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HomeMy Public PortalAboutA1986-07-30 LRA_sp:% L LYNWOOD REDEVELOPMENT AGENCY 11330 BULLIS ROAD LYNWOOD, CALIFORNIA 90262 (213) 603 -0220 AGENDA LYNWOOD REDEVELOPMENT AGENCY JULY 30, 1986 SPECIAL MEETING 5:00 P.M LYNWOOD CITY HALL, 1330 BULLIS ROAD .F I- 71 171 W FIN AGENCY STAFF CHARLES G. GOMEZ .� • �� �� � :+yam �;. � A. Call Meeting to Order. B. Roll Call. (BYOW- MORRIS - VEILS- HjNvING) 1. TAX ALLOCATION BOND ISSUE. Conments: E. L. MORRIS NfflMR f_!ef �C�►�Z i���17�i1 y n Pursuant to the Agency's desire to issue tax allocation bonds, the Agency is requested to adopt resolutions approving the form and distribution of the Notice Inviting Bids and the Preliminary Official Statement and related matters. Recommendation Adopt the attached Resolutions. 2. OFFER TO ACQUIRE - 3208 SANBORN AVaffjE. Comments Pursuant to the Agency's desire to acquire the property known as Sanborn Avenue, Lynwood, owned by Pair. Floyd J. Head, for the purpose of assembling a developable site to allow for the development of the Proposed Lynwood Towne Center (Hopkins), the Agency is requested to authorize staff to submit the Statutory Offer in ccsapliance with the California Redevelopment Law. -1- Reconarendation Authorize the submittal of the Statutory Offer to Mr. Head. �� • •iii Motion to adjourn to a Regular P4eeting of the Lynwood Redevelopment Agency, to be held August 5, 1986, in the Council Chambers of City Hall, 11330 Bullis Road, Lynwood, California. -2- 0 AGENDA ITEM TO: FROM: Re: Date: M E M O R A N D U M Board of Directors, Lynwood Redevelopment Agency Vicente C. Mas, Community Development Director TAX ALLOCATION BONDS OF AGENCY July 28, 1986 Purpose: Approval of that certain resolution of the Redevelopment Agency authorizing the form and distribution of the Notice Inviting Bids and the Preliminary official Statement prepared in connection with the Agency's $4,550,000 Tax Allocation Bonds, and certain other matters. Background Pursuant to the Community Redevelopment Law, the Agency has the power to issue bonds secured by tax increments generated by its respective project areas. In 1976, the Agency issued $2,000,000 in bonds secured by revenues from Project Area A. Subsequent to the amendments to the Project Area in 1980, the Agency is now in a position to issue bonds again from Project Area A secured on a parity with the 1976 bonds. The proceeds of the bonds can be used for the redevelopment purposes of the Agency in Project Area A, including the relocation of the corporate yard, provision of certain public improvements to eliminate the impact of blight, and the acquisition of certain real property. Bond counsel has advised staff that pending changes in federal tax law relating to tax exempt bonds make it advantageous for the Agency to issue its bonds before September 1, 1986. Specifically, pending changes in federal tax law would restrict the purposes for which the Agency could issue bonds, and would make the authorization for the issuance of the bonds more difficult. While there is no assurance that these changes will become law, staff believes it is advantageous to move forward with the sale of the bonds at this time. In early July, the Agency approved the publication of notice inviting bids for the bonds in accordance with law. At this time, it is requested that the Agency approve the form of the notice inviting bids and the preliminary official statement Board of Directors, Lynwood Redevelopment Agency July 28, 1986 Page Two to be furnished to bidders in connection with the sale of the bonds. With this approval, the bonds can be sold on August 6, 1986, with the Agency approval to occur that same evening. Thereafter, the bond issue would close sometime before September 1. The proceeds of the bond issue would be used to pay the costs of issuance and future redevelopment cost. Analysis The size of the bond issue (i.e., $4,550,000) has been computed by the Agency's financial consultant so as to maximize available bond proceeds for the Agency. In order to secure bond insurance for-the issue, as well to attract bidders, the issue has been sized so as to provide the bond holders with tax increment coverage of 1.25 times regular debt service. To be on the safe side, the issue has been further reduced to account for monies which may be payable to the County pursuant to the County's agreement for reimbursement of tax increment revenues approved in 1983. In 1983, following discussions between the Agency and the County, the Redevelopment Agency approved a resolution and a form of pass- through agreement which provided for reimbursement to the County of certain tax increment monies otherwise payable to the Agency. The County never approved this agreement (in fact they objected to it), and the County has taken no steps to implement this agreement. However, in order to be sure that no misrepresentations are made to bondholders and in order to provide the - Agency sufficient comfort that it will have the revenues to pay its bonds, the size of the bond issue has been reduced to account for the maximum annual amount which staff estimates could be paid to the County if the pass- through agreement were construed to be applicable. Although Agency counsel believes that the Agency may have no obligation to reimburse the County for any of these monies, the size of the bond issue has been reduced by the amount which may be payable to the County in order to be on the safe side. As currently drafted, the bond issue does not account for any Agency obligation to set aside tax increment monies for low and moderate income housing. In connection with the adoption of Ordinance No. 1111 in 1980, the Agency made the appropriate findings pursuant to Health and Safety Code 33334.2 to exempt the Agency from the requirements of this statute. Further action will need to be Board of Directors, Lynwood Redevelopment Agency July 28, 1986 Page Two taken by the Agency in August in order to complete this. However, on the assumption that no low and moderate housing set aside obligation is applicable to the Agency, the bond issue does not contemplate that any monies will be set aside for low and moderate income housing. Although all other consultants required in connection with this bond issue have been retained, Stradling, Yocca, Carlson & Rauth have not been formally approved as bond counsel (as opposed to Agency counsel) at this time. The proposed. resolution formally accepts bond counsel's proposal. Recommendation That the Agency adopt the attached Resolutions approving the form and the distribution of the Notice Inviting Bids and the Preliminary Official Statement, and certain other matters. RESOLUTION NO. RESOLUTION OF THE LYNWOOD REDEVELOPMENT AGENCY APPROVING THE FORM AND DISTRIBUTION OF A NOTICE INVITING BIDS AND A PRELIMINARY OFFICIAL STATEMENT REGARDING TAX ALLOCATION BONDS OF THE AGENCY IN THE APPROXIMATE PRINCIPAL AMOUNT OF FOUR MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($4,550,000) FOR THE PROJECT AREA A PROJECT, AND APPROVING CERTAIN OTHER MATTERS WHEREAS, the Lynwood Redevelopment Agency (herein sometimes referred to as 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 `l 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 Agency wishes to sell at this time not more than $4,550,000 in the aggregate principal amount of the Tax Allocation Bonds to provide financing in connection with the Project Area A on a parity with the Agency's Series 1976 bond issue; and WHEREAS, the Agency is required by law to sell the Bonds at competitive bid following publication of notice of intention to sell such securities. NOW, THEREFORE, THE LYNWOOD REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1 . Sale Authorized The sale of an aggregate principal amount of not to exceed Four Million Five Hundred Fifty Thousand Dollars ($4,550,000) (or such lesser amount as may be specified in the notice of sale as approved by the Director) of the LYNWOOD REDEVELOPMENT AGENCY, Lynwood Redevelopment Agency, Redevelopment Project Area "A ", as amended, Tax Allocation Bonds, Series 1986, describing in the published notices as $6,000,000 LYNWOOD COMMERCIAL CENTER PROJECT TAX ALLOCATION BONDS, Series 1986 (herein sometimes referred to as the "Bonds "), in accordance with law, is hereby authorized. Section 2. Publication of Notice of Inte Securit es. The Notice Inviting Bids attache Exhi b 'A" , and the form of the Preliminary Statement attached hereto as Exhibit "B ", are in,substantially the form presented; subject requested by Bond Counsel and approved by the Director. ntion to Sell d hereto as Official hereby approved to such changes as Executive Section 3 Furnishing of Notice Inviting Bids and official Statement. The Director of the Agency and the Financial Consultant are hereby authorized and directed to cause to be furnished to prospective bidders a reasonable number of copies of the Notice Inviting Bids (including the bid form) and a reasonable number of copies of the Official Preliminary Statement. Section 4. Bond Counsel Stradling, Yocca, Carlson & Rauth is hereby approved as bond counsel for the proposed issuance of bonds on the terms summarized in the letter proposal previously submitted to staff. Section 5. Effective Date. This Resolution shall take effect upon adoption. ADOPTED AND APPROVED this day of 1986 by the following vote: AYES: NOES: ABSENT: Chairman, Lynwood Redevelopment Agency (SEAL) ATTEST: Secretary, Lynwood Redevelopment Agency 2609k/2019/00 / 2 - RESOLUTION NO. RESOLUTION OF`THE LYNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF PARITY TAX ALLOCATION BONDS OF SAID AGENCY TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS REDEVELOPMENT PROJECT A,AIN A PRINCIPAL AMOUNT OF NOT TO EXCEED FOUR MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($4A 50,000) 11 RESOLUTION NO. 0 RESOLUTION OF THE LYNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF PARITY TAX ALLOCATION BONDS OF SAID AGENCY TO FINANCE A PORTION OF THE COST OF A REDEVELOPMENT PROJECT KNOWN AS REDEVELOPMENT PROJECT A,AIN A PRINCIPAL AMOUNT OF NOT TO EXCEED FOUR MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($4,f55 000 ) TABLE OF CONTENTS Page Section 1. Definitions Section 2. Amount, Issuance and Purpose of Bonds Section 3. Nature of Bonds Section 4. Description of Bonds Section 5. Interest Section 6. Place of Payment Section 7. Forms of Bonds Section 8. Execution of Bonds Section 9. Registration and Exchange of Bonds A Section i 10. Bond Register Section 11. Call and Redemption and Purchase of Bonds Prior to Maturity A. Optional Redemption B. Special Early Redemption C. Sinking Account Redemption D. Call and Redemption, Notice of Redemption (i) Page (ii) E. Redemption Fund F. Partial Redemption of Bonds G. Effect of Redemption H. Purchase of Bonds Section 12. Funds Section 13. Sale of Bonds; Disposition of Bond Proceeds; Redevelopment Fund Section 14. Tax Revenues Section 15. Special Fund Section 16. Deposit and Investment of Moneys in Funds Section 17. Issuance of Parity Bonds Section 18. Covenants of the Agency Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan Covenant 2. Use of Proceeds, Management and Operation of Properties Covenant 3. No Priority Covenant 4. Punctual Payment Covenant 5. Payment of Taxes and Other Charges Covenant 6. Books and Accounts; Financial Statements Covenant 7. Eminent Domain Proceeds Covenant 8. Disposition of Property Covenant 9. Protection of Security and Rights of Bondholders; No Arbitrage Covenant 10. Compliance with Law Covenant 11. Limitation on Indebtedness (ii) • 0 P_ age Section 19. Taxation of Leased Property Section 20. Fiscal Agent and Paying Agents Section 21. Lost, Stolen, Destroyed or Mutilated Bonds Section 22. Cancellation of Bonds Section 23. Amendments A. Calling Bondholders' Meeting B. Notice of Meeting C. Voting Qualifications D. Issuer -Owned Bonds E. Quorum and Procedure F. Vote Required Section 24. Proceedings Constitute Contract; Events of Default and Remedies of Bondholders A. Events of Default B. Certain Remedies of Bondholders C. Non - Waiver D. Actions by Fiscal Agent as Attorney -in -Fact E. General Section 25. CUSIP Numbers e Section 26. Severability Section 27. Effective Date Exhibit A Form of Bond (iii) p .Y 0 RESOLUTION NO. E RESOLUTION'OF THE LYNWOOD REDEVELOPMENT AGENCY AUTHORIZING THE ISSUANCE OF PARITY TAX ALLOCATION BONDS OF SAID AGENCY TO FINANCE A PORTION OF THE COST OF A.REDEVELOPMENT PROJECT KNOWN AS REDEVELOPMENT PROJECT A /\IN A PRINCIPAL AMOUNT OF NOT TO EXCEED FOUR MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($4,1,5 000 ) WHEREAS, the Lynwood 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, a redevelopment plan for a redevelopment project known and designated as the "Project Area A" has been adopted and approved, and all requirements of law for and precedent to the adoption and approval of the Redevelopment Plan have been duly complied with; and WHEREAS, the Agency has previously issued by Resolution No. LRA 76 -10 (the "1976 Bond Resolution ") $2,000,000 of its tax allocation bonds (the "1976 Bonds "), for the purpose of carrying out the redevelopment plan for its Project Area A previously known as the Commercial Center Project and WHEREAS, the Agency is in compliance with all conditions of the 1976 Bond Resolution for the issuance of additional bonds on a parity with the 1976 Bonds; and WHEREAS, the Agency's redeveloRment. will be accomplished by issuing at this time such additional tax allocation bonds in a principal amount of Not to Exceed Four Million Five Hundred Fifty Thousand Dollars ($4 550,000) pursuant to this Resolution providing for the issuance of "Lynwood Redevelopment Agency, ,Redevelopment Project Area "A As Amended Tax Allocation Bonds, Series 1986," (the "Bonds ") the proceeds of which will be used to finance the costs of implementing the Project Area A, to fund a debt service reserve fund and pay costs of issuing the Bonds; and NOW, THEREFORE, THE LYNWOOD REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 0 Section 1 Definitions following terms shall have the context otherwise requires: As used in this Resolution, the following meanings, unless the "Bond" or "Bonds" means the "Lynwood Redevelopment Agency, edevelopment Project Area "A," as Amended, Tax Allocation Bonds, Series 1986," authorized by this Resolution. "Bond Insurer" means [Bond Insurer], a stock insurance corporation, doing business in California as Insurance Company, and its successor or successors. "Bond Year" means the twelve (12) month period of each year commencing on the initial date of the Bonds. "Bondholder" 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 Bondholders' 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. "Business Day" shall mean any day other than (i) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city in which the principal office of the Trustee is located are authorized to close, or (ii) a day on which the New York Stock Exchange is closed. "City" means the City of Lynwood, California. "Federal Securities" means United States Treasury notes, bonds, bills or certificates of indebtedness or those for which the faith and credit of the United States are pledged for the payment of principal and interest; obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority; all as and to the extent that such securities are eligible for the legal investment of Agency funds. "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. "Independent Financial Consultant," "Independent Engineer," "Independent Certified Public Accountant" or "Independent Redevelopment Consultant" means any individual 07 -28 -86 2532k/2019/27 -2- 0 or firm engaged in the profession involved, appointed by the Agency, and who, or each of whom, has a favorable reputation in the field in which his/her opinion or certificate will be given, and: - (1) is in fact independent and not under domination of the Agency; and (2) does not have any substantial interest, direct or indirect, with the Agency, other than as original purchaser of the Bonds; and (3) is not connected with the Agency as an officer or employee of the Agency, but who may be regularly retained to make reports to the Agency. "Law" means the Community Redevelopment Law of the State of California as cited in the recitals hereof. "Maximum Annual Debt Service" means the largest of the sums obtained for any Bond Year after the computation is made, by totaling the following for each such Bond Year: (1) The principal amount of all serial Bonds and serial Parity Bonds, if any, payable in such Bond Year; and (2) The interest which would be due during such Bond Year on the aggregate principal amount of Bonds and Parity Bonds which would be outstanding in such Bond Year if the Bonds and Parity Bonds outstanding on the date of such computation were to mature or be redeemed in accordance with the maturity schedules for the serial Bonds and serial Parity Bonds. At the time and for the purpose of making such computation, the amount of term Bonds and term Parity Bonds already retired in advance of the above- mentioned schedules shall be deducted pro rata from the remaining amounts thereon. "Minimum Reserve Requirement" means the interest on the Bonds, the 1976 Bonds and any additional bonds coming due during the next ensuing 12 month period. "1976 Bonds" shall mean the $2,000,000 Lynwood Redevelopment Agency Commercial Center Project Tax Allocation Bonds, Series 1976, authorized by Resolution No. LRA 76 -10, adopted on June 15, 1976. "1976 Bond Resolution" means Resolution No. LRA 76 -10 adopted on June 15, 1976. 07 -28 -86 2532k/2019/27 -3- "Opinion of Counsel" means a written opinion of an attorney or firm of attorneys of favorable reputation in the field of municipal bond law. Any opinion of such counsel may be based upon, insofar as it is related to factual matters, information which is in the possession of the Agency as shown by a certificate or opinion of, or representation by, an officer or officers of the Agency, unless such counsel knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which his or her opinion may be based, as aforesaid, is erroneous. "Parity Bonds" means any additional tax allocation bonds (including, without limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Agency as permitted by Section 17 of this Resolution and Secion 17 of the 1976 Bond Resolution. "Paying Agent" means any paying agent provided by the Agency pursuant to this Resolution. "Redevelopment Agency" or "Agency" means the Lynwood Redevelopment Agency. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project Area A, approved and adopted by the City by Ordinance No. 945, as amended, and includes any amendment thereof heretofore or hereafter made pursuant to the Law. "Redevelopment Project" means the project of carrying out, pursuant'to the Law, the Redevelopment Plan for the Redevelopment Project Area. "Redevelopment Project Area" means the project area described and defined in said Ordinance No. 945, as amended, which project area is known and designated as "Redevelopment Project Area A. "^ "Regular Record Date" means the fifteenth day preceding any interest payment date or if such day is not a Business Day, then the following Business Day. "Reserve Requirement" means, as of the date of issue of the Bonds, an amount equal to Maximum Annual Debt Service on the Bonds net of the amount attributable to debt service on a portion of the Term Bonds equal in principal amount to the amounts then on deposit in the Escrowed Proceeds Fund. 07 -28 -86 2532k/2019/27 -4- 0 e "Pledged.Tax Revenues" or "Tax Revenues" means that portion of taxes levied upon taxable property in the Redevelopment Project Area and received by the Agency on or after the date of issue of the Bonds, for the Redevelopment Project Area of the Agency pursuant to Article 6 of Chapter 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California. [Provided, however, that Pledged Tax Revenues shall not include that portion of taxes allocated to and received by the Agency for deposit in the low and moderate income housing fund required by Section 17 of the Redevelopment Plan and Section 33334.2 of the Law and any tax revenues which are required to be passed through to certain taxing entities pursuant to agreements entered into pursuant to Section 33401 of the Law.) [Delete] "Treasurer" or "Treasurer of the Agency" means the officer who is then performing the functions of Treasurer of the Agency. Section 2 Amount, Issuance and Purpose of Bonds Under and pursuant to the Law and this Resolution, Bonds of the Agency in a principal amount of Four Million Five Hundred Fifty_ Thousand Dollars ($4 shall be issued by the Agency for the corporate purposes of the Agency by providing funds for the financing of a portion of the cost of implementing the Redevelopment Plan which constitutes a "redevelopment activity" as such term is defined in Health and Safety Code Section 33678; and such issue of Bonds is hereby authorized. . 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 and premium, if any, from Pledged Tax Revenues and other funds as hereinafter provided. The Bonds, interest and premium, if any, thereon are not a debt of the City, the State of California or any of its political subdivisions, and neither the City, the State nor any of its political subdivisions is liable on them. In no event shall the Bonds, 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, together with the 1976 Bonds, by an irrevocable pledge of the Pledged Tax Revenues and other funds as hereinafter provided, without priority for number, date of sale, date of execution or date of delivery, except as expressly provided herein. 07 -28 -86 2532k/2019/27 -5- 11 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 by anyone of his/her obligations relative to the Redevelopment Project Area, 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, however derived, to any of the uses and purposes mentioned in this Resolution. If the Agency shall cause to be paid, or shall have made provision to pay upon maturity or upon redemption prior to maturity, to the Bondholders the principal of, premium, if any, and interest to become due on the Bonds, 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 therefor, including, but not limited to, interest earned or to be earned on Federal Securities, then the lien of this Resolution, including, without limitation, the pledge of the Pledged Tax Revenues, and all other rights granted hereby, shall 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 any refunding of the Bonds. Bonds, the principal of or interest on which has been paid by the Bond Insurer shall not be deemed to have been paid or caused to be paid by the Agency, and shall remain outstanding until paid by the Agency. In the event of such a defeasance of the Bonds, the Agency shall cause an accounting for such period or periods to be prepared and filed with the Fiscal Agent, and the Fiscal Agent, upon the request of the Agency, shall release the rights of the Bondholders under this Resolution and execute and deliver to the Agency all such instruments as may be desirable to evidence such release, discharge and satisfaction, and the Fiscal Agent shall pay over or deliver to the Agency all moneys or securities held by it pursuant to this Resolution which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption. 