Service on the Bonds, exclusive of Escrowed Bonds. Revenues means the Pledged Revenues together with all other moneys held by the Trustee in any Fund or Account and the interest earnings thereon. 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 Notifications, 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, Fax (215) 496-5058; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Agency may designate in a Request of the Agency delivered by the Agency to the Trustee. Serial Bonds means the Bonds maturing in the years 1998 to and including the year 2008. SLG means U.S. Treasury Securities State and Local Government Series. Standard & Poor's or S&P means Standard & Poor's Ratings Group, New York, New York, and its successors and assigns. A-7 31 1131 State means the State of California. Supplemental Indenture or 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. Tax Certificate means that certain Tax Certificate executed in connection with the issuance of the Bonds or any Parity Bonds. 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 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 2018 and 2028. Treasurer or Treasurer of the Agency means the officer who is then performing the functions of Treasurer of the Agency. Trustee means the trustee appointed by the Agency pursuant to the Indenture, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in the Indenture. A-8 APPENDIX B REDEVELOPMENT FISCAL CONSULTANT'S TAX INCREMENT PROJECTIONS (This Page Left Intentionally Blank) APPENDIX C SPECIMEN MUNICIPAL BOND INSURANCE POLICY 1? ATTACHMENT NO. 11 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 $7,500,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 (the 'Bonds"). The Bonds are being issued pursuant to an Indenture of Trust, dated as of April 1, 1998 between the Agency and U.S. Bank Trust National Association, as Trustee (the "Indenture of Trust"). 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: Munls@Bloomberg.com Kenny Information Systems, Inc. Attn: Kenny Repository Service 65 Broadway, 16th Floor New York, NY 10006 (212) 770-4595 FAX (212) 797-7994 576852.1\22338.0051�• 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@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 Disclosure 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 1997/1998 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 Section 5(c). 41 j 576852.1\22339.0051 -2- 0 %J (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: (1) 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 (11) 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: (1) 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 "LA QUINTA REDEVELOPMENT PROJECT - Largest Local Secured Taxpayers" of the Official Statement; (11) Annual assessed valuations, tax increment values, Pledged Revenues (as defined in the Indenture) and ratio of Pledged Revenues to debt service on Bonds, in substantially the formats of the tables set forth under the captions "PLEDGED REVENUES - Historical Tax Revenues" and "- Pledged Revenues and Debt Service Coverage" of the Official Statement. (111) Discussion of any property tax appeals, which, either alone or in the aggregate could have greater than a 10% adverse effect on Pledged Revenues. 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 576852.1\22338.0051 -3- �+ included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Agency shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) Principal and interest payment delinquencies. (11) Non-payment related defaults. (111) 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. (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 Bonds. (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 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. .>r1� 576852.1\22338.0051 -4- 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 not 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 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 576952.1\22338.0051 -5- (c) the proposed amendment or waiver either (1) 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 (11) 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 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. 576852.1\22338.0051 -6- 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: May_, 1998 LA QUINTA REDEVELOPMENT AGENCY IRE Executive Director U.S. BANK TRUST NATIONAL ASSOCIATION, as Dissemination Agent Authorized Signatory ., rN , 576852.1\22338.0051 -7- a.► 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: $7,500,000 La Quinta Redevelopment Project No. 2 Tax Allocation Refunding Bonds Issue of 1998 Date of Issuance: May_, 1998 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 April 1, 1998, 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: , 1998 cc: U.S. Bank Trust National Association LA QUINTA REDEVELOPMENT AGENCY By:_ Title: 576852.1\22338.0051 A-1 •� ," � T O u - !; T4,,f 4 QuArcu I� 2 OF rN� COUNC'1L,/RDA MEETING DATE: APRIL 7, 1998 ITEM TVI'Ll:: Demand Register Dated April 7, 1998 RECOMMENDATION BACKGROUND Prepaid Warrants 32483 - 32488 32489 - 32503 } 32504 - 32506} 32507 - 32510i 3251 1 - 325121, 32513 - 325191f Wire Transfers, P/R 793 -867 P/R Tax Transfers; Payable Warrants: 32520 - 32671 } Approve Demand Register Dated April 7, 1998 1,490.44 9,994.04 3,501.87 3,083.55 15,945.00 8,826.86 242,761.09 77,762.06 22,255.15 529,714.34 $915,334.40 FISCAI, IIUIPLIC'ATI0NS.- Demand of Cash - RDA $25,01 1.05 John 1.V1. Falconer, Finance Director AGENDA CATEGORY: BUSINESS SESSION CONSENT CALENDAR STUDY SESSION PUBLIC HEARING CITY DEMANDS $890,323.35 RDA DEMANDS 25,011.05 $915,334.40 CITY OF LA QUINTA BANK TRANSACTIONS 3/12/98 - 3/31/98 3/18/98 WIRE TRANSFER - DEBT SVC - 96 CITY HALL $222,175.50 3/20/98 WIRE TRANSFER - DEFERRED COMP $4,602.09 3/20/98 WIRE TRANSFER - PERS $15,983.50 TOTAL WIRE TRANSFERS OUT $242,761.09 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 11:10AM 04/01/98 CITY OF LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32520 04/01/98 &00565 CAROL ALLEN 40.00 32521 04/01/98 &00566 PHYLLIS MAJOR 40.00 32522 04/01/98 &00567 MICHAEL TERAN 25.00 32523 04/01/98 &00568 ARNOLD THOMPSON 45.00 32524 04/01/98 &00569 DIVERSIFIED LANDSCAPE 65.00 32525 04/01/98 AlRO01 A-1 RENTS 346.36 32526 04/01/98 ABLO01 ABLE RIBBON TECH 175.18 32527 04/01/98 ACE010 ACE HARDWARE 286.75 32528 04/01/98 ADV100 ADVERTISING SPECIALTIES 952.50 32529 04/01/98 ALC050 BOB ALCALA 200.00 32530 04/01/98 ALL100 ALLIANCE SERVICE STATION 763.22 32531 04/01/98 AME200 AMERIPRIDE UNIFORM SVCS 121.00 32532 04/01/98 AND050 ANDY'S AUTO REPAIR 630.20 32533 04/01/98 ARRO10 ARROW PRINTING COMPANY 638.42 32534 04/01/98 ASCO01 A & S COFFEE SERVICE 466.00 32535 04/01/98 ASS050 ASSOC OF ENVIRONMENTAL 160.00 32536 04/01/98 ATC010 ATCO MANUFACTURING CO 259.10 32537 04/01/98 BAN150 BANK OF NEW YORK 260.00 32538 04/01/98 BAT050 MARY BATOK 60.00 32539 04/01/98 BEI050 R BEIN, W FROST & ASSOC 25569.72 32540 04/01/98 BIG010 BIG A AUTO PARTS 123.09 32541 04/01/98 BSIO10 BSI CONSULTANTS INC 3746.97 32542 04/01/98 BUL100 JAMES BULGRIN 200.00 32543 04/01/98 CAD010 CADET UNIFORM SUPPLY 316.74 32544 04/01/98 CAL010 CAL WEST ENGINEERING 7480.00 32545 04/01/98 CAL023 CALIF COMMERCIAL POOLS 104085.00 32546 04/01/98 CAR100 CARDINAL PROMOTIONS 183.34 32547 04/01/98 CEN007 CENTER PHOTO LAB 29.91 32548 04/01/98 CH1010 CHIEF AUTO PARTS 34.37 32549 04/01/98 CLA050 CLASSIC AUTO TRANSPORT 152.50 32550 04/01/98 COA023 COACHELLA VLLY ENGINEERS 250.00 32551 04/01/98 COA080 COACHELLA VALLEY WATER 2924.43 32552 04/01/98 COM015 COMPUTER U LEARNING CENTR 420.00 32553 04/01/98 COM030 COMSERCO 64.65 32554 04/01/98 COM040 COMMERCIAL LIGHTING IND 494.32 32555 04/01/98 COS050 COSTCO BUSINESS DELIVERY 1281.07 32556 04/01/98 DEC100 DE CASTRO/WEST/CHODOROW 1024.25 32557 04/01/98 DES010 DESERT BUSINESS MACHINES 125.00 3255E 04/01/98 DESO40 DESERT JANITOR SERVICE 3878.00 32559 04/01/98 DES051 DESERT SANDS UNIFIED SCHL 429.00 32560 04/01/98 DES060 DESERT SUN PUBLISHING CO 2520.22 32561 04/01/98 DES061 DESERT SUN COMMUNITY 1989.00 32562 04/01/98 DIE020 DIEGO'S GARDENING SERVICE 1250.00 32563 04/01/98 DOU010 DOUBLE PRINTS 1 HR PHOTO 13.87 32564 04/01/98 EAC100 EAGLE/BENEFICIAL NATL BNK 38.76 32565 04/01/98 ECO050 ECONOMICS INC 1583.38 32566 04/01/98 EIS010 EISENHOWER IMMEDIATE CARE 520.00 CJb0'7 7 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 11:10AM 04/01/98 CITY OF LA QUINTA PAGE 2 CHECK NUMBER 32567 32568 32569 32570 32571 32572 32573 32574 32575 32576 32577 32578 32579 32580 32581 32582 32583 32584 32585 32586 32587 32588 32589 32590 32591 32592 32593 32594 32595 32596 32597 32598 32599 32600 32601 32602 32603 32604 32605 32606 32607 32608 32609 32610 32611 32612 32613 32614 32615 CHECK DATE 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 NO. EVA050 FAL050 FAM035 FED010 GRA010 GRE020 GTE010 GUM100 HIG010 HIS100 HOA010 HOM030 H00050 HOP050 IMPO10 INF030 INF100 INS100 INT013 IVE050 KEL010 KIN050 KIR010 KOR050 KOS100 KUN100 LAC010 LAQ030 LAQ100 LIN050 L00010 LQV010 LUB050 LUC050 LUN050 MAR040 MAU050 MCD010 MCK010 MIN010 MOB100 MUN010 NAT025 NAW010 NEP010 NIC100 NOR010 OAS050 VENDOR NAME DAVID EVANS & ASSOC INC JOHN FALCONER FAMILY SERVICE ASSOC FEDERAL EXPRESS CORP GRANITE CONSTRUCTION CO GREAT SCOTT'S CATERING GTE CALIFORNIA VIRGINIA GUMPERT HIGH TECH IRRIGATION INC HISTORIC PERSERVATION HUGH HOARD INC HOME DEPOT FAYE HOOPER BOB HOPE CHRYSLER CLASSIC ** AP CHECK RUN VOID ** IMPERIAL IRRIGATION DIST INFORMATION RESOURCES INFORMATION TECHNOLOGY INSTITUTE TRANSPORTATION INTERNATIONAL CITY/COUNTY KARA IVERSON KELLY TEMPORARY SERVICES KINKO'S TOM KIRK KORVE ENGINEERING, INC DAVID S KOSLOW MARNI KUNSMAN L A CELLULAR LA QUINTA CAR WASH LA QUINTA