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2019-01 SA RESOLUTION NO. SA 2019-01 A RESOLUTION OF THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE, AUTHORIZING THE REDEMPTION AND DEFEASANCE OF BONDS ISSUED IN 2011 FROM UNSPENT PROCEEDS, THE EXECUTION AND DELIVERY OP AN ESCROW AGREEMENT, AND TAKING OTHER ACTIONS RELATED THERETO WHEREAS, prior to the enactment of the dissolution law described below, the Community Redevelopment Agency of the City of Grand Terrace (the "Redevelopment Agency") was a public body, corporate and politic, duly established and authorized to transact.business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code (together with Parts 1.8 and 1.85 of Division 24, as amended from time to time (the "Law"), including the power to borrow funds and issue bonds for any of its corporate purposes, including implementation of the provisions of the redevelopment plans enacted within its project areas;.and WHEREAS, the City Council of the City of Grand Terrace has previously adopted the Grand Terrace Community Redevelopment Project Area for the purpose of financing certain redevelopment activities within the City (the "Project Area"); and WHEREAS, the Redevelopment Agency has heretofore authorized the following: (a) $15,175,000 original principal amount of the Community Redevelopment Agency of the City of Grand Terrace Community Redevelopment Project Area, Tax Allocation Bonds, Issue of 2011A (the "2011A Bonds").and (b) $5,650,000 original principal amount of the Community Redevelopment Agency of the City of Grand Terrace Community Redevelopment Project Area, Taxable Tax Allocation Bonds, Issue of 2011 B (the "2011 B Bonds" and, together with the 2011A Bonds, the "2011 Bonds"); and WHEREAS, the 2011 Bonds were issued pursuant to an Indenture.of Trust, dated as of June 1, 2011 (the "Indenture"), by and between. the Redevelopment Agency and U.S. Bank.National Association; and WHEREAS, in 2011, pursuant to California Assembly Bill No. 26 (First Extraordinary Session) ("AB1X 26"), as thereafter amended from time to time and adjusted by the California Supreme Court, all redevelopment agencies were dissolved, and the State designated "successor agencies". and "oversight boards" to satisfy "enforceable obligations" of the former redevelopment agencies and administer dissolution and wind down of the former redevelopment agencies; and WHEREAS, pursuant to California Health and Safety Code Section 34173(d), the Successor Agency to the Community Redevelopment Agency of the City of Grand Terrace is the successor agency(the "Successor Agency")to the Redevelopment Agency _ r with respect to the Redevelopment Agency's outstanding bonds and indebtedness; and SA Reso 2019-01 Page 1 of 6 May 28, 2019 WHEREAS, pursuant to Health and Safety Code Section 34191.6, the Successor Agency prepared a Last and Final Recognized Obligation Payment Schedule (the "Last and Final ROPS") and such Last and Final ROPS was approved by the State of California Department of Finance ("DOF") by letter dated August 6, 2018; and WHEREAS, pursuant to Health & Safety Code Section 34191.4(c)(2)(B), the Successor Agency, which issued bonds on June 17, 2011, may use 20% of its bond proceeds in a manner consistent with the original bond covenants and must use the remaining 80% of such bond proceeds at the earliest date permissible under, the applicable bond covenants to defease its outstanding 2011A Bonds and 2011B Bonds; and WHEREAS, pursuant to Health & Safety Code Section 34191.4(c)(2)(D), any remaining bond proceeds that cannot be spent shall be used to defease bonds; and WHEREAS, pursuant to a DOF letter dated August 6, 2018, DOF (i) authorized the Successor Agency to expend $2,857,416 of the remaining unspent proceeds of the 2011 Bonds in a manner consistent with the original bond covenants and (ii) directed the Successor Agency to use the remaining unspent 2011 Bond proceeds (the "80% .Proceeds") to defease the 2011 Bonds, as approved on the Last and Final ROPS (collectively, the "DOF Expenditure Authorization"); and WHEREAS, the Successor Agency's Last and Final ROPS currently provides for the repayment of scheduled debt service on the 2011A Bonds and the 2011 B Bonds through the, final maturity of the 2011 Bonds in fiscal year 2033-34 using the 80% Proceeds and certain moneys to be received from the Successor Agency's Redevelopment Property Tax Trust Fund, as set forth in specific detail in the approved Last and Final ROPS; and WHEREAS, the Successor Agency, in addition to the 80% Proceeds that the Successor Agency is required to use to defease the 2011 Bonds.and the unspent 2011 Bond proceeds authorized to be expended consistent with bond covenants pursuant to the DOF Expenditure Authorization, has received additional interest earnings on the unspent proceeds and other funds and accounts relating to .the. 2011 Bonds ("Extra Proceeds"); and WHEREAS, the Successor Agency believes it is in the best interest of all affected taxing entities that the Successor Agency use the 80% Proceeds and the Extra Proceeds to fully defease the outstanding 2011 Bonds, as the case may be, by providing for a depositof the 80% Proceeds, the Extra Proceeds, certain moneys currently on deposit in the funds and accounts of the Successor Agency and/or Trustee established and . maintained pursuant to the Indenture (the "Indenture Deposit Amounts"), and certain funds in the Redevelopment Obligation Retirement Fund and/or.to be deposited in the Redevelopment Obligation Retirement Fund for the debt service payment coming due on September 1, 2019 from the Redevelopment Property Tax Trust Fund from the distribution on January 2, 2019 and/or June 1, 2019 (collectively the "RORF Amounts"); and SA Reso 2019-01 Page 2 of 6 May 28,.2019 WHEREAS, in order to evaluate the most efficient, practical and financially responsible'expenditure of the 80% Proceeds and other moneys held by the Successor Agency, the Successor Agency has retained certain legal and financial advisors, including the Municipal Advisor, and incurred certain costs to evaluate a potential refunding of the 2011 Bonds for savings in accordance with Health and Safety Code .Section .34177.5(a)(1), and subsequently to, evaluate the potential early redemption and defeasance in full.of all outstanding 2011 Bonds (collectively, the "Costs"); and WHEREAS, based on such evaluation and the advice of such legal and financial advisors, including the Municipal Advisor, and based on the