07 -28 -86 2532k/2019/27 -6- 0 0 Provision shall be made by the Agency, satisfactory to the Fiscal Agent, for the mailing of a notice to the Owners of such Bonds that such moneys are so available for such payment. Section 4 Description of Bonds The Bonds shall be issued in a principal amount of Four Million Five Hundred Fifty Thousand Dollars ($4,&50,000) and shall be designated "LYNWOOD DEREVELOPMENT AGENCY, tREDEVELOPMENT PROJECT AREA "A " TAX ALLOCATION/%BONDS, SERIES 1986." The Bonds shall be initially issued in the form of fully registered bonds in denominations of $5,000 each or any whole multiple thereof. The Bonds shall beAterm bondsnand shall mature on July 15 2015 and shall bear interest at the rat per annum Section 5 . Interest The Bonds shall bear interest at the ratenset forth above per annum payable semiannually on each January 15 and July 15, commencing January 15, 1987. Each Bond shall bear interest until its principal sum has been paid; provided, however, that if funds are available for the payment thereof in full accordance with the terms of this Resolution, such Bond shall then cease to bear interest. Interest is 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 or the Agency shall determine and shall be dated as of the date of their authentication, 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 the exchange or transfer, and Bonds issued before the first Regular Record Date shall be dated as of Auguste, 1986. Each Bond shall bear interest from the interest payment date next preceding the date thereof unless (i) it is'dated as of an interest payment date, in which event it shall bear interest from that interest payment date, or (ii) it is dated after.a Regular Record Date and 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, or (iii) it is dated prior to the first Regular Record Date, in which event it shall bear interest from'the date of the Bonds. Interest on Bonds shall be paid by the Fiscal Agent (out of the appropriate funds) by check or draft mailed by first class mail on the interest payment date to the registered owner as his/her name and address appear on the register kept by the Fiscal Agent on the Regular Record Date preceding the interest payment date. Section 6 . Place of Payment The principal of the Bonds and any premiums upon the redemption thereof prior to maturity shall be payable in lawful money of the United States of 07 -28 -86 2532k/2019/27 -7- America and shall be payable at the corporate trust office. of the Fiscal Agent in Los Angeles, California. Section 7 . Forms of Bonds The Bonds shall be -- substantially in the form annexed hereto as Exhibit "A ". Such form is hereby approved and adopted as the form of the Bonds and of the redemption, exchange, registration and assignment provisions pertaining to them, with necessary or appropriate variations, omissions, and insertions, as permitted or required by this Resolution and by any subsequent supplemental resolution of the Agency. Any Bonds issued pursuant to this Resolution may be initially issued in temporary form exchangeable for definitive Bonds when the same are ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Agency, and may contain references to any of the provisions of this 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 fully registered 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. The Fiscal Agent shall deliver in exchange for the surrendered temporary Bonds _ an equal aggregate principal amount of definitive Bonds of authorized denominations of this same issue. Until exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds of this same issue, except no accrued interest shall be paid on the temporary Bonds 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 facsimile signature and by its Secretary by 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 facsimile signature appears on the Bonds ceases to be a member or officer before delivery of the Bonds, his/her signature is as effective as if he or she had remained in office. The Fiscal Agent shall authenticate the Bonds on registration and /or exchange to effectuate the registration and exchange provisions set forth in Section 9, and only those Bonds that have endorsed' on them a certificate of authentication, substantially in the form set forth in the form 07 -28 -86 2532k/2019/27 -8- 0 0 of Bond, 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 the certificate of authentication has been duly_ executed by the Fiscal Agent. The certificate of the Fiscal Agent upon any Bond shall be conclusive and the only evidence required that the Bond has been duly authenticated and delivered under this Resolution. The Fiscal Agent's certificate of authentication on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the Fiscal Agent, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Bonds that may be issued hereunder. Section 9 Registration and Exchange of Bonds The Bonds shall be issued only in fully registered form. Fully registered Bonds may be exchanged for other Bonds of equal aggregate denominations and of like maturity. Transfer of ownership of a Bond or Bonds shall be made by exchanging the same for a new Bond or Bonds. All exchanges shall be made in such a manner and upon such reasonable terms and conditions as may be determined and prescribed by the Agency and the Fiscal Agent. The person, firm or corporation requesting the exchange shall pay any tax or governmental charge that may be imposed in connection with the 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 maturity. Section 10 . Bond Register The Fiscal Agent will keep 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. The books shall at all times during reasonable business hours be open to inspection by the Bond Insurer and 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 the register, the Bonds as hereinbefore provided. Section 11 Call and Redemption and Purchase of Bonds Prior to Maturity The Bonds maturing on or before July 15, 1996, are not subject to call and redemption prior to maturity. A. Optional Redemption The Bonds maturing on or after July 15, 1997 may be called before maturity and redeemed at the option of the Agency, in whole or in part from the proceeds of refunding bonds or other source of available funds, on July 15, 1996 or on any interest payment date thereafter, prior to maturity, in inverse order of maturity and by lot within any maturity. The interest payment date on which Bonds are to be presented for redemption is sometimes referred to as the 07 -28 -86 2532k/2019/27 -9- �J "redemption date." Bonds called for redemption shall be redeemed at the redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date as shown in the following table: Redemption Dates Redemption Price July 15, 1996 and'January 15, 1997 102% July 15, 1997.and January 15, 1998 101 -1/2% July 15, 1998 and January 15, 1999 101% July 15, 1999 and January 15, 2000 100 -1/2% July 15, 1000 and thereafter 100% B. Special Early Redemption [The Bonds are subject to special redemption in whole or in part, by lot at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date without premium, (i) on July 15, 1989 to the extent of any moneys remaining in the Escrowed Proceeds Fund on June 15, 198A For the purpose of selecting Bonds by lot, Bonds in excess of $5,000 will be assigned a separate number for each $5,000 of principal they represent. C. Sinking Account Redemption The Bonds will be subject to minimum sinking fund redemption at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, on July 15 in each of the following years and amounts: Year 2002 2003 2004 2005 2006 2007 2008 2009 Amount Year Amount 2010 2011 2012 2013 2014 2015 2016 ID. Call and Redemption; Notice of Redemption The Agency may (and, if required by Section 15 hereof, shall) by resolution direct the call and redemption prior to maturity of Bonds by the Fiscal Agent pursuant to Section 11A hereof in such amounts as there are funds available for use in redemption and shall give notice to the Fiscal Agent of the redemption at least thirty (30) days prior to the redemption date. No such notice shall be required with respect to redemption pursuant to Sections 11B or ITC hereof. 07 -28 -86 2532k/2019/27 -10- 0 E Notice of redemption prior to maturity shall be given by first class mailing, postage prepaid not less than ten (10) nor more than sixty (60) days prior to the redemption date, (i) to the original purchaser(s) of the Bonds from the Agency (in the case of a syndicate, to the manager thereof), and (ii) to the registered owner, of each such Bond at the address shown on the registration books of the Fiscal Agent. Neither the failure to receive such notice nor any immaterial defect in any notice mailed shall affect the sufficiency of the proceedings for the redemption of any Bonds. The notice of redemption shall (a) state the 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; and (e) state that interest on the principal portion of the Bonds designated for redemption shall cease to accrue from and after the redemption date and that on the redemption date there shall become due and payable on each of such Bonds the redemption price for each Bond. The actual receipt by the Owner of any Bond of notice of redemption shall not be a condition precedent'to redemption, and failure to receive notice shall not affect the validity of the proceedings for the redemption of the Bonds or the cessation of interest on the redemption date. Notice of redemption of Bonds shall be given by the Fiscal Agent on behalf of the Agency and at the expense the Agency. A certificate by the Fiscal Agent that notice of redemption has been given in accordance with this Resolution shall be conclusive as against all parties, and no Bondholder whose Bond is called for redemption may object to the redemption or the cessation of interest on the redemption date by claiming or showing that he failed to receive actual notice of call and redemption. E. Redemption Fund Prior to the mailing of notice as required above, the Fiscal Agent shall establish, maintain and hold in trust a separate fund which is hereby created for the purpose of this Resolution entitled "Lynwood Redevelopment Agency, ARedevelopment Project Area "A ", as Amended Tax Allocation Bonds, Series 1986, Redemption Fund" (hereinafter referred to as the "Redemption Fund "). There shall be set aside in the Redemption Fund prior to mailing notice of optional or mandatory redemption, moneys for the purpose of and sufficient to redeem, at the premiums, if any, payable as provided in this Resolution, the Bonds designated in the notice of redemption. The moneys must be set aside in the Fund solely for that purpose and shall be applied on or after the 07 -28 -86 2532k/2019/27 -11- redemption date to the payment (principal and premium, if any) of the Bonds to be redeemed upon presentation and surrender of the Bonds. In the event moneys transferred to the Redemption Fund from the Escrowed Proceeds Fund exceed the amount required to redeem the Bonds, such monies shall be transferred to the Special Fund. F. 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, 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. G. Effect of Redemption Notice of redemption having been duly given as provided above, and moneys for payment of the principal of, premium, if any, and interest payable upon redemption of the Bonds being set aside as provided above, the Bonds, or parts thereof, called for redemption shall, on the redemption date, become due and payable at the redemption price specified in the notice. Interest on the Bonds, or parts thereof, as the case may be, called for redemption shall cease to accrue. The Bonds, or parts thereof redeemed, shall cease to be entitled to any lien, benefit or security under this Resolution, and the owners of the Bonds shall have no rights except to receive payment of the redemption price upon surrender of the Bonds, and, in the case of partial redemption of Bonds, also to receive a new Bond or Bonds for the unredeemed balance as provided above. H. Purchase of Bonds In lieu of redemption or otherwise, the Fiscal Agent, on behalf of the Agency and upon its direction, is hereby authorized to purchase Bonds on the open market at any time at a price not to exceed the principal amount of the Bonds plus the applicable premium and accrued interest, if any, to the date of purchase plus brokerage fees, if any. Section 12 . Funds There is hereby created with the Treasurer a special,trust fund called the Project Area "A" Redevelopment Fund" (hereinafter sometimes called the "Redevelopment Fund "). There is herebyAcontinued with the Fiscal Agent a special trust fund Adenominated in the 1976 Resolution the "Commercial Center Project Special Fund" to be redesignated herein the "Redevelopment Pro ject A rea "A ", as n e. aea cno ,mot FimA in which there are Aco nt,nttPd special trust accounts Account" and the with the Fiscal Fund called the fu called the 07 -28 -86 2532k/2019/27 mown as the "Interest Account ", "Principal "Reserve Account." There is hereby created Agent a special trust account in the Special "Cost of Issuance Account" and a special trust "Escrowed Proceeds Fund." -12- So long as any of the Bonds, or any interest on them,, remain unpaid by the Agency, the moneys in the foregoing Funds shall be used for no purposes other than those required or permitted by this Resolution, the 1976 Resolution and -the Law. Section 13 Sale of Bonds; Disposition of Bond Proce velopment Fund The Agency may provide by resolution sale of the Bonds in the manner provided by the Law. A. Upon the delivery of the Bonds to the purchasers, the Fiscal Agent, on behalf of the Agency and upon its direction, shall receive the proceeds from the sale of the Bonds, and shall dispose of the proceeds and moneys as follows: (1) Deposit in the Interest Account accrued interest and premium, if any, paid by the purchasers of the Bonds; plus an amount which when added to the sum of the accrued interest and premium, if any, and anticipated investment earnings on the total amount deposited in the Interest Account will equal the interest due on the Bonds on January 15, 1987 net of that portion of interest due on monies deposited in the Escrowed Proceeds Fund; (2) Deposit in the Reserve Account a sum equal to the Reserve Requirement net of an amount equal to debt service (calculated at the rate borne by the Bonds) attributable to monies deposited in the Escrowed Proceeds Fund; (3) Deposit in the Cost of Issuance Account, the - amount necessary to pay expenses, including bond insurance premiums, if any, in connection with the issuance and sale of the Bonds and fees of the Fiscal Agent and Paying Agents; (4) Deposit in the Escrowed Proceeds Fund the sum of (5) After making the above deposits, the balance of the proceeds from the sale of the Bonds, if any, shall be transferred to the Treasurer who shall place the same in the Redevelopment Fund. B. The moneys set aside in the Escrowed Proceeds Fund shall be transferred to the Redevelopment Fund from time to time upon receipt by the Fiscal Agent of a certificate or opinion of an Independent Financial Consultant that Pledged Tax Revenues to be received by the Agency during such Fiscal Year, based upon the most recent assessed valuation of taxable property in the Redevelopment Project Area, furnished by the appropriate officer of the County of Lynwood, will be at least equal to 1.25 times the current bond year's debt service on the Bonds less the current bond year's debt service on that portion 07 -28 -86 2532k/2019/27 -13- of the Bonds which will remain in the Escrowed Proceeds Fund immediately following any such transfer. Any moneys remaining in the Escrowed Proceeds Fund on June 15, 1989 shall be transferred to the Redemption Fund and applied to the - redemption of ABonds pursuant to Section 11B. Upon transfer of moneys from the Escrowed Proceeds Fund to the Redevelopment Fund, the Fiscal Agent shall give notice to each Bondowner by first class mail postage prepaid that such transfer has been made and that the Bonds are no longer subject to Special Mandatory Redemption pursuant to Section 11B hereof. C. The moneys set aside in the Redevelopment Fund shall remain there until from time to time expended for the purpose of financing a portion of the costs of the Redevelopment Project and other related costs, and also including in such costs: (1) The payment of an amount of money in lieu of taxes as authorized by Section 33401 of the Law in any year during which the Agency owns property in the 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; (2) The cost of any lawful activities in connection with the implementation of the Redevelopment Project Area, including, without limitation, those activities authorized by Section 33445 of the Law; and (3) The necessary expenses in connection with the issuance and sale of the Bonds and fees of the Fiscal Agent and Paying Agents not otherwise paid under paragraph B above. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for which the Bonds were issued as determined by resolution of the Agency, that sum shall be transferred to the Special Fund. All of the above uses constitute a "redevelopment activity" as that term is defined in Health and Safety Code Section 33678. 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 07 -28 -86 2532k/2019/27 -14- 0 E Ordinance No. 945 of the City of Lynwood, which was adopted'on July 10, 1973, which ordinance became effective on August 9, 1973) and upon taxable property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 960, adopted by the City Council of the City of Lynwood on December 27, 1973, which ordinance became effective on January 26, 1974) and upon taxable,property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 990, adopted by the City Council of the City of Lynwood on August 19, 1975, which ordinance became effective on September 18, 1975), and upon taxable property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 1111, adopted by the City Council of the City of Lynwood on December 16, 1980, which ordinance became effective on January 15, 1981 less such property removed by an ordinance from the Redevelopment Plan (being Ordinance No. 1000 adopted by the City Council of the City of Lynwood on June 1, 1976, which ordinance will become effective on July 1, 1976), 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 August 9, 1973 (being the effective date of the Ordinance No. 945 referred to above),- with reference to property described in the Redevelopment Plan approved by that Ordinance, and 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 January 26, 1974 (being the effective date of the amending Ordinance No. 960), with reference to property described in the Amendment to the Redevelopment Plan approved by said amending Ordinance, and 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 September 18, 1975 (being the effective date of the amending Ordinance No. 990), with reference to property described in the Amendment to the Redevelopment Plan approved by said amending Ordinance, and the taxable project 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 January 15, 1981 (being the effective date of the amending Ordinance No. 1111), with reference to property described and added in the amendment to the Redevelopment Plan approved by said amending Ordinance, and shall be allocated to and when collected shall be paid into the funds of the 07 -28 -86 2532k/2019/27 -15- F`Ati� 0 • respective taxing agencies as taxes by or for the taxing agencies on all other property are paid; and (b) That portion of the levied taxes each year in excess of such amount shall be allocated to and when collected shall be paid into the Special Fund of the Agency. This portion of the levied taxes (plus State reimbursed amounts for certain property tax exemptions including but not limited to those related to business inventory and homeowners exemptions, to the extent received), are herein referred to as "Pledged Tax Revenues" and any tax revenues which are required to be passed through to certain taxing entities. The foregoing provisions of this Section are a portion of the provisions of Article 6 of the Law as applied to the Bonds and shall be interpreted in accordance with Article 6, and the further provisions and definitions contained in Article 6 are incorporated by reference herein and shall apply. The Pledged 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 Bonds and the 1976 Bonds, 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 Bonds and the 1976 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 Bonds and the 1976 Bonds and shall be irrevocable. 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 intended to comply with the above quoted provision and shall be so construed. Section 15 . Special.Fund The Agency shall pay or cause to be paid to the Fiscal Agent for deposit in the Special Fund in accordance with this Section all Pledged Tax Revenues and other moneys identified herein, and the Agency will, so far as permitted by law, authorize and direct the payment of the Pledged Tax Revenues by the respective taxing entities directly to the Fiscal Agent. The interest on the Bonds until maturity shall be paid by the Fiscal Agent from the Special Fund. At the maturity of any of the Bonds, and, after all interest then 07 -28 -86 2532k/2019/27 -16- due on the Bonds then outstanding has been paid or provided for, moneys in the Special Fund shall be applied to the payment of the principal of any of such Bonds. Without limiting the generality of the foregoing and for the purpose of assuring that the payments referred to above will be made as scheduled, the Pledged Tax Revenues accumulated in the Special Fund shall be used in the following priority; provided, however, to the extent that deposits have been made in any of the'Funds referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Interest Account Deposits shall be made into the Interest Account so that the balance in the Account on each interest payment date shall be equal to interest due on the then outstanding Bonds on such interest payment date. Moneys in the Interest Account shall be used solely for the payment of interest on the Bonds as interest becomes due, including accrued interest on any Bonds purchased or redeemed prior to maturity. (b) Principal Account After the deposits have been made pursuant to subparagraph (a) above, deposits shall next be made into the Principal Account so that the balance in the Account on or prior to each July 15 is equal to the principal coming due on such date on the then outstanding - serial- Bonds. All monies in -the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying principal installments on the Bonds as they shall become due and payable. (c) Reserve Account After deposits have been made pursuant to subparagraphs (a) and (b) above, deposits shall be made to the Reserve Account, if necessary, in order to , cause the amount on deposit therein to equal the Reserve Requirement. Moneys in the Reserve Account shall be transferred to the Interest Account or Principal Account to pay interest on and principal of the Bonds either (i) as it becomes due to the extent Pledged Tax Revenues are insufficient therefor or (ii) at the final maturity of the Bonds. Any portion of the Reserve Account which is in excess of the Reserve Requirement shall be transferred at least semiannually to the Interest Account. (d) Surplus It is the intent of this Resolution: (i) that the deposits in subparagraphs (a) and (b) above to the Interest Account and the Principal Account, respectively, shall be made as scheduled, and (ii) that the deposits in subparagraph (c) above to the Reserve Account shall be made as necessary to maintain a balance equal to 07 -28 -86 2532k/2019/27 -17- 0 0 the Reserve Requirement, if and only if the Pledged Tax Revenues are sufficient therefor. Should it be necessary to defer all or part of any deposits referred to in subparagraph (c) above, such deferred deposits shall be cumulative and shall be made when the Pledged Tax Revenues are sufficient to make the deposits required by subparagraphs (a) and (b) and thereafter make the deposits required by subparagraph (c). If: (i) the above transfers have been made so that the required amounts as of that time are in the above mentioned Accounts, and (ii) the Pledged Tax Revenues to be received by the Agency in the current Fiscal Year, based upon the most recent assessed valuation of taxable property in the Redevelopment Project Area, furnished by the appropriate officer of the County of Lynwood are at least equal to 1.25 times the Maximum Annual Debt Service on all Bonds, Parity Bonds and any loans, advances or indebtedness payable from Pledged Tax Revenues on a parity with the Bonds pursuant to Section 33670 of the Law, as shown by the certificate or opinion of an Independent Financial Consultant employed by the Agency, and (iii) there has been no material change in the status of the Redevelopment Project which in the opinion of an Independent Redevelopment Consultant, said opinion having been filed with the Fiscal Agent, would be likely to result in diminution of increment in the succeeding fiscal year, any balances in the Special Fund may be used and applied by the Agency for any lawful purpose, including without limitation, the purchase and /or call and redemption of Bonds and Parity Bonds. Section 16 Deposit and Investment of Moneys in Funds Subject to the provisions of Covenant 9 of Section 18 hereof, all moneys held by the Agency in the Redevelopment Fund, except such moneys which are at the time invested in obligations in which the Agency is authorized to make investments, and by the Fiscal Agent in the Special Fund which are not otherwise invested pursuant to this Section shall be held in time or demand deposits in any bank or trust company authorized to accept deposits of public funds (including the banking department of the Fiscal Agent) and all of such deposits shall be 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 Moneys in the Redevelopment Fund shall from time to time be invested by the Agency, and moneys in the Special Fund may be invested by the Fiscal Agent and upon request of the Agency shall be invested in Federal Securities,/"ject to the following restrictions: 07 -28 -86 2532k/2019/27 -18- (,a) Moneys in the Redevelopment Fund shall be invesfed only in obligations 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 the Fund. j Moneys in the Interest and Principal Account of the Special Fund shall be invested only in obligations which will by their terms mature on such dates as to ensure that before each interest and principal payment date, there will be in such Account, from matured obligations and other moneys already in such Account, cash equal to the interest and principal, payable on such payment date. (F) Moneys in the Reserve Account shall be invested in obligations which will by their terms mature on or before the date of the final maturity of the Bonds or five (5) years from the date of investment, whichever is earlier. ( Moneys in the Escrowed Proceeds Fund shall be investM in accordance with the investment agreement as described in (f) below or otherwise in Federal Securities which mature on or before July 15, 1989. Any monies remaining in the Escrowed Proceeds Fund after July 1, 1989 shall be used to redeem theABonds on July 15, 1989 in accordance with Section 11B of this Resolution. Except as otherwise provided in Section 13 hereof, obligations purchased as an investment of moneys in any of the Funds or Accounts shall be deemed at all times to be a part of such respective Fund or Account and the interest accruing thereon and any gain realized from an investment shall be credited to such Fund or Account and any loss resulting from any authorized investment shall be charged to such Fund or Account 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 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 the Fund shall be valued at the then estimated or appraised market value of the investment or face amount thereof, whichever is lower; provided, however, that investments in the Interest Account and the Principal Account shall be valued at the face amount thereof. All interest earnings received on any monies invested in the Interest Account, Principal Account or Reserve Account, to the extent they exceed the amount required to be in such account, shall be transferred to the Special Fund. All interest earnings on monies invested in the Redevelopment Fund shall be retained in such fund and applied to the costs of the Project. 07 -28 -86 2532k/2019/27 -19- 0 0 Section 17 Issuance of Parity Bonds If at any time the Agency determines it needs to do so, the Agency may provide for the issuance of, and sell, Parity Bonds in such principal amounts as it estimates will be needed. The issuance - and sale of any Parity Bonds shall be subject to the following conditions precedent: (a) The Agency shall be in compliance with all covenants in this Resolution and the 1976 Resolution including any conditions to the issuance of additional ,1A.. (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 moneys into the Reserve Account in an amount sufficient, together with the balance of the Reserve Account, to equal the Reserve Requirement on all Bonds expected to be outstanding including the outstanding Bonds and Parity Bonds, (iii) the disposition of Surplus Pledged Tax Revenues in substantially the same manner as Section 15(d) hereof; (c) Receipt of a certificate or opinion of an Independent Financial Consultant showing: (i) For the current and each future fiscal year the debt service for each such Bond year with respect to all Bonds and Parity Bonds reasonably expected to be outstanding following the issuance of the Parity Bonds; (ii) For the then current fiscal year, the Pledged Tax Revenues.to be received by the Agency based upon the most recent assessed valuation of taxable property in the Project Area provided by the appropriate officer bf the County of Lynwood (and exclusive of any anticipated business inventory subvention revenues); and (iii) That for the then current fiscal year, the Pledged Tax Revenues referred to in item (ii) were at least equal to 1.25 times the maximum annual debt service referred to in item (i) above (excluding debt service with respect to any portion of the Parity Bonds deposited in an escrowed proceeds account), and that the Agency is entitled under the Law and the Redevelopment Plan to receive taxes under Section 33670 of the Law in an amount sufficient to meet expected debt service with respect to all Bonds and Parity Bonds. 