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HomeMy WebLinkAbout11/19/2002Tuesday, November 19, 2002 4:30 p.m. - Study Session - Room CC -8 6:00 p.m. - "Meet and Greet" with Senator Margett - Room CC -8 6:30 p.m. - Regular Meeting - Main Auditorium Redevelopment Agency Meeting Public Financing Agency Meeting Closed Session South Coast Air Quality Management District/Government Center 21865 East Copley Drive Diamond Bar, CA 91765 Mayor Wen P. Chang Mayor Pro Tem Debby O'Connor Council Member Carol Herrera Council Member Bob Huff Council Member Bob Zirbes City Manager Linda C. Lowry City Attorney Michael Jenkins City Clerk Lynda Burgess Copies of staff reports or other written documentation relating to agenda items are on file in the Office of the City Clerk, and are available for public inspection. if you have questions regarding an agenda item, please contact the City Clerk at (909) 860-2489 during regular business hours. In an effort to comply with the requirements of Title II of the Americans with Disabilities Act of 1990, the City of Diamond Bar requires that any person in need of any type of special equipment, assistance or accommodation(s) in order to communicate at a City public meeting, must inform the City Clerk a minimum of 72 hours prior to the scheduled meeting. Please refrain from smoking, eating or drinking in the Council Chambers. The City of Diamond Bar uses recycled paper and encourages you to do the same. DIAMOND BAR CITY COUNCIL RULES (ALSO APPLIES TO COMIISSION AND CON UTTEE M MTING5) PUBLIC INPUT The meetings ofthe Diamond Bar City Council are open to the public. A member ofthe public may address the Council on the subject of one or more agenda items and/or other gem of interest which are within the subject matter jurisdiction ofthe Diamond Bar City Council. A request to address the Council should he submitted is person to the City Cleric. As a general rule the opporhrnity for public comments will take place at the discretion ofthe Chair. However, in order to facilitate the meeting. persons who am interested parties for an item may be requested to give their presentation at the time the item is called on the calendar. The Chair may limit the public input ea any item or the total amount oftitne allocated for public testimony hawed on the number of people requesting to speak and the business ofthe Council Individuals are requested to refrain from personal attacks towards Council Members or other citizens. Cartnnenta which are not conducive to a positive business meeting eavirwmrent are viewed as attacks against the entire City Council and will not be tolerate& Your cooperation is greatly appreciated. In accordance with Govertttnent Code Section 54954.3(a) the Chair tray ftom time to time dispense with public oomment on items previously considered by the CounW. (Does not apply to Committee meetings.) In accordance with State Law (Brown Acts all matters to be acted on by the City Council ttatst be posted at least 72 hours prior to the Council meeting. fn case of emergency, or when a subject trotter arum subsequent to the posting of the agenda, upon making certain findings the Council may act on an item that is not on the posted agenda CONDUCT IN THE CITY COUNCIL CHAMBERS The Chair shall order removed from the Council Chambers any person who eorrunits the following acts in respect to a regular or special meeting ofthe Diamond Bar City Council- A- Disorderly behavior toward the Council or any member ofthe sta8"thereof tending to interrupt the due and orderly course of said meeting_ B. A breach ofthe peace, boisterous conduct or violent disturbance, tending to interrupt the due and orderly course of said meeting. C. Disobedience of any lawful order ofthe Chair, which shall include an order to be seated or to refrain from addressing the Board; and D Any other unlawful interference with the due and orderly conduct ofsaid meeting. INFORMATION RELATING TO AGENDAS AND ACTIONS OF THE COUNCIL Agendas for the regular Diamond Bar City Council meetings are prepared by the City Cleric and are available 72 hours prior to the meeting. Agendas are available electronically and may he aoeeased by a personal computer through a phone modem - Every meeting ofthe City Council is recorded on cassette taper and duplicate apes are available for a nominal charge. ADA REQUIREMENTS A cordless microphone is available for these persons with mobility impairments who cannot access the public speaking area. Sign language interpreter services are also available by giving notice at least three business days in advance ofthe meeting. Please telephone (909) 860-2489 between 8 am. and 5 p.m. Monday through Friday. HELPFUL PHONE NUMBERS Copies of Agenda, Rules ofthe Council, Cassette Tapes. of Meetings (909) 860-2489 Computer Access to Agendas (909) 860 -LINE General Information (909) 860-2489 NOTE: ACTION MAY BE TARN ON ANY ITEM IDENTIFIED ON THE AGENDA. THIS MEETING IS BEING BROADCAST LIVE BY ADELPHIA FOR AIRING ON CHANNEL 17, AND BY REMAINING IN THE ROOM, YOU ARE GIVING YOUR PERMISSION TO BE TELEVISED. THIS MEETING WILL BE RE -BROADCAST EVERY SATURDAY AT 9:00 A.M. AND EVERY TUESDAY AT 6:30 P.M. ON CHANNEL 17. CITY OF DIAMOND BAR CITY COUNCIL AGENDA November 19, 2002 STUDY SESSION: 4:30 p.m., AQMDIGovernment Center Room CC -8 ► 4.30 p.m. - Lease Revenue Bond Presentation and Review of Documents ► 5:00 p.m. - Library Bond Discussion ► 6:00 P.M. - "Meet and Greet" with Senator Margett CALL TO ORDER: 6:30 p.m. PLEDGE OF ALLEGIANCE: Boy Scout Troop 777 INVOCATION: Tony Nguyen, Diamond Canyon Christian Center ROLL CALL: Council Members Herrera, Huff, Zirbes, Mayor Pro Tem O'Connor, Mayor Chang APPROVAL OF AGENDA: Mayor 1. SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS: 1.1 Presentation of Certificates of Appreciation to Volunteer Patrol members Bill Chisholm, Jim Degnan, Machiko Tanaka and Bob Reppenhagen for 500 hr. of service. 1.2. Presentations by Nikki Burley, representing Supervisor Don Knabe; by the City of Diamond Bar and by the Friends of the Library to "Read Together Diamond Bar" Essay Contest Winners: Kimberlee Earnheart, Benjamin Berk, Jocelyn Hu, Philip Catbagan, Erika Estrada, Monica Godinez, Edgar Saray, Brian Sandoval, Christine Tran and Jack Wong, 1.3 Presentation of Certificates to Winners of the City's Annual Trash Cutter Awards to SEMA, the Automobile Club of Southern California and the Walnut Creek Mobile Home Park in recognition of their efforts in recycling and waste prevention. 1.4 Presentation by the Diamond Bar Chinese Association of Funds Collected for Purchase of Commemorative Tiles from the Diamond Bar Community Foundation. BUSINESS OF THE MONTH: 1.5 Presentation of City Tile to Craig Ammon, DDS, as Business of the Month, November 19, 2002 PAGE 2 November 2002 and display of Business of the Month video. 2. CITY MANAGER REPORTS AND RECOMMENDATIONS: 3. PUBLIC COMMENTS: "Public Comments" is the time reserved on each regular meeting agenda to provide an opportunity for members of the public to directly address the Council on Consent Calendar items or matters of interest to the public that are not already scheduled for consideration on this agenda. Although the City Council values your comments, pursuant to the Brown Act, the Council generally cannot take any action on items not listed on the posted agenda. Please complete a Speaker's Card and give it to the, City Clerk (completion of this form is voluntary). There is a five-minute maximum time limit when addressing the City Council. 4. RESPONSE TO PUBLIC COMMENT: Under the Brown Act, members of the City Council may briefly respond to public comments but no extended discussion and no action on such matters may take place. 5. SCHEDULE OF FUTURE EVENTS: 5.1 COMMUNITY FOUNDATION MEETING — November 21, 2002 -- 7:00 p.m., AQMD/Government Center, Room CC -3 & 5, 21865 E. Copley Dr. 5.2 PARKS AND RECREATION COMMISSION MEETING — November 21, 2002 — 7:00 p.m., AQMDIGovernment Center Board Hearing Room, 21865 E. Copley Dr. 5.3 PLANNING COMMISSION MEETING — November 26, 2002 — 7:00 p.m., AQMDIGovernment Center, 21865 E. Copley Dr. 5.4 THANKSGIVING HOLIDAY — City Offices will be closed in observance the Thanksgiving Holiday, Thursday November 28 and Friday, November 29, 2002. City Offices will reopen on Monday, December 2, 2002. 5.5 CITY COUNCIL MEETING — December 3, 2002 — 6:30 p.m., AQMDIGovernment Center Auditorium, 21865 E. Copley Dr, 6. CONSENT CALENDAR: 6.1 CITY COUNCIL MINUTES: 6.1.1 Regular Meeting of October 15, 2002 - Amend minutes previously approved on November 5, 2002. 6.1.2 Study Session of November 5, 2002 - Approve as submitted. 6.1.3 Regular Meeting of November 5, 2002 — Approve as submitted. Requested by: City Clerk November 19, 2002 PAGE 3 6.2 PLANNING COMMISSION MINUTES: 6.2.1 Study Session of October 8, 2002 - Receive and file. 6.2.2 Regular Meeting of October 8, 2002 — Receive and file. Requested by: Planning Division 6.3 TRAFFIC AND TRANSPORTATION COMMISSION MINUTES — September 12, 2002 - Receive and file. Requested by: Public Works Division 6.4 WARRANT REGISTERS - Approve Warrant Registers dated November 7, 2002 and November 14, 2002, totaling $758,072.68. Requested by: Finance Division 6.5 REJECTION OF CLAIM - Filed by Michael and Kyung Chung October 23, 2002. Recommended Action: Approve rejection of the Claim for Damages. Requested by: City Clerk 6.6 APPROVE AMENDMENT TO CONTRACT WITH GONZALEZ/GOODALE ARCHITECTS FOR DESIGN SERVICES RELATED TO THE PROPOSED LIBRARY BOND ACT APPLICATION ($35,000) AND APPROPRIATE $17,000 FROM GENERAL FUND RESERVES, Recommended Action: Approve amendment. Requested by: City Manager 6.7 APPROVE AWARD OF CONTRACT TO DAVID EVANS & ASSOCIATES, INC. FOR DESIGN OF ADA IMPROVEMENTS AT STARSHINE PARK IN THE AMOUNT OF $13,470. Recommended Action: Award contract. Requested by: Community Services Division 6.8 APPROVE AMENDMENT #3 TO CONTRACT WITH DAVID EVANS AND ASSOCIATES FOR AS -NEEDED LANDSCAPE ARCHITECT SERVICES IN THE AMOUNT OF $48,100 FOR IMPROVEMENTS AT THREE LOCATIONS AND APPROPRIATE $18,000 FROM GENERAL FUND RESERVES. Recommended Action: Approve amendment. November 19, 2002 PAGE 4 Requested by: Community Services Division 6.9 AUTHORIZE EXCEEDING THE CITY. MANAGER'S PURCHASING AUTHORITY TO PURCHASE NETWORK SERVERS FROM DELL COMPUTER CORPORATION IN AN AMOUNT NOT -TO -EXCEED $25,000. Recommended Action: Authorize. Requested by: City Manager 6.10 AUTHORIZE VERIZON TO UPGRADE THE CITY'S PHONE SYSTEM AND APPROPRIATE NECESSARY FUNDS FROM GENERAL FUND RESERVES ($16,000). Recommended Action: Authorize. Requested by: City Manager 7. PUBLIC HEARINGS: 7:00 p.m., or as soon thereafter as matters may be heard. 7.1 PUBLIC HEARING - ADOPT RESOLUTION NO. 2002-77 APPROVING: a) THE JOINT EXERCISE OF POWERS AGREEMENT CREATING THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; b) SITE LEASE BY AND BETWEEN THE CITY OF DIAMOND BAR AND CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; c) LEASE AGREEMENT BY AND BETWEEN THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND THE CITY OF DIAMOND BAR; d) BOND PURCHASE AGREEMENT, CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY SENIOR CENTER PROJECT) e) AUTHORIZING NEGOTIATION AND EXECUTION OF A REIMBURSEMENT AGREEMENT AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. Recommended Action: Open the Public Hearing, take testimony, close the Public Hearing and adopt Resolution, approve all associated documents and authorize the appropriate parties to execute the documents on behalf of the City. Requested by: City Manager RECESS TO REDEVELOPMENT AGENCY November 19, 2002 PAGE 5 1 � C 1 T r o r DIWONDRAR REDEVELOPMENT AGENCY REGULAR MEETING NOVEMBER 19, 2002 1. CALL TO ORDER: Chairman ROLL CALL: Agency Members Chang, Herrera, Huff, VC/Zirbes, C/O'Connor 2. PUBLIC COMMENTS: "Public Comments" is the time reserved on each regular meeting agenda to provide an opportunity for members of the public to directly address the Agency on Consent Calendar items or matters of interest to the public that are not already scheduled for consideration on this agenda. Although the Redevelopment Agency values your comments, pursuant to the Brown Act, the Agency generally cannot take any action on items not listed on the posted agenda. Please complete a Seeaker's Card and give it to the Agency Secretary (completion of this form is voluntary). There is a five-minute maximum time limit when addressing the Redevelopment Agency. 3. CONSENT CALENDAR: 3.1 APPROVAL OF MINUTES — Annual Meeting of April 2, 2002 -- Approve as submitted. Requested by: Agency Secretary 3.2 TREASURER'S STATEMENT - Submitted for review and approval is the Treasurer's Statement dated October 31, 2002. Requested by: Finance Division 4. PUBLIC HEARINGS: None 5. AGENCY CONSIDERATION: 5.1 ADOPT RESOLUTION NO. RA2002-01 APPROVING JOINT EXERCISE OF POWERS AGREEMENT CREATING THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. Recommended Action: Adopt Resolution, approve all associated documents and authorize the appropriate parties to execute the documents on behalf of the Agency. November 19, 2002 PAGE 6 Requested by: Executive Director 6. AGENCY MEMBER COMMENTS: Items raised by individual Agency Members are for Agency discussion. Direction may be given at this meeting or the item may be scheduled for action at a future meeting. RECESS TO DIAMOND BAR PUBLIC FINANCING AUTHORITY November 19, 2002 PAGE 7 e,A\ DIAMOND BAR PUBLIC FINANCING AUTHORITY REGULAR MEETING NOVEMBER 19, 2002 (Should the Diamond Bar City Council and/or the Diamond Bar Redevelopment Agency fail to approve the Joint Exercise of Powers Agreement Creating the Public Financing Authority, this meeting will not be held) CALL TO ORDER: Chairman ROLL CALL: Agency Members Herrera, Huff, Zirbes, VC/O'Connor, C/Chang. 2. PUBLIC COMMENTS: "Public Comments" is the time reserved on each regular meeting agenda to provide an opportunity for members of the public to directly address the Authority on Consent Calendar items or matters of interest to the public that are not already scheduled for consideration on this agenda. Although the Public Financing Authority values your comments, pursuant to the Brown Act, the Authority generally cannot take any action on items not listed on the posted agenda. Please complete a Speaker's Card and dive it to the Authority Secretary (completion of this form is voluntarv). There is a five-minute maximum time limit when addressing the Public Financing_Authority. 3. PUBLIC HEARINGS: None 4. AUTHORITY BOARD CONSIDERATION: 4.1 ADOPT RESOLUTION NO. PFA2002-01 APPROVING: a) JOINT EXERCISE OF POWERS AGREEMENT CREATING THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; b) BYLAWS OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; c) INDENTURE AGREEMENT; d) SITE LEASE BY AND BETWEEN THE CITY OF DIAMOND BAR AND THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT); e) LEASE AGREEMENT BY AND BETWEEN THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND THE CITY OF DIAMOND BAR RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER November 19, 2002 PAGE 8 PROJECT); f) ASSIGNMENT AGREEMENT; g) REMARKETING AGREEMENT; h) BOND PURCHASE AGREEMENT; i) PRELIMINARY OFFICIAL STATEMENT. j) AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH. Recommended Action: Adopt Resolution, approve all associated documents and authorize the appropriate parties to execute the documents on behalf of the Authority. Requested by: Executive Director 5. AUTHORITY MEMBER COMMENTS: Items raised by individual Authority Members are for Authority discussion. Direction may be given at this meeting or the item may be scheduled for action at a future meeting. ADJOURN PUBLIC FINANCING AUTHORITY MEETING: November 19, 2002 PAGE 9 CONVENE CLOSED SESSION: ► Conference with Legal Counsel - Existing Litigation - Government Code Section 54956.9(a): Los Angeles County Superior Court, Case No. BS079642, City of Diamond Bar, et al v. Mountains Recreation Conservation Authority. (Based on advice from the City Attorney, the City Council determines that receipt of advice from legal counsel regarding this matter of pending litigation in open session wouid prejudice the position of the City in the litigation.) RECONVENE CITY COUNCIL MEETING: 8. COUNCIL SUB -COMMITTEE REPORTS/ COUNCIL MEMBER COMMENTS: 9. ADJOURNMENT: RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; APPROVING A SITE LEASE, A LEASE AGREEMENT AND A BOND PURCHASE AGREEMENT; AUTHORIZING THE NEGOTIATION AND EXECUTION OF A REIMBURSEMENT AGREEMENT; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City") and the Redevelopment Agency of the City of Diamond Bar (the "Agency") desires to enter into a Joint Exercise of Powers Agreement establishing the City of Diamond Bar Public Financing Authority (the "Authority") for the purpose, among other things, of issuing its bonds to be used to provide financing and refinancing for public capital improvements of the City and the Agency; and WHEREAS, upon its creation, the Authority will authorize the issuance of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of a community/senior center project (the "Project") and other public capital improvements within the City; WHEREAS, the City will lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to a Site Lease (the "Site Lease"); and WHEREAS, the Authority, concurrently with the execution of the Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the City pursuant to a Lease Agreement (the "Lease"), in consideration for base rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), 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; and WHEREAS, the City has heretofore held a public hearing pursuant to Section 6586.5 of the Act; and WHEREAS, the City Council has reviewed the documentation related to the issuance of the Bonds which documentation is on file with the City Clerk of the City of Diamond Bar; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF DIAMOND BAR, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The City hereby finds and determines that the foregoing recitals are true and correct. Section 2. The City hereby approves the creation of the Authority, its membership therein and the Joint Powers Agreement related thereto, substantially in the form on file with the City Clerk and presented to the City Council at this meeting. Any one of the Mayor, the City 45248999_3.DOC Manager or the City Clerk of the City, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Joint Powers Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 3. The City hereby finds and determines that (i) the Project is to be located within the boundaries of the City and (ii) there are significant public benefits arising from the Authority's issuance of the Bonds to finance the Project, including but not limited to employment benefits from undertaking the acquisition and construction of the Project in a timely fashion, as contemplated by Section 6586 of the Act. Section 4. The Site Lease, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Site Lease, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 5. The Lease Agreement, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Lease Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 6, The Bond Purchase Agreement, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. The initial interest rate shall not exceed 2.5% and the underwriter's discount for the Bonds specified in the Bond Purchase Agreement shall not exceed 1.0%, exclusive of original issue discount. Section 7. The City Manager is hereby authorized and directed to select a letter of credit bank and, if applicable, a confirming letter of credit bank (collectively, the "Bank"), and negotiate the terms of a Reimbursement Agreement, to be prepared and entered into by and between the City and the Bank, pursuant to which the Bank will issue its irrevocable direct pay letter of credit with respect to the Bonds. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Reimbursement Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. 45248999 3.DOC 2 Section 8. The Authorized Officers, the other officers and employees of the City, the members of the City Council, Bond Counsel and the other consultants to and agents of the City, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions, including, without limitation, closing documents in connection with the issuance of the Bonds are hereby ratified, approved and confirmed in every respect. Section 9. This Resolution shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED this 19th day of November, 2002. Wen Chang, Mayor 1, TOMMYE CRIBBINS, Assistant City Clerk of the City of Diamond Bar, California do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of Diamond Bar, California at its regular meeting held on the 19th day of November, 2002, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAINED: COUNCIL MEMBERS: Tommye Cribbins, Assistant City Clerk City of Diamond Bar 45248999_3.DOC 3 RESOLUTION NO. RESOLUTION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY APPROVING AND ADOPTING ITS BYLAWS; APPROVING THE ISSUANCE OF ITS VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $15,000,000, AND APPROVING AN INDENTURE, A SITE LEASE, A LEASE AGREEMENT, AN ASSIGNMENT AGREEMENT, A BOND PURCHASE AGREEMENT AND A REMARKETING AGREEMENT IN CONNECTION THEREWITH; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City") and the Redevelopment Agency of the City of Diamond Bar (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the City of Diamond Bar Public Financing Authority (the "Authority") for the purpose, among other things, of issuing its bonds to be used to provide financing and refinancing for public capital improvements of City and the Agency; and WHEREAS, the Authority wishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of a community/senior center project (the "Project") and other public capital improvements within the City; WHEREAS, the City will lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to a Site Lease (the "Site Lease"); and WHEREAS, the Authority, concurrently with the execution of the Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the City pursuant to a Lease Agreement (the "Lease"), in consideration for base rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), constituting Article 4 (commencing with Section 6584 of Chapter 5 of Division 7 of Title I of the Government Code of the State of California; and WHEREAS, the Authority has reviewed the documentation related to the issuance of the Bonds which documentation is on file with the secretary of the Authority; NOW THEREFORE, THE BOARD OF DIRECTORS OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section I. The Authority hereby finds and determines that the foregoing recitals are true and correct. Section 2. The Authority hereby finds and determines that the issuance of the Bonds will result in significant public benefits within the contemplation of Section 6586 of the Act. 45248970_4. DDC Section 3. The Authority hereby approves the issuance of the Bonds in an aggregate principal amount not to exceed $15,000,000. Section 4. The Bylaws, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, are hereby approved and adopted. Section 5. Pursuant to the Joint Exercise of Powers Agreement, the Conflict of Interest Code of the City, on file with the Secretary of the Authority and incorporated by reference as if fully set forth herein, is hereby adopted as the Conflict of Interest Code of the Authority. Section 6. The Statement of Investment Policy of the City, on file with the Secretary of the Authority and incorporated by reference as if fully set forth herein, is hereby adopted as the Investment Policy of the Authority. Section 7. The Indenture, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Chairperson, the Executive Director, the Treasurer or the Secretary of the Authority, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 8. The Site Lease, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Site Lease, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 9. The Lease Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 10. The Assignment Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 11. The Remarketing Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on 45248970 4.DOC 2 behalf of the Authority, to execute and deliver the Remarketing Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 12. The Bond Purchase Agreement relating to the Bonds (the "Bond Purchase Agreement"), by and between the Authority and the Underwriter in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Agreement with such insertions and changes and as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. The initial interest rate shall not exceed 2.5% and the underwriter's discount for the Bonds specified in the Bond Purchase Agreement shall not exceed 1.0%, exclusive of original issue discount. Section 13. The Authorized Officers, the other officers and employees of the Authority, the members of the Authority's Board of Directors, Bond Counsel and the other consultants to and agents of the Authority, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions, including, without limitation, closing documents in connection with the issuance of the Bonds are hereby ratified, approved and confirmed in every respect. 45248970_4.DOC Section 14. This Resolution shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED this 19th day of November, 2002. Wen Chang, Chairperson I, TOMMYE CRIBBINS, Assistant Secretary of the City of Diamond Bar Public Financing Authority do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Board of Directors of the City of Diamond Bar Public Financing Authority at its regular meeting held on the 19th day of November, 2002, by the following vote: AYES: AUTHORITY MEMBERS: NOES: AUTHORITY MEMBERS: ABSENT: AUTHORITY MEMBERS: ABSTAINED: AUTHORITY MEMBERS: Tommye Cribbins, Assistant Secretary City of Diamond Bar Public Financing Authority 45248470_4.DOC 4 RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City") and the Redevelopment Agency of the City of Diamond Bar (the "Agency") desires to enter into a Joint Exercise of Powers Agreement establishing the City of Diamond Bar Public Financing Authority (the "Authority") for the purpose, among other things, of issuing its bonds to be used to provide financing and refinancing for public capital improvements of the City and the Agency; and WHEREAS, the Agency finds and declares that entering into the Joint Exercise of Powers Agreement will be beneficial to persons residing within the jurisdiction of the Agency; and WHEREAS, the Agency has reviewed the Joint Exercise of Powers Agreement and the Agency wishes to approve the Joint Exercise of Powers Agreement and matters related thereto; NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The Agency hereby approves the creation of the Authority, its membership therein and the Joint Exercise of Powers Agreement related thereto, substantially in the form on file with the Secretary of the Agency and presented to the Agency at this meeting. Any one of the Chairperson, the Executive Director or the Secretary of the Agency, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver the Joint Exercise of Powers Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 2. The Authorized Officers, the other officers and employees of the Agency, the members of the Agency, Bond Counsel and the other consultants to and agents of the Agency, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions. Section 3. This Resolution shall become effective immediately upon adoption. 45249044_2.DOC PASSED, APPROVED AND ADOPTED this 19th day of November, 2002. Deborah H. O'Connor, Chairperson 1, TOMMYE CRIBBINS, Assistant Secretary of the Redevelopment Agency of the City of Diamond Bar, California do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Governing Board of the Redevelopment Agency of the City of Diamond Bar, California at its regular meeting held on the 19th day of November, 2002, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: ABSTAINED: BOARD MEMBERS: Tommye Cribbins, Assistant Secretary Redevelopment Agency of the City of Diamond Bar 45249044 2.DOC 2 Wen P. Chang Mayor Deborah H. O'Connor Mayor Pro Tem Carol Herrera Council Member Robert S. Huff Council Member Robert P. Zirbes Council Member R1�11ed p.per November 7, 2002 City of Diamond Bar 21825 E. Copley Drive • Diamond Bar, CA 91765-4178 Craig M. Ammon, DDS 23525 Golden Springs Drive Diamond Bar, CA 91765 Dear Dr. Ammon: (909) 860-2489 • Fax (909) 861-3117 www.CityofDiamondBar.com On behalf of the Diamond Bar City Council, I would like to take this opportunity to express our appreciation to you for your support and contribution to the economic strength of the City of Diamond Bar. The City Council would like to formally recognize Craig M. Ammon, D.D.S., Inc., as Business of the Month -November 2002, at its meeting on Tuesday, November 19. The meeting is held at 6:30p, at the Government Center/Air Quality Management District (AQMD) Auditorium, 21865 E. Copley Drive, Diamond Bar. Also, if it hasn't already been arranged, the City's videographer will be contacting you to prepare a video snippet of your business. The video would be aired at the meeting and on the City's local station, DB17, during the month of November. Please contact my secretary, Ms. Nancy Whitehouse, 9091396-5666, to confirm your availability and attendance. I look forward to seeing you November 19. Sincerely, Wen P. Chang Mayor WPC:nbw c: City Council City Clerk CC � Agenda # Study Session Meeting Date: November 9 2002 CITY COUNCIL AGENDA REPORT TO: Honorable Mayor and Members of the City Council VIA: Linda C. Lowry, City Manage TITLE: Discussion of Library Bond Act Issues Recommendation: It is recommended that the City Council discuss the issues associated with the submission of a Library Bond Act application and direct staff as appropriate. Budget Implication: Operating Costs The existing Diamond Bar Public Library is approximately 9,800 sq. ft. and is owned and operated by the County of Los Angeles. According to the County, the annual cost to operate the library is approximately $1 million. Each year, Diamond Bar residents pay the LA County Library Service District approximately $1 million for library services. The City has the option of withdrawing from the County Library System and receiving the existing $1 million in assessments to provide library services to residents. Bond Act Application The City has budgeted $135,000 for work associated with a Library Bond Act application. In addition there is an item on tonight's agenda requesting a further appropriation of $17,000. If approved tonight, the City will have budgeted $152,000 in the current fiscal year to complete the Library Bond Act application. Along with these contracted costs, the completion of the Library Bond Act will require significant staff resources. To date, the library consultant has provided approximately $30,000 worth of services. Background: The City has pursued the construction of a new library for several years. Since the passage of the California Library Bond Act, the City has been working to submit an application to provide funding for the construction of the facility. The Bond Act application requires the City to identify the entity that will operate the facility. The entity may either be the County of Los Angeles, the current provider of library services in Diamond Bar, the City or an independent contractor. The City has moved through the application process under the assumption the County of Los Angeles would continue to operate the facility. Under this scenario, the County will have to be a signatory to the Bond Act application and the City will have to enter into a formal operating agreement with the County. In order to enter into this agreement, there must be an understanding of the operating costs of the new facility. The operating costs can vary widely based on hours of operation types of programs and services provided, and size and physical layout of the facility. Last year the City and the County engaged in a general discussion about the proposed new library to develop very preliminary operating cost estimates. The estimated cost for operating the new facility, according to the County of Los Angeles, is $2 million. The City would be responsible for paying the $1 million difference between what residents currently pay and the new operating costs to operate the new facility. The City cannot fund the additional $1 million from its General Fund operating budget. A new revenue stream must be created to support this expense. To understand the community's willingness to financially support a new library, the City administered a scientifically valid survey. The results of the survey were presented at the last City Council meeting. DISCUSSION SURVEY FINDINGS The results of the survey showed that there is a perceived need for a new larger library. The survey also showed that 50% of the voters would support an annual assessment of $70 per parcel to fund the operations of a new library. Unfortunately lowering the cost of the annual payment to $30 doesn't generate much additional support (54%). These are people that indicated they would definitely or probably vote yes in the election. There is an additional percentage of voters that indicated they would "lean" towards voting Yes (3%-11 %). While these results could be interpreted as positive, the real issue is that the measure would require a 2/3 majority to pass. Our survey indicated that 21 % to 31 % of the voters would vote no on the measure regardless of the benefits of the facility or the cost of the annual assessment. According to the surrey company, this would make it difficult but not impossible to pass a measure by a 2/3 vote. If certain demographic groups which the survey shows are much more likely to support the measure, vote in large numbers, the measure would be more likely to pass. The key question for the Council is: "Is Council willing to place the measure on an upcoming ballot either March 2002 or November 2003 election?" The City Clerk has provided the attached information about the next three elections March 5, 2002, June 4, 2002 and November 5, 2002. The City would need to approve a resolution placing the measure on the ballot before the date of "LAST DAY TO CALL ELECTION FOR BALLOT MEASURES' as shown on the attached information. If the Council does not want to place the measure on the ballot at any time, then we should concentrate on methods to reduce operating costs to stay within the current operating budget. It should be noted that options for reducing operating costs to within the current operating budget, may impact how competitive the City's Bond Act application would be. In other words, one option to reduce operating costs is to reduce the size of the facility. However, the Bond Act requires the City to propose a library building that will meet the needs of the estimated population in the year 2020. It is unlikely that a library smaller than the 21,000 sq. ft. facility currently proposed would meet this criteria In a recent meeting with LA County Library staff (see attached memo), we discussed options to operate a new 21,000 sq. ft. library with the existing staff to maintain current operating costs for staffing and administration. However, the discussions were very exploratory and no definitive options were provided. The County is going to prepare a proposal on the programs, services, hours, staffing, etc. that can be accomplished within the current revenue stream. However, regardless of these items, there will be cost increases for such items as utilities and materials regardless of the other operating cost issues. OPERATING COSTS As previously mentioned, Diamond Bar residents currently provide approximately $1 million to the County for library services. According to the County, it costs slightly more than the residents currently contribute to operate the existing facility. The new 21,000 sq. ft. facility would cost an additional million dollars to operate or a total of $2 million according to the County. However, as stated earlier this number is a rough estimate and the County is willing to negotiate with the City to finalize the actual operating costs based on several factors outlined below. Operating costs are driven by a number of factors including staffing levels, circulation, hours of operations, size of facility, the extent of self service check out and other self service equipment. The City of Duarte is currently developing a Library Bond Act application to build a 17,000 sq. ft. library. The County has provided Duarte with an estimated operating cost of $1,021,000. Based on this operating cost, it would seem that there is an opportunity to negotiate the proposed library's operating costs lower than the original $2 million estimate. Unfortunately, the City would have to spend the money identified in the existing contract with Dubberly Garcia Associates to develop the library service program and building program. The City would have to spend additional money to have the architect develop the floor plan. The items would need to be developed before we could negotiate operating costs. OTHER CITY COSTS The Bond Act will pay up to 65% of the total allowable project cost and requires the local agency to contribute the remaining 35%. Allowable project costs include architect and engineering fees, site preparation costs, construction of the facility and satellite structures to support the facility such as parking, reimbursement of library consultant fees. The Bond Act does not provide funding for any furniture, fixtures or equipment such as computers within the building or costs associated with the collection. If a new library of 21,000 sq. ft. is constructed, the current collection of 105,000 items will need to be increased to 146,250 items, per County standards, at a cost of $1.5 million. The development of the collection may be phased in over 2-3 years but clearly some additional materials will be desired when the new library opens. If the City elects to utilize another library services provider, the City would be required to fund an entirely new collection at approximately $20 per book or approximately $3 million. The purchase of the new collection or expansion of existing collection is not eligible to be funded by the Bond Act. The local agency is responsible for these costs. 