HomeMy WebLinkAbout2003/01/06 - Agenda Packet - Spec Jt w/RDA, PFA AGENDA
RANCHO CUCAMONGA REDEVELOPMENT
AGENCY, PUBLIC FINANCING AUTHORITY
AND CITY COUNCIL
Special Joint Meetinq
January 6, 2003 - 6:00 p.m.
Rancho Cucamonga Civic Center
Council Chambers
10500 Civic Center Drive
Rancho Cucamonga, California 91730
A. CALL TO ORDER
1. Pledge of Allegiance
2. Roll Call:
Alexander __, Gutierrez , Howdyshell __, Kurth __, Williams __
B. ITEM OF BUSINESS
1. CONSIDERATION OF RESOLUTIONS CONCERNING TAXALLOCATION BOND
RESOLUTION NO. RA03-001
A RESOLUTION OF THE RANCHO CUCAMONGA
REDEVELOPMENT AGENCY, RANCHO CUCAMONGA,
CALIFORNIA, APPROVING AND AUTHORIZING THE
BORROWING OF FUNDS FROM THE RANCHO CUCAMONGA
PUBLIC FINANCING AUTHORITY RELATING TO THE AGENCY'S
RANCHO REDEVELOPMENT PROJECT, APPROVING,
AUTHORIZING AND DIRECTING THE EXECUTION OF A LOAN
AGREEMENT AND APPROVING AND AUTHORIZING OTHER
ACTIONS RELATING THERETO
Redevelopment Agency,
Public Financing Authority &
City Council Agenda
January 6, 2003
Page 2
RESOLUTION NO. PFA03-001
A RESOLUTION OF THE RANCHO CUCAMONGA PUBLIC
FINANCING AUTHORITY, RANCHO CUCAMONGA, CALIFORNIA,
APPROVING AND AUTHORIZING THE LENDING OF FUNDS TO
THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY
RELATING TO THE AGENCY'S RANCHO REDEVELOPMENT
PROJECT, APPROVING, AUTHORIZING AND DIRECTING THE
EXECUTION OF A LOAN AGREEMENT AND APPROVING AND
AUTHORIZING OTHER ACTIONS RELATING THERETO
RESOLUTION NO. 03-001
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO CUCAMONGA, CALIFORNIA, AUTHORIZING THE
INCURRENCE OF DEBT BY THE RANCHO CUCAMONGA
REDEVELOPMENT AGENCY
C. COMMUNICATIONS FROM THE PUBLIC
This is the time and place for the general public to address the Redevelopment Agency,
Financing Authority and City Council. State law prohibits the Agency, Financing Authority
and City Council from addressing any issue not previously included on the agenda. The
Agency, Financing Authority and City Council may receive testimony and set the matter for a
subsequent meeting. Comments are to be limited to five minutes per individual.
D. ADJOURNMENT
I, Debra J. Adams, City Clerk of the City of Rancho Cucamonga, hereby certify that a true,
accurate copy of the foregoing agenda was posted on January 2, 2003, per Government
Code 54954.2 at 10500 Civic Center Drive, Rancho Cucamonga, California.
T H E C I T ¥ 0 F
[~A N CII 0 C U CAM 0 N C,A
Staff Report
DATE: January 2, 2003
TO: Mayor and Members of the City Council
Chairman and Members of the Redevelopment Agency
Chairman and Members of the Public Financing Authority
FROM: Linda Daniels, Redevelopment Director
SUBJECT: Consideration of a Resolution approving a plan to facilitate the issuance of
a 2003 Tax Allocation Bond for the benefit of the Redevelopment Agency's
Capital Improvement Program.
RECOMMENDATION: Adopt the attached resolution approving a plan to facilitate the
issuance of a 2003 Tax Allocation Bond for the benefit of the Redevelopment Agency's
Capital Improvement Program.
BACKGROUND: Since 1984, the Rancho Cucamonga Redevelopment Agency has
utilized a financing mechanism to pay for needed public improvements within the
Project Area. This mechanism -- Tax Allocation Bond financing -- allows the Agency
to use the proceeds of a Bond sale to pay for needed improvements that help eliminate
blighted conditions in the Project Area. The debt incurred from this type of transaction
is repaid by the Agency with the tax increment that it receives on an annual basis.
ANALYSIS: Since its last Bond Issue in August 2001, the Agency has determined that
a number of capital projects critical to the economic and safety needs of the Project
Area and community require funding. To ensure that there is sufficient funding to carry
out these projects, the Agency will need to issue a new Tax Allocation Bond in the
spring of 2003. Planning for this next Bond Issue has been ongoing since last
fiscal year.
Currently, the State of California is considering several methods for reducing the State's
budget crisis using local government resources, including redevelopment tax increment
funding. With the potential loss of the Agency's primary source of funding, tax
increment, the Agency is requested to officially declare its plan for the issuance of a
new Tax Allocation Bond. Through the adoption of the attached resolution, the Agency
Board will publicly affirm its intent to issue a Bond in 2003 to pay for capital projects
Page 2
within the Project Area. These projects include, but are not limited to, infrastructure
improvements, such as the Base Line/l-15 interchange and Foothill Boulevard Visual
Improvement Plan enhancements; public facilities projects, such as a fire administration
building and fire training facilities; and those projects associated with an Agency-
approved Disposition & Development Agreement (DDA) obligation with Forest City
Development/Lewis Investment Company, such as parking facilities and freeway-related
improvements for the Victoria Gardens Regional Center.
Once the timeline for the issuance of a 2003 Tax Allocation Bond has been identified,
the Agency will proceed with the preparation of the required documents associated with
this issuance. Staff has already established a preliminary meeting with Agency bond
counsel and bond underwriter to begin work on the new bond issue.
Respectfully submitted,
Linda D. Daniels
Redevelopment Director
SO t TION NO. 0 }
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO'
CUCAMONGA AUTHORIZING THE INCURRENCE OF DEBT BY THE
RANCHO CUCANOGA REDEVELOPMENT AGENCY
RECITALS:
WHEREAS, the City Council of the City of Rancho Cucamonga has approved and
adopted a redevelopment plan for the Rancho Redevelopment Project (the "Redevelopment
Project") of the Rancho Cucamonga Redevelopment Agency (the "Agency"); and
WHEREAS, the Agency has heretofore issued tax allocation bonds for the purpose of
financing or refinancing costs of the Redevelopment Project; and
WHEREAS, the City of Rancho Cucamonga (the "City") and the Agency have
heretofore entered into a joint powers agreement establishing the Rancho Cucamonga Public
Financing Authority (the "Authority") for the purpose of issuing bonds or incurring other
obligations to be used to provide financial assistance to the City and the Agency; and
WHEREAS, the Authority is authorized to Article 4, Chapter 5, Division 7, Title 1 of the
Government Code to make loans to the Agency to provide financing for public capital
improvements and to issue revenues bonds or incur other indebtedness for that purpose; and
WHEREAS, in order to finance additional redevelopment programs, projects and
activities with respect to the Redevelopment Project, the Agency has requested that Authority to
fund a loan (the "Loan") to the Agency pursuant to a Loan Agreement dated as of January 1,
2003 between the Agency and the Authority (the "Loan Agreement") in an aggregate principal
amount of not to exceed $110,000,000 in order to provide funds to the Agency for such purpose;
and
WHEREAS, such Loan will be secured by a pledge and lien on the tax increment
revenues derived by the Agency from the Redevelopment Project;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO
CUCAMONGA DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE, AS
FOLLOWS:
Section 1. The City Council hereby approves the incurrence of debt by the Agency to the
Authority pursuant to the Loan Agreement, in an aggregate principal amount not to exceed
$110,000,000.
11244/0001/717513v6 1
Section 2. This Resolution shall take effect from and after the date of its passage and
adoption.
PASSED, APPROVED AND ADOPTED this __ day of ,2003.