available funds at the time of defeasance, the Successor Agency has determined that the Successor Agency will have sufficient available moneys to defease all of.the 2011A Bonds to their first optional redemption date of September 1, 2019 (or such later date as practical following DOF approval if necessary) and to defease all of the 2011 B Bonds to their first optional redemption date of September 1, 2021, using the remaining unspent 80% Proceeds of the 2011 Bonds, certain of the Extra Proceeds, certain of the Indenture Deposit Amounts relating to the 2011 Bonds, and certain of the RORF Amounts which are available to pay debt service on the 2011A Bonds pursuant to the Last and Final ROPS; and WHEREAS, the 80% Proceeds, the Extra Proceeds, the Indenture Deposit Amounts and the RORF Amounts are referred to collectively herein as the "Defeasance Amounts"; and WHEREAS, pursuant to Section 9.3 of the Indenture, the Successor Agency may f� defease bonds by depositing with an escrow agent in trust sufficient moneys, when invested, to pay the principal, premium, if any, and accrued interest of the 2011 Bonds to the date set forth for redemption ("Full Defeasance"); and WHEREAS, to-effectuate the full defeasance of the 2011A Bonds and the 2011B Bonds, the Successor.Agency further desires to approve the form and authorize the execution and delivery of an escrow agreement by and between the Successor Agency and the Trustee, acting as escrow agent (the "Escrow Agreement"), a form of which is on file with the Secretary, and to take other actions necessary to effectuate the defeasance of the 2011 Bonds; and WHEREAS, Fieldman, Rolapp & Associates, Inc., the Successor Agency's Municipal Advisor (the "Municipal Advisor"), has prepared an analysis (the "Report") which demonstrates that affected taxing entities will receive increased distributions of money from the Successor Agency's Redevelopment Property Tax Trust Fund and will receive such moneys earlier as a result of the application and use of the Defeasance Amounts for the early redemption and defeasance of the 2011 Bonds pursuant to the Escrow Agreement, as compared with the moneys the affected taxing entities will receive under the current Last and Final ROPS, and therefore it is in the best interests of all taxing entities that the Successor Agency execute and deliver the Escrow Agreement and deposit the Defeasance Amounts-described above with the 2011. Bonds Trustee, acting as Escrow Bank, to redeem and defease the 2011 Bonds on the first optional redemption dates permitted under the Indenture; and SA Reso 2019-01 Page 3 of 6 May 28,2019 WHEREAS, concurrently with or the following approval of the full defeasance provided for herein by the Oversight Board and DOF or in accordance with the timing requested by DOF, the Successor Agency will submit 'a first amendment to its current Last and Final ROPs to DOF reflecting the investment and deposit of the Defeasance Amounts pursuant to the Escrow Agreement, which amounts will be sufficient to pay the principal,.interest and redemption price of the 2011 Bonds to the first optional redemption date (or such other practical date) of each series such.that no.additional moneys will be needed from the Successor Agency's Redevelopment Property Tax Trust Fund in connection with payment of the 2011 Bonds following defeasance of the 2011 Bonds; and WHEREAS, the Successor Agency has reviewed information in the Report and the staff report presented herewith and desires to make the following determinations; and NOW THEREFORE, THE SUCCESSOR AGENCY TO THE COMMUNITY , REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2. Report. The Successor Agency approves of the Report, which is on file with the City Clerk, as Secretary of the Successor Agency, and incorporated herein by this reference, and finds that it is beneficial to the Successor Agency, the City, and all affected taxing entities to undertake the full defeasance of the 2011 Bonds at the first optional redemption date pursuant to the Escrow Agreement, using the Defeasance Amounts as described in the foregoing Recitals. Without limiting the generality of the foregoing, the Successor Agency hereby finds and determines that the execution and delivery of the Escrow Agreement and the use of the Defeasance Amounts to effectuate the early redemption and defeasance of the 2011 Bonds will reduce liabilities and increase net revenues to the taxing entities and is in the best interests of the taxing entities, all in accordance with Health and Safety Code Section 3418.1(e). Section 3. Authorization to Proceed. The Successor Agency hereby approves the use of the Defeasance Amounts to effectuate. the early redemption and . defeasance of the 2011 Bonds pursuant to the Escrow Agreement and Health and Safety Code Sections 34181(e) and 34191.4(c)(2)(C). The Successor Agency shall use the Defeasance Amounts to redeem and defease the 2011 Bonds on the earliest practical optional redemption date permitted under the Indenture. Section 4. Costs and Expenditure of Remainina Funds. The Successor Agency shall pay all Costs using Defeasance Amounts available after making all deposits required under the Escrow Agreement to effectuate the early redemption and defeasance of the 2011 Bonds on the first optional redemption date for each series of 2011 Bonds permitted by the Indenture. Any remaining Defeasance Amounts not needed to defease the 2011 Bonds or pay the Costs may be expended by the Successor Agency for any lawful purposes consistent with the original bond covenants ("Additional Expenditure Funds"). SA Reso 2019-01 Page 4 of 6 May 28, 2019 Section 5. Approval of the Escrow Agreement. All of the 2011 Bonds shall be defeased pursuant to the Escrow Agreement. The Successor Agency hereby approves the Escrow Agreement in the form on file with the City Clerk, as Secretary of the Successor Agency, and which is incorporated herein by this reference. The Chair . (Mayor), Vice Chair (Mayor Pro Tempore), City Finance Director, and Executive Director (City Manager) (the "Designated Officers"), each-acting alone, are hereby authorized and directed to execute the Escrow Agreement, and the Secretary (City Clerk) or Assistant or Deputy Secretary(Assistant or Deputy City Clerk) ("Secretary"), is hereby authorized and directed to attest, the Escrow Agreement in said form, togetherwith such additions thereto or changes therein as the Designated Officer executing. the Escrow Agreement, upon consultation with