3 APPLICATION PROCESS The Bond Act has three funding cycle deadlines, one of which has already passed (June 6, 2002). There are two remaining deadlines to submit an application for funding, March 2003 and January 2004. The City's ability to submit an application by the March 2003 deadline is, in part, dependent upon which entity will be operating the facility. LA COUNTY OPERATES OPTION — MARCH 2003 DEADLINE If the County is going to operate the library, the County requires the City to have the application information completed and submitted to them by December 15th. In order to have a competitive application, the City will need to develop a joint partnership with the local school districts. This joint partnership will require a formal agreement, approved by the school board of each school district, to be included in the application packet due on December 15th. It would seem highly unlikely that this could be accomplished in the next 6 weeks. See attached memo from Dubberly Garcia Associates. It should be noted that in a meeting with County staff early this month, County staff indicated that they are currently working on four bond act applications for the March 2003 deadline (East San Gabriel Valley Library and Lawndale — both County projects and West Hollywood and Duarte — both City projects which require County approval). The City would be the first in line for County services for a January 2004 application or third in line for service for a March 2003 deadline. CITY OPERATED — MARCH 2003 DEADLINE The City could apply for Bond Act funding without the County as long as the City agrees to operate the facility. The City could operate the facility with City staff or a private contractor. If the City and the School Districts can formalize an agreement regarding the joint partnership and the agreement is approved by one or more of the Districts, the City could reasonable expect to complete an application prior to the March 2003 deadline. There was a request to analyze if there would be any cost savings by operating the library with City staff. In response to this request, we contacted a number of different City libraries to determine their operating costs. The attached spread sheet provides the operational costs for the various City libraries. Of the libraries we contacted, the Upland City library is the closest match to the proposed library in terms of sq. footage and hour of operation. Their operating budget is $1.488 million. Of course the actual operating cost of any facility is based on more than sq. footage and hours of operation. The City's actual operating costs could be more or less based on the types of programs and services offered. JANUARY 2004 DEADLINE — ANY OPERATOR Provided the County cooperates in providing information to the City and is available to meet with City staff, the consultant and architect, and provided the School Districts are able to draft an agreement and have Board approval of the agreement, the City could reasonably expect to complete all the application requirements before the January deadline. 4 NEXT STEPS The City Council needs to answer the following questions in order to proceed with the Library Bond Act application: • Will the City place a measure on an upcoming ballot to develop a new revenue stream? • If so, which election? • If not, does the Council want to spend money to develop the building program and library service program so it can negotiate operating costs with the County? Development of the building program and library service program are services included in the current contract with Dubberly Garcia Associates. However, additional funds will need to be appropriated to the architect to develop the floor plan ($36,000). This item is placed on tonight's agenda for Council consideration. • Does the City want to continue to pursue Bond Act funding? PREPARED BY: Deputy City Manager Attachments: 1. Options for Proceeding with Library Construction 2. Memo, November 13th Regarding Meeting with LA County 3. Election Information 5 OPTION 1 Bond Act Funding City remains with LA County — 21,000 sq. ft. library NEXT STEPS • Continue development of the building program and service program (Gonzalez Goodale and Dubberly Garcia Associates) • Develop Joint Partnership with School District(s) (School District(s)/City'/County) • Negotiate Operating Agreement with LA County (City with input from Dubberly Garcia Associates/LA County) • Depending on cost to operate we may need to schedule for ballot measure — Placing a measure on the ballot will require Council to call the election item in accordance with the election deadlines but it will also require the creation of a VOTE YES committee and we will have to rely on Council and community members to promote the measure in the community. City staff will be limited to only providing information about the measure and can not actively support the measure. • Complete Bond Act application for either March 2003 deadline (unlikely based on County's deadline) or January 2004 deadline ISSUES/COSTS Spending money to complete bond act application including already appropriated amount of $117,000 for Dubberly Garcia and an additional $35,000 for Gonzalez Goodale. Other costs will be incurred as well for site appraisal, etc. as required by the Bond Act. City will be responsible for furnishing the facility including computers and increasing current collection (by approx 50,000 volumes) — total cost of $2 million - $2.5 million. County Deadline for application materials -- December 15th for March 2003 application deadline — This includes approval by one or both school districts of a joint partnership agreement and approved operating agreement with the County. OPTION 2 Bond Act Funding — 21,000 sq. ft. — City or Contractor Operated NEXT STEPS • Continue development of the building program and service program (Gonzalez Goodale and Dubberly Garcia Associates) • Develop Joint Partnership with School District(s) ATTACHMENT I- (School Districts)/City/County) • City develop staffing plan or Negotiate Operating Agreement with LSSI (City with input from Dubberly Garcia Associates/LSSI) May still require a ballot measure for increased operating costs — costs may not be as great as the initial estimate provided by County. Also, there are increased start up costs identified below. • Complete Bond Act application ISSUES/COSTS It is much more likely City would be able to complete the bond act application for the March 2003 deadline —although this is dependent upon school district approval of the joint partnership agreement. Increased start up costs — City would have to purchase 150,000 volumes for new collection at a cost of $3 million - $3.5 million plus cost to furnish the library ($1 million +/-) City has no experience or expertise running a library. OPTION 3 City Funded Library Construction — City or County Operated NEXT STEPS • No issue with meeting deadline for Bond Act funding. • No requirement to develop Bond Act application packet — however, planning for library should be conducted using library experts such as Dubberly Garcia • Develop Operating agreement with County and/or develop Request for Proposal for operating library. • Decide financing mechanism for construction and FFE's ISSUES/COST City would be responsible for 100% of all costs including all construction costs, furniture fixtures equipment and enhanced/expanded or new collection ($8 million - $9 million) OPTION 4 Status Quo Next Steps Terminate contract with Dubberly Garcia Associates Survey other options for site. ATTACHMENT 1 2 CITY OF DIAMOND BAR MEMORANDUM TO: Linda Lowry, City Manager FROM: Dave Doyle, Deputy City Manager DATE: November 13, 2002 SUBJECT: Results of November 12, 2002 Meeting with Library Consultant, LA County Library, PUSD and WVUSD Yesterday June Garcia and I met with Wendy Romano and Phyllis Young of the Los Angeles County Public Library system. The meeting began at 9 AM and lasted until 6:30 pm. We discussed a number of issues relative to the Bond Act application process, the conceptual design of the proposed library, operations costs and a proposed joint partnership with PUSD and WVUSD. The highlights of the meeting are as follows: Conceptual Design - The County liked the conceptual design of the new library, although the separation of the staff work area and circulation desk needs to be reviewed further by County staff. Operational Costs — The County indicated that the difference between the operational costs for the Duarte library (17,000 sq. ft. at approx $1 million) and the Diamond Bar library (9,800 sq. ft. at approx. $1 million) is due the volume of material circulated. Diamond Bar is 151h in circulation compared to all other libraries in the County and it is the smallest library with a circulation that high. The Diamond Bar library is open 50 hours per week and has a staff of 16 FTEs. The County is continuing to negotiate the operating cost of the proposed library in Duarte. According to County staff, the negotiations are intended to lower the operational costs for the new facility below the current $1 million estimate. We discussed the need for the County to lower our anticipated operating costs. The County is developing a proposal to operate the facility within current revenue levels. School Partnership — From 4:30 pm to 6:30 pm Nancy Hogg from Walnut Valley Unified School District and Constance Struve from Pomona Unified School District joined our meeting. We discussed the International Baccalaureate program at Castle Rock Elementary School and how it could be the foundation of our joint partnership. All parties agreed that the partnership should include more than just this one school but the goal of developing globally responsible citizens would be our foundation. Our library consultant will draft up the scope of the joint partnership efforts for consideration by both School Boards and the County. ATTACHMENT'L CONSOLIDATED GENERAL LAW CITIES GENERAL (OR SPECIAL) MUNICIPAL ELECTION TUESDAY, NOVEMBERS, 2002 LAWS IN EFFECT IN 2002 May 29 SUGGESTED LAST DAY TO FILE PETITIONS REGARDING MEASURE (E — 160) July 1 SUGGESTED LAST DAY FOR COUNCIL TO ADOPT RESOLUTIONS (E — 127) July 1 —July 15 PUBLISH NOTICE OF ELECTION (E — 127 to 113) July 8 LAST DAY TO ADOPT REGULATIONS FOR CANDIDATES STATEMENTS (E — 120) July 15 — August 9 FILING PERIOD FOR NOMINATION PAPERS AND CANDIDATE'S STATEMENTS (E — 113 to 88) July 19 SUGGESTED LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E — 109) LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENT — MEASURES PUBLISH NOTICE OF ELECTION — MEASURE, NO CANDIDATES July 19 POST NOTICE OF DEADLINE FOR FILING ARGUMENTS (E — 109) July 30 SUGGESTED LAST DAY TO FILE ARGUMENTS (E -- 98) July 31 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL August 9 LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E — 88) August 9 SUGGESTED LAST DAY TO FILE REBUTTAL ARGUMENTS (E — 88) August 9 LAST DAY TO FILE NOMINATION PAPERS (E — 88) August 14 LAST DAY TO FILE NOMINATION PAPERS — EXTENSION (E — 83) August 14 LAST DAY TO WITHDRAW MEASURE(S) FROM BALLOT. (E — 83) August 15 SECRETARY OF STATE TO DETERMINE ORDER OF NAMES ON BALLOT (E — 82) August 22 CANCEL ELECTION — INSUFFICIENT CANDIDATES (E — 75) September 9 — October 22 FILING PERIOD FOR WRITE—IN CANDIDATE (E — 57 to 14) October 7 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 1ST PRE-ELECTION (E — 31) October 7 — October 29 VOTERS MAY REQUEST ABSENTEE/ VOTE BY MAIL BALLOTS (E — 29 t0 7) October 15 LAST DAY TO MAIL SAMPLE BALLOTS AND POLLING PLACE NOTICES (E — 21) October 21 LAST DAY TO REGISTER TO VOTE (E —15) October 24 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 2ND PRE-ELECTION (E — 12) October 29 LAST DAY FOR CLERK TO PUBLISH NOTICE OF NOMINEES (E — 7) October 30 — November 5 EMERGENCY ABSENT VOTING PERIOD (E — 6 to E) November 4 LAST DAY FOR COUNCIL TO ADOPT PROCEDURES TO RESOLVE TIE VOTE (E — 1) November 5 ELECTION DAY (E) November 5 CLOSE OF POLLS LAST DAY TO RECEIVE ABSENT VOTER BALLOTS (E) December 10 COUNCIL TO DECLARE THE RESULTS (E + 35) December 19 LAST DAY TO FILE STATEMENT OF ECONOMIC INTERESTS (E + 44) January 31, 2003 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL April 1, 2003 LAST DAY TO SUBMIT REPORT ON MEASURES TO SECRETARY OF STATE MARTIN & CHAPMAN CO. 1851 WRIGHT CIRCLE ANAHEIM, CA 92806$028-M4I939-9866 Fm4X 71 419 3 9-98 7 0 website: www.martinchayman.com email: scoff martincha m n.com ATTACHMENT 2 GENERAL LAW CITIES GENERAL (OR SPECIAL) MUNICIPAL ELECTION TUESDAY, JUNE 45 2002 LAWS IN EFFECT IN 2002 December 26, 2001 SUGGESTED LAST DAY TO FILE PETITIONS REGARDING MEASURE (E — 160) January 28 SUGGESTED LAST DAY FOR COUNCIL TO ADOPT RESOLUTIONS (E — 127) January 28 — February 11 PUBLISH NOTICE OF ELECTION (E — 127 to 113) January 31 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL February 4 LAST DAY TO ADOPT REGULATIONS FOR CANDIDATES STATEMENTS (E — 120) February 11 -- March 8 FILING PERIOD FOR NOMINATION PAPERS AND CANDIDATE'S STATEMENTS (E — 113 t0 88) February 15 SUGGESTED LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E — 109) LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENT— MEASURES PUBLISH NOTICE OF ELECTION — MEASURE, No CANDIDATES February 15 POST NOTICE OF DEADLINE FOR FILING ARGUMENTS (E — 109) February 26 SUGGESTED LAST DAY TO FILE ARGUMENTS (E — 98) March 8 LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E — 88) March 8 SUGGESTED LAST DAY TO FILE REBUTTAL ARGUMENTS (E — 88) March 8 LAST DAY TO FILE NOMINATION PAPERS (E — 88) March 13 LAST DAY TO FILE NOMINATION PAPERS — EXTENSION (E — 83) March 13 LAST DAY TO WITHDRAW MEASURE(S) FROM BALLOT. (E — 83) March 14 SECRETARY OF STATE TO DETERMINE ORDER OF NAMES ON BALLOT (E — 82) March 21 CANCEL ELECTION — INSUFFICIENT CANDIDATES (E — 75) April 4 LAST DAY TO SUBMIT PRECINCT CONSOLIDATIONS TO COUNTY (E — 61) April 4 SUGGESTED LAST DAY TO DESIGNATE POLLING PLACES (E - 61) April 8 — May 21 FILING PERIOD FOR WRITE-IN CANDIDATE (E — 57 to 14) April 25 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 18T PRE-ELECTION (E — 40) May 6 LAST DAY TO APPOINT ELECTION OFFICERS & POLLING PLACES (E — 29) May 6 FIRST DAY TO MAIL OUT PERMANENT ABSENT VOTER BALLOTS (E — 29) May 6 — May 28 VOTERS MAY REQUEST ABSENTEE/ VOTE BY MAIL BALLOTS (E — 29 t0 7) May 14 LAST DAY TO MAIL SAMPLE BALLOTS AND POLLING PLACE NOTICES (E — 21) May 20 LAST DAY TO REGISTER TO VOTE (E —15) May 23 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 2NO PRE-ELECTION (E — 12) May 24 SUGGESTED LAST DAY TO POST NOTICE — ABSENTEE CANVASS (E — 11) May 25 PUBLISH NOTICE OF CENTRAL COUNTING PLACE (E — 10) May 28 LAST DAY FOR CLERK TO PUBLISH NOTICE OF NOMINEES (E — 7) May 28 LAST DAY TO PUBLISH NOTICE OF ELECTION OFFICERS & POLLING PLACES (E — 7) May 29 — June 4 EMERGENCY ABSENT VOTING PERIOD (E — 6 to E) June 3 LAST DAY TO ORDER CANVASS BY CITY CLERK (E — 1) June 3 LAST DAY FOR COUNCIL TO ADOPT PROCEDURES TO RESOLVE TIE VOTE (E — 1) a ijr 4 ELE. u#yION AY (E) June 4 CLOSE OF POLLS LAST DAY To RECEIVE ABSENT VOTER BALLOTS (E) June 4 CLOSE OF POLLS CLERK TO CANVASS ABSENT VOTER BALLOTS (E) June 18 CLERK (OR COUNCIL) TO CANVASS THE RETURNS AND TO DECLARE THE REsULTS(E + 14) July 18 LAST DAY TO FILE STATEMENT OF ECONOMIC INTERESTS (E + 44) July 31 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL April 1, 2003 LAST DAY To SUBMIT REPORT ON MEASURES TO SECRETARY OF STATE MARTIN & CHAPMAN CO. 1851 WRIGHT CIRCLE ANAHEIM, CA 92806$028 7941939-9866 FSAx 7141939-9870 website: www.martincha an.com email: scott@rnartinchayman.com ATTACHMENT CONSOLIDATED GENERAL LAW CITIES GENERAL (OR SPECIAL MUNICIPAL ELECTION TUESDAY, MARCH 5, 2002 LAWS IN EFFECT IN 2002 September 26, 2001 SUGGESTED LAST DAY TO FILE PETITIONS REGARDING MEASURE (E — 160) October 29 SUGGESTED LAST DAY FOR COUNCIL TO ADOPT RESOLUTIONS (E — 127) October 29 — November 12 PUBLISH NOTICE OF ELECTION (E — 127 to 113) November 5 LAST DAY TO ADOPT REGULATIONS FOR CANDIDATES STATEMENTS (E — 120) November 12 — December 7 FILING PERIOD FOR NOMINATION PAPERS AND CANDIDATE'S STATEMENTS (E — 113 to 88) November 16 SUGGESTED LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E —109) LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENT — MEASURES PUBLISH NOTICE OF ELECTION — MEASURE, NO CANDIDATES November 16 POST NOTICE OF DEADLINE FOR FILING ARGUMENTS (E — 109) November 27 SUGGESTED LAST DAY TO FILE ARGUMENTS (E — 98) December 7 LAST DAY TO CALL ELECTION FOR BALLOT MEASURES (E — 88) December 7 SUGGESTED LAST DAY TO FILE REBUTTAL ARGUMENTS (E — 88) December 7 LAST DAY TO FILE NOMINATION PAPERS (E — 88) December 12 LAST DAY TO FILE NOMINATION PAPERS — EXTENSION (E — 83) December 12 LAST DAY TO WITHDRAW MEASURE(S) FROM BALLOT. (E — 83) December 13 SECRETARY OF STATE TO DETERMINE ORDER OF NAMES ON BALLOT (E — 82) December 20 CANCEL ELECTION — INSUFFICIENT CANDIDATES (E — 75) January 7 — February 19 FILING PERIOD FOR WRITE --IN CANDIDATE (E — 57 to 14) January 24 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 1" PRE-ELECTION (E —40) January 31 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL February 4 — February 26 VOTERS MAY REQUEST ABSENTEE/ VOTE BY MAIL BALLOTS (E — 29 to 7) February 12 LAST DAY TO MAIL SAMPLE BALLOTS AND POLLING PLACE NOTICES (E= — 21) February 18 LAST DAY TO REGISTER TO VOTE (E —15) February 21 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - 2ND PRE-ELECTION (E — 12) February 26 LAST DAY FOR CLERK TO PUBLISH NOTICE OF NOMINEES (E — 7) February 27 — March 5 EMERGENCY ABSENT VOTING PERIOD (E — 6 to E) March 4 LAST DAY FOR COUNCIL TO ADOPT PROCEDURES TO RESOLVE TIE VOTE (E —1) �,!i srch 5" ELECTION DAA' (E) March 5 CLOSE OF POLLS LAST DAY TO RECEIVE ABSENT VOTER BALLOTS (E) April 9 COUNCIL TO DECLARE THE RESULTS (E + 35) April 18 LAST DAY TO FILE STATEMENT OF ECONOMIC INTERESTS (E + 44) July 31 LAST DAY TO FILE CAMPAIGN EXPENDITURE STATEMENTS - SEMI-ANNUAL April 1, 2003 LAST DAY TO SUBMIT REPORT ON MEASURES TO SECRETARY OF STATE MARTIN & CHAPMAN CO. 13959 WRIGHT CIRCLE ANAHEIM, CA 92806-6028 7441939-9866 FiAX 714!939-9870 website: www.martlnchapmanx2m email: SCOWEDmartmoapman.com ATTACHMENT VOLUNTARY REQUEST TO ADDRESS THE CITY COUNCIL TO: CITY CLERK FROM: - 1 ; V --s DATE: d ADDRESS: PHONE: ORGANIZATION: AGENDA #{SUBJECT: I expect to address the Council on the subject agenda item. name and address as written above. —,- Signatu ease have the Council Minutes reflect my VOLUNTARY REQUEST TO ADDRESS THE CITY COUNCIL TO: CITY CLERK FROM:�DATE: ADDRESS: PHONE: ORGANIZATION: r AGENDA #/SUBJECT: I expect to address the Council on the subject agenda item. Please have the Council Minutes reflect my name and address as written above. re A Agenda No. 6.1. MINUTES OF THE CITY COUNCIL REGULAR MEETING OF THE CITY OF DIAMOND BAR OCTOBER 15 2002 CLOSED SESSION: None DR 'As FT CALL TO ORDER: Mayor Chang called the meeting to order at 6:40 p.m. in the Auditorium of the South Coast Air Quality Management District, 21865 E. Copley Drive, Diamond Bar, CA, PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was led by Council Member Zirbes INVOCATION: The Invocation was given by Monsignor James Loughnane, St. Denis Catholic Church. ROLL CALL: Council Members Herrera, Zirbes, Mayor Pro Tem O'Connor, Mayor Chang. Council Member Huff arrived at 6:50 p.m. Also present were: Linda Lowry, City Manager; Mike Jenkins, City Attorney; James DeStefano, Deputy City Manager; Bob Rose, Community Services Director; Linda Magnuson, Finance Director and Lynda Burgess, City Clerk. APPROVAL OF AGENDA: CM/Lowry asked Council to approve the following Agenda changes: Continue Item 1.4 to a future agenda; move Item 1.5 to the beginning of Special Presentations; move Consent Calendar Item 6.13 to Council Considerations Item 8.3; amend the title of Consent Calendar Item 6.14 to "Authorize the City Manager to purchase a Parks and Recreation Reservation System" and continue the recommendation for the Customer Request Management Software to a future agenda. Council concurred with the recommendations. SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS: 1.1 Presented City Tile to Joe Torrealta, owner, Guiseppe's Italian Deli & Imported Groceries and Business of the Month video presentation. 1.2 Proclaimed October 14 through 18, 2002 as "Red Ribbon Week" — accepted by Deputy Rick Wright. 1.3 Proclaimed October 20-26, 2002 as "World Population Awareness Week.,, 1.4 Presentation by Jennifer Colamonico, Fairbank, Maslin, Maullin & Assoc. reporting on the results of the Library Survey. 2. CITY MANAGER REPORTS AND RECOMMENDATIONS: CC/Burgess presented information on the touch screen voting that would be implemented for this year's election. A slide presentation was given by OCTOBER 15, 2002 PAGE 2 CITY COUNCIL CSD/Rose regarding recently completed City beautification and street improvement projects. CMILowry responded to concerns from Council Members regarding Old Business Items from the October 1, 2002 meeting. Regarding the concern about bus service to Lorbeer Middle School, a new bus route (#853) has been established to cover the area. Since implementation, no complaints have been received. With respect to street sweeping enforcement, staff continues to monitor the matter to establish the most effective and efficient route with particular emphasis in and around schools. Staff expects to have this situation resolved by the end of October. Regarding maintenance issues at the post office, staff contacted the office and improvements have been undertaken. This is a work in progress and staff will continue to monitor the situation. 3. PUBLIC COMMENTS: Martha Bruske, speaking on Consent Calendar Item 6.8, asked if the financial meetings should be public meetings. Regarding 6.12a, she asked Council to scrutinize additional printing charges. Are these additional charges for the City's newsletter and if so, does the additional amount track with the bids? Clyde Hennessee spoke about the November 5th ballot measures and candidates. He questioned Consent Calendar Item 6.9 and expressed concern that approval of Consent Calendar Item 6.8 could result in fiscal mismanagement if the Council Members delegated too much responsibility to staff. He vowed to vote against a tax increase to build a larger library. Marie Buckland asked the Council to place discussion of the use of the City logo on a future agenda. 4. RESPONSE TO PUBLIC COMMENT: CM/Lowry offered the following responses: on the matter of the Consent Calendar, the World Water Rescue organization called to ask that, to avoid an impropriety, the matter of a presentation to Ed Beiderman be made later in the year. Item 6.8 addresses the method of approval for the new approved schedule for payment of warrants on a weekly basis. Finance Committee meetings continue to be open to the public. Consent Calendar Item 6.12 includes a $40,000 recreation brochure. The amount for printing the newsletter has not yet been contracted. Regarding the Library Survey, the City contracted with the consultant to perform the survey. Mr. Hennessee's name did not appear on the random sample listing. With respect to placing the matter of the City's logo on a future agenda for discussion, there is a policy in place, which was reviewed by the City Attorney. Therefore, the Council currently stands on that policy. 5. SCHEDULE OF FUTURE EVENTS: OCTOBER 15, 2002 PAGE 3 CITY COUNCIL 5.1 COMMUNITY FOUNDATION MEETING — October 17, 2002 — 7:00 p.m., Room CC -8, SCAQMD/Government Center, 21865 E. Copley Dr. 5.2 PLANNING COMMISSION MEETING -- October 22, 2002 — 7:00 p.m., SCAQMDIGovernment Center Auditorium, 21865 E. Copley Dr.. 5.3 PARKS AND RECREATION COMMISSION — October 24, 2002 — 7:00 p.m., SCAQMDIGovernment Center Hearing Board Room, 21865 E. Copley Dr. 5.4 HALL OF HORRORS HAUNTED HOUSE — October 30-31, 2002 — 6:00 p.m. to 9:00 p.m., Heritage Park; 2900 S. Brea Canyon Rd. 5.5 FALL FUN FESTIVAL — October 31, 2002 — 4:30 p.m. to 8:30 p.m., Heritage Park, 2900 S. Brea Canyon Rd. Admission $3.00 per child. 5.6 PUBLIC SAFETY COMMITTEE — November 4, 2002 — 7:00 p.m., Walnut/Diamond Bar Sheriff's Station, 21695 E. Valley Blvd., Walnut. 5.7 ELECTION DAY — November 5, 2002 — 6:30 p.m., SCAQMDIGovernment Center Auditorium, 21865 E. Copley Dr. 5.8 CITY COUNCIL MEETING — November 5, 2002 — 6:30 p.m., SCAQMDIGovernment Center Auditorium, 21865 E. Copley Dr. 6. CONSENT CALENDAR: Moved by C/Herrera, seconded by C/Huff to approve the Consent Calendar, with the exception of Item 6.11. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS - Herrera, Huff, Zirbes, MPT/O'Connor, M/Chang NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None 6.1 APPROVED CITY COUNCIL MINUTES: 6.1.1 Special Meeting of September 25, 2002 —As submitted. 6.1.2 Regular Meeting of October 1, 2002 —As submitted. 6.2 RECEIVED & FILED PARKS AND RECREATION COMMISSION MINUTES - Regular Meeting of August 22, 2002. 6.3 RECEIVED AND FILED PLANNING COMMISSION MINUTES — September 10, 2002. 6.4 RECEIVED AND FILED TRAFFIC AND TRANSPORTATION OCTOBER 15, 2002 PAGE 4 CITY COUNCIL COMMISSION MINUTES —August 8, 2002. 6.5 APPROVED WARRANT REGISTERS - dated October 3 and October 10, 2002 in the amount of $580,455.07. 6.6 REVIEWED AND APPROVED TREASURER'S STATEMENTS — Revised statement for July 31, 2002 and new statement for August 31, 2002. 6.7 REJECTED CLAIM FOR DAMAGES — filed by Veronica Lockhart October 1, 2002. 6.8 APPROVED CHANGE IN VOUCHER REGISTER APPROVAL PROCESS BY ELIMINATING WEEKLY FINANCE COMMITTEE MEETINGS. 6.9 AUTHORIZED CITY MANAGER TO ENTER INTO AN AGREEMENT WITH WALNUT VALLEY WATER DISTRICT FOR WORK ASSOCIATED WITH CONSTRUCTION OF WATER DISTRIBUTION SYSTEM FOR COMM UNITYISENIOR CENTER IN AN AMOUNT NOT TO EXCEED $255,966.50. 6.10 APPROVED NOTICES OF COMPLETION: 6.10.1 SLURRY SEAL PROJECT AREA 4 — PAVEMENT COATINGS CO. 6.10.2 AREA 4 ASPHALT RUBBER AND AGGREGATE MEMBRANE (ARAM) PROJECT — MANHOLE ADJUSTING, INC. 6.12 APPROVED EXCEEDING THE CITY MANAGER'S PURCHASING AUTHORITY: a) INCREASED THE PURCHASE ORDER FOR SERVICES PROVIDED BY REINBERGER PRINTWERKS, INC. IN AN AMOUNT UP TO $46,000 FOR THE 2002103 FISCAL YEAR. b) RENEWED MAINTENANCE. CONTRACT WITH XEROX CORP. FOR MAINTENANCE OF PHOTOCOPIERS FOR FISCAL YEAR 2002-03 IN THE AMOUNT OF $18,800.76. c) INCREASED THE PROFESSIONAL SERVICES AGREEMENT WITH KOURY ENGINEERING BY $45,000 FOR SPECIAL INSPECTION SERVICES, FOR A TOTAL CONTRACT NOT - TO -EXCEED $60,000. OCTOBER 15, 2002 PAGE 5 CITY COUNCIL 6.13 MOVED TO CITY COUNCIL CONSIDERATION. 6.14 AUTHORIZED CITY MANAGER TO PURCHASE PARKS AND RECREATION RESERVATION SYSTEM SOFTWARE FROM VERMONT SYSTEMS IN THE AMOUNT OF $43,000. 6.15 APPROVED AMENDMENT TO A CONSULTING SERVICES AGREEMENT WITH GARY L. NEELY FOR GOVERNMENTAL AFFAIRS CONSULTING SERVICES' MATTERS WITHDRAWN FROM CONSENT CALENDAR: 6.11 AMENDMENT NO. 3 TO A PROFESSIONAL SERVICES AGREEMENT WITH BONTERRA CONSULTING IN AN AMOUNT NOT TO EXCEED $7,370 TO PREPARE CEQA DOCUMENTATION FOR A LIBRARY BUILDING AT THE SUMMITRIDGE PARK COMMUNITY/SENIOR CENTER PROJECT SITE, AND REQUEST TO APPROPRIATE $7,370 FROM GENERAL FUND RESERVES. MPT/O'Connor felt that it might be premature to prepare a CEQA document prior to Council's consideration of whether or not to proceed with a new library. CM/Lowry explained that this item is a byproduct of the process toward completion of an application for bond funds that Council had previously approved. C/Herrera moved, C/Zirbes seconded to approve Amendment No. 3 to a Professional Services Agreement with Bonterra Consulting in an amount not to exceed $7,370 to prepare CEQA documentation for a library building at the Summitridge Park Community/Senior Center project site, and an appropriation of $7,370 from General Fund reserves. Motion carried by the following Roll Cali vote: AYES: COUNCIL MEMBERS - Herrera, Huff, Zirbes, M/Chang NOES: COUNCIL MEMBERS - MPT/O'Connor ABSENT: COUNCIL MEMBERS - None 7. PUBLIC HEARINGS: None 8. COUNCIL CONSIDERATION: 8.1 AWARD DESIGN SERVICES CONTRACT TO DEWAN-LUNDIN AND ASSOCIATES FOR GRAND AVENUE BETTERMENT/ MPROVEMENT PROJECT IN THE AMOUNT OF $167,482 ($147,482 AND A $20,000 CONTINGENCY INCLUDING AN ALLOCATION OF $67,482 FROM UNAPPROPRIATED GAS TAX FUNDS). OCTOBER 15, 2002 PAGE 6 CITY COUNCIL Clyde Hennessee did not believe the City should take on the additional expense of maintaining acquired property in order to accommodate cut -through traffic. History shows that if you build a wider road, more traffic will make use of it. Q.B. should not try to compete with cities that have a much greater financial base. Martha Bruske is convinced that the goals of the City and the City Council are not the goals of the residents. There are pressing issues that should be resolved before considering the "fancying up of D.B. streets." When it comes to improving slopes, D.B. Blvd. needs more improvement than does Grand Ave. What happened to the City of Industry's EIR statement that assured widening of Grand Ave? Is this. proposal presented to satisfy the City of Industry? If it is not, take care of more pressing needs of the City. Marie Buckland asked why the City of D.B. is proposing this project for the sake of the Industry East project? Grand Ave. cannot handle the current capacity. If Grand is expected to accommodate a hundred or more trucks per day, who will fix the streets? Industry is giving D.B. nothing but trouble and headaches. DCMIDeStefano explained that the City of Industry approved an EIR about two years ago for an almost 7,000,000 sq. ft. industrial project currently under construction between Brea Canyon Road, SR 60 and Grand Ave. Within the EIR, traffic impacts were identified. Among the streets impacted was Grand Ave. west of the City's limits. Industry's traffic reports incorporated within the EIR showed what Industry felt were improvements necessary to D. B. Blvd. east of the SR 60. Some of those impacts were shown to show acquisition of significant properties and loss of some commercial businesses to allow capacity through D.B. D.B. objected to Industry preparing an EIR that described mitigation measures that had the effect of ruining property values along Grand Ave. as well as, affecting the City's commercial base. Even though Industry adopted the EIR, it does not mean that D.B. is obligated to implement measures Industry deemed appropriate. Only the City of D.B. has the right to determine what occurs within its boundaries, including Grand Ave. and the D.B. City Council will make a final determination with respect to this matter. Moved by C/Herrera, seconded by C/Zirbes, to award a design services contract to Dewan-Lundin and Associates for Grand Ave. betterment/improvement project in the amount of $167,482. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS - Herrera, Huff, Zirbes, MPT/ O'Connor, M/Chang NOES: COUNCIL MEMBERS - None OCTOBER 15, 2002 PAGE 7 CITY COUNCIL ABSENT: COUNCIL MEMBERS - None 8.2 APPOINTMENT OF JODY ROBERTO TO THE DIAMOND BAR COMMUNITY FOUNDATION BOARD OF DIRECTORS — (Council appointee). MPT/O'Connor moved, C/Zirbes seconded, to approve appointment of Jody Roberto to the D.B. Community Foundation Board of Directors. Motion carried by the following Rall Call vote: AYES: COUNCIL MEMBERS - Herrera; Huff, Zirbes, MPT/O'Connor, M/Chang NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None 8.3 AWARD OF CONTRACT FOR CONSTRUCTION OF COMMUNITY/SENIOR CENTER IN THE AMOUNT OF $9,861,190; AUTHORIZE A 7% CONTINGENCY IN THE AMOUNT OF $691,683 AND APPROPRIATE $1,000,000 FROM GENERAL FUND RESERVES. .. oi .. _. ,, OCTOBER 15, 2002 PAGE 8 CITY COUNCIL CIHuff stated that last week Foothill Transit held its open house for the $21,000,000 Irwindale maintenance facility. KPRS built that facility. When he asked for a truthful recommendation, he received glowing reports. If Council rejects the proposal and goes out to bid again, it risks losing this contractor. C/Zirbes said that when -he joined the City CounclI last December, he learned that the City's budget was $12.6 million for this project. He understood that the majority of the cost increase resulted from improvement to the site. Now the budget is $13.6 million and he wanted to know if the new amount included contingencies. DCMIDoyle responded that the $13.6 million includes contingencies. That figure represents a total turnkey project budget including architect and engineering fees, design services, geotechnical, civil engineering, etc. C[Zirbes asked FD/Magnuson what the reserve fund balance would be if the City approved the project as presented. FD/Magnuson estimated that if the Community/Senior Center budget was increased by $1,000,000, the fund reserve balance would be reduced to about $13,000,000. CIZirbes asked DCMIDoyle to expand on his recommendation to reject this bid and go back out to bid for the project. DCMIDoyle said it was a difficult recommendation because it is a gamble either way. If Council decides to go back out to bid, revise the scope of the project and significantly change the scope of the project, D.B. runs the risk of getting a contractor who is not as good as what we know this contractor to be. D.B. also runs the risk of the bids coming back in and not realizing anticipated savings. One certainty is that if the Council goes out to bid once again, the project would be delayed anywhere from three to four months. If Council awards the contract and pursued change order options to reduce the costs, there is a risk in not realizing the full value of those items and/or having to pay for those items in future years. As a staff member, he made a conservative recommendation. If dollars are an issue and timing is not an issue and the contractor is not an issue, going out to bid would be a viable option. Even so, there is no assurance the City would save $1,000,000. If Council decided to go forward OCTOBER 1b, 2002 PAGE 9 CITY COUNCIL with the current contractor and incorporate change orders, there is no assurance that the savings would amount to $1,000,000. Responding to ClHerrera, DCMIDoyle said that staff prepared 30 bid packages. About 15-20 general contractors attended the mandatory pre-bid meeting and the City ultimately received seven bid packages. This project is fairly small when compared to projects that are in the range of $50.100,000,000 and there are a limited number of contractors that would consider this project. ClHerrera believed timing was everything. As CIHuff stated, the low bidder on this project is a quality company. She felt it was important to D.B. because if Council went back out to bid and redesigned the project and/or downsized the scope, there was no assurance that D.B. would receive quality bids. In addition, four months would be lost and additional money would be spent in the pursuit of additional bids. She asked if there was a possibility that the current contractor could recommend areas of cost savings. DCMIDoyle responded that if Council decided to move forward, discussions regarding areas of cost savings could take place with the contractor. He reassured Council that staff would work closely with the architect to make certain that the quality of the items put forward by the contractor would not significantly reduce the quality of the project. CIHuff added that Foothill Transit indicated that there were a number of change orders for their project. Many were initiated by the architect's failure to adequately plan. This contractor was very flexible in working with Foothill Transit and staff was very happy with the negotiations and outcome. Martha Bruske commented that $1,000,000 is a shock. She wondered if Council had been psychologically prepared by staff to receive this news. Fortunately, this is not an election year because all of the Council Members used this building as a campaign promise. She suggested that Council proceed with the project and build it as originally intended in order to keep their promise to the residents and in particular, the senior citizens. Clyde Hennesee said, "don't spend the money." The City keeps taking on more and more projects and depleting General Fund monies. When will it end. Steve Tye wanted Council to build the Community/Senior Center OCTOBER 15, 2002 PAGE 10 CITY COUNCIL and do it right. The first cost estimate he heard was $5,000,000. Today it's twice that amount. After the contract is signed, concessions will not be forthcoming. A few months delay to save $1,000,000 is a good exchange. Put the project out to bid again and the City might save a million or more dollars. Please make a good and prudent business decision. MPTIO'Connor pointed out that only about $500,000 could be attributed to cost reductions. The other $400,000 in reductions were due to deferring certain aspects of the project. C/Huff reported that over the past several years, Council has anticipated this project. The City has saved and been prudent with the community's resources, have exacted funds from developers and anticipated the day the City would build an amenity for its residents. If Council moves forward with this project as outlined and appropriates another $1,000,000, the City would still have approximately $4,000,000 more in its general fund than it had when he and ClHerrera came to the Council in 1995196. The City has saved for a rainy day and this is the rainy day. The City has gone through the tedious bid process and has a very qualified low bidder. Everyone is suffering from sticker shock. However, this project cost was always a best —guess estimate. The task force conducted lengthy deliberations about what types of amenities it would like to have included in the project. Although it is a large and costly project, it should be done right. This type of project should include higher quality materials because of its extensive use. We have the money saved and we have a comfortable cushion left in the general fund. If the project was compromised at this point, it would lack continuity. It is not the City's fault that taxes have doubled since it incorporated. He believed it was prudent to move forward at this time for all of the reasons previously outlined. ClHerrera said that the cost of the project increased when additional mitigation became necessary to shore up the slopes. C/Zirbes said he has thought a lot about this project and about the community's expectation. He asked that everyone temper their emotions and not make a decision based upon a timeline. He felt it might not be the most opportune time to begin negotiations after the contract has been awarded. Perhaps the deferred costs could be borne by a future library or some other tenant or perhaps a $30,000 building management system could replace a $130,000 building management system. He cautioned Council about entering into an agreement with the builder with OCTOBER 15, 2002 PAGE 11 CITY COUNCIL the hope of deferring cost items or going in with change orders, hoping to receive a fair value. He did not believe it was possible. He believed the decision the Council should consider was whether to come in at a budget amount agreed upon by the Council. If so, Council should direct staff to deny the bid, re - scope the project and again go out to bid. If this is the building the community and the Council have the vision for, it should move forward to bid out the original design. M/Chang said he had asked himself many questions. As a Council, have they tried their best and done everything possible to insure the best interest for the residents of D.B. Since there is some question about the actual cost of the project, he wanted to go back out to bid. In the beginning, he committed to building this quality project on time and on budget. Now it appears that Council is juggling two decisions, If the project is to be built on time, Council should proceed. If Council wants to keep the project within budget, it is not possible at this juncture. With these discrepancies, he would rather delay three more months, go back out to bid and attempt to save the money and keep the project within budget. He felt it was more important to save $1,000,000 than to save three or four months. This project has been on the drawing board since he joined the Council almost five years ago. He believed everyone should be willing to wait for three or four months if the City could save $1,000,000. At the very least, Council should give the community the benefit of the doubt and try one more time to attempt to get a better bid. Even if the bid comes back the same, at least Council has exhausted all opportunities and provided a best effort for the community. He would like to have the project go back out to bid without downgrading the quality of the project. ClHerrera said she had confidence that DCMIDoyle would be able to reduce the cost of this project. The City is entitled to 25% of the project amount in change orders that could result in cost reductions of up to $2.4 million. Her decision was not emotion based. She was very thoughtful in her deliberations and she cautiously thought through the matter. Following discussion, ClHerrera moved, C/Huff seconded, to award a contract to KPRS Construction Services, Inc. in the amount of $9,861,190, authorize a 7% contingency in the amount of $691,683 and appropriate $1,000,000 from General Fund Reserves. Motion carried by the following Rall Call vote: OCTOBER 15, 2002 PAGE 12 CITY COUNCIL AYES: COUNCIL MEMBERS - Herrera, Huff, MPTIO'Connor NOES: COUNCIL MEMBERS - Zirbes, MlChang ABSENT: COUNCIL MEMBERS - None 9. COUNCIL SUB -COMMITTEE REPORTS/ COUNCIL MEMBER COMMENTS: C/Herrera felt it had been an exciting evening and looked forward to a Council Study Session to review and discuss the results of the Library survey as well as consideration of the next step in the process. Although the Council split its vote on the Community/Senior Center project tonight, all Council Members are committed to moving forward with the project. The split vote was merely an indicator of "how we get there." She had confidence in City staffs ability to negotiate with a quality builder and felt that tonight's decision was the right decision. C/Zirbes wants the City to build a Community Center and to be as certain as possible that the City is going about it in the right manner. He had difficulty with the concept of negotiating "after the fact." This is a magnificent project that will make the City proud. He would prefer change orders be kept to a minimum in order to insure the best possible finished product. This morning, the Neighborhood Improvement Committee met and will soon be submitting a draft home improvement program for Council consideration. He thanked M/Chang for his commitment to the project. He also thanked Jody Roberto for volunteering to serve on the D.B. Community f=oundation. C/Herrera reported that staff wrote a resolution to support a unique zip code for D.B. for presentation before the League of California Cities. At the first go -round, the League took no action, a polite way of rejecting the issue because the League has a policy of not getting involved in local or regional issues. D.B. modified its resolution by including an advisement that property taxes, franchise fees, economic development assessments, waste collection, etc. are allocated by zip code. Thanks to C/Herrera's and CM/Lowry's testimony, D.B. was successful in obtaining adoption of its proposed resolution. The next step is to communicate with all 477 cities in California to see which ones are having a similar problem, assemble a packet including the adopted resolution and submit it to the U.S. Postal Service for possible adoption. MPT/O'Connor stated that the League of Cities Conference was well attended by cities throughout California. One of the many interesting seminars was the Code of Ethics seminar. As a board member on the Wildlife Corridor Conservation Authority (WCCA), she has had difficulty with the way in which the organization conducts meetings and she would be suggesting that the WCCA Board establish a code of ethics. She asked staff to look into drafting a Code of Ethics for D.B. Last Sunday, she and her daughter's Girl Scout troup visited the Museum of Tolerance. They were unable to view the entire museum in the four hours they spent at the site. She highly recommended a visit to the museum. She felt that the City's attempt to beautify Sycamore OCTOBER 15, 2002 PAGE 13 CITY COUNCIL Canyon Park was a dismal failure. She asked for a report from staff outlining mitigation plans for Sycamore Canyon and when the fence would be taken down so that residents could visit the site. She asked who was responsible for maintaining the cul-de-sac at the end of Sunset Crossing Rd. near the YMCA. She wished everyone a safe Halloween and asked residents to be watchful of young people as they make their way around the City, especially with the fall back time change and early sunset taking place just prior to the festivities. M/Chang attended grand opening and ribbon cutting ceremonies for two new businesses in D.B. He praised the Sheriff's Department and staff for securing the safety of everyone in the City in light of the bomb threats on opening day of one of the businesses. Council and staff are aggressively pursuing an economic development program for the City to maintain a good quality of life and infrastructure for the residents and the community. He spoke about the Neighborhood Improvement Committee's proposal to provide financial assistance and low cost loans to homeowners for property improvement. He thanked staff and C/Zirbes for their creative thinking and dedication to this matter. He felt the primary concern regarding the construction of the Community/Senior Center should be to serve the community in the best way possible including being fiscally responsible. 10. ADJOURNMENT: There being no further business to conduct, M/Chang adjourned the meeting at 10:25 p.m. LYNDA BURGESS, City Clerk ATTEST: WEN CHANG, Mayor Agenda No. 6.1.2 CITY OF DIAMOND BAR CITY COUNCIL STUDY SESSION J� NOVEMBER 5, 2002 STUDY SESSION: Mayor Chang called the Study Session to order at 4:43 p.m. in the SCAQMD/Government Center, Room CC -8. Present: Council Members Herrera, Huff, Zirbes, Mayor Pro Tem O'Connor and Mayor Chang. Also present: Linda Lowry, City Manager; Mike Jenkins, City Attorney; James DeStefano, Deputy City Manager; David Doyle, Deputy City Manager; David Liu, Public Works Director; Linda Magnuson, Finance Director and Lynda Burgess, City Clerk. 1) Discussion regarding Capital Improvement Program Financing Options Larry Kosmont stated that his presentation would concentrate on the subject of issuing lease revenue bonds to finance the Comm unity/Sen ior Center. In response to MPT/O'Connor, Mr. Kosmont explained that tonight's agenda addresses only the description of the program with a determination by Council whether or not to move forward. If Council decides to move forward, it would adopt a resolution authorizing this activity to take place. There still is no commitment to move forward with a specific decision about financing. Mr. Kosmont further explained that this is a method of financing capital improvement and economic development activities at a very low cost with no risk to the City. The lease revenue payment program, a mechanical process, offers the City the ability to take a site it owns, lease the site to the newly formed JPFA, and the JPFA would then sublease the site back to the City. MPT/O'Connor asked if the City was allowed to lease parkland and Mr. Kosmont said yes, the City could lease just about anything it owns - streets, tunnels, bridges, etc. ClZirbes pointed out that the City should look at its deed and title policy to be certain there were no restrictions to such a program. MPT/O'Connor asked for clarification that Mr. Kosmont was referring to leasing the parkland to build the community center. Mr. Kosmont said he was referring to both the land and the building. MPT/O'Connor agreed with ClZirbes that the matter should be researched to determine whether the City was allowed to lease the property. Mr. Kosmont said that the package presentation to the Council would include information regarding whether the City was allowed to lease the NOVEMBER 5, 2002 PAGE 2 CC STUDY SESSION site. He believed it could be done and it was likely there were no restrictions disallowing the lease program. He would not know for certain until he researched the matter. The JPFA would then use the lease payments to pay the lease revenue bonds. The City makes payments to the trustee bank. The trustee bank has the responsibility to make certain that the bondholders get paid. Ultimately, the bondholders are the lending source and they need a guarantee that the bonds are paid off. In Step 3, the trustee takes the bond proceeds and puts them into a project account. The money from the project account is used to build the Community/Senior Center. Additionally, the City could recapture payments under this plan — all soft costs and 60 days prior to the effective date on the hard costs — approximately $400,000. CM/Lowry foresaw the need to provide Council with an annual report detailing balances, proceeds, use of proceeds, etc. Mr. Kosmont and his team explained that most municipalities have JPFA's because they enjoy broader powers and more flexibility. For instance, areas close to D.B. that have JPFA's are Corona, Rialto, Colton, EI Monte, Montebello, Whittier, Duarte and San Dimas. Mr. Kosmont said that most cities have a JPFA. In addition, over 50% of cities statewide fund an economic development organization whether or not they have redevelopment agencies. Mr. Kosmont explained how the City could proceed with either a fixed-rate or variable-rate finance program, once it determines it wants to move forward. Eric Scriven stated that over a five-year period, the City could save about $475,000 to $1,100,000. If the City purchased a 5% cap on the variable rate (variable rate = 2.8% to 4.8% with a 5% cap buyout/ fixed rate = 5%). Mr. Kosmont explained the potential for investigating its own funds if the Council chose to move forward with the JPFA. He reminded Council that the interest from the investment would offset the lease payment. In response to MPTIO'Connor, Mr. Kosmont said the City would be better off to invest in tax-free structures than to purchase its own bonds. In addition, the return on tax-free structure is higher than it is on the bonds. Responding to C/Herrera's question regarding borrowing $30 or $50,000,000, Mr. Kosmont explained that his team looked at D.B's budget (revenues and expenditures) and felt that it would be very comfortable for the City to borrow about $15,000,000. With this additional cash flow, making a net payment of somewhere between $270,000 and $560,000 doesn't really stress the budget. NOVEMBER 5, 2002 PAGE 3 CC STUDY SESSION Mr. Kosmont explained to MlChang that if the City financed $30 million, the payment would be $1,500,000, an amount that would entirely deplete the City's profits. C/Zirbes asked if Mr. Kosmont was proposing 30 -year notes, which would be due in five years. Mr. Kosmont responded that 30 -year notes contain a five-year cap with no prepayment penalty. At the end of five years, if D.B. decided it wanted out of the finance business, it could pay off the notes and be done. Additionally, five years would be a good window of opportunity to determine whether economic development was successful. In response to MlChang, Mr. Scriven explained that the City could purchase a 10 -year cap but it would be more expensive. Mr. Kosmont said his team would provide 5-10-15 year cap pricing and rates for the Council's consideration, if they so desired. Mr. Kosmont summarized. His team recommended that the City borrow $15,000,000, select a 30 -year variable with a 5 year and 10 year interest rate cap with no prepayment penalty, and maximize interest earnings to keep net payments low. Further, the City should use those five years to determine whether or not it wanted to get out of the borrowing business or keep going. The City would raise up to $15,000,000 in funds through a bond issue and use those monies to pay the project costs. The general fund reserves that would have been spent on that project could be invested in a format that maximized interest rate earnings and in compliance with an investment policy that the City would establish and continue to direct. Those interest earnings would be used to offset the bond payments and make borrowing costs lower. Keeping money in your pocket allows you to invest money, make money and reduce payments on the financing. Periodically, the City would review its investment opportunities in order to determine whether a better investment yield could be realized. Within five years, Council Members and staff could re -assess the results and determine whether or not they wish to pay off some of it, all of it, or continue with financing and pursue economic development. CIHuff asked if the JPFA could pursue another five-year cap at the end of the first five years. Mr. Kosmont responded yes. C/Herrera asked if, at the end of the first five years, the City is doing well with its investments, could it then sell additional bonds. Mr. Kosmont responded affirmatively. He recommended that the City not embark on selling additional bonds prior to the end of the first five-year period and instead, use the first five years to establish a credit base and get locked into the finance market. NOVEMBER 5, 2002 PAGE 4 CC STUDY SESSION CIHuff asked if the first year's prepayment made at the beginning of the fixed rate period would be applied to the final payment. Mr. Kosmont and Mr. Scriven responded that Mr. Huff was correct in his assumption. In addition, the City would realize interest earnings on that reserve. ClZirbes complimented Mr. Kosmont on his presentation. He asked what would happen if the City chose to use the proceeds for long-term economic development? Why should the City incur debt when it appeared to him that the City had about $500,000 in reserves. Mr. Kosmont explained that the money in reserves would be about $1.6 million in free and clear cash flow. The City would likely choose to proceed with a variable loan and the debt service would be less. Additionally, the City does not have to spend any of the money on economic development or it could create a corporation for $2,000,000 and not a nickel more insuring X number of dollars in the bank. ClZirbes stated that the Comm unitylSenior Center would come on-line whether or not the City borrows to fund it. He heard estimates ranging from $200,000 per year to $500,000 per year to operate the center. What about the "what -ifs and budget shortfalls?" He would not like to have the City move into a number that is so large based upon current projects. There needs to be a comfort level assuring the City that if it is not comfortable with this scenario, the loan -could be paid off. He could see the benefits of staying with the finance program. However, this is a very fiscally conservative community and that is why it is currently in a good financial position. Mr. Kosmont suggested that Council incorporate a policy that it never spends more than X amount of its reserves. ClZirbes said he needed to get to a level of comfort that insures him that current and future obligations (contingencies) could be met and that there would be sufficient funds left over to pay for this loan. He was concerned about over -stretching the budget. C/Herrera explained that the Community/Senior Center would likely not open until January 2004 and the ongoing costs to run the center would not be known until sometime later. If at that time, the City determines it is in over its head, it could pay off the bonds or a portion thereof, and get out of the debt service. CM/Lowry explained that when the numbers are reworked, the City has had, over the past five years, a general operating expense overage of about $2.4 million. If the City paid the maximum loan payment of NOVEMBER 5, 2002 PAGE 5 CC STUDY SESSION $800,000 from the operating fund, there is still a budget surplus of $1.6 million. If $500,000 or $600,000 is expended for the Community/Senior Center operating budget, the City still has an overage of $1,000,000. She explained why she believed that this scenario is prudent city -building. CIHuff asked Mr. Kosmont to tell the Council why it should consider his team over another team. Mr. Kosmont responded that the City could certainly take time to explore other options with respect to finance teams and he and his team would remain in the mix. In this case, a number of his team members have been working with D.B. for some time in economic development matters and therefore have "a leg up." Other team members presented their qualification credentials and why they would likely be selected to participate in D.B.'s financing program. C/Herrera appreciated Mr. Kosmont's good faith effort in bringing his team members to brainstorm with staff and Council. She reminded Council Members that the City interviewed numerous firms and chose Kosmont to spearhead economic development and strategic planning. CIHuff felt there were two different issues — economic development and bonding. M/Chang felt very comfortable with Mr. Kosmont and his ability. When D.B. lost redevelopment, Mr. Kosmont presented an option for economic development. He believed the JPFA tool would allow the City to leverage its money and invest in its future. He thanked Mr. Kosmont and his team for presenting information to the City without remuneration. Clyde Hennessee spoke in favor of the proposed plan. ADJOURNMENT: With no further business to conduct, M/Chang adjourned the study session at 6:13 p.m. LYNDA BURGESS, City Clerk ATTEST: WEN CHANG, Mayor Agenda No. 6.1.3 CITY OF DIAMOND BAR CITY COUNCIL REGULAR MEETING November 5, 2002 STUDY SESSION: Mayor/Chang called the meeting to order at 4:43 p.m. in SCAQMD/Government Center Room CC -8, 21865 E. Copley Drive, Diamond Bar, CA. *Discussion regarding Capital Improvement Program Financing Options Present: Council Members Herrera, Huff, Zirbes, Mayor Pro Tem O'Connor and Mayor Huff. Also present were: Linda Lowry, City Manager; Mike Jenkins, City Attorney; James DeStefano, Deputy City Manager; David Doyle, Deputy City Manager; David Liu, Public Works Director; Linda Magnuson, Finance Director and Lynda Burgess, City Clerk. ADJOURNMENT: at 6:13 p.m. SPECIAL CLOSED SESSION: to order at 6:15 p.m. ADJOURNED CLOSED SESSION: Session at 6:46 p,m. Mayor Chang adjourned the Study Session Mayor Chang called the Closed Session Mayor Chang adjourned the Special Closed CALL TO ORDER: Mayor Chang called the meeting to order at 6:50 p.m. in the Auditorium of the SCAQMD/Government Center, 21865 E. Copley Drive, Diamond Bar, CA. M/Chang reported that during the study session, the Council discussed Capital Improvement Program financing options. This matter will be considered under regular meeting Agenda Item 8.1. CA/Jenkins reported that during the evening's Closed Session, Council considered possible initiation of litigation. By a unanimous vote, Council authorized filing of litigation against the Mountains Recreation Conservation Authority for violation of the Brown Act. PRESENTATION OF COLORS: PLEDGE OF ALLEGIANCE: INVOCATION: presented the invocation. 4'h Low Altitude Air Defense Battalion Tom Ortiz led the Pledge of Allegiance. USAF Chaplain (Capt.) Alan Madera ROLL CALL: Council Members Herrera, Huff, Zirbes, Mayor Pro Tem O'Connor, Mayor Chang. NOVEMBER 5, 2002 PAGE 2 CITY COUNCIL Also present were: Linda Lowry, City Manager; Mike Jenkins, City Attorney; James DeStefano, Deputy City Manager; David Doyle, Deputy City Manager; David Liu, Public Works Director; Linda Magnuson, Finance Director and Lynda Burgess, City Clerk, APPROVAL OF AGENDA: As presented. 1. SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS: 1.1 Introduced Fred Alamolhoda, Senior Engineer, Department of Public Works. 1.2 Introduced Christopher O'Hearn, newly appointed Mount San Antonio College President. 1.3, Recognized Veterans a. Presentation delivered by Thomas M. Vetter, Lt, Colonel, Retired., U.S. Marine Corps b. Distributed Plaques to Veterans RECESS/RECEPTION: M/Chang recessed the City Council meeting at 7:35 p.m. RECONVENE: M/Chang reconvened the meeting at 7:57 p.m. 2. CITY MANAGER REPORTS AND RECOMMENDATIONS: None Offered. 3. PUBLIC COMMENTS: Don Karlin, Phillips Ranch, President-elect, D.B. Rotary Club, announced that the Club's Tea and Fashion show would be held Sunday, November 17 from 12 noon to 3:00 p.m. at the Shilo Inn. 4. RESPONSE TO PUBLIC COMMENT: None Offered, 5. SCHEDULE OF FUTURE EVENTS: 5.1 VETERAN'S DAY -- November 11, 2002 — City Offices will be closed. Offices will reopen Tuesday, November 12, 2002 at 7:30 a.m. 5.2 PLANNING COMMISSION MEETING - November 12, 2002 - 7:00 p.m., SCAQMD/Government Center Auditorium, 21865 E. Copley Dr. 5.3 TRAFFIC AND TRANSPORTATION COMMISSION —November 14, 2002 — 7:00 p.m., SCAQMD/Government Center Hearing Board Room, 21865 E. Copley Dr. 5.4 COMMUNITY COORDINATING COMMITTEE -November 18, 2002 - 7:00 p.m., SCAQMD/Government Center, Rooms CC -3&5, 21865 E. Copley Dr. NOVEMBER 5, 2002 PAGE 3 CITY COUNCIL 5.5 CITY COUNCIL MEETING — November 19, 2002 — 6:30 p.m., SCAQMD/Government Center Auditorium, 21865 E. Copley Dr. 6. CONSENT CALENDAR: Moved by C/Herrera, seconded by C/Zirbes to approve the Consent Calendar as presented. Motion carried by the following Roll Call vote with MPT/O'Connor voting no on Item 6.10. AYES: COUNCIL MEMBERS - Herrera, Huff, Zirbes, MPT/O'Connor, M/Chang NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None 6.1 APPROVED CITY COUNCIL MINUTES: 6.1.1 Special Meeting of October 14, 2002—As submitted. 6.1.2 Regular Meeting of October 15, 2002 — As submitted. 6.2 RECEIVED AND FILED PLANNING COMMISSION MINUTES — September 24, 2002. 6.3 RECEIVED AND FILED PARKS AND RECREATION COMMISSION MINUTES — September 26, 2002. 6.4 APPROVED WARRANT REGISTERS - dated October 17, October 24 and October 31, 2002, for a combined total of $1,380,872.21. 6.5 REVIEWED AND APPROVED TREASURER'S STATEMENT - month of September 2002. 6.6 AUTHORIZED CITY MANAGER TO PURCHASE A CUSTOMER REQUEST MANAGEMENT SYSTEM FROM GOVPARTNERS ($42,000) AND AUTHORIZED PAYMENT FOR HOSTING SERVICES IN AN AMOUNT NOT TO EXCEED $6,000. 6.7 ACCEPTED STORM DRAIN EASEMENTS. (a) ADOPTED RESOLUTION NO. 2002-74 ACCEPTING GRANT OF STORM DRAIN EASEMENTS FROM THE WALNUT VALLEY UNIFIED SCHOOL DISTRICT FOR TRACT NOS. 32400, 52203, 52204 AND 52228 LOCATED IN THE DIAMOND CREST ESTATES. (b) ADOPTED RESOLUTION NO. 2002-75 REQUESTING THE LOS ANGELES COUNTY FLOOD CONTROL DISTRICT TO ACCEPT TRANSFER AND CONVEYANCE OF STORM DRAIN MAINTENANCE EASEMENT FOR TRACT NOS. 32400, 52203, 52204 AND 52228 (DIAMOND CREST ESTATES) FOR FUTURE OPERATION, MAINTENANCE, REPAIR AND IMPROVEMENT. NOVEMBER 5, 2002 PAGE 4 CITY COUNCIL 6.8 APPROVED EXONERATION OF SEWER, STORM DRAINS AND STREETS BOND (FAITHFUL PERFORMANCE - BOND NO. 3SM98404300) IN THE AMOUNT OF $297,587; AND REDUCTION OF GRADING BOND (FAITHFUL PERFORMANCE - BOND NO. 3SM98404500) FROM $1,054,549 TO $210,909.80 FOR TRACT NOS. 50313 AND 48487 (WINDMILL ESTATES, LLC). 6.9 APPROVED AMENDMENT NO. 1 TO AGREEMENT WITH KOSMONT ASSOCIATES IN AN AMOUNT NOT TO EXCEED $56,000 TO PROVIDE ECONOMIC DEVELOPMENT SERVICES AND APPROPRIATE $56,000 FROM GENERAL FUND RESERVES. 6.10 AUTHORIZED EXPENDITURES IN AN AMOUNT NOT TO EXCEED $11,000 FOR FY 2002/03 TO GRAPHICS UNITED FOR NEWSLETTER PRINTING AND MAILING SERVICES; AND AUTHORIZE A CUMULATIVE EXPENDITURE OF $15,750 TO THE POSTMASTER FOR NEWSLETTER POSTAGE. 6.11 SUPPORTED THE CITY OF SACRAMENTO'S PETITION IN FILING OF AMICUS CURIAE BRIEF IN THE MATTER OF BARDEN V. CITY OF SACRAMENTO. 7. PUBLIC HEARINGS: None 8, COUNCIL CONSIDERATION: 8.1 ADOPT RESOLUTION NO. 2002-76 APPROVING REIMBURSEMENT OF PROJECT COSTS AND APPOINTMENT OF FINANCING TEAM. MPT/O'Connor asked for amendment changes. correct the first Whereas in Recital 1 to "Community/Senior Center and other capital projects" for purpose of possible financing and in Section 4, change " e designee" to "her/his designee." Y Moved by C/Herrera, seconded by MPT/O'Connor to adopt Resolution No. 2002-76 as amended by MPT/O'Connor. Motion carried by the following Roll Call vote: AYES: COUNCIL MEMBERS - Herrera, Huff, Zirbes, MPT/O'Connor, M/Chang NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None 9. COUNCIL SUB -COMMITTEE REPORTS/ COUNCIL MEMBER COMMENTS: C/Zirbes thanked all veterans for their service to the U.S. and thanked the veterans who participated in this evening's ceremonies. NOVEMBER 5, 2002 PAGE 5 CITY COUNCIL C/Herrera appreciated the ceremony honoring veterans this evening. Because of their commitment to the service of their country, residents are able to maintain a safe homeland. Her son serves in the military and she is concerned for him during this time of uncertainty in the world. God Bless all veterans as well as everyone who currently serves in the military. C/Huff thanked the veterans and staff members who participated in tonight's ceremony. He encouraged everyone to pause on Veterans' Day in honor of all who have served this great country and protected its freedoms. MPT/O'Connor thanked veterans for providing the freedoms to the citizens of the U. S. She appreciated the work staff did in providing the forum to honor the veterans. She thanked the veterans who came to participate this evening. She asked staff to pay particular attention to abuses of the City's Sign Ordinance during politica[ campaigns. She suggested the Council consider moving the first meeting in November to the first Monday or Wednesday in order to avoid having a meeting occur on Election Days. M/Chang paid his respects to local veterans and all veterans who have served this nation. He also asked for recognition of all veterans who gave their lives in service to protect the nations' freedoms. 10. ADJOURNMENT: Mayor Chang adjourned the meeting at 8:30 p.m. in memory of Georgette Plovanich, mother of Community Volunteer Patrol Member Glen Plovanich. LYNDA BURGESS, City Clerk ATTEST: WEN CHANG, Mayor Agenda No. 6.2.1 MINUTES OF THE CITY OF DIAMOND BAR STUDY SESSION OF THE PLANNING COMMISSION OCTOER 8, 2002 CALL TO ORDER: Chairman Ruzicka called the meeting to order at 6:00 p.m, in Room CC -8 of the South Coast Air Quality Management Center, 21865 East Copley Drive, Diamond Bar, California, 91765. 1. ROLL CALL: Present: Chairman Joe Ruzicka, Vice Chairman Steve Tye, and Commissioners Steve Nelson, Dan Nolan and Jack Tanaka. Also Present: James DeStefano, Deputy City Manager; Ann Lungu, Associate Planner; Linda Smith, Development Services Assistant, Stella Marquez, Administrative Assistant, David Meyer and Milan Garrison, LDM Associates. 2. DISCUSSION -r ENTITLEMENT PROCESS POLICIES AND PROCEDURES — Presentation by David Meyer and Milan Garrison Mr. Meyer explained how specific plans are generally considered for much larger projects that the project currently under consideration. C/Tanaka asked if the Grand Avenue/Diamond Bar Boulevard intersection area was built as it was because of different property owners. Mr. Meyer explained that Los Angeles County did not use a specific plan for that development. The County allowed the area to be cut up into smaller lots and sold off. When the development was fist proposed it may have been owned by a single property owner. However, the County cut it up into small lots and there was no requirement for the owners to work together for the common good of the area. As a result, parking is inadequate and some of the delivery areas and alleys are dead ends so that there is no possible way to make one circle around the area. Some of the centers in the City are extremely difficult and dangerous to access. These are examples of projects being economically driven. In addition, the City was unable to adopt certain development standards until the General Plan was finally adopted in 1995, five and one-half years after the initial attempt to get it adopted. OCTOBER 8, 2002 PAGE 2 PLANNING COMMISSION C/Nolan reiterated that the General Plan is generally considered a long- term plan, five or ten years out. In a community such as Diamond Bar that is 90 percent developed, is it common practice to change the General Plan for specific initiatives. Mr. Meyer responded in the affirmative. When circumstances change and a City recognizes there is a better way to do business, it can change its General Plan. The project currently under discussion is zoned for industrial use and one of the Commission's considerations is to determine whether industrial is an appropriate use for the site given what is taking place in the immediate area. If the City believes there are better opportunities for the site, then General Plan modifications may be considered. DCM/DeStefano explained that this particular property was not an issue during any of the General Plan discussions. Other parts of the City were at issue. This particular parcel has been slated for development for the past 12 or so years. There was a project approved back in 1991 that did not proceed when the economy nose-dived. The General Plan that was adopted in July 1995 was a snapshot of where the City felt it wanted to be in 10-15-20 years. It is common for a General Plan to change over time and when a City determines it is out of alignment with its document, it is appropriate for modification to take place. DCM/DeStefano explained to Chair/Ruzicka that there is no prescribed time for this to take place. Each year staff is required to submit a basic report to the State Office of Planning and Research, and Housing and Community Development. Mr. Meyer is talking about a basic review of the document to determine whether it states what the City still intends to do. Discussion should likely be agendized on an annual basis. Mr. Meyer explained that the purpose of this discussion is to understand the tools available to the Planning Commission. Staff did not want to introduce this matter as a public hearing item and become involved in an educational process. He said that his firm remains ready to assist the Planning Commission. C/Tanaka asked if the current use of this property went through the Conditional Use Permit process to which Mr. Meyer responded that he did not know because this use was inherited from the County. DCM/DeStefano informed the Commissioners that staff would present a specific project to the Planning Commission for consideration on October 27. In the meantime, if any Commissioners have questions about OCTOBER 8, 2002 PAGE 3 PLANNING COMMISSION their decision-making responsibilities, staff will provide additional backup for their edification. For educational purposes, Commissioners ought to take a look at the current General Plan paying particular attention to the Land Use Element. Mr. Garrison explained that "page 3" of the discussion memo gives a brief outline of the proposed project. DCM/DeStefano explained that when projects are presented Commissioners are concerned about what types of uses are compatible. The specific plan gives the Commissioners the opportunity to separate out those uses that they may not believe to be appropriate. It is a tool that provides the list of uses that would be permitted within this property and allows the Commissioners to list the uses they would want to include within this piece of unique property. He believed that in the future, there would be an opportunity for more specific plans. Other areas of the City may be identified for this kind of detailed planning. ADJOURNMENT: There being no further business to come before the Planning Commission, Chair/Ruzicka adjourned the Study Session at 7:00 p.m. to the Regular Planning Commission Meeting. S .lama nz.gtnfann Agenda No. 6.2.2 MINUTES OF THE CITY OF DIAMOND BAR REGULAR MEETING OF THE PLANNING COMMISSION OCTOBER S, 2002 CALL TO ORDER: Chairman Ruzicka called the meeting to order at 7:10 p.m. in the South Coast Air Quality Management/Government Center Auditorium, 21865 East Copley Drive, Diamond Bar, California 91765, PLEDGE OF ALLEGIANCE: Commissioner Nolan led the pledge of allegiance. 