07 -28 -86 2532k/2019/27 -20- y .. ' . 0 0 (d) The Parity Bonds shall mature on and interest shall be payable on the same dates as the Bonds (except the first interest payment may be from the date of the Parity Bonds until the next succeeding January 15 or Jury 15). (e) Receipt of written consent of the Bond Insurer to the issuance of Parity Bonds if the Parity Bonds are to bear interest at a variable rate. If the Parity Bonds are to be applied under Section 33334.2 of the Law, Pledged Tax Revenues for purposes of such Parity Bonds shall include that portion of taxes allocated under Section 33670 of the Law for payment of the Parity Bonds which are required to be set aside under Section 33334.2. 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 all covenants of the Agency set forth in the 1976 Resolution and the following covenants and agreements for the benefit of the Bondholders which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that the Covenants do not require the Agency to expend any funds other than the Pledged Tax Revenues: - - -- - Covenant 1 Complete Redevelopment Project; Amendment to Redevelopment Plan The Agency covenants and agrees that it will diligently carry out and continue to completion in a sound and economical manner, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan. The Redevelopment Plan may be amended as provided in the Law but no amendment shall be made unless it will not substantially impair the security of the Bonds or the rights of the Bondholders, as shown by an Opinion of Counsel addressed to the Agency, Fiscal Agent and Bond Insurer, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency and unless the Bond Insurer shall have consented thereto in writing. Covenant 2 Use of Proceeds, Management and Operation of Properties The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in this Resolution and that it will manage and operate all properties owned by it comprising any part of the Redevelopment Project Area in a sound and businesslike manner. 07 -28 -86 2532k/2019/27 -21- 0 9 14 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 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 any lien upon the Pledged Tax Revenues on a parity with the Bonds authorized herein. 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 on the date, at the place and in the manner provided in the Bonds. Covenant S Payment of Taxes and Other Charges The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of.taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Redevelopment Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of the 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 on the Bonds, 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 of the payment. Covenant 6 Books and Accounts; Financial Statements The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in 07 -28 -86 2532k/2019/27 -22- 0 0 which complete and accurate entries shall be made of all transactions relating to the Redevelopment Project and the Tax Revenues and other funds relating to the Project. The Agency 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 the year, in reasonable detail covering the Redevelopment Project 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 the statement or statements to the Fiscal Agent, the Bond Insurer and any rating agency which maintains a rating on the Bonds, and, upon written request, to any Bondholder. Covenant 7 Eminent Domain Proceeds 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, it shall take all steps necessary to adjust accordingly the base roll of the Project Area. Covenant S Disposition of Property The Agency covenants and agrees that it will not dispose of more than ten percent (10 %) of the land area in the Redevelopment Project Area (except property shown in the Redevelopment Plan in effect on the date this Resolution is adopted as planned for public use; or property to be used for public streets, public offstreet parking, sewage facilities, parks, easements or right -of -way for public utilities, or other similar uses) to public bodies or other persons or entities whose property is tax exempt, unless such disposition will not result in the security of the Bonds or the rights of Bondholders being substantially impaired, as shown by an Opinion of Counsel addressed to the Agency, the Fiscal Agent and the Bond Insurer, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 9 Protection of Security and rs; No Arbitrage; No Consumer Loan Bond_ covenants and agrees to preserve and protect a security of the Bonds and the rights of the Bondholders and to contest by court action or otherwise (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) that the Pledged 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 Bondholders is taxable under 07 -28 -86 2532k/2019/27 -23- r • 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 (a) the Pledged Tax Revenues being withheld unless the withholding is being contested in good faith, and (b) the interest received by the Bondholders becoming taxable under federal income tax laws. The Agency covenants and agrees that it will make no use of the proceeds of the Bonds at any time during the term thereof which will cause the Bonds to be "arbitrage bonds" within the meaning of Section 103(c) or "consumer loan bonds" within the meaning of Section 103(0) of the United States Internal Revenue Code of 1954, as amended, and applicable regulations adopted thereunder by the Internal Revenue Service, and the Agency hereby assumes the obligation to comply with Section 103(c) and Section 103(o) and the regulations throughout the term of the Bonds. Covenant 10 Compliance with Law The Agency covenants that it will comply with the requirements of the Law. Without limiting the generality of the foregoing, the Agency covenants and agrees to file all required statements and hold all public hearings required under Section 33334.6 and 33675 of the Law to assure compliance by the Agency with its covenants hereunder. Covenant 11 Limitation on Indebtedness The Agency covenants and agrees that is has not and will not incur any loans, obligations or indebtedness from Pledged Revenues such that the total aggregate debt service on said loans, obligations or indebtedness incurred from and after the date of adoption of the Redevelopment Plan, when added to the total aggregate debt service on the Bonds, will exceed the maximum amount of Pledged Revenues to be divided and allocated to the Agency pursuant to the Redevelopment Plan. 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 the property in any year during the term of the lease or contract are less than the taxes which would have been levied if the entire property had been assessed and taxed in the same manner as privately owned property, the lessee shall pay such difference to the Agency within (30) days after 07 -28 -86 2532k/2019/27 -24- r the taxes for the year become payable to the taxing agencies and in no event later than the delinquency date of such taxes established by law. All such payments shall be treated as Pledged Tax Revenues, and when received by the Agency be used as provided herein. Section 20 Fiscal Agent and Paying Agents The Agency hereby appoints as Fiscal Agent hereunder, to act as the agent, trustee and depositary 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 may remove the Fiscal Agent initially appointed, or any successor, and shall forthwith appoint a successor thereto, with written notice to the Bond Insurer, but any successor shall be a bank or trust company doing business and having an office in the City of Los Angeles, having a combined capital and surplus of at least $50,000,000. The Fiscal Agent or any substituted Fiscal Agent may at any time resign by filing written notice thereof with the Agency and the Bond Insurer. Upon a resignation in writing, the Agency shall forthwith appoint a substitute Fiscal Agent with notice to the Bond Insurer, 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. 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 reponsibility in respect thereof, other than in connection with the duties or obligations herein or in the 07 -28 -86 2532k/2019/27 -25- A 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. Section 21 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 deems a surety bond necessary, as may from time to time be determined and prescribed by resolution. The Agency may authorize the new Bond to be signed and authenticated in a manner as it determines in the resolution. Section 22 Cancellation of Bonds All Bonds surrendered to the Fiscal Agent or any Paying Agent for payment at maturity or, in the case of call and redemption prior to maturity, at the redemption date, shall upon payment therefor be cancelled immediately and transmitted to the Treasurer or destroyed by the Fiscal Agent at the direction of the Agency, If Bonds are destroyed a certificate of destruction shall forthwith be transmitted to the Treasurer. Any Bonds purchased by the Fiscal Agent shall be cancelled immediately and transmitted to the Treasurer or destroyed. All of the cancelled Bonds not destroyed shall remain in the custody of the Treasurer until destroyed pursuant to due authorization. Section 23 . Amendments This Resolution, and the rights and obligations of the Agency and of the Owners of the Bonds may be modified-or - amended at any time by supplemental resolution adopted by the Agency: (a) without the consent of Bondholders, if the modification or amendment is for the purpose of adding covenants and agreements further to secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make modifications not affecting any outstanding series of Bonds only with the consent of the 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 the modifications or amendments do not adversely affect the rights of the Owners of any outstanding Bonds; (b) for any purpose with the written consent of the Bond Insurer and consent of the Bondholders holding 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; provided, however, that no 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 on it, 07 -28 -86 2532k/2019/27 -26- <wr.. 0 a- extend its maturity or the times for paying interest, change the monetary medium in which principal and interest is payable, or create a mortgage pledge or lien upon the 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. Any act done pursuant to a modification or amendment consented to by the Bondholders 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 the 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 consent has been given, no Bondholder, whether attached to a Bond or detached therefrom, shall have any right or interest to object to the action, to question its propriety or to enjoin or restrain the Agency or its officers from taking any action pursuant to a modification or amendment. A. Calling Bondholders' Meeting If the Agency shall desire to obtain the Bondholders consent, it shall duly adopt a resolution calling a meeting of the Bondholders for the purpose of considering the action for which consent is desired. B. Notice of Meeting Notice specifying the purpose, place, date and hour of a Bondholders' meeting shall be mailed postage prepaid, to the respective registered owners at their addresses appearing on the bond register as maintained by the Fiscal Agent. The notice shall be mailed not less than sixty (60) days nor more than ninety (90) days prior to the date fixed for the meeting, and said notice shall set forth the nature of the proposed action for which consent is desired. The place, date and hour of the meeting and the date or dates of mailing the notice shall be determined by the Agency in its discretion. The actual receipt by any Bondholder of notice of any Bondholders' meeting shall not be a condition precedent to the holding of the meeting, and failure to receive notice shall not affect the validity of the proceedings at the meeting. A certificate by the Secretary of the Agency approved by resolution of the Agency, that the meeting has been called and that notice has been given as provided herein, shall be conclusive as against all parties and no Bondholder shall have the right to show that he failed to receive actual notice of the meeting. C. Voting Qualifications The Fiscal Agent shall prepare and deliver to the chairman of the meeting a statement of the names and addresses of the registered owners of the Bonds. 07 -28 -86 2532k/2019/27 -27- O t 0 This statement shall show maturities, serial numbers and principal amounts_ so that voting qualifications can be determined. No Bondholders shall be entitled to vote at the meeting unless their names appear upon the statement. No Bondholders shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against their names on the statement. D Issuer -Owned Bonds The Agency covenants that it will present at the meeting a certificate, signed and verified by one of its member 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 the certificate, or any Bond which is established at or prior to the meeting to be owned by the Agency or the City, directly or indirectly, and no such Bond (in this Resolution referred to as "issuer -owned Bonds ") shall be counted in determining whether a quorum is present at the meeting. E. 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 Bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting shay be held as adjourned without further notice, whether such adjournment shall have been held by a quorum or by less than a quorum. 'The Agency shall, by an instrument in writing, appoint a temporary chairman of the meeting,'and the meeting shall be organized by the election of a permanent chairman and secretary. At any meeting each Bondholder shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be qualified to vote as set forth above, and the vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The Agency and /or the Fiscal Agent by their duly authorized representatives and counsel, may attend any meeting of the Bondholders, but shall not be required to do so. F. Vote Required At any Bondholders' meeting there shall be submitted for the consideration and action of the Bondholders a statement of the proposed action for which consent is desired. If the action is consented to and approved by Bondholders holding at least sixty percent (60 %) in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds), the chairman and secretary of the meeting shall so certify in writing to the Agency. The certificate shall constitute complete evidence of consent of the Bondholders under the provisions of this Resolution. A 07 -28 -86 2532k/2019/27 -28- 0 certificate signed and verified by the chairman and the secretary of any Bondholders' meeting shall be conclusive evidence and the only competent evidence of matters stated in the certificate relating to proceedings taken at the - meeting. Section 24 Proceedings Constitute Contract; Events of Default and Remedies of Bondholders 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, the Bond Insurer and the Bondholders. The provisions of any amendment shall be enforceable by the Bond Insurer and any Bondholder for the equal benefit and protection of all Bondholders 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. This 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 by the Agency of any installment of interest on any Bond when the interest installment becomes due and payable; (2) Default in the due and punctual payment by the Agency of the principal and premium, if any, of any Bond when the principal becomes due and payable, whether at maturity, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the covenants, agreements or conditions contained in this Resolution or in the Bonds, where the default continues for a period of thirty (30) days following written notice to the Agency: or (4) The Agency shall file a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of 07 -28 -86 2532k/2019/27 -29- 0 0 competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property; In each event of default described in (1) or (2) above the Fiscal Agent shall, and in each case of default described in (3) or (4) above, the Fiscal Agent shall upon written request of the Bond Insurer or if requested by the owners of not less than a majority of the aggregate principal amount of the Bonds at the time outstanding ( such request to be in writing to the Fiscal Agent and to the Agency) with the consent of the Bond Insurer, declare the principal of all of the Bonds then outstanding and the interest accrued thereon, to be due and payable immediately; provided, however, if a policy of bond insurance insuring the payments of principal and interest shall be in force, and if the Agency and /or the insurer shall have promptly paid Bond interest and principal when due, then no such acceleration of maturities shall occur unless requested in writing by the Bond Insurer. Upon any such declaration the Bonds shall become and shall be immediately due and payable, anything in this Resolution or in the Bonds to the contrary notwithstanding. The declaration may be rescinded by the Bond Insurer if such declaration resulted from a request of the Bond Insurer or otherwise by the owners of not less than a majority of the Bonds then outstanding provided the Agency cures the default or defaults and deposits with the Fiscal Agent a sum sufficient to pay all principal on the Bonds matured prior to the declaration and all matured installments of interest (if any) upon all the Bonds, with interest at the rate of twelve percent (12%) per annum on the overdue installments of principal and, to the extent the payment of interest on interest is lawful at that time, on such overdue installments of interest,, so that the Agency is currently in compliance with all payment, deposit and transfer provisions of this Resolution, and any expenses incurred by the Fiscal Agent in connection with the default. B. Certain Remedies of Bondholders Any Bondholder with the consent of the Bond Insurer or the Bond Insurer shall have the right, for the equal benefit and protection of all Bondholders 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 convenant contained in this Resolution and in the Bonds, and to require the carrying out of any or all covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; 07 -28 -86 2532k/2019/27 -30- 0 0 (2) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bondholders' rights; or (3) upon the happening of any event of default (as defined in this Section), by suit, action or proceeding in any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were the trustees of an express trust. C. Non - Waiver Nothing in this Section or in any other provisions of this Resolution, or in the Bonds, shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at the respective dates of maturity from Pledged Tax Revenues, as herein provided, or affect or impair the right, which is also absolute and unconditional, of the Owners to institute suit to enforce the payment by virtue of the contract embodied in the Bonds. No remedy conferred upon any Bondholder or Bond Insurer by the Resolution is intended to be exclusive of any other remedy, but each remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law of the State of California. No waiver of any default or breach of any duty or contract by any Bondholder or Bond Insurer shall affect any subsequent default or breach of any duty or contract or shall impair any rights or remedies on the subsequent default or breach. No delay or omission of any Bondholder or Bond Insurer to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any default or acquiescence therein. Every substantive right and every remedy conferred upon the Bondholders or Bond Insurer may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right, or exercise any remedy, shall be brought and should said suit, action or proceeding be abandoned, or be determined adversely to the Bondholders, then, and in every such case, the Agency and the Bondholders shall be restored to their former positions, rights and remedies as if the suit, action or proceeding had not been brought or taken. D. Actions by Fiscal Agent as Attorney -in -Fact Any suit, action or proceeding which any Owner of 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 similarly situated and the Fiscal Agent is hereby appointed (and the successive respective 07 -28 -86 2532k/2019/27 -31- ti2r "SaM�- registered owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in -fact of the respective registered owners of the Bonds for the purpose of bringing any suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective registered owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Fiscal Agent as attorney -in -fact; provided that provision is made•to indemnify the Fiscal Agent for all expenses, including attorneys fees. E. General After the issuance and delivery of the 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 25 . CUSIP Numbers CUSIP identification numbers will be imprinted on the Bonds, but numbers shall not constitute a part of the contract evidenced by the Bonds and no liability shall attach to the Agency or any of the officers or agents because of or on account of said numbers. Any error or omission with respect to the numbers shall not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. Section 26 . 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 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 Bondholders 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, the duties shall be performed by the Treasurer. 07 -28 =86 2532k/2019/27 -32- 0 0 Section 27 . Effective Date This Resolution shall take effect upon adoption. ADOPTED AND APPROVED the day of 1986. AYES: NOES: ABSENT: Chairman ATTEST: Secretary 07 -28 -86 2532k/2019/27 -33- i STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF LYNWOOD C SECRETARY'S CERTIFICATE )ss. RE ADOPTION OF RESOLUTION I, , Secretary of the Lynwood Redevelopment Agency, DO HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Agency at a regular meeting of the Agency held on the day of , 1986, and that the same was passed and adopted by the following vote: AYES: Members NOES: Members ABSENT: Members ABSTAIN: Members Secretary of the Lynwood Redevelopment Agency (SEAL) STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF LYNWOOD SECRETARY'S CERTIFICATE )ss. OF AUTHENTICATION I, Secretary of the Lynwood Redevelopment Agency, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. of the Agency and that the Resolution was adopted at the time and by the vote stated on the above certificate, and has not been amended or repealed. Secretary of the Lynwood Redevelopment Agency (SEAL) 07 -28 -86 2532k/2019/27 -34- 0 EXHIBIT A [FORM OF BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF LYNWOOD LYNWOOD REDEVELOPMENT AGENCY COMMERCIAL CENTER PROJECT TAX ALLOCATION PARITY BOND, SERIES 1986 Registered f ?.I 7 The LYNWOOD REDEVELOPMENT AGENCY (hereinafter sometimes called the "Agency "), a public body, corporate and politic, duly organized and existing under the laws of the State of California, for value received, hereby promises to pay (but solely from the funds hereinafter mentioned) to the registered owner specified above or registered assigns, herein sometimes referred to as "registered owner" (subject to the right of prior redemption hereinafter mentioned), the principal sum specified above on the maturity date stated above, and to pay such registered owner by check or draft mailed thereto, at his address as it appears on the register kept by the Fiscal Agent at the close of business on the fifteenth day preceding the interest payment date (the "regular record date "), interest on such principal sum at the rate specified above from the interest payment date next preceding the date hereof (unless (i) the date hereof is prior to January 15, 1987 in which event from August( —, 1986 (ii) it is dated after a regular record date and bdf=e 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 or (iii) it is dated as of an interest payment date, in which event it shall bear interest from such date) until the principal hereof shall have been paid or provided for in accordance with the Resolution hereinafter referred to, at the rate or rates above indicated, payable semiannually on January 15 and July 15 in each year, commencing on January 15, 1987. Both principal and interest and any premium upon the redemption prior to the maturity 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 or draft as stated above) are payable at the principal corporate trust office of , Fiscal Agent for the Agency, in Los Angeles, California. 07 -28 -86 2532k/2019/28 A -1 y:Y.. 