Aleshire &Wynder, LLP, shall deem necessary,desirable or appropriate in accordance with the terms of this Resolution and the execution of the Escrow Agreement by a Designated Officer shall be conclusive evidence of the approval of any such additions and changes..Without limiting the foregoing, the dollar amounts set forth in the form of Escrow Agreement on file with the.Secretary shall be adjusted and revised by the Designated Officer, in consultation with the Municipal Advisor, to account for interest earnings on Defeasance Amounts prior to execution of the Escrow Agreement. Section 6. Confirmation of Consultants Costs.. The Successor Agency is hereby authorized to pay all the Costs incurred in connection with the.actions authorized by this Resolution, including; the' Escrow Agreement and the early redemption and defeasance of the 2011. Bonds, including all fees and expenses of the Successor Agency's legal counsel, Aleshire & Wynder, LLP, and Stradling Yocca Carlson & Rauth, a Professional corporation, the Municipal Advisor, and other consultants that have assisted in the analysis and work performed to evaluate the potential refunding of the 2011 Bonds for savings and relating to the early redemption and defeasance of the 2011 Bonds. The recovery of such Costs shall be in addition to and shall not count against any administrative cost allowance of the Successor Agency as such allowance is defined 'in Health and Safety Code Section 34171(b). Section 7. Bond Proceeds Expenditure Agreement. Staff is hereby authorized and ordered to take all actions necessary.. to complete the permissible expenditure and use.of the remaining proceeds of the 2011 Bonds in the amount of $2,857,416, which was approved by the State Department of Finance in a letter dated August 6, 2018, for expenditure by the Successor Agency. Staff is also authorized to expend any Additional Expenditure Funds to the extent approved by the DOF consistent with the bond covenants and, if appropriate such funds will be governed by the bond expenditure agreement or an amendment thereto with the City in the form approved by the Designated Officer or as otherwise permitted by DOF. Section 8. Further Action. Upon approval by the Successor Agency, the Successor Agency hereby directs the Designated Officers and other appropriate officers and employees of the Successor Agency to submit or cause to be submitted all legal proceedings and documents related to the redemption and defeasance of the 2011 Bonds to the San Bernardino Countywide Oversight Board, the County of San Bernardino, and DOF for consideration at the earliest practical opportunity. -SA Reso 2019-01 Page 5 of 6 May 28,2019 Section 9. Official Action. All actions heretofore taken by the officers and agents of the Successor Agency with respect to the defeasance of the 2011 Bonds using the Defeasance Amounts are hereby approved, confirmed and ratified. The Designated Officers of the Successor Agency and the Secretary and any and all other officers of the Successor Agency are hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to do any and all things and take any and all actions, including preparing an amendment to the Last and Final ROPS, execution and delivery of any and all assignments, certificates, tax certificates, and agreements, requisitions, including requisitions for the payment of Costs, agreements, notices, consents, instruments of conveyance, warrants, related and other documents,, which they, or any of them, may deem necessary or advisable in order to consummate the full defeasance of the 2011 Bonds and the purposes of this Resolution. Section 10. Severabilitv,. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The Successor Agency declares that the Successor Agency would have adopted.this Resolution irrespective. of the invalidity of any particular portion of this Resolution. Section 11. Effective Date. This Resolution shall take effect immediately upon its passage. r � PASSED, APPROVED AND ADOPTED by the Successor Agency for the Grand Terrace Redevelopment Agency at a Regular Meeting held on the 28th day of May 2019. D rcj4AGPda6o� Ch ccessor Agency for the Community Redevelopment Agency of the City of Grand Terrace ATTEST: Debra L. Thomas Agency Secretary APPROVED AS TO FORM: Adrian Guerra Agency Counsel SA Reso 2019-01 Page 6 of 6 May 28, 2019 Exhibit B ESCROW AGREEMENT by and between SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE and U.S.BANK NATIONAL ASSOCIATION as Trustee Dated as of July 1,2019 Relating to the defeasance of Community Redevelopment Agency of the City of Grand Terrace Community Redevelopment Project Area, Tax Allocation Bonds,Issue of 2011A Community Redevelopment Agency of the City of Grand Terrace Community Redevelopment Project Area, Taxable Tax Allocation Bonds,Issue of 2011B ESCROW AGREEMENT This ESCROW AGREEMENT(the"Agreement")is made and entered into as of .1,2019, by and between the SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE (the "Agency"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, having a corporate 'trust office. located in Los Angeles, California, and being qualified to accept and administer the trusts hereby created, as trustee (the "Trustee") and acting as escrow agent hereunder(in such capacity, the"Escrow Agent"), WITNESSETH: WHEREAS,the former Community Redevelopment Agency of the City of Grand Terrace(the "RDA")has heretofore issued its(a) Community Redevelopment Project Area,Tax Allocation Bonds, Issue of 2011A in the original aggregate principal amount of $15,175,000, which are currently outstanding in the principal amount of $13,095,000 (the "Series 2011A Bonds"), and its (b) Community Redevelopment Project Area, Taxable Tax Allocation Bonds, Issue of 2011B in the original aggregate principal amount of$5,650,000, which are currently outstanding in the principal amount of$3,735,000 (the "Series 201113. Bonds" and together with the Series 2011A.Bonds, the "Series 2011 Bonds"),pursuant to the terms of an Indenture of Trust, dated as of June 1, 2011 ("2011 Indenture"),by and between the RDA and U.S. Bank National.Association(the"2011 Trustee"); and WHEREAS, pursuant to Health & Safety Code Section 34191.4(c), because the Series 2011 Bonds were issued on June 17, 2011, the Agency may expend 20% of the proceeds of the Series 2011 Bonds in a manner consistent with the original bond covenants and must use the remaining 80% of the proceeds of the Series 2011 Bonds to defease the Series 2011 Bonds; and