1. ROLL CALL: Present: Chairman Joe Ruzicka, Vice Chairman Steve Tye, and Commissioners Steve Nelson, Dan Nolan and Jack Tanaka. Also Present: James DeStefano, Deputy City Manager, Ann Lungu, Associate Planner, Linda Smith, Development Services Assistant, and Stella Marquez, Administrative Assistant. 2. MATTERS FROM THE AUDIENCEIPUBLIC COMMENTS: None Offered. 3. APPROVAL OF AGENDA: Chair/Ruzicka requested that Item 7.1 and 7.3 be considered ahead of Item 6.1. 4. CONSENT CALENDAR: 4.1 Minutes of Regular Meetings of September 24, 2002. C/Nolan moved, C/Tanaka seconded, to approve the minutes of September 24, 2002, as presented. Without objection, the motion was so ordered. 5. OLD BUSINESS: None. 7. PUBLIC HEARING (S): 7.1 Develooment Review No. 2002-16(1). Minor Conditional Use Permit No. 2000-15(1) and Minor Variance No. 2000-17(1) (pursuant to Code Sections 22.66.050.C.) is a request for a one-year extension of time for a project approved by the Planning Commission on October 24, 2000. The Planning Commission approval allows the construction of a two-story, single-family residence, of approximately 12,340 square foot two-story single-family residence OCTOBER 8, 2002 PAGE 2 PLANNING COMMISSION with two garages for five -cars, pool/spa, gazebo, and tennis court. A Minor conditional Use Permit is required to process the circular driveway. The Minor Variance is a request to decrease the rear yard setback by 20 percent. The extension of time, if approved, will allow the continuation of this entitlement until October 24, 2003. PROJECT ADDRESS: 2521 Braided Mane (Lot 91 of Tract No. 23483) Diamond Bar, CA 91765 PROPERTY OWNER: Ton -Dei Chiu 2822 Bentley Way Diamond Bar, CA 91765 APPLICANT: Tein Wang 801 S. Garfield Avenue Alhambra, CA 91801 DSA/Smith presented staff's report. Staff recommends Planning Commission approval of Development Review No. 2002-16(1), Minor Conditional Use Permit No. 2000-15(1) and Minor Variance No. 2000-17(1), the Findings of Fact, and conditions of approval as listed within the resolution. Chair/Ruzicka opened the public hearing. There was no one present who wished to speak on this item. Chair/Ruzicka closed the public hearing. VC/Tye moved, C/Nolan seconded, to approve Development Review No. 2002-16(1), Minor Conditional Use Permit No. 2000-15(1) and Minor Variance No. 2000-17(1), Findings of Fact, and conditions of approval as listed within the resolution.. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS: Nelson, Nolan, Tanaka, VC/Tye, Chair/Ruzicka NOES: COMMISSIONERS: None ABSENT: COMMISSIONERS: None 7.3 Conditional Use Permit No. 2002-10 (pursuant to Code Sections 22.58.22.42.035 and 22.1.0.030. Table 2-5.) is a request to allow a computer services/gaming center in an existing shopping center. A computer services/gaming center is defined as a business establishment that provides the space, equipment and technology to make fast, multi -player PC games and high speed computers available to patrons for a fee. OCTOBER S, 2002 PAGE 3 PLANNING COMMISSION PROJECT ADDRESS: 962 N. Diamond Bar Boulevard (The Oak Tree Plaza) Diamond Bar, CA 91765 PROPERTY OWNER: Beal Bank 600 Legacy Drive #4E Plano, Texas 75024 APPLICANT: Paul Esteves 23025 Paseo De Terrado Diamond Bar, CA 91765 AssocP/Lungu presented staff's report. Staff recommends Planning Commission approval of Conditional use Permit No. 2002-10, the Findings of Fact, and conditions of approval as listed within the resolution. Paul Esteves, applicant, said he read staff's report and conditions of approval contained within the resolution. Chair/Ruzicka opened the public hearing. Greg Kiser, 606 Boxcove Place, said his 16 year-old son lost his 10"' year of school due to gaming. The issue was curfew. He was extremely concerned that youths would remain at Gainers X past the stated curfew. He asked how the City would prevent minors from violating curfew at Garners X. He was also concerned about safety and quoted from a June 16, 2002, Los Angeles Times article regarding security measures at Cyber Cafes. DCM/DeStefano explained that the Ordinance dealing with this type of use was carefully crafted to include proactive measures including curfew. Monitoring of this ordinance is the responsibility of 1) the property owner and 2) the City of Diamond Bar's Neighborhood Improvement staff. He pointed out that no problems with this establishment have been brought to the City's attention during its term of operation. Chair/Ruzicka closed the public hearing. VC/Tye was still concerned about enforcement of the curfew. Mr. Esteves responded that his establishment has been in business for about a year. He knows most of his customers, their schools and ages. He and his staff are very aware of the possibility of young people getting into trouble if they stay out past a certain hour. As a result, he and his staff ask the students to Ieave or call their parents to pick them up. Some times parents are late picking up their children. If this occurs, the individual is asked to get off of the computer and wait in the lounge OCTOBER 8, 2002 J. area. PAGE 4 PLANNING COMMISSION C/Nolan asked the applicant if notices regarding the 10:00 p.m. curfew are posted at his business to which he responded that such notices are posted in the front entrance. In addition, Sheriff's Deputies periodically monitor the establishment. Monitoring occurred quite frequently during the first year of operation. Monitoring has slowed down because of the self-monitoring. C/Nelson asked for clarification of Item (g) (3) on Page S. C/Tanaka moved, C/Nelson seconded, to approve Conditional Use Permit No. 2002-10, the Findings of Fact, and conditions of approval as listed within the resolution. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: Tanaka, Nelson, Nolan, VC/Tye, Chair/Ruzicka None None C/Nelson urged the applicant to use common sense monitoring of patrons to avoid implementation of additional restrictions by the Planning Commission. NEW BUSINESS: 6.1 Discussion of the City's Telecommunications Ordinance. Staff recommends that the Planning Commission direct staff as appropriate. Chair/Ruzicka reminded the Commissioners that the first installation on Darrin Drive turned into a very controversial decision. He felt that cell sites should be installed in such a manner as to be as non -disturbing as possible to the surrounding property owners. Since that time, at least three additional cell sites have been incorporated at the same location with the latest consideration indicating full cooperation and consideration from the property owner. In another instance, another property owner, a church, introduced a second cell site to the Commission. He was extremely disappointed with the telecommunications company and property owner's uncaring attitude about the effect of the site on its surrounding neighbors. He is not so concerned about the company because the City can govern the telecommunication's company. However, it is the attitude of the property owners that give him caution that the Planning Commission should give them up -front notice that it will not tolerate them giving carte blanche to telecommunications companies to put up any kind of facility they wish to install. At some point in the ordinance there should be a complete and required reading of the permit process and related materials by the company and the property owner to insure compliance. OCTOBER S, 2002 PAGE 5 PLANNING COMMISSION VC/Tye felt that the Commission should determine boundaries. In that regard, he did not find the current ordinance to include limitation of sites. Should there be a different set of criteria for residential and commercial sites? When the antennas were installed on Golden Springs Drive at Torito Lane there were no private residences in the area. The site is hideous and now residents have to live with the blight. Is that area residential or commercial at this point? He appreciates the opportunity to revisit this evolving process. He agreed wholeheartedly that businesses do whatever they need to do at the least cost and the neighborhoods "be damned". It becomes the city's responsibility to take care of the neighborhood. C/Nolan said he believed that at some point the current technology would become outdated and would it make sense to include clauses that speak to the eventual removal of the antennas by the property owner or company. C/Nelson felt that applicants should come before the Commission with appropriate cross-sections and visual simulations. He believed that part of the answer to the question "when is enough, enough?" has to do with the aesthetics. He was also interested in timely remmediation at no cost to the City. He agreed with C/Nolan's comment regarding dismantling. DCM/DeStefano responded yes to C/Tanaka's question about whether the section addressing abandonment and removal addressed antennas that were no longer worker, inoperable or useless. Chair/Ruzicka placed great emphasis on the "Attitude" of property owners about these types of installations. So long as attitudes are tuned to paying attention to the effect these installations would have on their neighbors would satisfy his concern. And, should there be reference to X number of sites per acre or per half acre, etc. C/Nolan felt that if a number were not specified in the ordinance, there would be no limit to the number of applicants per site submitted to the City resulting in a proliferation of antennas on any one location. VC/Tye wondered if the Commission could legislate attitude. If a specific number were set down in the ordinance, property owners and companies would understand the City's expectations. C/Nolan concurred with C/Tanaka's comments regarding the abandonment paragraph he felt the Commission should review the wording and concur with the definition. DCM/DeStefano assured Chair/Ruzicka that his remarks tendered at the September 24 meeting were included in the minutes. Staff will explore the issue of "when is enough, enough?" because the consideration is pertinent to commercial and OCTOBER 8, 2002 PAGE 6 PLANNING COMMISSION industrial locations as welt as residential locations. Staff will explore the clause addressing what must occur when a device becomes inoperable, antiquated or unused. Staff will explore application requirements and consider strengthening areas addressing visual aesthetics of a device by using graphics to depict what the device might look like in its proposed setting. Staff will also consider imposing bond requirements to ensure timely implementation of conditions. VC/Tye pointed out that the task force minutes indicate the members wanted to be careful that an onerous process was not placed on telecommunication companies by requiring bonds. 7. PUBLIC HEARING(S): 7.2 _Conditional Use Permit No. 2002-07, Variance No. 2002-02 and Development Review No. 2002-18 (pursuant to Code Sections 22.42.130.G.4, 22.58, 22.54, and 22.45) is a request to install a wireless telecommunications facility with Antennas (mounted on a mono -cypress) camouflaged as a cypress tree and equipment cabinet. The Variance relates to the height of the mono -cypress that exceeds the maximum allowable 35 -foot height. The Development Review relates to architectural/design review. PROJECT ADDRESS PROPERTY OWNER: APPLICANT: 2151 S. Diamond Bar Boulevard Diamond Bar, CA 91765 Roman Catholic Abp 3424 Wilshire Boulevard Los Angeles, CA 90010 Cingular 2521 Michelle Drive Tustin, CA 92780 AssocP/Lungu presented staff's report. Staff recommends Planning Commission approval of Conditional Use Permit 2002-07, Variance No. 202-02 and Development review No. 2002-18, the Findings of Fact, and conditions of approval as listed within the resolution. C/Nelson asked how tall the current Cypress trees stand at this Iocation. AssocP/Lungu responded that some of the Cypress trees are not as tall as the proposed mono -cypress. Some pine trees appear to be close to the same height and the Cypress trees will eventually mature to this height. She said she has not inspected the material of the mono -cypress. OCTOBER 8, 2002 PAGE 7 PLANNING COMMISSION C/Nelson was concerned that the mono -cypress would be a bad imitation of a Christmas tree. This is a good example of an applicant appearing before the Commission expecting it to rule on camouflage material it has not inspected. Chair/Ruzicka asked that the record reflect this Commissioner's deep concern about that Roman Catholic Archdiocese short sightedness restricting access to the bell tower. This bell tower could be amply modified to house the antenna to insure that this site would be totally invisible and at the same time provide the telecommunications company with what they need. John Halminsky, Cingular, stated he read staff's report and concurs with the conditions of approval. Regarding the Commission's valid concerns, he explained that in addition to lack of access to the bell tower, the architect and structural engineer conceded that the best available option for location of the equipment was found to be outside the church. VC/Tye asked why the antenna could not be located on the courtyard area. Mr. Halminsky explained that the courtyard is a public gathering area. Equipment containment would require approximately 10x 15 feet of area that would greatly reduce the area to which the church was opposed. Chair/Ruzicka said he now has a different picture of the process leading to this proposal after the applicant's explanation. Mr. Halminsky apologized for not providing the Commission with a sample of the product. He visited the manufacturing site in Escondido that houses several such products that appear realistic. The product is UV protected and will not lose its color. He suggested the Commission impose a condition to provide that the applicant submit material samples for review and approval. Chair/Ruzicka opened the public hearing. Dennis Anderson, 1950 Silverhawk, said that if the applicant knew that 24-hour access was unavailable, why did they go to such lengths to consider the location. Mr. Halminsky stated that during the long negotiation process the church realized it would not be feasible to house the equipment in the bell tower when they decided not to allow 24-hour access. C/Nelson and C/Nolan felt that the best Iocation might be outside the church. They troth wanted to see a sample of the material. DCM/DeStefano indicated to C/Nolan that proliferation of antennas at this site is OCTOBER 8, 2002 PAGE 8 PLANNING COMMISSION possible, depending ; on various factors. It is likely that one or two additional applications would be forthcoming for this location. VC/Tye reiterated that therein lies his concern. The church needs to consider placing these antennas in the bell tower for the good of the neighborhood. C/Nelson moved, C/Nolan seconded, to continue the public hearing for Conditional Use Permit No. 2002-07, Variance No. 2002-02 and Development Review No. 2002-18 to October 22, 2002. The applicant is requested to provide the following: 1) A substantial amount of the mono -cypress material including a leaf and portion of the branch leading from the trunk as well as, a sample of live Cypress tree for comparison purposes; 2) a conceptual plan for increasing the equipment cabinet wall to six feet in height including landscape materials and 3) a drawing of the possible location in the courtyard for the equipment cabinet. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: Tanaka, Nelson, Nolan, VC/Tye, Chair/Ruzicka None None 8. PLANNING COMMISSION COMMENTS: VC/Tye thanked staff for addressing issues raised by himm at a prior meeting. The bins and graffiti have been removed. He asked if the Big Lots location has a certain number of days to respond or are they cited on a daily basis. DCM/DeStefano responded that Big Lots, through the citation effort, was given 30 days to resolve the problem and pay for the citation. If they do not comply within the 30 days they would be subject to a second citation. 9. INFORMATIONAL ITEMS: DCM/DeStefano reported that Big Lots has removed two of the four big bins. Staff continues to work with Big Lots toward the removal of the two bins currently located between the store and the Edison substation. Graffiti was removed as indicated. The Planning Commission also asked staff to look into the matter of construction debris. Staff has observed that the area looks better than it did two weeks ago but needs further consideration. Such is the message that will be conveyed to the developer. Staff believes the problem of access with "The Country Estates" has been resolved and reportedly, all that the Commissioners need to provide is a piece of identification. Each Commissioner is on a list and should be provided access to review sites for consideration. VC/Tye advised him about the gate closure on Diamond Bar Boulevard at Shadow Canyon and a future closure on Grand Avenue at Shotgun, both ingress/egress to "The Country Estates." DCM/DeStefano reported that once the City became aware of the closures for improvement purposes, a coordination effort took place between "The Country Estates" staff and City staff and essential services. With respect to the dead tree at the 24401 Damn Drive OCTOBER S, 2002 PAGE 9 PLANNING COMMISSION cell site, the City's Arborist visited the site and reported that indeed, the Black Walnut tree is dead and has been so for about two years. He believes that its demise is attributable to the application of herbicide in the immediate area. At a recent meeting, the City Council approved the Parcel Map No. 22987 for Gentle Springs Drive properties (Best Western, etc.) Earlier this evening he approved three additional homes in "The Country Estates" proposed by JCC. 10. SCHEDULE OF FUTURE EVENTS: As presented in the agenda. ADJOURNMENT: There being no further business to come before the Planning Commission, Chairman Ruzicka adjourned the meeting at 9:25 p.m. to October 22, 2002. Respectfully Submitted, /s/ James DeStefano James DeStefano Deputy City Manager Attest: /s/ Joe Ruzicka Chairrnan Joe Ruzicka CITY OF DIAMOND BAR Agenda No. 6.3 MINUTES OF THE TRAFFIC AND TRANSPORTATION COMMISSION SEPTEMBER 12, 2002 CALL TO ORDER: Chairman Morris called the meeting to order at 7:08 p.m. in the South Coast Air Quality Management/Government Center Hearing Board Boom, 21865 E. Copley Drive, Diamond Bar, California 91765. PLEDGE OF ALLEGIANCE: Commissioner Kashyap led the Pledge of Allegiance. ROLL CALL: Present: Vice Chairman Morris, and Commissioners Vinod Kashyap, Liana Pincher and Tony Torng. Chairman Virginkar was excused. Also Present: David Liu, Director of Public Works, Sharon Gomez, Management Analyst, and Debbie Gonzales, Administrative Assistant. II. APPROVAL OF MINUTES: A. Minutes of August 8, 2002. C/Torng moved, C{Pincher seconded, to approve the minutes of the August 8, 2002 meeting as presented. Motion carried by the following Roll Call vote: AYES: COMMISSIONERS: Kashyap, Pincher, Torng NOES: COMMISSIONERS: None ABSTAIN: COMMISSIOENRS: VC/Morris ABSENT: COMMISSIONERS: ChairNirginkar III. COMMISSION COMMENTS: C/Kashyap reported an update on the traffic situation for Cold Spring Lane and Diamond Bar Boulevard. IV. PUBLIC COMMENTS: None Offered. V. CONSENT CALENDAR: None VI. ITEMS FROM STAFF A. Traffic Enforcement Update — Received and filed. VII. OLD BUSINESS A. Speeding Concerns at Golden Prados/Woodleaf Drive intersection. SEPTEMBER 12, 2002 PAGE 2 T&T COMMISSION MA/Gomez presented staff's report. Staff recommends that the Traffic and Transportation Commission receive public testimony, review and discuss the Golden Prados Drive/Woodleaf Drive intersection. Shirley Wilkomm, 573 Golden Prados Drive, said it is a joke to have a black and white sitting on the street because the young people see everything that goes on in the street. On Saturday night three cars came down Woodleaf Drive, stopped at the stop sign, lined up and proceeded to drag race up Golden Prados Drive to Golden Springs Drive. She has seen this occurrence many times and the practice will continue because the City does nothing. She wholeheartedly disagrees with the speed sensor attached to the light pole in front of her home because it serves no purpose when it is there for only a few hours. C/Tomg said that if there is a problem about drag racing on the street Mrs. Wilkomm should contact the police. She responded that she has talked to the Sheriff's department. Mrs. Wilkomm responded to VC/Morris that the drag racers are from the neighborhood. By the time the police respond the kids are gone. Mrs. Wilkomm asked the Commission to consider a three-way stop on both ends of Golden Prados Drive as well as on Woodleaf Drive. DPW/Liu explained to C/Kashyap that stop signs are not warranted at their intersection. The location must meet the criteria and in this case, it does not. The City Council can use its discretion to meet public demand. However, they must consider whether this constitutes a public safety issue and whether installation of stop signs would hold up to legal scrutiny. Speeding alone does not meet the multi -way stop sign criteria. C/Torng said he felt the Public Works review of this matter was excellent and that the Commission should follow the criteria. The City cannot please everyone. VIII. NEW BUSINESS: None IX. STATUS OF PREVIOUS ACTION ITEMS: DPW/Liu reported that at its August 20 meeting, the City Council approved the Commission's recommendation to install a three-way stop sign on Goldrush Drive at Chandelle Place. At the September 3 meeting the City Council approved the Commission's recommendation to install multi -way stop signs on Leyland Drive at Newbury Way and on Leyland Drive at Wynnewood Drive. That evening the Council received a street sweeping presentation update and a report on the Dial -A -Ride Program. Beginning September 16, the Sheriff's Department will begin enforcement of the street sweeping parking regulation program. SEPTEMBER 12, 2002 PAGE 3 T&T COMMISSION X. ITEMS FROM COMMISSIONERS: XI. INFORMATIONAL ITEMS: DPW/Liu reported on the following items: A. Redflex B. Brea Canyon Road at Diamond Bar Boulevard C. Brea Canyon Road at Pathfinder Road D. Brea Canyon Road at 60/57 Freeway Off -Ramp E. Neighborhood Traffic Management Program F. Cold Springs Lane/Diamond Bar Bouelvard XII. SCHEDULE OF FUTURE CITY EVENTS — as agendized. ADJOURNMENT: There being no further business to come before the Traffic and Transportation Commission, Vice Chairman Morris adjourned the meeting at 8:47 p.m. Respectfully, _/ a l Dayid G LU David G. Liu, Secretary Attest: /s/ Roland Morris Vice Chairman Roland Morris Agenda # 6 ,4 Meeting Date: November 19,2002 CITY COUNCIL AGENDA REPORT jt�:orcw �rc,'� TO: Honorable Mayor and Members of the City Council VIA: Linda C. Lowry, City ManageW?,,, TITLE: Approval of Voucher Registers dated November 7, 2002 and November 14, 2002, totaling $758,072.68. RECOMMENDATION: Approve Voucher Registers. FINANCIAL IMPACT: Expenditure of - $758,072.68 of budgeted funds. BACKGROUND: At the September 17, 2002 City Council meeting, the City established a policy of issuing accounts payable checks on a weekly basis with City Council ratification and approval at its next regularly scheduied City Council meeting. DISCUSSION: The list of accounts payabie bills, in the form two voucher registers, was reviewed and recommended for payment by the Finance Subcommittee. The Finance Subcommittee reviewed the Voucher Registers dated November 7, 2002 for $427,258.18 and November 14, 2002 for $330,814.50. The voucher registers are now being presented to the City Council for ratification and approval. PREPARED 8Y: Linda G. Magnuson Finance Director REVIEWED BY: f Departmenk read Attachments: Voucher Register — 11 /07/2002 & 11/14/02 Deputy City Manager 1 CITY OF DIAMOND BAR INTEROFFICE MEMORANDUM TO: Mayor Pro Tem O'Connor and Councilmember Huff FROM: Linda G. Magnuson, Finance Director /k� SUBJECT: Voucher Register, November 7, 2002 DATE: November 7, 2002 Attached is the Voucher Register dated November 7, 2002. As requested, the Finance Department is submitting the voucher register for the Finance Committee's review and approval prior to the creation of the warrants. The Voucher Register will subsequently be entered on the consent calendar for the City Council meeting on November 19, 2002. The checks will be produced after the scheduled meeting time and any recommended changes are made. Please review and sign the attached. ' CITY OF DIAMOND BAR VOUCHER REGISTER APPROVAL TIMe attached listing of vouchers dated November 7, 2002 have been reviewed, approved, and recommended for payment. Payments are hereby allowed from the following funds in these amounts ' FUNDDBCRIPTIONPREPAID VOUCHERS TOTAL 0O1 GENERAL FUND _ ,00 229,334.65 229,334~65 112 PROP A - TRANSIT FUND .00 11,639.98 11,639.98 | 118 AIR QLTY IMpR FD (AB2766) - .00 1,361.79` 1,361.79 125 COM DEV BLK GRANT FUND'.'`� .O()_ 2,237.00 2,237.O0 126 CITIZENS OPT -PUBLIC 5FTT �.00 _ 120.82 '. 130-82` 128 CA LAW ENF EQUIP PGM . .08 . ' �6O,215.0O ` 6V"215.00 138 LLAD #38 FUND .00 ^ . .`11 ,964.40 \ 11,964.40 139 LLAD #39FUND .00 10,289.21 10,289.21 141 LLAD #41 FUND .00 9,9--7.01 9,927.Dt 250 CAPITAL IMPROV/PRDJ FUND .00 90,158.32 90,1�—fS.32 [ REPDRT FOR ALL FUNDS .00 427,258.18 427,258.18 APP�JV�D BY: Finance �ire�tor Deborah H. O'Connor Mayc3r Pro Tem Councilmember RUN DATE: 11/06/2002 17:10:27 7-L D/SYCT-ACCT-PROJECT-ACCT NC {A ABDOU 001-34760-- 001-34760-- AI)ELPH;A 0014610-42125-CC503-42125 0014010-42125-CC203-42125 0014010-42125-CC403-42125 0014010-42125-CC303-42125 ` ADVANCED INFRASTRUCTURE MNGMT INC If 00155:0-45221-- DALENE ALOJIPAN 001 -23002 -- AMERICANA ART CHINA CO OO 15090-9100-- ARCADIA MUSIC CLL: 0015350-45300-- CY.RISTINE ARREOLA 001 -34730 -- ARROYO GEOTECHNICAL 001 -23C12 -- 001 -23012 -- CITY OF DIAMOND BAR VOUCHER REGISTER PAGE: 1 DUE 71�RU: 11/07/2002 PREPAID PO # INVOICE DESCRIPTION AMOUNT DATE CHECE 51628 RECREATION RIZUND x10.00 50797 RECREATION REFUND 74.00 TOTAL PREPAIDS TOTAL VOUCHERS 184.00 TOTAL DUE VENDOR I84.00 MODEM SVCS -COUNCIL 56.95 MODEM SVCS -COUNCIL 44.95 MODEM SVCS -COUNCIL 54.95 MODEM SVCS -COUNCIL 141.64 TOTAL PREPAIDS .00 TOTAL VOUCHERS - 298.45 TOTAL DUE VENDOR 298.45 12256 NO.2 CNSLTNG SVCS -GIS IMPL.PLN .2,750.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,750.00 TOTAL DUE VENDOR 1,750.00 52731 PARK DEP REFUND-REAGAN 50.00 TOTAL PREPAID$ .00 TOTAL VOUCHERS 50.00 TOTAL DUE VENDOR 50.00 12174 31272 ENGRAVE SVCS -CITY MUGS 30.12 TOTAL PREPAIDS .00 TOTAL VOUCHERS 30.12 TOTAL DUE VENDOR 30.12 -2002-01 PERFORMANCE -VETERAN'S 350.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 350.00 TOTAL DUE VENDOR 350.00 51-210 RECREATION REFUND 80.00 TOTAL PREPAID$ .00 TOTAL VOUCHERS 80.00 TOTAL DUE VENDOR 80.00 031-5058 PROF.SVCS-EN 02-344 980.00 031-5058 PROF.SVCS-EN 02-343 1,120.00 TOTAL PREPAIDS .CC TOTAL VOUC =S 2.,100.00 TOTAL DUE VENDOR 2.100.00 ` CITY OF DIAMOND BAR RUN DATE: 11/06/2002 17:10:27 VOUCHER REGISTER PAGE: 2 • DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO 4 INVOICE DESCRIPTION AMO'UN'T DATE CHECK A^&-• 0014090-42125-- LONG DIST CHARGES 220.33 TOTAL PREPAIDS .00 TOTAL VOUCHERS 220.33. _ TOTAL DUE VENDOR 220.33 AT&T WIRELESS SERVICES 0014411-42125-- CELL CHRGS-SHERIFF 26.27 0014415-42125-- - CELL CHRGS-V/PATROL 26.27 001409C-42125-- CELL CHRGS-POOL V£H 193.75 C014090-42125-- MEMO CREDIT -4.35 TOTAL_ PREPAIDS .00 TO'AL VOUCHERS 241.94 TOTAL DDE VENDOR 241.94 DANA AYALA 001-34780-- 50706 RECREATION REFUND 20.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 20.00 TOTAL DISE VENDOR 20.00 RAQUEL EARNEDO 001-34780-- 50980 RECREATION REFUND 45.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 45.00 TOTAL DUE VENDOR 45.00 GLORIA BECERRA 001-34780-- 51024 RECREATION REFUND 20.00 TOTAL PREPAIDS .00 TOTAL, VOUCHERS 20.00 TOTAL DUE VENDOR 20.00 EOISE CASCADE OV 10E PRODUCTS 0014040-41200-- PC 12318 SUPPLIES-CITY CLERK 19.46 0014 G30-41200-- PO 12318 SUPPLIES-CITY MANAGER 7-64 C015210-41200-- PO 12318 SUPPLIES-PLANNING 90.32 0015350-41200-- PC 12318 SUPPLIES-RECREATION 77.30 0014090-41200-- PO 12318 SUPPLIES-GENERAL 573.69 001,5350-41200-- PO 12318 SUPPLIES-RECREATION 8.24 0015350-41200-- PO 12318 SUPPLIES-RECREATION 60.45 0015350-41200-- PO 12318 MEMO CREDIT-RECREATION -19.86 TOTAL PREPAIDS .00 TOTAL VOUCHERS 817.24 TOTAL DUE VENDOR 817.24 BONTI;RRA CUNSULTING 2505215-4642C-13899-4642G 12296 2660 CONSULTING SVC-COMM S/CTR 4,048.00 001-23011-- 2650 PROF.SVCS-FER 96-01 5,237.03 TOTAL PREPAIDS •00 TOTAL VOUCHERS 9,285.03 TOTAL DUE VENDOR - 9,285.03 CITY OF DIAMOND BAR RUN DATE: 11/06/2002 17:10:27 VOUCHER REGISTER PAGE: 3 DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACC'?'-PROJECT-ACCT PO # INVOICE DESCRIPTION AMOUN77 DATE CHECK LYNDA BURGESS 0014040-42330-:- REIMB-CCACG CONF 14 00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 14.00 - TOTAL DUE VENDOR 14.00 CASTER RENTALS INC 6015350-46250-- 12571 34667 CANOPIES -COM SVCS 4,945.57 TOTAL PREPAIDS -00 TOTAL VOUCHERS 4,945.57 TOTAL .DUE VENDOR 4,945.57 CCCA 0014030-42325-- 10/25/02 CCCA CONF-CMGR 24-00 TOTAL PREPAIDS .00 TOTAL VOUCHBRS 24.00 TOTAL DUE VENDOR 24.00 CHURCR IN THE VALLEY 001-23G02-- 52652 PARK DEP REFUND--SYC CYN 50-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 50,00 TOTAL DUE VENDOR 50.00 CINTAS COR?ORATION 09'.5310-42130-- 12317 15051542 UNPRM ^RNTi,-WK 6/24 5-13 0015310-42130-- 12317 150586029 UNFRM RN.TL-WK 10/28 21.38 0015310-42230-- 12317 15GS89547 UNFRM RNTL-WK 11/04 21.38 00_5310-422_30-- 12317 150582494 UNFRM RNTL-WK 10/21 21.38 TOTAL PREPAIDS .DO TOTAL VOUCHERS 69.27 TOTAL DUE VENDOR 69.27 CITY OF LA VERNE 0019412-55405-- AUG 01 PRKG CITE BRCS -AUG 02 7.00 --- . 0014411-45405-- OCT 02 PRKG CITE 14RCS-OCT 02 125.00 TOTAL PREPAIDS .00 TOTAL VOUC14ERS 132-00 TOTAL DUE VENDOR 132.00 CONRAD & ASSOCIATES 0015050-49020-- 12659 10195 PROF.SVCS-AUDITING 5,000.00 0014050-44010-- 12659 9879 PROF -SVCS -AUDITING 6,500.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS _ 11,500-00 TOTAL DUE VENDOR 11,500.00 DAY & NITE COPY CENTER 0015350-421'_3-- 12166 164775 PRINT SVCS -VETERANS PROG 376.17 001535C"42110-- 12166 163276 PRINT SVCS-VETEF)%NS PROG 32.87 TOTAL PREPAIDS .00 TOTAL VOUCHERS 409.04 TOTAL DUE VENDOR 409-04 CITY OF DIAMOND BAR RUN DATE: 11/06/2002 17:10:27 VOUCHER REGISTER PAGE: 4 DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO 4 INVOICE DESCRIPTION AMOUNT DATE CHECK EDWARD DE:.ANO OC1-23002-- 52813 PARK DEP REFUND-PANTERA 200.00 TOTAL, PREPAIDS ,00 TOTAL VOUCHERS 200.00 - TOTAL DUE VENDOR 200.00 DELL MARKETING LP 1185098-96230-- 12652 138922167 COMP EQ -BOARD REPLACEMENT 1,361.79 TOTAL PREPAIDS .00 TOTAL VOUCHERS !,361.79 TOTAS, DUE VENDOR 1,361.79 DELTA DENTAL 001-21104-- PP 2I-22 NOV 02 -DENTAL PREMIUMS 1,300.84 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,300.64 TOTAL DUE VENDOR 1,300.64 CAROL CEN:IIS 0014040-4400G-- 12383- DBCCI01502 PROF.SVCS - CC MTG 350.00 - 0015210-44000-- 12383 PCIO0802 PROF-SVCS-PLNd COM 10/8 375.00 0015210-44000-- 12.383 PC102202 PROF.SVCS-PLNN COM 10/22 450.00 001404044000-- 12383 DBCCICII02 PROF.SVCS-SPC CC MTG 175.00 0015350-44000-- 12383 FRR102402 PROF.SVCS-P & R MTG 10/24 150.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,500.00 TOTAL DUE VENDOR 1,500.00 DEPARTMENT OF TRANSPORTATION 0015554-45507-- 12111 161911 SIGNAL MAINT-SEPT 02 1,897.23 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,897.23 TOTAL DUE VENDOR 1,897.23 DIAMOND BAR CHAMBER OF COMMERCE 00114095-45010-- 12376 2629 CONTRACT SVCS-NOV 02 5,811.00 0015240-45000-- 12378 2628 FUEL,-NOV 02 21000-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 7,811.00 TOTAL DUE VENDOR 7,811.00 DIAMOND B_9R/WALNUT YMCA 3255215-42355-D5590102-42355 A12304 li/01/02 CHILD CARE FROG-NOV 02 2,237.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 2,237.00 TOTAL DUE VENDOR 2,237.00 DIVERSIFIED PARATRANSIT INC 1125553-45529-- 12415 9/16-9/30 DIAMOND RIDE -9/15-9130 11,639.98 TOTAL PREPAIDS -DO - TOTAL VOUCHERS 11,639.98 TOTAL DUE VENDOR 111639.98 RON DATE: 11/06/2002 17:10:27 FUND/SECT-ACCT-PROJECT-ACCT DCG DEALERS, INC oo153sc-453oc-- EDUCATION TO GC, INC 001535C -45300 -- EMPLOYMENT DEVELOPMENT DEPARTMENT 0014690-40093 -- MARIE ERRO OQ1-34780-- EVERGREEN1NTEZi0RS 0014090-42216-- FEDERAL EXPRESS 0019090 -42'20 -- 001 -23010 -- 001 -23010 -- 00; -23010 -- 0014090 -42120 -- 001 -23010 -- 00? -23010 001-23010-- 0014090-42120-- FILTERFRESH 0014090 -42325 -- KIM ORAC6 001 -23002 -- AMOUNT PAGE: 5 48.00 00 48.00 46,00 29.00 00 29.00 29.00 5,602.00 .00 5,602.00 5,602.00 20.00 -00 20.00 20.00 200.00 .00 200.00 200.00 70.78 3.29 3.28 18.92 32.10 3.28 3.26 3.28 63.13 .00 201.34 201.34 62.92 .00 62-92 62.92 50.00 .00 50.00 50.00 PREPAIP DATE CHECK ®I CITY OF DIAMOND $AR VOUCHER REGISTER DUE THRU: 11/07/2002 PO n INVOICE - DESCRIPTION 12214 CONTRACT CLASS -FALL TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 12245 813513 CONTRACT CLASS -FALL TOTAL, PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR UNMPLYMNT CHRGS-JUL-SEPT TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 51464 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 12366 OCT 02 PLANTS MAINT-OCT 02 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 445822355 EXPRESS MAIL -GENERAL 445858250 EXPRESS MAIL -PPL 2002-46 445858250 EXPRESS MAIL -FPL 2002-13 441142'714 EXPRESS MAIL -FPL 02-17 44/,142714 EXPRESS MALL -GENERAL 445556250 EXPRESS MAIL -FPL 2002-11 445858250 EXPRESS MAIL -FPL 2002-07 445858250 EXPRESS MAII,-FPL 2002-49 445858250 - EXPRESS MAIL -GENERAL TOTAL PREPAIDS - TOTAL VOUCHERS TOTAL DUE VENDOR 456656 MTG SUPPLIES -COFFEE TOTAL PREPAADS TOTAL VOUCHERS TOTAL DUE VENDOR 52809 PARK DEP REF UND-REAGAN TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR AMOUNT PAGE: 5 48.00 00 48.00 46,00 29.00 00 29.00 29.00 5,602.00 .00 5,602.00 5,602.00 20.00 -00 20.00 20.00 200.00 .00 200.00 200.00 70.78 3.29 3.28 18.92 32.10 3.28 3.26 3.28 63.13 .00 201.34 201.34 62.92 .00 62-92 62.92 50.00 .00 50.00 50.00 PREPAIP DATE CHECK ®I RUN DATE= 11/06/2002 17:10:27 FUND/SECT-ACCT-PROJECT-ACCT GRIFFITH COMPANY 2505516-46411-13498-46411 HALL & FOREMAN,INC 0015551-45223-- 9015551-45223-- 0015551-45223-- OOi-23010-- BARBARA HENNESSY 001 -34780 -- CAROL HERRERA 0014010-42330-CC203-42330 i-IOME pEPCT C015350-42200-- 0014440-41200-- 0015350-41200-- 0015340-42210-- Y iSU 001-34780-- JEDY HUANG 001 -34780 -- HYDRO SCA22 PR0DUCTS 1415541 -42210 -- AMOUNT PAGE: 6 PREPAID DATE CHECK 11,627.8.2 .00 11,627.82 11,627.82 127.50 127.50 127.50 127.50 .00 510.00 510.00 20.00 .00 20.00 20.00 7.00 00 7.00 7.00 129-70 66.54 87.49 43.19 .00 326.92 326-92 15.00 00 15.00 15.00 272.00 .00 272.00 272.00 984.30 .00 984.30 984.30 CITY OF DIAMOND BAR VOUCHER REGISTER DUE THRU: 11/07/2002 PO fi INVOICE DESCRIPTION 11627 10 CIPPROJECT-BREA CYN RD TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 12605 1209030 PROF.9VCS-PLAt3 CHECK 12601 1209030 PROF.SVCS-PLAN CHECK 12600 1209030 PROF.SVCS-PLAN CHECK 1209030 PROF.SVCS-FPL 02-40 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 51275 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR REIMB-LEAGUE CONF TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 1110002 SUPPLIES -HAUNTED HOUSE 9140500 SUPPLIES-EOC 2212632 SUPPLIES -HAUNTED HOUSE 2013155 SUPPLIES -HERITAGE COM CTR TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 51029 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS' TOTAL oUE VENDOR 50883 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 12612 2548709-00 MAINT-DIST 41 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR AMOUNT PAGE: 6 PREPAID DATE CHECK 11,627.8.2 .00 11,627.82 11,627.82 127.50 127.50 127.50 127.50 .00 510.00 510.00 20.00 .00 20.00 20.00 7.00 00 7.00 7.00 129-70 66.54 87.49 43.19 .00 326.92 326-92 15.00 00 15.00 15.00 272.00 .00 272.00 272.00 984.30 .00 984.30 984.30 RUN DATE: 11/06/2002 17;10:27 FL'ND/SECT-ACCT-PROJECT-ACCT INLAND VALLEY HUMANE SOCIETY 0014431-45403-- JENKINS & HOGIN, LLP 0014020-44020-- 0014020-44020-- 0014020-45020-- STEPHANNIE JO-,LIFF 001 -34730 -- RUSSELL RURUMA 001-34780-- L T EXCAVATING INC 2505215-46520-13899-46420 LAC DISTRICT ATTORNEY'S O=FICE 0014020 -44021 -- '.DM ASSOCIATES =NC OGi-230'_0-- 001-23010-- 001-23010-- GO1-23010-- 001-23010-- L=AGUE OF CA CITIES 9014030-42325-- - - CITY OF DIAMOND BAR - VOUCHER REGISTER PAGE: 7 DUE THRU: 11/07/2002 PREPAID PC # INVOICE DESCRIPTION AMOUNT DATE CHECK 12360 425200211/02 ANIMAL CONTROL-NOV 02 5,437.