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RDA Resolution 1991-12= RESOLUTION NO. RA 91-12 RESOLUTION OF THE BOARD OF DIRECTORS OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS $8,700,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT 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" 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 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 1989 Bonds and the Series 1990 Bonds for such purpose; and WHEREAS, the corporate purposes of the Agency will be accomplished by issuing at this time tax allocation bonds in a principal amount of Eight Million Seven Hundred Thousand Dollars *$8,700,000) pursuant to this Resolution to be designated La Quinta Redevelopment Agency, La Quinta Redevelopment Project, Tax Allocation Bonds, Series 1991 the Bonds"); and BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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 bids for the Bonds and has determined that the bid of Rauscher Pierce Refsnes, Inc. the Underwriter'*) is the lowest responsible bid; and WHEREAS, this Board of Directors desires to proceed to issue the Bonds; and 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 $8,700,000 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 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. SECTION 3. The Bonds shall be executed on behalf of the Agency by the manual or facsimile signature of the Chairman and attested with the manual or facsimile signature of the Secretary. The seal of the Agency, or a facsimile thereof, hereby adopted as the seal of the Agency, shall be impressed or imprinted thereon. 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. 10/08/91 6864u/2338/14 2- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 SECTION 5. Security Pacific National Bank, Los Angeles, California, is hereby appointed to act as Fiscal Agent, Registrar and Transfer Agent for the Bonds and the Executive Director of the Agency, or his written designee, is hereby authorized to enter into an agreement with the Fiscal Agent to provide such services to the Agency. SECTION 6. The bid of the Underwriter offering $8,526,000 with the Bonds to bear interest as set forth in the Supplement to Resolution. SECTION 7. The Chairman is authorized to execute a final Official Statement in substantially the form of the Preliminary Official Statement and Supplement 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. SECTION 8. Each and every officer of the Agency is authorized to perform his or her services on behalf of the Agency. The Executive Director, or 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. The Executive Director, or his written designee, is authorized to pay for such Costs of Issuance up to a maximum aggregate amount of $200,000) with Bond proceeds deposited to the Redevelopment Fund 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 10/08/91 6864u/233B/14 3- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 Chairman is unavailable to sign any document authorized for execution herein, the Chairman may designate 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 9th day of October, 1991. LA QUINTA REDEVELOPMENT AGENCY 10/08/91 6864u/2338/14 4- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =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 9th day of October, 1991, and that the same was passed and adopted by the following vote to wit: AYES: Council Members Bohnenberger, Franklin, Rushworth Sniff & Mayor Pena NOES: None ABSENT: None ABSTAIN: None 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. RA 91-12 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: October 9, 1991 Redevelopment Agency SEAL) 10/08/91 6864u/2338/14 5- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =SUPPLEMENT TO RESOLUTION NO. RA 91-12 OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS $8,700,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = SUPPLEMENT TO RESOLUTION NO. RA 91-12 OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS $8,700,000) TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT 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; Redevelopment Fund 16 i) BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 Page 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 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 ii) BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 Page Section 24. Amendments 35 A. Calling Bondowners* Meeting 36 B. Notice of Meeting 36 C. Voting Qualifications 37 D. Issuer-Owned Bonds 37 F. Quorum and Procedure 37 F. Vote Required 37 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 MBIA 44 Exhibit A. Form of Bond) iii) BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = SUPPLEMENT TO RESOLUTION NO. RA 91-12 OF THE LA QUINTA REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF TAX ALLOCATION BONDS OF SAID AGENCY IN A PRINCIPAL AMOUNT OF EIGHT MILLION SEVEN HUNDRED THOUSAND DOLLARS $8,700,000) TO *FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS THE LA QUINTA REDEVELOPMENT PROJECT Section 1. Definitions. As used in this Resolution, the following terms shall have the following meanings, unless the context otherwise requires: a) t?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. BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 c) Bond" or 11Bonds" means the La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Bonds, Series 1991," authorized by this Resolution in a principal amount of Eight Million Seven Hundred Thousand Dollars $8,700,000). d) 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. e) 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, or the City, directly or indirectly, shall not be counted. f) City" means the City of La Quinta, California. g) Code" means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, Dudicial decisions, notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. h) Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including any ruling 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. i) Delivery * means the date the Bonds are issued to the initial purchaser thereof. j) 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. k) Financial Guaranty Insurance Policy" means the municipal bond insurance policy issued by MBIA guaranteeing the payment of the principal of and the interest on the Bonds. 