WHEREAS, on May 28, 2019, the Successor Agency adopted Resolution No. approving the execution of this Escrow Agreement to defease the Series 2011 Bonds; and WHEREAS, the San Bernardino Countywide Oversight Board has approved the defeasance provided for herein pursuant to Resolution No._adopted on_; and WHEREAS, the Department of Finance has issued a letter, attached as Exhibit G hereto, approving Resolution No._of the San Bernardino Countywide Oversight Board; and WHEREAS, this Agreement is for the purpose of using unspent Series 2011 Bond proceeds, together with other funds of the Agency,which will,among other things,be sufficient to pay scheduled principal and interest on each series of Series 2011 Bonds to the first optional redemption date set forth in the 2011 Indenture and to redeem each series of the Series 2011 Bonds, at a redemption price equal to the sum of the principal amount of the applicable series of the Series 2011 Bonds plus a premium, if any,plus accrued interest thereon to the redemption date for each applicable series, such amount for each series hereinafter referred to as the"Redemption Price"; and WHEREAS, this Agreement contemplates the setting aside of funds in order to provide for the payment of scheduled principal and interest through and including the first optional redemption date and the Redemption Price related to the Series 2011A Bonds and the Series 2011B Bonds and that such funds shall be deposited in separate special escrow funds with respect to each series of the Series 2011 Bonds to'be created and maintained by the Escrow Agent hereunder(to be referred to herein as r' the "2011A Escrow" and the "2011B Escrow", respectively, and collectively as the "Refunding Escrows"); and WHEREAS, the Agency has taken action to cause to be delivered to the Escrow Agent for deposit in or credit to.the Refunding Escrows with respect to each series of the Series 2011 Bonds, moneys in amounts that have been verified by Causey, Demgen & Moore, P.C. in its Verification Report, dated _ ("Report"), to be sufficient, if held invested in part and [uninvested] in part as provided herein, to pay on September 1, 2019 the regularly scheduled principal and interest payment coming due on the Series 20HA Bonds maturing on September 1, 2019 and to pay the.Redemption Price of the Series 2011A Bonds maturing after September 1, 2019 (collectively the "2011A Redemption Price'!) and to pay the regularly scheduled payments of principal and interest coming due on the Series 2011B Bonds through and including September 1,2021 and to pay the Redemption Price of the Series 2011B Bonds maturing after September 1, 2021 (collectively, the "2011B Redemption Price") on September 1, 2021. NOW,THEREFORE, the Agency and the Escrow Agent hereby agree as follows: Section 1. ARencv Instructions; Establishment. Funding and Maintenance of 2011A . Escrow.Notice of Redemption. (a) The Agency hereby instructs the Trustee to transfer the following amounts from the 2011 Indenture to the Escrow Agent for deposit in the 2011A Escrow as described below: (i) $ from the 2011A Subaccount of the Redevelopment Fund; (ii) $ from the Reserve Account; and . (iii) $ from the_Fund. The term"2011A Subaccount of the Redevelopment Fund"is hereby defined to include the fund wherein the bond proceeds of the Series 2011A Bonds are held at the Agency, .which may be held under a bond proceeds agreement with the City of Grand Terrace. (b) The Agency has heretofore or concurrently herewith transferred $ to the Escrow Agent for deposit in the 2011A Escrow described below, constituting certain moneys in the Redevelopment Obligation Retirement Fund; (c) The Escrow Agent hereby accepts and acknowledges receipt of$ to secure the payment of the 2011A Redemption Price on September 1, 2019. The Escrow Agent agrees to establish and maintain the 2011A Escrow until the 2011A Redemption Price has been paid in full, and to hold the moneys therein at all times as a special and separate trust fund (wholly segregated from all other securities, investments or moneys on deposit with the Escrow Agent). All moneys in the 2011A Escrow are hereby irrevocably.pledged to secure the payment of the 2011A Redemption Price and shall constitute a special fund for the-payment thereof. Moneys in the 2011A Escrow shall be invested as provided in Section 3 hereof. (d) The Escrow Agent shall give notice of redemption [and defeasance] to the owners of the Series 2011A Bonds at the addresses appearing on the bond registration books of the Trustee on , 2019,which is not less than 30,nor'more than 60,days prior to September 1, 2019, being the Redemption Date of the Series 2011A Bonds, and which is not more than 10 days 2 following the defeasance of the Series 2011A Bonds, in the manner provided in the 2011 Indenture. The form of Notice of Redemption and Defeasance is attached hereto as Exhibit C. To the extent agreed to by the 2011 Trustee and the City Manager for the Successor Agency, the 2011 Trustee may provide for a notice which conditions redemption on the receipt of funds for the defeasance of the 2011 Bonds prior to the date set for redemption. (e) [If notice of redemption and notice of defeasance will be provided separately,. including form of Notice of Defeasance in Exhibit D.] Section 2. Establishment. Fundins_ and Maintenance of 2011B Escrow: Notice of Redemption. (a) The Agency hereby instructs the Trustee to transfer the following amounts from the 2011 Indenture to the Escrow Agent for deposit in the 2011 B Escrow as described below: (i) $ from the 2011B Subaccount of the Redevelopment Fund; (ii) $ from the Reserve Account; and (iii) $_from the_Fund. The term"2011B Subaccount of the Redevelopment Fund" is hereby defined to include the fund wherein the bond proceeds of the Series 2011B Bonds are held at the Agency,which may be held under a'bond proceeds agreement with the City of Grand Terrace. (b) The Agency has heretofore or concurrently herewith transferred $ to the Escrow Agent for deposit in the 2011B Escrow described below, constituting certain moneys in the Redevelopment Obligation Retirement Fund; (c) The Escrow Agent hereby accepts and acknowledges receipt of$ to secure the payment of the 2011B Redemption Price on September 1, 2021. The Escrow Agent agrees to establish and maintain the 2011B Escrow until the 2011B Redemption Price has been paid in full and to hold the moneys therein at all times as a special and separate trust fund(wholly segregated from