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 5,437.00 TOTAL DUE VENDOR 5,437.00 10727 GEN LEGAL SVCS -SEPT 02 3,186.00 10728 - GEN LEGAL SVCS. -CCM DSV 297,00 10729 GEN LEGAL SVCS-P/WKS SEPT 1,971.00 TOTAL PREPAIDS -DO TOTAL VOUCHERS 5,454.00 TOTAL DUE VENDOR 5,454.00 50617 RECREATION REFUND 20-00 TOTAL PR2PAIDS .00 TOTAL VOUCHERS 20.00 TOTAL, DUE VENDOR 20.00 51263 RECREATION REFUND 20.00 TOTAL PREPAID$ .00 TOTAL VOUCHERS - 20.00 TOTAL DUE VENDOR 20.00 12332 GRADING IMP PROD -COMM S/C 74,212.50 TOTAL PREPAIDS .00 TOTAL VOUCHERS 74,272.50 TOTAL DUE VENDOR 74,272.50 02-1205 - LEGAL SVCS-JUT,Y 02 31.01 TOTAL PREPAIDS .00 TOTAL VOUCHERS 31.01 TOTAL, DUE VENDOR 31.01 461/P0 12476 PROF -SVCS -FPL 01-15 285.00 461/P0 12476 PROF.SVCS-FPL 02-29 70.00 461/PO 124?6 PROF.SVCS-FPL 02-17 1,121.25 461/?0 12476 PROF.SVCS-FPL 02-32 210.00 4611PO 12476 PROF.SVCS-PPL 02-25 105-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,791.25 TOTAL DUE VENDOR 1,791.25 - 11/14/2002 LEAGUE MTS-CMGR 30.00 - TOTAL PREPAIDS .00 - TOTAL VOUCHERS 30.00 - TOTAL DUE VENDOR - 30.00 PAGE: 8 PREPAID AMOUNT DATE CHECK 107.00 .00 107.00 107.00 1,420.64 -00 1,420.64 1.420.64 21.54 17.32 17.32 .00 56.18 56.18 50.00 .00 50.00 so.Do 745.20 .00 745.20 74520 569.00 .00 569.00 569.00 428.55 724.00 -00 1,152.55 1,152.55 60,215.00 .00 60,215,00 60,.215.00 CITY OF DIAMOND BAR RUN DATE: 11/06/2002 17:10:27 -VOUCHER REGISTER • DUE THRU:-11/07/2002 FOND/SECT-ACCT-PROJECT-ACCT PO 4 INVOICE DESCRIPTION PAMELA LEE 091-34780-- 50833 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR LEIGRTON & ASSOCIATES, INC 001-23012-- 13748/P12658 PROF.SVCS-EN 01-323 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR- ENDORLEWIS LEWISENGRAVING INC 0014090-42113-- 12319 10125 ENGRAVING SVCS -NAME BADGE 0014090-42113-- 12319 10205 ENGRAVING SVCS -CITY TILE 0014090-42i13-- 12319 10196 ENGRAVING SVCS -CITY TILE TOTAL PREPAIDS TOTAL. VOUCHERS TOTAL DUE VENDOR TEK LIE LIEM 001-23002-- 52826 PARK DEP REFUND -MAPLE HLL TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR CONSTA-NCS J LILLIE 0015350-45300-- A12229 CONTRACT CLASS -FALL TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR LOREEER YOUTH ACT 001-34720-- FALL FUN FSTVL PROCEEDS TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDCR LOS ANGELES COUNTY PUBLIC WORKS 0015559-55507-- 12107 AR250368 TRAFFIC MAINT-SEFT 02 0015510-45530-- 12108 AR250423 INDUSTRIAL WASTE -SEPT 02 TOTAL. PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR LOS ANCELFS COUNTY SHERIFF'S DEPT 1284411-45401-- LARCIS-010 LARCIS CONTRIBUTION TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR PAGE: 8 PREPAID AMOUNT DATE CHECK 107.00 .00 107.00 107.00 1,420.64 -00 1,420.64 1.420.64 21.54 17.32 17.32 .00 56.18 56.18 50.00 .00 50.00 so.Do 745.20 .00 745.20 74520 569.00 .00 569.00 569.00 428.55 724.00 -00 1,152.55 1,152.55 60,215.00 .00 60,215,00 60,.215.00 - CITY OF DIAMOND BAR RUN DATE: --1/06/2002 17:10:27 VOUCHER REGISTER PAGE: 9 DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO INVOICE DESCRIPTION AMOUNT DATE CHECK AIN LOVELL 001-23002-- 52751 PARK DEP REFUND -HERITAGE 50.00 TOTAL PREPAIDS -OG TOTAL VOUCHERS 50.00 - TOTAL DUE VENDOR 50.00 ANN LOVELL OCI-34780-- 50653 RECREATION REFUND 40.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 40-00 TOTAL DUE VENDOR 40.00 MCP CORPORATION - 0015554-45502-- 12283 209076 ROAD MAINT-SEPT 02 9,297.87 0015554-45522-- 12284 209070 2201c -T OP WAY -SEPT 02 57,960.36 0015554-45506-- 12286 209070 STRIPING MAINT-SEPT 02 16,681.10 0015554-45502-- 12283 269070 ROAD MAINT-SEPT 02 7,759,10 . OO1S558-45508-- 12186 0209071 VEGETATION CNTRL-SEPT 02 5,597.30 TOTAL PREPAIDS .00 TOTAL VOUCHERS 97,295.73 TOTAL DUE VENDOR 97,295-73 LARRY MCMILLAN - OE1-34780-- 50593 RECREATION REFUND BG.GC TOTAL PREPAIDS ,00 TOTAL VOUCHERS 80.00 TOTAL D -JE VENDOR 80.00 HENRY MORGIA 001-34780-- 50651 RECREATION REFUTNI) 20.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 20.00 TOTAL DUE VENDOR 20.00 ,14ATTHEW MOSS 001-34780-- 51186 RECREATION REFUND 80.00 TOTAL PREPAIDS -.00 TOTAL VOUCRERS 80.00 TOTAL DUE VENDOR 80.00 NATIONAL A'._L-ANCE FOR YOUTH SPORTS 0015350-42340-- TILAINING-H WRIGHT 450-60 TOTAL PREPAIDS .00 TOTAE VOUCE2RS 450.00 TOTAL DUE VENDOR 450.06 STEVEN G. NELSON 00'_5210-54100-- PLNN COMM -9/10,9/24 130.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 130.00 TOTAL DUE VENDOR 130.00 KELLY PIATT CITY OF DIAMOND BAR Col -34780-- RUN DATE: 11/06/2002 1710:27 100-00 VOUCHER REGISTER PACE: i.. .00 DUE TNRU: 11/07/2002 - TOTAL DUE VENDOR 100.00 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO n INVOICE DESCRIPTION AMOUNT DATE CHECK NICK LAZARIS PSY.D. TOTAL, PREPAIDS _ 0014090-44000-- 12479 PROF.SVCS-LEAPERSHP DEV 875.00 TOTAL DUE VENDOR 80.00 TOTAL PREPAIDS .00 00155E4-45501-- TOTAL VOUCHERS 875.00 TOTAL PREPAIDS TOTAL DUE VENDOR 875-00 DANIEL NOLAN 7,500.00 TOTAL DUE VENDOR 00152'_0-44100-- RALPES GROCERY COMPANY PLNN COMM -9/10,9/24 130.00 OOI535G-41200-- 12164 10238406 - SUP_LIES-RAUNTED HOUSE TOTAL PREPAIDS .00 TOTAL, PREPAIDS .00 TOTAL VOUCHERS 130.00 10.89 TOTAL DUE VENDOR. 130.00 P & D CONSULTANTS INC OC15350-453Q0-- 0015340-44000-- A.12363 048174770-07 UTIL SVCS -OCT 02 11415.75 1385538-44000-- A12363 048174770-07 UTIL SVCS -OCT 02 1,213.50 1415541-44000-- A12363 048174770-07 UTIL SVCS -OCT 02 849-45 1395539-44000-- A12363 048174770-07 UTIL SVC3-OCT 02 566 30 TOTAL PREPAIDS .00 TOTAL VOUCHERS 4,045.00 TOTAL DUE VENDOR 41045.00 KELLY PIATT Col -34780-- - 50938 RECREATION REFUND 100-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 100.00 TOTAL DUE VENDOR 100.00 FRANCES POPEVICH 00'-39780-- - 50914 RECREATION REFUND 80.00 TOTAL, PREPAIDS .00 TOTAL VOUCHERS 60-00 TOTAL DUE VENDOR 80.00 R F DICKSON COMPANY 00155E4-45501-- 12113 1142804 ST SR'EEPINC-OCT 02 7,500.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 7,500.00 TOTAL DUE VENDOR 7,500.00 RALPES GROCERY COMPANY OOI535G-41200-- 12164 10238406 - SUP_LIES-RAUNTED HOUSE 10.89 TOTAL, PREPAIDS .00 TOTAL VOUCHERS 10.89 TOTAL DUE VENDOR 10.89 JIMMY RAM:REZ OC15350-453Q0-- 12534 CONTRACT CLASS -FALL 841.20 TOTAL PREPAIDS .00 TOTAL VOUCHERS 841.20 TOTAL nuE VENDOR 841-20 CITY OF DIAMOND BAR 'RUN DATE: 11/06/2002 17:10:27 VOUCHER REGISTER PAGE: 11 DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACCT- PROJECT' -ACCT -20 ,u. INVOICE DESCRIPTION AMOUNT DATE CHECK RICHARDS WATSON & GERSHON, 0014020-44021-- 12417 123662 LEGAL SVCS -CABLE SEPT 02 58.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 56.00 - TOTAL DUE VENDOR 58.00 JOSEPH ROZICKA 0015210-44100-- PLNN COMM -9/10,9/24 1.30.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 130.00 TOTAL UUE VENDOR 130.00 SAFENAY SIGN COMPANY 0015554-45506-- 12188 45488 INSTALL -STREET SIGNS 15,552.55 TOTAL PREPAIDS .00 TOTAL VOUCHERS 15,552.55 TOTAL DUE VENDOR 15,552.55 RICK SCYROT-74 001-34780-- 51073 RECREATION REFUND 50.0.0 TOTAL PREPAIDS .00 TOTAL VOUCHERS 60.00 TOTAL DUE VENDOR 60.00 SCM_aF 0015350-45300-- 0018853 -IN REGIS-SOFTBALL/BASKETBALL 224.00 0015350.-41200-- 0918837 -IN SUPPLIES -RECREATION 120.00 TOTAL PREPAID$ .00 TOTAL VOUCHERS 344.00 TOTAL DUE VENDOR 344.00 SECTRAN SFCUR'TY 0014090-44000-- A12267 11124 COURIER SVCS-NOV 02 220.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 220.00 TOTAL DUE VENDOR 220.00. LOUISE HS:NG 001-23D02-- 52737 PARK DEP REFUND-REAGAN 50.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 50.00 TOTAL DUE VENDOR 50.00 SIGNAL MAINTENANCE INCORPORATED 001555e -455C7- 12325 51212812 TRFFC SIGNAL MAINT-OCT 02 2,058.00 0015554-45507-- _-2325 51213175 TRPFC SIGNAL MAINT-OCT 02 1,527.55 0015554-45507-- 12325 51212725 TRFFC SIGNAL MAINT-OCT 02 924.54 TOTAL PREPAIDS .00 TOTAL VOUCHERS 4,510.09 TOTAL DUE VENDOR 4,510.09 r CITY OF DIAMOND BAR RUN DATE: 11/_06/2002 17:10:27 VOUCH^R REGISTER DUE THRU: 11/07/2002 FLTiD/SECT-ACCT-PROJECT-ACCT PO 9 INnIOICE DESCRIPTION SKATE PARK MAGAZINE TOTAL DUE VENDOR 0015310-42320-- 892050 MAGAZINF SUBSCRIPTION 0015350-45300-- TOTAL PREPAIDS TOTAL VOUCHERS - TOTAL DUE VENDOR SOUTHERN CALIFORNIA EDISON TOTAL DUE VENDOR 0015340-42'_26--- ELECT SVCS -BARKS 0015510-42126•- ELECT SVCS -TRAFFIC CONTRL 1415541-42126-- ELECT SVCS -DIST 41 0015510-42126-- ELECT SVCS -TRAFFIC CONTRL 1395539-42126-- ELECT SVCS -DIST 39 0015510-5.2126-- ELECT SVCS -TRAFFIC CONTRL 1385538-42126-- ELECT SVCS -DIST 38 TOTAI, PREPAIDS TOTAL VOUCHERS - TOTAL DUE VENDOR STARLITE SAFETY SUPPLY INC 0015554-41250-- 20052 SUPPLIES -ROAD MAINT TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR SYSTEMS INTERNATIONAL. INC 0015350-45305-- 22144 PROF.SVCS-W/SNW FEST BNNR 0014090-41400-- 22143 REMOVE/INSTALL-BANNERS TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR JACK TANAKA 0915210-44100-- PiNN COMM -9/10,9/24 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR TENNIS ANYONE 0015350-45300-- A12223 CONTRACT CLASS -FALL TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR THE CONSULTING CROUP 001-23GI0-- REFUND - FPL 2062-56 TOTAL PREPAIDS TOTAL VOUCHERS TOTAL 1,UE VENDOR TINA CAREY & ASSOCIATSS 0014090-44000-- 8/21/02 7=ROF.SVCS-OUST SVC PLNG TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR PAG7. 12 PREPAID AMOUNT DATE CHECK 30.00 00 30.00 30.00 4,893.34 125.36 129.53 596.10 239.16 1-71.64 308.32 00 6,363.45 6,363.45 98.20 .00 98.20 98.20 367.50 60.00 .00 427.50 427.50 130.00 .00 130.00 130.00 3,055,50 00 3,oss.so 3,055.50 1,915.00 .00 1,915.00 1,915.00 300.00 .00 300-00 300.00 CITY OF DIAMOND BAR RUN DATE: 11/06/2002 17:10:27 VOUCHER REGISTER PAGE: 33 DUE THRU: 11/07/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO k INVOICE DESCRIPTION AMOUNT DATE CHECK STEVEN :__ 007.5210-44100-- PLNN COMM -9/10,9/24 '_30.00 TOTAL PREPAIDS -00 TOTAL VOUCHERS 130.00 TOTAL DUE VENDOR '30.00 UNTIED STATES POSTAL SERVICE 0014090-42120-- REPLENISH POSTAGE MACHINE 2,000.00 TOTAL PREPAIDS -CO TOTAL VOUCHERS 2,000,0.0 TOTAL DUE VENDOR 2,000.00 DAN VASQUEZ 001-23002-- 52827 PARK DEP REFUND-PANTERA 206-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 200.00 TOTAL DUE VENDOR _ 200.00 VERIZON CALIFORNIA 0014095-42125-- 8887772489 ?H,SVCS-COM. & MRAT 46.56 CO -74090-42125-- CH45778 RELOCATE PHONE-P/WORKS 162.50 TOTAL PREPAIDS -00 TOTAL VOUCHERS 229.06 TOTAL DUE VENDOR 229.06 VERIZON WIRELESS -LA 1264411-42125-- CELL CHRGS-SHERIFF 105.70 0014090-42125-- CELL CHRGS-POOL VEH 215.96 0014030-42125-- CELL CHRGS-CMGR 33.25 00.4040-42125-- CELL CHRGS-EMERG PREP 133.00 0074090-42=25-- MEMO CREDIT -316.78 264411-42125-- CELL CHRGS-V/PATROL 25.12 -0014C1G-42125-CC403-4212° CELL CHRGS-COUNCIL 33.25 C0I4010-42_25-CC203-42120 CELL CHRGS-COUNCIL 33.25 TOTAL PREPAIDS .00 TOTAL VOUCHERS 262.75 TOTAL DUE VENDOR 262.75 WALLACE LABORATORIES 2505215-46420-13899-46420 13598 PROF.SVCS-SOIL ANALYSIS 210.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 210.00 TOTAL DUI;' VENDOR 210.00 WALNUT VALLEY JNIF=ES SCHOOL DIST. 001S35C-42140- - 12243 AR02030514 FACILITY RENTAL-AUL-OCT 4,100.00 TCTAL PREPAIDS ,00 TOTAL VOUCHERS 4,100.00 TOTAL DUn VENDOR 4,100.00 i. I RUN DATE: 11/06/2002 17:10:27 F-,TND/SECT-ACCT-PROJECT-ACCT WALNUT VALLEY WATER LISTRIC- 0014090-42126-- 1395539-42126-- OC1534D-42126-- -0015340-42126-- '395539-42126-- 1415541-42126-- 0015340-52126-- 0015340-42126-- 1385538-42126-- 0015340-42126-- 0015340-42126-- 0015340-42126-- GO".5340-92126-- 0G15340-42126-- 1415541-42126-- WELLS FARGO CARD SERVICES 0015350-42330-- 0015350-41200-- 001403C-42125-- 0014010-42325-CC203-42325 0015350-41200-- 0015350-41200-- 0014060-42325-- 0015510-41300-- 0014010-42330-CC303-42330 0014010-41200-- 0014010-42125-CC403-42125 00140IC-42330-CC2C3-42330 002.4090-423'0-- OC14C30-42325-- 0014030-42330-- WHITE CAH 0015554 -41300 -- CITY OF DIAMOND BAR VOUCHER REGISTER DUE THRU: 11/07/2002 PO 4 INVOICE DESCRIPTION STANDBY CHRGS-GENERAL STANDBY CHRGS-DIST 39 STANDBY CHRGS-SYC CYN STANDBY CHRGS-R REAGAN WATER SVCS -DIST 39 STANDBY CFTRGS-DIST 41 STANDBY CHRGS-SUMMITRIDGE STANDBY CHRGS-HERITAGE WATER SVCS -DIST 38 STANDBY CHRGS-STARSHINE WATER SVCS -PARKS STANDRY CHRGS-MAPLE HILL STANDBY CHRGS-PANTERA STANDBY CHRGS-PETERSON WATER SVCS -DIST 41 TOTAL PREPAID$ TOTAL VOUCHERS TOTAL DUE VENDOR CPRS CONP-S BAYES SUPPLIES-PANTERA PALMNET SVCS-DCM MTGS-COUNCIL SUPPLIES -HAUNTED HOUSE SUPPLIES -HERITAGE MTG-ORAL PANEL EQ -PUBLIC WORKS APTA CONF-COUNCIL SUPPLIBS-COUNCIL PALMNET SVCS -COUNCIL LEAGUE CONF-COUNCIL FUEL -GENERAL MTGS-CMGR LEAGUE CONF-CMGR TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR 12518 387468 SUPPLIES -ROAD MAINT TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR PAGE. -4 AMOUNT 29.62 5,084.80 2,461.20 362.32 4,398.95 1,785.54 1,460.98 188.72 10,442.58 92.40 5,760.33 318.08 1,144.08 921.76 6,178.19 .00 40,629.55 40,629.55 293.70 118.37 10.72 91.98 287.92 91.96 70.80 188.59 103.62 89.83 10.72 665.07 9.91 326.96 61,63 .00 2,442.78 2,542.78 37.47 00 37.47 37.47 v EAN WILLIAMS 001-34780-- 51446 RECREATION REFUND 33.00 TOTAL PREPAIDS .DO TOTAL VOUCHERS 33.00 TOTAL DUE VENDOR 33.00 PREPAID DATE CHECK RM DATE- 11/06/2002 17:10:27 FUND/SECT-ACCT-PROJECT-ACCT SU FUNG ZAU 001-24780-- CT_TY OF DIAMOND BAR VOUCHER '.REGISTER DUE THRU: 11/07/2002 PC # INVOICE D'SCRIPTTON 51182 RECREATION REFUND TOTAL PREPAIDS TOTAL VOUCHERS TOTAL DUE VENDOR REPORT TOTAL PREPAIDS REPORT TOTAL VOUCHERS REPORT TOTAL PAGE: 15 PREPAID AMOUNT DATE CHECK 80.00 .00 80.00 80.00 00 427,258.18 427,258.1-8 CITY OF DIAMOND BAR INTEROFFICE MEMORANDUM TO: Mayor Pro Tem O'Connor and Councilmember Huff FROM: Linda G. Magnuson, Finance Director'r1 SUBJECT: Voucher Register, November 14, 2002 DATE: November 14, 2002 Attached is the Voucher Register dated November 14, 2002. As requested, the Finance Department is submitting the voucher register for the Finance Committee's review and approval prior to the creation of the warrants. The Voucher Register will subsequently be entered on the consent calendar for the City Council meeting on November 19, 2002. The checks will be produced after the scheduled meeting time and any recommended changes are made. Please review and sign the attached. x CITY OF DIAMOND BAR VOUCHER REGISTER APPROVAL The attached listing of vouchers dated November 14, 002 have been reviewed, approved, and recommended for payment. Payments are hereby allowad from the following funds in these amounts FUND DESCRIPTION PREPAID VOUCHERS TOTAL DCS 1 GENERAL FUND 171,326.41 144,962.29 _316,283.70 112 PROP A - TRANSIT FUND .60 12,263.08 12,263.06 138 L_LAD #38 FUND . 00 899.22 899.22 250 CAPITAL I MPROV JPROJ FUND . 0.0 1,363.50 1 , 62':.50 REPORT FOR ,ALL FUNDS 171,,326.41 .159,488.09 Z.30,814.50 APPROV'E'D Py : CITY OF DIAMOND FAR RUN DATE: 11/13/2002 15:26:33 VOUCHER REGISTER PAGE: 1 DUE THRU: 11/14/2002 PREPAID FUND/SECT,ACCT-PRC�-ECT-ACCT PD 4 INVOICE DESCRIPTION AMOUNT DATE C14ECX AGRICULTURAL =ANT. WGHTS & MEASURES - 0014431-45400'-- 12512 4011. TRAPPING SVCS -SEPT 02 617.15 TOTAL PREPAIDS -00 TOTAL VOUCHERS 617-15 TOTAL DUE VENDOR 617-.15 AJAX SIGN GRAPHICS INC -0014090-41200-- 12173 16035 ENGRAVE SVCS -NAMEPLATE 21.25 TOTAL PREPAIDS .00 TOTAL VOUCHERS 21.25 TOTAL DIS$ VENDOR 21.25 AMERICAN PUBLIC WORKS ASSOCIATION 0015510-42320-- 644577 PUBLICATIONS-P/WORKS 48.00 001551G-42315-- MEMEERSHP DUES-ALAMOLHODA 141.25 TOTAL PREPAIDS .00 TOTAL VOUCHERS 189.25 TOTAL DUE VENDOR 189.25 AMERICAN SOCIETY OF CIVIL aNGIN22RS 00'!5510-42315-- MEMBERSHP DUES-ALAMOLHODA 180.00 TOTAL PREPAIDS .Q0 TOTAL VOUCHERS 180.00 TOTAL DUE VENDOR 180.00 CHARLES ABBOTT ASSOCIATES INC 0015510-45227-- 12562 9940' PROF.SVCS-INSPECTION 127.50 0015510-45227-- 12604 9954 PROF.SVCS-PLAN CHECK 184.88 0015551-45223-- 12487 9949 PROF.SVC6-PL.AN CHECK 558.68 0015510-45227-- 12602 9947 PROF.SVCS-INSPECTION 127.50 GO`_55i0-45229-- 12609 9945 PROF.SVCS-INSPECTION 127.50 0015551-45223-- 12377 9951 PROF.SVCS-PLAN CHECK 127-50 0015510-45227-- 12141 9942 PROF.SVCS-INSPECTION 186.00 0015513-45227-- 11984 9939 PROF, SVCS -INSPECTION 325.50 0015510-45227-- 2.0784A 9938 PROF.SVCS-INSPECTION 186.00 0015551-45223-- 12608 9959 PROF.SVCS-PLAN CHECK 127.50 0015510-45227-- 11169 9944 PROF.SVCS-INSPECTION 93.00 0015551-45223-- 12523 9950 PROF.SVCS-PLAN CHECK 608.75 001551C-45227-- 11446 9940 PROF.SVCS-INSPECTION 58.65 0015551-45223-- 126C7 9958 PROF -SVCS -PLAN CHECK 127.50 0.715510-45227-- 12350 9953 PROF -SVCS -INSPECTION 127.50 0615510-45227-- 11937 9943 PROF.SVCS-INSPECTION 31-52 00,5510-45227-- 12644 9957 PROF.SVCS-INSPECTi ON 127.50 0015551-95223-- 1250: 9955 PROP.SVCS-PLAN CHECK 157.25 0015510-45227--, 12603 9941 PROF.SVCS-INSPECTION 93.00 0015551-45223- 12486 9952 PROF.SVCS-PLAN CHECK 127.50 0075551-45223- 12502 9956 PROF.SVCS-PLAN CHECK 127.50 0015551-45223-- 12560 9948 PROF.SVCS-PLAN CHECK 867.40 TOTAL PREPAIDS .00 TOTAL VOUCHERS 4,625.53 TOTAL DUE VENDOR 4,625.53 e , 0014030-42330-- • CITY OF DIAMOND BAR 107.46 RLN DATE: 11/13/2DD2 15:26:3} PREPAIDS VOUCHER REGISTER PAGE: 2 TOTAL VOUCHERS 107.46 • DUE THRU: 11/14/2002 TOTAL DUE VENDOR 107.46 DUB�ERLY GARCIA ASSOCIATES INC PREPAID F"JND/SECT-ACCT-PROJECT-ACCT PC # INVOICE DESCRIPTION AMOUNT DATE CHECK COUNTY OF 1.03 ANGELES 103 - 1,185.59 0014090-41200-- PR2PA1D5 REVERSAL -82,566.84 11/14/2002 55199 0014090-41200-- 91800.00 PURCH-BRAMELEA PRPTY 82,566.84 11/14/2002 55199 0014090-46305-- GLASS EY_- PROD_'CT-ONS PURCH-BRAMELEA PRPTY 82,566.84 11/14/2002 55199 0015350-99000-- 12572 TOTAL PREPAIDS 82,566.84 1,210.00 TOTAL TOTAL VOUCHERS .00 - TOTAL VOUCHERS TOTAL DUE VENDOR 82,560.84 TOTAL IDP. CRAFT 1,210.00 001-34730-- 50611 RECREATION REFUND 25.00 TOTAL PREPAIDS .00 TOTAL VOUC!3ER5 25.00 TOTAL DUE VENDOR 25.00 DIAMOND BAR AUTOMOTIVE 0014090-42200-- 18698 MAINT-POOL VEH 168.57 TOTAL PREPAIDS .OD TOTAL VCbCHERS 168.57 TOTAL DUE VENDOR 168.57 DIAMOND BAR INTERNATIONAL DELI - 0014090-42325-- 12175 566 MTG SUPPLIES -COUNCIL 155.00 0014090-42325-- 12175 558 MTG SUPPLIES -COUNCIL 200-00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 355.00 TOTAL DUE VENDOR 355.00 DIVEPSi F_TD7 PARATRP-NS:T LNC - 1125553-95529-- 12415 DIAMOND RIDE -10/01-10/15 11,939.08 TOTAL ?REPAID6 .00 TOTAL VOUCHERS 11,938.08 TOTAL DUE VENDOR 11.938.08 DAVID COYLE 0014030-42330-- REIMB-ICMA CONF 107.46 TOTAL PREPAIDS .00 TOTAL VOUCHERS 107.46 TOTAL DUE VENDOR 107.46 DUB�ERLY GARCIA ASSOCIATES INC OC14090-44000-- 12680 103 CNSLTNG SVCS -LIBRARY COST 8,614.41 00_4090-4=000-- 12355 103 CNSLTNG SVCS -LIBRARY COST 1,185.59 TOTAL PR2PA1D5 .00 TOTAL VOUCHERS 91800.00 TOTAL DUE VENDOR _ 9,800.00 GLASS EY_- PROD_'CT-ONS 0015350-99000-- 12572 - VIDEOGRAPHY-VETERANS DAY 1,210.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,210-00 TOTAL D'JE VENDOR 1,210.00 m • CITY OF DIAMOND BAR RUN DATE: 11/13/2002 15:26:33 VOUCHER REGISTER PAGE: 3 DUE THRU: 11/14/2002 PR-_PAID F-JND/SZCT-ACCT-PROJECT-ACC: PO # INVOICE DEESCRIPTION AMOUNT DATE CHECK DAVID J GRUNDY 0015350-441CO-- P & R COi4M-10/24 45. 00 TOTAL PREPAIDS00 TOTAL VOUCHERS 45.00 • TOTAL DUE VENDOR 45-00 HITT ^1ARXTNG D8VICES, INC 0014090-41200-- 192621 SUPPLIES-ENGRAVED PLATES 377.26 TOTAL PREPAIDS .00 TOTAL VOUCHERS 377-26 TOTAL DUE VENDOR 377.26 HOME DEPOT 01715340-42210-- 1266C 280440 SUPPLIES-PARKS 1,672.81 TOTAL PREPAIDS PO TOTAL VOUCHERS 1,672.61 TOTAL DUE VENDOR 1,672-81 . INLAND EMPIRE STAGES 112S36G-45310-- 12677 6087 EXCURSION-TRANSPORTATION 325.CC 0015350-45310-- 12677 6087 EXCURSION -WILD BILLS i,080,00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,405.00 TOTAL DUE VENDOR 11405.00 KOSN.ONT & ASSOCIATES INC 0)15240-44009-- 12614 03 PROF.SVCS-ECON DEV 5,108.79 001S240-44000-- 04 - PROF.0VCS-EC0N DEV 4,668.&4 0015240-44000-- 12614 04 PROF.SVCS-ECON DEV 9,891.21 TOTAL PREPAIDS .00 TOTAL VOUCHERS 19,668.84 TOTAL DUE VENDOR 19,666.84 LEWIS ENGRAVING INC OC14090-42:13-- 12319 10221 ENGRAVING SVCS-BADGE 12.07 TOTAL PREPAIDS .00 TOTAL VOUCHERS - 12.07 TOTAL DUE VENDOR 12.07 ANDREW L'JI 005.5350-541CG- P & R COM-10/24 45.00 TOTAL PREPAIDS -00 TOTAL VOUCHERS 45.00 TOTAL DUE VENDOR 45.00 NS1CY LYONS 001535^--4CC-- P & R COU.;-20/24 45.00 TOTAL PREPAIDS .00 - TOTAL VOUCHERS 45.00 TOTAL DUE VENDOR 45.00 m CITY OF DIAMOND BAR RLN DA -R: 11/13/2002 15.25:33 VOUCHER REGISTER PAGE= 4 DUE THRU: 11/14/2002 PREPAID � CITY OF DIAMOND BAR RUN DATE: 11/13/2002 15:26:33 VOUCHER REGISTER PAGE: 5 DJE THRU: 11/14/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PC) INVOICE DESCRIPTION AMOUNT DATE CHEC_< WARREN SIECKE 2505510-46412-1660 -46412 1108$ 4954 DSGN SVCS-D/BCaSsLVER tWWK 156-96 2505510-45412-"6801-46412 11{785 4954 DSGN SVCS-G/SPRGS@SYL GLN 156.96 2505510-46412-10`701-46412 11085 4954 DSGN SVCS-D/Sz�CLEAR CREEP{ 156.96 -2505510-46412-16801-46412 12662 4954 TRFPC SGNL-S/8PRGS9S/GLEN 892.62 TOTAL PREPAIDS .00 TOTAL VOUCHERS 1,363.50 TOTAL DUE VENDOR 1,363.50 SD°.ART & FINAL 00-15350-41200-- 12354 64948 SUPPLIES -HERITAGE C/CTR 33.68 0015350-41200-- - 12354 35571 SUPPLIES -HERITAGE C/CTR 123-95 TOTAL PREPAIDS - .00 TOTAL VOUCHERS 157.63 TOTAL DUE VENDOR 157.63 S0. COAST AIR 4UA1,1TY MANAGEMENT DIS 0014090-42140-- - 12262 SEPTEMBER 02 RENT -CITY HALL SEPT 02 19,993.05 0014090-42140-- 12262 OCTOBER 02 RENT -CITY HALL OCT 02 19,993 05 OC14090-42140-- 12262 NOVEMBER 02 :RENT -CITY HALL NOV 02 19,.993.05 0014090-42190-- 12262 AUGUST 02 RENT -CITY HALL AUG 02 19,993.05 0014090-42140-- 12262 JULY C2 RENT -CITY HALL JUL 02 19,993.05 TOTAL PREPAIDS .00 TOTAL VOUCHERS 99,965.25 - T0TAL DUE VENDOR 99,965.25 SO4"THERN CALIFORNIA EDISON 0015510-42126-- ELECT SVCS -TRAFFIC CONTRL 51.94 001-5510-42126-- ELECT SVCS -TRAFFIC CONTRL 33.41 TOTAL PREPAIDS .00 TOTAL VOUCHERS 85_35 TOTAL DUE VENDOR 85.35. SOUTHLAND SPCRTS OFFICIALS 0015350-45300-- 12291 OFFICIAL SVCS -10/16-11/5 816.00 TOTAL PREPAIDS ,00 TOTAL VOUCHERS 616-00 TOTAL DUE VENDOR 816.00 SUBWAY CC�4090-42325-- 22210 36158 MTC SUPPLIES -GENERAL 7.57 0014090-42325-- 1221? 37085 MTG SUPPLIES -GENERAL 9.98 TOTAL PREPAIDS .00 TOTAL VOUCHERS 17.55 TOTAL DUE VENDOR 17.55 TENIIS ANYCNE 0025350-5:300-- A12223 CONTRACT CLASS -PALL 78.40 TOTAL PREPAIDS .00 TOTAL VOUCHERS 78.40 TOTAL DUE VENDOR 78.40 7 ` CITY OF DIAMOND 6AR RUN DATE: 11/13/2002 15:26:33 VOUCHER REGISTER PAGE: 6' DUE THRU; 11/14/2002 PREPAID FUND/SECT-ACCT-PROJECT-ACCT PO #k INVOICE DESCRIPTION AMOUNT DATE CHECK THE FINISHING TOUCH CATERING 0015350-45300-- CATERNG SVCS -VETERANS REC 31.18 TOTAL PREPAIDS .00 TOTAL VOUCHERS 31.18 - TOTAL DUE VENDOR 3'_.18 THOMAS J COLLINS & ASSC 0015350-41200-- 12649 RK -016 SUPPLIES -FLAG LAPEL PINS 293.45 TOTAL PREPAIDS .00 TOTAL VOUCHERS 293.45 - TOTAL DUE VENDOR 293.45 MARTIN T_ORRES 0015350-44'_00-- P & R COMM -10/24 45.00 TOTAL PREPAID$ .00 TOTAL VOUCHERS 45.00 TOTAL DUE VENDOR 45.00 VERIZON CALIFORNIA 0015340-42125-- 9095949117 PH.SVCS-R REAGAN PARK 90.86 0015340-42125-- 9098619227 PH -$VCS -MAPLE HILL PARK 90.06 - TOTAL PREPAIDS .00 TOTAL VOUCHERS 181-72 - TOTAL DUE VENDOR 181.72 WALNUT VALLEY UNIFIED SCHOOL DIST. 0015350-42190-- 12243 AR02030532 FACILITY RENTAL-JUL-SEPT 500.00 TOTAL PREPAIDS .00 TOTAL VOUCHERS 500-00 TOTAL DUE VENDOR 500.00 WALNUT VALLEY WATER DISTRICT 13055313-42126-- WATER SVCS-DIST 38 899.22 TOTAL PREPAIDS .00 TOTAL VOUCHERS 899.22 TOTAL DUE VENDOR 899.22 WELLS FARGO CARD SERVICES 0014030-42330-- ICMA CONF-DOYLE 559.57 11/14/2002 55200 TOTAL PREPAIDS 559.57 TOTAL VOUCHERS .00 TOTAL DUE VENDOR 559.57 PAUL WRIGHT 0014090-44000-- 12208 A/V SVCS-PC/CNL 332.50 TOTAL PREPAIDS .00 TOTAL VOUCHERS 332.50 TOTAL DUE VENDOR 332.50 - PAM YUGAR 0015350-42325-- MTG-ROSE,WEST,AREVALO 30.00 TOTAL PREPAIDS .00 - TOTAL VOUCHERS 30.00 TOTAL DUE VENDOR 30.00 7 s RUN DATE: 11/13/2602 15:26:33 FUND/SECT-ACCT-FROSECT-ACCT PAN YUGAR CITY OF DIAMOND BAR VOUCHER REGISTER DUE TFIRU: 11/14/2002 PO # INVOICE DESCRIPTION REPORT TOTAL PREPAIDS REPORT TOTAL, VOUCHERS REPORT TOTAL PAGE: 7 PREPAID AMOUNT DATE CHECK 171,326.41 159,488.09 330,814,50 Agenda # 6.5 Meeting Date: November 19, 2002 CITY COUNCIL AGENDAREPORT � rjg°J TO: Honorable Mayor and Members of e City Council VIA: Linda C. Lowry, City Manag TITLE: Rejection of Claim — Filed by Michael and Kyung Chung on October 23, 2002. RECOMMENDATION: Carl Warren & Co., the City's claims administrator, recommends the City Council reject the claim filed by Michael and Kyung Chung. FINANCIAL IMPACT: There is no financial implication associated with rejecting this claim. The claim for damage is for approximately $5,000. Should the claim be successful, it will be paid by the JPIA. BACKGROUND: On October 23, 2002, Kyung Chung, guardian for Michael Chung (a minor), filed a Claim for Damages with the City alleging that Michael Chung was struck by a vehicle due to improper construction and design of the roadway on Brea Canyon Road. Carl Warren & Co., the City's claims administrator, determined that the claim appears to be one of questionable liability and has recommended denial. Upon action by the City Council, appropriate notice shall be sent to the claimant and Carl Warren & Co. PREPARED BY: Tommye Cribbins, Asst. City Clerk REVIEWED BY: Department Head __ Deputy City Manager October 29, 2002 TO: The City of Diamond Bar ATTENTION: Tommye Cribbins, Asst. City Clerk RE: Claim Chung vs. The City of Diamond Bar CIaimant Michael & Kyung Chung D/Event 5/17/2002 Rec'd Y/Office 10/23/2002 Our File S-134579-SWQ We have reviewed the above captioned claim and request that you take the action indicated below: CLAIM REJECTION: Send a standard rejection letter to the claimant. Please provide us with a copy of the notice sent, as requested above. If you have any questions please contact the undersigned. Very hely yours, CARL ARREN & COMPANY J Dwight J. Kunz cc: CJPIA w/enc. Attn.: Executive Director CARL WARREN & CO. CLAIMS MANAGEMENT -CLAIMS ADJUSTERS 750 The City Drive - Ste 400 - Orange, CA 92868 Mail: P.O. Box 25180 - Sans Ana, Ca 92799-5180 Phone, (714) 740-7999 Est. 140 (800) 572-6900 • Fax: (714) 740-9412 Agenda # 6 -6 - Meeting _6_Meeting Date: November 19. 2002 CITY COUNCIL �� , `� AGENDA REP'OR'T' TO: Honorable Mayor and Members of the City Council VIA: Linda C. Lowry, City Manager TITLE: Amendment to Contract with Gonzale Goodale Architects for design services related to the proposed Library Bond Act application ($35,000) and Appropriate $17,000 from General Fund reserves RECOMMENDATION: It is recommended that the City Council approve an amendment to the contract with Gonzalez Goodale Architects for work related to the submission of a Library Bond Act application in the amount of $35,000 and appropriate $17,000 from General Fund reserves. BUDGET IMPLICATION: The City budgeted $135,000 for consulting services related to the preparation of a Library Bond Act application ($100,000 for library consultant and $35,000 for architectural services). Early this year, the City awarded a contract to Dubberly Garcia Associates for an amount not -to -exceed $116,648. There is $18,000 remaining in the current fiscal year budget for architectural services and an additional $17,000 will need to be appropriated. DISCUSSION: The California State Library Bond Act provides for $350 million for the construction of library facilities. To receive grant funds, the City must participate in a competitive process to first determine eligibility for funding and, secondly, to determine if the project receives funding. The application process requires the City to submit architectural renderings and elevation drawings of the proposed library. Some work on this has been completed to date. However, if the City desires to submit a funding application in either of the upcoming funding cycles (March 2003 or January 2004), additional work will be required by the architect. The attached proposal from Gonzalez Goodale Architects provides sufficient services to prepare the application information. -•;a De uty City Manager Attachment: 1. Proposal from Gonzalez Goodale Architects for services related to the Library Bond Act application. 2000 Edition - Electronic Format AIA Document 0606 - 2000 .Amendment to the Professional Services Agreement TO: David Doyle, Deputy City Manager (Ow77ers Rep, aseotafive) In accordance with the Agreement dated: September 5, 2000 between the Owner: City of Diamond Bar 21825 East Copley Drive Diamond Bar, California 91765-4177 and the Architect: Gonzalez I Goodale Architects 135 West Green Street, Suite 200 Pasadena, Calif omia 91105 for the Project: (Name and address) Community / Senior Center Gonzalez I Goodale Project No. 00016 Amendment Number: 7 Authorization is requeste ( X ) to proceed with Additional Services or a Change in Services. ( ) to incur Additional Reimbursable Expenses. As Follows: Provide revised Concept Design of Library excluding revisions required for County review and color renderings. The fallowing adjustments shall be made tc compensation and time. (insert pro I isia us in accordance w th the Ap, reemeat, oras others, se agreed br fhe pz rties. ) Compensation: 1. Lump sum fee of thirty-five thousand dollars ($35,000). 2. Color renderings, if required, shall be a lump sum fee of seven thousand dollars ($7,000) per rendering. 3. County review/revisions, it required, shall be on standard hourly rates, as attached. Time: N/A © 2000 by The American institute of Arc netts. Reproduction of the material herein or su stantia quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution- WARNING: Unlicensed photocopying violates U.S. copyright laws and will subject the violator to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced in accordance,with your license without violation until the date of expiration as noted below. expiration as noted below. expiration as noted below. user Document: APSA-007.AIA -- 10125/2002. AIA License Number 1004410, which expires on 2/312003. Electronic Format G606 - 2000 AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AlA DOCUMENT MAY BE MADE BY USING AIA DOCUMEN7 D401. @2000 AIA® AIA DOCUMENT GSM -2000 AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT The American Institute of Architects 1735 New York Avenue, N.W. Washington, D -C. 20006-5292 HOURLY RATES January 1, 2002 Staff Position Hourly Rate Principal $185.00 Project Manager $145.00 Project Designer $145.00 Project Architect $130.00 Project Captain $105.00 Co -Project Manager $ 105..00 Senior Concept Designer $105.00 Senior Implementation Designer $ 95.00 Architectural Designer 2 $ 85.00 Architectural Designer 1 $ 75.00 Architectural Intern $ 65.00 Secretarial / Clerical $ 65.00 This schedule is valid for 2002. Services commenced in 2003 will be charged in accordance with the Hourly Compensation Schedule effective January 1, 2003. Direct Personnel Expense is inclusive of base salaries together with mandatory and customary benefits including employment taxes, group health insurance, holidays, vacation and similar benefits. CITY COUNCIL Agenda # 6.7 Meeting Date: 11119/02 AGENDA REPORT TO: Honorable Mayor and MembeAt, e City Council VIA: Linda C. Lowry, City Manager TITLE: Award of a contract to David Evans aociates, Inc. for the design of A.D.A. improvements at Starshine Park in the amount of $13, 470. RECOMMENDATION. Award the contract. FINANCIAL IMPACT: The City Council has appropriated $20,000 in Community Development Block Grant funds to develop the design for the A.D.A. retro -fit of Starshine Park. The A.D.A. retro -fit design contract will include design tasks in the amount of $12,420 and reimbursables in the amount of $1,050 for a total contract amount of $13,470. BACKGROUND: The Americans with Disabilities Act (A.D.A.) requires that public parks be constructed so they are accessible to individuals with disabilities. When a park has already been constructed without access, the park must be re -constructed, or retro -fit, to accommodate the park usage needs of individuals with disabilities. DISCUSSION. Staff released an RFP to seek a design consultant to complete the retro -fit design for Starshine Park. A total of four proposals were received and staff interviewed three firms whose proposals demonstrated the most relevant experience. Staff has determined that David Evans and Associates, Inc. is the most qualified firm for the project. The design plan will include a park accessibility inventory, a topographic survey, and a conceptual layout of A.D.A. park upgrades. The conceptual layout will include a group picnic shelter concept, park security lighting, a drinking fountain, and an expanded tot lot area. PREPARED BY: Kim Crews, Senior Management Analyst REVIEWED Bob est Director of Community Services Ja es DeS fano Deputy City Manager CONSULTING SERVICES AGREEMENT THIS AGREEMENT is made as of the 19`h day of November, 2002 by and between the City of Diamond Bar, a municipal corporation ("City") and David Evans and Associates, Inc., ("Consultant"). RECITALS A. City desires to utilize the services of Consultant as an independent contractor to provide consulting services to City as set forth in Exhibit "A", limited to tasks 1, 2, 3a, 4, 10, 11, 12, and 13. B. Consultant represents that it is fully qualified to perform such consulting services by virtue of its experience and the training, education and expertise of its principals and employees. C. Since this is a Federally assisted construction project, Davis -Bacon will be enforced, and if the State and Federal wage rates are applicable, then the higher of the two will be used. The Federal Labor Standards provisions (Form HUD4010), HUD's Section 3 requirements Federal Minority Business Enterprise/ Women's Business Enterprise (MBE/WBE) requirements and the Federal Wage Determination are attached and made part of this agreement, and compliance will be enforced. Any prime contractor or subcontractor working on a Federally assisted project must be eligible to participate. Any agreement must contain the same Federal language, NOW, THEREFORE, in consideration of performance by the parties of the covenants and conditions herein contained, the parties hereto agree as follows: 1. Consultant's Services. A. Scope of Services. The nature and scope of the specific services to be performed by Consultant are as described in Exhibit "A" the Consultant's Response, dated October 18, 2002 to the City's Request for Proposals. B. Level of Services/Time of Performance. The level of and time of the specific services to be performed by Consultant are as set forth in Exhibit "A." 2. Term of Agreement. This Contract shall take effect November 19, 2002, and shall continue until June 30, 2005 unless earlier terminated pursuant to the provisions herein. 3. Compensation. City agrees to compensate Consultant for each service which Consultant performs to the satisfaction of City in compliance with the schedule set forth in Exhibit "A", limited to tasks 1, 2, 3a, 4, 10, 11, 12, and 13. Payment will be made only after submission of proper invoices in the form specified by City. 'Total payment to Consultant pursuantto this Agreement shall not exceed $13,470.00. 4. General Terms and Conditions. In the event of any inconsistency between the provisions of this Agreement and Consultant's proposal, the provisions of this Agreement shall control. 5. Addresses. City: Consultant: City Manager, Linda C. Lowry David Evans & Associates, Inc. City of Diamond Bar 800 N. Haven Ave., Suite 300 21825 East Copley Drive Ontario, CA 91764 Diamond Bar, CA 91765-4177 6. Status as Independent Consultant. A. Consultant is, and shall at all times remain as to City, a wholly independent contractor. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Consultant or any of Consultant's employees, except as set forth in this Agreement. Consultant shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City. B. Consultant agrees to pay all required taxes on amounts paid to Consultant under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. In the event that City is audited by any Federal or State agency regarding the independent contractor status of Consultant and the audit in any way fails to sustain the validity of a wholly independent contractor relationship between City and Consultant, then Consultant agrees to reimburse City for all costs, including accounting and attorney's fees, arising out of such audit and any appeals relating thereto. C. Consultant shall fully comply with the workers' compensation law regarding Consultant and Consultant's employees. Consultant further agrees to indemnify and hold City harmless from any failure of Consultant to comply with applicable worker's compensation laws. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City' any reimbursement or indemnification arising under this Section 6. 7. Standard of Performance. Consultant shal l perform all work at the standard of care and skill ordinarily exercised by members of the profession under similar conditions. 8. Indemnification. Consultant agrees to indemnify the City, its officers, agents, volunteers, employees, and attorneys against, and will hold and save them and each of them harmless from, and all actions, claims, damages to persons or property, penalties, obligations, or liabilities that may be asserted or claimed by any person, firm, entity, corporation, political subdivision or other organization arising out of the acts, errors or omissions of Consultant, its agents, employees, subcontractors, or invitees, including each person or entity responsible for the provision of services hereunder. In the event there is more than one person or entity named in the Agreement as a Consultant, then all obligations, liabilities, covenants and conditions under this Section 8 shall be joint and several. 9. Insurance. Consultant shall at all times during the term of this Agreement carry, maintain, and keep in full force and effect, with an insurance company admitted to do business in California and approved by the City (1) a policy or policies of broad -form comprehensive general liability insurance with minimum limits of $1,000,000.00 combined single limit coverage against any injury, death, loss or damage as a result of wrongful or negligent acts by Consultant, its officers, employees, agents, and independent contractors in performance of services under this Agreement; (2) property damage insurance with a minimum limit of $500,000.00; (3) automotive liability insurance, with minimum combined single limits coverage of $500,000.00; (4) professional liability insurance (errors and omissions) to cover or partially cover damages that maybe the result of errors, omissions, or negligent acts of Consultant, in an amount of not less than $1,000,000 per occurrence; and (5) worker's compensation insurance with a minimum limit of $500,000.00 or the amount required by law, whichever is greater. City, its officers, employees, attorneys, and volunteers shall be named as additional insureds on the policy(les) as to comprehensive general liability, property damage, and automotive liability. The policy (les) as to comprehensive general liability, property damage, and automobile liability shall provide that they are primary, and that any insurance maintained by the City shall be excess insurance only. A. All insurance policies shall provide that the insurance coverage shall not be non - renewed, canceled, reduced, or otherwise modified (except through the addition of additional insureds to the policy) by the insurance carrier without the insurance carrier giving City thirty (30) day's prior written notice thereof. Consultant agrees that it will not cancel, reduce or otherwise modify the insurance coverage. B. All policies of insurance shall coverthe obligations of Consultant pursuantto the terms of this Agreement; shall be issued by an insurance company which is admitted to do business in the State of California or which is approved in writing by the City; and shall be placed with a current A.M. Best's rating of no less that A VI1. C. Consultant shall submit to City (1) insurance certificates indicating compliance with the minimum worker's compensation insurance requirements above, and (2) insurance policy endorsements indicating compliance with all other minimum insurance requirements above, not less that one (1) day prior to beginning of performance under this Agreement. Endorsements shall be executed on City's appropriate standard forms entitled "Additional insured Endorsement", or a substantially similar form which the City has agreed in writing to accept. 10. Confidentiality. Consultant in the course of its duties may have access to confidential data of City, private individuals, or employees of the City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without written authorization by City. City shall grant such authorization if disclosure is required by law. All City data shall be returned to City upon the termination of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. Notwithstanding the foregoing, to the extent Consultant prepares reports of a proprietary nature specifically for and in connection with certain projects, the City shall not, except with Consultant's prior written consent, use the same for other unrelated projects. 11. Ownership of Materials. All materials provided by Consultant in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City. 12. Conflict of Interest. A. Consultant covenants that it presently has no interest and shall not acquire.any interest, director or indirect, which may be affected by the services to be performed by Consultant under this Agreement, or which would conflict in any manner with the performance of its services hereunder. Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Consultant shall avoid the appearance of having any interest which would conflict in any manner with the performance of its services pursuant to this Agreement. B. Consultant covenants not to give or receive any compensation, monetary or otherwise, to or from the ultimate vendor(s) of hardware or software to City as a result of the performance of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. 13. Termination. Either party may terminate this Agreement with or without cause upon fifteen (15) days' written notice to the other party. However, Consultant shall not terminate this Agreement during the provision of services on a particular project. The effective date of termination shall be upon the date specified in the notice of termination, or, in the event no date is specified, upon the fifteenth (15th) day following delivery of the notice. In the event of such termination, City agrees to pay Consultant for services satisfactorily rendered prior to the effective date of termination. Immediately upon receiving written notice of termination, Consultant shall discontinue performing services. 14. Personnel. Consultant represents that it has, or will secure at its own expense, all personnel required to perform the services under this Agreement. All of the services required under this Agreement will be performed by Consultant or under it supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant reserves the right to determine the assignment of its own employees to the performance of Consultant's services under this Agreement, but City reserves the right, for good cause, to require Consultant to exclude any employee from performing services on City's premises. 15. Non -Discrimination and Equal Employment Opportunity. A. Consultant shall not discriminate as to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation, in the performance of its services and duties pursuant to this Agreement, and will comply with all rules and regulations of City relating thereto. Such nondiscrimination shall include but not be limited to the following: employment, upgrading, demotion, transfers, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. B. Consultant will, in all solicitations or advertisements for employees placed byor on behalf of Consultant state either that it is an equal opportunity employer or that all qualified applicants will receive consideration for employment without regard to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation. C. Consultant will cause the foregoing provisions to be inserted in all subcontracts for any work covered by this Agreement except contracts or subcontracts for standard commercial supplies or raw materials. 16. Assignment. Consultant shall not assign or transfer any interest in this Agreement. nor the performance of any of Consultant's obligations hereunder, withoutthe prior written consent of City, and any attempt by Consultant to so assign this Agreement or any rights, duties, or obligations arising hereunder shall be void and of no effect. 17. Performance Evaluation. For any contract in effect for twelve months or longer, a written annual administrative performance evaluation shall be required within ninety (90) days of the first anniversary of the effective date of this Agreement, and each year thereafter throughout the term of this Agreement. The work product required by this Agreement shall be utilized as the basis for review, and any comments or complaints received by City during the review period, either orally or in writing, shall be considered. City shall meet with Consultant prior to preparing the written report. If any noncompliance with the Agreement is found, City may direct Consultant to correct the inadequacies, or, in the alternative, may terminate this Agreement as provided herein. 18. Compliance with Laws. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state, and local governments. 19. Non -Waiver of Terms, Rights and Remedies. Waiver by either party of any one or more of the conditions of performance under this Agreement shall not be a waiver of any other condition of performance under this Agreement. In no event shall the making by City of any payment to Consultant constitute or be construed as a waiver by City of any breach of covenant, or any default which may then exist on the part of Consultant, and the making of any such payment by City shall in no way impair or prejudice any right or remedy avai lable to City with regard to such breach or default. 20. Attorney's Fees. In the event that either party to this Agreement shall commence any legal or equitable action or proceeding to enforce or interpret the provisions of this Agreement, the prevailing party in such action or proceeding shall be entitled to recover its costs of suit, including reasonable attorney's fees and costs, including costs of expert witnesses and consultants. 21. Notices. Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on (a) the day of delivery if delivered by hand during regular business hours or by facsimile before or during regular business hours; or (b) on the third business day following deposit in the United States mail, postage prepaid, to the addresses heretofore set forth in the Agreement, or to such other addresses as the parties may, from time to time, designate in writing pursuant to the provisions of this section. 22. Governing Law. This Contract shall be interpreted, construed and enforced in accordance with the laws of the State of California. 23. Counterparts. This Agreement may be executed in any numberof counterparts, each of which shall be deemed to be the original, and all of which together shall constitute one and the same instrument. 24. Entire Agreement. This Agreement, and any other documents incorporated herein by specific reference, represent the entire and integrated agreement between Consultant and City. This Agreement supersedes all prior oral or written negotiations, representations or agreements. This Agreement may not be amended, nor any provision or breach hereof waived, except in a writing signed by the parties which expressly refers to this Agreement. Amendments on behalf of the City will only be valid if signed by the City Manager or the Mayor and attested by the City Clerk. 25. Exhibits. All exhibits referred to in this Agreement are incorporated herein by this reference. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. "Cityll ATTEST- CITY OF DIAMOND BAR BY:_—__.._._.. _ BY. Lynda Burgess Wen P. Chang C4 Clerk Mayor Approved as to form: "CONSULTANT" By: City Attorney —7axv i d ,. ,EyA ,. Assoc., Inc. By: Its: We -e— Pre5i'de-n� 2d Wd8O : SO MME VT ' e)ON LS, .S IBV --6O6 : 'ON XUA S31U I DOSSU '8 SNO03 G MUU : WONA ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY Name and address of named insured {"Named Insured"): Name and address of Insurance Company ("Company"): Ceneral description of agreement(s), permit(s), ficense(s), and/or activity0es) insured: Notwithstanding any inconsistent statement in the policy to which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The ("PublicAgencyl, its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named insured. The Additional Insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional Insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the Policy shall apply separately to each Additional Insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shall be construed to preclude coverage of a claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. 5. The insurance afforded by the Policy for contractual liability insurance (subject to the I-1 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY terms, conditions and exclusions applicable to such insurance) includes liability assumed by the Named Insured under the indemnification and/or hold harmless provision(s) contained in or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named Insured and the Additional Insureds. 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereof. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. 7. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds. S. It is hereby agreed that the laws of the State of California shall apply to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD LIMITS OF THIS ENDORSEMENT ATTACHES FROM/TO LIABILITY J-2 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY 11. Scheduled items or locations are to be identified on an attached sheet. The following inclusions relate to the above coverages. Includes: Contractual Liability Owners/Landlords/Tenants Man ufactu rens/Contractors Products/Completed Operations Broad Form Property Damage Extended Bodily Injury Broad Form Comprehensive General Liability Endorsement Explosion Hazard Collapse Hazard Underground Property Damage Pollution Liability Liquor Liability 12. A deductible or self-insured retention (check one) of all coverage(s) except: (if none, so state). The deductible is applicable one). per claim or per occurrence (check 13. This is an occurrence or claims made policy (check one). 14. This endorsement is effective on Policy Number at 12:01 A.M. and forms a part of 1, (print name), hereby declare under penalty of perjury under the laws of the State of California, that I have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed Phone No.: ( mm�) 20 Signature of Authorized Representative (Original signature only; no facsimile signature or initialed signature accepted) J-3 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Name and address of named insured ("Named Insured"): Name and address of Insurance Company ("Company"): Ceneral description of agreement(s), permit(s), license(s), and/or activity(ies) insured. Notwithstanding any inconsistent statement in the policy to which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The ("Public Agency"), its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured. The Additional Insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional Insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the Policy shall apply separately to each Additional Insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shat l be construed to preclude coverage of a claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this.provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. 5. The insurance afforded by the Policy for contractual liability insurance (subject to the terms, conditions and exclusions applicable to such insurance) includes liability assumed by the J-4 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Named Insured under the indemnification and/or hold harmless provisions) contained or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named insured and the Additional Insureds, 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereto. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. 7. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds. 8. It is hereby agreed that the laws of the State of California shall apply to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. 9. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD LIMITS OF THIS ENDORSEMENT ATTACHES FROM/TO LIABILITY 11. Scheduled items or locations are to be identified on an attached sheet. The following inclusions relate to the above coverages. Includes: J-5 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Any Automobiles All Owned Automobiles Non -owned Automobiles Hired Automobiles Scheduled Automobiles Garage Coverage Truckers Coverage Motor Carrier Act Bus Regulatory Reform Act Public Livery Coverage 12. A deductible or self-insured retention (check one) of $ applies to all coverage(s) except: none, so state), The deductible is applicable per claim or per occurrence (check one). 13. This is an occurrence or claims rnade policy (check one). 14. This endorsement is effective on at 12:01 A.M. and forms a part of Policy Number i, (print name), hereby declare under penalty of perjury under the laws of the State of California, that I have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed Phone No.: ( ) rr3�� Signature of Authorized Representative (Original signature only; no facsimile signature or initialed signature accepted) J-6 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY Name and address of named insured ("Named Insured"): Name and address of Insurance Company ("Company"): General description of agreement(s), permit(s), license(s), and/or activity(ies) insured: Notwithstanding any inconsistent statement in the policyto which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The ("Public Agency"), its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured. The Additional insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional Insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the Policy shall apply separately to each Additional Insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shal I be construed to preclude coverage of a claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. The insurance afforded by the Policy for contractual liability insurance (subject to the J-7 ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY terms, conditions and exclusions applicable to such insurance) includes liability assumed by the Named Insured under the indemnification and/or hold harmless provision(s) contained in or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named Insured and the Additional Insureds. 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereto. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. 7. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds, 8. It is hereby agreed that the laws of the State of California shall apply to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. 9. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD LIMITS OF THIS ENDORSEMENT ATTACHES FROM/TO LIABILITY Following Form Umbrella Liability 11. Applicable underlying coverages: INSURANCE COMPANY POLICY NO. J-8 AMOUNT ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY 12. The following inclusions, exclusions, extensions or specific provisions relate to the above coverages: 13. A deductible or self-insured retention (check one) of $ all coverages) except: state). The deductible is applicable per claim or per occurrence (check one) 13. This is an occurrence or claims made policy (check one). 14� This endorsement is effective on Policy Number appliesto (ifnone,so at 12:01 A.M. and forms a part of I, (print name), hereby declare under penalty of perjury under the laws of the State of California, that I have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed Phone No.: ( ) 20_ Signature of Authorized Representative (Original signature only; no facsimile signature or initialed signature accepted) J-9 ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY Professional. Consulting .Services t for Improvements to Starshine Park m in the City of Diamond Bar A, IJ 1 10 ._ s October 18, 2002 ,. _ S S Mr. Bob Rose, Community Services Director City of Diamond Bar 21825 E. Copley Drive Diamond Bar, CA 91765 Subject: PROPOSAL TO PROVIDE PROFESSIONAL CONSULTING SERVICES FOR IMPROVEMENTS TO STARSHINE PARK Dear Bob: David Evans and Associates, Inc. (DEA) would like to thank you for the opportunity to submit a proposal to provide landscape architecture, surveying and electrical engineering services for the above mentioned project. As you know, DEA has been involved in numerous projects throughout the city for several years; including the ADA retrofit for Ronald Reagan and Heritage Parks. Additionally, DEA has been involved in the planning, design, and improvement of over 100 parks throughout Southern California; many of which require similar improvements to that of Starshine Park. DEA's team of park and recreation designers have experience with park master planning, sports complex design, facility planning for high profile recreation and commercial areas such as Pier 39 in San Francisco, and numerous projects ranging in size from I acre to 1,500 acres. We are currently providing master planning and construction documentation services for a 12 -acre river park in Santa Clarita, a 15 mile multi -use trail along the Kern River, a 34 -acre park in Palm Desert, and 8 playground renovations in the city of Pasadena. We have also had the opportunity to work with you and your staff on numerous streetscape projects and park renovations. DEA also has experience with civic center parks including the 70 acre Palm Desert Civic Center Park; home to numerous amenities including a one acre lagoon, 2,000 seat outdoor amphitheater, children's playgrounds, two restrooms, play courts, lighted ballfields, walking paths, site furnishings and perhaps one of the finest displays of `'Art in Public Places" found in the Coachella Valley. Most of the work performed for municipalities over the — past few years includes all phases of work from master planning and facilitation at community workshops, to the preparation of construction drawings and value engineering efforts. Our construction services often include assistance with bidding and part or full time construction observation, inspection and administrative services. We have provided a project understanding and list of tasks regarding the scope of services. Please note that our fees are negotiable and are reflective of the level of effort proposed by our team. If you need any additional information or clarification on any item, please feel free to contact us. We look forward to the next step in the selection process and thank you once again for your consideration of our qualifications. Sincerely, DAVID EVANS AND ASSOCIATES, INC. Kim S. Rhodes, L.A. 3867 Project ManagerNice President 800 North Haven Avenue Suite 300 Ontario California 91764 Telephone: 909.481.5750 Facsimile: 909.48 1.5757 ...,^ 1. :op oposal ovideofessional Consulting Services provements To Starshine Park Prepared for the City, of Diamond Bar Mr. Bob Rose, Community Services Director 21825 E. Copley Drive Diamond Bar, CA 91765 (909) 396-5694 ext. 232 Prepared by David Evans and Associates, Inc. 800 North Haven Avenue Ontario, California 91764 Contact: Ms. Kim S. Rhodes, L.A. 3867, Project Manager/Vice President (909) 481-5750 Fax (909) 481.5757 email: ksr a;deainc.com Additional Southern California offices in Laguna Hills, Palm Desert and San Diego. October 18, 2002 Proposal for Improvements to Starshine Park Proposal for Improvements to Starshine Park DEA Statistics: • Over 900 personnel in 22 offices • Located in Cafifornia, Alabama, Arizona, Colorado, Oregon, Washington, and Florida • No. 78, ENR (Engineering News Record) Top 500 Design Firms • No. 40, ENR Top 100 "Pure Designers" in the nation • Founding member of GDR (Global Design Alliance), a national consortium of prominent U.S. architecture and engineering firms I Section 1: Firm Information Since 1976, David Evans and Associates, Inc. (DEA) has been providing multi- disciplinary engineering services to clients in the public and private sectors, including: • Landscape Architecture • Civil Engineering • Conventional Surveying • Land Planning • Environmental Planning • Structural Engineering • Environmental Engineering • Telecommunications Engineering • GPS Surveying • GIS Mapping • Right of Way Acquisition • Natural Resource Management • Transportation Planning/Engineering/Design Total Quality Management DEA has an aggressive, firmwide total quality management (TQM) program., To maintain a consistently high level of quality, DEA: • designates a professional staff member as central contact for each client to ensure that the client's needs are met • organizes TQM committees in each office to identify issues, develop recommendations, and implement solutions • is in the process of becoming an ISO 9001 registered firm Commitment to Technology DEA is committed to using the most powerful, advanced graphics and mapping systems, including: • Microstation • Intergraph InRoad • AutoCAD • ARC/INFO GIS • GPS • LISCADD • LANDCADD Financial Information DEA is a corporation organized under the laws of the state of Oregon, From its inception on April 1, 1976, DEA has grown to include 106 stockholders. Current financing in addition to stockholder equity consists of accounts receivable from 401 SW Fifth Avenue, Portland, Oregon 97204. DEA's contact is Richard Pickwick, .(503)225-1753. F42001, DEA's business volume reached $101.7 million. Proposal for Improvements to Starshine Park i� �iits% I., Insurance Coverage Limits Comprehensive General Liability $2,000,000 Automobile Liability $17000,000 Workmen's Comprehensive Insurance/Employer's Liability $ 500,000 (Umbrella covers over $500, 000 in California) Professional Liability Insurance $5,000,000 Insurance Company Names Agent and Phone Number Continental Casualty Insurance Bruce Oleszczek Kemper National (503) 306-2809 Minority or Women Owned Business Enterprise Utilization DEA provides small businesses, small business concerns owned and controlled by socially and economically disadvantaged individuals, and women -owned small businesses, with maximum practicable opportunity to participate as subcontractors in contracts between DEA and local, state and federal agencies. Our company -wide Small business Program includes an active outreach element for soliciting small, minority, and woman -owned businesses to join our project teams and provide their unique expertise. Consequently, DEA has established long-term working relationships with many small businesses. DEA is committed to providing as many opportunities as we can to small business. We plan to use numerous small businesses throughout the term of the project. We have gathered together a list of certified business owners we can call upon as needed to set up meetings, provide temporary office help, print stationary, copy printed materials, provide transportation services, do desktop publishing, provide graphic design and service our office machinery. As part of this program, regional liaisons have been designated for our offices in Oregon, Washington, California, Arizona and in our corporate office. The liaison's role is to connect DEA staff with qualified small businesses. The liaisons are responsible for maintaining files of qualified small businesses in every office. In addition, the liaisons are responsible for outreach, documentation of activities, and other issues related to small business contracting. Each DEA office posts the Small Business Program statement on their bulletin board, and reviews the procedures every six months during a staff meeting. In addition to the outreach efforts managed by the liaisons, the offices have committed to at least one outreach effort annually. Examples of outreach efforts undertaken by DEA include attending a local small business opportunity fair, having open house for small business firms, inviting specific firms for a "brown bag" presentations, and utilizing small businesses for support services such as printing and deliveries. Proposal for Improvements to 5tarshine Park i Section 2. Proiect Team DEA has assembled a qualified and creative team based on the anticipated project needs. The team assigned to this project has the experience and capabilities to provide the City of Diamond Bar with superior services. Our management structure explains the appropriate "chain of command" and reporting responsibilities. DEA has a project team management approach, which provides flexibility and innovative 'thinking, while maintaining strict adherence to the project's goals and schedule. Kim S. Rhodes, L.A.. 3867 - Ms. Rhodes will serve as project manager and the City's primary contact on this project. A California registered landscape architect and vice president with DEA, Ms. Rhodes has over 16 years of landscape architectural experience. She has been responsible for the design of parks, several projects in Diamond Bar, sports facilities, streetscape, urban design, trails, and master plans for numerous projects throughout California. She has served in the quality assurance and project management role for many years. City of Diamond Bar Bob Rose comrm ,> Servicer amcio' �ffAW Project Manager Am Quality Assurance Kim S. Rhodes, LA., 3867 Crisbne Mihail, LA vice Presidetd 4216 I)n+idEmns andi2csaciate.�I.x. - (DF 1) DEQ Surye Civil Engineering Lawlsmpe Architecture Se 'cal B=wd J. hkhxdly, RLS, Rob Baffike, P.E Jeffrey r. Smit, ASLA Encpneering Jeff S. KNA L.A. 4586 Joseph M Nolan, EE DER IAEA DEA Dre—Ersg ft—g,1— EW CADD/G7raphics Marihel A Jaw, ASLA DER Cristine McPhail, L.A., 4216 — Ms. McPhail will be in charge of the quality assurance for this project. She is a California registered landscape architect, certified arborist, and project manager with David Evans and Associates, Inc, For the past 12 years, Ms. McPhail has been responsible for all aspects of landscape architectural planning, design, construction, and maintenance. She has been the project manager for a variety of projects including downtown redevelopment, commercial sites, hotels, land development, median and streetscapes, parks, schools, transit centers, and historic restoration. Proposal for Improvements to Starshine Park `7� �.