AgdaPkt 2003-09-08 - Laserfiche WebLink

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9AID ATTACHMENT III Summary of Pdndpel Legal Documents Indenture This document, approved by the Agency in 1997, establishes a trust estate for the benefit of bond investors. It establishes a lien on tax increment revenues for the payment of interest on and the principal of bonds issued by the Agency to implement redevelopment activities. It further establishes conditions for the issuance of additional bonds and the procedures therefore, and establishes certain covenants that the Agency has pledged to observe. The indenture requires the Agency to approve a supplemental indenture in connection with the proposed bonds. First Suoolemental Indenture These are ministerial changes to the 1997 indenture. The changes allow the Agency to issue escrowed bonds, they provide greater flexibility in structuring future debt issues, they enhance the security for bonds and they clarify that the insurance policy on the 1997 bonds applies only to the 1997 bonds and not to any additional bonds. Second SuoDlemental Indenture The Agency's approval of a second supplemental indenture is required for the issuance of additional bonds secured on a parity basis by the tax increment revenue that secures the Agency's outstanding 1997 bonds. The second supplemental indenture establishes the principal payment dates and amounts, interest rates, and redemption provisions relating to the proposed bonds, and directs the trustee regarding the deposit of funds to be held under the indenture. It also establishes the pledge of tax revenues; it creates various funds and accounts; it imposes various covenants on the Agency recommended by the Agency's financing team in order to secure the proposed bonds; it establishes the duties and liabilities of the trustee; it specifies the conditions necessary to modify the second supplemental indenture; it establishes events of default and remedies of bondholders; and, it establishes miscellaneous provisions incidental to the creation of the trust estate. Preliminary Official Statement The preliminary official statement is the primary disclosure document provided to investors in connection with the Agency's issuance of bonds. Disclosure of these risks is a prudent and necessary condition to the issuance of bonds. It discloses material information regarding the City and the Agency, the authority for and purpose of the bonds, the project area and the security for the payment of interest on and the repayment of the bonds, the terms of the bonds and the redemption provisions therefore, debt service on the bonds and the debt service coverage on the bonds, tax increment financing in general and limitations under California law with regard to the imposition of and collection of taxes, material risk factors relating to the Agency's collection of taxes and the security for the bonds, and other miscellaneous matters. III -1