AYES:
NO:
ABSENT:
ABSTAiN:
Mayor
Attest:
City Clerk
11244/0001/717813v6 2
REsoLUTION NO. fl~ 0~ '00 [
A RESOLUTION OF THE RANCHO CUCAMONGA PUBLIC FINANCING
AUTHORITY APPROVING AND AUTHORIZING THE LENDING OF FUNDS
TO THE RANCHO CUCAMONGA REDEVELOPMENT AGENCY RELATING
TO THE AGENCY'S RANCHO REDEVELOPMENT PROJECT, APPROVING,
AUTHORIZING AND DIRECTING THE EXECUTION OF A LOAN
AGREEMENT AND APPROVING AND AUTHORIZING OTHER ACTIONS
RELATING THERETO
RECITALS:
WHEREAS, the City Council of the City of Rancho Cucamonga has approved and
adopted a redevelopment plan for the Rancho Redevelopment Project (the "Redevelopment
Project") of the Rancho Cucamonga Redevelopment Agency (thc "Agency"); and
WHEREAS, the Agency has heretofore issued tax allocation bonds for the purpose of
financing or refinancing costs of the Redevelopment Project; and
WHEREAS, the City of Rancho Cucamonga (the "City") and the Agency have
heretofore entered into a joint powers agreement establishing the Rancho Cucamonga Public
Financing Authority (thc "Authority") for the purpose of issuing bonds or incurring other,
obligations to be used to provide financial assistance to thc City and the Agency; and
WHEREAS, the Authority is authorized pursuant to Article 4, Chapter 5, Division 7,
Title 1 of the Government Code to make loans to the Agency to provide financing for public
capital improvements and to issue revenue bonds or incur other indebtedness for that purpose;
and
WHEREAS, in order to finance additional redevelopment programs, projects and
activities with respect to the Redevelopment Project, the Agency has requested that Authority to
fund a loan (the "Loan") to the Agency pursuant to a Loan Agreement dated as of January 1,
2003 between the Agency and the Authority (the "Loan Agreement") in an aggregate principal
amount of not to exceed $110,000,000 in order to provide funds to the Agency for such purpose;
and
WHEREAS, such Loan will be secured by a pledge and lien on the tax increment
revenues derived by the Agency from thc Redevelopment Project.
NOW, THEREFORE, THE RANCHO CUCAMONGA PUBLIC FINANCING
AUTHORITY DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE, AS
FOLLOWS:
11224/0001/717819v6
Section 1. Approval of Loan. The Authority hereby authorizes and approves the Loan to
be made to the Agency by the Authority i~ an amount not to exceed $110,000,000. The Loan
shall be made pursuant to and in accordance with the terms of the Loan Agreement. The
Authority hereby approves the Loan Agreement in substantially the form on file with the
Secretary together with any additions thereto or changes therein deemed necessary or advisable
by the Executive Director of the Authority, whose execution thereof shall be conclusive evidence
of approval of any such additions and changes. The President and Executive Director, or either
of them, is hereby authorized 'and directed to execute the Loan Agreement for and in the name
and on behalf of the Authority. The Authority hereby authorizes the delivery and performance of
the Loan Agreement.
Section 2. Preparation and Submission of Documentation. The Authority hereby directs
Authority staff, in cooperation with Agency staff, to cause the preparation of appropriate
documentation in connection with the consummation of the Loan.
Section 3. Official Action. The officers of the Authority are hereby authorized and
directed, for and in the name and on behalf of the Authority, to do any and all things and take any
and all actions deemed necessary or advisable in order to consummate the lawful making of the
Loan as described herein, including but not limited to, the issuance and sale of tax allocation
revenue bonds by the Authority to fund the Loan.
Section 4. Effective Date. This Resolution shall take effect from and after the date of its
passage and adoption.
PASSED, APPROVED AND ADOPTED this day of ,2003.
AYES:
NO:
ABSENT:
ABSTAIN:
President
Attest:
Secretary
11224/0001/717819v6 2
RESOLUTION NO. 0 00 {
A RESOLUTION OF TIlE RANCHO CUCAMONGA REDEVELOPMENT
AGENCY APPROVING AND AUTHORIZING TIlE BORROWING OF FUNDS
FROM THE RANCHO CUCAMONGA PUBLIC FINANCING AUTHORITY
RELATING TO THE AGENCY'S RANCHO REDEVELOPMENT PROJECT~
APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF A LOAN
AGREEMENT AND APPROVING AND AUTIIORIZING OTHER ACTIONS
RELATING THERETO
RECITALS:
WHEREAS, thc City Council of the City of Rancho Cucamonga has approved and
adopted a redevelopment plan for thc Rancho Redevelopment Project (thc "Redevelopment
Project") of thc Rancho Cucamonga Redevelopment Agency (the "Agency"); and
WHEREAS, the Agency has heretofore issued tax allocation bonds for the purpose of
financing or refinancing costs o£thc Redevelopment Project; and
WHEREAS, thc City 'of Rancho Cucamonga (thc "City") and the Agency have
heretofore entered into a joint powers agreement establishing the Rancho Cucamonga Public
Financing Authority (thc "Authority") for thc purpose of issuing bonds or incurring other
obligations to be used to provide financial assistance to thc City and the Agency; and
WHEREAS, the Authority is authorized pursuant to Article 4, Chapter 5, Division 7,
Title I of the Government Code to make loans to the Agency to provide financing for public
capital improvements and to issue revenue bonds or incur other indebtedness for that purpose;
and
WHEREAS, in order to finance additional redevelopment programs, projects and
activities with respect to the Redevelopment Project, the Agency has requested that Authority to
fund a loan (the "Loan") to the Agency pursuant to a Loan Agreement dated as of January 1,
2003 between the Agency and the Authority (the "Loan Agreement") in an aggregate principal
amount of not to exceed $110,000,000 in order to provide funds to the Agency for such purpose;
and
WHEREAS, such Loan will be secured by a pledge and lien on the tax increment
revenues derived by the Agency from the Redevelopment Project;
NOW~ THEREFORE, THE RANCHO CUCAMONGA REDEVELOPMENT
AGENCY DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE, AS
FOLLOWS: .
Section 1. Approval of Loan. The Agency hereby authorizes and approves the Loan to
be made to the Agency by the Authority in an amount not to exceed $110,000,000. The Loan
11224/0001/717822v6
shall be made pursuant to and in accordance with the terms of the Loan Agreement. The Agency
hereby approves the Loan Agreement in substantially the form on file with the Secretary together
with any additions thereto or changes therein deemed necessary or advisable by the Executive
Director, whose execution thereof shall be conclusive evidence of approval of any such additions
and changes. The Chairman and the Executive Director, or either of them, is hereby authorized
and directed to execute the Loan Agreement for and in the name and on behalf of the Agency.
The proceeds of the Loan shall be applied by the Agency for the purpose of financing programs,
projects and activities of the Agency relating to the Redevelopment Project. The Agency hereby
authorizes the delivery and performance of the Loan Agreement.
Section 2. Preparation and Submission of Documentation. The Agency hereby directs
Agency staff, in cooperation with Authority staff, to cause the preparation of appropriate
documentation in connection with the consummation of the Loan.
Section 3. Official Action. The officers of the Agency are hereby authorized and
directed, for and in the name and on behalf of the Agency, to do any and all things and take any
and all actions deemed necessary or advisable in order to consummate the lawful making of the
Loan as described herein, including but not limited to, the issuance and sale of tax allocation
revenue bonds by the Authority to fund the Loan.
Section 4. Effective Date. This Resolution shall take effect from and after the date of its
passage and adoption.
PASSED, APPROVED AND ADOPTED this day of ,2003.