1) 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. 10/08/91 6820u/2338/014 2- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 m) tFiscal Year't means the year beginning July 1st and ending on the next following June 30th. n) 1lndependent Financial Consultant," Independent Engineer," Independent Certified Public Accountantt1 or Independent Redevelopment Consultant1' 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 report* to the Agency. o) Law" means the Community Redevelopment Law of the St*ate 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. p) Maximum Annual Debt Service" means the largest Annual Debt Service for any Bond Year. q) MBIA" means Municipal Bond Investors Assurance Corporation, 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. r) 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. s) 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, 10/08/91 6820u/2338/014 3- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 unless such counsel knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which his opinion may be based, as aforesaid, is erroneous. t) Parity Bonds" means the Series 1989 Bonds, the Series 1990 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. u) 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. v) Rebate Regulations" means the Proposed and Temporary Treasury Regulations issued under Section 148(f) of the Code. w) Record Date" means the fifteenth day of the month preceding any interest payment date. x) Redevelopment Agency" or Agency" means the La Quinta Redevelopment Agency. y) 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. z) Redevelopment Project" means the La Quinta Redevelopment Project. aa) Redevelopment Project Area" means the project area described and defined in the Redevelopment Plan. bb) Regulations" means regulations adopted by the Department of Treasury from time to time. cc) Reserve Requirement" means, so long as the Series 1989 Bonds and the Series 1990 Bonds are outstanding, an amount equal to Maximum Annual Debt Service on the Bonds, as such term is defined in Resolution No. RA 88-14 and Resolution No. RA 90-4, means an amount equal to Maximum Annual Debt Service, but not to exceed 10% 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. 10/08/91 6820u/2338/014 4- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 dd) Resolution" means Resolution No. RA 91-12 ad*adopted by the Agency on October 9, 1991, together with this Supplement to Resolution. All references herein and in any document referring to Resolution No. RA 91-12 shall be deemed for all purposes to refer to said Supplement to Resolution. ee) Resolution No. RA 85-S" 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. ff) 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. gg) 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. hh) 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. ii) 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. jj) Series 1990 Bonds" means the $19,695,000 La Quinta Redevelopment Agency, La Quinta Redevelopment Project Tax Allocation Refunding Bonds, Series 1990. kk) Six-Month Period" means, with respect to a particular issue of Bonds or Parity Bonds, the period of time beginning on he 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). 11) Tax Certificate" means that certain Tax Certificate executed on the Delivery Date by the District with respect to the Certificates 10/08/91 6820u/2338/014 5- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 mm) Tax Revenues" means that portion of taxes le*ied 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. nn) Term Bonds" means the Bonds maturing in the year 2014. 00) 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 Eight Million Seven Hundred Thousand Dollars $8,700,000) 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 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 10/08/91 6820u/2338/014 6- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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 per***! 5 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 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 10/08/91 6820u/2338/014 7- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 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 moneys are so available for such payment. Section 4. Description of Bonds. The Bonds shall be in a principal amount of Eight Million Seven Hundred Thousand Dollars $8,700,000) and shall be designated LA *QUINTA REDEVELOPMENT AGENCY, LA QUINTA REDEVELOPMENT PROJECT, TAX ALLOCATION BONDS, SERIES 1991." 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 October 1, 1991. 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 1 of each year, commencing March 1, 1992. Serial Bonds maturing in the amounts, on the dates and at the interest rates set forth below, shall be issued: Date Principal Interest Rate 1992 $175,000 6.375% 1993 190,000 6.375% 1994 200,000 6.375% 1995 210,000 6.375% 1996 225,000 6.375% 1997 240,000 6.375% 1998 255,000 6.375% 1999 270,000 6.375% 2000 290,000 6.375% 2001 310,000 6.375% 2002 325,000 6.375% 2003 350,000 6.375% 2004 370,000 6.375% 2005 395,000 6.375% 2006 420,000 6.375% 2007 445,000 6.375% 2008 475,000 6.375% 2009 505,000 6.375% 10/08/91 6820u/2338/014 8- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 Term Bonds maturing on September 1, 2014 subject to the mandatory sinking fund redemption provisions herein set forth) bearing interest at the rate of 6.40% per annum shall be issued in an aggregate principal amount of $3,050,000. 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 accordance with the terms of this RE*solution, 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 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 *ecord 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 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, 10/08/91 6820u/2338/014 9- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 omissions and insertions as permitted or required by this Resolution and by any subsequent supplemental*al 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 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 by his or her manual or facsimile signature and by its Secretary by his or her manual or facsimile signature, and the seal of the Agency shall be impressed, imprinted or reproduced thereon. 