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 Lynwood, the State of California or any of its political subdivisions, and neither said City, said - State nor any of its political subdivisions is liable hereon, nor in any event shall this Bond, said interest or said premium be payable out of any funds or properties other than the funds of the Agency as set forth in the 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 the Bond are liable personally on this Bond by reason of its issuance. This Bond is one of a duly authorized issue of bonds of the Agency designated "Lynwood Redevelopment Agency, ARedevelopment Project Area "A" as Amended Tax Allocation n Bonds, Series 1986" (hereinafter called Bonds ") in aggregate principal amount of $4 all of like tenor (except for bond numbers, maturity dates and differences, if any, in interest rates) and all of which have been issued pursuant to and in full conformity with the Constitution and laws of the State of California and particularly the Community Redevelopment Law (Part 1 of Division 24 of the Health and Safety Code of the State of California) for the purpose of aiding in the financing of the Redevelopment Project above designated, and are authorized by and issued pursuant to Resolution No. adopted by the Agency on _, 1986 (said resolution being hereinafter referred to as the "Resolution ") and all of the Bonds are equally secured in accordance with the terms of the Resolution, reference to which is hereby made for a specific description of the security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants, and agreements made for the benefit of the Bondholders, and for a statement of the rights of the Bondholders, and by the acceptance of this Bond the registered owner hereof assents 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 Bondholders, may (with certain exceptions as stated in said Resolution) be modified or amended with the consent of the Holders of sixty percent (60 %) in aggregate principal amount of outstanding Bonds, exclusive of issuer -owned bonds, unless such modification or amendment is for the purpose of curing ambiguities, defects, etc., in which case no Bondholder's consent is required. The Bonds are issued on a parity with the $1,605,000 outstanding Commercial Center Project Tax Allocation Bonds, Series 1976 (the "1976 Bonds ") originally authorized to be 07 -28 -86 2532k/2019/28 A -2 M .Y� e issued by Resolution No. LRA 76 -10 (the "1976 Resolution "), of the Agency adopted on July 15, 1976. _ The principal of this Bond and the interest hereon are secured by an irrevocable pledge o£, and are payable solely from, the Pledged Tax Revenues (as such term is defined in said Resolution) and certain other funds, all as more particularly set forth in the Resolution. Said Resolution is adopted under and this Bond is issued under and is to be construed in accordance with the laws of the State of California. The outstanding Bonds maturing on or after July 15, 1997, may be called before maturity and redeemed at the option of the Agency in whole or in part from any source of funds on July 15, 1996, or on any interest payment date thereafter prior to maturity. If less than all of the Bonds outstanding are to be redeemed at any one time, the Bonds to be redeemed shall be redeemed in inverse order of maturity, and by lot within a maturity. Bonds called for redemption shall be redeemed at a redemption price (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date as shown in the following table: Redemption Dates Redemption Price July 15, 1996 or January 15, 1997 102% July 15, 1997 or January 15, 1998 101 -1/2% July 15, 1998 or January 15, 1999 101% _. _. July 15, 1999 or January 15, 2000 100 -1/2% July 15, 2000 and thereafter 100% The Bonds are subject to special early redemption in whole or in part, by lot at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date without premium, (i) on July 15, 1989 to the extent of any moneys remaining in the Escrowed Proceeds Fund on June 15, 1989; (ii) on any interest payment date prior to July 15, 1989 in the event that state law is modified to alter the 'generation of Pledged Tax Revenues in a manner that lowers Pledged Tax Revenues to the level that the Agency determines will prohibit the transfer of all funds from the Escrowed Proceeds Fund; and (iii) on the interest payment date next succeeding the date the Agency determines that current market conditions prohibit the investment of all or a portion of the proceeds remaining in the Escrowed Proceeds Fund at a rate at least equal to the true interest rate on the Special Term Bonds The Bonds are also subject to minimum sinking fund redemption on July 15 of the following years in the following amounts: 07 -28 -86 2532k/2019/28 A -3 0 Year 2002 2003 2004 2005 2006 2007 2008 2009 Amount Year 2010 2011 2012 2013 2014 2015 2016 0 Amount For the purpose of selecting Bonds by lot, Bonds in excess of $5,000 will be assigned a separate number for each $5,000 of principal they represent. This Bond is issued in fully registered form and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue, all as more fully set forth in the Resolution. This Bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at the principal office of the Fiscal Agent in 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 registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue will be issued to the transferee in exchange therefor. The Agency, the Fiscal Agent and any Paying Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Agency, the Fiscal Agent and any Paying 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. 07 -28 -86 2532k/2019/28 A -4 IN WITNESS WHEREOF, the Lynwood Redevelopment Agency has caused this Bond to be signed on its behalf by its Chairman by his facsimile signature and by its Secretary by her facsimile signature and the seal of said Agency to be imprinted, hereon. Registration Date: Chairman of the Lynwood Redevelopment Agency (SEAL] Secretary of the Lynwood Redevelopment Agency 07 -28 -86 2532k/2019/28 A -5 (FORM OF CERTIFICATE OF AUTHENTICATION ON FULLY REGISTERED BONDS] This is one of the Fully Registered bonds described in the within - mentioned Resolution. Fiscal Agent By: Authorized Officer [FORM OF ASSIGNMENT OF FULLY REGISTERED BONDS] For value received hereby sells, assigns and transfers unto the within - mentioned Bond and hereby irrevocably constitutes and appoints attorney, to transfer the same on the books of the 71 scal Agent with full power of substitution in the premises. Dated: NOTE: The signature to this Assignment must correspond with the name as written] on the face of the within Bond in every particular, without alteration or. enlargement or any change whatsoever. 07 -28 -86 2532k/2019/28 A -6 0 0 NOTICE INVITING BIDS $4,550,000 LYNWOOD REDEVELOPMENT AGENCY REDEVELOPMENT PROJECT AREA "A ", AS AMENDED TAX ALLOCATION BONDS SERIES 1986 NOTICE IS HEREBY GIVEN that sealed proposals for the purchase of Four Million Five Hundred Fifty Thousand Dollars ($4,550,000) aggregate principal amount of tax allocation bonds (as designated herein) of the Lynwood Redevelopment Agency (the "Agency ") will be received by the Agency up to the time and at the place specified below: • Time: 11:00 A.M. (Pacific Time) Wednesday, August 6, 1986 Place: Offices of Stradling, Yocca, Carlson & Rauth Wells Fargo Bank Building 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Mailed Bids: Mailed bids should be addressed to: _Lynwood Redevelopment Agency c/o Stradling, Yocca, Carlson & Rauth Wells Fargo Bank Building 660 Newport Center Drive, Suite 1600 Newport Beach, California 92660 Attn: E. Kurt Yeager, Esquire OPENING OF BIDS: The bids will be received at the above place, will be opened at the above time by the Financial Consultant and Bond Counsel and will be presented to the Agency for its consideration and action at its meeting to be held later in the day on which bids are received. If bids are not accepted by the Agency on August 6, 1986, the Bonds will be sold at the same time and place on August 12, 1986, or August 19, 1986, until bids are accepted. ISSUE: Four Million Five Hundred Fifty Thousand Dollars ($4,550,000), designated "Lynwood Redevelopment Agency, Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986" (the "Bonds "), consisting of fully 1 ,N :r' registered Bonds, in den inations of five thousand dollars ($5,000) each or any integral multiple thereof, dated as of August 1, 1986, and numbered consecutively upward in order of issuance. MATURITY: The Bonds will mature on July 15, 2016., INTEREST: The Bonds will bear interest at a rate to be fixed upon the sale thereof but not to exceed twelve percent (12 %) per annum, payable semiannually on February 1 and July 15 in each year, commencing on January 15, 1987. PAYMENTS: The principal of, premium, if any, and interest on the Bonds are payable in lawful money of the United States of America; interest being payable by check or draft mailed to the registered Owner of the Bond at his address as shown on the registration books of the Fiscal Agent on the 15th day prior to any interest payment date, and principal being payable at the principal corporate trust office of Security Pacific National Bank, Fiscal Agent for the Agency, in Los Angeles, California. TRANSFER AND EXCHANGE: Transfer of ownership of a Bond or Bonds will be made by exchanging the same for a new Bond or Bonds and transferring the registration of such Bond or Bonds on the registration books of the Fiscal Agent. CALL AND REDEMPTION: The outstanding Bonds, or any of them,, may or will, as the case may be, be called before maturity and redeemed as follows: (a) The Bonds may be called before maturity and, redeemed, at the option of the Agency, in whole from the proceeds of refunding bonds and other available funds, or in whole or in part from any other source of funds, on July 15, 1996, or on any interest payment date thereafter prior to maturity. Bonds so called for redemption will be redeemed on the following redemption dates and at the following redemption price (expressed as a percentage of the principal amount of Bonds to be redeemed) plus accrued interest to the redemption date: Redei July 15, 1996 July 15, 1997 July 15, 1998 July 15, 1999 July 15, 2000 npti! and and and and and m Date January January January January thereaf 15, 1997 15, 1998 15, 1999 15, 2000 :er Redemption 2 U Price . . . . . . 102 % , . . . . . " . 101 %: . . . . . . 101 . . . . . . 100 %: . . . . . 100 0 0 (b) The Bonds will be subject to mandatory redemption from minimum sinking account payments on July 15, 2002, and on each July 15 thereafter prior to maturity in accordance with the schedule set forth herein under the caption "Successful Bidder; Bond Printing." The Bonds to be so redeemed will be determined by lot. Bonds so called for redemption will be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium. Special Early Redemption The Bonds are subject to special redemption in part, by lot at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date, without premium, (i) on August 1, 1989 to the extent of any moneys remaining in the Escrowed Proceeds Fund on July 1, 1989. ' PURPOSE OF ISSUE: The Bonds are to be issued by the Agency under and pursuant to the Community Redevelopment Law of the State of California (Part 1 of Division 24 of the Health and Safety Code) to aid in the financing of a redevelopment project in the City of Lynwood, California, known as the Redevelopment 'Project Area "A ", As Amended, pursuant to a Resolution, to be adopted by the Agency, providing for the issuance of the Bonds (the "Resolution "), to which reference is made for further particulars. SECURITY: The Bonds are being issued on a parity with the Agency's outstanding Redevelopment Project Area "A ", Tax Allocation Bonds, Series 1976 and are payable, as to both principal and interest, solely from Tax Revenues (as defined in the Resolution). The Bonds are not a debt of the City of Lynwood, the State of California or any of its political subdivisions-. TERMS OF SALE ----- ' - Interest Rate: The rate bid, may not exceed twelve percent (12 %) per annum, payable semiannually on January 15 and July 15 in each year, commencing on January 15, 1987.. The rate bid must be a multiple of one - eighth of one percent (1/8 %) or one - twentieth of one percent (1/20 %). All Bonds must bear the same interest rate. No Bond may bear more than one interest rate, and each Bond must bear interest at the rate specified in the bid from its date to its fixed maturity date. Sale of Bonds: The Bonds will be sold for cash only and all bids must be for not less than all of the Bonds hereby offered for sale. Each bid shall state: (1) that the bidder offers accrued interest from the date of the Bonds to the date of delivery, (2) the purchase price, which shall not be less than ninety -seven percent (97 %) of the principal amount thereof, and (3) the interest rate, not to exceed that specified herein, at which the bidder offers to buy the Bonds. Each bidder shall state in his bid the total interest cost in dollars and the net interest rate determined thereby, which will be considered informative only and not a part of the bid. 3 0 �1 I Successful Bidder; Bond Printing: The Bonds will be awarded to the responsible bidder or bidders considering the interest rate specified and the premium or discount offered, if any. The successful bid will be determined by deducting the amount of the premium (if any) from, or adding the amount of the discount (if any) to, the total amount of interest which the Agency would be required to pay from the date of the Bonds to the maturity date thereof at the rate specified in the bid, and the award will be made on the basis of the lowest net interest cost to the Agency. If two or more bids provide the same lowest net interest cost, the Agency will determine by lot which bid will be accepted, and such determination will be final. The purchaser must pay accrued interest from the date of the Bonds to the date of delivery thereof computed on a 360 -day year basis. The cost of printing the Bonds will be borne by the Agency. For the purposes of determining interest cost, the Bonds maturing on July 15, 2016 will be deemed to mature on July 15 in the amounts and in the years as follows: Right of Rejection: The Agency reserves the right, in its discretion, to reject any and all bids and, to the extent not prohibited by law, to waive any irregularity or informality in any bid. Award of Bonds: The Agency will take action awarding the Bonds or rejecting all bids not later than twenty -six (26) hours after the time herein prescribed for the receipt of bids; provided that the award may be made after the expiration of such specified time if the bidder has not given to the Agency notice in writing of the withdrawal of such bid. Notice of the award will be given promptly to the successful bidder. Form of Bid: Each bid, together with the bid check, must be in a sealed envelope addressed to the Agency, with the envelope and bid clearly marked "Bid for the purchase of $4,550,000 Lynwood Redevelopment Agency, Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986. Each bid must be unconditional and in accordance with the terms and conditions set forth or permitted herein and must be submitted on, or in substantial accordance with, the bid form provided by the Agency. 4 Principal Principal July 15 Amount July 15 Amount 2002 $175,000 2010 $310,000 2003 185,000 2011 335,000 2004 200,000 2012 360,000 2005 215,000 2013 385,000 2006 230,000 2014 415,000 2007 250,000 2015 450,000 2008 270,000 2016 (maturity) 480,000 2009 290,000 Right of Rejection: The Agency reserves the right, in its discretion, to reject any and all bids and, to the extent not prohibited by law, to waive any irregularity or informality in any bid. Award of Bonds: The Agency will take action awarding the Bonds or rejecting all bids not later than twenty -six (26) hours after the time herein prescribed for the receipt of bids; provided that the award may be made after the expiration of such specified time if the bidder has not given to the Agency notice in writing of the withdrawal of such bid. Notice of the award will be given promptly to the successful bidder. Form of Bid: Each bid, together with the bid check, must be in a sealed envelope addressed to the Agency, with the envelope and bid clearly marked "Bid for the purchase of $4,550,000 Lynwood Redevelopment Agency, Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986. Each bid must be unconditional and in accordance with the terms and conditions set forth or permitted herein and must be submitted on, or in substantial accordance with, the bid form provided by the Agency. 4 0 0 CUSIP: CUSIP identification numbers maybe imprinted on the Bonds, but such numbers will not constitute a part of the contract evidenced -by the Bonds and no liability will attach to the Agency or any of the officers or agents thereof because of or on account of said numbers. Any error or omission with respect to said numbers will not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. Delivery and Payment: Delivery of the Bonds will be made to the successful bidder at such place as may be agreed upon by the successful bidder and the officer of the Agency making delivery. Payment for the Bonds must be made in funds immediately available to the Agency in Los Angeles, California. Form of Delivery; Cancellation for Late Delivery: The Bonds are scheduled to be delivered to the successful bidder within thirty (30) days following the sale thereof. If the Agency fails to execute the Bonds and tender them for delivery by twelve o'clock noon on the 60th day following 'the date of sale or the first business day thereafter if said 60th day is not a business day, the successful bidder may (subject to the conditions set forth below under the heading "Good Faith Check "), on that day or any time thereafter until delivery of the Bonds, withdraw his bid by serving notice of cancellation, in writing, on the undersigned, in which event the Agency will promptly return the good faith check. The Agency expects to deliver the Bonds in the form of definitive bonds, but reserves the right to make such delivery in the form of temporary bonds, exchangeable for definitive bonds, at no cost to the purchaser. Accrued interest to the date of delivery of the Bonds will be paid by the purchaser at the time of delivery. - - Good Faith Check: A certified or cashier's check drawn on a responsible bank or trust company in the amount of fifty thousand dollars ($50,000) payable to the order of the Agency, must accompany each bid as a guaranty that the bidder, if successful, will accept and pay for the Bonds in accordance with the terms of his bid. No interest will be allowed on such good faith checks, and good faith checks of unsuccessful bidders will be promptly returned to each bidder's representative by hand delivery or registered mail. The good faith check accompanying any accepted bid will be cashed and the proceeds thereof applied to the purchase price. If such bid is accepted but not performed, unless such failure or performance is caused by any act or omission of the Agency, the proceeds of the good faith check accompanying any accepted bid will be retained by the Agency. Change in Tax Exempt Status: At any time before the Bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the bid if the interest on bonds of the same type and character as the Bonds are declared to be taxable under present federal income tax laws, either by a ruling of the Internal Revenue Service or by a decision of any federal court, or are declared taxable by the terms of any federal income tax law enacted subsequent to the date of this notice. 5 y y 9•` F Legal Opinion: The opinion of the Bond Counsel firm of Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, approving the validity of the Bonds and stating that under existing statutes, regulations, rulings and court decisions, interest on the Bonds is exempt from present federal income taxation and from present State of California personal income taxes, will be furnished to the successful bidder at the time of delivery of the Bonds at the expense of the Agency. A copy of such opinion, certified by an officer of the Agency by his facsimile signature, will be printed on the back of each Bond. No charge will be made to the purchaser for such opinion, printing or certification. Closing Documents: In addition to the opinion of Bond Counsel referred to above, at the time of payment for the delivery of the Bonds, the Agency will furnish the successful bidder the following documents, all to be dated as of the date of delivery: 1. Arbitrage Certificate -- A certificate of an appropriate officer of the Agency certifying that, on the basis of facts, estimates and circumstances in effect at the time of delivery of the Bonds, it is not expected that the proceeds of the Bonds will be used in a manner that will cause the Bonds to be arbitrage bonds. 2. No Litigation Certificate -- A certificate of an appropriate officer of the Agency certifying that there is no litigation pending or, to the best of such officer's knowledge, threatened against the Agency affecting the validity of the Bonds. 3. Signature Certificate -- A certificate of appropriate officers of the Agency indicating that they have signed the Bonds by manual or facsimile signature and that they were duly authorized to execute the same. 4. Fiscal Agent's and Treasurer's Receipts , -- The receipts of the Fiscal Agent and the Treasurer of the Agency showing that the purchase price of the Bonds, including accrued interest to the date of delivery, if any, has been received by the Agency and the Fiscal Agent, respectively. 5. Certificate Concerning Official Statement -- A certificate of an appropriate officer of the Agency, acting in such person's official and not personal capacity, to the effect that at the time of the sale of the Bonds and at all times subsequent thereto up to and including the time of delivery of the Bonds, the Official Statement relating to -the Bonds did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 0 0 Official Statement: The Agency will furnish to the successful bidder, at no charge, such number of copies of the Official Statement as said bidder may reasonably request (but not to exceed 750) for use in connection with any resale of the Bonds. - Insurance: The Agency has applied to AMBAC Indemnity Corporation, Financial Guaranty Insurance Company, Municipal Bond Insurance Association, USF &G Financial Security Company and Bond Investors Guaranty to issue an insurance commitment, to be purchased by the Agency, on or prior to the delivery of the Bonds. The insurer chosen, if any, will be announced prior to the sale of the Bonds through the Munifacts wire service. INFORMATION AVAILABLE: Requests for copies of the Official Statement pertaining to the Bonds, the Official Bid Form, or for other information concerning the Agency, should be addressed to Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Solana Beach, ,California 92075, telephone (619) 481 -5894. GIVEN by resolution of the Agency adopted on July 22, 1986. /s/ Charles Gomez Executive Director of the Lynwood Redevelopment Agency 7 Q OFFICIAL BID FORM BID FOR THE PURCHASE OF $4,550,000 LYNWOOD REDEVELOPMENT AGENCY REDEVELOPMENT PROJECT AREA "A ", AS AMENDED TAX ALLOCATION BONDS SERIES 1986 August 6, 1986 Lynwood Redevelopment Agency Lynwood, California On behalf of a group which we have formed consisting of and pursuant to the Notice Inviting Bids, we offer to purchase Four Million Five Hundred Fifty Thousand Dollars ($4,550,000) principal amount, all or none, of the Bonds designated as "Lynwood Redevelopment Agency, Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986 ", particularly described in the Notice Inviting Bids, at the interest rate of % and to pay therefor the aggregate sum of $ *, plus accrued interest on such Bonds to the date of delivery thereof. This bid is subject to all of the terms and conditions of the Notice Inviting Bids, all of which terms and conditions are hereby accepted by us and are made a part hereof as though set forth fully in this bid. a a Except as otherwise specified in the Notice Inviting Bids, this bid is subject to acceptance not later than twenty -six (26) hours after the expiration of the time for the receipt of bids, and the opinion of the Bond Counsel firm of Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, approving the validity of the Bonds, being furnished us (if we are the successful bidder) at the time of delivery of the Bonds at the expense of the Agency. There is enclosed herewith a ** check in the amount of fifty thousand dollars, ($50,000), payable to the order of the Lynwood Redevelopment Agency. * $4,550,000 plus premium or less discount, if any (discount not to exceed three percent 0W. ** Insert "certified" or "cashier's ". There is submitted herewith a "Memorandum of Interest Cost" (which shall not constitute a part of this bid), stating the total interest cost in dollars on the Bonds during the life of the issue under this bid and the net interest rate determined thereby. Respectfully submitted, Name: Account Manager By: Address: City: State: _ Telephone: The assuming t is MEMORANDUM OF INTEREST COST total interest cost on the minimum sinking account and the net Bonds during the payments, under interest rate life of the issue, the above bid is determined thereby #,_. 