all other securities, investments or moneys on deposit with the Escrow Agent). All moneys in the 2011B Escrow are hereby irrevocably pledged to secure the payment of the 2011 B Redemption Price and shall constitute a special fund for the payment thereof. Moneys in the 2011B Escrow shall be invested as provided in Section 3 hereof. (d) The Escrow Agent shall give notice of redemption of the Series 2011B Bonds to the owners of the Series 2011B Bonds at the addresses appearing on the bond registration books of the Trustee not less than 30,nor more than 60, days prior to September 1,2021,being the Redemption Date of the Series 2011B Bonds, in the manner provided in the 2011 Indenture. The form of Notice of Redemption is attached hereto as Exhibit E. (e) The Escrow Agent is instructed to post a Notice of Defeasance of the Series 2011B Bonds with the EMMA platform of the Municipal Securities Rulemaking Board. A form of the Notice of Defeasance is attached as Exhibit F hereto, and shall be posted within 10 days following the defeasance of the Series 2011B Bonds on 3 Section 3. Cash Deposit in the 201 IA Escrow and 2011B Escrow. (a) The Agency hereby directs the Escrow Agent to accept the cash deposit of $ with respect to the 2011 A Escrow and invest$ as provided on Exhibit A hereto with respect to the 2011A Escrow and by this reference incorporated herein and hold$ uninvested. The amount deposited, as invested, shall be sufficient to pay the 2011A Redemption Price on September 1, 2019. In its Report,Causey Demgen&Moore,P.C.has verified the sufficiency of funds in the 2011A Escrow to pay the 2011A Redemption Price on September 1, 2019. (b) The Agency hereby directs the Escrow Agent to accept the cash deposit.of $ with respect to the 2011B Escrow and invest$ as provided on Exhibit A hereto with respect to the 2011B Escrow and by this reference incorporated herein and hold$_uninvested. The amount deposited, as invested, shall be sufficient to make all required payments constituting the 2011B Redemption Price to and including September 1, 2021. In its Report, Causey Demgen&Moore,P.C. has verified the sufficiency of funds in the 2011B Escrow to pay the 2011B Redemption Price to and including September 1, 2021. Section 4. Pavment and Redemption of the Series 2011 Bonds. The Agency hereby requests and irrevocably instructs the Escrow Agent to transfer amounts from the 2011A Escrow and the 2011B Escrow to the 2011 Trustee to pay when due the scheduled payments.of principal of and interest on the Series 2011 Bonds as they become due and payable through and including the respective Redemption Dates of the Series 2011 Bonds and to pay the 2011A Redemption Price on September 1, . 2019 and the 2011B Redemption Price on September 1, 2021 as provided in Exhibit B hereto with respect to each series and by this reference incorporated herein. Upon payment in full of the principal of,interest on and the Redemption Price of the Series 2011 Bonds,the Escrow Agent shall transfer any moneys remaining in the 2011A Escrow or 2011B Escrow to the Agency after provision for payment of amounts due the Escrow Agent pursuant to Section 5 and 11 hereof, and this Agreement shall terminate. Section 5. Fees and Costs. (a) The Agency shall pay to the Escrow Agent from time to time reasonable compensation for all services rendered under this Agreement. The parties hereto agree that the duties and obligations of the Escrow Agent shall be as expressly provided herein, and no implied duties or obligations shall be read into this Agreement against the"Escrow Agent. (b) The Agency shall pay to the Escrow Agent additional fees and reimbursements for costs incurred, including but not limited to legal and accountants' services, involving this Agreement. (c) The fees of and the costs incurred by the Escrow Agent shall in no event be deducted or payable from, or constitute a lien against, the Refunding Escrows, except as otherwise provided herein. Section 6. Mereer or Consolidation. Any company into which the Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business,provided such company shall 4 be eligible under this Agreement, shall be the successor of such Escrow Agent without the execution or filing of any paper or any further act, notwithstanding anything herein to the contrary. Section 7. Resignation of Escrow Agent. The Escrow Agent may at any time resign by giving written notice to the Agency of such resignation. The Agency shall promptly appoint a successor Escrow Agent upon receipt of such notice. Resignation of the Escrow Agent will be effective only upon acceptance of appointment of a successor Escrow Agent. If the Agency does not appoint a successor within 60 days of the receipt of such notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor Escrow Agent,which court may thereupon, after such notice, if required by law,.appoint a successor Escrow Agent. After receiving a notice of resignation of an Escrow Agent, the Agency may appoint a temporary Escrow Agent to replace the resigning Escrow Agent until the Agency appoints a successor Escrow Agent. Any such temporary Escrow Agent so appointed by the Agency shall immediately and without further act be superseded by the successor Escrow Agent so appointed. Section 8. Severability. If any section, paragraph, sentence, clause or provision of this Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of this Agreement. Section 9. Execution of Counterparts. This 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 10. Applicable-Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 11. Definitions. Any capitalized term used but not otherwise defined in this Agreement shall have the meaning assigned to such term in the Indenture. Section 12. Indemnification. The Agency agrees to indemnify, hold harmless and defend the Escrow Agent and its officers, directors, employees and agents to the maximum extent permitted by law against any and all losses, damages, claims, actions, liabilities, costs and expenses of whatever nature, kind or character (including,.without limitation, attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments)which may be imposed on, or incurred by or asserted against the Escrow Agent directly or indirectly arising out of or related to the acceptance and performance by the Escrow Agent of its duties hereunder. This indemnification shall" apply whether any such claim, suit, investigation, proceeding or action is based upon (i) the interference with or breach of or alleged interference with or alleged breach of any existing contract in connection with the Series 2011 Bonds, (ii) any untrue statement or alleged untrue statement of a . material fact or omission of a material fact required to be stated in any offering document with respect to the Series 2011 Bonds necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) any other wrongful act or alleged wrongful act of the Agency related to the redemption of the Series 2011 Bonds; provided, however, that this indemnification shall not cover any losses or expenses incurred by the Escrow Agent as a result of its negligence or willful misconduct. In addition to the foregoing,the prevailing party in any lawsuit shall be entitled to attorneys' fees and costs incurred in any judgment proceeding to collect or enforce the judgment. This provision is separate and severable and shall survive the merger of this Agreement into any judgment on this Agreement. 