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 10/08/91 6820u/2338/014 10- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 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 as 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 shall 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. 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 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 herein before 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, 1999 shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after September 1, 2000 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, 1999, 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 10/08/91 6820u/2338/014 11- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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, 1999 thru August 31, 2000.......102% September 1, 2000 thru August 31, 2001.......101% September 31, 2001 and thereafter..............100% 2) Mandatory Sinking Fund Redemption. The Term Bond maturing on September 1, 2014 shall be subject to mandatory redemption in part, by lot, on September 1, 2010 and on each September 1 thereafter to and including September 1, 2014 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 2010 $540,000 2011 580,000 2012 625,000 2013 670,000 2014 Final Maturity) 715,000 B. Call and Redemption. The Agency may and, if required by Section 11A(2), shall) 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 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 10/08/91 6820u/2338/014 12- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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; and g) the rate of interest borne by each Bond being redeemed. 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 three registered securities depositories listed below and b) by first-class mail to the original purchaser of the Bonds, including any syndicate manager of the underwriting syndicate originally purchasing the Bonds, and c) by first-class mail to the national information services listed below that disseminate notice of redemption of obligations as the Bonds. Registered Securities Depositories The Depository Trust Company 711 Stewart Avenue Garden District, New York 11530 Attention: Diana Difiglia Telecopy: 516) 227-4039 or 4190 Midwest Securities Trust Company Capital Structures-Call Notification 440 South LaSalle Street Chicago, Illinois 60605 Telecopy. 312) 663-2343 Philadelphia Depository Trust Company Reorganization Division 1900 Market Street Philadelphia, Pennsylvania 19103 Attention: Bond Department Telecopy: 215) 496-5058 10/08/91 6820u/233*/014 13- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 National Information Services Financial Information, Inc.ts Financial Daily Called Bond Service 30 Montgomery Street, 10th Floor Jersey District, New Jersey 07302 Attention: Editor Interactive Data Corporation's Bond Service 22 Cortland Street, 32nd floor New York, New York 10007 Kenny Information Service's Called Bond Service 55 Broad Street, 29th Floor New York, New York 10004 Moody's Investors Service 99 Church Street, 8th Floor New York, New York 10007 Attention: Municipal News Report Standard and Poor's Called Bond Record 25 Broadway, 3rd Floor New York, New York 10004 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 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 1991, 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 10/08/91 6820u/2338/014 14- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 for the purpose and sufficient to redeem the Bonds designated in the notice as herein before required to be redeemed as provided in this Section 1lA(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 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 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 Y!Redevelopment Fund!!), which Redevelopment Fund is 10/08/91 6820u/2338/014 15- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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) After making the above deposits, the balance of the proceeds from the sale of the Bonds shall be transferred 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 10/08/91 6820u/2338/014 16- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = I' RESOLUTION NO. RA 91-12 2) The cost of any lawful purposes in connection wi*h implementation of the Redevelopment Project, including, without limitation, those purposes authorized by Section 33445 of the Law; and 3) rhe 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*ent 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 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. 10/08/91 6820u/2338/014 17- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 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 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 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 definition*s 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 in Section 15 of Resolution Nos. RA 85-14 and RA 90-4. 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, 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 10/08/91 6820u/2338/014 18- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12; made in any of the Funds referred to below from the proceeds of the saie 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 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 the Series 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 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 10/08/91 6820u/2338/014 19- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 the top two rating categories by Moody's Investor's Se*vice, 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 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 Funds established for the Series 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 Bonds and under this Resolution, pro rata, the Bond Payment Funds established for the Series 1989 Bonds, the Series 1990 and under this Resolution, pro rata, and the Debt Service Reserve Funds established for the Series 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 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 1989 Bonds, the Series 1990 Bonds or the Bonds. 