AYES:
NO:
ABSENT:
ABSTAIN:
Chairman
Attest:
Secretary
I1224/0001/717822v6 2
LOAN AGREEMENT
Dated as of January 1, 2003
by and between the
RANCHO CUCAMONGA REDEVELOPMENT AGENCY
and the
RANCHO CUCAMONGA PUBLIC FINANCING AUTHORITY
11224/0001/717.828v6
TABLE OF CONTENTS
ARTICLE I. Definitions ................................................................................................................ 2
SECTION 1.01. Definitions .............................................................................................. 2
SECTION 1.02. Rules of Construction ............................................................................. 6
ARTICLE II. The Loan; Application of Loan Proceeds; Parity Bonds ........................................ 6
SECTION 2.01. Authorization .......................................................................................... 6
SECTION 2.02. Application of Loan Proceeds ................................................................ 6
SECTION 2.03. Repayment of Loan ................................................................................. 7
SECTION 2.04. Optional Prepayment of the Loan .......................................................... 7
SECTION 2.05. Bond Proceeds Fund. ............................................................................. 7
SECTION 2.06. Parity Bonds ........................................................................................... 8
SECTION 2.07. Issuance of Subordinate Debt. ............................................................... 9
SECTION 2.08. Validity of Loan ....................................................................... : .............. 9
ARTICLE III. Pledge of Tax Revenues; Application of Funds .................................................... 9
SECTION 3.01. Pledge of Tax Revenues ......................................................................... 9
SECTION 3.02. Special Fund; Deposit of Tax Revenues ............................................... 10
SECTION 3.03. Transfer of Tax Revenues From Special Fund ..................................... 10
SECTION 3.04. Investment of Moneys; Valuation of Investments ................................. 11
ARTICLE IV. Other Covenants of the Agency .......................................................................... 11
SECTION 4.01. Compliance with Senior Lien Bond Documents ................................... 11
SECTION 4.02. Limitation on Additional Indebtedness ................................................ 11
SECTION 4.03. Payment of Claims ............................................................................... 11
SECTION 4.04. Books and Accounts; Financial Statements ......................................... 12
SECTION 4.05. Protection of Security and Rights ........................................................ 12
SECTION 4.06. Payments of Taxes and Other Charges ................................................ 12
SECTION 4.07. Disposition of Property ........................................................................ 12
SECTION 4.08. Maintenance of Tax Revenues .............................................................. 13
SECTION 4.09. Compliance With Plan Limitations ...................................................... 13
11224/0001/717828v6 -i-
SECTION 4.11. Continuing Disclosure .......................................................................... 14
ARTICLE V. Events of Default and Remedies .......................................................................... 15
SECTION 5.01. Events of Default and Acceleration of Maturities ................................ 15
SECTION 5.02. Application of Funds Upon Default ..................................................... 16
SECTION 5.03. Absolute Obligation of the Agency ....................................................... 17
SECTION 5.04. No Waiver ............................................................................................. 17
SECTION 5.05. Agreement to Pay Attorneys' Fees and Expenses ................................ 17
SECTION 5.06. Remedies Not Exclusive ....................................................................... 17
ARTICLE VI. Miscellaneous ...................................................................................................... 17
SECTION 6.01. Benefits Limited to Parties ................................................................... 17
SECTION 6.02. Successor is Deemed Included in All References to Predecessor ........ 18
SECTION 6.03. Discharge of Loan Agreement ............................................................. 18
SECTION 6.04. Amendment ........................................................................................... 18
SECTION 6.06. Payment on Business Days ............... .................................................... 19
SECTION 6.07. Notices .................................................................................................. 19
SECTION 6.08. Partial Invalidity .................................................................................. 19
SECTION 6.09. Article and Section Headings and References ..................................... 19
SECTION 6.10. Execution of Counterparts ................................................................... 20
SECTION 6.11. Governing Law ..................................................................................... 20
SECTION 6.12. Public Hearing ..................................................................................... 20
11224/0001/717828v6 -ii-
LOAN AGREEMENT
This LOAN AGREEMENT (this "Loan Agreement") is made and entered into as of January 1,
2003, by and between the RANCHO CUCAMONGA REDEVELOPMENT AGENCY, a public
body, corporate and politic, duly organized and existing under the laws of the State of California (the
"Agency"), and the RANCHO CUCAMONGA PUBLIC FINANCING AUTHORITY, a joint
powers authority organized and existing under the laws of the State of California (the "Authority");
WITNESSE TH:
WHEREAS, the Agency is a public body, corporate and politic, duly established and
authorized to transact business and exercise powers under and pursuant to the provisions of Part 1 of
Division 24 of the Health and Safety Code of the State of California (the "Redevelopment Law"),
and has the power under Section 33601 of the Redevelopment Law to borrow money for any of its
corporate purposes; and
WHEREAS, the Authority is a joint powers authority duly organized and existing under and
pursuant a joint powers agreement by and between the City and the Agency, and under the provisions
of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the
Government Code of the State of California (the "Act"), and is authorized pursuant to Article 4 of
the Act to issue bonds for the purpose, among others, of raising funds to make a loan to the Agency
to provide financing and refinancing for public capital improvements of the Agency; and
WHEREAS, a Redevelopment Plan for the Rancho Redevelopment Project (the
"Redevelopment Project"), in the City of Rancho Cucamonga (the "City"), has been adopted in
compliance with all requirements of the Redevelopment Law; and
WHEREAS, the Agency and Bank of America National Trust and Savings Association as
trustee entered into a trust indenture, dated as of March 1, 1990 (the "Original Indenture") relating to
the issuance of the Agency's Rancho Redevelopment Project 1990 Tax Allocation Bonds (the
"Series 1990 Bonds"); and
WHEREAS, pursuant to Section 3.05 of the Original Indenture, the Agency and Bank of
America National Trust and Savings Association as trustee entered into a first supplemental
indenture, dated as of February 1, 1994 (the "First Supplemental Indenture") relating to the issuance
of the Agency's Rancho Redevelopment Project 1994 Tax Allocation Refunding Bonds (the "Series
1994 Bonds"); and
WHEREAS, pursuant to Section 3.05 of the Original Indenture, the Agency and U.S. Bank
Trust National Association as trustee entered into a second supplemental indenture, dated as of
August 1, 1999 (the "Second Supplemental Indenture") relating to the issuance of the Agency's
Rancho Redevelopment Project 1999 Tax Allocation Refunding Bonds (the "Series 1999 Bonds");
and
11224/0001/717828v6 -1-
WHEREAS, pursuant to Section 3.05 of the Original Indenture, the Agency and Wells Fargo
Bank, National Association as trustee entered into a third supplemental indenture, dated as of
August 1, 2001 (the "Third Supplemental Indenture") relating to the issuance of the Agency's
Rancho Redevelopment Project 2001 Tax Allocation Bonds (the "Series 2001 Bonds"); and
WHEREAS, Section 3.05 of the Original Indenture permits and provides for the issuance of
additional bonds pursuant to the terms and conditions of a supplemental indenture, to be on a parity
with and secured equally and ratably with, the Series 1994 Bonds, the Series 1999 Bonds and the
Series 2001 Bonds provided certain conditions set forth in the Original Indenture are satisfied; and
WHEREAS, the Agency wishes to borrow funds at this time for the purpose of financing
additional projects, programs and activities of the Agency relating to the Redevelopment Project; and
WHEREAS, to that end the Authority has agreed to make a loan (the "Loan") to the Agency
under this Loan Agreement, which is secured by a pledge and lien on the tax increment revenues
derived from the Redevelopment Project on a parity with the Series 1994 Bonds, the Series 1999
Bonds and the Series 2001 Bonds; and
WHEREAS, in order to raise the funds required to make the Loan to the Agency, the
Authority will issue its Rancho Cucamonga Public Financing Authority 2003 Tax Allocation
Revenue Bonds (Rancho Redevelopment Project) in the aggregate principal amount of not to exceed
$110,000,000 (the "Bonds"); and
WHEREAS, all acts and proceedings required by law necessary to make this Loan
Agreement, when executed by the Agency and the Authority, the valid, binding and legal obligations
of the Agency and the Authority, and to constitute this Loan Agreement a valid and binding
agreement for the uses and purposes herein set forth in accordance with its terms, have been done
and taken, and the execution and delivery of this Loan Agreement have been in all respects duly
authorized;
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEF~INITIONS
SECTION 1.01. Definitions. Except as provided by this Loan Agreement, all terms
which are defined in the Agency Indenture shall have the same meanings, respectively, in this
Loan Agreement. The following additional terms shall, for all purposes of this Loan Agreement,
have the respective meanings herein specified.
"Additional Revenues" means, as the date of calculation, the amount of Tax Revenues which,
as shown in the report of an Independent Redevelopment Consultant, are estimated to be receivable
by the Agency within the Fiscal Year following the Fiscal Year in which such calculation is made as
a result of increases in the assessed valuation of taxable property in the Project Area due to either (a)
construction which has been completed but which is not then reflected on the tax rolls, or (b) transfer
11224/0001/717828v6 -2-
of ownership or any other interest in real property which has been recorded but which is not then
reflected on the tax rolls. For purposes of this definition, the term "increases in the assessed
valuation" means the amount by which the assessed valuation of taxable property in the Project Area
is estimated to increase above the assessed valuation of taxable property in the Project Area (as
evidenced in the written records of the County) as of the date on which such calculation is made.
"Agency Indenture" means the Original Indenture as amended by the First Supplemental
Indenture, the Second Supplemental Indenture and the Third Supplemental Indenture, and as further
amended from time to time.