0 PRELIMINARY OFFICIAL STATEMENT DATED JULY 31, 1986 RATINGS: " 1 $4,550,000 LYNWOOD REDEVELOPMENT AGENCY REDEVELOPMENT PROJECT AREA - A% AS AMENDED TAY ALLOCATION BONDS SERIES 1986 Dated: August L, 1986 " Due: July 15, 2016 The Bonds will be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Bonds are payable at the principal corporate trust office of the Fiscal Agent for the Agency, Security Pacific National Bank, Los Angeles, California. Interest on the Bonds is payable semiannually on January 15 and July 15 in each year, commencing on January L5, 1987, by check or draft mailed to the registered owner thereof. The Bonds maturing on July L5, 2016 are subject to mandatory redemption from minimum sinking account payments in part, by lot, on July 15, 2002 and on each July 15 thereafter at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date. The Bonds are subject to optional redemption prior to maturity, in whole or in part, on July 15, 1996 and on each interest payment date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, plus a premium, as described herein. The Bonds are also subject to special early redemption, in part, from moneys remaining on deposit in the Escrowed Proceeds Fund on August 1, 1989, as described herein. MATURITY SCHEDULE $4,550,000 - _% Term Bonds due July 15, 2016 Yield -_% (Plus accrued interest) The Bonds are being issued on a parity with the Agency's previously issued $2,000,000 Redevelopment Project Area "A ", Tax Allocation Bonds, Series 1976 (the "1916 Bonds ") and are payable from and secured by the Tax Revenues as defined herein to be derived from the Project Area. Taxes levied on the property within the Project Area on that portion of the taxable valuation over and above the taxable valuation of the base year property tax roll (1972 -73 for the original Project Area and 1975 -76 and 1980 -81 for the amended portions of the Project Area), shall be deposited in the Special Fund, administered by the Fiscal Agent for the payment of principal of and interest on the Bonds and the 1976 Bonds. Payment of the principal of and interest on the Bonds will be guaranteed by a municipal bond insurance policy to be issued by simultaneously with the delivery of the Bonds, as described herein. Attention is hereby directed to certain Risk Factors more fully described herein. The Bonds are not a debt of the City of Lynwood, the State of California or any of its political subdivisions, and neither said City, said State or any of its political subdivisions is liable therefor. The principal of and interest on the Bonds are payable solely from the Tax Revenues allocated to the Agency from the Project Area as defined herein and in the Resolution. The date of this Official Statement is August _, 1986. TABLE OF CONTENTS 0 Page Introductory Statement . . Source and Uses of Funds . The Bonds . Authority for Issuance . Description of the Bonds . Redemption and Purchase of Bonds . . Security for the Bonds . . The Resolution . Allocation of Bond Proceeds Escrowed Proceeds Fund Tax Revenues - Application . . . . . . . . . . . . Investment of Moneys in Funds and Accounts . Issuance of Parity Bonds . Covenants of the Agency . . Events of Default and Remedies . Amendments . The Lynwood Redevelopment Agency . . . . . . . . . . Members and Officers . . . . . . . . . . . . . Agency Powers . Financing . . . . . . . . . . . Factors Affecting Redevelopment Agencies Generally . . Other Redevelopment Projects . Risk Factors . . . . . . . . . . . . . . . . Reduction of Tax Revenues . Article XIII A of the State Constitution . . . . . Business Inventory Exemption . . Pending Federal Legislation Concerning Tax- Exempt Obligations Redevelopment Project Area "A ", As Amended . . Background . Agreement for Reimbursement of Tax Increment Revenues . . . Tax Revenues . . . . . . . . . . . . . . . Historical Tax Revenues . . . . . . . . . . . Projected Tax Revenues . New Development . . . . . . . . . . . . . Annual Debt Service . . . . . . . . . . . Debt Service Coverage . . . . . . . . . . Concluding Information . . Financial Consultant . . . . . . . . . . . . . Underwriting . Legal Opinion . . . . . . . . . . . . Tax Exempt Status . . . . . . . . . . . Legality for Investment in California . . . Bond Insurance . . . . . . . . . . . . . Rating . Miscellaneous . . . . . . Supplemental Information - The City of Lynwood . . . . 1 3 3 3 4 4 5 7 7 8 8 9 11 . 12 . . 15 . 16 . 17 . 17 . 17 . . 18 . . 18 . . 19 . . 19 . . 19 . . 20 . . 20 . . 21 . . 23 . . 23 . . 25 . . 27 . . 27 . 29 . 29 . . 32 . . 33 . . 33 . . 33 . . 33 . . 34 . . 34 . . 34 . . 34 . . 35 . . 35 . . 36 No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than'those contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the Agency. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the Agency or the Project Area since the date hereof. LYNWOOD REDEVELOPMENT AGENCY Robert Henning, Chairman Louis Thompson Evelyn Wells E. L. Morris John D. Byork Charles Gomez, Executive Director Vicente Mas, Deputy Executive Director Mary Wright, Treasurer E. Kurt Yeager, Agency Counsel CITY OF LYNWOOD, CALIFORNIA CITY COUNCIL Robert Henning, Mayor Louis Thompson Evelyn Wells E. L. Morris John D. Byork Charles Gomez, City Manager Donald J. Fraser, Acting Assistant City Manager Andrea L. Hooper, City Clerk Mary Wright, Treasurer E. Kurt Yeager, City Attorney SPECIAL SERVICES Bond Counsel Stradling, Yocca, Carlson & Rauth A Professional Corporation Newport Beach, California Fiscal Agent Security Pacific National Bank Los Angeles, California Fiscal Consultant Katz, Hollis, Coren & Associates, Inc. Los Angeles, California Financial Consultant Miller & Schroeder Financial, Inc. Solana Beach, California r OFFICIAL STATEMENT $4,550,000 LYNWOOD REDEVELOPMENT AGENCY REDEVELOPMENT PROJECT AREA "A ", AS AMENDED TAX ALLOCATION BONDS SERIES 1986 This Official Statement, including the cover page, is provided to furnish information in connection with the sale by the Lynwood Redevelopment Agency (the "Agency ") of $4,550,000 aggregate principal amount of the Agency's Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986 (the "Bonds "). The Bonds are being issued pursuant to the Constitution and laws of the State of California (the "State "), including the Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000 of the Health and Safety Code of the State) (the "Law "), Resolution No. LRA76 -10 adopted by the Agency on June 15, 1976 for the 1976 Bonds (the "1976 Bond Resolution ") and Resolution No. adopted by the Agency on August 1986 (the "Resolution "). The City of Lynwood (the "City ") is located in Los Angeles County (the "County ") and is situated in the Los Angeles Basin, midway between downtown Los Angeles and downtown Long Beach. The City was incorporated on July 11, 1921 and operates as a general law city under the Council- Manager form of government. The City encompasses an area of approximately 4.84 square miles with an average elevation of 89 feet above sea level. The 1986 population of the City is estimated to be 53,000. The Agency was established by the City Council with the adoption of Ordinance No. 932 on April 9, 1973. The five members of the City Council serve as the governing body of the Agency, and exercise all rights, powers, duties and privileges of the Agency. The Mayor serves as Chairman of the Agency. The Redevelopment Plan for Redevelopment Project Area "A ", As Amended (the "Redevelopment Plan ") was approved by Ordinance No. 945 adopted by the City Council on July 10, 1973 and amended by Ordinance No. 960 adopted by the City Council on December 27, 1983, Ordinance No. 990 adopted by the City Council on August_ 19, 1975 and Ordinance No. 1111 adopted by the City Council on December 16, 1980. The Redevelopment Project Area "A ", As Amended (the "Project Area ") originally consisted of 20.8 acres encompassing approximately 1% of the total area of the City and was amended in 1976 and again in 1981 increasing the total size of the Project Area to 564 acres or approximately 18% of the City's total area. The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a project area on the property tax roll last equalized 1 prior to the effective date of the ordinance which adopts the redevelopment plan becomes the "base year" valuation. The increase, if any, in taxable valuation in subsequent years over the base year valuation becomes the incremental valuation upon which taxes can be levied by the County and other taxing agencies and the resulting tax increment revenues are allocated to the Agency. All taxes thereafter collected thereafter upon the incremental valuation (the increase in taxable valuation over the base year valuation) plus State reimbursed amounts for certain property tax exemptions which are allocated to the Agency may be pledged to the payment of debt service on obligations issued by the Agency. The Bonds are being issued on a parity with the 1976 Bonds and are payable from and are secured by a pledge of the Tax Revenues (described herein under the section entitled "SECURITY FOR THE BONDS "). The Agency has no power to levy and collect taxes, and any legislative property tax de- emphasis or provision of additional sources of income to taxing agencies having the effect of reducing the property tax rate must necessarily reduce the amount of Tax Revenues that would otherwise be available to pay the principal of and interest on the Bonds. Likewise, broadened property tax exemptions could have a similar effect. The 1986 -87 Tax Revenues of $478,000 will provide 125% coverage of the estimated Maximum Annual Debt Service on the 1976 and $3,340,000 principal amount of Bonds. The Bond proceeds in excess of $3,340,000 will be initially deposited in the Escrowed Proceeds Fund, held by the Fiscal Agent and released pursuant to a formula described on page 8 herein. The Agency has received a commitment from (" ") to issue, effective as of the date th, delivered, a policy of insurance guaranteeing the payment, when principal of and interest on the Bonds. The insurance extends for the Bonds and cannot be cancelled by Bonds are due, of the the life of Brief descriptions of the Bonds, the Resolution, the Agency and the City are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Resolution, the Law, the Constitution and the laws of the State as well as the proceedings of the Agency and the City are qualified in their entirety by reference to such documents. References herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Resolution and the information with respect thereto included herein, copies of which are all available for inspection at the offices of the Agency. During the period of the offering of the Bonds, copies of the forms of all documents are available at the offices of the Financial Consultant, Miller & Schroeder Financial, Inc., 505 Lomas Santa Fe Drive, Solana Beach, California 92075. 2 SOURCE AND USES OF FUNDS* �' The estimated source and uses of funds, excluding accrued interest on the Bonds, is summarized as follows: Source Principal Amount of Bonds . . Uses Underwriter's Discount Reserve Account (2) . Costs of Issuance Accol Bond Insurance Premium Redevelopment Fund . Escrowed Proceeds Fund Total Uses . . . 4.550.000 (1) . . . . . . . . . . . $ 136,500 . . . . . . . . . . . 340,120 int . . . . . . . . . . . . 100,000 . . . . . . . . . . .. . 125,486 . . . . . . . . . . 2,637,894 (3) . . . . . . . . . . . 1,210,000 . . . . . . . . . . . 4.550.000 (1) Underwriter's discount estimated at three percent (3 %). (2) An amount which when added to the moneys on deposit in the Reserve Account for the 1976 Bonds will be equal to Maximum Annual Debt Service on the Bonds and the 1976 Bonds. (3) An amount of Bonds, the Maximum Annual Debt Service of which is in excess of that currently supported by 125% of Tax Revenues. *Preliminary, subject to change. THE BONDS Authority for Issuance The Lynwood Redevelopment Agency, Redevelopment Project Area "A ", As Amended, Tax Allocation Bonds, Series 1986, in an aggregate principal amount of $4,550,000 (the "Bonds "), were authorized for issuance pursuant to Resolution No. LRA76 -10 adopted by the Agency on June 15, 1976 for the 1976 Bonds (the "1976 Bond Resolution ") and Resolution No. , adopted by the Agency on August , 1986 (the "Resolution "). Pursuant to the 1976 Bond Resolution, if at any time the Agency determines that it will not have sufficient moneys available from other sources to pay the costs of the Redevelopment Project, the Agency may provide for the issuance of, and sell, additional tax allocation bonds in such principal amount as it estimates will be needed, for such purpose, subject to the following conditions precedent to such sale: (a) The Agency shall be in compliance with all covenants set forth in the 1976 Bond Resolution. (b) The Reserve Account must be increased, if necessary by an amount sufficient to maintain the Minimum Reserve Requirement with reference to the Bonds and any additional bonds. 3 - 0 0 (c) The additional bonds must mature on July 15, of each year, and interest thereon is to be payable January 15 and July 15 of each year, except the first year's interest may be payable at the end of that year. (d) Tax Revenues received or to be received from the most recent equalized assessed valuation of taxable property located in the Redevelopment Project Area are to be at least equal to 1.20 times the combined debt service of the then outstanding Bonds plus the assumed aveiage annual debt service (computed on the basis of approximately equal annual payments of principal plus interest) on all series of outstanding Bonds and additional bonds, with reference to any future fiscal year, as opined to by an independent municipal finance consultant employed by the Agency. For purposes of this computation, taxable property shall include assessed valuations of property exempt from local property taxation by reason of the homeowners' and business inventories exemptions to the extent that in lieu payments are made to the Agency for such exemptions. (e) The Agency must have received all required approvals of any governmental authority having jurisdiction over the additional bonds or their terms. Description of the Bonds The Bonds will be issued in the form of fully registered bonds in denominations of $5,000 each or any integral multiple thereof. The Bonds will be dated August 1, 1986 and mature on July 15, 2016. The Bonds will bear interest at a rate to be fixed upon the sale thereof, but not to exceed twelve percent (12 %) per annum, payable semiannually on January 15 and July 15 in each year commencing on January 15, 1987 by check' or draft mailed to the registered owners thereof. Redemption and Purchase of Bonds Optional Redemption The Bonds are subject to redemption at the option of the Agency, in whale from the proceeds of refunding bonds and other available funds, or in whole or in part by lot from any other source of funds, on July 15, 1996 or on any interest payment date thereafter prior to maturity. Bonds called for redemption will be redeemed.on the following redemption dates and at the following redemption price (expressed as a percentage of the principal amount of Bonds to.be redeemed) plus accrued interest to the redemption date: 4 Redemption Date Redemption Price July 15, 1996 and January 15, 1997 102 % July 15, 1997 and January 15, 1998 101 Y: July 15, 1998 and January 15, 1999 101 July 15, 1999 and January 15, 2000 100 Y: July 15, 2000 and thereafter 100 4 E u Sinking Account Redemption The Bonds will be subject to mandatory redemption, on each July 15, commencing on July 15, 2002, at a redemption price equal to the principal amount thereof together with accrued interest thereon to the redemption date, without premium, from minimum sinking account payments made by the Agency in the years and amounts as follows: Year Amount Year Amount 2002 $175,000 2010 $310,000 2003 185,000 2011 335,000 2004 200,000 2012 360,000 2005 215,000 2013 385,000 2006 230,000 2014 415,000 2007 250,000 2015 450,000 2008 270,000 2016 (maturity) 480,000 2009 290,000 Special Early Redemption The Bonds are subject to special redemption in part, by lot at a redemption price of 100% of the principal amount thereof plus accrued interest to the redemption date, without premium, on August 1, 1989 to the extent of any moneys remaining in the Escrowed Proceeds Fund on July 1, 1989. . Notice of Redemption As provided in the Resolution, notice of redemption will be mailed by first class mail, not less than ten (10) nor more than sixty (60) days prior to the redemption date, to the registered owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Fiscal Agent, but neither failure to mail such notice nor any defect in the notice so mailed will affect the sufficiency of the proceedings for redemption. The Fiscal Agent, at the direction of the Agency, may purchase Bonds on the open market, on behalf of the Agency, at any time at a price not to exceed the principal amount of the Bonds, the applicable premium and accrued interest, if any, to the date of purchase plus brokerage fees, if any. SECURITY FOR THE BONDS Under the provisions of the State Constitution, the Law and the Resolution, taxes on all taxable property in the Project Area levied by or for the benefit of any taxing agency after the effective date of the Ordinance approving the Redevelopment Plan (being Ordinance No. 945 of the City of Lynwood, which was adopted on July 10, 1973, which ordinance became effective on August 9, 1973) and upon taxable property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 960, adopted by the City Council of the City of Lynwood on December 27, 1973, which ordinance became effective on January 26, 1974) and upon taxable property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 990, adopted by the City Council of the City of Lynwood on August 19, 1975, which ordinance became effective on 5 • � o September 18, 1975), and upon taxable property added by an ordinance amending the Redevelopment Plan (being Ordinance No. 1111, adopted by the City Council of the City of Lynwood on December 16, 1980, which ordinance became effective on January 15, 1981 less such property removed from the Redevelopment Plan by an ordinance (being Ordinance No. 1000 adopted by the City Council of the City of Lynwood on June 1, 1976, which ordinance became effective on July 1, 1976), 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 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 August 9, 1973 (being the effective date of the Ordinance No. 945 referred to above), with reference to property described in the Redevelopment Plan approved by that Ordinance, and the taxable property in the 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 January 26, 1974 (being the effective date of the amending Ordinance No. 960), with reference to property described in the Amendment to the Redevelopment Plan approved by said amending Ordinance, and the taxable property in the Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agencies last equalized prior to September 18, 1975 (being the effective date of the amending Ordinance No. 990), with reference to property described in the Amendment to the Redevelopment Plan approved by said amending Ordinance, and the taxable project in the 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 January 15, 1981 (being the effective date of the amending Ordinance No. 1111), with reference to property described and added in the amendment to the Redevelopment Plan approved by said amending Ordinance, and 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 the levied taxes each year in excess of such amount, less any amount required to be paid to the other taxing agencies pursuant to existing agreements entered into with such taxing agencies under Section 33401 of the Health & Safety Code, shall be allocated 'to and when collected shall be paid into the Special Fund of the Agency. This portion of the levied taxes (plus State reimbursed amounts for certain property tax exemptions, including but not limited to business inventory, to the extent received), are herein referred to as "Tax Revenues." The Bonds and the 1976 Bonds are payable from and are specifically secured by a first lien upon and irrevocable pledge of the Tax Revenues derived from the Project Area, and interest earnings on funds held on deposit in trust for the Bondowners by the Fiscal Agent. The Agency has no power to levy and collect taxes, and any legislative property tax de— emphasis or provision of additional sources of income to taxing agencies having the effect of reducing 0 ,iY 2Y Q the property tax rate must necessarily reduce the amount of Tax Revenues that would otherwise be available- to pay the principal of and interest on the Bonds. Likewise, broadened property tax exemptions could have a similar effect. Conversely, any increase in the tax rate or taxable valuation, or any reduction or elimination of present exemptions, would necessarily increase. the amount of Tax Revenues that would be available to pay the principal of and interest on the Bonds. The Bonds are not a debt of the City of Lynwood, the State of California or any of its political subdivisions, and neither said City, s.:id State or any of its political subdivisions is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. THE RESOLUTION The following is a summary of certain provisions of the Resolution and does not purport to be complete. Reference is hereby made to the Resolution for further particulars. Copies of the Resolution are available from the Agency upon request. All capitalized terms used herein and not otherwise defined shall have the same meaning-as used in the Resolution. Allocation-of Bond Proceeds The Resolution provides for the continuation by the Treasurer of the Agency of a special trust fund redesignated the "Redevelopment Project Area "A ", As Amended, Redevelopment Fund" (the "Redevelopment Fund "). The Resolution provides for the continuation by the Fiscal Agent of a special trust fund redesignated the "Redevelopment Project Area "A ", As Amended, Special Fund" (the "Special Fund "), comprised of the following special trust accounts: the "Interest Account ", the "Principal Account ", the "Cost of Issuance Account" and the "Reserve Account." There is also created by the Fiscal Agent a special trust fund called the "Escrowed Proceeds Fund." The Fiscal Agent, on behalf of the Agency, will receive the proceeds from the sale of the Bonds, upon the delivery of the Bonds to the purchasers thereof and will dispose of such proceeds and transfer moneys as follows: (1) Deposit in the Interest Account accrued interest and premium, if any, paid by the purchasers of the Bonds. (2) Deposit in the Reserve Account an amount equal to the Maximum Annual Debt Service on the Bonds and the 1976 Bonds (the "Reserve Requirement "). (3) Deposit in the Cost of Issuance Account the amount necessary to pay expenses in connection with the issuance and sale of the Bonds, including bond insurance premiums, if any, and fees of the Fiscal Agent. 7 (4) Deposit in the Escrowed Proceeds Fund the sum of $ (5) Transfer the balance of the proceeds of the Bonds, after making the above deposits, to the Trea "surer of the Agency for deposit in the Redevelopment Fund. The moneys set aside and placed in the Redevelopment Fund will 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: (a) The payment, in any year during which the Agency owns property in the Project Area, to any city, county, city and county, district or other public corporation which would have levied a tax upon such property had it not been exempt; (b) The cost of any lawful activities in connection with the Redevelopment Project including, without limitation, those activities authorized by Section 33445 of the Law; and (c) The necessary expenses in connection with the issuance and sale of the Bonds and fees of the Fiscal Agent. If any sum remains in the Redevelopment Fund after the full accomplishment of the objects and purposes for which said Bonds were issued, said sum will be transferred to the Special Fund. Escrowed Proceeds Fund The moneys set aside in the Escrowed Proceeds Fund shall be transferred to the Redevelopment Fund from time to time upon receipt by the Fiscal Agent of a certificate or opinion of an Independent Financial Consultant that Tax Revenues to be received by the Agency during such Fiscal Year, based upon the most recent assessed valuation of taxable property in the Project Area, 'furnished by the appropriate officer of the County of Los Angeles, will be at least equal to 125% of the current Bond Year's debt service on that portion of the Bonds less the current Bond Year's debt service on that portion of the Bonds which will remain in the Escrowed Proceeds Fund immediately following any such transfer. Any moneys remaining in the Escrowed Proceeds Fund on August 1, 1989 shall be transferred to the Redemption Fund and applied to the redemption of the Bonds pursuant to the Resolution. Tax Revenues - Application Tax Revenues will be deposited by the Fiscal Agent in the Special Fund. The principal of and interest on the Bonds and the 1976 Bonds through maturity will be paid by the Fiscal Agent from the Special Fund. 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 Tax Revenues accumulated in the Revenue Account of the Special Fund will be 0 0 0 used in the following priority; provided, however, that to the extent that deposits have been made in any of the Accounts referred to below from the proceeds of the sale of the Bonds or otherwise, the deposits below need not be made: (a) Interest Account. On or before July 1 deposits will be made into the Interest Account so that the balance in said Account will be equal to the interest becoming due and payable on the Bonds and the 1976 Bonds on the next following July 15th and January 15th. Moneys in the Interest Account will be used for the payment of interest on the Bonds and the 1976 Bonds as the same becomes due. (b) Principal Account After the deposits have been made pursuant to (a) above, deposits will next be made into the Principal Account so that the balance in said Account on or prior to July 1 of each year is equal to the principal coming due on the then outstanding 1976 Bonds or, thereafter, the amount of the minimum sinking account payments due on the Bonds on such date. Moneys in the Principal Account will be used for the purpose of making principal on the 1976 Bonds and minimum sinking account payments on the Bonds as the same become due and payable. (c) Reserve Account. After deposits have been made pursuant to (a) and (b) above, deposits necessary, will next be made to the Reserve Account if so that the amount on deposit therein is equal to Maximum Annual Debt Service on the Bonds and the 1976 Bonds. Moneys in the Reserve Account will be transferred to the Interest Account or the Principal Account in the event moneys on deposit in said Accounts are insufficient therefor. Moneys in the Reserve Account which are in excess of Maximum Annual Debt Service on the Bonds and the 1976 Bonds will be transferred at least semiannually to the Interest Account. Moneys in the Reserve Account may be used to pay the principal of and interest on the last outstanding maturity of the Bonds. (d) Surplus. It is the intent of the Resolution that: (i) the deposits to the Interest Account and the Principal Account, respectively, will be made as scheduled, and (ii) the deposits to the Reserve Account will be made as scheduled if, and only if, the Tax Revenues are sufficient therefor. Any moneys remaining in the Special Fund may be transferred to and used by the Agency for any lawful purpose if: (1) after the above transfers have been made, the required amounts as of that time are in the above mentioned Accounts, (2) Tax Revenues to be received by the Agency are at least equal to 125% of Maximum Annual Debt Service on the Bonds and the 1976 Bonds, as shown by the certificate or opinion of an Independent Financial Consultant, and (3) there has been no material change in the status of the Redevelopment Project. Investment of Moneys in Funds and Accounts Subject to the provisions of the Resolution and the 1976 Bond Resolution, all moneys held by the Agency in the Redevelopment Fund and by the Fiscal Agent in the Special Funds or any Accounts thereof, except such moneys which a roe v:: • 0 are at the time invested, which are not otherwise invested, shall be held in time or demand deposits in any bank or trust company authorized to accept deposits of public funds (including the banking department of the Fiscal Agent) and all of such deposits shall be 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. Moneys in the Redevelopment Fund may from time to time be invested by the Agency, and moneys in the Special Fund may, and, upon request of the Agency, will, be invested by the Fiscal Agent as provided in the Resolution and the 1976 Bond Resolution, subject to the following restrictions: (a) Moneys in the Redevelopment Fund will be invested only in Federal Securities 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 Interest Account, Principal Account and Reserve Account of the Special Fund will be invested only in Federal Securities which will by their terms mature on such dates as to ensure that before each interest payment date there will be in such Accounts, from matured Federal Securities and other moneys already in such Accounts, cash equal to the principal and interest payable on such date. (c) Moneys in the Escrowed Proceeds Fund shall be invested in Federal Securities which mature on or before August 1, 1989. Any moneys remaining in the Escrowed Proceeds Fund after July 1, 1989 shall be used to redeem the Term Bonds on August 1, 1989 in accordance with the Resolution. Interest earnings on the Escrowed Proceeds Fund shall be transferred at least semiannually to the Interest Account. Federal Securities purchased as an investment of moneys in any of said Funds or Accounts will be deemed at all times to be a part of such Fund or Account, and the interest accruing thereon and any gain realized from such investment will be credited to such Fund or Account and any loss resulting from any such authorized investment will be charged to such Fund or Account without liability to the Agency or the members and officers thereof or to the Fiscal Agent. The Fiscal Agent will sell at the best price obtainable or present for redemption any Federal securities so purchased whenever it will be necessary to do so in order to provide moneys to meet any payment or transfer from such Fund or Account as required by the Resolution. For the purpose of determining at any given time the balance in any such Fund or Account, any such investment constituting a part of such Fund or Account will be valued at the then estimated or appraised market value of such investment or face amount thereof, whichever is lower; provided, however, that investments in the Interest Account and the Principal Account will be valued at the face amount thereof. 