� • Jeffret• F. Scott, ASLA — Mr. Scott will lead the landscape architectural efforts on ,r this project. Mr. Scott has over 14 years of experience in the landscape architectural field and park planning. His experience includes the design of numerous parks and sports facilities throughout Southern California. r ► Jeff S. Khun, L.A., 4586 — Mr. Khun will assist with the landscape architectural efforts on this project. Mr. Khun is a project manager / landscape architect with DEA. He is responsible for landscape architectural design and graphic renderings, and the preparation of construction documents on numerous projects, including recreational/park facilities, streetscapes, sports facilities, schools, commercial sites, skateboard parks and industrial developments. He is particularly skilled in using several computer programs such as AutoCAD and LandCADD in the preparation of site, design development and construction documents. He is also experienced in using Adobe Photoshop to produce presentation renderings and photo imaging. Rob Bathke, P.E. — Mr. Bathke will provide civil engineering expertise related to ADA services for this project. He is a California registered engineer with over 15 years of experience. His responsibilities have included project management, project engineering, and design for street improvements, parks and trails, infrastructure improvements, and storm drain improvements for public works, residential, and commercial projects. Mr. Bathke's projects include four phases of the Santa Clara River Trail system, numerous projects for a major entertainment industry client in Burbank, and Chandler Boulevard bikeway in Burbank. Maribel Arellano, ASLA — Ms. Arellano will assist with the landscape design efforts on this project. For the past two years she has gained experience in residential, commercial, streetscape, and park design. Her experience also includes presentations within city public workshop forums, on site -construction observation, site analysis, CARD operations, and administration tasks. Ms. Arellano is also bilingual and has assisted with translation at various meetings and community gatherings. Dream Engineering, Inc. - Dream Engineering is an electrical engineering firm, which has provided electrical engineering services to municipalities and governing agencies for over 20 years. Dream provides these services on parks, walkways, sports areas, parking lots, median islands, and streets where lighting is necessary. Dream Engineering has previously worked with DEA on Lorbeer Middle. School, the 70 -acre Palm Desert Civic Center Park, streetscape lighting for five major roadways in La Quinta, the Costa Mesa Soccer Complex and Central Park West iwBaldwimtPark. Mr. Joseph M. Nolan, E.E. will head the Dream Engineering team on these projects. He is a California registered engineer who specializes in the field of electrical and electronic engineering. His experience involves: all types of electrical engineering including lighting for roadways, sports arenas, tennis courts, baseball fields, soccer fields and football fields. Mr. Nolan has engineered the lighting of over 300 sports area fields during the past several years. Proposal for Improvements to Starshine Park Landscape architecture is an integral part of DEA's inter- disciplinaty project approach. i Section 3: Experience 1 Proiect Examples f DEA has over 23 years of experience in landscape architectural design. Landscape architecture combines art and science in such a way as to provide harmony between the natural and built environment. The work of the DEA landscape architect involves planning, design, and preserving the land. We blend the art of attractively shaping Iand and the objects upon it for use and enjoyment, with a talent for producing practical, yet innovative designs. DEA's landscape architects and master planners analyze �h � site potential and the environmental impact of proposed development. As master planners, we 4 generate ideas and alternatives, conceptual it layouts, and preferred designs. Then, together with the project team, we review goals, facts, needs, issues and community concerns. We consider the character and function of the site and -•. the aesthetic quality that can be achieved. Our success depends on our creative ability to accommodate development while maintaining the natural qualities of the site. At DEA, landscape architecture provides an integral part of the team processes. Our landscape architects have the design expertise necessary to combine attractive designs with functional solutions, assuring the client the highest quality of work. Ronald Reagan and Heritage Parks, Diamond Rai-, Cal{forma DEA provided landscape architectural services for ADA upgrades at two Diamond Bar parks. Each park was observed for ADA compliance of parking areas, restrooms, play equipment, and site furnishings. Recommendations were made in accordance with the best utilization of play areas, as well as suggestions on playground equipment components and accessible play surfaces for the physically challenged. DEA provided conceptual design services, tot lot construction documents, cost estimates, and park accessibility inventories for each park. Reference: Mr. Bob Rose (909) 396-5694 City of Diamond Bar 21660 East Copley Drive, #100 Diamond Bar, CA 91765 City of Costa Mesa Tot Lot and Playground ADA Upgrades, Costa Mesa, Calitornia DEA provided landscape architectural services for 20 Costa Mesa parks which require Americans with Disability Acts (ADA) upgrades. Each park was observed for current play activity and recommendations were made in accordance with the best utilization of those play areas, as well as suggestions on playground equipment components and accessible play surfaces for the physically challenged. DEA provided design services, tot lot construction documents, cost estimates and park accessibility inventories for each of the parks. Proposal for improvements to Starsh€ne Park Reference: Mr. David Alkema (714) 754-5300 City of Costa Mesa 77 Pair Drive Costa Mesa, CA 92628-1200 Rancho San Jose Avenue Pak, Claremont, California DEA landscape architects are currently providing design and construction services to the city of Claremont for a new pocket park facility. The 1.3 -acre park will consist of a children's playground, tennis court, a half basketball court, and picnic areas. DEA will also be facilitating workshops and City Council meetings and will be determining the phasing of the project to accommodate the available budget. Reference: Mr. Mark Hodnick (909) 399-5431 City of Claremont Community Services Department 215 Cornell Avenue Claremont, CA 91711-0880 Central Park West, Baldivin Park, California DEA provided conceptual and final design of this neighborhood park project which includes playground and tot lot areas, parking, basketball courts, volleyball courts, a roller hockey rink, batting cages, a restroom/maintenance buildings, picnic areas and --Y open play space. DEA facilitated community workshops held at both City Hall and local high schools. Valuable input was also gained through discussion with the park district and police department. The project was phased in accordance with available budget. DEA also worked closely with the City to prepare documentation for grant purposes. Reference: Mr. Arjan Idnani (626) 960-4011 City of Baldwin Park 14403 East Pacific Avenue Baldwin Park, CA 91706 Valley Park, Hermosa Beach, California DEA landscape architects are providing design and construction services to the city of Hermosa Beach for improvements to the City's premier park facility, Valley Park. The 20 -acre park consists of children's playgrounds, an outdoor amphitheater, a restroom, basketball courts, a sports field, picnic areas, and perimeter parking. DEA will evaluate ADA issues and upgrade the park with various improvements such as a new irrigation system, native garden and playground modifications. Reference: Mr. Kenneth Kim City of Hermosa Beach 1315 Valley Drive Hermosa Beach, CA 90254 Proposai for Improvements to StarsNne Park Pasadena Playgrounds, Pasadena, California DEA landscape architects and park planners provided custom playground design for eight (8) parks within the City of Pasadena. Each site was evaluated to determine the theme and age appropriateness best suited to achieve the desired results for accessibility and play value. DEA worked closely with the City and playground manufacturer to address ADA concerns while creating a safe and creative play environment. Community workshops and consensus building were important components of the work program and DEA assisted the city with the facilitation of these efforts. Custom playgrounds and various park improvements required the preparation of grading plans, planting and irrigation plans, and play equipment layout plans. All parks were designed in accordance with the available funding for each site. Close coordination and project documentation were key factors in the overall success of the project. Reference: Mr. Todd Holmes, Park Planner (626) 744-3729 Cite of Pasadena Parks and Natural Resources Division 233 West Mountain Street Pasadena, CA 91103 Palm Desert Civic Center Park Master Plan, Pahn Desert, California DEA performed landscape architectural services, irrigation design, civil engineering, surveying and construction administration for this $9.3 million, 70 -acre park project for the city of Palm Desert. The site includes development of a lagoon, waterfalls, fountains, picnic shelters, playground and tot lots, restrooms, play courts, trails, gardens, an extensive display of artwork, and parking facilities. The City recently completed Phase Three of the project which includes more picnic shelters, four lighted ballfields, two soccer fields, a concession building with restrooms, and jogging/biking trails. The park is designed to allow handicap access to all major park features including the recently constructed amphitheater stage. There are three entranceways to the site and the 2.2 miles of jogging trails were designed to connect the entranceways with the park's passive and active elements. The site is irrigated from a one -acre lagoon and plant selection was critical to adapt to the extreme heat. Reference: Mr, Joe Gaugish (760) 346-0611 City gfPalm Desert 73-510 hied Waring .Drive Palm Desert, CA 92260 River Park, Santa Clarita, California The DEA project team is working with the city of Santa Clarita on the master plan of a 12 -acre River Park adjacent to the Santa Clara River. The park will be passive in nature providing native planting areas with trails and equestrian routes, a custom water feature which acts as a filtration system for allowing clean water discharge into the river, picnic areas, parking, a restroom/nature center, and children's play areas. Active sports areas will be considered during the conceptual planning phases; however, it is the City's desire to keep the park rustic in character. Traffic and circulation studies will be performed for on-site and off-site improvements. Environmental consultants including biologists and archeologists will assist in the Proposal for Improvements to Starshine Park _ preparation of a Negative Declaration. DEA will also be responsible for trail feasibility studies, design and cost estimates in addition to documentation for easements related to the trail. Preliminary engineering for the site will include review of infrastructure needs and grading and drainage concerns. Once the conceptual planning phases are complete and approved by all agencies including Fish �- and Game, DEA shall commence with construction plans for the park. _ Refereneet Mr. Wayne Weber (661) 2864000 City of Santa Clarita 23720 Valencia Boulevard, Suite 120 Santa Clarita, CA 91355 Proposal for Improvements to Starshine Park Ronald Reagan and Heritage Parks Client: City of Diamond Bar, California V�ti DEA PROVIDED LANDSCAPE ARCHITECTURAL SEPVICES for ADA upgrades at two Diamond Bar parks. Each park was observed for ADA compliance of parking areas, restrooms and site furnishings. Recommendations were made in accordance with the best utilization of play areas, as well as suggestions on playground equipment components and accessible play surfaces for the physically challenged. DEA provided design services, tot lot construction documents, cost estimates, and park accessibility inventories for each park. Construction observation included coordination with the contractor, city building inspector, and site furnishing manufacturers. DEA attended weekly meetings to ensure the project was being constructed in conformance with the plans.0 Section 4: Project Understanding 1 Scope of Services Task 1: Start Up Meeting/Site Visit DEA project team members shall attend an initial start-up meeting with City staff to develop a working relationship between all key members of the team. This meeting shall serve as an opportunity to acquire all relative input about the project site. DEA would request that the city provide any and all existing park plans and digital files, if applicable. This meeting shall also provide a review of the scope of services, objectives, design, maintenance, construction scheduling and budget. Deliverables: Meeting with city staff. Task 2: Park Accessibility Inventory The project team shall prepare a park accessibility inventory and recommendation report which contains checklists for evaluation of outdoor settings and are applicable to all park facilities. Following the data listed on the survey forms, DEA shall make recommendations for all ADA improvements at Starshine Park. An 11" x 17" site plan will be included which highlights the location and type of modification required. Finally, this report shall include a summary of ADA improvements, cost estimates and a cost matrix which denotes a prioritized schedule of park upgrades. This task also includes reviewing bid alternative for the work required to construct said improvements Deliverables: Park accessibility inventory and recommendations for creating a completely accessible facility in addition to recommendations for bid alternates. Task 3: Topographic Survey DEA will prepare a 1 "= 20' scale topographic map which indicates spot elevations for specific site features included in this ADA retrofit project. DEA will acquire a base map from the city, which shall be digitized by our AutoCAD technicians in order to provide a new base map which depicts existing elevations. If the City has this base information available in a digital format, DEA could reduce our fee for this task by eliminating the digitizing services. If park plans are not available, see optional cost for the preparation of aerial and ground survey. Deliverables: Topographic survey. Task 4: Conceptual Layout of ADA Park Upgrades DEA shall prepare an overall site plan at an appropriate scale which fully depicts the proposed improvements necessary to adhere to all ADA guidelines and requirements. Improvements shall include on street parking areas, access ramps, drinking fountains, playground areas, picnic faces (tables, BBQ's, and trash receptacles), spectator viewing areas and signage accessibility. A preliminary cost estimate shall also be provided. As part of this task, .DEA shall attend two Parks and Recreation Commission meetings in support of the conceptual plan and associated improvement costs. Deliverables: Conceptual Plan; attendance at two Parks and Recreation Commission meetings. Proposal for Improvements to Starshine Park Task S: Construction Documents and Specifications DEA shall prepare 20 scale final construction documents and specifications for all ADA park improvements noted above. The bid document package shall include requirements set forth by C.D.B.G. requirements. A final construction cost estimate will also be provided indicating: item number, description, quantity, unit, unit price, and total. DBA will attend one City Council meeting to support the bid documents during the approval process of the plans and specifications. Deliverables: Two sets offinal plans; specifications and estimates; attendance at one City Council Meeting. Task b: Bid Assistance DEA shall assist the City during the bid process which shall include: distribution of addendum to the bid documents, review of submittals during the bid process (and recommendation to approve or reject), answering questions from prospective bidders, attendance at the bid opening and review of all submitted bids for completeness (check licenses and references of apparent low bidder including prime and subcontractors). DEA shall provide a written recommendation for the apparent low bidder based on information obtained in the submitted documents, interviews with references, including the State of California Consumer Affairs and other sources with first hand knowledge regarding the competency of the contractor to successfully complete the work described in the bid documents. This task shall also include the attendance at one city council meeting to support the award of contract to the apparent low bidder in addition to attendance at the pre -construction meeting to present information on the construction documents. The pre -construction meeting will include a site visit. Deliverables: Bid assistance as noted above. Task 7: Construction Observation DEA shall provide weekly site visitations by either a landscape architect or project engineer as deemed appropriate during the construction process. We have identified a ten -week construction period and therefore our fees reflect this methodology. DEA will continue to provide telephone support as -needed to City staff, project managers, the general contractor and city inspector, Should the length of time exceed our expectations, DEA would continue to provide construction observation for the duration of the project on a time and materials basis in accordance with our hourly rates. Weekly observations would include: quality control of installation and location of amenities, review of installed material quality, review submittals and change order requests (provide written recommendations), observation of construction conformance to design documents, attendance at a final walk through and written acceptance of the project, and construction schedule monitoring. It is our understanding that the city will provide a full time inspector for the project if necessary, in addition to necessary building inspectors. Deliverables: Construction observation as noted, Proposal for Improvements to Starshine Park Task 8: Final Record Drawings The DEA project team will prepare and submit 20 scale as -built drawings on mylar after the completion of project construction. The contractor shall be required to provide "red lines" to DEA in order for our technical staff to provide the necessary information. Deliverables: Mylar as-builts (one set). Task 9: City Council Meeting and Project Completion DEA shall attend a City Council meeting to support acceptance of the project and the filing of the notice of completion, in addition to the "preparation, compilation, and presentation of all necessary documentation, forms, and reports for review by the U.S. Department of Housing and Urban Development, Los Angeles County Office of Affirmative Action Compliance, Los Angeles County Community Development Commission, and other governmental entities during the project and audit review sessions." Deliverables.- City Council Meeting and project administration. Bid Alternates Task 14: Group Picnic Shelter (Optional) DEA Iandscape architects shall provide construction details for the installation of a pre -fabricated picnic shelter including site furnishings such as picnic tables, 1313Q's and trash receptacles. This task includes minor grading and structural tales for the shelter. Deliverables: Manufacturer data for a pre fabricated picnic shelter; structural talcs, grading information and site furniture data. Task 11: Park Security Lighting (Optional) Dream Engineering will work with DEA landscape architects to provide security lighting throughout the park which is condusive to the neighborhood theme — providing a safe, well lit park with no light spill beyond the project area. Fixture type and style shall be determined by the city and project landscape architect. Deliverables: Construction documents for park security lighting. Task 12: Drinking Fountain (Optional) DEA civil engineers and landscape architects will determine the point of connection for domestic water in order to provide a drinking fountain at or near the playground and picnic shelter (if constructed). This task includes the preparation of plans for a domestic service line from the city water meter and coordination and approval of plans through the Health Department. DEA shall coordinate with the city regarding the selection of the desired drinking fountain manufacturer. Deliverables: Drinkingfountain plans. Task 13: Expanded Playground Plans (Optional) If desired and within project budget parameters, DEA landscape architects shall provide additional playground area design and construction drawings. It has been determined that a larger playground area may be desired due to the required space allocation necessary to meet all ADA regulations. Proposal for Improvements to Starshine Park I Section 5; Proiect Schedule and Fees DEA understands the need for accelerated schedules. We have a great deal of confidence in our ability to meet this proposed schedule and pride ourselves in being accessible and responsive to our clients. This will be demonstrated by our willingness to contractually obligate DEA to an established schedule. With our moderate workload, DEA can adhere to the City's schedule. Graphic representation of our schedule may be found on the following page. DEA realizes the importance placed upon our firm to provide a quality product to our clients, while maintaining open and clear communication, and by providing our services in a timely manner. "On time" and "on budget" are some of the terms frequently used by clients, but very few consultants are able to live up to these standards. DEA has an excellent reputation for being on time and we have been commended by many of our clients for completing projects ahead of schedule and within budget. Proposal for Improvements to Starshine Park ac CL as m 13 0 E sln U) a o a _T Q7 Q v E0 - O Q E m O �LO U CO N w �- t/9 Q eq O N d 64 pp p H3 [? M r- &31Efi CDO p N b% p r d mw Cb 0 II) ff) C? W N to O O N fA O CCLC( N bi a0 O " d tf3 O W) CA co 4 O N f9 dO _ t% O Q CD H3 M t" Ca O O f!3 Cl [O CA O 4 O N !n O C fol r d9 O 07 fo d O O N 93 O CD M f/J O O O 69 O CD CO r fH Cl O 613 O CD CO 09 N U - r X w C7 O � �r fH 7 CD N CD N N in J ti E!3 zm iJ.l fA n V Ct N N N d CR m �' Cb O CD • N R W Q � W O CL � V d N V V co N N N d d N N Q O • • m N C C O O O � O m 8t tu 2 O cl M CD UCL �mn � V)CD _o .. a m o a C m a o i o C Q Q C N C b C3J y m go m ra o ❑ � oo O � g m t � � m ,:.o N m U o 5 c U _ ? c O cc U cl0_ R U z m w U L U m o a LL Ol a a i Y O O C C G U Q 3 y Y GC6 N _ C cn 0. H d U V a] V ti 0 m 0 0- u N cmj -COO Education B.S. Landscape Architecture, 1985, Califomia State Polytechnic University, Pomona, Registration Registered Landscape Architect, California, (3867), 1993 Professional Memberships American Society of Landscape Architects Publications "Water Management in a Desert Park" with Rupp, Land; and Water, May/June 1993. "Palm Desert, California - A Sense of Oasis", Landscape Architect and Specifier News, March 1993 "New Park is a Jewel in the Desert", Public Works, July 1993 "Palm Desert Civic Center Park —A Look Back", Builder/Architect, September, 1999 "Creating a Desert Oasis", Builder/Architect, August, 2000 Resumes Ms. Rhodes is a California registered landscape architect, vice president, DEA project manager and regional director of landscape architecture in Southern California. For the past 16 years with DEA, Ms. Rhodes has been responsible for landscape architectural design on numerous projects, including design and planning for parks, hotels, streetscapes and trail projects, sports facilities, schools, commercial, residential, and industrial developments. Experience: Ronald Reagan and Heritage Parks, Diamond Bar, California Ms. Rhodes provided landscape architectural services for ADA upgrades at two Diamond Bar parks. Each park was observed for ADA compliance of parking areas, restrooms and site furnishings. Recommendations were made in accordance with the best utilization of play areas, as well as suggestions on playground equipment components and accessible play surfaces for the physically challenged. She provided design services, tot lot construction documents, cost estimates, and park accessibility inventories for each park. Palm Desert Civic Center, Palm Desert, California Ms. Rhodes served as landscape architect for the 70 -acre, $9.3 million park located within Palm Desert's City Hall and Civic Center complex. Landscape design included a 1 -acre lagoon which serves as the source of irrigation for the park. Other park elements include, tot lots, play areas, an outdoor amphitheater, picnic areas, tennis courts, basketball and volleyball courts, entry plazas, a rose garden, public art, and jogging paths. The third phase of the 70 -acre park has been completed and includes four -lighted baseball fields, two soccer fields, a restroom, picnic facilities, and open play areas. Landscape design concentrated on the use of drought tolerant plants and water efficient irrigation systems. The project also involved various elements of strectscape and entry plaza design. Central Park West, Baldwin Park, California Ms. Rhodes provided conceptual design of this neighborhood park project which initially included playground and tot lot areas, parking, basketball courts, a roller hockey rink, batting cages, a restroom/maintenance building, picnic areas and open play space. She facilitated community workshops held at both City Hall and local high schools. Valuable input was also gained through discussion with the park district and police department. River Park, Santa Clarita, California Ms. Rhodes was responsible for working with Santa Clarita to develop a master plan for a 12 -acre park adjacent to the Santa Clara River. The park incorporated native planting areas with trails and equestrian routes, a custom water feature that acts as a filtration system and allows clean water discharge into the river, picnic areas, parking, restrooms and a nature center, and children's play areas. Project tasks included traffic and circulation studies for on- and off-site improvements, preparation of a negative declaration, trail feasibility studies, park design and a cost estimate, and providing documentation for trail easements.. Proposal for improvements to Starshine Park Education B.F.A. 1981, Carnegie-Mellon Univ., Pittsburgh, PA Registration Registered Landscape Architect, California (4216) 1997 expires 2128/03, Nevada (449) 1996 expires 6130103, Arizona (31656) 1997 expires 12/31/03 Certifications Certified Arborist (#WC -3400), Irrigation Designer (Residential) (#1948) Professional Memberships American Society of Landscape Architects, Irrigation Association, International Society of Arboriculture Years of Professional Experience 12 Ms. McPhail is a California registered landscape architect, certified arborist, and project manager with David Evans and Associates, Inc. For the past 12 years, Ms. McPhail has been responsible for all aspects of landscape architectural planning, design, construction, and maintenance. She has been the project manager for a variety of projects including downtown redevelopment, commercial sites, hotels, land development, median and streetscapes, parks, schools, transit centers, and historic restoration. The following projects were completed while with another firm: Experience: Rancho California Sports Park Tot Lot Improvements, Temecula, California Ms. McPhail served as landscape architect in the renovation and upgrade of this large playground area. Drainage facilities were designed, grading changed, new curbing and surfacing added, as well as installation of new playground equipment. The tot lot was designed for ease of maintenance and compliance ADA requirements. Kahle Community Park, Zephyr Cove, Nevada Ms. McPhail service as Construction Manager on this $3 million park project including a community center, lighted sports fields, parking, Iandscape and site furnishings. The project was subject to restrictions by the Tahoe Regional Planning Agency. When Ms McPhail was asked to manage the project, an hundred -year snowstorm had blown out a Keystone retaining wall, destroyed partially installed field lighting, and crushed the baseball backstop. Ms. McPhail through her extensive construction management experience was able to get the project completed and operational on schedule without extensive change orders. Aspen Park Field Lighting Project, Gardnerville, Nevada Ms. McPhail was project manager/construction manager for the installation of lighting for four existing ball fields. This was the County's first designibuild effort. Ms. McPhail worked closely with the District Attorney's office to write the Request for Proposals, worked closely with the chosen contractor and lighting manufacturer to design the project, and managed the project through construction. It is estimated that the County saved approximately $100,000 by using a design -build process. Construction was completed with no damaged to the existing fields. English Springs Park Gazebos, Chino Hills, California Ms. McPhail served as project designer and construction manager for the addition of two large gazebos on the south side of English Springs Park. Walkways with railings, a drinking fountain, and site lighting was incorporated into the site. Azusa Avenue Streetseape, Azusa, California Ms. McPhail served as landscape architect for renovation of Azusa's downtown retail district. Landscape design included traffic calming "bulbouts", decorative paving, street lighting, site furnishings, planting and irrigation. Improvements serve to enhance the pedestrian nature of the area. Proposal for Improvements to Starshine Park ILM i � F Education B.F.A. 1981, Carnegie-Mellon Univ., Pittsburgh, PA Registration Registered Landscape Architect, California (4216) 1997 expires 2128/03, Nevada (449) 1996 expires 6130103, Arizona (31656) 1997 expires 12/31/03 Certifications Certified Arborist (#WC -3400), Irrigation Designer (Residential) (#1948) Professional Memberships American Society of Landscape Architects, Irrigation Association, International Society of Arboriculture Years of Professional Experience 12 Ms. McPhail is a California registered landscape architect, certified arborist, and project manager with David Evans and Associates, Inc. For the past 12 years, Ms. McPhail has been responsible for all aspects of landscape architectural planning, design, construction, and maintenance. She has been the project manager for a variety of projects including downtown redevelopment, commercial sites, hotels, land development, median and streetscapes, parks, schools, transit centers, and historic restoration. The following projects were completed while with another firm: Experience: Rancho California Sports Park Tot Lot Improvements, Temecula, California Ms. McPhail served as landscape architect in the renovation and upgrade of this large playground area. Drainage facilities were designed, grading changed, new curbing and surfacing added, as well as installation of new playground equipment. The tot lot was designed for ease of maintenance and compliance ADA requirements. Kahle Community Park, Zephyr Cove, Nevada Ms. McPhail service as Construction Manager on this $3 million park project including a community center, lighted sports fields, parking, Iandscape and site furnishings. The project was subject to restrictions by the Tahoe Regional Planning Agency. When Ms McPhail was asked to manage the project, an hundred -year snowstorm had blown out a Keystone retaining wall, destroyed partially installed field lighting, and crushed the baseball backstop. Ms. McPhail through her extensive construction management experience was able to get the project completed and operational on schedule without extensive change orders. Aspen Park Field Lighting Project, Gardnerville, Nevada Ms. McPhail was project manager/construction manager for the installation of lighting for four existing ball fields. This was the County's first designibuild effort. Ms. McPhail worked closely with the District Attorney's office to write the Request for Proposals, worked closely with the chosen contractor and lighting manufacturer to design the project, and managed the project through construction. It is estimated that the County saved approximately $100,000 by using a design -build process. Construction was completed with no damaged to the existing fields. English Springs Park Gazebos, Chino Hills, California Ms. McPhail served as project designer and construction manager for the addition of two large gazebos on the south side of English Springs Park. Walkways with railings, a drinking fountain, and site lighting was incorporated into the site. Azusa Avenue Streetseape, Azusa, California Ms. McPhail served as landscape architect for renovation of Azusa's downtown retail district. Landscape design included traffic calming "bulbouts", decorative paving, street lighting, site furnishings, planting and irrigation. Improvements serve to enhance the pedestrian nature of the area. Proposal for Improvements to Starshine Park Education B.S. Landscape Architecture, Cal Poly, Pomona, 1989 Professional Affiliations American Society of Landscape Architects California Parks and Recreation Society, Parks Operation Board Member Mr. Scott is a landscape architectural designer and park planner with DEA. He is responsible for design on numerous projects including parks, streetscapes, sports complexes, schools, roller hockey rinks, commercial, residential, and industrial developments. His experience includes the use of AutoCAD and LandCADD in the preparation of construction plans, landscape, irrigation plans, and various construction details, along with on-site construction observation. Experience: ]Talley Park, Hermosa Beach, California As lead designer, Mr. Scott is providing design and construction services to the city of Hermosa Beach for improvements to the City's premier park facility, Valley Park. The 20 -acre park consists of children's playgrounds, an outdoor amphitheater, a restroom, basketball- courts, a sports field, picnic areas, and perimeter parking. He assisting with the evaluation of ADA issues and the upgrade of the park with various improvements such as a new irrigation system, native garden and playground modifications. He is also providing the City with fencing improvements for three parks and recreation sites. River Park, Santa Clarita, California Mr. Scott is serving as lead landscape architectural designer on the master plan of a 12 acre River Park adjacent to the Santa Clara River. The park will be passive in nature providing native planting areas with trails and equestrian routes, a custom water feature which acts as a filtration system for allowing clean water discharge into the river, picnic areas, parking, a restroom/nature center, and children's play areas. Active sports areas will be considered during the conceptual planning phases; however, it is the City's desire to keep the park rustic in character. William Green Park, .Lawndale, California As lead landscape architectural designer, Mr. Scott is providing park master planning services for the city of Lawndale and the school district. The park shall consist of a community center with daycare facilities, an interactive water play area, picnic shelter, children's drop-off area for safer and more functional vehicular site circulation. Access to the site will be carefully considered and new decorative hardscape areas will provide a renewed vision for the park. Playground Replacement, Pasadena Mr. Scott served as Project Manager/ Park Planner in the preparation of conceptual design, schematic, and final playground design and landscape improvements for eight (8) neighborhood park. Additional project tasks included staff meetings and presentations, preparation of estimates and support data, and regular coordination with the chosen playground representatives (Landscape Structures). Three of the park sites were selected for 100% wheel chair accessibility access, which included custom designed ramps to the play structures. Each play structure was custom designed so a child could have a different experience throughout Pasadena's parks Proposal for Improvements to Starshine Park I -If Education B.S. Landscape Architecture, 1997 California State Polytechnic University, Pomona Registration Registered Landscape Architect, California, (4586), 2001, expires 1131103 Professional Memberships American Society of Landscape Architects Years with DEA 1 (2001) Years with Other Firms 4 Mr. Khun is a project manager / landscape architect with DEA. He is responsible for landscape architectural design and graphic renderings, and the preparation of construction documents on numerous projects, including recreational/park facilities, streetscapes, sports facilities, schools, commercial sites, skateboard parks and industrial developments. He is particularly skilled in using several computer programs such as AutoCAD and LandCADD in the preparation of site, design development and construction documents. He is also experienced in using Adobe Photoshop to produce presentation renderings and photo imaging. Mr. Khun has four years of landscape architectural experience working on numerous projects throughout Southern California. Experience: Rancho San Jose Avenue Parr Claremont, California As landscape designer / project manager, Mr. Khun was responsible for preparing construction documents for a neighborhood park which included an entry monument, picnic shelter, basketball court, tot -lot play area, and dog run area. Mr. Khun was responsible for the preparation of a construction layout plan, construction details, demolition plan, irrigation layout and planting plan. Big Bear Valley Sports Park, Big Bear, California Mr. Khun was responsible for design assistance and the preparation of an illustration graphic presentation for the Big Bear Valley Sports Park. The plan consists of a full size computer image rendering of two different facilities. The 12 acre site consists of a community center / gymnasium building, picnic shelter, tennis court, basketball court, sand volleyball court, play equipment area, and open field. The 25 acre China Gardens facility is a large sports field site consisting of two soccer fields, four ball fields, play equipment area, restroom building, maintenance building and parking area. McPherson Athletic Facility, City of Orange, California Mr. Khun was involved in preparing the construction documents for the renovation of this 18 -acre athletic facility for the City of Orange and the Orange Unified School District. The facility consists of five little league fields, four soccer fields, play area, walking trail, parking area, plaza area, batting cage, ball walls, basketball courts, volleyball courts and entry signage. Mr. Khun coordinated with the architect in the placement of a concession / restroom building, office meeting building, and storage yard building. Skateboard Park Design, Southern California Mr. Khun has extensive experience in skateboard park design. His experience encompasses designing and preparing construction documents for numerous skateboard parks throughout Southern California. These plans included construction layout plan, grading plan, and skate park details. Proposal for improvements to Starshine Park Education A.S., Architectural Drafting, 1981, Mt. San Antonio College B.S., Civil Engineering, 1985, Northern Arizona University Registration Professional Civil Engineer, California (48138), 1991 Mr. Bathke is an associate and civil engineer at DEA with over 15 years of various engineering experience. His responsibilities include design of street, sewer, water, utility, drainage, and grading plans on public and private projects. He is also very involved with survey analysis of tract, parcel, boundary, and topographic maps and survey calculations utilizing coordinate geometry (COGO) and survey software. Experience: River Park, Santa Clarita, California Mr. Bathke served as lead civil engineer on this master plan project which involved a 12 acre river park. The park will be passive in nature providing native planting areas with trails and equestrian routes, a custom water feature, picnic areas, parking, a restroom/nature center, and children's play areas. Active sports areas will be considered; however, it is the City's desire to keep the park rustic in character. Mr. Bathke will assist in the trail feasibility studies, design and cost estimates in addition to documentation for easements related to the trail. Preliminary engineering for the site will include review of infrastructure needs and grading and drainage concerns. Chandler Boulevard Bikeway, Burbank & Los Angeles, California On behalf of the cities of Burbank and Los Angeles, Mr. Bathke is serving as project manager on this project responsible for engineering design, surveying services, and landscape architectural services for this trail project which will link the Burbank RITC to the Metro Red Line Station in Los Angeles. The trail will be designed to accommodate vehicular, bicycle, and pedestrian elements along the Chandler Boulevard