"Authority Bond Indenture" means the indenture, trust agreement, resolution or other
instrument under which the Bonds are issued, as originally executed or as it may from time to time
be supplemented, modified or amended.
"Bond Insurer" means the entity, if any, issuing a policy of municipal bond insurance for the
Bonds.
"Bond Law" means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of
the State of California, as in existence on the date of original execution and delivery of this Loan
Agreement or as thereafter amended from time to time.
~'Bond Year" means each 12-month period extending from September 2 in one calendar year
to September 1 of the succeeding calendar year, both dates inclusive, except that the first Bond Year
begins on the Funding Date and ends on September 1, 2003.
"Bonds" means the tax allocation revenue bonds which are issued by the Authority under the
Bond Law and the Authority Bond Indenture to provide funding for the Loan.
"Business Day" means a day of the year (other than a Saturday or Sunday) on which banks in
California are not required or permitted to be closed, and on which the New York Stock Exchange is
open.
"City" means the City of Rancho Cucamonga, California, a general law city and municipal
corporation organized and existing under the laws of the State.
"County" means the County of San Bemardino, a county duly organized and existing under
the Constitution and laws of the State.
"Federal Securities" means: (a) any direct general obligations of the United States of America
(including obligations issued or held in book entry form on the books of the Department of the
Treasury of the United States of America), for which the full faith and credit of the United States of
America are pledged; (b) obligations of any agency, department or instrumentality of the United
States of America, the timely payment of principal and interest on which are directly or indirectly
secured or guaranteed by the full faith and credit of the United States of America.
11224/0001/717828v6 -3-
"Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to
June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period
selected and designated by the Agency as its official fiscal year period pursuant to a Written
Certificate of the Agency filed with the Authority.
"Funding Date" means the date upon which the Loan is funded by the Authority, which is
also the date of delivery of the Bonds to the original purchaser thereof.
"Independent Redevelopment Consultant" means any consultant or firm of such consultants
appointed by or acceptable to the Agency, and who, or each of whom: (a) is judged by the Agency to
have experience in matters relating to the collection of Tax Revenues or otherwise with respect to the
financing of redevelopment projects; (b) is in fact independent and not under the domination of the
Agency; (c) does not have any substantial interest, direct or indirect, with the Agency, other than as
original purchaser of the Bonds or any Parity Bonds; and (d) is not connected with the Agency as an
officer or employee of the Agency, but who may be regularly retained to make reports to the Agency.
"Interest Payment Date" means March 1 and September 1 in each year following the Ftmding
Date, except that the first Interest Payment Date must be at least six months following the Funding
Date.
"Loan" means the loan made by the Authority to the Agency in the aggregate principal
amount of not to exceed $110,000,000 pursuant to Section 2.01.
"Loan Agreement" means this Loan Agreement by and between the Agency and the
Authority, as originally executed or as it may from time to time be amended, modified or
supplemented.
"Loan Default Event" means any of the events described in Section 5.01.
"Maximum Annual Debt Service" means, with respect to all or any designated portion of
Senior Lien Debt, the largest amount of principal (including principal coming due and payable by
operation of mandatory sinking fund redemption) and interest coming due with respect to all such
Senior Lien Debt during the current or any future Bond Year. For purposes of such calculation, there
shall be excluded a pro rata portion of each installment of principal of any Parity Bonds, together
with the interest to accrue thereon, in the event and to the extent that the proceeds of such Parity
Bonds are deposited in an escrow fund from which amounts may not be released to the Agency
unless the Tax Revenues for the current Fiscal Year (as evidenced in the written records of the
County), plus at the option of the Agency the Additional Revenues, at least equal 125% of the
amount of Maximum Annual Debt Service.
"Parity Bonds" means any loans, bonds, notes, advances or indebtedness payable from Tax
Revenues on a parity with the Loan to finance the Redevelopment Project, issued or incurred
pursuant to and in accordance with the provisions of Section 2.06.
"Parity Bonds Instrument" means any resolution, indenture of trust, trust agreement, loan
agreement or other instrument authorizing the issuance or incurrence of any Parity Bonds.
11224/0001/717828v6 -4-
"Plan Limitations" means the limitations contained or incorporated in the Redevelopment
Plan on (a) the aggregate principal amount of indebtedness payable from Tax Revenues which may
be outstanding at any time, (b) the aggregate amount of taxes which may be divided and allocated to
the Agency pursuant to the Redevelopment Plan, and (c) the period of time for establishing or
repaying indebtedness payable from Tax Revenues.
"Project Area" means the area of the Redevelopment Project as described in the
Redevelopment Plan.
"Redevelopment Law" means the Community Redevelopment Law of the State of California,
constituting Part 1 of Division 24 of the Health and Safety Code of the State, as in existence on the
date of original execution and delivery of this Loan Agreement or as thereafter amended from time to
time.
"Redevelopment Plan" means the Redevelopment Plan for the Rancho Redevelopment Plan,
adopted by City Ordinance No. 166, together with any amendments thereof heretofore or hereafter
duly enacted pursuant to the Redevelopment Law..
"Redevelopment Project" means the undertaking of the Agency pursuant to the
Redevelopment Plan and the Redevelopment Law for the redevelopment of the Project Area.
"Reserve Requirement" means, as of any calculation date, an amount equal to Maximum
Annual Debt Service on the Bonds.
"Senior Lien Debt" means, collectively, the Series 1994 Bonds, the Series 1999 Bonds, the
Series 2001 Bonds, the Loan and any Parity Bonds.
"Special Fund" means the fund by that name established and held by the Agency under
Section 5.02 of the Original Indenture.
"Tax Code" means the Internal Revenue Code of 1986 as in effect on the Funding Date or
(except as otherwise referenced herein) as it may be amended to apply to obligations issued on the
Funding Date, together with applicable proposed, temporary and final regulations promulgated, and
applicable official public guidance published, under said Code.
"Tax Revenues" means all taxes annually allocated to the Agency with respect to the Project
Area following the Funding Date, pursuant to Article 6 of Chapter 6 (commencing with Section
33670) of the Redevelopment Law and Section 16 of Article XVI of the Constitution of the State, or
pursuant to other applicable State laws, and as provided in the Redevelopment Plan, including all
payments, subventions and reimbursements (if any) to the Agency specifically attributable to ad
valorem taxes lost by reason of tax exemptions and tax rate limitations and including that portion of
such taxes otherwise required by Section 33334.2 of the Law to be deposited in the Low and
Moderate Income Housing Fund of the Agency established pursuant to Section 33334.3 of the Law,
but only to the extent necessary to r~pay that portion of the proceeds, if any, any Parity Bonds
(including applicable reserves and financing costs) used to increase or improve the supply o flow and
moderate income housing within or of benefit to the Project Area; but excluding all other amounts of
such taxes required to be deposited into the Low and Moderate Income Housing Fund and excluding
11224/0001/717828v6 -5-
amounts payable to entities other than the Agency under and pursuant to pass-through agreements or
similar tax-sharing agreements entered into pursuant to Section 33401 of the Law existing on the
Funding Date.
"Term of the Loan" means the period beginning on the Funding Date and extending to and
including the final maturity date of the Bonds, which shall not be later than the September 1
immediately preceding the final date established under the Redevelopment Plan and the
Redevelopment Law for the receipt of Tax Revenues by the Agency.
"Trustee" means such trustee as may be appointed by the Authority under the Authority Bond
Indenture.
"Written Certificate" or "Written Request" means a certificate or request, in writing, signed
by the Executive Director, Redevelopment Director, Treasurer or Secretary of the Agency, or by any
other officer of the Agency duly authorized by the Agency for that purpose.
SECTION 1.02. Rules of Construction. All references herein to "Articles," "Sections"
and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan
Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Loan Agreement as a whole and not to any particular Article, Section or subdivision
hereofi
ARTICLE II
THE LOAN; APPLICATION OF LOAN PROCEEDS; PARITY BONDS
SECTION 2.01. Authorization.
The Authority hereby agrees to lend to the Agency an amount not exceeding $110,000,000
under and subject to the terms of this Loan Agreement and the Redevelopment Law. This Loan
Agreement constitutes a continuing agreement with the Authority to secure the full and final payment
of the Loan, subject to the covenants, agreements, provisions and conditions herein contained.