VOLUNTEER FIRE JAMES LINDSEY LOCK SHOP INC LA QUINTA VOLUN FIRE PGA LUBE SHOP LUCENT TECHNOLOGIES LUNDEEN PACIFIC CORP VIC MARTIN BRIAN MAURER PHOTOGRAPHY MC DOWELL AWARDS McKESSON WATER PRODUCTS MINUTEMAN PRESS MOBILE COMM MUNI FINANCIAL SERV INC NATIONAL NOTARY ASSOCIATI RON NAWROCKI NEPTUNE ELECTRIC NICKERSON, DIERCKS & ASSC NORRELL SERVICES INC OASIS WATER PARK PAYMENT AMOUNT 6575.00 58.40 40.00 116.15 213220.07 150.00 685.79 32.26 268.91 90.00 1924.69 295.45 100.00 750.00 12492.69 125.00 702.85 308.00 62.50 114.91 1454.97 166.80 266.49 14310.56 168.00 121.83 1875.40 13.90 539.75 162.56 107.98 404.38 63.08 604.30 980.00 154.00 425.61 87.28 454.10 156.24 81.75 3213.17 24.00 2400.00 6978.00 3737.50 2425.92 340.00 LJUV~jt q' ACCOUNTS PAYABLE AP5005 CITY OF LA QUINTA CHECK NUMBER 32616 32617 32618 32619 32620 32621 32622 32623 32624 32625 32626 32627 32628 32629 32630 32631 32632 32633 32634 32635 32636 32637 32638 32639 32640 32641 32642 32643 32644 32645 32646 32647 32648 32649 32650 32651 32652 32653 32654 32655 32656 32657 32658 32659 32660 32661 32662 32663 32664 CHECK DATE 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/O1/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 04/01/98 CHECK REGISTER VENDOR NO. NAME OSBO50 OWE020 PAP050 PAR003 POW100 PRE015 PRI020 PROO10 RAL050 RAN040 RAS020 REL100 RIS100 RIV100 RIV101 RIV130 ROB100 ROS010 RUT050 SAN015 SEC050 SMA010 SMI010 SMO010 SoC010 SOC100 SOU007 SOU010 SOU100 SPE010 SPRO10 STA020 STA050 STE008 STE020 SUN075 SUSO10 TAR050 TAY010 THI050 TKDO10 TOP010 TRU010 VAL010 LEE M OSBORNE CPA OWEN & BRADLEY 11:10AM 04/01/98 PAGE 3 PAPERDIRECT INC PARAGON SIGNS POWERS AWARDS THE PRESS -ENTERPRISE CO THE PRINTING PLACE PROTECTON SERVICE IND RALPHS GROCERY CO RANDAL'S PLUMBING RASA - ERIC NELSON RELIANT FUND-RAISING PEGGY RISK RIVERSIDE COUNTY SHERIFFS RIV COUNTY SHERIFF/INDIO RIVERSIDE COUNTY SUPPLY ROBINS NEST FLORAL EXPRES ** AP CHECK RUN VOID ** ** AP CHECK RUN VOID ** ** AP CHECK RUN VOID ** ROSENOW SPEVACEK GROUP ** AP CHECK RUN VOID ** ** AP CHECK RUN VOID ** RUTAN & TUCKER SANBORN A/E SECURITY LINK/AMERITECH SMART & FINAL MARILYN SMITH DONNALDA SMOLENS THE SOCO GROUP INC SOCIETY CALIF ARCHAEOLOGY SOUTHWEST NETWORKS SOUTHERN CALIF GAS CO SOUTHLAND GEOTECHNICL INC STEVE SPEER SPRINT STANDARD REGISTER STAPLES FRANK STEIN NOVELTY CO STEVE'S OFFICE SUPPLY SUNLINE TRANSIT AGENCY SUSKI & SAKEMI TARGET/DAYTON'S STEVE TAYLOR & SON THINK EARTH T.K.D. ASSOCIATES INC TOPS'N BARRICADES INC TRULY NOLEN INC VALLEY OFFICE EQUIP INC PAYMENT AMOUNT 200.00 4635.00 88.70 404.06 8.62 124.80 4235.66 337.00 97.16 165.00 6160.00 35.00 624.40 1876.80 1039.44 112.50 33.40 15937.85 14831.87 560.00 127.25 196.57 306.46 100.00 46.90 45.00 2802.17 190.42 1912.75 15.04 36.66 1442.65 504.74 143.36 672.00 293.00 647.32 19.38 250.00 1000.00 632.50 590.20 282.00 66.00 5 � r+ - C`JU��(.l ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 11:10AM 04/01/98 CITY OF LA QUINTA PAGE 4 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT 32665 04/01/98 VID050 VIDEO DEPOT 11.25 32666 04/01/98 VIK010 VIKING OFFICE PRODUCTS 196.46 32667 04/01/98 VOG050 CHRIS A VOGT 121.45 32668 04/01/98 WAL010 WAL MART STORES INC 1350.04 32669 04/01/98 XER010 XEROX CORPORATION 1220.04 32670 04/01/98 ZAI050 ZAINO TENNIS COURTS INC 16083.20 32671 04/01/98 ZUR050 ZUMAR INDUSTRIES ING 810.71 CHECK TOTAL 529,714.34 r G 17v ACCOUN'�'S PAYABLE - AP5003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER &00565 CAROL ALLEN 101 000 437 000 &00566 PHYLLIS MAJOR 101 000 437 000 &00567 MICHAEL TERAN 101 000 437 000 &00568 ARNOLD THOMPSON 101 000 437 000 &00569 DIVERSIFIED LANDSCAPE 401 622 609 000 AlRO01 A-1 RENTS 101 453 615 000 A1R001 A-1 RENTS 101 454 703 825 AlRO01 A-1 RENTS 101 454 615 000 AIR001 A-1 RENTS 101 454 615 000 ABL001 ABLE RIBBON TECH 101 153 703 811 ACE010 ACE HARDWARE 101 453 703 847 ACE010 ACE HARDWARE 101 454 703 847 ACE010 ACE HARDWARE 101 453 703 847 ACE010 ACE HARDWARE 101 454 703 847 ACE010 ACE HARDWARE 101 453 703 833 ACE010 ACE HARDWARE 101 453 703 847 ACE010 ACE HARDWARE 101 453 703 849 ACE010 ACE HARDWARE 101 454 703 847 ADV100 ADVERTISING SPECIALTIES 101 454 703 847 ALC050 BOB ALCALA 101 202 609 592 ALL100 ALLIANCE SERVICE STATION 501 501 619 646 AME200 AMERIPRIDE UNIFORM SVCS 101 202 609 634 AME200 AMERIPRIDE UNIFORM SVCS 101 357 609 634 AME200 AMERIPRIDE UNIFORM SVCS 101 202 609 634 AND050 ANDY'S AUTO REPAIR 501 501 619 649 TO -BE PAID INVOICES 09.30AM 04/C1/98 PAGE 1 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. 3137 REFUND/COMPUTER CLASS 40.00 T184 1 VENDOR TOTAL 40.00 2784 REFUND/COMPUTER CLASS 40.00 T184 2 VENDOR TOTAL 40.00 3067 REFUND/HOCKEY CLASS 25.00 T184 3 VENDOR TOTAL 25.00 2838 REFUND/COMPUTER CLASS 45.00 T184 4 VENDOR TOTAL 45.00 98-01 REFUND/PLANS & SPECS 65.00 T184 59 VENDOR TOTAL 65.00 36457 EQUIP RENTAL 36.00 T186 1 41769 SUPPLIES 98.06 T186 2 41821 EQUIP RENTAL 118.80 T186 3 41749 EQUIP RENTAL 93.50 T186 4 VENDOR TOTAL 346.36 77474 PRINTER CART 175.18 T185 24 VENDOR TOTAL 175.18 49871 SUPPLIES 23.19 T186 5 49871 SUPPLIES 23.19 T186 6 49865 SUPPLIES 8.77 T186 7 49560 SUPPLIES 86.50 T185 8 49568 SUPPLIES 15.90 T186 9 49568 SUPPLIES 55.37 T186 10 49795 SUPPLIES 40.03 T186 11 49795 SUPPLIES 33.80 T186 12 VENDOR TOTAL 266.75 2 CAST METAL LETTERS/DEL O 952.50 T186 13 VENDOR TOTAL 952.50 INSTRUCTOR/COMPUTERS 200.00 T184 5 VENDOR TOTAL 200.00 283604 GAS PURCHASES 763.22 T186 17 VENDOR TOTAL 763.22 S331292 MATS 35.98 T184 6 S335246 MATS 49.04 T184 18 S335247 MATS 35.98 T187 200 VENDOR TOTAL 121.00 16632 VEHICLE REPAIRS 35.00 T186 14 ACCOUIT�11'5 PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/98 CITY OF LA QUINTA PAGE 2 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. AND050 ANDY'S AUTO REPAIR 501 501 619 649 16716 VEHICLE REPAIRS 595.20 T186 16 VENDOR TOTAL 630.20 ARR010 ARROW PRINTING COMPANY 101 153 703 810 972043 ENVELOPES 439.62 T184 7 ARRO10 ARROW PRINTING COMPANY 101 153 647 000 97202897 REQ FOR TRAVEL/ADVANCE F 80.81 T184 8 ARRO10 ARROW PRINTING COMPANY 101 451 701 000 971912 CITIZEN REQUEST/COMPLAIN 117.99 T186 15 VENDOR TOTAL 638.42 ASCO01 A & S COFFEE SERVICE 101 153 703 880 63260 COFFEE SUPPLIES 264.00 T164 9 ASCO01 A & S COFFEE SERVICE 101 153 703 880 63336 COFFEE SUPPLIES 202.00 T184 10 VENDOR TOTAL 466.00 ASS050 ASSOC OF ENVIRONMENTAL 101 402 649 000 CITY/SPONSOR MEMBERSHIP 160.00 T184 11 VENDOR TOTAL 160.00 ATC010 ATCO MANUFACTURING CO 101 454 703 825 459763 SUPPLIES 125.50 T186 18 ATC010 ATCO MANUFACTURING CO 501 501 619 649 459763 SUPPLIES 133.60 T186 19 VENDOR TOTAL 259.10 BAN150 BANE: OF NEW YORE: 101 151 607 000 06053201 CUSTODIAL SVC FOR 1-98 260.00 T184 12 VENDOR TOTAL 260.00 BAT050 MARY BATOK 101 251 703 000 REIMB/GIFTS VOLUN APRECI 60.00 T186 20 VENDOR TOTAL 60.00 BEI050 R BEIN, W FROST & ASSOC 401 649 605 532 0301477/ DESIGN SVCS 25569.72 T186 21 VENDOR TOTAL 25569.72 BIG010 BIG A AUTO PARTS 501 501 619 649 188488 REPAIR PARTS 48.81 T186 22 BIGOID BIG A AUTO PARTS 501 501 619 649 192214 REPAIR PARTS 53.92 T186 23 BIG010 BIG A AUTO PARTS 501 501 619 649 191384 REPAIR PARTS 25.53 T186 24 BIG010 BIG A AUTO PARTS 501 501 619 649 151565 REPAIR PARTS -5.17 T186 25 VENDOR TOTAL 123.09 BSIO10 BSI CONSULTANTS INC 401 642 605 532 04161 96/97 ST IMP FROG DESIGN 3746.97 T186 26 VENDOR TOTAL 3746.97 BUL100 JAMES BULGRIN 101 000 133 000 TRAVEL ADV/J BULGRIN/CMT 200.00 T184 13 VENDOR TOTAL 200.00 CADOID CADET UNIFORM SUPPLY 101 353 617 000 20509 UNIFORMS 21.64 T184 14 CAD010 CADET UNIFORM SUPPLY 101 353 617 000 18469 UNIFORMS 21.64 T184 15 CAD010 CADET UNIFORM SUPPLY 101 357 617 000 20510 UNIFORMS 7.00 T184 16 CAD010 CADET UNIFORM SUPPLY 101 357 617 000 18470 UNIFORMS 7.00 T184 17 CAD010 CADET UNIFORM SUPPLY 101 453 617 000 20508 UNIFORMS 80.59 T186 27 CAD010 CADET UNIFORM SUPPLY 101 454 617 000 20508 UNIFORMS 80.59 T186 28 CAD010 CADET UNIFORM SUPPLY 101 453 617 000 18468 UNIFORMS 49.14 T186 29 CAD010 CADET UNIFORM SUPPLY 101 454 617 000 18468 UNIFORMS 49.14 T186 30 VENDOR TOTAL 316.74 CAL010 CAI, WEST ENGINEERING 401 654 609 553 98-29 PLAN CK/EMERGENCY GENERA 3070.00 T164 19 ACCOUNTS PAYABLE. - AP5003 CITY OF LA QUINTA VENDOR CAL010 CAL WEST ENGINEERING ACCOUNT NUMBER 101 354 605 547 CAL023 CALIF COMMERCIAL POOLS 401 643 609 553 CAR100 CARDINAL PROMOTIONS 101 354 703 000 CAR100 CARDINAL PROMOTIONS 101 354 703 000 CEN007 CENTER PHOTO LAB 101 401 701 000 CHI010 CHIEF AUTO PARTS 501 501 619 649 CHI010 CHIEF AUTO PARTS 501 501 619 649 CLA050 CLASSIC AUTO TRANSPORT 501 501 619 649 COA023 COACHELLA VLLY ENGINEERS 401 633 609 000 COA080 COACHELLA VALLEY WATER 101 357 631 000 COA080 COACHELLA VALLEY WATER 101 357 631 000 COA080 COACHELLA VALLEY WATER 101 453 631 000 COA080 COACHELLA VALLEY WATER 101 454 631 632 COA080 COACHELLA VALLEY WATER 101 454 631 663 COA080 COACHELLA VALLEY WATER 101 454 631 665 COA080 COACHELLA VALLEY WATER 101 202 631 000 COA080 COACHELLA VALLEY WATER 101 202 631 000 COA080 COACHELLA VALLEY WATER 401 632 609 553 COA080 COACHELLA VALLEY WATER 401 632 609 553 COA080 COACHELLA VALLEY WATER 401 632 609 553 COM015 COMPUTER U LEARNING CENTR 101 202 609 592 COM030 COMSERCO 101 351 621 611 -COM030 COMSERCO 101 351 621 611 COM040 COMMERCIAL LIGHTING IND 101 454 703 847 C014040 COMMERCIAL LIGHTING IND 101 454 703 847 COS050 COSTCO BUSINESS DELIVERY 101 153 703 884 COS050 COSTCO BUSINESS DELIVERY 101 153 703 802 TO -BE PAID INVOICES 09:30AM 04/01/9P PAGE 3 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO_ 98-28 PLAN CHECK SVCS FEB 98 4410.00 T184 20 VENDOR TOTAL 7480.00 3 POOL CONST/FRITZ BURNS P 104085.00 T186 31 VENDOR TOTAL, 104085.00 18655 BLDG INSPECTOR JACKET 33.94 T184 21 18684 BLDG INSPECTOR SHIRTS 149.40 T184 22 VENDOR TOTAL 183.34 4041 