10/08/91 6820u/2338/014 20- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 e) Payments under the Financial Guaranty Insurance P*icy. i) In the event that, on the second Business Day, and again on the Business Day, prior to an Interest Payment Date, the Fiscal Agent has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, Business Day, the Fiscal Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph, confirmed in wrzting by registered or certified mail, of the amount of the deficiency. ii) If the deficiency is made up in whole or in part prior t* or on the Interest Payment Date, the Fiscal Agent shall so notify MBIA or its designee. iii) In addition, if the Fiscal Agent has notice that any Bondowner has been required to disgorge payments of principal or interest on the Bond to the Agency or its Fiscal Agent in Bankruptcy or creditors of others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Bondowner within the meaning of any applicable bankruptcy laws, then the Fiscal Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. iv) The Fiscal Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Owners of the Bonds as follows: A. If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Fiscal Agent shall 1) execute and deliver to Citibank, N.A., or its successors under the Financial Guaranty Insurance Policy the Insurance Paying Agent"), in form satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such Owners in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, 2) receive as designee of the respective Owners and not as Fiscal Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned and 3) disburse the same to such respective Owners; and B) If and to the extent of a deficiency in amounts required to pay principal of the Bonds, the Fiscal Agent shall 1) execute and deliver to the Insurance Paying Agent in form satisfactory to the 10/08/91 6820u/2338/014 21- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 =RESOLUTION NO. RA 91-12 Insurance Paying Agent an instrument appointing MBIA as agent for such Owner in any legal proceeding relating to the payment of such principal and an assessment*nment to MBIA of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Fiscal Agent and available for such payment but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), 2) receive as designee of the respective Owners and not as Fiscal Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent and 3) disburse the same to such Owners. v) Payments with respect to claims for interest on and principal of Bonds disbursed by the Fiscal Agent from proceeds of the Policy shall not be considered to discharge the obligation of the Agency with respect to such Bonds, and MBIA shall become the owner of such unpaid Bond and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subseation or otherwise. vi) Irrespective of whether any such assignment is executed and delivered, MBIA and the Fiscal Agent hereby agree for the benefit of MBIA that: A) the Agency recognizes that to the extent MBIA makes payments directly or indirectly as by paying through the Fiscal Agent), on account of principal of or interest on the Bonds, MBIA will be subrogated to the rights of such Owners to receive the amount of such principal and interest from the Agency, with interest thereon as provided and solely from the sources stated in this Resolution and the Bonds, and B) the Agency will accordingly pay to MBIA the amount of such principal and interest including principal and interest recovered under subparagraph ii) of the first paragraph of the Policy, which principal and interest thereon as provided in this Resolution and the Bond, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Bonds to Owners, and will otherwise treat MBIA as the owner of such rights of the amount of such principal and interest. vii) In connection with the issuance of Parity Bonds, the Agency shall deliver to MBIA a copy of the disclosure document, if any, circulated with respect to such Parity Bonds. 10/08/91 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 = RESOLUTION NO. RA 91-12 In the event that amounts held in the Special Fund are insufficient to provide for all amounts of interest on and principal of the Series 1989 Bonds, the Series 1990 Bonds and the Bonds due on any payment date, such amounts shall be applied pro rata to the payment of interest on the Series 19*9 Bonds, the Series 1990 Bonds and the Bonds, without priority among them and then to the payment of principal of the Series 1989 Bonds, the Series 1990 Bonds and the Bonds, pro rata and without priority. In the event of acceleration of the Bonds, the provisions of Section 25B hereof shall govern. Any remaining Pledged Tax Revenues after providing for a), b), c), and d) above shall be transferred to the Agency and may be used in a manner provided by law for the purpose of aiding in financing the Project, including early redemption or purchase of the Bonds, as provided in this Resolution. 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 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 10/08/91 6820u/2338/014 23- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 != I I RESOLUTION NO. RA 91-12 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 * 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 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 Fledged Tax Revenues in substantially the same manner as Section 15(d) hereof; 10/08/91 6820u/2338/014 24- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 "=RESOLUTION NO. RA 91#12 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 Tax Revenues referred to in item ii)(A) and B) above are at least equal to l*2O 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 10/08/91 6820u/2338/014 25- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 #= RESOLUTION NO. RA 91-12 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 Pr6perties. 