SECTION 2.02. Application of Loan Proceeds.
In order to provide funds to make the Loan, the Authority hereby covenants to issue the
Bonds under the Authority Bond Indenture within 60 days following receipt of a Written Request of
the Agency to do so. Such Written Request shall identify the exact principal amount of the Bonds to
be issued, which shall not exceed the maximum authorized amount of the Loan under Section 2.01.
On the Funding Date, the Authority shall cause the net proceeds of the Bonds to be disbursed by the
Trustee as follows:
(a) The Trustee shall apply a portion of the proceeds of the Loan to pay the costs
of issuance of the Bonds.
(b) The Trustee shall deposit an amount equal to the Reserve Requirement in the
Reserve Accotmt established for the Bonds.
11224/0001/717828v6 -6-
(c) The Trustee shall transfer the remainder of such proceeds to the Agency to
be deposited in the Bonds Proceeds Fund and applied for lawful purposes of the Agency.
SECTION 2.03. Repayment of Loan
The Agency shall repay the principal of the Loan in annual installments on September 1 in
each year during the Term of the Loan. Principal of the Loan shall be scheduled so that the Loan
amoritizes on a level debt service basis through the Term of the Loan, provided that each installment
of principal on the Loan must be in an integral multiple of $5000. If the unpaid princiapal
installments of the Loan are prepaid in whole or in part under Section 2.04, the schedule of principal
payments will be reduced on a pro rata basis in integral muliples of $5000, corresponding to the
principal amount of the Bonds which are redeemed under the optional redemption provisions of the
Authority Bond Indenture.
Interest shall accrue on the Loan at a rate of interest equal to the lesser of(a) 8% per annum,
or (b) the actual rate of interest on the respective principal maturities of the Bonds. The Maximum
Annual Debt Service shall not exceed $21,200,000 per year during the Term of the Loan.
Interest on each installment of principal of the Loan will accrue from and including the
Funding Date to but not including the Interest Payment Date with respect to which such installment
of principal is payable, calculated on the basis of a 360-day year of twelve 30-day months. Interest
on the Loan is payable on each Interest Payment Date. Any installment of principal or interest which
is not paid when due shall continue to accrue interest from and including the date on which such
principal or interest is payable to but not including the date of actual payment.
Principal of and interest on the Loan shall be payable to the Trustee as assignee of the
Authority under the Authority Bond Indenture, in immediately available funds which constitute
lawful money of the United States of America. Payment of such principal and interest shall be
secured, and amounts for the payment thereof shall be deposited with the Trustee at the times, as set
forth in Article III.
SECTION 2.04. Optional Prepayment of the Loan
The Agency shall have the right to prepay the unpaid principal installments of the Loan, in
whole or in part in any integral multiple of $5,000, on any Interest Payment Date on which the Bonds
are subject to optional redemption under the Authority Bond Indenture, by depositing with the
Trustee an amount sufficient to redeem a like aggregate principal amount of Bonds under the
Authority Bond Indenture, together with the amount of accrued interest and premium (if any)
required to be paid upon such redemption.
SECTION 2.05. Bond Proceeds Fund.
There is hereby established a separate fund to be known as the "Bond Proceeds Fund," which
shall be held and maintained by the Agency. Amounts on deposit in the Bond Proceeds Fund shall
be derived solely from the proceeds of the Loan deposited therein pursuant to Section 2.02(c), from
any other funds required to be deposited therein under the Authority Bond Indenture, and from
interest, profits and other income received from the investment of amounts on deposit in the Bond
11224/0001/717828v6 -7-
Proceeds Fund under Section 3.04. The moneys in the Bond Proceeds Fund shall be used solely in
the manner provided by the Redevelopment Law and the Redevelopment Plan to provide financing
for the Redevelopment Project, which may include the refinancing of any outstanding debt of the
Agency.
SECTION 2.06. Parity Bonds.
The Agency may issue Parity Bonds as provided for in the Agency Indenture. If the Agency
Indenture has been discharged, in addition, the Agency may issue Parity Bonds in such principal
amount as it determines, subject to the following conditions:
(a) No Loan Default Event (or no event with respect to which notice has been
given and which, once all notice of grace periods have passed, would
constitute a Loan Default Event) has occurred and is continuing, unless
otherwise permitted by the Bond Insurer.
(b) The Tax Revenues for the then current Fiscal Year based on assessed
valuation of property in the Project Area as evidenced in a written document
from an appropriate official of the County, plus at the option of the Agency
the Additional Revenues, must be at least equal to 125% of Maximum
Annual Debt Service on alt Senior Lien Debt which will be outstanding
following the issuance of such Parity Bonds.
(c) The document providing for the issuance or incurrence of such Parity Bonds
must provide that:
(i) interest on said Parity Bonds is payable on March 1 and September 1
in each year of the term of such Parity Bonds, except that interest
during the first twelve month period may be payable on any March 1
or September 1;
(ii) the principal of such Parity Bonds is payable on September 1 in any
year in which principal is payable; and
(iii) an amount is deposited in a reserve fund from the proceeds of the sale
of such Parity Bonds in an amount equal to Maximum Annual Debt
Service on such Parity Bonds or such lesser amount as is the
maximum permitted under the Tax Code.
(d) The proceeds of such Parity Bonds may be deposited into an escrow fund
from which amounts may be released to the Agency to the extent the Tax
Revenues for the most recent Fiscal Year (as evidenced in the written records
of the County), plus at the option of the Agency the Additional Revenues, at
least equals 125% of the amount of Maximum Annual Debt Service on all
Senior Lien Debt.
11224/0001/717828v6 -8-
(e) The issuance of such Parity Bonds may not cause the Agency to exceed any
applicable Plan Limitations. Without limiting the generality of the foregoing,
the Agency may not issue any Parity Bonds in the event and to the extent that
either:
(i) the aggregate amount of debt service on all outstanding obligations of
the Agency, including such Parity Bonds, exceeds the aggregate
amount of Tax Revenues which are eligible under the Redevelopment
Plan to be allocated and paid to the Agency during the period while
such outstanding obligations remain outstanding, or
(ii) the aggregate principal amount of all outstanding obligations of the
Agency, including such Parity Bonds, exceeds any applicable limit in
the Redevelopment Plan on the aggregate principal amount of
indebtedness which the Agency. is permitted to have outstanding at
any one time.
(f) The Agency must deliver to the Trustee and the Bond Insurer a certificate of
the Agency certifying that the conditions precedent to the issuance of such
Parity Bonds set forth in this Section 2.06 and in the documents authorizing
the issuance of all other Senior Lien Debt have been satisfied.
SECTION 2.07. Issuance of Subordinate Debt.'
In addition to the Loan, the Series 1994 Bonds, the Series 1999 Bonds, and the Series 2001
Bonds, and any other Parity Bonds, from time to time the Agency may issue or incur subordinate
debt in such principal amount as shall be determined by the Agency, provided that the issuance of
such subordinate debt shall not cause the Agency to exceed any applicable Plan Limitations, and
does not cause the Agency to violate the provisions of Section 4.09.
SECTION 2.08. Validity of Loan.
The validity of the Loan shall not be dependent upon the completion of the Redevelopment
Project or upon the performance by any person of its obligation with respect to the Redevelopment
Project.
ARTICLE III
PLEDGE OF TAX REVENUES; APPLICATION OF FUNDS
SECTION 3.01. Pledge of Tax Revenues.
The Loan and all other Senior Lien Debt are equally secured by a first pledge of and lien on
all of the Tax Revenues and all of the moneys on deposit in the Special Fund, without preference or
priority for series, issue, number, dated date, sale date, date of execution or date of delivery. Except
for the Tax Revenues and other funds pledged hereunder, no funds or properties of the Agency shall
11224/0001/717828v6 -9-
be pledged to, or otherwise liable for, the payment of principal of or interest or prepayment premium
(if any) on the Loan.
The Loan is indebtedness of the Agency which constitutes Parity Bonds under and within the
meaning of the Agency Indenture for all purposes thereof. In the event of any inconsistency or
conflict between any of the provisions of this Loan Agreement and any of the provisions of the
Agency Indenture, the provisions of the Agency Indenture are controlling.
SECTION 3.02. Special Fund; Deposit of Tax Revenues.