PHOTOS 29.91 T184 23 VENDOR TOTAL 29.91 49481.5 REPAIR PARTS 3.47 T186 32 1442493 REPAIR PARTS 30.90 T186 33 VENDOR TOTAL 34.37 14200 VEHICLE TOWING 152.50 T184 33 VENDOR TOTAL 152.50 003FC SURVEY SVCS/CALLE TAMPIC 250.00 T186 34 VENDOR TOTAL 250.00 60706300 WATER SVC 18.00 T184 24 60706300 WATER SVC 71.66 T184 25 VARIOUS WATER SVC 26.44 T186 35 VARIOUS WATER SVC 2438.70 T186 36 VARIOUS WATER SVC 155.97 T186 37 VARIOUS WATER SVC 82.45 T186 38 VARIOUS WATER SVC 74.92. T186 39 60706300 WATER SVC 13.00 T186 40 50729300 WATER SVC 18.77 T186 41 50729402 WATER SVC 18.77 T186 42 60706327 WATER SVC 5.75 T186 43 VENDOR TOTAL 2924.43 INSTRUCTOR/COMPUTER 420.00 T186 58 VENDOR TOTAL 420.00 03014617 PAGER BATTERIES 25.86 T184 26 03014762 RADIO CHARGER 38.79 T184 27 VENDOR TOTAL 64.65 3871 LIGHTS 90.25 T186 44 3682 LIGHTS 404.07 T186 45 VENDOR TOTAL 494.32 82218495 SUPPLIES 46.11 T184 35 82218495 SUPPLIES 167.49 T184 36 r� ,- jJ 1t-)i, ACCOUNTS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER COS050 COSTCO BUSINESS DELIVERY 101 151 701 000 COS050 COSTCO BUSINESS DELIVERY 101 401 701 000 COS050 COSTCO BUSINESS DELIVERY 101 153 703 802 COS050 COSTCO BUSINESS DELIVERY 101 355 703 000 COS050 COSTCO BUSINESS DELIVERY 101 201 701 000 COS050 COSTCO BUSINESS DELIVERY 101 151 701 000 DEC100 DE CASTRO/WEST/CHODOROW 101 000 261 000 DEC100 DE CASTRO/WEST/CHODOROW 101 000 261 000 DEC100 DE CASTRO/WEST/CHODOROW 101 101 601 523 DEC100 DE CASTRO/WEST/CHODOROW 101 101 601 523 DEC100 DE CASTRO/WEST/CHODOROW 101 101 601 523 DES010 DESERT BUSINESS MACHINES 101 153 609 605 DESO40 DESERT JANITOR SERVICE 101 251 609 634 DESO40 DESERT JANITOR SERVICE 101 202 609 634 DESO40 DESERT JANITOR SERVICE 101 251 609 634 DESO40 DESERT JANITOR SERVICE 101 357 609 634 DES051 DESERT SANDS UNIFIED SCHL 101 253 613 000 DES051 DESERT SANDS UNIFIED SCHL 101 253 609 000 DES051 DESERT SANDS UNIFIED SCHL 101 253 609 000 DES051 DESERT SANDS UNIFIED SCHL 101 253 609 000 DES051 DESERT SANDS UNIFIED SCHL 101 253 605 000 DES060 DESERT SUN PUBLISHING CO 101 153 643 000 DES060 DESERT SUN PUBLISHING CO 101 201 643 000 DES060 DESERT SUN PUBLISHING CO 101 401 643 000 DES061 DESERT SUN C014MUNITY 101 101 643 000 DIE020 DIEGO'S GARDENING SERVICE 101 352 609 615 DIE020 DIEGO'S GARDENING SERVICE 101 352 609 615 DIE020 DIEGO'S GARDENING SERVICE 101 352 609 615 DIE020 DIEGO'S GARDENING SERVICE 101 352 609 615 DIED20 DIEGO'S GARDENING SERVICE 101 352 609 615 DIE020 DIEGO'S GARDENING SERVICE 101 352 609 615 DOU010 DOUBLE PRINTS 1 HR PHOTO 101 103 643 000 EAG100 EAGLE/BENEFICIAL NATL BNK 101 357 703 000 TO -BE PAID INVOICES 09:30AM 04/01/98 PAGE 4 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. 82218495 SUPPLIES 260.17 T184 37 82218495 SUPPLIES 279.58 T184 38 82218657 PAPER 306.60 T187 87 82218657 CABINET 191.71 T187 88 82218657 SUPPLIES 22.14 T187 89 82218657 SUPPLIES 7.27 T187 90 VENDOR TOTAL 1281.07 58735 LGL/VALIDATION DEPOSIT 175.00 T184 28 58732 LGL/EIR LIT/STAMRO 291.25 T184 29 58734 LGL/INDIO LIT 125.00 T184 30 58733 LGL/COUNTY LIT 253.00 T184 31 58736 LGL/COUNTY LIT 180.00 T184 32 VENDOR TOTAL 1024.25 14932 TYPEWRITER MAINT 125.00 T184 34 VENDOR TOTAL 125.00 278 JANITORIAL SVC 245.00 T184 39 278 JANITORIAL SVC 765.00 T184 40 278 JANITORIAL SVC 318.00 T184 41 277 JANITORIAL SVC 2550.00 T184 42 VENDOR TOTAL 3878.00 8297 FACILITIES USE 18.00 T184 43 8313 FACILITIES USE 51.00 T184 44 8303 FACILITIES USE 12.00 T184 45 8309 FACILITIES USE 18.00 T184 46 7683 FACILITIES USE 330.00 T186 59 VENDOR TOTAL 429.00 1271120 JOB PLACEMENT 537.69 T184 48 1271126 ADVERTISING 1269.44 T184 49 1271126 ADVERTISING 713.09 T184 50 VENDOR TOTAL 2520.22 131988 ADVERTISING 1989.00 T184 47 VENDOR TOTAL 1989.00 LOT CLN/N97-198 250.00 T184 51 LOT CLN/N97-199 125.00 T184 52 LOT CLN/N97-196 125.00 T184 53 LOT CLN/N97-182 250.00 T184 54 LOT CLN/N97-186 250.00 T184 55 CLN LOT/N97-190 250.00 T184 56 VENDOR TOTAL 1250.00 60714 PHOTOS 13.87 T184 57 VENDOR TOTAL. 13.87 04910092 FLASHLIGHTS 38.76 T186 46 ACCOUNTS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER E00050 ECONOMICS INC 101 402 605 542 EIS010 EISENHOWER IMMEDIATE CARE 101 153 605 000 EVA050 DAVID EVANS & ASSOC INC 101 402 605 000 FAL050 JOHN FALCONER 101 153 637 000 FAM035 FAMILY SERVICE ASSOC 101 251 637 000 FED010 FEDERAL EXPRESS CORP 101 153 645 000 GRA010 GRANITE CONSTRUCTION CO 401 641 609 553 GRA010 GRANITE CONSTRUCTION CO 401 641 609 553 GRA010 GRANITE CONSTRUCTION CO 101 453 703 834 GRE020 GREAT SCOTT'S CATERING 101 202 703 000 GTE010 GTE CALIFORNIA 101 153 635 000 GTE010 GTE CALIFORNIA 101 251 635 000 CTE010 GTE CALIFORNIA 101 1.53 635 000 GTE010 GTE CALIFORNIA 101 153 635 000 GTE010 GTE CALIFORNIA 101 153 635 000 GTE010 GTE CALIFORNIA 101 153 635 000 GTE010 GTE CALIFORNIA 101 454 635 664 GTE010 GTE CALIFORNIA 101 454 627 619 GUM100 VIRGINIA GUMPERT 101 253 703 000 HIG010 HIGH TECH IRRIGATION INC 101 454 703 847 HIG010 HIGH TECH IRRIGATION INC 101 454 703 847 HIG010 HIGH TECH IRRIGATION INC 101 454 703 847 HIGO10 HIGH TECH IRRIGATION INC 101 454 703 847 HIG010 HIGH TECH IRRIGATION INC 101 454 703 847 HIS100 HISTORIC PERSERVATION 101 402 649 000 TO -BE PAID INVOICES 09:30AM 04/01/9H PAGE 5 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. VENDOR TOTAL 38.76 7 AB 939 INPLEMENTATION PR 1583.38 T185 1 VENDOR TOTAL 1583.38 EMP PHYSICALS 520.00 T184 58 VENDOR TOTAL 520.00 14-0196 GENERAL PLAN UPDATE 6575.00 T186 47 VENDOR TOTAL 6575.00 REIMB/INTERVIEW PANEL LU 58.40 T184 60 VENDOR TOTAL 58.40 WORKSHOP/M KUNSMAN 40.00 T186 48 VENDOR TOTAL 40.00 44583609 FEDERAL EXPRESS 116.15 T184 61 VENDOR TOTAL 116.15 225319/3 CONST/DUNES PALMS/WHITEW 14332.28 T186 60 225319/2 CONST/DUNES PALMS/WHITEW 198760.41 T166 61 10134 ASPHALT 127.38 T186 62 VENDOR TOTAL 213220.07 SNR CTR ST PATRICK'S LUN 150.00 T184 62 VENDOR TOTAL 150.00 7759664 PHONE SVC 50.92 T184 63 5645441 PHONE SVC 97.20 T184 64 5649171 PHONE SVC 45.54 T184 65 5649202 PHONE SVC 45.54 T184 66 5649182 PHONE SVC 46.17 T184 67 5640096 PHONE SVC 338.60 T184 68 7713100 PHONE SVC 25.86 T186 63 7714270 PHONE SVC 35.96 T166 64 VENDOR TOTAL 685.79 SUPPLIES/AFTERSCHOOL CIA 32.26 T184 69 VENDOR TOTAL 32.26 334761 SUPPLIES 23.19 T186 65 334762 SUPPLIES 44.12 T186 66 333296 SUPPLIES 64.95 T186 67 333116 SUPPLIES 97.85 T186 68 332884 SUPPLIES 38.80 T186 69 VENDOR TOTAL 268.91 71533210 MEMBERSHIP 90.00 T184 70 ACCOUNTS PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/96 CITY OF LA QUINTA PAGE 6 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAM NUMBER DESCRIPTION AMOUNT NO. VENDOR TOTAL. 90.00 IIOAD10 HUGH HOARD INC 101 357 621 610 21018 AIR COND REPAIR 1176.15 T184 73 HOA010 HUGH HOARD INC 101 357 621 610 21280 AIR COND REPAIR 55.00 T184 74 HOA010 HUGH HOARD INC 101 357 621 610 21289 AIR COND REPAIR 583.54 T184 75 HOA010 HUGH HOARD INC 101 357 621 610 21305 AIR COND REPAIR 110.00 T184 76 VENDOR TOTAL 1924.69 H014030 HOME DEPOT 101 357 621 000 66300001 SUPPLIES 13.48 T184 71 HOM030 HOME DEPOT 101 253 705 000 66300000 SUPPLIES 120.45 T184 72 HOM030 HOME DEPOT 101 454 703 847 66300002 SUPPLIES 31.10 T186 70 HOM030 HOME DEPOT 101 454 703 847 66300001 SUPPLIES 68.10 T186 71 HOM030 HOME DEPOT 101 454 703 847 2212631 PALLET FEE -10.78 T186 72 HOM030 HOME DEPOT 101 454 703 847 66300000 SUPPLIES 73.10 T186 73 VENDOR TOTAL 295.45 H00050 FAYE HOOPER 101 202 609 592 INSTRUCTOR/CERAMICS 100.00 T186 74 VENDOR TOTAL 100.00 HOP050 BOB HOPE CHRYSLER CLASSIC 101 103 643 000 582 ADV/BOB HOPE CRYSLR CLAS 750.00 T185 2 VENDOR TOTAL 750.00 IMP010 IMPERIAL IRRIGATION DIST 101 357 627 000 78020570 ELECTRIC SVC 4334.35 T185 3 IMP010 IMPERIAL IRRIGATION DIST 401 641 609 553 38122500 ELECTRIC SVC 7.87 T186 49 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 88448950 ELECTRIC SVC 113.87 T186 50 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 15847034 ELECTRIC SVC 33.43 T186 51 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 15847031 ELECTRIC SVC 80.78 T186 52 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 88448900 ELECTRIC SVC 31.92 T186 53 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 15647032 ELECTRIC SVC 4.11 T186 54 IMP010 IMPERIAL IRRIGATION DIST 401 632 609 553 19820667 ELECTIRC SVC 35.75 T186 55 IMP010 IMPF,RIA1. IRRIGATION DIST 401 632 609 553 19820666 ELECTIRC SVC 97.86 T186 56 IMP010 IMPERIAL IRRIGATION DIST 101 202 627 000 78020580 ELECTIRC SVC 664.04 T186 57 IMP010 IMPERIAL IRRIGATION DIST 101 453 627 000 VARIOUS ELECTRIC SVC 260.06 T186 75 IMP010 IMPERIAL IRRIGATION DIST 101 454 627 619 VARIOUS ELECTRIC SVC 4292.42 T186 76 IMPO10 IMPERIAL IRRIGATION DIST 101 454 627 632 VARIOUS ELECTRIC SVC 537.96 T186 77 IMP010 IMPERIAL IRRIGATION DIST 101 454 627 663 VARIOUS ELECTRIC SVC 262.83 T186 78 IMP01.0 IMPERIAL IRRIGATION DIST 101 454 627 664 VARIOUS ELECTRIC SVC 1641.94 T186 79 IMP010 IMPERIAL IRRIGATION DIST 101 454 627 665 VARIOUS ELECTRIC SVC 62.33 T186 80 IMP010 IMPERIAL IRRIGATION DIST 101 454 627 666 VARIOUS ELECTRIC SVC 31.17 T186 81 VENDOR TOTAL 12492.69 INF030 INFORMATION RESOURCES 101 153 603 000 1044 EMP BACKGROUND CHECK 125.00 T185 4 VENDOR TOTAL 125.00 INF100 INFORMATION TECHNOLOGY 101 153 609 000 DTA-02-1 MAINT/DATA COMM EQUIP 2/ 250.00 T185 5 INF100 INFORMATION TECHNOLOGY 101 153 609 000 DP-02-00 INTERNET PAGE 2/98 285.00 T185 6 INF100 INFORMATION TECHNOLOGY 101 153 609 000 ADN 02-3 DATA NETWORK 2/98 167.85 T185 7 VENDOR TOTAL 702.85 INS100 INSTITUTE TRANSPORTATION 101 452 703 000 TRIP GERERATION BOOKS 308.00 T186 82 i ,J J �•i 12 ACCOUN'iS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER INT013 INTERNATIONAL CITY/COUNTY 101 102 651 000 IVE050 KARA IVERSON 101 253 703 000 KEL010 KELLY TEMPORARY SERVICES 101 151 505 534 KEL010 KELLY TEMPORARY SERVICES 101 151 505 534 KEL010 