5 The agreements of the Agency hereunder shall survive the resignation or removal of the Escrow Agent.or termination of this Agreement. Section 13. Immunities and Liability of Escrow Aaent. (a) The Escrow Agent undertakes to perform only such duties as are expressly and specifically set forth in this Agreement and no implied duties or obligations shall be read into this Agreement against the Escrow Agent. (b) The Escrow Agent shall not have any liability hereunder except to the extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable for any special, indirect or consequential damages, even if the Escrow Agent or the Agency knows of the possibility of such damages. The Escrow Agent shall have-no duty or responsibility under this Agreement in the case of any default in the performance of the covenants or agreements contained in the Indenture. The Escrow Agent is not required to resolve conflicting demands to money or property in its possession under this Agreement. (c) The Escrow Agent may consult with counsel of its own choice (which may be counsel to the Agency) and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action hereunder in accordance with such opinion of counsel. (d) The Escrow Agent shall not be responsible for any of the recitals or representations contained herein or in the Indenture, other than recitals or representations specifically made by the Escrow Agent. r (e) The Escrow Agent may engage or be interested in any financial or other transaction with the Agency. (f) The Escrow Agent shall not be liable for the accuracy of any calculations provided as to the sufficiency of the moneys or securities deposited with it to pay the principal of or interest or premium on the Series 2011 Bonds. (g) The Escrow Agent shall not be liable for any action or omission of the Agency under this Agreement or the Indenture. (h) Whenever in the administration of this Agreement the Escrow Agent shall deem it necessary or desirable that a matter be proved-or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed)may, in the absence of negligence or willful misconduct on the part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate of any authorized representative of the Agency, and such certificate shall,in the absence of negligence or willful misconduct on the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or suffered by it under the provisions of this Agreement upon the faith thereof. (i) The Escrow Agent may conclusively rely as to the truth and accuracy of the statements and correctness of the opinions and the calculations provided to it in connection with this Agreement and shall be protected in acting, or refraining from acting, upon any written notice, instruction,request,certificate,document or opinion furnished to the Escrow Agent in connection with this Agreement and reasonably believed by the.Escrow Agent to have been signed or presented by the 6 proper party, and it need not investigate any fact or matter stated in such notice, instruction, request, certificate or opinion. (j) No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. (k) The Agency acknowledges that to the extent regulations of the Comptroller of the.Currency or other applicable regulatory entity grant the Agency the right to receive brokerage confirmations of security transactions as they occur,the Agency specifically waives receipt.of such confirmations to the extent permitted by law. The Escrow Agent will furnish the Agency periodic cash transaction statements which include detail for all investment transactions made by the Escrow Agent hereunder. . (1) If the Escrow Agent learns that the Department of the Treasury or the Bureau of Public Debt will not, for any reason, accept a subscription of securities that is to be submitted pursuant to this Agreement, the Escrow Agent shall promptly request alternative written investment instructions from the Agency with respect to escrowed funds which were to be invested in securities. The Escrow Agent shall follow such instructions and, upon the maturity of any such alternative investment,the Escrow Agent shall hold funds uninvested and without liability for interest until receipt of further written instructions from the Agency. In the absence of investment instructions from the Agency,the Escrow Agent shall not be responsible for the investment of such funds or interest thereon. .The Escrow Agent may conclusively rely upon the Agency's selection of an alternative investment as a determination of the alternative investment's legality and suitability and shall not be liable for any losses related to the alternative investments or for compliance with any yield restriction _ . applicable thereto. (m) The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the . part of any agent, attorney, custodian or nominee so appointed. (n) The Escrow, Agent shall incur no liability for losses arising from any investment made pursuant to this Agreement. Section 14. Termination of Agreement. Upon payment in full of the principal of and interest on the Series 2011 Bonds and all of the fees and expenses of the Escrow Agent as described above, all obligations of the Escrow Agent under this Agreement shall cease and terminate, except for the obligation,of the Escrow Agent to pay or cause to be paid to the owners of the Series 2011 Bonds not presented for payment all sums due thereon and the obligation of the Agency to pay to the Escrow Agent any amounts due and owing to the Escrow Agent hereunder;provided,however, the obligations of the Escrow Agent with