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, 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 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 10/08/91 6820u/2338/014 26- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 $=RESOLUTION NO. RA 91-12 Agency or any of the properties then owned by it in the Redev*lopment 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 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 purchaser(s) of the Bonds 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 NBIA 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 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 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 10/08/91 6820u/2338/014 27- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 %= iL RESOLUTION NO. RA 91-12 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: 1) Private Activity. The Agency has not taken and shall not take or permit any other person to take, any action within its control, private activity which would cause the Bonds to constitute bonds within the meaning of Section 141 of the Internal Revenue Code of 1986, 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 * bonds" within the meaning of Section 148 of the Code; 10/08/91 6820u/2338/014 28- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 &=RESOLUTION NO. RA 91-12 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 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. 10/08/91 6820u/2338/014 29- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 '=RESOLUTION NO. RA 91-12 Section 20. Fiscal Agent. The Agency hereby appoints Security Pacific National Bank 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 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. 10/08/91 6620u/2338/014 30- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 (= RESOLUTION NO. RA 91-12 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 expenses including, but not limited to reasonable * 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 10/08/91 682Cu/2338/014 31- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 )= I I RESOLUTION NO. RA 91-12 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 11Rebate Fund"), and within the particular Rebate Fund shall establish a Rebate Account the Rebate Account'1) and comply with the requirements of Subsection 1) below and, if the Agency has elected in the applicable Tax Certificate to pay a penalty in lieu of rebate with respect to the particular bond issue, pursuant to Section 148(f)(4)(C)(vii) of the Code the 1 1/2% Penalty"), within the particular Rebate Fund shall establish an Alternative Penalty Account the Alternative Penalty Account") and comply with the requirements of Subsection 2) below. All money at any time deposited in each Rebate Fund shall *e 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. 1) Rebate Account. The following requirements shall be satisfied with respect to a Rebate Account: i) Annual Computation. Within 55 days of the end of each Bond Year with respect to the particular bond issue, 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 1.148-2T 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 *, the temporary investments exceptions of Section 148(f)(4)(B) and C) of the Code)1 and taking into account whether the 1 1/2% Penalty has been elected), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section l.148-8T(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. 10/08/91 6820u/2338/014 32- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 *=RESOLUTION NO. RA 91-12 ii) Annual Transfer. Within 55 days of the end of each applicable Bond Year with respect to the particular bond issue, upon the Agency's written direction, an amount shall be deposited to the applicable Rebate Account by the Fiscal Agent from any legally available funds if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated in accordance with i) of this Subsection a)(l). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the applicable Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from the Agency, the Fiscal Agent shall withdraw the excess from the Rebate Account and then credit the excess to the Special Fund. iii) Payment to the Treasury. The Agency shall direct the Fiscal Agent to pay to the United States Treasury, out of amounts in each Rebate Account, X) Not later than 60 days after the end of A) the fifth Bond Year with respect to the particular bond issue, and B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and Y) Not later than 60 days after the payment of all the applicable Bonds or Parity Debt, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code. In the event that, prior to the time of any payment required to be made from a Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the Agency shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency in the particular Rebate Account prior to the time such payment is due. Each payment required to be made pursuant to this Subsection a)(1) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. 10/08/91 6820u/2338/014 33- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 +=RESOLUTION NO. RA 91-12 2) Alternative Penalty Account. i) Six-Month Computation. With respect to each issue of Bonds and Parity Debt for which an Alternative Penalty Account has been established, within 85 days of each particular Six-Month Period with respect to a bond issue, the Agency shall determine or cause to be determined whether the 1 1/2% Penalty is payable and the amount of such penalty) as of the close of the applicable Six-Month Period. The Agency shall obtain expert advice in making such determinations. ii) Six-Month Transfer. Within 85 days of the close of each Six-Month Period, the Agency shall deposit in the Alternative Penalty Account from any legally available source of funds if and to the extent required, so that the balance in the particular Alternative Penalty Account equals the amount of 1 1/2% Penalty due and payable to the United States Treasury determined as provided in Subsection a)(2)(i) above. In the event that immediately following the transfer provided in the previous sentence, the amount then on deposit to the credit of the Alternative Penalty Account exceeds the amount required to be on deposit therein to make the payments required by Subsection iii) below, the Agency may withdraw the excess from the Alternative Penalty Account and credit the excess to the Special Fund. iii) Payment to the Treasury. With respect to a bond issue, the Agency shall pay to the United States Treasury, out of amounts in an Alternative Penalty Account, not later than 90 days after the close of each Six-Month Period the 1-1/2% Penalty, if applicable and payable, computed in accordance with Section 148(f)(4) of the Code. In