KELLY TEMPORARY SERVICES 101 151 505 534 KEL010 KELLY TEMPORARY SERVICES 101 151 505 534 KIN050 KINKO'S KIR010 TOM KIRK 101 402 701 000 101 401 637 000 KOR050 KORVE ENGINEERING, INC 401 632 605 000 KOS100 DAVID S KOSLOW 101 253 609 592 KUN100 MARNI KUNSMAN 101 251 641 000 KUN100 MARNI KUNSMAN 101 000 133 000 KUN100 NIARNI Y,UNSMAN 101 251 637 000 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAC010 L A CELLULAR 101 153 635 660 LAQ030 LA QUINTA CAR WASH 501 501 619 649 LAQ100 LA QUINTA VOLUNTEER FIRE 101 356 609 580 LIN050 JA14F.S LINDSEY 101 456 641 000 L00010 LOCI: SHOP INC 501 501 619 649 TO -BE PAID INVOICES 09:30AM 04/01/96 PAGE INV. INVOICE PAYMENT BATCH :'RAN NUMBER DESCRIPTION AMOUNT NO. VENDOR TOTAL 306.00 210158 PUBLICATION 62.50 T185 8 VENDOR TOTAL 62.50 SUPPLIES/AFTERSCHOOL PRO 114.91 T185 9 VENDOR TOTAL 114.91 9182499 CONTRACT LABOR 407.03 T185 10 8159139 CONTRACT LABOR 306.79 T185 11 10159643 CONTRACT LABOR 97.20 T185 12 11145781 CONTRACT LABOR 643.95 T185 13 VENDOR TOTAL 1454.97 31010010 SUPPLIES 166.80 T185 14 VENDOR TOTAL 166.80 TRAVEL EXP LLC PLANNERS 266.49 T185 15 VENDOR TOTAL 266.49 7648 CONST SUPPORT/AVE 48 EXT 14310.56 T187 83 VENDOR TOTAL 14310.56 INSTRUCTOR/READING SHAKE 168.00 T185 16 VENDOR TOTAL 168.00 MILEAGE 48.64 T185 17 REIMB TRAVEL ADVANCE -150.00 T185 18 TRAVEL EXP/CPRS CONF 223.19 T185 19 VENDOR TOTAL 121.83 27635754 CELLULAR PHONE SVC 256.35 T185 20 27635804 CELLULAR PHONE SVC 40.37 T185 21 27635788 CELLULAR PHONE SVC 44.10 T185 22 27635846 CELLULAR PHONE SYS 67.55 T185 53 11770468 CELLULAR PHONE SVC 777.22 T187 84 17504192 CELLULAR PHONE SVC 647.77 T187 85 27635788 CELLULAR PHONE SVC 42.04 T187 86 VENDOR TOTAL 1875.40 VEHICLE MAINT 13.90 T185 23 VENDOR TOTAL 13.90 FEB 98 FIRE SUPPORT FEB 98 539.75 T185 25 VENDOR TOTAL 539.75 MILEAGE 162.56 T187 91 VENDOR TOTAL 162.56 21389 AUTO KEYS 4.53 T185 27 13 ACCOUNTS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR L00010 LOCK SHOP INC ACCOUNT NUMBER 101 454 703 847 LQV010 LA QUINTA VOLUN FIRE PGA 101 356 609 580 LUB050 LUBE SHOP 501 501 619 649 LUB050 LUBE SHOP 501 501 619 649 LUC050 LUCENT TECHNOLOGIES 101 153 609 608 LUN050 LUNDEEN PACIFIC CORP 101 454 609 000 MAR040 VIC MARTIN 101 253 609 592 MAU050 ➢RIAN MAURER PHOTOGRAPHY 101 102 603 000 MCD010 MC DOWELL AWARDS 101 151 703 000 MCD010 MC DOWELL AWARDS 101 251 647 000 MCDO10 MC DOWELL AWARDS 101 253 703 000 MCK010 McRESSON WATER PRODUCTS 101 251 703 000 MCK010 McEESSON WATER PRODUCTS 101 153 703 882 MCK010 McKESSON WATER PRODUCTS 101 153 703 882 MCK010 McKESSON WATER PRODUCTS 101 453 703 847 MCK010 McKESSON WATER PRODUCTS 101 454 703 847 MIN07.0 MINUTEMAN PRESS 101 202 647 000 MOB100 MOBILE COMM 101 153 635 660 MUN010 MUNI FINANCIAL SERV INC 720 000 267 000 MUN010 MUNI FINANCIAL SERV INC 715 000 267 000 MUN010 MUNI FINANCIAL SERV INC 710 000 267 000 MUN010 MUNI FINANCIAL SERV INC 715 000 267 000 MUN010 MUNI FINANCIAL SERV INC 720 000 267 000 MUN010 MUNI FINANCIAL SERV INC 725 000 267 000 MUN010 MUNI FINANCIAL SERV INC 730 000 267 000 NAT025 NATIONAL NOTARY ASSOCIATI 101 201 649 000 TO -BE PAID INVOICES 09:30AM 04/01/9b PAGE 8 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. C618246 LOCKS 10.3.45 T187 92 VENDOR TOTAL 107.98 FEB 98 FIRE SUPPORT FEB 98 404.38 T185 26 VENDOR TOTAL 404.38 98030500 VEHICLE MAINT 25.69 T187 93 98022700 VEHICLE MAINT 37.39 T187 94 VENDOR TOTAL 63.08 01870872 PHONE EQUIP MAINT 604.30 T187 95 VENDOR TOTAL 604.30 4449 LANDSCAPE PLANTS 980.00 T187 96 VENDOR TOTAL 980.00 INSTRUCTOR/GOLF 154.00 T185 28 VENDOR TOTAL 154.00 2946 PHOTOS/WILDFLOWERS 425.61 T187 97 VENDOR TOTAL 425.61 34163 NAME PLATE 17.24 T185 29 34196 NAME PLATE 21.55 T185 30 34155 TROPHIES 48.49 T185 31 VENDOR TOTAL 87.28 82059346 DRINKING WATER 51.00 T185 32 83926316 WATER SVC 206.90 T187 103 83911696 WATER SVC 110.10 T187 104 82588966 WATER SVC 43.05 T187 105 82588966 WATER SVC 43.05 T187 106 VENDOR TOTAL 454.10 36910 BLOOD PRESSURE CARDS 156.24 T185 33 VENDOR TOTAL 156.24 H3393252 PAGER SVC 81.75 T185 34 VENDOR TOTAL 81.75 10674 DELIQUENCY MGMNT SVC 200.00 T185 35 10674 DELIQUENCY MGMNT SVC 100.00 T185 36 CD000025 LOC IMP DIST ADMIN 378.39 T187 98 CB000025 LOC IMP DIST ADMIN 477.68 T187 99 CB000025 LOC IMP DIST ADMIN 497.82 T187 100 CB000025 LOC IMP DIST ADMIN 863.49 T187 101 CB000025 LOC IMP DIST ADMIN 695.79 T187 102 VENDOR TOTAL 3213.17 751710 MEMBERSHIP RENEWAL 24.00 T187 119 ACCOUNTS PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/96 CITY OF LA QUINTA PAGE 9 VENDOP. ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. VENDOR TOTAL 24.00 NAW010 RON NAWROCK.I 401 622 609 553 273308 PROJECT SIGNS 2400.00 T187 107 VENDOR TOTAL 2400.00 NEP010 NEPTUNE ELECTRIC 101 454 609 000 5532 MEDIAN LIGHTING/JEFFERSO 4897.00 T187 108 NEP010 NEPTUNE ELECTRIC 101 454 609 000 5533 CATUS FLOWER LIGHT FIXTU 420.00 T187 109 NEP010 NEPTUNE ELECTRIC 101 454 703 847 5535 MEDIAN LIGHTING/EISENHOW 464.00 T187 110 NEP010 NEPTUNE ELECTRIC 101 454 703 847 5514 LIGHTING/RANCHO OCOTILLO 1197.00 T187 III VENDOR TOTAL 6978.00 NIC100 NICKERSON, DIERCKS & ASSC 401 627 609 000 97-027/1 VARIOUS CITYWIDE LANDSCA 227.50 T187 112 NIC100 NICKERSON, DIERCF.S & ASSC 401 633 609 000 97-027/1 PM 10 STREET IMPROVEMENT 260.00 T187 113 NIC100 NICKERSON, DIERCKS & ASSC 401 641 901 000 97-027/1 DUNE PALMS/WWR CROSSING 130.00 T187 114 NIC100 NICKERSON, DIERCKS & ASSC 401 622 609 000 97-027/1 EISENHOWER MEDIANS 1040.00 T187 115 NIC100 NICKERSON, DIERCKS & ASSC 101 456 603 000 97-027/1 HWY 111 MEDIAN LANDSCAPE 910.00 T187 116 NIC100 NICKERSON, DIERCKS & ASSC 101 456 603 000 97-027/1 MISC ASSIGNED WORK 1170.00 T187 117 VENDOR TOTAL 3737.50 NOR010 NORRELL SERVICES INC 101 102 505 534 5478336 CONTRACT LABOR 638.40 T185 37 NOR010 NORRELL SERVICES INC 101 102 505 534 5464728 CONTRACT LABOR 510.72 T185 38 NOR010 NORRELL SERVICES INC 101 102 505 534 5493133 CONTRACT LABOR 638.40 T185 39 NOR010 NORRELL SERVICES INC 101 102 505 534 5508047 CONTRACT LABOR 638.40 T187 118 VENDOR TOTAL 2425.92 OAS050 OASIS WATER PARK. 101 253 703 000 SPRING BREAK 340.00 T185 40 VENDOR TOTAL 340.00 OSBO50 LEE M OSI3ORNE CPA 101 000 133 000 TRAVEL ADVANCE/L OSBORNE 200.00 T185 41 VENDOR TOTAL 200.00 OWE020 OWEN & BRADLEY 710 000 267 000 ATTNY FEES DELIQUENCY MG 721.00 T185 42 OWE020 OWEN b BRADLEY 715 000 267 000 ATTNY FEES DELIQUENCY MG 927.00 T185 43 OWE020 OWEN & BRADLEY 720 000 267 000 ATTNY FEES DELIQUENCY MG 412.00 T185 44 OWE020 OWED! & BRADLEY 725 000 267 000 ATTNY FEES DELIQUENCY MG 1133.00 T185 45 OWE020 OWEN & BRADLEY 730 000 267 000 ATTNY FEES DELIQUENCY MG 1442.00 T185 46 VENDOR TOTAL 4635.00 PAP050 PAPERDIRECT INC 101 401 703 662 31532061 SUPPLIES 88.70 T185 47 VENDOR TOTAL 88.70 PAR003 PARAGON SIGNS 401 647 609 000 12003 SIGNS 404.06 T187 120 VENDOR TOTAL 404.06 POW100 POWERS AWARDS 101 351 647 000 51884 NAME PLATE 8.62 T185 48 VENDOR TOTAL 8.62 PRE015 THE PRESS -ENTERPRISE CO 101 201 651 000 0146294 NEWSPAPER SUBSCRIPTION 124.80 T187 121 VENDOR TOTAL 124.80 PRI020 THE PRINTING PLACE 101 101 647 000 980138 BUSINESS CARDS/J PENA 191.80 T185 49 �J ��jUIjc��.1 ACCOUNTS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR PRI020 THE PRINTING PLACE PRI020 THE PRINTING PLACE ACCOUNT NUMBER 101 153 647 000 101 354 647 000 PRO010 PROTECTON SERVICE IND 101 202 609 640 RAL050 RALPHS GROCERY CO 101 101 637 000 RAL050 RALPHS GROCERY CO 101 202 703 000 RAN040 RANDAL'S PLUMBING 101 251 703 000 RAS020 RASA - ERIC NELSON 101 452 603 000 RAS020 RASA - ERIC NELSON 101 452 603 000 RAS020 RASA - ERIC NELSON 101 452 603 000 P7:S020 RASA - ERIC NELSON 101 452 603 000 _9020 RASA - ERIC NELSON 101 452 603 000 '�S020 RASA - ERIC NELSON 101 452 603 000 55020 RASA - ERIC NELSON 101 452 603 000 S020 RASA - ERIC NELSON 101 452 603 000 '.S020 RASA - ERIC NELSON 101 452 603 000 %S020 RASA - ERIC NELSON 101 452 603 000 REL100 RELIANT FUND-RAISING 101 202 703 000 RIS100 PEGGY RISK 101 253 609 592 RIS100 PEGGY RISK 101 253 609 592 RIS100 PEGGY RISK 101 253 609 592 RIV100 RIVERSIDE COUNTY SHERIFFS 101 301 609 574 RIV101 RIV COUNTY SHERIFF/INDIO 101 301 609 579 RIV101 RIV COUNTY SHERIFF/INDIO 101 301 609 579 RIV130 RIVERSIDE COUNTY SUPPLY 101 201 701 000 ROB100 ROBINS NEST FLORAL EXPRES 101 101 701 000 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 TO -BE PAID INVOICES 0c�:30AM 04/01/96 PAGE 10 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. 