The Agency has previously established the Special Fund, which the Agency shall continue to
hold as a separate fund during the entire Tem~ of the Loan. The Agency has the right in its sole
discretion to establish one or more accounts within the Special Fund for any purposes whatsoever,
provided that all of such accounts must be accounted for as part of the Special Fund.
The Agency shall continue to deposit all Tax Revenues in the Special Fund promptly upon
the receipt thereof, until such time during such Bond Year as the amounts on deposit in the Special
Fund equal the aggregate amounts required to be transferred to the Trustee under Section 3.03
hereof, under the provisions of the Agency Indenture and under the provisions of the documents
authorizing any Parity Bonds. All Tax Revenues received during any Bond Year in excess of such
amounts shall be released from the pledge and lien hereunder and may be used for any lawful
purposes of the Agency. Prior to the payment in full of the principal of and interest and premium (if
any) on the Senior Lien Debt, and the payment in full of all other amounts payable under the Agency
Indenture, this Loan Agreement and the documents authorizing any Parity Bonds, the Agency has no
beneficial right or interest in the moneys on deposit in the Special Fund, except only as provided in
the Agency Indenture, this Loan Agreement and the documents authorizing any Parity Bonds, and
such moneys shall be used and applied as set forth therein and herein.
SECTION 3.03. Transfer of Tax Revenues From Special Fund.
In addition to the transfers required to be made under the Agency Indenture and the
documents authorizing any Parity Bonds, the Agency shall withdraw from the Special Fund and
transfer to the Trustee the following amounts at the following times and in the following order of
priority:
(a) Interest and Principal Deposits. No later than the 5th Business Day preceding
each date on which the principal of or interest or prepayment premium on the
Loan comes due and payable, the Agency shall transfer to the Trustee an
amount which, together with the amounts then held on deposit in the Interest
Account, the Principal Account and the Revenue Fund established under the
Authority Bond Indenture, is equal to the aggregate amount of such principal,
interest and prepayment premium.
(b) Reserve Account Deposits. Immediately following each transfer made under
the preceding clause (a), the Agency shall transfer to the Trustee, for deposit
in the reserve account established for the Bonds, an amount (if any) which is
required to cause the balance on deposit therein to equal the full amount of
11224/0001/717828v6 - 10-
the Reserve Requirement, as set forth in written notice given to the Agency
by the Trustee under the Authority Bond Indenture. No such transfer need be
made so long as there is on deposit in the reserve account an amount at least
equal to the Reserve Requirement.
SECTION 3.04. Investment of Moneys; Valuation oflnvestments. The Agency shall invest
moneys in any fund or account established hereunder in any investments authorized for the
investment of Agency funds under the laws of the State of California. Obligations pumhased as an
investment of moneys in any fund or account established hereunder shall be credited to and deemed
to be part of such fund or account. The Agency may commingle any amounts in any of the funds and
accounts held hereunder with any other amounts held by the Agency for purposes of making any
investment, provided that the Agency shall maintain separate accounting procedures for the
investment of all funds and accounts held hereunder.
All interest, profits and other income received from the investment of moneys in any fund or
account established hereunder shall be deposited in such fund or account. Notwithstanding anything
to the contrary contained in this paragraph, an amount of interest received with respect to any
investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such
investment shall be credited to the fund from which such accrued interest was paid.
ARTICLE IV
OTHER COVENANTS OF THE AGENCY
SECTION 4.01. Compliance with SeniorLien Bond Documents. The Agency shall
punctually pay or cause to be paid the principal, premium (if any) and interest to become due in
respect of all Senior Lien Debt, in strict conformity with the terms of the respective documents
authorizing the issuance thereof. The Agency shall faithfully observe and perform all of the
conditions, covenants and requirements of the respective documents authorizing the issuance of
such Senior Lien Debt.
SECTION 4.02. Limitation on Additional Indebtedness. So long as the Loan remains
unpaid, the Agency may not issue any bonds, notes or other obligations, enter into any agreement or
otherwise incur any loans, advances or indebtedness, which is in any case secured by a pledge of and
lien upon all or any part of the Tax Revenues which is superior to or on a parity with the lien
established hereunder for the security of the Loan, excepting only Parity Bonds.
SECTION 4.03. Payment of Claims.
The Agency will pay and discharge, or cause to be paid and discharged, any and all lawful
claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the
properties owned by the Agency or upon the Tax Revenues or any part thereof, or upon any funds in
the hands of the Trustee, or which might impair the security of the Loan. Nothing herein contained
shall require the Agency to make any such payment so long as the Agency in good faith shall contest
the validity of said claims.
11224/0001/717828v6 -11-
SECTION 4.04. Books and Accounts; Financial Statements.
The Agency will keep, or cause to be kept, proper books of record and accounts, separate
from all other records and accounts of the Agency and the City, in which complete and correct
entries shall be made of all transactions relating to the Redevelopment Project, the Tax Revenues, the
Special Fund and the Bond Proceeds Fund. Such books of record and accounts shall at all times
during business hours be subject, upon prior written request, to the reasonable inspection of the
Trustee (who has no duty to inspect), the Bond Insurer and the owners of not less than ten percent
(10%) in aggregate principal mount of the Bonds then outstanding, or their representatives
authorized in writing.
The Agency will cause to be prepared within one hundred and eighty (180) days after the
close of each Fiscal Year so long as any of the Bonds are outstanding, complete audited financial
statements with respect to such Fiscal Year showing the Tax Revenues, all disbursements from the
Special Fund, and the financial condition of the Redevelopment Project, including the balances in all
funds and accounts relating to the Redevelopment Project, as of the end of such Fiscal Year. The
Agency will furnish a copy of such statements to the Bond Insurer and, upon reasonable request, to
the Trustee and any Bond owner. The Trustee has no duty to review any such financial statement.
SECTION 4.05. Protection of Security and Rights.
The Agency will preserve and protect the security of the Loan and the rights of Trustee, the
Bond Insurer and the Bond owners with respect to the Loan. From and after the Funding Date, the
Loan shall be incontestable by the Agency. The Loan and the provisions of this Loan Agreement are
and will be the legal, valid and binding special obligations of the Agency in accordance with their
terms, and the Agency shall at all times, to the extent permitted by law, defend, preserve and protect
all the rights of the Trustee, the Bond Insurer and the Bond owners under this Loan Agreement
against all claims and demands of all persons whomsoever.
SECTION 4.06. Payments of Taxes and Other Charges.
The Agency will pay and discharge, or cause to be paid and discharged, all taxes, service
charges, assessments and other governmental charges which may hereafter be lawfully imposed upon
the Agency or the properties then owned by the Agency in the Project Area, when the same shall
become due. Nothing herein contained shall require the Agency to make any such payment so long
as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The
Agency will duly observe and comply with all valid requirements of any governmental authority
relative to the Redevelopment Project or any part thereof.
SECTION 4.07. Disposition of Property.
The Agency will not participate in the disposition of any land or real property in the Project
Area to anyone which will result in such property becoming exempt from taxation because of public
ownership or use or otherwise (except property dedicated for public right-of-way and except property
planned for public ownership or use by the Redevelopment Plan in effect on the Funding Date) so
that such disposition shall, when taken together with other such dispositions, would either
11224/0001/717828v6 -12-
(a) aggregate more than ten percent (10%) of the land area in the Project Area, or (b) aggregate more
than 10% of the assessed valuation of the Project Area.
SECTION 4.08. Maintenance of Tax Revenues.
The Agency shall comply with all requirements of the Redevelopment Law to insure the
allocation and payment to it of the Tax Revenues, including without limitation the timely filing of
any necessary statements of indebtedness with appropriate officials of the County and (in the case of
supplemental revenues and other amounts payable by the State of California) appropriate officials of
the State. The Agency shall not enter into any agreement with the County or any other governmental
or private entity, which would have the effect of reducing the amount of Tax Revenues to be
received in the current or any future Fiscal Year below 125% of Maximum Annual Debt Service on
all Senior Lien Debt. The provisions of this Section 4.08 do not apply to any agreement with the
County or with any other governmental or private entity, which by its terms is subordinate to the
pledge of and lien on the Tax Revenues for the benefit of the Bond owners or which does not
obligate the Agency to pay any Tax Revenues except to the extent such Tax Revenues are released
from the pledge thereof and lien thereon in accordance with Section 3.02.