10 0 0 Issuance of Parity Bonds If at any time the Agency determines it needs to do so, the Agency may provide for the issuance of, and sell, Parity Bonds in such principal amount as it estimates will be needed. The issuance and sale of any Parity Bonds will be subject to the following conditions precedent: (a) The Agency will be in compliance with all covenants set forth in the Resolution and the 1976 Bond Resolution; (b) The Parity Bonds will be on such terms and conditions as may be set forth in a supplemental resolution, which will provide for (i) bonds substantially in accordance with the Resolution and the 1976 Bond Resolution, (ii) the deposit of moneys into the Reserve Account in an amount sufficient, together with the balance of the Reserve Account, to equal Maximum Annual Debt Service on all Bonds expected to be outstanding including the Outstanding Bonds and Parity Bonds, and (iii) the disposition of Surplus Tax Revenues in substantially the same manner as set forth in the Resolution and the 1976 Bond Resolution; (c) Receipt of a certificate or opinion of an Independent Financial Consultant showing: (i) For the then current and each future Bond Year the debt service for each such Bond Year with respect to all Bonds and Parity Bonds reasonably expected to be outstanding following the issuance of the Parity Bonds; (ii) For the then current fiscal year, the Tax Revenues (excluding Business Inventory Reimbursement) to be received by the Agency based upon the most recent valuation of taxable property in the Project Area as shown by the appropriate officer of the County of Los Angeles; and (iii) That for the then current fiscal year, the Pledged Tax Revenues referred to in item (ii) were at least equal to 125% of the amaximum annual debt service referred to in item (i) above (excluding debt service with respect to any portion of the Parity Bonds deposited in an escrowed proceeds account), and that the Agency is entitled under the Law and the Redevelopment Plan to receive taxes under Section 33670 of the Law in an amount sufficient to meet expected debt service with respect to all Bonds and Parity Bonds. (d) The Parity on the same dates as from the date of the July 15). Bonds shall mature the Bonds (except Parity Bonds until 11 on and interest shall be payable the first interest payment may be the next succeeding January 15 or Notwithstanding the foregoing, if the Agency is in compliance with all covenants set forth in this Resolution, the Agency may issue and sell junior lien obligations pursuant to the Law, having a lien on the Tax Revenues which is junior to the Bonds and payable solely from "Surplus ". Covenants of the Agency As long as the Bonds are outstanding and unpaid, the Agency will (through its proper members, officers, agents or employees) faithfully perform and, abide by all of the covenants, undertakings and provisions contained in the Resolution and the 1976 Bond Resolution or in any Bond, including the following covenants and agreements for the benefit of the Bondowners which are necessary, convenient and desirable to secure the Bonds and will tend to make them more marketable; provided, however, that said covenants do not require the Agency to expend any funds other than the Tax Revenues. Covenant 1. Complete Redevelopment Project; Amendment to Redevelopment Plan. The Agency covenants and agrees that it will diligently carry out and continue to completion, with all practicable dispatch, the Redevelopment Project in accordance with its duty to do so under and in accordance with the Law and the Redevelopment Plan and in a sound and economical manner. The Redevelopment Plan may be amended as provided in the Law but no amendment will be made unless it will not substantially impair the security of the Bonds or the rights of the Bondowners, as shown by an Opinion of Counsel, based upon a certificate or opinion of an Independent Financial Consultant appointed by the Agency. Covenant 2. Use of Proceeds; Management and Operation of Properties. The Agency covenants and agrees that the proceeds of the sale of the Bonds will be deposited and used as provided in the Resolution and that it will manage and operate all properties owned by it comprising any part of the Project Area in a sound and businesslike manner. 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 Tax Revenues, which have any lien upon the Tax Revenues prior or superior to the lien of the Bonds. Except as permitted in the Resolution, it will not issue any obligations, payable as to principal or interest, from the Tax Revenues, which have any lien upon the Tax Revenues on a parity with the Bonds. Notwithstanding the foregoing, nothing in the Resolution will prevent the Agency (i) from issuing and selling pursuant to law refunding obligations payable from and having any lawful lien upon the 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, (ii) from issuing and selling obligations which have, or purport to have, any lien upon the 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 Tax Revenues. As used in the Resolution, "obligations" include, without limitation, bonds, notes, interim certificates, debentures or other obligations. 12 ` • 4 Covenant 4. Punctual Payment, The Agency covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Bonds on the date, at the place and in the manner provided in the Bonds. Covenant 5. Payment of Taxes and Other Charges. The Agency covenants and agrees that it will from time to time pay and discharge, or cause to be paid and discharged, all payments in lieu of taxes, service charges, assessments or other governmental charges which may lawfully be imposed upon the Agency or any of the properties then owned by it in the Project Area, or upon the revenues and income therefrom, and will pay all lawful claims for labor, materials and supplies which if unpaid might become a lien or charge upon any of said properties, revenues or income or which might impair the security of the Bonds or the use of 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 will be preserved; provided, however, that nothing in this Covenant will require the Agency to make any such payment so long as the Agency in good faith contests the validity thereof. Covenant 6. Books and Accounts; Financial Statements. The Agency covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries will be made of all transactions relating to the Redevelopment Project and the Tax Revenues and other funds relating to the Project Area, and will prepare within one hundred twenty (120) 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, 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 and any rating agency which maintains a rating on the Bonds, and, upon written request, to any Bondowner. Covenant 7. Eminent Domain Proceeds. The that if all or any part of the Project Area eminent domain proceedings or other proceedings public or other use under which the property wi] all steps necessary to adjust accordingly the Project Area. Agency covenants and agrees should be taken from it, by authorized by law, for any 1 be tax exempt,'it will take base year valuation of the Covenant 8. Disposition of Property. The Agency covenants and agrees that it will not dispose of more than ten percent (10 %) of the land area in the Project Area (except property shown in the Redevelopment Plan in effect on the date the Resolution is adopted as planned for public use, or property to be used for public streets, public offstreet parking, sewage facilities, parks, easements or rights -of -way for public utilities, or other similar uses) to public bodies or other persons or entities whose property is tax exempt, unless such disposition will not result in the security of the Bonds or the rights of Bondowners being substantially impaired, as shown by an Opinion of Counsel, based upon the certificate or opinion of an Independent Financial Consultant appointed by the Agency. 13 0 Covenant 9. Protection of Security and Rights of Bondowners; No Arbitrage; No Consumer Loan Bonds. The Agency covenants and agrees to preserve and protect the security of the Bonds and the rights of the Bondowners and to contest by court action or otherwise (a) the assertion by any officer of any government unit or any other person whatsoever against the Agency that (i) the Law is unconstitutional or (ii) the Tax Revenues pledged under the Resolution cannot be paid to the Agency for the debt service on the Bonds, (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 (aa) the Tax Revenues being withheld unless the withholding thereof is being contested in good faith, and (bb) the interest received by the Bondowners becoming taxable under federal income tax laws. The Agency covenants and agrees that it will make no use of the proceeds of the Bonds at any time during the term thereof which will cause such Bonds to be "arbitrage bonds" within the meaning of Section 103(c) or "consumer loan bonds" within the meaning of Section 103(o) of the Internal Revenue Code of 1954, as amended, of the United States of America and applicable regulations adopted thereunder by the Internal Revenue Service, and the Agency hereby assumes the obligation to comply with Sections 103(c) and 103(o) and such regulations throughout the term of the Bonds. Covenant 10. Compliance with Law The Agency covenants that it will comply with the requirements of the Law. Without limiting the generality of the foregoing, the Agency covenants and agrees to file all required statements. and hold all public hearings required under the Law to assure compliance by the Agency with its covenants hereunder. Covenant 11. Limitation on Indebtedness The Agency covenants and agrees that is has not and will not incur any loans, obligations and indebtedness repayable from Tax Revenues such* that the total aggregate debt service on said loans, obligations or indebtedness incurred from and after the date of adoption of the Redevelopment Plan, when added to the total aggregate debt service on the Bonds, will exceed the maximum amount of Tax Revenues to be divided and allocated to the Agency pursuant to the Redevelopment Plan. Taxation of Leased Property Whenever any property in the Project Area has been redeveloped and thereafter is leased by the Agency to any person or persons (other than a public agency) or whenever the Agency leases real property in the Project Area to any person or persons '(other than a public agency) for redevelopment, the property shall be assessed and taxed in the same manner as privately owned property (as required by Section 33673 of the Law), and the lease or contract shall provide (a) that the lessee shall pay taxes upon the assessed value of the entire property and not merely upon the assessed value of his or its leasehold interest, and (b) that if for any reason the taxes levied on the property in any year during the term of the lease or contract shall be 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 14 •o 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 shall be used as provided in the Resolution. Single Sum Payments in Lieu of Taxes As an alternative to payment to the Fiscal Agent pursuant to subsection (b) above, the new owner or owners of property becoming exempt from taxation may elect to make payment to the Fiscal Agent in a single sum equal to the amount estimated by an Independent Financial Consultant to be receivable by the Agency from taxes on said property from the date of said payment to the maturity date of the Notes, less a reasonable discount value. All such single sum payments in lieu of taxes shall be treated as Tax Revenues and shall be transferred to the Fiscal Agent for deposit in the Special Fund. Events of Default and Remedies Each of the following shall constitute an event of default under the Resolution: (1) Default in the due and punctual payment by the Agency of- any installment of interest on any Bond when the interest installment becomes due and payable; (2) Default in the due and punctual payment by the Agency of the principal of any Bond when the principal becomes due and payable, whether at maturity, by declaration or otherwise; (3) Default made by the Agency in the observance of any of the covenants, agreements or conditions contained in the Resolution or in the Bonds, and where the default continues for a period of thirty (30) days following written notice to the Agency; or (4) The Agency shall file a petition seeking reorganization or arrangement under the federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Agency, seeking reorganization under the federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Agency or of the whole or any substantial part of its property. In each event of default described in (1) or (2) above the Fiscal Agent will, and in each event of default described in (3) or (4) above, the Fiscal Agent will if requested by the Owners (such request to be in writing) of not less than a majority of the principal amount of Bonds then Outstanding, declare the principal of the Bonds then Outstanding and the interest thereon to be due and payable immediately. 15 •• 1 •0 Such declaration may be rescinded by the Owners of not less than a majority of the Bonds then Outstanding provided the Agency cures the default and deposits with the Fiscal Agent a sum sufficient to pay all principal and installments of interest (if any) matured on the Bonds prior to the declaration, with interest at the rate of 12% per annum, so that the Agency is in compliance with all payment, deposit and transfer provisions of the Resolution, and has paid or provided for the payment of any expenses incurred by the Fiscal Agent in connection with the default. Remedies available to any Bondowner under the Resolution concerning events of default by the Agency are as follows: (1) Mandamus, suit, action or proceeding, to compel the Agency and its members, officers, agents or employees to perform each and every term, provision and covenant contained in the Resolution and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Agency and the fulfillment of all duties imposed upon it by the Law; (2) Suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bondowners' rights; or (3) Upon the happening of any event of default (as defined in the Resolution and summarized above), by suit, action or proceeding in any court of competent jurisdiction, to require the Agency and its members and employees to account as if it and they were trustees of an express trust. Amendments The Resolution may be modified or amended at any time by supplemental resolution adopted by the Agency: (a) without the consent of Bondowners, if the modification or amendment is for the purpose of adding covenants and agreements further to secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the Agency, to make modification not affecting any outstanding series of Bonds with the consent of the Fiscal Agent, for the purpose of curing any ambiguities, defects or inconsistent provisions in the Resolution or to insert provisions clarifying matters or questions arising under the Resolution, provided that the modifications or amendments do not adversely affect the rights of the Owners of any Outstanding Bonds; or (b) for any purpose with the consent of the Owners of 60% of all Bonds then Outstanding (exclusive of Bonds owned by the Agency or the City) provided, however, that no modification or amendment will reduce the principal amount of any Bond, reduce the interest rate payable thereon, extend the maturity or the time for paying interest thereon, change the monetary medium in which principal and interest is payable, or create a mortgage pledge or lien on the revenues superior to or on a parity with the pledge or lien created pursuant to the Resolution or reduce the percentage of consent required for amendment or modification. 16 06 THE LYNWOOD REDEVELOPMENT AGENCY The Agency was established by the City Council on April 9. 1973 with the adoption of Ordinance No. 932, pursuant to the Law. The five members of the City Council serve as the governing body of the Agency, and exercise all rights, powers, duties and privileges of the Agency. The Mayor serves as Chairman of the Agency. Members and Officers The members and officers of the Agency, their occupations and the expiration of their terms are as follows: Member Robert Henning, Chairman Louis Thompson Evelyn Wells E. L. Morris Sohn D. Byork Occupation Public Service Public Service - Retired Public Service Businessman- Retired Businessman- Retired Term Expiration November, 1987 November, 1989 November, 1989 November, 1989 November, 1987 Agency Powers All powers of the Agency are vested in its five members who are elected members of the City Council. Pursuant to the Law, the Agency is a separate public body and may exercise governmental functions in planning and implementing redevelopment projects. The Agency may exercise broad governmental functions and authority to accomplish its purposes, including, but not limiting to, the right of eminent domain, the right to issue bonds or notes for authorized purposes and to expend their proceeds and the right to acquire, sell, rehabilitate, develop, administer or lease property. The Agency may demolish buildings, clear land, and cause to be constructed certain improvements including streets, sidewalks and utilities, and can further prepare for use as a building site any real property which it owns or administers. The Agency may, from any funds made available to it for such purposes, pay for all or part of the value of land and the cost of buildings, facilities, or other improvements to be publicly owned and operated, provided that such improvements are of benefit to a redevelopmert project area and cannot be financed by any other reasonable method. The Agency may not construct or develop buildings, with the exception of public buildings, and must sell or lease cleared property which it acquires within a redevelopment project area for redevelopment in conformity with a particular redevelopment plan, and may further specify a period within which such redevelopment must begin and be completed. 17 00 Financing •0 The Law authorizes the financing of redevelopment projects through the use of tax increment revenues. This method provides that the taxable valuation of the property within a redevelopment project on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation, and the increase in taxable valuation in subsequent years over the base year valuation becomes the incremental valuation upon which taxes are levied and allocated to a redevelopment agency. The resulting tax increment revenues (based on an increase in taxable valuation over the base year valuation) are allocated to a redevelopment agency and deposited in the applicable special fund. Redevelopment agencies have no authority to levy taxes but must look to the allocation of tax increment revenues as indicated above. In accordance with Section 33334.2 of the Law, not less than twenty percent (20 %) of all taxes which are allocated to the Agency shall be used by the Agency for purposes of improving the City's supply of housing for persons and families of low or moderate income. This requirement is applicable unless the Agency and City Council make the finding that: 1. No need for such housing exists in the City; 2. Less than twenty percent (20 %) is sufficient to meet such housing needs of the City; or 3. A substantial effort is presently being carried out with other funds (either local, State or federal) and that such efforts are equivalent in impact to twenty percent (20 %) of the Tax Revenues. The City Council of the City of Lynwood, pursuant to Ordinance No. 1111 adopted on December 16, 1980 and effective on January 15, 1981, has made a finding that the City is making a substantial effort to meet the low and moderate income housing needs of the City and that this effort, including funds available from State, local and federal sources, is equivalent in impact to the funds otherwise required to be set aside pursuant to the Law. Nothing contained therein shall preclude the Agency from using taxes for meeting the low and moderate income housing needs of the City. The issuance of tax allocation bonds is authorized under the Law. The 1976 Bonds and the Bonds described herein are equally secured by a pledge of the Tax Revenues to be paid into the Special Fund of the Agency and administered by the Fiscal Agent. Factors Affecting Redevelopment Agencies Generally Other features of California law which bear on redevelopment agencies include general provisions which require public agencies to let contracts for construction only after competitive bidding. The Law provides generally that construction in excess of $5,000 undertaken by a redevelopment agency shall be done only after competitive bidding. California statutes also provide for offenses punishable as felonies which involve direct or indirect interest of a m . •• 00 public official in a contract made by such official in his official capacity. In addition, the Law prohibits a redevelopment agency or city official or employee who, in the course of his duties, is required to participate in the formulation or approval of plans or policies, from acquiring any interest in property in a redevelopment project area. Under a State law enacted in 1974, public officials are required to make extensive disclosures regarding their financial interests by filing such disclosures as public records. As of the date of this Official Statement, the members of the City Council and the Agency, and other City and Agency officials have made the required filings. California also has strict laws regarding public meetings (known as the Ralph M. Brown Act) which require that all redevelopment agency and city meetings be open to the public, with certain exceptions not applicable here. Redevelopment agencies are required to file a statement of indebtedness with the County Auditor - Controller not later than the first day of October, stating the amount of indebtedness of such redevelopment agency as of the close of its fiscal year, June 30. The Agency has made such a filing. Other Redevelopment Projects The Agency has adopted one other completely separate project area and redevelopment plan. This project area has been designated the Alameda Industrial Area; and the redevelopment plan was adopted by Ordinance No. 993 which became effective on December 18, 1975. This project is entirely industrial. The objectives of the project area are to improve employment opportunities, improve property access and circulation, and improve the tax base. RISK FACTORS Reduction of Tax Revenues Tax Revenues allocated to the Agency are determined by the amount of incremental valuation in the Project Area and the current rate at which property in the Project Area is taxed. The reduction of taxable valuation of property in the Project Area caused by a relocation out of the Project Area by one or more major property owners, or the complete or partial destruction of such property could result in a reduction of the Tax Revenues that secure the Bonds. In addition, any reduction in tax rates or the taxable valuation of property in the Project Area would cause a reduction in the Tax Revenues. Such reduction of Tax Revenues could have an adverse effect on the Agency's ability to make timely payments of principal of and interest on the Bonds. Article XIII A of the State Constitution provides that the full cash value of property used in determining taxable valuation may reflect from year to year the inflationary rate, not to exceed two percent for any given year, or such lesser amount as shown in the consumer price index. Such rate is computed on an April 1 year end. 19 Article XIH A of the State Constitution 0 On June 6, 1978, California voters approved Proposition 13 or the Jarvis -Gann Initiative, which added Article XIII A to the State Constitution. The principal thrust of Article XIII A is to limit the amount of ad valorem