971888 BUSINESS CARDS MASTER 3905.94 T185 50 980405 CORRECTION NOTICE FORMS 137.92 T187 122 VENDOR TOTAL 4235.66 0381746 SYSTEM MAINT 337.00 T185 51 VENDOR TOTAL 337.00 75282 SUPPLIES 79.73 T185 52 75318 TEA DANCE REFRESHMENTS 17.43 T187 123 VENDOR TOTAL 97.16 83101 FOUNTAIN REPAIR/SPORTS C 165.00 T185 54 VENDOR TOTAL 165.00 1331 TRACT MAP/LQ RESORT 630.00 T187 124 1321 TRACT MAP/LQ RESORT 990.00 T187 125 1319 TRACT MAP/PGA WEST 390.00 T187 126 1329 TRACT MAP/PGA WEST 300.00 T187 127 1330 TRACT MAP/LA RESORT 600.00 T187 128 1324 TRACT MAP/LQ RESORT 390.00 T187 129 1320 TRACT MAP/PGA 1290.00 T187 130 1323 TRACT MAP/PGA 915.00 T187 131 1326 TRACT MAP/KSL 330.00 T187 132 1322 TRACT MAP/KSL 325.00 T187 133 VENDOR TOTAL 6160.00 GREETING CARDS 35.00 T185 55 VENDOR TOTAL 35.00 INSTRUCTOR/DANCE/TWIRL 145.60 T185 56 INSTRUCTOR/DANCE/TWIRL 254.80 T185 57 INSTRUCTOR/DANCE 224.00 T185 58 VENDOR TOTAL 624.40 98-14041 BOOKING FEES/JAN 98 1876.80 T185 59 VENDOR TOTAL 1876.80 EXTRA DEPUTIES (LLEBG97) 215.70 T185 60 EXTRA DEPUTIES VIPS (LLE 823.74 T185 61 VENDOR TOTAL 1039.44 229156 SUPPLIES 112.50 T185 62 VENDOR TOTAL 112.50 1629 FLOWERS 33.40 T185 63 VENDOR TOTAL 33.40 6282 HOUSING PROGRAM 64.00 T185 64 6282 HOUSING PROGRAM 136.00 T185 65 1 IJ UJU(J(3U ACCOUNTS PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AN 04/01/95 CITY OF LA QUINTA PAGE 11 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6282 HOUSING PROGRAM 62.00 T185 66 ROS010 ROSENOW SPEVACEK. GROUP 247 916 603 000 6282 HOUSING PROGRAM 118.00 T185 67 ROS010 P.OSENOW SPEVACEK GROUP 245 903 603 000 6326 BUDGET ACCOUNTING 30.32 T185 68 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6326 BUDGET/ACCOUNTING 64.43 T185 69 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6326 BUDGET/ACCOUNTING 38.85 T185 70 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6326 BUDGET/ACCOUNTING 55.90 T185 71 ROS010 ROSENOW SPEVACEK GROUP 405 902 603 000 6326 BUDGET/ACCOUNTING 379.00 T185 72 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6326 BUDGET/ACCOUNTING 379.00 T185 73 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6288 1998 REFUNDING BONDS 3597.50 T185 74 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6283 ASSESSMENT SUBSIDY PROG 639.48 T185 75 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6283 ASSESSMENT SUBSIDY PROG 1358.87 T185 76 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6291 ECONOMIC DEVELOPMENT PLA 46.48 T185 77 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6291 ECONOMIC DEVELOPMENT PLA 98.77 T185 78 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6291 ECONOMIC DEVELOPMENT PLA 59.56 T185 79 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6291 ECONOMIC DEVELOPMENT PLA 85.69 T185 80 ROS010 ROSENOW SPEVACEK GROUP 405 902 603 000 6291 ECONOMIC DEVELOPMENT PLA 581.00 T185 81 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6291 ECONOMIC DEVELOPMENT PLA 581.00 T185 82 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6285 LA QUINTA HOUSING PROG 353.70 T185 83 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6285 LA QUINTA HOUSING PROG 751.60 T185 84 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6285 LA QUINTA HOUSING PROG 453.18 T185 85 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6285 LA QUINTA HOUSING PROG 652.12 T185 86 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6287 RESALE HOUSING PROG 129.03 T185 87 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6287 RESALE HOUSING PROG 274.17 T185 88 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6267 RESALE HOUSING PROG 165.32 T185 89 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6287 RESALE HOUSING PROG 237.88 T185 90 ROS010 ROSENOW SPEVACEK GROUP 405 902 603 000 6286 BUSINESS DEVELOPMENT PRO 150.00 T185 91 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6286 BUSINESS DEVELOPMENT PRO 150.00 T185 92 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6284 48TH & JEFFERSON HOUSING 533.00 T185 93 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6284 48TH & JEFFERSON HOUSING 767.00 T185 94 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6290 10 YEAR HOUSING PLAN UPD 133.60 T185 95 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6290 10 YEAR HOUSING PLAN UPD 283.90 T185 96 ROS010 ROSENOW SPEVACEK. GROUP 246 906 603 000 6290 10 YEAR HOUSING PLAN UPD 171.18 T185 97 ROS010 ROSENOW SPEVACEK GROUP 247 916 603 000 6290 10 YEAR HOUSING PLAN UPD 246.32 T185 98 ROS010 ROSENOW SPEVACEK GROUP 405 902 603 000 6293 BERMUDA DUNES ANNEXATION 125.00 T185 99 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6293 BEP14UDA DUNES ANNEXATION 125.00 T185 100 ROS010 ROSENOW SPEVACEK GROUP 101 103 605 000 6289 HIGHWAY Ill COMMERCIAL 1340.00 T185 101 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6292 WELLS FARGO BANK 200.00 T185 102 ROS010 ROSENOW SPEVACEK GROUP 245 903 603 000 6325 CITY FEE ANALYSIS 9.60 T185 103 ROS010 ROSENOW SPEVACEK GROUP 244 913 603 000 6325 CITY FEE ANALYSIS 20.40 T185 104 ROS010 ROSENOW SPEVACEK GROUP 246 906 603 000 6325 CITY FEE ANALYSIS 12.30 T185 105 ROSO10 ROSENOW SPEVACEK GROUP 247 916 603 000 6325 CITY FEE ANALYSIS 17.70 T185 106 ROSDIO ROSENOW SPEVACEK GROUP 405 902 603 000 6325 CITY FEE ANALYSIS 120.00 T185 107 ROS010 ROSENOW SPEVACEK GROUP 406 905 603 000 6325 CITY FEE ANALYSIS 120.00 T185 108 VENDOR TOTAL 15937.85 RUT050 RUTAN & TUCKER 101 101 601 523 277661 LGL/GENERAL LIT 601.14 T185 109 RUT050 RUTAN & TUCKER 405 902 601 523 277661 LGL/GENERAL LIT 330.62 T185 110 RUT050 RUTAN & TUCKER 406 905 601 523 277661 LGL/GENERAL LIT 78.15 T185 111 RUT050 RUTAN & TUCKER 245 903 601 523 277661 LGL/GENERAL LIT 42.32 T185 112 ACCOUNT;, PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/9t, CITY OF LA QUINTA PAGE 12 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. RUT050 RUTAN & TUCKER 244 913 601 523 277661 LGL/GENERAL LIT 89.93 T185 113 RUT050 RUTAN & TUCKER 246 906 601 523 27761 LGL/GENERAL LIT 24.65 T185 114 BUT050 RUTAN & TUCKER 247 916 601 523 27761 LGL/GENERAL LIT 35.47 T185 115 RUT050 RUTAN & TUCKER 101 101 601 000 277659 LGL/GENERAL 92.50 T185 116 RUT050 RUTAN & TUCKER 405 902 601 000 277659 LGL/GENERAL 50.88 T185 117 RUT050 RUTAN & TUCKER 406 905 601 000 277659 LGL/GENERAL 12.03 T185 118 RUT050 RUTAN & TUCKER 245 903 601 000 277659 LGL/GENERAL 6.51 T185 119 RUT050 RUTAN & TUCKER 244 913 601 000 277659 LGL/GENERAL 13.84 T185 120 RUT050 RUTAN & TUCKER 246 906 601 000 277659 LGL/GENERAL 3.79 T185 121 RUT050 RUTAN & TUCKER 247 916 601 000 277659 LGL/GENERAL 5.46 T185 122 RUT050 RUTAN & TUCKER 101 101 601 000 277667 LGL/GEN/LIBRARY 165.00 T185 123 RUT050 RUTAN & TUCKER 405 902 601 000 277667 LGL/GEN/LIBRARY 90.75 T185 124 RUT050 RUTAN & TUCKER 406 905 601 000 277667 LGL/GEN/LIBRARY 21.45 T185 125 RUT050 RUTAN & TUCKER 245 903 601 000 277667 LGL/GEN/LIBRARY 11.62 T185 126 RUT050 RUTAN & TUCKER 244 913 601 000 277667 LGL/GEN/LIBRARY 24.68 T185 127 RUT050 RUTAN & TUCKER 246 906 601 000 277667 LGL/GEN/LIBRARY 6.77 T185 128 RUT050 RUTAN & TUCKER 247 916 601 000 277667 LGL/GEN/LIBRARY 9.74 T185 129 RIJT050 RUTAN & TUCKER 101 101 601 000 277670 LGL/GEN/PARC LA QUINTA 408.90 T185 130 RUT050 RUTAN & TUCKER 101 101 601 000 277660 LGL/PERSONNEL 651.00 T185 131 RUT050 RUTAN & TUCKER 101 101 601 000 277662 LGL/EMINENT DOMAIN 413.28 T185 132 RT2050 RUTAN & TUCKER 101 101 601 523 277669 LGL/WESTERN/EAGLE 6577.15 T185 133 RUT050 RUTAN & TUCKER 101 101 601 000 277664 LGL/CODE ENFORCEMENT 222.00 T185 134 RUT050 RUTAN & TUCKER 101. 101 601 523 277665 LGL/CODE ENF/RUMMONDS 4260.61 T185 135 RUT050 RUTAN & TUCKER 101 101 601.523 277663 LGL/KSL/JMP 581.63 T185 136 VENDOR TOTAL 14831.87 SAN015 SANBORN A/E 245 000 202 000 1770 CIVIL COST ESTIMATES 560.00 T185 137 VENDOR TOTAL 560.00 SEC050 SECURITY LINK/AMERITECH 101 453 609 640 23907920 ALARM MONITORING SVC 63.63 T187 136 SEC050 SECURITY LINK/AMERITECH 101 454 609 640 23907920 ALARM MONITORING SVC 63.62 T187 137 VENDOR TOTAL 127.25 SMA010 SMART & FINAL 101 253 661 000 5869052 SUPPLIES 61.56 T185 138 SMA010 SMART & FINAL 101 202 703 000 5867866 SUPPLIES 68.17 T185 139 SMA010 SMART & FINAL 101 202 703 000 5867866 SUPPLIES 17.97 T185 140 SMA010 SMART & FINAL 101 202 703 000 5867866 SUPPLIES 40.98 T185 141 SMA010 SMART & FINAL 101 202 703 000 5867866 SUPPLIES 7.89 T185 142 VENDOR TOTAL 196.57 SMI010 MARILYN SMITH 101 202 641 000 MILEAGE/CPRS CONE 116.40 T185 143 SM1010 14ARILYN SMITH 101 202 637 000 TRAVEL/CPRS CONF 188.06 T185 144 VENDOR TOTAL 306.46 SMO010 DONNALDA SMOLENS 101 202 609 592 FED 98 INSTRUCTOR/ART 100.00 T185 145 VENDOR TOTAL 100.00 S00010 THE SOCO GROUP INC 501 501 619 646 950747 DIESEL FUEL MAINT 46.90 T187 139 VENDOR TOTAL 46.90 SOC100 SOCIETY CALIF ARCHAEOLOGY 101 402 649 000 MEMBERSHIP 45.00 T185 146 ACCOUNTS PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/9P CITY OF LA QUINTA PAGE 13 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH THAN NUMBER DESCRIPTION AMOUNT NO. VENDOR TOTAL 45.00 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803009 COMPUTER SUPPORT 137.50 T185 149 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803013 COMPUTER SUPPORT 220.00 T185 150 SOU007 SOUTHWEST NETWORKS 101 153 703 811 9803013 COMPUTER SUPPLIES 9.48 T185 151 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803018 COMPUTER SUPPORT 55.00 T185 152 SOU007 SOUTHWEST NETWORKS 101 153 703 811 9803029 COMPUTER SUPPORT 371.25 T185 153 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803042 COMPUTER SUPPORT 220.00 T185 154 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803047 COMPUTER SUPPORT 591.25 T185 155 S00007 SOUTHWEST NETWORKS 101 153 703 811 9803047 COMPUTER SUPPLIES 388.65 T185 156 SOU007 SOUTHWEST NETWORKS 101 153 609 601 9803048 COMPUTER SUPPORT 660.00 T187 143 S00007 SOUTHWEST NETWORKS 101 153 703 811 9803048 COMPUTER SUPPORT 149.04 T187 144 VENDOR TOTAL 2802.17 SOU010 SOUTHERN CALIF GAS CO 245 903 629 000 01852563 GAS SERVICE 2.79 T185 157 SOU010 SOUTHERN CALIF GAS CO 101 202 629 000 09422738 GAS SERVICE 187.63 T185 158 VENDOR TOTAL 190.42 SOU100 SOUTHLAND GEOTECHNICL INC 401 641 609 000 971433 TECH SVC/MATERIAL TESTIN 1333.75 T187 141 SOU100 SOUTHLAND GEOTECHNICL INC 401 641 609 000 971434 TECH SVC/MATERIAL TESTIN 579.00 T187 142 VENDOR TOTAL 1912.75 SPE010 STEVE SPEER 101 452 637 000 MEETING/COUNTY TRANSP 15.04 T187 145 VENDOR TOTAL 15.04 SPRO10 SPRINT 101 153 635 000 18330139 PHONE SVC 36.66 T187 146 VENDOR TOTAL 36.66 STA020 STANDARD REGISTER 101 151 647 000 3248787 CHECK STOCK 235.38 T187 147 STA020 STANDARD REGISTER 101 153 609 601 80309000 MAINT CONT/CHECK WRITER 1164.00 T187 148 STA020 STANDARD REGISTER 101 151 647 000 3088039 1099 FORMS 43.27 T187 149 VENDOR TOTAL 1442.65 STA050 STAPLES 101 451 701 000 80313087 SUPPLIES 73.78 T187 150 STA050 STAPLES 101 202 701 000 80302041 SUPPLIES 75.41 T187 151 STA050 STAPLES 101 101 855 000 80313027 PRINTER 355.55 T187 205 VENDOR TOTAL 504.74 STE008 FRANK STEIN NOVELTY CO 101 253 661 000 13772 EVENT SUPPLIES 143.36 T187 152 VENDOR TOTAL 143.36 STE020 STEVE'S OFFICE SUPPLY 101 153 703 802 1387571A PAPER 114.00 T187 153 