respect to the payment of the respective series of Series 2011 Bonds shall cease and terminate two years after the date on which the same shall have become due as described hereunder and in accordance with the Indenture. Section 15. Substitution or Withdrawal of Federal Securities. The Agency may at any time direct the Escrow Bank to substitute federal securities described.herein with federal securities — , permitted under the 2011 Indenture for discharge of the Series 2011 Bonds ("Federal Securities") for any or all of the Federal Securities then deposited in the Refunding Escrows, or to withdraw and 7 transfer to the Agency any portion of the Federal Securities then deposited in the Refunding Escrows, provided that any such direction and substitution or withdrawal shall be accompanied by: (a) a certification of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions that the Federal Securities then to be so deposited in the Refunding Escrows together with interest to be derived therefrom,or in the case of withdrawal,the Federal Securities to be remaining in the Refunding Escrows following such withdrawal together with the interest to be derived therefrom, shall be in an amount at all times at least sufficient to make the payments specified in Section 3 hereof; and (b) an opinion of Bond Counsel that the substitution or withdrawal will not affect, for Federal income tax purposes the exclusion from gross income for federal income tax purposes of the interest on the Series 2011A Bonds and that such substitution is consistent with the Indenture. In the event that, following any such substitution of Federal Securities pursuant to this Section 15, there is an amount of moneys or Federal Securities in excess of an amount sufficient to make the payments required by Section 3 hereof, such excess shall be transferred by the Escrow Bank to the Agency. 8 IN WITNESS WHEREOF, the Successor Agency to the Community Redevelopment Agency of the City of Grand Terrace and U.S. Bank National Association,have caused this Agreement to be executed each on its behalf as of the day and year first above written. SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE By: City Manager;acting for the Agency U.S.BANK NATIONAL ASSOCIATION, as Escrow Agent By: Authorized Officer 9 SCHEDULEI DEFEASANCE ESCROW CASH FLOW The cash flow for the Defeasance Escrow is set forth on Exhibit A to the Verification Report prepared by Causey, Demgen and Moore, attached hereto and incorporated herein by reference as though fully set forth herein and made a part hereof. EXHIBIT A A-1 EXHIBIT B Schedule of Payments to Redemption for 2011A Bonds Redemption Period Ending Accrued Interest Principal Price Total Schedule of Payments to Redemption for 2011B Bonds Redemption Period Ending Accrued Interest Principal Price Total B-1 EXHIBIT C NOTICE OF DEFEASANCE &REDEMPTION COMMUNITY REDEVELOPMENT AGENCY . OF THE CITY OF GRAND TERRACE COMMUNITY REDEVELOPMENT PROJECT AREA, TAX ALLOCATION BONDS,ISSUE OF 2011A Redemption Date on September 1, 2019, at 101%for 2022 and 2033; 100% for 2019 Rate Maturity CUSIP1 Principal Date Amount 4.375% 9/1/2019 386485 BQ 8 $340,000 - 5.100 9/l/2022* 386485 BT 2 1,140,000 6.000 9/l/2033* 386485 BV 7 11,615,000 *Term Bond OWNERS of the above-described Bonds (the "Bonds") are hereby NOTIFIED that, pursuant to an Escrow Agreement dated as of July 1, 2019, by and among the SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE (the "Agency") and U.S. BANK NATIONAL ASSOCIATION, as Escrow Bank(the"Escrow Bank"), the Agency has deposited in an Escrow Fund with the Escrow Bank sufficient monies, as invested, to pay all of the principal of, and interest on the Bonds as the same shall become due and payable to and including September 1, 2019, the date of early redemption of the Bonds, all as set forth above. As a result of the deposit of said monies to the Escrow Fund, the Bonds are defeased as of 2019. Pursuant to the terms of the Indenture of Trust dated as of June 1, 2011 (the "Indenture") by and between the former Community Redevelopment Agency of the City of Grand Terrace,now known as the Agency, and U.S. Bank National Association, as trustee (the."Trustee"), $12,755,000 principal amount of the above-described Bonds are hereby called for optional redemption on September 1,2019 (the "Redemption.Date") at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. All of the Bonds outstanding under the Indenture are hereby called for redemption on the Redemption Date. The Escrow Bank shall collect interest on and the principal of such obligations and shall pay the same, together with any such cash moneys held by the Escrow Bank, to owners of record of the Bonds, in such amounts and at such times as shall be required to pay interest on.and the principal of the Bonds to the Redemption Date. Owners of the Bonds should surrender the Bond to Trustee for payment at the following address: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Department t The Agency, Trustee and the Escrow Bank shall not be responsible for the use of the CUSIP number(s)selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for the convenience of the owners of the Bonds. C-1 The method of presentation and delivery of a Bond is at the option and risk of the holder of each Bond. If mail is used, insured registered mail;return receipt requested is suggested. The Bonds are now deemed to have been paid,and the owners thereof shall hereafter be limited to the application of such cash moneys-for the payment of interest on and the principal of such Bonds as the same become due and payable as described above. The Trustee may be obligated to withhold a percentage of the redemption price from any bondowner who fails to furnish the Trustee with a valid taxpayer identification number or a certification that such bondowner is not subject to backup withholding.bondowners who wish to avoid the application of these provisions should submit a completed IRS Form W-9 when presenting their Bonds. Date: 2019 By: U.S. BANK NATIONAL ASSOCIATION, as Trustee &Escrow Bank 2 EXHIBIT D NOTICE OF DEFEASANCE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE COMMUNITY REDEVELOPMENT PROJECT AREA, TAX ALLOCATION BONDS, ISSUE OF 2011A Redemption Date on September 1,2019, at 101% for 2022 and 2033; 100% for 2019 Rate Maturity CUSIPZ Principal. Date Amount 4.375% 9/1/2019 386485 BQ 8 $340,000 5.100 9/l/2022* 386485 BT 2 1,140,000 6.000 9/l/2033* 386485 BV 7 11,615,000 *Term Bond NOTICE IS