taxes on real property to 1% of "full cash value" of such property, as determined by the County Assessor. Article XIII A defines "full cash value" to mean "the County Assessor's valuation of real property as shown on the 1975 -76 tax bill under 'full cash value,' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." Furthermore, the "full cash value" of all real property may be increased to reflect the rate of inflation, as shown by the consumer price index, not to exceed 2% per year or may be reduced. Article XIII A has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster. Article XIII A exempts from the 1% tax limitation any voter approved indebtedness incurred prior to July 1, 1978, requires a vote of two- thirds of the qualified electorate to impose special taxes, while totally precluding the imposition of any additional ad valorem, sales or transaction tax on real property, and requires the approval of two- thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. On September 22, 1978, the 'California Supreme Court upheld the general validity of Article XIII A against a series of challenges which attacked the Jarvis -Gann Initiative as a whole ( Amador Valley Joint Union School District vs. State Board of Equalization 22 Cal. 3d 208 (1978)). The Court found that it was premature to rule on the claim that Article XIII A impermissibly interfered with contracts in violation of the U.S. Constitution, stating that such a challenge must come when a specific contract or obligation is impaired. The Agency has no power to levy and collect taxes. Any further reduction in the tax rate or the implementation of any constitutional or legislative property tax de- emphasis will reduce the Tax Revenues, and, accordingly, would have an adverse impact on the ability of the Agency to pay debt service on the Bonds. Business Inventory Exemption Pursuant to legislation adopted in 1979 (Statutes of 1979, Chapter 1150), business inventories were exempted from taxation in fiscal year 1980/81 and each fiscal year thereafter. This law further provided a formula for reimbursement by the State to cities, counties, cities and counties, special districts and school districts for the amount of tax revenues lost by reason of such exemption, as adjusted for percentage changes in the population and the cost of living. Under prior 'State law, the State paid 50% of the taxes that were levied against business inventory. Under Chapter 1150, the State 20 00 •0 paid, as a subvention, an amount equal to 100% of taxes that would otherwise be due (excluding taxes to pay for voter approved indebtedness) from business inventories commencing with the 1980/81 fiscal year. The effect of Chapter 1150 has been to eliminate current and future business inventories from assessment and taxation, with the State reimbursing local agencies for lost revenue approximately equal to the total due in fiscal year 1979/80 with annual increases allowed based on increases in population and inflation. Recently adopted 1984 legislation (Senate Bill 794 and Assembly Bill 1849) has replaced business inventory subventions with a long term financing plan for local governments. In section 1 of Senate Bill 794, "The Long -Term Local Financing Act of 1984," (Section 16110, et seq. of the Government Code, which became operative, along with counterpart legislation Assembly Bill 1849, on July 1, 1984) the purpose and intent of The Long -Term Local Financing Act of 1984 is stated as follows: "The Legislature finds and declares that some local agencies lack sufficient revenues to meet their obligations to the landowners and residents they serve. It is the intent of the Legislature in enacting this act to provide local agencies with reliable, stable, and very predictable revenues to finance these obligations." In place of the terminated business inventory subvention, the new legislation makes available to redevelopment agencies and other local agencies, beginning in fiscal year 1984/85, special supplemental subventions to compensate for lost revenue resulting from the repeal of former personal property tax subvention programs. First, agencies receive a share of the revenues generated from taxes on a new supplemental property tax roll. Then if agencies do not receive sufficient revenue from this source to replace the funds lost by reason of termination of the business inventory subvention, the new legislation establishes a special supplemental allocation. The special supplemental allocation is to be paid by the State to certain local agencies, including redevelopment agencies, to restore to such agencies the difference between the level of business inventory subventions which were to be paid under prior law and the amount of revenue received from taxes on the supp property tax roll. As a result of these changes, redevelopment agencies will receive approximately the same amounts of revenue as they were to receive in fiscal year 1983/84 had business inventory subventions not been terminated. Pending Federal Legislation Concerning Tax- Exempt Obligations On December 17, 1985, the United States House of Representatives passed H.R. 3838, the Tax Reform Act of 1985 (the "House Bill "). The House Bill in the form passed by the House imposes additional requirements which must be satisfied in order for the interest on obligations issued by or on behalf of state and local governments to be exempt from federal income taxation. Such 21 00 •0 requirements generally are effective for all obligations issued after December 31, 1985, and thus, if the House Bill becomes law in its present form, would be applicable to the Bonds. The House Bill is subject to change, and, if it becomes law, may contain requirements which differ from those contained in the House Bill in its present form. Therefore, there can be no assurance that the Agency will be able to comply with such requirements. The failure or inability of the Agency to comply with the requirements of the House Bill could jeopardize the tax- exempt status of the Bonds from their date of issuance. Bondowners should be aware that in such event, the Bonds are not callable, nor will the interest rate on the Bonds be adjusted to reflect the loss of the tax exemption. On March 14, 1986, a joint statement was made by Chairman Dan Rostenkowski, D -Ill., House Committee on Ways and Means, Chairman Bob Packwood, R -Ore., Senate Committee on Finance, Rep. John J. Duncan, Ranking Member of the Committee on Ways and Means, Sen. Russell Long, Ranking Member of the Committee on Finance and Secretary of the Treasury, James A. Baker, III with respect to the effective dates of certain provisions of the Comprehensive Tax Reform Legislation (H.R. 3838) being considered by Congress (the "Joint Statement "). On June 24, 1986, the Senate approved an amended version of H.R. 3838 (the "Senate Bill "). The Senate Bill contains provisions relating to tax- exempt obligations and in most respects applies to obligations issued after enactment of tax reform legislation. Regardless of the postponement of the effective date contained in the Joint Statement, under the' House Bill, during any period in taxable years beginning after 1987 when the Bonds are held by property and casualty insurance companies, interest received with respect to the Bonds by such companies would be subject to a minimum tax, which would operate in a manner similar to the alternative minimum tax under existing law, and under -the Senate Bill, during any period in taxable years beginning after 1986 when the Bonds are held by corporations, interest received with respect to the Bonds would be included in reported profits of such corporations for the purposes of the alternative minimum tax provisions applicable to corporations, which provisions require there to be included as an item of tax preference, in computing such alternative minimum tax, fifty percent of reported profits not otherwise included in the minimum tax base. Except as to the minimum tax upon property and casualty insurance companies and the alternative minimum tax upon certain corporations, both as referred to in the preceding paragraph, it is the opinion of Bond Counsel that if the provisions of the Joint Statement are incorporated into the provisions of the House Bill and if the House Bill is enacted in the form adopted by the United States House of Representatives on December 17, 1985, with such incorporation, or if the Senate Bill is enacted, in the form passed by United States Senate on June 24, 1986, the tax- exempt nature of interest payable with respect to the Bonds would not be impaired. P* 1,0 ,.. Background 0 so REDEVELOPMENT PROJECT AREA "A ", AS AMENDED The City of Lynwood is primarily a residential community, with scattered areas of commercial and industrial development, situated in the central basin area of Los Angeles County, in southern California. The City is approximately 5.0 square miles in size and had a 1980 population of about 52,000. It is located approximately 11 miles southeast of the downtown area of the City of Los Angeles and is bordered by the cities of South Gate, Paramount, Compton and Los Angeles and unincorporated county territory. The Lynwood Redevelopment Agency implements and administers two redevelopment projects: Redevelopment Project Area "A" and 'Alameda Project. The goal of the Lynwood Redevelopment Agency is the implementation of the redevelopment plans for both project areas in a manner consistent with Agency and City policies, including the removal of blight and blighting influences from the project areas and replacement of these blighted conditions with uses and development which will benefit the total community both economically and socially. Redevelopment Project Area "A" was formulated after consideration and review by the Redevelopment Advisory Committee and the Lynwood Planning Commission in the spring of 1973. On September 2, 1973 the City Council enlarged the Redevelopment Survey Area surrounding Redevelopment Project Area "A" and commenced proceedings with the Lynwood Redevelopment Agency to designate and plan an amendment to Redevelopment Project Area "A ". The Planning Commission considered the amendment on December 20, 1973 and by Planning Commission Resolution No. 549 formed the redevelopment plan as amended to be consistent with the Land Use Element of the, City of Lynwood General Plan. After reveiwing the VTN "Market Feasibility Report," the Wainwright and Ramsey Lynwood Commercial Center Project "A" Financial Feasibility Report June, 1973 proposing use of the State Redevelopment Act and the Wainwright and Ramsey report of December, 1973 "Lynwood Commercial Center Summary of the Financial Feasibility of Redevelopment Project Area "A" As Amended Using the State Redevelopment Act," the City Council adopted Ordinance No. 960 as an amendment to Ordinance No. 945 and the official Redevelopment Plan for Redevelopment Project Area "A ". On June 17, 1975 the Lynwood Redevelopment Agency adopted Resolution of Intention to again amend the Redevelopment Plan for Redevelopment Project Area "A" by enlarging the territory within the plan. The City Council adopted Ordinance No. 990 on August 20, 1975 amending Ordinance No. 945 and the Redevelopment Plan for Redevelopment Project Area "A ". On April 6, 1979 the Lynwood Redevelopment Agency and the City Council conducted a joint hearing to consider an amendment to the Redevelopment Plan for Redevelopment Project Area "A" by adding additional properties and deleting certain properties. The City Council adopted Ordinance No. 1000 on June 3, 1976 amending the plan. 23 •0 The Lynwood Redevelopment Agency adopted Resolution of Intention to again amend the Redevelopment Plan for Redevelopment Project Area "A" by deleting certain properties. The Redevelopment Plan was amended a fourth time by adoption of Ordinance..No. 1010 by the City Council on December 8, 1976. The Redevelopment Plan for Redevelopment Project Area "A" was finally amended by the City Council adoption of Ordinance No. 1111 on December 16, 1980. The size of Redevelopment Project Area "A" increased in size from one initial area of 44 acres to the present 564 acres. The Project Area expansion primarily encompasses commercial and manufacturing uses. In addition, street right -of ways, public land and properties currently under the control of Caltrans are not included in the Project Area. Project Area acreage is detailed below: Land Use (Zoning) Existing Residential Single Family (R -1 & R -2) 2.94 (1 -6 Unit /Acre) Townhouse /Cluster 0 (7 -14 Units /Acre (R -3)) Multiple Family 1.00 (15 -35 Units /Acre (R -3)) Commercial (CB -1, C -2, C -2A, C -3) 180.64 Industrial /Semi - Public 77.47 (General Plan designated) Freeway Right -of- Way /Buffer 0 (General Plan designated) Street Right -of -Way 190.00 Total Acreage 564.43 As these acreage figures show, approximately 190 acres of the Amended Area are street right -of -way. Of the remaining 374.43 acres, 44 were in the original Project Area, 24.69 are owned by Caltrans, and public and semipublic uses (St. Francis Medical Center, the City Park and City Hall Complex) total 52.47 acres, leaving a balance of 253.27 acres of commercial and industrial property. 24 •M •0 Agreement for Reimbursement of Tax Increment Revenues At the time of consideration of the Agency's amendments to the Redevelopment Project Area "A" adopted by Ordinance No. 1111 on December 16, 1980, the Agency received a list of conditions upon which the County would be agreeable to the City's amendments to the Redevelopment Plan. These included some of the following requested limitations on the Agency's diversion of tax increment for the Project Area: 1. A limit of $20,000,000 in maximum tax increment revenues to be diverted for the added Project Area over the 40 year life of the project. 2. Exclusion of the diversion of any tax increment revenues from the Lynwood Civic Center, Lynwood City Park, and St. Francis Hospital property, and Jorgensen Steel Company property, if any. 3. Reimbursement to the Los Angeles County Flood Control District and Public Library for additional costs of service associated with any actions taken by the Agency or the City. 4. Reimbursement to the affected taxing agencies of those tax increment revenues associated with the compounded 2% annual inflationary growth in assessed value on the local secured, unsecured and public utility tax rolls; and the state business inventory reimbursement over the base year amount. 5. Reimbursing to the affected taxing agencies 15% of all tax increment revenues diverted from the - Seven - th Day Adventist Church owned property in the event it returns to the tax ules. 6. The County shall receive any increase in tax increment revenues attributable to increases in the tax reimposed by County taxing agencies within the Project Area. 7. The Agency shall make in lieu payments for any revenue losses resulting from property being taken off the tax rolls for extended periods of time by virtue of ownership by the Agency. a 8. The Agency shall not spend tax increment revenues within the Project Area for public improvements that are not related to the Project Area and are normally a financial responsibility of the City such as parks, cultural facilities, city hall, community facilities, etc. Although the County suggested these restrictions on the Redevelopment Plan and Agency staff communicated general concurrence with these conditions to the County, the plan amendment which was adopted by the Agency and Ordinance No. 1111 made no reference to these provisions. Thereafter, in 1982, the County proposed a form of agreement for reimbursement of tax increment funds to implement the County's earlier recommendations. The Agency responded and by resolution adopted in 1983 approved a form of agreement for reimbursement of tax increment revenues substantially similar to the County's recommendations 25 •0 •0 in 1980, except that the agreement provided for subordination of any obligation of passed tax increment revenues to any tax allocation bonds of the Agency, and did not provide for the pass through to the taxing agencies of the 2% inflationary increase which may have occurred. The County objected to several of the provisions of the Agency's proposed agreement, and has not approved this agreement. To the best knowledge of the Agency, the County has taken no steps to implement by means of diversion of tax increment revenues, any moneys as a result of any of the above - referenced negotiations. Nevertheless, the size of the Bond issue has been computed as though the 1983 Agency Agreement were valid and has further assumed that such obligation would 'not be subordinated to the Agency's Bonds and that the 2% inflationary increases would not be available to the Agency. The Agency does not believe it has any legal obligation to implement any thing beyond its 1983 Agreement, and it is unclear whether the 1983 Agreement is of any force or affect. 26 •! TAX REVENUES 00 Tax Revenues (as described in the section "Security for the Bonds" on page 5 hereof) derived each year from the levy and collection of taxes on any increase in the taxable valuation of land, improvements, personal property and public utility property in the Project Area over and above the base year valuation for such property are to be deposited in the Special Fund, administered by the Fiscal Agent and applied to the payment of the principal of and interest on the Bonds. Historical Tax Revenues The Base Year valuation was established in fiscal year 1972 -73 for the original Project Area, 1975 -76 and 1980 -81 for the amended portions of the Project Area. The following table shows the breakdown of the Base Year Property Tax Rolls. REDEVELOPMENT PROJECT AREA "A ", AS AMENDED BASE YEAR PROPERTY TAX ROLLS Boundaries 1976 Annexation 1981 Annexation 1972 -73 1975 -76 1980 -81 Secured Valuation (1) $1,744,240 $1,835,820 $69,213,160 Unsecured Valuation 92,680 593,504 13,396,700 Total Valuation 1.836.92 2.429.324 $82.609 i 1) Secured valuation included the public utility valuation as reported by the State Board of Equalization. 27 •0 ... . �....��... .� . . -... .. ....4 _. w .. _ ... .�. ...w .. The following table is a schedule of the taxable valuations and resulting Tax Revenues for the fiscal years 1983 -84 through 1985 -86. REDEVELOPMENT PROJECT AREA "A ", AS AMENDED SCHEDULE OF HISTORICAL TAX REVENUES W] 1976 Annexation Original Boundaries 1983 -84 1984 -85 1985 -86 1983 -84 $ 3,030 1984 -85 1985 -86 Secured Valuation $ 6,567,557 $ 7,079,648 $ 7,161,236 Utility Valuation -0- 423,460 $ 16,980 397,720 417,500 Unsecured Valuation (2,429,324 1,348,187 (2,429,324 1,824,594 1,834,942 Total Valuation $ 8,339,204 $ 9,301,962 $ 9,413,678 Less: Base Year Valuation $ 335.802 (1,836,920 (1,836,920 (1,836,920 Incremental Valuation $ 6,502,284 $ 7,465,042 $ 7,576,758 Average Tax Rate 1.187894 1.175477 1.162826 Tax Revenues $ 77.240 $ 87.750 $ 88.105 W] 1976 Annexation 1983 -84 1984 -85 1985 -86 Secured Valuation $ 3,030 $ -0- $ -0- Utility Valuation 13,950 14,030 4,280 Unsecured Valuation -0- -0- -0- Total Valuation $ 16,980 $ 14,030 $ 4,280 Less: Base Year Valuation (2,429,324 (2,429,324 (2,429,324 Incremental Valuation $(2,412,344) $(2,415,294) $(2,425,044) W] 1981 Annexation 1983 -84 1984 -85 1985 -86 Secured Valuation $ 90,066,941 $ 96,404,468 $102,782,281 Utility Valuation 3,591,030 3,833,760 3,853,700 Unsecured Valuation 17,220,586 17,981,014 28,530,510 Total Valuation $110,878,557 $118,219,242 $135,166,491 Less: Base Year Valuation (82,609,860 (82,609,860 (82,609,860 Incremental Valuation $ 28,268,697 $ 35,609,382 $ �5 2,556,631 Average Tax Rate 1.187894 1.175477 1.162826 Tax Revenues $ 335.802 $ 418.580 $ 611.142 W] •! Projected Tax Revenues •4 The following table is a schedule of the projected taxable valuations and resulting Tax Revenues in the Project Area. REDEVELOPMENT PROJECT AREA "A ", AS AMENDED SCHEDULE OF PROJECTED TAX REVENUES (000's omitted) (1) Adjusted Real Property values, less assumed acquisition and demolition, reflects an annual two percent increase as allowed by Article XIII A of the California Constitution. (2) New Development is as discussed below. (3) Other Property includes taxable value attributable to personal and State assessed public utilities, less assumed acquisition and demolition. For purposes of this analysis, projected increases in personal property value are the result of anticipated new development. (4) Tax revenue is projected on the basis of area tax rates reflecting an assumed annual decline equal to the average annual decline of rates between 1981 -82 and 1985 -86. Source: Katz, Hollis, Coren & Associates, Inc. New Development The estimates of taxable value added as a result of new construction and change in ownership activity in the Project Area include valuation estimates for developments currently under construction as well as proposed developments for which the scope and timing have yet to be finalized. Information regarding the scope and timing of active and proposed developments was provided by Agency staff and developers in the Project Area. Should the scope and timing of proposed developments vary from current estimates, tax revenue estimates would need to be adjusted accordingly. 29 .ter' ]�Y y M Iy (1) (3) Increment (4) Adjusted (2) Total Over Total Fiscal Real New Other Total Base of Projected Year Property Development Property Value $86,876 Revenue 1986 -87 $121,813 $ 236 $24,716 $146,766 $59,889 $478 1987 -88 124,176 5,336 24,716 154,228 67,351 535 1988 -89 132,102 7,703 24,836 164,641 77,765 624 1989 -90 142,601 512 26,626 169,739 82,863 651 1990 -91 145,975 0 26,918 172,893 86,017 655 1991 -92 148,895 0 26,947 175,842 88,966 657 1992 -93 151,872 0 26,947 178,820 91,943 658 1993 -94 154,910 0 26,947 181,857 94,981 659 1994 -95 158,008 0 26,947 184,955 98,079 660 (1) Adjusted Real Property values, less assumed acquisition and demolition, reflects an annual two percent increase as allowed by Article XIII A of the California Constitution. (2) New Development is as discussed below. (3) Other Property includes taxable value attributable to personal and State assessed public utilities, less assumed acquisition and demolition. For purposes of this analysis, projected increases in personal property value are the result of anticipated new development. (4) Tax revenue is projected on the basis of area tax rates reflecting an assumed annual decline equal to the average annual decline of rates between 1981 -82 and 1985 -86. Source: Katz, Hollis, Coren & Associates, Inc. New Development The estimates of taxable value added as a result of new construction and change in ownership activity in the Project Area include valuation estimates for developments currently under construction as well as proposed developments for which the scope and timing have yet to be finalized. Information regarding the scope and timing of active and proposed developments was provided by Agency staff and developers in the Project Area. Should the scope and timing of proposed developments vary from current estimates, tax revenue estimates would need to be adjusted accordingly. 29 .ter' ]�Y y M Iy • Estimated valuations for the developments included are based on our understanding of the general assessment practices currently employed by Los Angeles County. General assessment practices are subject to policy changes, legislative changes, and the individual appraiser's judgment in a specific situation. While we believe our estimates to be reasonable, taxable values resulting from actual tax appraisals may vary from the amounts assumed in the projections. A brief description of developments which have been included in the - projection of new development and projection of personal property are outlined below. It should be noted that potential taxable value added as a result of changes in ownership not specifically identified below have not been assumed. To the extent that the included development proceeds as anticipated, and additional new development or property transfers occur within the Project Area, property assessments and the resulting tax revenues could be higher than amounts estimated in the Schedule of Projected Tax Revenues. The developments which are included in this analysis are as follows: 1. Condor West Partnership A 4,600 square foot neighborhood shopping center was completed in the second quarter of 1986. Partial and full valuations are anticipated to appear on the 1986 -87 and 1987 -88 tax rolls. 2. Hercules Restaurant A 769 square foot expansion of an existing restaurant is currently underway with an estimated completion in the third quarter of 1986. Total valuation is expected for the 1987 -88 tax roll. 3. Navarro Development -- A- 3,888 _square- foot- office and retail building is assumed to begin construction by the first quarter of 1987. Full valuation is projected in fiscal year 1987 -88. .4. Windsor Financial Corporation A 6,950 square foot neighborhood shopping center was completed in the second quarter of 1986. Taxable value added as a result of this development is anticipated for the 1986 -87 and 1987 -88 tax rolls. 5. Century Atlantic Associates shopping center is presently under first quarter of 1987 will result in tax roll. A 7,162 square foot neighborhood construction. A completion by the taxable value added to the 1987 -88 6. Triad Development A 7,300 square foot neighborhood shopping center currently under construction is expected to be complete by the first quarter of 1987. Taxable value from the development is projected for the 1987 -88 tax roll. 7. Barber & Mendoza Development A 10,196 square foot shopping center is anticipated to begin construction by the first quarter of 1987. A projected completion by the fourth quarter of 1987 will be reflected on the 1988 -89 tax roll. 30 w J 8. Moya Development A development consisting of 8,400 square feet of retail space and a 1,400 square foot restaurant is projected to begin construction by the first quarter of 1987. A completion by the fourth quarter of 1987 will result.in taxable value added in fiscal year 1988 -89. 9. Saiver Development A shopping center consisting of 11,800 square feet and a fast food restaurant of 1,700 square feet are projected for construction in the first quarter of 1987. Completion by the fourth quarter of 1987 is assumed, resulting in value added to the 1988 -89' tax roll. 10. Sterick Company A renovation and expansion of a former Zody's department store will begin in the third quarter of 1986 with the remodeling of the 100,800 square foot building. Subsequent expansion of 34,000 square feet of retail space and 3,850 square feet of fast food and restaurant space is projected to begin by the first quarter of 1987. Taxable value added from the development is projected for the 1987 -88 to 1989 -90 fiscal years. 