STE020 STEVE'S OFFICE SUPPLY 101 202 701 000 1384593 SUPPLIES 79.02 T187 154 STE020 STEVE'S OFFICE SUPPLY 101 202 701 000 1382993 SUPPLIES 117.45 T187 155 STF,020 STEVE'S OFFICE SUPPLY 101 202 701 000 1385052 SUPPLIES 23.86 T187 156 STE020 STEVE'S OFFICE SUPPLY 101 351 701 000 1389498 SUPPLIES 4.96 T187 157 STE020 STEVE'S OFFICE SUPPLY 101 351 701 000 1389480 SUPPLIES 20.33 T187 158 STE020 STEVE'S OFFICE SUPPLY 101 153 703 802 1387571 SUPPLIES 213.99 T187 159 STE020 STEVE'S OFFICE SUPPLY 101 201 701 000 1387571 SUPPLIES 60.62 T187 160 ACCOUNTS PAYABLE - AP5003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER STE020 STEVE'S OFFICE SUPPLY 101 351 701 000 STE020 STEVE'S OFFICE SUPPLY 101 351 701 000 STE020 STEVE'S OFFICE SUPPLY 101 351 701 000 SUN075 SUNLINE TRANSIT AGENCY 101 000 203 219 SUS010 SUSKI & SAKEMI 501 501 619 649 SUS010 SUSKI & SAKEMI 501 501 619 649 SUS010 SUSKI & SAKEMI 501 501 619 649 TAR050 TARGET/DAYTON'S 101 202 701 000 TAY010 STEVE TAYLOR & SON 101 352 609 615 THI050 THINK EARTH 101 101 663 000 TKD01.0 T.K.D. ASSOCIATES INC 101 452 603 000 TOP010 TOPS'N BARRICADES INC 101 453 703 849 TOP010 TOPS'N BARRICADES INC 101 453 703 833 TOP010 TOPS'N BARRICADES INC 101 453 703 833 TRU010 TRULY NOLEN INC 101 202 609 637 TRU010 TRULY NOLEN INC 101 251 609 637 TRU010 TRULY NOLEN INC 101 202 609 637 TRU010 TRULY NOLEN INC 101 357 609 637 VAL010 VALLEY OFFICE EQUIP INC 101 351 701 000 VID050 VIDEO DEPOT 101 202 703 000 VIK010 VIK.ING OFFICE PRODUCTS 101 102 701 000 V00050 CHRIS A VOGT 101 451 637 000 WAL010 WAL MART STORES INC 101 352 703 823 TO -BE PAID INVOICES 09:30AM 04/01/96 PAGE 14 INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. 1385701- SUPPLIES -RETURNED -6.76 T187 161 1385969 SUPPLIES -RETURNED 6.76 T187 162 1386913 SUPPLIES 37.77 T187 163 VENDOR TOTAL 672.00 11807 BUS PASSES/FED 98 293.00 T187 164 VENDOR TOTAL 293.00 20936 EQUIP REPAIR PARTS 156.20 T187 165 21092 EQUIP REPAIR PARTS 146.66 T187 166 21289 EQUIP REPAIR PARTS 344.46 T187 167 VENDOR TOTAL 647.32 10196050 FILE CABINET 19.38 T187 168 VENDOR TOTAL 19.38 N97162 CLN LOT/774-292-032 250.00 T187 169 VENDOR TOTAL 250.00 TRUMAN/ADAMS SCHOOL PROG 1000.00 T187 170 VENDOR TOTAL 1000.00 9908 RETENTION BASIN PLAN CHE 632.50 T187 171 VENDOR TOTAL 632.50 919578 SUPPLIES 226.28 T187 172 919556 SUPPLIES 68.15 T187 173 919099 SUPPLIES 295.77 T187 174 VENDOR TOTAL 590.20 03880630 PEST CONTROL SVC 70.00 T187 179 03822561 PEST CONTROL SVC 60.00 T187 180 P0638063 PEST CONTROL SVC 70.00 T187 181 03878654 PEST CONTROL SVC 82.00 T187 182 VENDOR TOTAL 282.00 197574 COPIER MAINT 66.00 T187 183 VENDOR TOTAL 66.00 VIDEOS FOR MOVIE EVENT 11.25 T187 184 VENDOR TOTAL 11.25 494243 SUPPLIES 196.46 T187 185 VENDOR TOTAL 196.46 TRAVEL/LCC 121.45 T187 186 VENDOR TOTAL 121.45 7040809 CODE COMP FILM 676.89 T187 187 ACCOUNTS PAYABLE - AP5003 TO -BE PAID INVOICES 09:30AM 04/01/9N CITY OF LA QUINTA PAGE 15 VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. WAL010 WAL MART STORES INC 101 354 703 815 7040498 SUPPLIES 53.79 T187 188 WAL010 WAL MART STORES INC 101 352 703 823 7040498 SUPPLIES 91.52 T187 189 WAL010 WAL MART STORES INC 101 251 703 000 7040794 SUPPLIES 28.40 T187 190 WAL010 WAL MART STORES INC 101 202 703 000 7040979 PHOTOS 7.18 T187 191 WAL010 WAL MART STORES INC 501 501 619 649 7040806 WIPER BLADES 7.41 T187 192 WAL010 WAL MART STORES INC 101 354 703 815 7040819 CELL PHONE BATTERIES 75.34 T187 193 WAL010 WAL MART STORES INC 101 202 701 000 7040797 FILE CABINET CADDY 13.96 T187 194 WAL010 WAL MART STORES INC 101 101 701 000 7040804 SUPPLIES 85.76 T187 195 WAL010 WAL MART STORES INC 101 357 621 000 7040495 SUPPLIES 34.35 T187 196 WAL010 WAL MART STORES INC 101 101 703 000 7003303 SUPPLIES 42.92 T187 197 WAL010 WAL MART STORES INC 101 253 661 000 7003474 SUPPLIES 222.90 T187 198 WAL010 WAL MART STORES INC 101 354 703 815 7040824 SUPPLIES 9.62 T187 199 VENDOR TOTAL 1350.04 XER010 XEROX CORPORATION 101 153 609 604 06132934 COPIER MAINT 6.03 T187 201 XER010 Y.EROX CORPORATION 101 153 609 604 58006965 COPIER LEASE 1214.01 T187 202 VENDOR TOTAL 1220.04 ZAI050 ZAINO TENNIS COURTS INC 401 647 609 553 FINAL PAYMENT/RETENTION/ 16083.20 T187 203 VENDOR TOTAL 16083.20 ZUR050 ZUMAR INDUSTRIES ING 101 352 703 815 7655 SUPPLIES 810.71 T187 204 VENDOR TOTAL 810.71 TO -BE PAID - PAYMENT TOTAL 529,714.34 ACCGUNTS PAYABLE - AP5005 CHECK REGISTER 5:02PM 03/31/98 CITY OF LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32513 03/31/98 CAL050 STATE OF CALIFORNIA 70.00 32514 03/31/98 CAL054 STATE OF CALIF BOARD OF 276.86 32515 03/31/98 CLE010 CLERK OF SUPERIOR COURT 300.00 32516 03/31/98 LAQ050 LA QUINTA CITY EMPLOYEES 75.00 32517 03/31/98 RIV040 RIV CNTY DISTRICT ATTORNY 361.50 32518 03/31/98 RIV070 RIVERSIDE COUNTY EMPLOYEE 7588.00 32519 03/31/98 UNIO05 UNITED WAY OF THE DESERT 155.50 CHECK TOTAL 8,826.86 27 r ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 12:03PD1 03/25/98 CITY OF LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32511 ** AP CHECK RUN VOID ** 32512 03/25/98 HON050 DAWN C HONEYWELL 15945.00 CHECK TOTAL 15,945.00 L�U�9 ACC OIIN^PS PAYABLE: - AP5003 TO -BE PAID INVOICES 11:53Ab1 03/1.�/`an -IT', OF LA QUINTA PAGE I VENDOR ACCOUNT NUMBER INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. 111)N050 DAWN C HOTIFYWELL 101 101 601 000 FEB 98 LGL/GENERAL 1210.75 T184 '17 1f0N11S0 [LAWN 1' HONEYWELL 405 902 601 000 FEB 98 LGL/GENERAL 665.91 T184 78 HON050 DAWN C HONEYWELL 406 905 601 000 FEB 98 LGL/GENERAL 157.40 T184 79 HI)N050 DAWN C HONEYWELL 245 903 601 000 FEB 98 LGL/GENERAL 85.24 T184 80 IION050 DAWN C HONEYWELL 244 913 601 000 FEB 98 LGL/GENERAL 181.13 T184 81 HON050 DAWN C HONEYWELL 246 906 601 000 FEB 98 LGL/GENERAL 49.64 T184 82 HON050 DAWN ' HONEYWELL 247 916 601 000 FEB 98 LGL/GENERAL 71.43 T184 83 HON050 DAWN C HONEYWELL 101 101 601 000 FEB 98 LGL/RETAINER 5000.00 T184 84 HON050 DAWN C HONEYWELL 405 902 601 000 FEB 98 LGL/RETAINER 2750.00 T184 85 HON050 DAWN C HONEYWELL 406 905 601 000 FEB 98 LGL/RETAINER 650.00 T184 86 11ON050 DAWN C HONEYWELL 245 903 601 000 FEB 98 LGL/RETAINER 352.00 T184 87 HON050 DAWN C HONEYWELL 244 913 601 000 FEB 98 LGL/RETAINER 748.00 T184 88 HON050 DAWN C HONEYWELL 246 906 601 000 FEB 98 LGL/RETAINER 205.00 T184 69 11ON050 DAWN C HONEYWELL 247 916 601 000 FEB 98 LGL/RETAINER 295.00 T184 90 HON050 DAWN C HONEYWELL 101. 101 601 000 FEB 98 LGL/GEN HOME DEPO 189.00 T184 91 HON050 DAWN C HONEYWELL 101 101 601 523 FEB 98 LGL/WESTERN/EAGLE 40.50 T184 92 HON050 DAWN C HONEYWELL 101 101 601 000 FEB 98 LGL/CLARKE DEV 486.00 T184 93 19ON050 DAWN C HONEYWELL 245 903 601 000 FEB 98 LGL/WILLIAMS 21.60 T184 94 HON050 DAWN C HONEYWELL 244 913 601 000 FEB 98 LGL/WILLIAMS 45.90 T184 95 HON050 DAWN C HONEYWELL 245 903 601 000 FEB 98 LGL/LOW MOD HOUSING 434.16 T184 96 HON050 DAWN C HONEYWELI, 244 913 601 000 FEB 98 LGL/LOW MOD HOUSING 922.59 T184 97 HON050 DAWN C HONEYWELL 246 906 601 000 FEB 98 LGL/LOW MOD HOUSING 556.27 T184 98 11ON050 DAWN C HONEYWELL 247 916 601 000 FEB 98 LGL/LOW MOD HOUSING 800.4R T184 99 11ON050 DAWN C HONEYWELL 101 101 601 523 FEB 98 LGL/TRADITIONS 27.00 T184 100 VENDOR TOTAL 15945.00 TO -BE PAID - PAYMENT TOTAL 15,945.00 ,i A ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 1:14PM 03/20/98 CITY OF LA OUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32507 03/20/98 CMT055 CMTA 1998 CONFERENCE 605.00 32508 03/20/98 HOF050 DAVE HOFFMAN 504.00 32509 03/20/98 ORA100 ORANGE COUNTY PERFORMING 645.75 32510 03/20/98 UNUO50 UNUM LIFE INS 1328.80 CHECK TOTAL 3,083.55 A-CCOIINT� PPYART,R - AP5003 CLPY OF LA OUINTA VENDOR ACCOUNT NUMBER CMT055 CMTA 1998 CONFERENCE 101 151 637 000 HOF050 DAVE HOFFMAN 101 202 609 592 ORA100 ORANGE COUNTY PERFORMING 101 253 703 000 UNU050 UNUM LIFE INS 101 000 239 000 TO -BE PAID INVOICES 11:37At4 03/20/98 PACE 1 INV. INVOICE PAYMENT BATCH TRAM NUMBER DESCRIPTION AMOUNT NO. CMTA CONE 605.00 T183 3 VENDOR TOTAL 605.00 INSTRUCTOR/SPANISH 504.00 T183 2 VENDOR TOTAL 504.00 THEATRE TICKETS/CHICAGO 645.75 T183 1 VENDOR TOTAL 645.75 03896400 STD/LTD INS MAR 98 1328.80 T183 1. VENDOR TOTAL 1328.80 TO -BE PAID - PAYMENT TOTAL 3,083.59 1 73 ACCOUNTS PAYABLE - AP40041 CITY OF LA QUINTA ACCOUNT NUMBER CHECK AMOUNT NUMBER 101 000 201 000 0 -1754.75 10i 151 637 000 0 605.00 101 202 609 592 0 504.00 101 253 703 000 0 645.75 FUND TOTAL 0.00 MANUAL CHECKS 0.00 MACHINE CHECKS 1754.75 FINAL TOTAL 0.00 MANUAL CHECKS 0.00 MACHINE CHECKS 1754.75 GL DISTRIBUTION REPORT AP032098 17.27AM 03:::0/9C+ BY ACCOUNT PAGE: 1 VENDOR VENDOR NAME INVOICE DESCRIPTION -� C� `( 1�• NUMBER AP OFFSET ENTRY CMT055 CMTA 1998 CONFERENCE CMTA CONE HOF050 DAVE HOFFMAN INSTRUCTOR/SPANISH ORA100 ORANGE COUNTY PERFORMING THEATRE TICKETS/CHICAGO ITN14ATCIIED ACCT TTL 0.00 UNMATCHED TOTALS ARE NOT APPLIED TO THE GL ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 2:10PM 03/19/98 CITY OF' LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32504 03/19/98 BLA100 H ANDRE BLANCHE 1777.87 32505 03/19/98 JAG030 SNAKE JAGGER 754.25 32506 03/19/98 MUG050 DEXTER MUGFORD 969.75 CHECK TOTAL 3,501.87 GJu0 6 ; 11AYAPLi - 71['S110 i TO -BE PAID INVOICES, 1 _` CPM cl, "19 PAGE I C LT S' OP LA qU 1n1'PA. V1:;SDOR ACCOUNT NUMBER INV, INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. T11�11f10 II :ANUR}; 11LANCIIR 101 101 703 899 CIVIC CENTER ART PURCHA[< 1777.P�7 T183 . VENDOR TOTAL 1777.87 JAr;030 ';NAYS JA(_GP:R 101 101 703 899 CIVIC CENTER ART PURCHAS 754.75 T1,83 1 VENDOR TOTAL 754.25 MUG050 DEXTER MUGFORD 101 101 703 899 CIVIC CENTER ART PURCHAS 969.75 T183 3 VENDOR TOTAL 969.75 TO -BE PAID - PAYMENT TOTAI, 3,501.87 ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 3:33PM 03/18/9S CITY OF LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32489 