HEREBY GIVEN to the owners of the bonds described above(the"Bonds"),that pursuant to the Escrow Agreement(the"Agreement") entered into and dated as of July 1,2019,by and among the SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE (the "Agency") and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America having a corporate trust office in Los Angeles, California, as escrow agent, 2011 Trustee, and Trustee (as those terms are defined in the Agreement) (collectively, the"Escrow Bank");that: The Agency has deposited in an Escrow Fund with the Escrow Bank sufficient monies, as invested, to pay all of the principal of, and interest on the Bonds as the same shall become due and payable to and including September 1, 2019,the date of early redemption of the Bonds, all as set forth above. As a result of the deposit of said monies to the Escrow Fund, the Bonds are defeased as of 2019 The Escrow Bank has been instructed by the Agency to redeem the Bonds on September 1, 2019 at the redemption price of 100%. Date: ,2019 By: U.S. BANK NATIONAL ASSOCIATION, as Escrow Bank -THIS IS NOT A NOTICE OF REDEMPTION 2 The Agency and the Escrow Bank shall not be responsible for the use of the CUSIP number(s)selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for the convenience of the owners of the Bonds. D-1 EXHIBIT E NOTICE OF REDEMPTION COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE COMMUNITY4WDEVELOPMENT PROJECT AREA, TAXABLE TAX ALLOCATION BONDS,ISSUE OF 2011B (TAXABLE) Notice is hereby given that,pursuant to the terms of the Indenture of Trust dated as of June 1, 2011 (the"Indenture") by and between the former Community Redevelopment Agency of the City of Grand Terrace,now known as the Successor Agency(the"Successor Agency")and U.S.Bank National Association (the "Trustee"), $2,580,000 principal amount of the below-described outstanding bonds (the "Bonds") are hereby called for optional redemption on September 1, 2021 (the "Redemption Date") at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the Redemption Date. All of the Bonds Outstanding under the Indenture are hereby called for redemption on the Redemption Date. The stated CUSIP numbers, interest rates, maturity dates and principal amounts of the Bonds to be redeemed are as follows: Rate Maturity CUSIP3 Principal Date Amount n 7.100% 9/l/2020* 386485 BW 5 $2,660,000 7.700 9/1/2026* 386485 BX 3 2,990,000 *Term-Bond The Bonds called for redemption will be redeemed at the principal payment office of U.S.Bank National Association, as Trustee and paying agent, upon surrender of such Bonds on or after the Redemption Date, and interest shall cease to accrue on and after the Redemption Date. Presentation and delivery address for first class mail, by registered mail, express mail, or delivered in person: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, California 90071 Attention: Global Corporate Trust Department . The method of presentation and delivery of a Bond is at the option and risk of the holder of each Bond. If mail is used, insured registered mail,return receipt requested is suggested. The Trustee may be obligated to withhold a percentage of the redemption price from any bondowner who fails to furnish the Trustee with a valid taxpayer identification,number or a certification that such bondowner is not subject to backup withholding.bondowners who wish to avoid s The Successor Agency and the Trustee shall not be responsible for the use of the CUSIP number(s)selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for the convenience of the owners of the Bonds. C-1 the application of these provisions,should submit a completed IRS Form W-9 when presenting their _ Bonds. Date: , 2021 By: U.S. BANK NATIONAL ASSOCIATION, as Trustee [Other Provisions Requested by Trustee] 2 EXHIBIT F NOTICE OF DEFEASANCE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE COMMUNITY REDEVELOPMENT PROJECT AREA, TAXABLE TAX ALLOCATION BONDS,ISSUE OF 2011B (TAXABLE) Redemption Date on September 1,2021, at 100% Rate Maturity CUSIP4 Principal Date Amount 7.100% 9/1/2020* 386485 BW 5 $2,660,000 7.700 .9/1/2026* 386485 BX 3 2,990,000 *Term Bond NOTICE IS HEREBY GIVEN to the owners of the bonds described above(the"Bonds"),that pursuant to the Escrow Agreement(the"Agreement")entered into and dated as of July 1,2019,by and among the SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF GRAND TERRACE (the "Agency") and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America having a corporate trust office in Los.Angeles, California, as escrow agent, 2011 Trustee, and Trustee (as those terms are defined in the Agreement) (collectively, the"Escrow Bank"), that: The Agency has deposited in an Escrow Fund with the Escrow Bank sufficient monies, as invested, to pay all of the principal of, and interest on the Bonds as the same shall become due and payable to and including September 1, 2021,the date of early redemption of the Bonds, all as set forth above. As a result of the deposit of said monies to the Escrow Fund, the Bonds are defeased as of 2019. The Escrow Bank has been instructed by the Agency to redeem the Bonds on September 1, 2021 at the Redemption price of 100%. Date: , 2019 By: U.S. BANK NATIONAL ASSOCIATION, as Escrow Bank THIS IS NOT A NOTICE OF REDEMPTION a The Agency and the Escrow Bank shall not be responsible for the use of the CUSIP number(s)selected, nor is any representation made as to their correctness indicated in the notice or asprinted on any Bond. They are included solely for the convenience of the owners of the Bonds. 09999.0009/512589.6 EXHIBIT H = DOF LETTER 09999.0009/512589.6 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO ) CITY OF GRAND TERRACE ) I Debra L. Thomas, City Clerk of the CITY OF GRAND TERRACE, CALIFORNIA, DO HEREBY CERTIFY that the foregoing Resolution, being Resolution No. SA 2019-01 was duly passed, approved and adopted by-the Successor Agency to the Community Redevelopment Agency. of the City of Grand Terrace, approved and signed by the Chair, and attested by the Agency Secretary, at the regular meeting of said Successor Agency to the Community Redevelopment Agency of the City of Grand Terrace held on the.28th day of May 2019, and that the same was passed and adopted by the following vote: AYES: Board Members Allen, Hussey, Robles; Vice-Chair Wilson; Chair McNaboe NOES: None. ABSENT: None. ABSTAIN: None. Executed this 29th day of May 2019, at Grand Terrace, California. Debra L. Thomas = City Clerk [SEAL] a