11. Zerounian Development A 4,296 square foot neighborhood shopping center and adjoining 1,500 square foot restaurant is expected to start construction in the fourth quarter of 1986. Completion is projected by the third quarter of 1987, resulting in partial and full valuation on the 1987 -88 and 1988 -89 tax rolls. 12. Lucky's Supermarket A new 41,465 square foot market is anticipated to begin construction in the fourth quarter of 1986, replacing the current market on the site. Partial and complete valuation is expected to appear on the 1987 -88 and 1988 -89 tax rolls. 13. Lynwood Towne Center A shopping center development consisting of a 60,000 square foot supermarket, 19,210 square foot super drugstore, 24,300 square feet of retail space and 7,000 square feet of fast food restaurants will begin construction by the fourth quarter of 1986. Completion is anticipated in the third quarter of 1987, with taxable value added to the 1987 -88 and 1988 -89 tax rolls. Source: Katz, Hollis, Coren & Associates. 31 SAN CY. 0 1 Annual Debt Service A Set forth below is the annual debt service requirements for the 1976 Bonds and the estimated annual debt service (assuming minimum sinking account payments) for the term of the Bonds. REDEVELOPMENT PROJECT AREA "A ", AS AMENDED ANNUAL DEBT SERVICE Maturity Tax Allocation Bonds, Series 1986 Total Date Series 1976 Total Combined July 15 of Debt Service Principal Interest Debt Service Debt Service 1987 $ 169,467 $ 316,983 $ 316,983 $ 486,450 1988 170,417 345,800 345,800 516,217 -1989 171,030 345,800 345,800 516,830 1990 166,305 345,800 345,800 512,105 1991 171,580 345,800 345,800 517,380 1992 175,980 345,800 345,800 521,780 1993 169,680 345,800 345,800 515,480 1994 173,380 345,800 345,800 519,180 1995 176,380 345,800 345,800 522,180 1996 178,680 345,800 345,800 524,480 1997 180,040 345,800 345,800 525,840 1998 180,680 345,800 345,800 526,480 1999 180,600 345,800 345,800 526,400 2000 179,800 345,800 345,800 525,600 2001 .180,200 345,800 345,800 526,000 2002 $ 175,000 345,800 520,800 520,800 2003 185,000 332,500 517,500 517,500 2004 200,000 318,440 518,440 518,440 2005 215,000 303,240 518,240 518,240 2006 230,000 286,900 516,900 516,900 2007 250,000 269,420 519,420 519,420 2008 270,000 250,420 520,420 520,420 2009 290,000 229,900 519,900 519,900 2010 310,000 207,860 517,860 517,860 2011 335,000 184,300 519,300 519,300 2012 360,000 158,840 518,840 518,840 2013 385,000 131,480 516,480 516,480 2014 415,000 102,220 517,220 517,220 2015 450,000 70,680 520,680 520,680 2016 480,000 36,480 516,480 516,480 Totals $2,624,212 4.550.000 $8.386.663 $12.936.663 560.882 32 Debt Service Coverage is Set forth below is the estimated debt service coverage for the first four years the Bonds and the 1976 Bonds are outstanding. (1) Bond proceeds on deposit in the Escrowed Proceeds Fund and the Reserve Account invested at a rate of six and one -half percent (6.50 %). (2) Projected Tax Revenues as shown on page 29 of this Official Statement. CONCLUDING INFORMATION Financial Consultant Miller & Schroeder Financial, Inc. ( "Miller & Schroeder "), has acted as financial consultant to the Agency concerning the Bonds. As financial consultant, Miller & Schroeder will receive compensation contingent upon the sale and delivery of the Bonds. Miller & Schroeder may submit a bid Miller & Schroeder is the successful required to and does not intend to waive in addition, will receive compensation as for the purchase of the Bonds. If bidder, Miller & Schroeder is not its financial consultant's fee and, underwriter. Underwriting The Bonds have been sold at a net purchase price to be paid is $ The underwriters intend to offer the yields set forth on the cover page of interest from August 1, 1986, which yi requirement of prior notice. interest rate of %. The original for the Bonds, plus accrued interest. Bonds to the public initially at the this Official Statement, plus accrued gilds may subsequently change without any The underwriters reserve the right to join with dealers and other underwriters in offering the Bonds to the public. The underwriters may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. 33 "'YYw- Escrowed Projected Tax Proceeds Revenues Total Debt Fund Net Debt Available for July 15 Service Earnings (I Service Debt Service(2) Coverage 1987 $486,450 $112,502 $373,948 $478,000 1.28x 1988 516,217 86,502 429,715 535,000 1.25x 1989 516,830 45,552 471,278 624,000 1.32x 1990 512,105 -0- 512,105 651,000 1.27x (1) Bond proceeds on deposit in the Escrowed Proceeds Fund and the Reserve Account invested at a rate of six and one -half percent (6.50 %). (2) Projected Tax Revenues as shown on page 29 of this Official Statement. CONCLUDING INFORMATION Financial Consultant Miller & Schroeder Financial, Inc. ( "Miller & Schroeder "), has acted as financial consultant to the Agency concerning the Bonds. As financial consultant, Miller & Schroeder will receive compensation contingent upon the sale and delivery of the Bonds. Miller & Schroeder may submit a bid Miller & Schroeder is the successful required to and does not intend to waive in addition, will receive compensation as for the purchase of the Bonds. If bidder, Miller & Schroeder is not its financial consultant's fee and, underwriter. Underwriting The Bonds have been sold at a net purchase price to be paid is $ The underwriters intend to offer the yields set forth on the cover page of interest from August 1, 1986, which yi requirement of prior notice. interest rate of %. The original for the Bonds, plus accrued interest. Bonds to the public initially at the this Official Statement, plus accrued gilds may subsequently change without any The underwriters reserve the right to join with dealers and other underwriters in offering the Bonds to the public. The underwriters may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. 33 "'YYw- ti Legal Opinion 6 The opinion of the Bond Counsel firm of Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, approving the validity of the Bonds and stating that interest on the Bonds is exempt from income taxes of the United States of America under present federal income tax laws and such interest is also exempt from personal income taxes of the State of California under present State income tax laws, will be furnished the successful bidder at the time of delivery of the Bonds at the expense of the Agency. Compensation for Bond Counsel's services is entirely contingent upon the sale and delivery of the Bonds. A copy of such opinion, certified by an officer of the Agency by his facsimile signature, will be printed on the back of each definitive Bond. No charge will be made to the purchaser for such printing or certification. The legal opinion is only as to legality and is not intended to be nor is it to be interpreted or relied upon as a disclosure document of an express or implied recommendation as to the investment quality of the Bonds. In addition, certain opinions will be provided by the Agency's Counsel, Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California. Tax Exempt Status In the opinion of Stradling, Yocca, Carlson & Rauth, A Professional Corporation, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and court decisions, interest on the Bonds is exempt from present federal income taxation and from present State of California personal income taxes. Legality for Investment in California The Law provides that obligations authorized and issued under the Law shall be legal investments for all banks, trust companies and savings banks, insurance companies, and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Law. The Superintendent of Banks of the State of California has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in California. Bond Insurance issue, effective as of the date on which the insurance guaranteeing the payment when due of Bonds. The insurance extends for the life cancelled by 34 ") has committed Bonds are issued, a policy principal and interest on of the Bonds and cannot to of the be i � O I Rating As noted on the cover of this Official Statement, the Agency has received a " " rating from Standard & Poor's Corporation on the understanding that the standard insurance policy of will be issued upon delivery of the Bonds. This rating reflects the view of the rating agency and explanations can be obtained from Standard & Poor's Corporation, 25 Broadway, New York, New York 10004 (212) 248 -2525. There is no assurance that such rating will remain for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the rating agency, circumstances so warrant. Miscellaneous All of the preceding summaries of the Resolution, the Law, other applicable legislation, the Redevelopment Plan for the Project Area, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Agency for further information in connection therewith. This Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The execution and delivery of this Official Statement by its Executive - Director has been duly authorized by the Agency. LYNWOOD REDEVELOPMENT AGENCY By: 35 Executive Director • • • • SUPPLEMENTAL INFORMATION THE CITY OF LYNWOOD General The City is located in the Los Angeles Basin, midway between downtown Los Angles and Long Beach. Incorporated on July 11, 1921, the City has a general law form of government. Five City Councilmembers representing the City at large are elected to four -year overlapping terms. The mayor is selected annually by a majority of the City Council. The City elects both the City Treasurer and the City Clerk, while the Council appoints a City Manager. Population The population of the City as of January 1, 1986, was 53,000. A summary of the City's population is shown below. City of Lynwood Population (1) 1980 48,000 1981 49,050 1982 50,100 1983 51,000 1984 51,800 1985 52,400 1986 53,000 (1) Estimated by Population Research Unit, California Department of Finance, estimates as of January 1 of each year W. Commerce 40 0 The number of establishments selling merchandise subject to sales tax and the valuation of taxable transactions is presented in the following table. City of Lynwood Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions Economy Total Ali Outlets No. of Retail Stores Permits No. of Taxable 160,988,000 Permits Transactions 1980 283 100,930,000 1981 287 105,439,000 1982 287 101,566,000 1983 289 103,725,000 1984 295 109,895,000 1985 294 106,185,000 Economy Total Ali Outlets No. of Taxable Permits Transactions 784 160,988,000 779 155,964,000 794 148,070,000 770 148,121,000 769 162,434,000 748 159,734,000 The residents of the City have access to the City's labor market as well as to the metropolitan Los Angeles -Long Beach labor market. While the City of Lynwood is predominantly residential, it has significant industrial districts containing national manufacturers such as Jorgenson Steel, Cargill Chemical, Western Gear, and Sure Grip Skates. 37 The following table shows employment by industry through the first quarter of 1986. Employment by Industry (In Thousands) Manufacturing Wholesale and Retail Trade Services Government Finance, Ins., & Real Estate Transportation & Public Utilities Construction Mining Agricultural Total All Industries Total Civilian Labor Force (2) Total Unemployment Unemployment Rate (3) Los Angeles -Long Beach Labor Market Area (1) 1985 1986 917.9 909.4 910.2 898.4 999.5 995.2 472.9 495.5 259.1 265.3 199.9 197.7 122.5 114.1 11.9, 12.3 12.4 10.9 3,914.0 4,060.0 213.0 245.0 5.4% 6.0% (1) Average employment reported for the years indicated by place of work excluding self - employed, unpaid family and workers involved in labor disputes. Columns may not add due to rounding — (2) Annual average civilian labor force (and components) residence; includes workers involved in labor disputes. (3) The unemployment rate is computed from rounded data; differ from rates using rounded figures in this table. Source: State Employment Department. 01 is by location of therefore, it may 00 •a The largest employer in the Lynwood area is the St. Francis Hospital which employs approximately 1,400 people. The second largest employer in the area is Jorgensen Steel, which employs approximately 500 people. Los Angeles County is a relatively affluent county in comparison with other counties in California. Lynwood is slightly less affluent than average for the County, but it is above that of most of the adjacent communities. The general area is characterized by intense industrial development and high population densities, while Lynwood has' predominantly lower density residentially. The industrial base of both Lynwood and of the general area is essentially well diversified and manufacturing oriented. The following is a list of the major employers in the area provided by the Lynwood Chamber of Commerce. Company St. Francis Hospital Jorgensen Steel West Tech. Gear Manchester Tank Universal Molding Eastern Cabinet Ranger Diecasting Major Employers Product /Service Employment Medical Services 1,400 Steel 500 Equipment Parts 250 Propane Tanks 250 Various moldings Cabinets 7 Aluminum Diecasting 75 WE Construction Activity • • • The table below summarizes construction activity in Lynwood for both single - family and attached living units and'commercial units during the last five years. City of Lynwood Building Permit Valuation (1) (Valuation in Thousands of Dollars) 1982 1983 1984 1985 1986 Residential New Single - Dwelling $ 553 $ 520 $ 583 $ 195 $ -0- New Multi - Dwelling 288 -0- 201 816 -0- Additions, Alterations 2,049 2,039 1,539 1,901 64 Total Residential $2,890 $2,559 $2,323 $2,912 $ 64 Non - residential New Commercial $3,774 $ 299 $ 125 $1,103 $ -0- New Industrial 237 279 187 1,226 -0- Other 571 110 273 2,455 3 Additions, Alterations 1,619 1,109 1,254 1,195 148 Total Non - residential $6,201 $ 797 $1,839 $5,979 $ 150 Total Valuation $.4�4 4 5 4 1 $$ 9 L__Z 4 Number of New Dwelling Units Single - dwelling 11 14 9 4 -0- Multi- dwelling 6 -0 - -- 20 30 _ -0- Total Units �Z �4 — 2� — 4 -0- Source: "California Construction Trends," Security Pacific National Bank, Year to Date, March, 1986. Utilities Water is supplied by the City of Lynwood and the County of Los Angeles Waterworks and Utility Division. Sewage treatment and disposal is provided by the Los Angeles County Sanitation District. Southern California Gas Company supplies natural gas and electric power is provided by Southern California Edison Company. Telephone service is provided by General Telephone Company. 40 ! 0 Community Service Facilities • O The City maintains police protection service under contract to the Los Angeles County Sheriffs Department and maintains its own fire station. City planning and recreational activities are provided by the City's full -time professional staff. Library services are provided by the Los Angeles County Library District. The City's educational system is comprised of nine elementary schools, one junior high school and one high school. In addition to the public school system, there are private and church - affiliated schools in the Lynwood area. Compton Community College is located about five miles south of the City. In addition, there are many public and private universities including the University of California at Los Angeles, University of Southern California, and California State College at Long Beach in the Los Angeles Basin within commuting distance. Comprehensive hospital services are available to the City's residents at St. Francis Hospital. The Hospital is a 524 -bed facility that offers such specialized services as critical and coronary care units, an oncology ward, nuclear medicine, heart catheterization, and open -heart surgery, the SCAN heart program, a 24 -hour emergency room and several public health and community service programs. The City maintains an active public recreation program. Currently, there are three developed park sites with facilities that include baseball diamonds, volleyball, courts, handball /racquetball courts, swimming pools, barbecues, picnic shelters, and tennis courts. There is also a community center with a gymnasium, four meeting rooms, and an olympic -size, indoor swimming pool. Beyond the immediate area, major recreational centers located within a relatively short distance of the City are located to the south and to the west of Lynwood. Disneyland is nearby. To the east, the mountains provide recreation for skiers, hikers, campers, and naturalists. Climate The City of Lynwood is located at an elevation of about 89 feet. Lynwood's climate is characterized as generally clear, sunny, and mild with an annual mean temperature of 62.5 degrees Fahrenheit. The average annual temperature ranges from about 54 degrees to 72 degrees. Rainfall occurs almost entirely in winter and early spring and averages 13.8 inches annually. Transportation The City is well served by transportation modes. Lynwood has excellent surface street and freeway access to adjacent cities and other locations in the Los Angeles Basin. Major freeways are the Harbor Freeway which passes 41 �i� Ys {. I - O three miles west of Lynwood, the Long Beach Freeway along the City's eastern boundary and the proposed I- 105- Century Freeway. Southern California Rapid Transit District provides scheduled service to and through Lynwood to all parts of Los Angeles County. The City is approximately 25 miles east of Los Angeles International Airport, 12 miles north of the Long Beach Airport, and six miles west of a general aviation port in Compton. The industrial areas in western Lynwood are served by Southern Pacific Railroad which provides both intrastate and interstate rail service. 42 ti ;' i t r.ITL R. 6TP.O1ING ,.IC. C. YDCC. C. CRAIG CARLSON WILLIAM R. RAYTM III MAAr RICHARD C. GOODMAN JOHN J. MURPHY THOMAS P. CLARR, JR. RLN A. FRIO... DAVID R. I.C.L. M PAUL L CALE RUDOLPH C. SHEPARD ROLLRT J ..NE M. D. TALBOT LRUCL C. STUART DOUGLAS r. MIOMAM C. KURT YLAGER POSCPT J. WHALEN POSCRT C. RICH RCTEP J. TLNMYSON THOMAS A. PISTON[ SCOTT L. MCCONMCLL •HCMSEK OI DILTPKT OI CIR...M M. OHLY July 22, 1986 Mr. Charles Gomez Executive Director Redevelopment Agency of Lynwood 11330 Bullis Road Lynwood, CA 90262 of the City RE': Proposal for Bond Counsel Services for 1986 Tax Allocation Bonds Dear Charles: JOHN L. RRCCR[w RIDGC D. COVNL4 TELECOPI[R (714( 640.7332 This proposal is for bond counsel services with respect to the issuance of tax allocation bonds pursuant to the Community Redevelopment Law. We are prepared to provide all legal services required by the Agency as directed by you and your staff in connection with such a bond issue. In light of our existing relationship with the Agency, we have set the fee at a level substantially lower than we customarily charge for legal services in connection with such a bond issue. The variable amount of the fee reflects the increased level of responsibility assumed by our firm as the size of the bond issue increases. The Agency and the City are well familiar with our firm's services. We anticipate that Kurt Yeager and Mark Huebsch would be primarily responsible for work on your proposed issue. Our primary responsibility as tax allocation bond counsel is to render an opinion in connection with the issuance of bonds by the Agency to the effect: (i) that the bonds have been properly authorized and issued and are valid and binding STRAIM NO. YOCCA, CARLSON EE RAUTH A PROFESSIONAL CORPORATION PCwA C. 670.L ATTORNEYS AT LAW RANDALL J. SHERMAN SPUCL rEUCMTLR 660 NEWPORT CENTER DRIVE, SUITE 1600 MAR. J MVLLLCM KIRA r MALOOMADO POST OrrICE BOX 7660 A. CL NEWPORT BEACH, LLILA KLIZ. L[TN C. RRI [CN G CALIFORNIA DC660-6441 REGI.. GROU.DWAT[R TELEPHONE 1714) 640-7035 OONALO } NAMMAN JOMM A LWIGART, JR. wuu w, wEwNRTUN PAUL 4 SCMMIDHAUSER TONY L LOWL CMPI•JTORMLP J. .ILPATPIC. NANCY RADCR WMIT[MCAO LLW16 G. rCLOMAN EYLVIA D. LAUTSCM CLAN. M. LISCNSOM MAP. W. OUV0161N [PNEST W. KLATTC 11 1 4WRLNCC R. Co.. NNN D. CATACI LAWRENCE W. NORWITZ July 22, 1986 Mr. Charles Gomez Executive Director Redevelopment Agency of Lynwood 11330 Bullis Road Lynwood, CA 90262 of the City RE': Proposal for Bond Counsel Services for 1986 Tax Allocation Bonds Dear Charles: JOHN L. RRCCR[w RIDGC D. COVNL4 TELECOPI[R (714( 640.7332 This proposal is for bond counsel services with respect to the issuance of tax allocation bonds pursuant to the Community Redevelopment Law. We are prepared to provide all legal services required by the Agency as directed by you and your staff in connection with such a bond issue. In light of our existing relationship with the Agency, we have set the fee at a level substantially lower than we customarily charge for legal services in connection with such a bond issue. The variable amount of the fee reflects the increased level of responsibility assumed by our firm as the size of the bond issue increases. The Agency and the City are well familiar with our firm's services. We anticipate that Kurt Yeager and Mark Huebsch would be primarily responsible for work on your proposed issue. Our primary responsibility as tax allocation bond counsel is to render an opinion in connection with the issuance of bonds by the Agency to the effect: (i) that the bonds have been properly authorized and issued and are valid and binding 0 Mr. Charles Gomez July 22, 1986 Page 2 0 obligations, (ii) that the essential sources of security for the bonds have been legally provided for, and (iii) that interest on the bonds is exempt from federal and California income taxation. Our services as bond counsel shall consist of providing general advice to, and consultation with, you, your staff, fiscal and planning consultant, and financial advisor /underwriter; the preparation of all resolutions, notices and other documents required for the authorization, issuance and sale of the bonds; reviewing the provisions of the official statement; meeting with staff and consultants as may be necessary and desirable for the performance of "due diligence" in connection with the issuance and sale of the bonds; examining the transcript of the proceedings; and issuing our approving opinion to the purchaser of the bonds. Our fee for the above services will be based upon the total principal amount of each issue of bonds authorized and sold and will be computed in accordance with the following schedule: Total Amount of Bonds Authorized Fee $1,000,000 or less $1,000,001 to $5,000,000 $8,000 $8,000 plus .258 of the excess over $1,000,000 The proceedings with respect to each financing will be drafted so that the above fees will be paid from the proceeds of the bonds. In the event that a financing is not completed for any reason, we would expect to be compensated at the usual municipal finance hourly rate of the attorneys involved for the work done prior to abandonment. In addition to the above fees, we will be reimbursed for out -of- pocket expenses, including travel outside the Southern California area at the request of the Agency, long distance telephone calls, document preparation and copying, outside messenger service and similar items. • r. Mr. Charles Gomez July 22, 1986 Page 3 If this proposal is satisfactory to you, please authorize the employment according to the terms of this letter and return to us a copy executed by an authorized officer of the Agency. We value highly our relationship with the City and, as always, we look forward to ;serving you on this latest issue of bonds. Thank you for your consideration. 1 . Respectfully submitted, STRADLING `' CA, CARLSON S RAUTH E. Kurt Yeage EKY /lmb TERMS OF EMPLOYMENT APPROVED THIS DAY OF , 1986 2549k/2019/27 DATE: July 30, 1986 • • •.•: � • is r. • i e+• FROM: Vicente L. Mas, Director, Com=ity Development SUBJECT: OFFER TO ACQUIRE - 3208 SANBORN AVENUE e� PURPOSE To request Agency authorization to submit Statutory Offer to Mr. Floyd J. Head for his property at 3208 Sanborn Avenue, Lynwood. FACTS 1. Mr. Floyd's property is included in the Agency - approved Site Plan for the Lynwood Towne Center, the Hopkins Project (See attached Map). 2. On April 23, 1986, pursuant to Mr. Head's desire to relocate his business to a suitable location, the Agency tendered him an offer to acquire the referenced real property at fair market value ($272,500) . Relocation capensation was to be determined at a later date upon determination of "suitable" location to relocate to. 3. Mr. Head has rejected the offer. Staff is actively pursuing the location of a suitable property. However, there is no certainty at this time that a property acceptable to Mr. Head can be found in a timeframe which will allow for the timely development of the Lynwood Towne Center. 4. The Agency on. July 21, 1986, agreed to adopt a Resolution of Necessity (conditioned_ to Developer's performance in securing lease agreements) by August 19, 1986, as last recourse for the acquisition of the referenced property. 5. Pursuant to the provisions of the California Redevelopment Law a Statutory Offer (fair market value of real property and furniture, fixtures and equipment) must be made prior to the adoption of the Resolution of Necessity. The Statutory Offer is broken down as follows: Real Property = $272,500 Furniture, Fixture & Equi pment = $397,492 "iCITAL $669,992 AGENDA ITEM ANALYSIS & CONCLUSION Although staff continues its efforts to negotiate an amicable acquisition of Mr. Head's property, the referenced Resolution of Necessity must be adopted in order to insure a timely development of the proposed project as per Agency's desire and in compliance with the terms and conditions of certain DDA by and between the Agency and Lynwood Associates (Hopkins) dated February 20, 1986. The Statutory Offer moist be tender to Mr. Head prior to the adoption of the Resolution. !•uiwau• -1iCr�ii Staff respectfully recommends that after consideration the Agency authorize staff to tender the Statutory Offer to Mr. Head. V pyc 9j a rot b � a \.,• IG � YJ AY uj3v06 +' EpI pL. 1 5j5 .16 r'' IMP ' ) 165 110 3 172 fb '� l 00 * 4 a� geA Ih7i /45 1 160 h � T465v RIa � Ill ^i 11x37: I I I 1j1 �tb \l h rDY S b SI 1 a 440 1U^ RI Z, 116 I7� uj3v06 +' EpI pL. 1 5j5 .16 r'' IMP ' ) 165 110 3 172 fb '� l 00 * 4 a� geA Ih7i /45 7 160 So JO I I 11x37: I I I 1j1 \ », pt' BEECHW000 I a MpMim MULFORD C F S 1E , o EN E � m Ia` /a �Y� Ja y'( • � „) ° e . Y+I ° !, .IN >� ^ _r ^' s R� i A' /s / 3 ►pyi, PUTT $0 �5l HEAD'S PROPERTIES -�-�� HOPKINS PROJECT