03/18/98 AUT050 AUTOMOBILE CLUB OF 570.34 32490 03/18/98 BAS050 BASKIN & ROBBINS 70.95 32491 03/18/98 BOU050 FRED BOUMA 200.00 32492 03/18/98 BUI040 BUILDING INDUSTRY ASSOC 29.00 32493 03/18/98 BYRO10 RIV CO SHERIFF 140.79 32494 03/18/98 CAL050 STATE OF CALIFORNIA 70.00 32495 03/18/98 CAL054 STATE OF CALIF BOARD OF 276.86 32496 03/18/98 CLE010 CLERK OF SUPERIOR COURT 300.00 32497 03/18/98 DES014 DESERT CONTRACTORS ASSOC 29.00 32498 03/18/98 DII050 CHRISTINE DIIORIO 105.00 32499 03/18/98 LAQ050 LA QUINTA CITY EMPLOYEES 75.00 32500 03/18/98 RIV040 RIV CNTY DISTRICT ATTORNY 361.50 32501 03/18/98 RIV070 RIVERSIDE COUNTY EMPLOYEE 7588.00 32502 03/18/98 UNIO05 UNITED WAY OF THE DESERT 155.50 32503 03/18/98 WIL100 WILSON, PESOTA & PICHARDO 22.10 CHECK TOTAL 9,994.04 30 ACCOUNTS PAYABLE -- AP5003 ('IT,' OF LA QUINTA VENDOR ACCOUNT NUMBER AUT050 AUTOMOBILE CLUB OF 101 401 637 000 BAS050 BASKIN & ROBDINS 101 253 661 000 BOU050 FRED BOUMA 101 000 249 000 BUI040 BUILDING INDUSTRY ASSOC 101 101 637 000 BYRO10 RIV CO :ITTERIFF 101 000 221 000 CA1,050 STATE OF CALIFORNIA 101 000 221 000 CAI.054 ,',TATF. OF CALIF BOARD OF 101 000 221 000 CLR010 CLi?RI: OP SUPERIOR COURT 101 000 221 000 DES01.4 DESERT CONTRACTORS ASSOC 101 101 637 000 D11050 CHRISTINE DIIORIO 101 401 637 000 LAQ050 LA QUINTA CITY EMPLOYEES 101 000 223 000 RIV040 RIV CNTY DISTRICT ATTORNY 101 000 221 000 RIV070 RIVERSIDE COUNTY EMPLOYEE 101 000 240 000 UNIO05 UNITED WAY OF THE DESERT 101 000 225 000 W1L100 WILSON, PESOTA & PICHARDO 101 000 229 000 TO -BE PAID INVOICES 3:IOPM 03/Ikl/?k PAGE I INV. INVOICE PAYMENT BATCH TRAN NUMBER DESCRIPTION AMOUNT NO. TRAVEL/APA CONF 570.34 T182 , VENDOR TOTAL 570.34 TINY TOTS OLYMPICS TREAT 70.95 T182 4 VENDOR TOTAL 70.95 REFUND VOLLEYBALL TEAM F 200.00 T182 6 VENDOR TOTAL 200.00 GENERAL MEMBERSHIP MEETI 29.00 T182 3 VENDOR TOTAL 29.00 P/R Distr.-GARNISH-RIVCO 140.79 T999 8 VENDOR TOTAL 140.79 P/R Distr.-GARNISH - ST 70.00 T999 9 VENDOR TOTAL 70.00 P/R Distr.-GARNISH-ST BR 276.86 T999 10 VENDOR TOTAL 276.86 P/R Distr.-GARNISH - AZ 300.00 T999 11 VENDOR TOTAL 300.00 MONTHLY MEMBERSHIP MEETI 29.00 T182 2 VENDOR TOTAL 2.9.00 AEP WORKSHOP 105.00 T182 1 VENDOR TOTAL 105.00 P/R Distr.-L.Q.C.E.A. DU 75.00 T999 12 VENDOR TOTAL 75.00 P/R Distr.-GARNISH-RIV D 361.50 T999 13 VENDOR TOTAL 361.50 P/R Distr.-CR UNION 7588.00 T999 14 VENDOR TOTAL 75118.00 P/R Distr.-UNITED WAY 155.50 T999 15 VENDOR TOTAL 155.50 8048 WORKERS COMP DEFENSE ATT 22.10 T182 5 VENDOR TOTAL 22.10 TO -BE PAID - PAYMENT TOTAL 9,994.04 31. ACCOUNTS PAYABLE - AP5005 CHECK REGISTER 11:44AM 03/12/96 CITY OP' LA QUINTA PAGE 1 CHECK CHECK VENDOR PAYMENT NUMBER DATE NO. NAME AMOUNT ***NO CHECKS WERE USED FOR PRINT ALIGNMENT.*** 32483 03/12/98 &00563 RICHARD ACKLEY 40.00 32484 03/12/98 &00564 DAVID ROSS MILLER 500.00 32485 03/12/98 GUZO10 HECTOR GUZMAN 319.04 32486 03/12/98 PET005 CASH/PETTY CASH 100.00 32487 03/12/98 PET010 PETTY CASH/CITY LA QUINTA 441.40 32488 03/12/98 RAN100 CITY OF RANCHO MIRAGE 90.00 CHECK TOTAL 1,490.44 GIj;;j 32 ACCOUNTS PAYABLE - A115003 CITY OF LA QUINTA VENDOR ACCOUNT NUMBER &00563 RICHARD ACKLEY 101 000 438 000 &00564 DAVID FOSS MILLER 101 000 439 318 &00564 DAVID RO:,S MILLER 101 000 439 318 GUZ010 HECTOR GUZMAN 101 452 641 000 PET005 CASH/PETTY CASH 101 000 249 000 PET010 PETTY CASH/CITY LA QUINTA 101 102 637 000 PET010 PETTY CASH/CITY LA QUINTA 101 201 703 000 PET010 PETTY CASH/CITY LA QUINTA 101 101 637 000 PET010 PETTY CASH/CITY LA QUINTA 101 253 661 000 PET010 PETTY CASH/CITY LA QUINTA 101 151 637 000 PETO10 PETTY CASH/CITY LA QUINTA 101 354 651 000 RAN100 CITY OF RANCHO MIRAGE 101 101 637 000 RAN100 CITY OF RANCHO MIRAGE 101 102 637 000 TO -BE PAID INVOICES 11:32AM 03/12/98 PAGE 1 INV. INVOICE PAYMENT BATCH THAN NUMBER DESCRIPTION AMOUNT NO. REFUND COMPUTER CLASS 40.00 T181 1 VENDOR TOTAL 40.00 9802.006 REFUND BLDG PERMIT OVERP 250.00 T181 11 9802.005 REFUND BLDG PERMIT OVERP 250.00 T181 12 VENDOR TOTAL 500.00 MILEAGE 319.04 T181 13 VENDOR TOTAL 319.04 CHANGE/DISASTER FAIR/EQ 100.00 T181 2 VENDOR TOTAL 100.00 PETTY CASH REIMB 16.00 T181 3 PETTY CASH REIMB 1.00 T181 4 PETTY CASH REIMB 347.10 T181 5 PETTY CASH REIMB 13.90 T181 6 PETTY CASH REIMB 56.40 T181 7 PETTY CASH REIMB 5.00 T181 8 VENDOR TOTAL 441.40 LCC GENERAL MEETING 60.00 T181 9 LCC GENERAL MEETING 30.00 T181 10 VENDOR TOTAL 90.00 TO -BE PAID - PAYMENT TOTAL 1,490.44 33 G;Jt�I kj A/P - AP6002 CHECKS TO BE VOIDED 3:33PM 03/13/95 CITY OF LA QUINTA PAGE 1 CHECK INVOICE VENDOR VENDOR INVOICE NUMBER DATE AMT. PAID NUMBER NAME DESCRIPTION 31935 01/12/98 678.00 PSI050 PSI ENVIRON GEOTECH CONS SOIL/MATERIAL TESTING TOTAL VOIDED 678.00 j 34 A/P - AP6002 CHECKS TO BE VOIDED 3:17PM 03/13/yt, CITY OF LA QUINTA PAGE 1 CHECK INVOICE VENDOR VENDOR INVOICE NUMBER DATE AMT. PAID NUMBER NAME DESCRIPTION 31148 11/04/97 500.00 LAQ073 LA QUINTA RESORT & CLUB VSLUNTEER RECOGNITION LUNCHEON TOTAL VOIDED 500.00 .15 A/}' - A116002 CHECKS TO BE VOIDED CITY OF LA QUINTA CHECK INVOICE VENDOR VENDOR NUMBER DATE AMT. PAID NUMBER NAME 31906 01/26/98 50.00 ICM040 ICMA TOTAL VOIDED 50.00 3:26PM 03/13/9b PAGE 1 INVOICE DESCRIPTION ICMA DUES/M WEISS Ti-tit 4 4 Q" COUNCIL/RDA MEETING DATE: April 7, 1998 ITEM TITLE: Approval of a Settlement Agreement and Mutual Release by and between the La Quinta Redevelopment Agency and Washington/Adams Partnership for the completion of improvements stipulated in the Owner Participation Agreement between the Agency and Washington/Adams G.P., dated March 5, 1991, for the One Eleven La Quinta Shopping Center RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: 2. STUDY SESSION: PUBLIC HEARING: Approve the attached Settlement Agreement and authorize the Executive Director to execute the necessary documents. FISCAL IMPLICATIONS: The Agreement provides that the Washington/Adams Partnership ("Partnership") shall reimburse the Agency for $304,456.37 of costs related to certain Agency -funded improvements to Highway 111. These funds would be deposited in the Project No. 2 Redevelopment Fund. BACKGROUND AND OVERVIEW: In March of 1991 the La Quinta Redevelopment Agency entered into an Owner Participation Agreement ("OPA") to facilitate the development of an approximately 600,000 square foot regional commercial center. Through the OPA, the Agency provided $3.73 million in redevelopment assistance to underwrite some of the costs associated with improving Washington Street, Highway 111, Adams Street, the Whitewater Channel and a CVWD well site. Assistance was provided in two stages related to the improvements needed to accommodate development; the first stage funded $1,973.180 in improvements to Washington Street, the Whitewater Channel and Adams Street. The second stage funded $1,756,092 of the remaining improvements to Highway 111 and the CVWD well site. CCJH.006 The stage one improvements were completed in 1993. However, the local economy contracted and the Partnership was not able to initiate the development that required the stage 2 improvements. Since these improvements primarily involved the Highway 111 streetscape and the Agency had reserved tax allocation bond proceeds to underwrite these improvements, the Agency elected to work with the Participant and construct the stage 2 improvements prior to the construction of the corresponding stage 2 retail development. The OPA provided that the Participant would forward fund all improvements and subsequently seek reimbursement from the Agency. This occurred for the stage 1 improvements. For the stage 2 improvements, the Participant funded approximately $600,000 of the total costs; the Agency funded the remaining costs per the budget enumerated in the OPA. This occurred because the Agency agreed to fund these improvements (per the OPA) and the State required that the City of La Quinta, not the Participant, manage the Highway 111 improvement contract. The stage 2 improvements cost $662,110.48 more than the OPA allowed. The Participant funded $357,645 of this amount and the Agency funded the difference. The OPA further provides that the Participant will reimburse the Agency for cost overruns. The Settlement Agreement provides for the payment, to the Agency, of $304,456.37 to fund the Participants share of Agency funded cost overruns. Since construction of these improvements completes the Agency's obligations per the OPA, the Settlement Agreement also concluded both parties' obligations per the OPA. FINDINGS AND ALTERNATIVES: The options available to the City Council are as follows: 1. Approve the Settlement Agreement as proposed; 2. Deny the Settlement Agreement and provide staff with further direction. -ry He an mmuni y Development Director CCJH.M6 SETTLEMENT AGREEMENT AND MUTUAL RELEASE THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") is made and entered into as of this day of , 1998, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency") and WASHINGTON/ADAMS, G.P., a California limited partnership (the "Participant"). DEFINITIONS RECITALS A. Whereas, the Agency is a redevelopment agency organized and existing under the California Community Redevelopment Law (Heath and Safety Code Section 33000 et seq.). The Agency exercises redevelopment functions pursuant to the Redevelopment Plan for Project Area No. 2; and B. Whereas, the Agency and the Participant have entered into that Owner Participation Agreement dated as of March 5, 1991 (the "Agreement"). The Agreement is on file with the Agency as a public record and is incorporated herein by reference. The Agreement provides for the development of a retail shopping center on the Site (as defined in the Agreement), and requires the Participant to construct certain onsite and offsite public improvements related to such retail shopping center and for the Agency to reimburse the Participant for a certain amount of the cost of offsite public improvements; and C. Whereas, due to changed circumstances beyond the control of either party, the Participant has been unable to perform the development of the Site according to the time schedule and the uses originally performed; and D. Whereas, the Agency offered to complete a portion of the outstanding offsite improvements that were originally an obligation of the Participant in return for reimbursement of certain costs; and E. Whereas, those improvements have been completed and both parties seek to specifically find that with payment of the reimbursement set forth herein that performance under the Agreement have been adequately satisfied by both parties. NOW, THEREFORE, in consideration of the above recitals and the covenants hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Participant agrees to pay to Agency the amount of Three Hundred and Four Thousand Four Hundred Sixty-five Dollars and Thirty-seven cents ($304,465.37) in final payment for the Agency completion of offsite improvements. 