In addition, if the Agency amends the Redevelopment Plan in a manner which has the effect
of obligating the Agency to make payments from Tax Revenues under Section 33607.5 of the
Redevelopment Law to other governmental entities, no such amendment shall be made which would
have the effect of causing the amount of Tax Revenues to be received in the current or any future
Fiscal Year to fall below 125% of Maximum Annual Debt Service on all Senior Lien Debt.
In addition, if the Agency amends the Redevelopment Plan in a manner which has the effect
of\obligating the Agency to make payments from Tax Revenues under Section 33607.5 of the
Redevelopment Law to other governmental entities, no such amendment shall be made which would
have the effect of causing the amount of Tax Revenues to be received in the current or any future
Fiscal Year to fall below 125% of Maximum Annual Debt Service on all Senior Lien Debt.
SECTION 4.09. ComI~liance ~t'th Plan Limitations. The Agency may not take any
action, including, but not limited to the issuance of its bonds, notes or other obligations, which
causes or which, with the passage of time, would cause any of the Plan Limitations to be
exceeded for violated. The Agency shall not accept any Tax Revenues which would cause any of
the Plan Limitations to be exceeded.
The Agency shall manage its fiscal affairs in a mariner which ensures that it will have
sufficient Tax Revenues available under the Plan Limitations in the amounts and at the times
required to enable the Agency to pay the principal of and interest and redemption premium (if any)
on all Senior Lien Debt when due. The Agency shall not accept any Tax Revenues which would
cause any of the Plan Limitations to be exceeded.
SECTION 4.10. Tax Covenants.
(a) Generally. The Agency shall not take any action or permit to be taken any action within
its control which would cause or which, with the passage of time if not cured would cause, interest
on the Bonds to become includable in gross income for federal income tax purposes.
11224/0001/717828v6 -13-
(b) Private Activity Bond Limitation. The Agency shall assure that the proceeds of the Bonds
are not used in a manner which would cause the Bonds to become "private activity bonds" within the
meaning of Section 14 l(a) of the Tax Code, or which would meet the private loan financing test of
Section 141(c) of the Tax Code.
(c) Federal Guarantee Prohibition. The Agency shall not take any action or permit or suffer
any action to be taken if the result of the same would be to cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the Tax Code.
(d) No Arbitrage. The Agency shall not take, or permit or suffer to be taken by the Trustee or
otherwise, any action with respect to the Bond proceeds which, if such action had been reasonably
expected to have been taken, or had been deliberately and intentionally taken on the Funding Date
would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the
Tax Code.
(e) Rebate Requirement. The Agency shall take any and all actions necessary to assure
compliance with Section 148(0 of the Tax Code, relating to the rebate of excess investment earnings,
if any, to the federal government, to the extent that such Section is applicable to the Bonds. In the
event that the Authority determines that any amounts are due and payable to the United States of
America thereunder and that neither the Authority nor the Trustee has on deposit an amount of
available moneys (excluding moneys on deposit in the funds and accounts established for the
payment of the principal of or interest or redemption premium on the Bonds) to make such payment,
the Authority shall promptly notif)~ the Agency of such fact. Upon receipt of any such notice, the
Agency shall promptly pay to the Authority from available Tax Revenues or any other source of
legally available funds, the amounts determined by the Authority to be due and payable to the United
States of America as a result of the investment of amounts on deposit in any fund or account
established hereunder, together with all other amounts due and payable to the United States of
America.
SECTION 4.11. Continuing Disclosure. The Agency hereby covenants and agrees that it will
execute and deliver a continuing disclosure undertaking on the Funding Date, in form and substance
required by Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, and that it will comply with and carry out all of the
provisions of such undertaking. Notwithstanding any other provision of this Loan Agreement, failure
of the Agency to comply with such undertaking does not constitute a Loan Default Event; except that
any participating underwriter or any owner or beneficial owner of the Bonds may take such actions as
may be necessary and appropriate, including seeking specific performance by court order, to cause
the Agency to comply with its obligations under this Section 4.11.Section 4.11.
SECTION 4.12. Further Assurances. The Agency will adopt, make, execute and deliver any
and all such further resolutions, instruments and assurances as may be reasonably necessary or proper
to carry out the intention or to facilitate the performance of this Loan Agreement and for the better
assuring and confirming unto the Trustee, the Bond Insurer, the Authority and the owners of the
Bonds of the rights and benefits provided in this Loan Agreement.
11224/0001/717828v6 -14-
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
SECTION 5.01. Events of Default and Acceleration of Maturities.
The following events shall constitute Events of Default hereunder:
(a) Failure by the Agency to pay the principal of or interest or prepayment
premium (if any) on any Senior Lien Debt when due and payable.
(b) Failure by the Agency to observe and perform any of the covenants,
agreements or conditions on its part contained in this Loan Agreement, other
than as referred to in the preceding clause (a), for a period of 30 days after
written notice specifying such failure and requesting that it be remedied has
been given to the Agency by the Trustee or the Bond Insurer; provided,
however, that i fin the reasonable opinion of the Agency the failure stated in
such notice can be corrected, but not within such 30 day period, such failure
will not constitute a Loan Default Event if the Agency institutes corrective
action within such 30 day period and thereafter diligentlypursues such action
until the failure is corrected.
(c) The filing by the Agency of a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of
· the United States of America, or if a court of competent jurisdiction shall
approve a petition, filed with or without the consent of the Agency, seeking
reorganization under the federal bankruptcy laws or any other applicable law
of the United States of America, or if, under the provisions of any other law
for the relief or aid of debtors, any court of competent jurisdiction shall
assume custody or control of the Agency or of the whole or any substantial
part of its property.
(d) The occurrence of an event of default under and as defined in the Agency
Indenture or in the documents authorizing any Parity Bonds, to the extent
such failure does not constitute a Loan Default Event under the preceding
clauses (a), (b) or(c).
Ifa Loan Default Event has occurred and is continuing, with the prior written consent of the
Bond Insurer the Trustee may, and at the written direction of the Bond Insurer or (with the prior
written consent of the Bond Insurer) at the written direction of a majority in aggregate principal
amount of the outstanding Bonds the Trustee shall, (a) declare the principal of the Loan, together
with the accrued interest on all unpaid installments thereof, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable, anything in this
Loan Agreement to the contrary notwithstanding, and (b) subject to the provisions of the Authority
Bond Indenture and receipt of indemnity satisfactory to the Trustee, exercise any other remedies
available to the Trustee in law or at equity.
11224/0001/717828v6 -15-
Immediately upon becoming aware of the occurrence of a Loan Default Event, the Trustee
shall give notice of such Loan Default Event to the Agency and the Bond Insurer by telephone,
telecopier or other telecommunication device, promptly confirmed in writing. This provision,
however, is subject to the condition that if, at any time after the principal of the Loan have been so
declared due and payable, and before any judgment or decree for the payment of the moneys due has
been obtained or entered, the Agency deposits with the Tru§tee a sum sufficient to pay all
installments of principal of the Loan matured prior to such declaration and all accrued interest
thereon, with interest on such overdue installments of principal and interest at the net effective rate
then borne by the outstanding Bonds, and the reasonable expenses of the Trustee (including but not
limited to attorneys fees), and any and all other defaults known to the Trustee (other than in the
payment of principal of and interest on the Loan due and payable solely by reason of such
declaration) have been made good or cured to the satisfaction of the Trustee or provision deemed by
the Trustee to be adequate has been made therefor, then, and in eve~ such case, the Trustee may, by
written notice to the Agency, rescind and annul such declaration and its consequences. However, no
such rescission and annulment extends to or affects any subsequent default, or impairs or exhausts
any right or power consequent thereon.
SECTION 5.02. Application of Funds Upon Default. The Trustee shall apply all amounts
received by it under any right given or action taken under this Loan Agreement in the following
order:
First, to the payment of the costs and expenses of the Trustee in declaring the
Loan Default Event and in carrying out the provisions of this Article V, including
reasonable compensation to its agents, attorneys and counsel.
Second, to the payment of the whole amount of interest on and principal of the
Senior Lien Debt then due and unpaid, with interest on overdue installments of
principal and interest to the extent permitted by law at the net effective rate of interest
then borne by the outstanding Bonds; provided, however, that if such amounts are
insufficient to pay in full the full amount of such interest and principal, then the
Trustee will apply such amounts in the following order of priority:
(a) to the payment of all installments of interest on the Senior Lien Debt
then due and unpaid, on a pro .rata basis if the available amounts are
insufficient to pay all such interest in full,
(b) to the payment of all installments of principal of the Senior Lien Debt
then due and payable, on a pro rata basis if the available amounts are
installments of principal in full, and
(c) to the payment of interest on overdue installments of principal and
interest, on a pro rata basis if the available amounts are insufficient to
pay all such interest in full.