the event that, prior to the time of any payment required to be made from the Alternative Penalty Account, the amount in such Account is not sufficient to make such payment when such payment is due, the Agency shall calculate the amount of such deficiency and deposit an amount received from any legally available source of funds, equal to such deficiency into the Alternative Penalty Account prior to the time such payment is due. Each payment required to be made pursuant to this Subsection a)(2) shall be made to the Internal Revenue Service, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due* and shall be accompanied by Internal Revenue Service Form 8038-T or shall be made in such other manner as provided under the Code. 10/08/91 6820u/2338/014 34- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 ,=RESOLUTION NO. RA 91-12 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 the payments described in Subsection a)(l)(iii) or a)(2)(iii) whichever is applicable), may be withdrawn by the Agency and utilized in any manner by the Agency. c) Survival of Defeasance. Notwithstanding anything in this Section or this 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, as may from time to time be determined and prescribed by resolution. The Agency may authorize such new Bond to be signed and authenticated in such manner as it determines in said 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 shall forthwith 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 60%) 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; 10/08/91 6820u/2338/014 35- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 -=RESOLUTION NO. RA 91-12 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 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 MBIA, 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 ob*ect to such action or in any manner to question the propriety thereof or to en*oin 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. 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. 10/08/91 6820u/2338/014 36- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 .= LL RESOLUTION NO* RA 91-12 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' pal 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 11issuer-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 60%) 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 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 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 10/08/91 6820u/2338/014 37- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 /= RESOLUTION NO. RA 91-12 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. G. 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 60%) in aggregate principal amount of the Bonds then Outstanding exclusive of Agency-owned Bonds) shall have consented in writing, the Agency 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. 10/08/91 6*2Ou/2338/Ol4 38- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 0= RESOLUTION NO. RA 91-12 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. RA 88-14 or Resolution No. RA 90-4 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; 10/08/91 6820u/2338/014 39- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 1=RESOLUTION NO. RA 91-12 In each and every event of default described in 1) or 2) above the Fiscal Agent shall, with the consent of MBIA, and in each and every case of default described in 3) or 4) above, the Fiscal Agent may, with the consent of MBIA, and shall, with the consent of MBIA, 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 MBIA, 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 88-14 or Resolution No. RA 90-4 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 ma*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 this Resolution, Resolution No. RA 88-14 or Resolution No. RA 90-4, 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 this Resolution, in Resolution No. RA 89-14 and Resolution No. RA 90-4 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. 10/08/91 6820u/2338/014 40- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 2= I. RESOLUTION NO. RA 91-12 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; 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. C. Certain Remedies of Bondowners. Any Bondowner, with the consent of MBIA, and the owners of any Parity Bonds, at the direction of MBIA, 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, in Resolution No. RA 88-14, in Resolution No. RA 90-4, 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 of the rights of any of the Bondowners or owners of Parity Bonds; or 10/08/91 6820u/2338/014 41- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 3=RESOLUTION NO. RA 91-12 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 88-14, or in Resolution No. RA 9a-4, 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 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 hereunder 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 hereunder, by taking and 10/08/91 6820u/2338/014 42- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 4=RESOLUTION NO. RA 91-12 holding the same, shall be conclusively deemed so to have appoint*ed 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 in this Resolution, but to no greater extent and in no other 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 cr 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-los Calle Estado, La Quinta, California 92253 Attention: Finance Director. 2) If to the Fiscal Agent, to Security Pacific National Bank, 333 South Beaudry Avenue, 24th Floor, Los Angeles, California 90017, Attention: Corporate Trust Division w24-30. Reference No.: 11-7-20460. 