2. Mutual Releases. In consideration of terms and agreements contained herein, all parties to this Agreement hereby release each other, their divisions and subdivisions, their employees, officers (including, but not limited to, the Agency Board), agents, officials, successors and attorneys, and any heirs, executors, administrators, successors or assigns thereof, from any and all claims, demands, actions or causes of action, obligations, liabilities, indebtedness, breaches of contract, breaches of duty, claims for equitable relief, suits, liens, losses, costs or expenses, of any nature whatsoever, known or unknown, fixed or contingent, which are related to or which arise under or in connection with, any claim arising out of, based upon or relating to the performance of the Agreement. Further, with the exception of any actions brought to enforce the terms of this Agreement, each shall not, nor shall any individual associated with those parties, represent, participate or advise any individual or entity with respect to initiating any challenge, claim or lawsuit related to or arising out of the Agreement. 3. Waiver of Civil Code Section 1542. By releasing and forever discharging claims both known and unknown which are related to, or which arise under, or in connection with, the Agreement the parties to this Agreement expressly WAIVE any rights under California Civil Code Section 1542, which provides: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. By initialing below, each party acknowledges that the party has read the above waiver, understands its effect, has been advised by counsel regarding its effect, and agrees to it with the advice of counsel. INITIALS LA QUINTA REDEVELOPMENT AGENCY WASHINGTON/ADAMS, L.P. 4. Representations and Warranties by Parties. Each party to this Agreement represents and warrants to each of the other parties hereto that: (a) Such party has the power and capacity to enter into this Agreement; (b) Such party lacks actual knowledge of any agreement, obligation or law that would be violated by such party's entry into this Agreement; 2 U '1.1 01 �- � (c) Such party lacks actual knowledge of any agreement, obligation, pending litigation or asserted claim that would materially affect such party's obligation to enter into this Agreement or to perform its obligations under this Agreement; (d) Such party has been represented by counsel of his/its own choosing in the negotiation and drafting of this Agreement; and (e) Such party acknowledges and agrees that he/it entered into this Agreement based upon his/its own investigation, knowledge and voluntary assumption of all of the risks associated with the transactions contemplated hereby. 5. Representations and Warranties by Signatories. Each signatory to this Agreement represents and warrants to each of the parties hereto that: (a) The signatory has actual authority to execute this Agreement on behalf of the party for which the signatory has signed; (b) The signatory has carefully read this Agreement in its entirety, and (c) The signatory is duly authorized to execute and deliver this Agreement on behalf of said party for whom the signatory signed. 6. Conditions to Effectiveness. This Agreement, even if signed, shall not be effective unless and until all of the following actions are taken: (a) Approval of this Agreement by the Board of the Agency on behalf of the Agency; and (b) Execution of this Agreement by all parties and the initialing by all parties of the waiver of rights under Civil Code Section 1542 contained in Section 18 above. 7. Applicable Law. The parties hereby agree that this Agreement is made, executed and entered into, and is intended to be performed within, the State of California, and is to be governed by the laws of the State of California. 8. Additional Documents and Instruments. Each of the parties hereto agrees to execute and deliver to each of the other parties hereto all additional documents, instruments and agreements required, and to take such additional actions as are required to implement the terms and conditions of this Agreement. 9. Inadmissibility of Agreement. In the event this Agreement falls to become effective or ceases to be effective for any reason, then, notwithstanding anything to the contrary in Evidence Code Section II 52 and 1600, neither this Agreement nor any prior drafts or negotiations with respect to this Agreement shall be admissible as evidence in any proceeding or litigation for any purpose, except to prove the terms of this Agreement. G000 1 1 10. Attorneys' Fees. If any party to this Agreement is required to initiate or defend, or is made a parry to, any action or proceeding in any way connected with this Agreement, that party shall, upon prevailing in the final judgment in such action or proceeding, be entitled to reasonable attorneys' fees in addition to any other relief which may be granted. Attorneys' fees shalt include reasonable costs for investigating such action, conducting discovery, expert witnesses, appeals and all other fees and costs which are incurred in such Litigation. IL Integration. This Agreement contains the entire agreement between the parties concerning the subject matter herein, and supersedes, terminates, cancels and replaces any and all previous negotiations and agreements between the parties, whether oral or written, concerns the Litigation and redevelopment issues in the Project Area. 12. Amendment. This Agreement may be amended at any time by an instrument in writing with the consent of the parties to this Agreement. 13. Modification and Termination. If, after this Agreement is executed, the State of California or the Federal Government enacts laws or policies in conflict with all or any portion of this Agreement, the parties may mutually agree to excuse performance of all or any portion of this Agreement by La Quinta. 14. Severability. In the event any section or portion of this Agreement shall be held, found or determined to be void, unenforceable or invalid for any reason whatsoever, the remaining provisions shall remain in effect if to do so would not deprive any party to this Agreement of the benefit of the Agreement. The parties hereto shall take further actions as may be reasonably necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Agreement. 15. Default. Except to the extent required by law or otherwise permitted by this Agreement, failure or delay by any party to perform any obligation imposed by this Agreement constitutes a default under this Agreement. Prior to a failure or delay being deemed a default hereunder, or the period to cure, correct or remedy being deemed to have commenced, the nondefaulting party shall served the defaulting party with notice of default. Upon receipt of notice of default, the party who so fails or delays to perform must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy within thirty (30) days. For such defaults or delays that cannot be cured, corrected or remedied within thirty (30) days, the defaulting or delaying party shall commence to cure, correct or remedy the failure or delay within thirty (30) days and shall diligently prosecute such cure, correction or remedy to completion within a reasonable period of time after commencement. If the failure or delay is not cured, corrected or remedied within the required period of time, the defaulting party shall be liable for any damages caused by such default and the nondefaulting party may thereafter commence an action for damages with respect to such default or for specific performance of this Agreement. 4 16. Notices. All notices required by this Agreement or by law shall be in writing and delivered by personal delivery, by United States mail, prepaid, certified, return receipt requested, or by a reputable document delivery service that provides a receipt showing date and time of delivery. Notices personally delivered or delivered by document delivery shall be effective upon receipt. Notices sent by United States mail shall be effective on the second business day following deposit. Notices shall be addressed to: If to the Agency: City of La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, Ca 92253 If to the Participant: Michael J. Shovlin 71-084 Tamarisk Lane Rancho Mirage, CA 92270 17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument. Dated: , 1998 LA QUINTA REDEVELOPMENT AGENCY THOMAS P. GENOVESE, Executive Director WASHINGTON/ADAMS, G.P. WASHINGTON PLAZA ASSOCIATES Dated: 11998 By: MICHAEL J. SHOVLIN Its: MANAGING GENERAL PARTNER