Third, to the pfiyment of any amounts due and owing to the Bond Insurer with
respect to its policy of municipal bond insurance insuring the Bonds.
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SECTION 5.03. Absolute Obligation of the Agency.
Nothing in this Article V or in any other provision of this Loan Agreement, shall affect or
impair the obligation of the Agency, which is absolute and unconditional, to pay from the Tax
Revenues and other amounts pledged hereunder, the principal of and interest and premium (if any)
on the Loan to the Authority when due, as herein provided.
SECTION 5.04. No Waiver.
A waiver of any default by the Trustee shall not affect any subsequent default or impair any
rights or remedies on the subsequent default. No delay or omission of the Trustee to exercise any
fight or power accruing upon any default shall impair any such right or power or shall be construed
to be a waiver of any such default or an acquiescence therein, and everypower and remedy conferred
upon the Authority by the Redevelopment Law or by this Article V may be enforced and exercised
from time to time and as often as shall be deemed expedient by the Trustee.
Ifa suit, action or proceeding to enforce any fight or exercise any remedy shall be abandoned
or determined adversely to the Trustee, the Agency and the Trustee shall be restored to their former
positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
SECTION 5.05. Agreement to Pay Attorneys' Fees and Expenses.
In the event either party to this Loan Agreement should default under any of the provisions
hereof and the nondefaulfing party or the Trustee should employ attorneys or incur other expenses for
the collection of moneys or the enforcement or performance or observance of any obligation or
agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will
on demand therefor pay to the nondefaulting party the reasonable fees of such attorneys and such
other expenses so incurred.
SECTION 5.06. Remedies Not Exclusive.
No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any
other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may
be exercised without exhausting and without regard to any other remedy conferred by the
Redevelopment Law or any other law.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Benefits Limited to Parties.
Nothing in this Loan Agreement, expressed or implied, is intended to give to any person
other than the Agency, the Trustee, the Bond Insurer and the Authority, any right, remedy or claim
under or by reason of this Loan Agreement. All covenants, stipulations, promises or agreements in
this Loan Agreement contained by and on behalf of the Agency shall be for the sole and exclusive
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benefit of the Authority, the Bond Insurer, and of the Trustee acting as trustee for the benefit of the
owners of the Bonds.
SECTION 6.02. Successor is Deemed Included in All References to Predecessor.
Whenever in this Loan Agreement either the Agency, the Authority, the Bond Insurer or the
Trustee is named or referred to, such reference shall be deemed to include the successors or assigns
thereof, and all the covenants and agreements in this Loan Agreement contained by or on behalf of
the Agency, the Authority, the Bond Insurer or the Trustee shall bind and inure to the benefit of the
respective successors and assigns thereof whether so expressed or not.
SECTION6.03. DischargeofLoanAgreement. IftheAgencypaysanddischargestheentire
indebtedness on the Loan in any one or more of the following ways:
(a) by well and truly paying or causing to be paid the principal of and interest and
prepayment premiums (if any) on the Loan, when due and payable;
(b) by irrevocably depositing with the Trustee, in trust, at or before maturity, cash
in an amount which, together with the available amounts then on deposit in
any of the funds and accounts established under the Authority Bond Indenture
or this Loan Agreement, in the opinion or report of an independent
accounting firm is fully sufficient to pay all principal of and interest and
prepayment premiums (if any) on the Loan; or
(c) by irrevocably depositing with the Trustee or any other fiduciary, in trust,
non-callable Federal Securities in such amount as an independent accounting
firm determines will, together with the interest to accrue thereon and
available moneys then on deposit in the funds and accounts established under
the Indenture or under this Loan Agreement, be fully sufficient to pay and
discharge the indebtedness on the Loan (including all principal, interest and
prepayment premiums) at or before maturity;
then, at the election of the Agency but only if all other amounts then due and payable hereunder have
been paid or provision for their payment made, the pledge of and lien upon the Tax Revenues and
other funds provided for in this Loan Agreement and all other obligations of the Authority and the
Agency under this Loan Agreement with respect to the Loan will cease and terminate, except only
the obligation of the Agency to pay or cause to be paid to the Trustee, from the amounts so deposited
with the Trustee or such other fiduciary, all sums due with respect to the Loan and all expenses and
costs of the Trustee. Notice of such election must be filed with the Authority and the Trustee. The
Trustee shall pay to the Agency any funds thereafter held by it hereunder which are not required for
said purpose.
SECTION 6.04. Amendment.
This Loan Agreement shall be amended by the parties hereto but only (a) prior to the Funding
Date, which any effect whatsoever, and (b) following the Funding Date, only as provided in the
Authority Bond Indenture.
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SECTION 6.05. Waiver of Personal Responsibility
No member, officer, agent or employee of the Agency shall be individually or personally
liable for the payment of the principal of or interest on the Loan; but nothing herein contained shall
relieve any such member, officer, agent or employee from the performance of any official duty
provided by law.
SECTION 6.06. Payment on Business Days.
Whenever in this Loan Agreement any amount is required to be paid on a day which is not a
Business Day, such payment shall be required to be made on the Business Day immediately
following such day, provided that interest on such payment shall not accrue from and after such day.
SECTION 6.07. Notices.
Any notice, request, complaint, demand or other communication under this Loan Agreement
shall be given by first class mail or personal delivery to the party entitled thereto at its address set
forth below, or by facsimile transmission or other form of telecommunication, at its number set forth
below. Notice shall be effective either (a) upon transmission by telecopy or other form of
telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the
case of personal delivery to any person, upon actual receipt. The Authority or the Agency may, by
written notice to the other parties, from time to time modify the address or number to which
communications are to be given hereunder.
If to the Authority: Rancho Cucamonga Public Financing Authority
10500 Civic Center
Rancho Cucamonga, California 91730
Attention: Executive Director
If to the Agency: Rancho Cucamonga Redevelopment Agency
10500 Civic Center
Rancho Cucamonga, California 91730
Attention: Executive Director
SECTION 6.08. Partiallnvalidity.
If any Section, paragraph, sentence, clause or phrase of this Loan Agreement shall for any
reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the
remaining portions of this Loan Agreement. The Agency hereby declares that it would have adopted
this Loan Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof
and authorized the Loan irrespective of the fact that any one or more Sections, paragraphs, sentences,
clauses, or phrases of this Loan Agreement may be held illegal, invalid or unenforceable.
SECTION 6.09. Article and Section Headings and References.
The headings or titles of the several Articles and Sections hereof, and any table of contents
appended to copies hereof, shall be solely for convenience of reference and shall not affect the
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meaning, construction or effect of this Loan Agreement. All references herein to "Articles,"
"Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this
Loan Agreement; the words "herein," "hereof," "hereby," "hereunder" and other words of similar
import refer to this Loan Agreement as a whole and not to any particular Article, Section or
subdivision hereof; and words of the masculine gender shall mean and include words of the feminine
and neuter genders.
SECTION 6.10. Execution of Counterparts.
This Loan Agreement may be executed in any number of counterparts, each of which shall
for all purposes be deemed to be an original and all of which shall together constitute but one and the
same instrument.
SECTION 6.11. Governing Law.
This Loan Agreement shall be construed and governed in accordance with the laws of the
State.
SECTION 6.12. Public Hearing.
The Agency shall cause to be published a notice of public hearing and shall hold such notice
in accordance with Government Code Section 6586.5, all prior to the issuance of the Bonds.
11224/0001/717828v6 -20-
IN WITNESS WHEREOF, the RANCHO CUCAMONGA REDEVELOPMENT AGENCY and the
RANCHO CUCAMONGA PUBLIC FINANCING AUTHORITY have caused this Agreement to be signed by
their respective officers, all as of the day and year first above written.
RANCHO CUCAMONGA REDEVELOPMENT
AGENCY
By:
Executive Director
[SEAL]
Attest:
Secretary
RANCHO CUCAMONGA PUBLIC FiNANCING
AUTHORITY
By:
Executive Director
[SEA ]
Attest:
Secretary
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