10/08/91 6820u/2338/014 43- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 5=RESOLUTION NO. RA 91-12 3) If to MBIA, to Municipal Bond Investors Assurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Surveillance Department. Section 29 Effective Date. This Supplement to Resolution shall take effect upon adoption. Section 30. Rights of MBIA. MBIA is a third party beneficiary hereunder and the terms, conditions and obligations Bet forth herein which benefit MBIA are specifically enforceable by MBIA. At such times that MBIA is not obligated under the Financial Guaranty Insurance Policy, the provisions herein relating to MBIA shall cease to be in effect. EXECUTED the day of * iggi. Redevelopment Agency SE AT ST: ecretary of t e La Quinta Redevelopment Agency 10/08/91 6820u/2338/014 44- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 6=RESOLUTION NO. RA 91-12 STATE OF CALIFORNIA SECRETARY'S CERTIFICATE ss. RE ADOPTION OF RESOLUTION COUNTY OF RIVERSIDE I, SAUNDRA 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 day of 1991, and that the same was passed and adopted by the following vote to wit: AYES: Members NOES: Members ABSENT: Members ABSTAIN: Members Secretary of La Quinta Redevelopment Agency SEAL) STATE OF CALIFORNIA SECRETARY'S CERTIFICATE ss. OF AUTHENTICATION COUNTY OF RIVERSIDE I, SAUNDRA 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: 1991 Secretary of the La Quinta Redevelopment Agency SEAL) 10/08/91 6820u/2338/014 45- BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 7=RESOLUTION NO. RA 91-12 EXHIBIT A FOR* OF BOND) UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT TAX ALLOCATION BONDS, SERIES 1991 INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE CUSIP October 1, 1991 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 t1registered 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 * 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 prior to the first record date in which event from October 1, 1991, 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 March 1, 1992. Both principal and interest and any premium upon the redemption prior to maturity 10/08/91 6820u/2338/014 A-i BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 8=RESOLUTION NO. RA 91-12 of all or part hereof are payable in lawful money of 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 Security Pacific National Bank, 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, Tax Allocation Bonds, Series 1991" herein called the Bonds"), in an aggregate principal amount of $8,700,000, 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 1 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 91-12, adopted by the Agency on October 9, 1991 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 91-12 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, fQr 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. 10/08/91 6820u/2338/014 A-2 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 9=RESOLUTION NO. RA 91-12 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 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 60%) 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, 1999 shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after September 1, 2000 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, 1999, 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, 1999 thru August 31, 2000.......102% September 1, 2000 thru August 31, 2001.......101% September 31, 2001 and thereafter..............100% The Term Bonds maturing on September 1, 2014 shall be subject to mandatory redemption in part, by lot, on September 1, 2010 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. 10/08/91 6820u/2338/014 A-3 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 :=RESOLUTION NO. RA 91-12 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 there for. 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 Chairman 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 October, 1991. Chairman of the La Quinta Redevelopment Agency SEAL) Secretary of the La Quinta Redevelopment Agency 10/08/91 6820u/2338/014 A-4 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 ;=RESOLUTION NO. RA 91-12 FORM OF CERTIFICATE OF AUTHENTICATION OF BONDS) This is one of the Bonds described in the within mentioned Resolution. SECURITY PACIFIC NATIONAL BANK, 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. STATEMENT OF INSURANCE The Municipal Bond Investors Assurance Corporation the Insurer") has issued a policy containing the following provisions, such policy being on file at the corporate trust office of Security Pacific National Bank in Los Angeles, California. The Insurer, in consideration of payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete 1O/C8/91 6820u/2338/014 A-5 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 <=RESOLUTION NO. RA 91-12 payment required to be made by or on behalf of the Issuer to Security Pacific National Bank in Los Angeles, California or its successor the Fiscal Agent) of an amount equal to i) the principal of either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the obligations as that term is defined below) as such payment shall become due but shall not be so paid except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any acceleration); and ii) the reimbursement of any such payment which is subsequently covered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses i) and ii) of the preceding sentence shall be referred to herein collectively as the Insured Amounts." Obligations" shall mean: $8,700,000 La Quinta Redevelopment Agency La Quinta Redevelopment Project California) Tax Allocation Bonds, Series 1991 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer' from the Fiscal Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment ha* not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with Citibank, NA., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being a form satisfactory to Citibank, NA., Citibank, N.A shall disburse to such owners or the Fiscal Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Fiscal Agent for the payment of such Insured Amounts and legally available 10/08/91 6820u/2338/014 A-6 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02 == RESOLUTION NO. RA 91-12 theref*r. This policy does not insure against loss of any prepayment premium which at any time be payable with respect to any Obligation. As used herein, the term owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Fiscal Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations. Any service of process on MBIA may be made to MBIA at its offices located at 113 King Street, Armonk, New York 10504. This Policy is non-cancellable for any reason. The premium on the policy is not refundable for any reason including the payment prior to maturity of the Obligations. MUNICIPAL BOND INVESTORS ASSURANCE CORPORATION 10/08/91 A-7 BIB] 07-30-1997-U01 03:34:45PM-U01 ADMIN-U01 RDARES-U02 91-U02 12-U02