Corridor. DEA is working with both cities for the development and approval of the project. DEA is currently refining the preliminary design information previously developed for the Burbank portion of the trail and is in the process of gaining consensus for elements proposed in the Los Angeles portion. DEA is developing design alternatives for the median in Burbank and also several design alternatives for Los Angeles. Elements will be designed for both Class I and Class Il bikeways. Mr. Bathke will also generate a preliminary cost estimate for each of the alternative developed. All information will be presented to the community by Mr. Bathke at a number of community meetings. Santa Clara River Trail, Phase II, Santa Clarita, California Mr. Bathke is serving as assistant project manager for Phase II of the Santa Clara River trail project in the city of Santa Clarita. The trail will serve as a multi -modal recreation trail for commuter bicycle, pedestrian and equestrian use. This proj.ect is a vital link in the Santa Clara River trail system that will ultimately link the city of Santa Clarita with the Pacific Ocean in Ventura. South Fork River Trail, Phase IV, Santa Clarita, California Mr. Bathke served as project engineer for this 1.3 -mile recreational trail. This project involved coordination with numerous governing agencies for design compliance. Design of the project included grading, drainage, hydraulic analysis, and concrete structural design for elements within the Santa Clara River. This project is part of a ,trail system that will ultimately link Santa Clarita with the Pacific Ocean in Ventura. Proposal for Improvements to Starshine Park Education B.S. Landscape Architecture, California State Polytechnic University, Pomona, 2000 Professional Affiliations American Society of Landscape Architects, Member Ms. Arellano is a landscape designer with David Evans and Associates, Inc. and a recent graduate of California Polytechnic University of Pomona, with a Bachelor of Science degree in Landscape Architecture. For the past two years she has gained experience in residential, commercial, streetscape, and park design. Her experience -also includes presentations within city public workshop forums, on site -construction observation, site analysis, CADD operations, and administration tasks. Ms, Arellano is also bilingual and has assisted with translation at various meetings and- community gatherings. Experience: Playground Replacement, Pasadena Ms. Arellano assisted with the landscape design on this project which included custom playground design for eight (S) parks within the City of Pasadena. Each site was evaluated to determine the theme and age appropriateness best suited to achieve the desired results for accessibility and play value. DEA worked closely with the City and playground manufacturer to address ADA concerns while creating a'safe and creative play environment. Community workshops and consensus building were important components of the work program and DEA assisted the city with the facilitation of these efforts. Custom playgrounds and various park improvements required the preparation of grading plans, planting and irrigation plans, and play equipment layout plans. All parks were designed in accordance with the available funding for each site. Close coordination and project documentation were key factors in the overall success of the project. Polliwog Park, City ofManhattan Beach, California Ms. Arellano assisted in the design for newly refurbished park in the City of Manhattan Beach. In keeping with the polliwog/frog theme of the park, Ms Arellano researched various materials and play equipment that characterized the park theme. The park was prone to flooding semi-annually and therefore grading and drainage solutions were explored. Design plans included grading, staking, planting, and construction. Project tasks included preliminary and final design, in addition to the preparation of construction cost estimates. Bobby Bonds Sports Complex, City of Riverside, California Ms. Arellano worked closely with the city and other team members, to create a design that reflected the vision of the community. Located adjacent to an existing child day care center, color palette became a priority to this project. The interior designer and Ms. Arellano worked closely to finalize a color palette that functioned both for the interior and exterior aspect of the project. She was also responsible for site analysis, preliminary design and final working drawings, including staking, construction, and planting plans. Proposal for improvements to Starshine Park Education: B.S. Electrical Engineering, West Coast School of Engineering, Los Angeles, California, 1977 Registrations: Certified Energy Auditor California Energy Commission (#3749) Registered Professional Engineer - State of California (E-9333) Professional Affiliations: Consulting Engineers Association of California Illuminating Engineers Society of North America California Association of Building Consultants International Association of Electrical Inspectors Engineering Incorporated Mr. Nolan has over 20 years of experience in the field of electronic and electrical engineering. His experience includes transformer design, d -c electrical power systems, energy conservation, residential, commercial, industrial, sports area lighting, standby generator systems, cathodic protection; central office grounding and teaching of the National Electrical Code. Experience: CIVIC CENTER PARK - PALM DESERT Owner. City of Palm Desert. Project consists of lighting 4 baseball fields in a wagon wheel configuration, with two soccer field overlays. Photometrics is prime concern due to opposition by Monterey County Club, adjacent to site. Project estimate for electrical is $366,000.00. RALPH WELCHPARK- POMONA Owner: City of Pomona. Project consisted of relighting 2 existing baseball fields and soccer field. Also provided new lighting for 2 additional baseball fields. In place cost of electrical was $146,000.00. (Reused existing poles). MARINE AVENUE PARK -MANUATTANBEACH Owner: CityofManhattan Beach. Project consisted of a lit baseball field, lit soccer field, lit tennis courts and new restroom building. The challenge on this project was that the park was sandwiched into a downtown area between several tall buildings. Access and spill light from the sports area lights was a real challenge. In place cost of electrical was $184,000.00 HERITAGE PARK- IRVINE Owner. City of Irvine. Project consisted of lighting a softball field, soccer field, handball and tennis courts. A two story recreational building was also built. Park was existing and this project developed interior area of the park. Soccer fields were adjacent to the 5 freeway and spill light was a prime consideration. In place electrical cost was $219,000.00. HOOKPARK- VICTORVILLE Owner. City of Victorville Project consisted of lighting 2 softball fields, 3 baseball fields, 3 soccer fields, 4 tennis courts, 50 walkway lights and providing electrical for a restroom/snack bar building. Engineering and construction was done in phases. Phase 1 consisted of putting in underground electrical. Phase 2 was installation of all lighting. Phase 3 was installing new electrical service and switchgear. hi place cost of electrical was $488,000.00. KIT CARSONPARK-ESCONDIDO Owner: City of Escondido. Project consisted of 4 lit baseball fields in a wagon wheel configuration. Engineering also consisted of providing electrical layout for new restroom building. In place cost of electrical was $204,000.00. Proposal for Improvements to Starshine Park Agenda # 6.8 Meeting Date: 11/19/02 CITY COUNCIL ,;M AGENDA REPORT TO: Honorable Mayor and Members o he City Council VIA: Linda C. Lowry, City Manag TITLE: Approval Of Amendment #3 For Cont ct With David Evans And Associates For As - Needed Landscape Architect Services In The Amount Of $48,100 To Design Improvements At Three Locations In Diamond Bar, Plus The Appropriation Of $18,000 From General Fund Reserves To Complete The Funding For Design And Survey Work. RECOMMENDATION: Approve the Amendment and the Appropriation. FINANCIAL IMPACT: Funding status for each project: 1. Design of Landscape/Irrigation Improvements at City Entry -- Temple Ave and Diamond Bar Blvd. Design Cost: $11,600. Funds Budgeted: $128,000 in LLMD #38 funds for this project is included in the 2002/03 FY adopted CIP budget. 2. Design of Landscape/Irrigation Improvements for two repaired slopes -- Sycamore Canyon Park Design Cost: $11,500. Funds Budgeted: No funds for this project are included in the 2002/03 FY budget. Design project requires additional appropriation from the General Fund in the amount of $11,500. 3. Construction Documents for Trail and Trail Head Improvements — Sycamore Canyon Park Design Cost: $25,000. Funds Budgeted: $25,000 in the General Fund for this project is included in the 2002/03 FY adopted CIP budget. However, survey work in the estimated amount of $6,500 from another vendor is necessary for this project and requires an additional appropriation from the General Fund in the amount of $6,500. Total Cost of Contract Amendment #3: $48,100 Total Additional Appropriation needed: $18,000 (General Fund) BACKGROUND: The City Council awarded a contract to David Evans and Associates for as -needed landscape architect services in the amount of $25,000 on February 5, 2002. Amendment #1 in the amount of $55,406 for Grand Avenue Median design, Pantera Park Picnic Shelter design, conceptual design of Sycamore Canyon Park Trail and Trail Head, and design of landscape improvements at four Diamond Bar locations was approved on April 2, 2002; and Amendment #2 in the amount of $27,700 for design of landscape improvements along Brea Canyon Cut-off was approved on August 6, 2002. Both of these amendments were for additional projects in Diamond Bar requiring landscape architect services. Staff is requesting approval to add $48,100 to the contract for three additional projects for a total authorization of $156,206. DISCUSSION: Staff is seeking City Council approval to add the following projects to the Landscape Architect Services contract with David Evans and Associates: 1. Design of Landscape/Irrigation Improvements (approximately 5,000 sq. ft.) at City Entry -- Temple Ave and Diamond Bar Blvd. 2. Design of Landscape/irrigation Improvements for two repaired slopes (approximately 6,000 sq. ft.) — Sycamore Canyon Park 3. Construction Documents for Trail and Trail Head Improvements — Sycamore Canyon Park This amendment will result in the development of construction documents that will be used during the bid process to obtain a contractor to construct the improvements. REBY: Bob R 6se Community Services Director Attachments: Amendment #3 To Agreement James DeStefano Deputy City Manager DEA Proposal for Entry at Temple Avenue and Diamond Bar Boulevard dated October 7, 2002. DEA Proposal for Sycamore Canyon Park renovated slopes dated April 23, 2002. DEA Proposal for Sycamore Canyon Park Trail and Trail Head dated October 7, 2002. Current DEA Consulting Services Agreement dated February 5, 2002 AMENDMENT #3 TO AGREEMENT THIS AMENDMENT #3 TO AGREEMENT is made this 19th day of November 2002, by and between the CITY OF DIAMOND BAR, a municipal corporation ("City") and DAVID EVANS AND ASSOCIATES, ("CONSULTANT"), Recitals: a. CONSULTANT entered into an agreement with CITY on February 5, 2002 (the "AGREEMENT") in the amount not to exceed $25,000 for as -needed Landscape Architect Services for the term of February 5, 2002 through February 5, 2005. b. Additional Landscape Architect services were added to agreement per Amendment #1 dated April 2, 2002, and Amendment #2 dated August 6, 2002, for a total authorization not to exceed $108,106. c. Parties desire to amend the AGREEMENT to provide for additional Landscape Architect Services described as follows: 1. Design of Landscape/Migation Improvements at City Entry -- Temple Ave and Diamond Bar Blvd. - in the amount of $11,600. 2. Design of Landscape/Irrigation Improvements for two repaired slopes - Sycamore Canyon Park - in the amount of $11,500. 3. Construction Documents for Trail and Trail Head Improvements -- Sycamore Canyon Park - in the amount of $25,000. Fee for additional Landscape Architect Services described under recital "c" herein shall not exceed $48,100. Consultant represents that it is fully qualified to perform such consulting services by virtue of its experience and the training, education and expertise of its principals and employees. Now, therefore, the parties agree to amend the AGREEMENT as follows: Section 1- Attachment "A" to the AGREEMENT is amended by adding thereto the following additional landscape architect services: 1. Design of Landscape/Irrigation Improvements at City Entry -- Temple Ave and Diamond Bar Blvd. - Phase I Tasks #1, 3, 4 and 5, and Phase 11 Tasks #1, 2, 3, 6, 7, 8, 9, and 11, of proposal dated October 7, 2002, in the amount of $11,600. 2. Design of Landscape/Irrigation Improvements for two repaired slopes - Sycamore Canyon Park - Tasks 1 through 5 of proposal dated April 23, 2002, in the amount of $11,500. 3. Construction. Documents for Trail and Trail Head Improvements - Sycamore Canyon Park - Tasks #2, 3, 4, 5, 6, 7, 8, 9, 10, and 11, of proposal dated October 7, 2002, in the amount of $25,000. Section 2 - Section 3 of the AGREEMENT is amended to add compensation in the amount of $48,100, for a total authorization not to exceed $156,206. Except as provided above, the AGREEMENT is in all other respects in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT -#3 TO AGREEMENT on the date and year first written above. ATTEST: CITY OF DIAMOND BAR A Municipal Corporation Of the State of California Signed Title APPROVED TO FORM DAVID EVANS AND ASSOCIATES Consultant Signed Title City Attorney City Clerk D D Q October 7, 2002 Mr. Bob Rose City of Diamond Bar Director of Community Services 21660 East Copley Drive, Suite I00 Diamond Bar, CA 91765-4178 Subject: PROPOSAL TO PROVIDE LANDSCAPE ARCHITECTURAL SERVICES FOR SYCAMORE CANYON PARK TRAIL HEAD ALONG DIAMOND BAR BLVD. AND PEDESTRIAN TRAIL. FROM MAINTENANCE STORAGE YARD TO WATERFALL Dear Bob: On behalf ofDavid Evans and Associates, Inc. (DEA), we would like to thank you for the opportunity to again be of service to the City of Diamond Bar in providing landscape architectural services for the above noted project. We are currently working on a 15 mile equestrian, bicycle, and pedestrian trails master plan with the County of Kern which directly relates to your project. After meeting with you at the site and discussing the design opportunities, we feel ideally suited to complete this project now that the preliminary design has been approved. We recommend the following scope of services: Phase 11— CONSTRUCTION DOCUMENTS Task 1: Supplemental Survey Data (Optional) - $6,500 DEA survey crews shall be available to obtain supplemental field data to support existing base mapping and street plans provided by the City. DEA will provide a 50' grid and produce a F contour interval topographic map of the proposed trail head site and curb and gutter flow line along Diamond Bar Boulevard. The survey crew shall also _ obtain field data of the proposed trail from the maintenance storage yard to the waterfall. These surveying services will include any visible surface utilities, trees, walls, sidewalks, and street lights. ` Task 2; Demolition Plan - $1,500 DEA shall prepare a demolition plan at I" = 20' which shall designate all existing amenities to be removed or to be protected in place. Task 3: Site Plan - $3,500 This plan shall designate the final placement of all proposed site features as determined throughout the planning process. References to construction details, paving types, and enlarged pians shall also be shown. All necessary dimensions will be indicated in order for the selected contractor to stake the project for construction. This task would also include street improvement plans along Diamond Bar Boulevard. Task 4: Grading Plan � $3,500 DEA will prepare a 1 "=20' scale grading plan for the proposed improvement area. The plan will be prepared in AutoCAD and will be overlaid on the topographic map and site plan. The plan will contain the surface features required to construct the grading and paving work and shall meet ADA requirements as applicable. 800 North Haven Avenue Suite 300 Ontario California 91764 Telephone: 909.48 1.5750 Facsimile: 909.48 1.5757 October 7, 2002 City of Diamond Bar Sycamore Canyon Park Page 2 Task 5: Electrical / Lighting Plans - $3,500 Dream Engineering will prepare a 1 "=20' scale electrical plan for the proposed improvements area. The plan will be prepared in AutoCAD and will include electrical engineering, electrical calculations, single line diagrams, panel assignments, electrical details, photometrics, cost estimates, specifications, and construction drawings. Task 6: Planting pian - $2,600 DEA landscape architects shall prepare planting plans for the proposed improved area, Plans shall include plant legend indicating trees, shrubs, and ground covers, in addition to information regarding decorative paving. The legend shall indicate the botanical name, common name, quantity, size, remarks (such as variety and staking procedure). The plans shall provide an integrated palette of selected plant material. Task 7: Irrigation Plan - $3,300 The final irrigation plans will provide the. necessary information for a complete and fully automatic irrigation system for the project ar-a. The plans will indicate point(s) of connection based upon engineering and water district data, backflow prevention and pressure regulation (as necessary), and equipment size and type in the irrigation legend. Construction details and general notes will be incorporated as necessary. The irrigation system shall be designed in accordance with the City landscape guidelines based upon approved plant palettes and the level of maintenance desired. Task 8: Construction Details - $1,700 DEA shall prepare construction details for the proposed park elements. Such elements would include kiosk structure, rail fencing, enriched paving, D.G. paths, concrete walks, view deck at trail head. This task would include structural engineering ($1,500). Task 9: Construction Cost Estimate -$800 A final construction cost estimate will be provided to ensure that the project budget is sufficient and that phasing will not be required. Task 10: Project Specifications - $800 Final technical specifications shall be prepared in the desired format for the proposed trail head. These _ specifications will be provided in a "boiler plate" format and DEA shall modify the document accordingly. A complete bid list of all quantities and associated add-altemate items shall be provided indicating item descriptions, unit costs and totals. Task ll : Assistance During Construction - $800 DEA shall be available to review project submittals in addition to attending a pre -construction meeting and attending a final walk-thru to generate a punch list of items to be completed prior to project acceptance. October 7, 2002 City of Diamond Bar Sycamore Canyon Park Page 3 The above tasks include one submittal of plans and one set of corrections during plan check. Additional tasks required beyond the scope of services noted above, or changes requested by the City shall be charged on an "extra services" basis and negotiated accordingly. Excluded items would include Geotechnical analysis. DEA proposes to complete the project tasks for the fees indicated in addition to reimbursable expenses. Invoices will be due and payable within thirty (30) days, and will be sent monthly based upon the percentage of work completed. Government fees, mileage, delivery costs such as Federal Express charges, and plotting/reproduction services are considered reimbursable expenses and are billed at cost plus 15%. DEA welcomes the opportunity to work with you and look forward to discussing the proposal with you. We appreciate your consideration of our qualifications. Sincerely, DAYT, EVANS ASND ASSOCIATES, INC. i i_4/ Jeffrey F. Scott, ASLA Kim S. Rhodes, L.A. 3867 Project Manager / Park Planner Vice President April 23, 2002 Mr. Bob Rose City of Diamond Bar Director of Community Services 21660 East Copley Drive, Suite 100 Diamond Bar, CA 91765-4178 Subject: PROPOSAL TO PROVIDE LANDSCAPE ARCHITECTURAL SERVICES FOR SYCAMORE CANYON PARK NEWLY RENOVATED SLOPES Dear Bob: On behalf of David Evans and Associates, Inc. (DEA), we would like to thank you for the opportunity to again be of service to the City of Diamond Bar in providing landscape architectural services for the newly renovated slopes as noted on the construction plan provided to DEA dated 7/30/00, Project No. 98-31-144-01. After meeting with you at the site and reviewing the proposed slopes, we feel ideally suited to a project of this nature and recommend the following scope of services: Task 1: Planting Improvement Plan - $2,900 DEA landscape architects shall prepare planting plans for the proposed improvement area. Plans shall include plant legend indicating trees, shrubs, and ground covers, in addition to information regarding decorative paving. The legend shall indicate the botanical name, common name, quantity, size, remarks (such as variety and staking procedure). The plans shall provide an integrated palette of selected plant material. Task 2: Irrigation Improvement Plan - $5,800 The final irrigation plans will provide the necessary information for a complete and fully automatic irrigation system for the project area. The plans will indicate point(s) of connection based upon engineering and water district data, backflow prevention and pressure regulation (as necessary), and equipment size and type in the irrigation legend. Construction details and general notes will be incorporated as necessary. The irrigation system shall be designed in accordance with the City landscape guidelines based upon approved plant -palettes and level of maintenance desired. Task 3: Construction Cost Estimate -$600 A final construction cost estimate will be provided by DEA to ensure that the project budget is sufficient and that phasing will not be required. Task 4: Project Specifications - $1,000 Final technical specifications shall be prepared in the desired format for the proposed renovated slopes_ Task 5: Assistance During Construction - $1,200 DEA shall be available to review project submittals in addition to attending a pre -construction meeting and attending a final walk-thru to generate a punch list of items to be completed prior to project acceptance. The above tasks include one submittal of plans and one set of corrections during plan check. Additional tasks required beyond the scope of services noted above, or changes requested by the City shall be charged on an "extra services" basis and negotiated accordingly. 800 North Haven Avenue Suite 300 Ontario California 91764 Telephone: 909.48 1.5750 facsirnile: 909.481.5757 April 23, 2002 City of Diamond Ear Sycamore Park Slope Renovation Page 2 DEA proposes to complete the project tasks for the fees indicated in addition to reimbursable expenses. Invoices will be due and payable within thirty (30) days, and will be sent monthly based upon the percentage of work completed. Government fees, mileage, delivery costs such as Federal Express charges, and plotting/reproduction services are considered reimbursable expenses and are billed at cost plus 15%. DEA welcomes the opportunity to work with you and look forward to discussing this proposal with you. We appreciate your consideration of our qualifications. Sincerely, 4F.DAV ASSOCIATES, INC. Scott, ASLA Kim S. Rhodes, L.A. 3867 Project Manager / Park Planner Vice President October 7, 2002 — - - Mr. Bob Rose City of Diamond Bar Director of Community Services 21660 East Copley Drive, Suite 100 Diamond Bar, CA 917654178 Subject: PROPOSAL TO PROVIDE LANDSCAPE ARCHITECTURAL SERVICES FOR TEMPLE AVENUE AT DIAMOND BAR BOULEVARD Dear Bob: On behalf of David Evans and Associates, Inc. (DEA), we would like to thank you for the opportunity to again be of service to the City of Diamond Bar in providing landscape architectural services for the above noted project. After meeting with you and discussing the design opportunities, we feel ideally suited to a project of this nature and recommend the following scope of services: Phase I — PRELIMINARY DESIGN Task 1: Project Kick -Off Meeting - $500 DEA project team members shall attend an initial start up meeting with the City staff to determine each person's role and level of responsibility. This meeting shall allow a review of the status of the project and existing field conditions such as confirming wall treatments, landscaping enhancements, irrigation system and meter location; to name a few. We recommend a site visit to discuss opportunities and constraints throughout the project area. This meeting shall provide a thorough review of the scope of services, objectives, design, maintenance, construction schedule and budget. Task 2: Supplemental Survey Data (Optional) - $4,500 - DEA survey crews shall be available to obtain supplemental field data to support existing base mapping and street plans provided by the City. DEA will provide a 50' grid and produce a F contour interval topographic map of the proposed site and curb and gutter flow line along Temple Avenue and Diamond Bar Boulevard. These additional surveying services will include any visible surface utilities, trees, walls, sidewalks, and street lights. Task 3: Site Visit / Data Collection - $500 DEA landscape architects shall make a site visit to determine field conditions which directly impact the overall design. Data collection will involve the acquisition of pertinent infrastructure record data and coordination with the affected agencies. Task 4: Conceptual Plan - $2,800. DEA shall prepare one sample plan view and sections which indicate the proposed design intent, plant palette, hardscape and drainage treatment. A colored rendering will be provided for presentation purposes, in addition to a preliminary cost estimate which shall determine if phasing or value engineering will be necessary. This plan shall be presented to the City staff. 800 North Haven Avenue Suite 300 Ontario California 91764 Telephone: 909.48 1.5750 Facsimile: 909.48 1 .5757 October 7, 2002 City of Diamond Bar Temple Avenue And Diamond Bar Blvd.. Page 2 Task 5: Revised Conceptual Design — $800 DEA landscape architects shall prepare one revised colored sample conceptual plan based on input from the City staff or community meetings. Task 6: Photo Imaging (optional) — 2,100 DEA graphic designers shall prepare a total of three perspective photo images of the proposed landscape and hardscape elements. Phase II -- CONSTRUCTION DOCUMENTS Task l: Demolition Plan - $800 DEA shall prepare a demolition plan at 1" = 20' which shall designate all existing amenities to be removed or to be protected in place. Task 2: Site Plan - $1,000 This plan shall designate the final placement of all proposed site features as determined throughout the planning process. References to construction details, paving types, and enlarged plans shall also be shown. All necessary dimensions will be indicated in order for the selected contractor to stake the project for construction. Task 3: Planting Improvement Plan - $1,000 DEA landscape architects shall prepare planting plans for the proposed improved area. Plans shall include plant legend indicating trees, shrubs, and ground covers, in addition to information regarding decorative paving. The legend shall indicate the botanical name, common name, quantity, size, remarks (such as variety and staking procedure). The plans shall provide an integrated palette of selected plant material. Task 6: Irrigation Improvement Plan - $1,400 The final irrigation plans will provide the necessary information for a complete and fully automatic irrigation system for the project area. The plans will indicate point(s) of connection based upon engineering and water district data, backflow prevention and pressure regulation (as necessary), and equipment size and type in the irrigation legend. Construction details and general notes will be incorporated as necessary. The irrigation system shall be designed in accordance with the City landscape guidelines based upon approved plant palettes and level of maintenance desired. Task 7: Construction Details - $800 DEA shall prepare construction details for the proposed park elements. Such elements would include kiosk structure, rail fencing, enriched paving, D.G. paths, and concrete walks. Task 8: Construction Cost Estimate -$400 A final construction cost estimate will be provided to ensure that the project budget is sufficient and that phasing will not be required. Task 9: Project Specifications - $800 Final technical specifications shall be prepared in the desired format for the proposed project. These specifications will be provided in a "boiler plate" format and DEA shall modify the document accordingly. A complete bid list of all quantities and associated add -alternate items shall be provided indicating item descriptions, unit costs and totals. Task 11: Assistance During Construction - $800 DEA shall be available to review project submittals in addition to attending a pre -construction meeting and attending a final walk-thru to generate a punch list of items to be completed prior to project acceptance. 'October 7, 2002 City of Diamond Bar Temple Avenue And Diamond Bar Blvd Page 3 The above tasks include one submittal of plans and one set of corrections during plan check. Additional tasks required beyond the scope of services noted above, or changes requested by the City shall be charged on an "extra services" basis and negotiated accordingly. DEA proposes to complete the project tasks for the fees indicated in addition to reimbursable expenses. Invoices will be due and payable within thirty (30) days, and will be sent monthly based upon the percentage of work completed. Government fees, mileage, delivery costs such as Federal Express charges, and plotting/reproduction services are considered reimbursable expenses and are billed at cost plus 15%. DEA welcomes the opportunity to work with you and look forward to discussing this proposal with you. We appreciate your consideration of our qualifications. Sincerely, DAVID EVfkNS AND ASSOCIATES, INC. Jeffrey F. Scott, ASLA Kim S. Rhodes, L.A. 3867 Project Manager / Park Planner Vice President CONSULTING SERVICES AGREEMENT THIS AGREEMENT is made as of February 5.-2002, by and between the City of Diamond Bar, a municipal corporation ("City") and David Evans and Associates, Inc., ("Consultant"). RECITALS A. City desires to utilize the services of Consultant as an independent contractor to provide "As Needed" landscape architectural review consulting services to City as set forth in Exhibit "A", the City's Request for Proposals, dated October 24, 2001. B. Consultant represents that it is fully qualified to perform such consulting services by virtue of its experience and the training, education and expertise of its principals and employees. NOW, THEREFORE, in consideration of performance by the parties of the covenants and conditions herein contained, the parties hereto agree as follows: 1. Consultant's Services. A. - Scope of Services. The nature and scope of the specific services to be performed by Consultant are. as described in Exhibit 'B", the Consultant's Response, dated November 19, 2001, to the City's Request for Proposal. B. Level of Services/Time of Performance. The level of and time of the specific services to be performed by Consultan# are as set forth in Exhibit "B." 2. Term of Agreement. This Contract shall take effect February 5, 2002, and shall continue until February 5, 2005, with the possibility of two (2) additional annual renewals, unless earlier terminated pursuant to the provisions herein. 3. Compensation. City agrees to compensate Consultant for each service which Consultant performs to the satisfaction of City in compliance with the schedule set forth in Exhibit "B.r Payment will be made only after submission of proper invoices in the form specified by City. Total payment to Consultant pursuant to this Agreement shall not exceed TWENTY FIVE THOUSAND DOLLARS ($25,000.00). 4. General Terms and Conditions. In the event of any inconsistency between the provisions of this Agreement and Consultant's proposal, the provisions of this Agreement shall control. 5. Addresses. City: City Manager Consultant: David Evans and City of Diamond Bar Assoicates, Inc. 21828 E. Copley Drive 800 N. Haven Ave., Diamond Bar, CA 9 1765-4177 Suite 300 Ontario, CA 91764 6. Status as Independent Consultant. A. Consultant is, and shall at all times remain as to City, a wholly independent contractor. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City as an agent. Neither City nor any of its agents shall have control over the conduct of Consultant or any of Consultant's employees, except as set forth in this Agreement. Consultant shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City. B. Consultant agrees to pay all required taxes on amounts paid to Consultant under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the_ independent contractor relationship created by this Agreement. In the event that City is audited by any Federal or State agency regarding the independent contractor status of Consultant and the audit in any way fails to sustain the validity of a wholly independent contractor relationship between City and Consultant, then Consultant agrees to reimburse City for all costs, including accounting and attomey's fees, arising out of such audit and any appeals relating thereto. C. Consultant shall fully comply with the workers' compensation law regarding Consultant and Consultant's employees. Consultant further agrees to indemnify and hold City harmless -from any failure of Consultant to comply with applicable worker's compensation laws. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this Section 6. 7. Standard of Performance. Consultant shall perform all work at- the standard of care and skill ordinarily exercised by members of the profession under similar conditions. 8. Indemnification. Consultant agrees to indemnify the City, its officers, agents, volunteers, employees, and attorneys against, and will hold and save them and each of them harmless from, and all actions, claims, damages to persons or property, penalties, obligations, or liabilities that may be asserted or claimed by any person, fir�n��i entity, corporation, political subdivision or other organization arising out of the-mig, errors or omissions of Consultant, its agents, employees, subcontractors, or invitees, including each person or entity responsible for the provision of services hereunder. In the event there is more than one person or entity named in the Agreement as a Consultant, then all obligations, liabilities, covenants and conditions under this Section 8 shall be joint and several. 9. Insurance. Consultant shall at all times during the term of this Agreement carry, maintain, and keep in full force and effect, with an insurance company admitted to do business in California and approved by the City (1) a policy or policies of broad -form comprehensive general liability insurance with minimum limits of $1,000,000.00 combined single limit coverage against any injury, death, loss or damage as a result of wrongful or negligent acts by Consultant, its officers, employees, agents, and independent contractors in performance of services under this Agreement; (2) property damage insurance with a minimum limit of $500,000.00; (3) automotive liability insurance, with minimum combined single limits coverage of $500,000.00; (4) professional liability insurance (errors and omissions) to cover or partially cover damages that may be the result of errors, omissions, or negligent acts of Consultant, in an amount of not less than $1,000,000 per occurrence; and (5) worker's compensation insurance with a minimum limit of $500,000.00 or the amount required by law, whichever is greater. City, its officers, employees, attorneys, and volunteers shall be named as additional insureds on the policy(ies) as to comprehensive general liability, property damage, and automotive liability. The policy (les) as to comprehensive general liability, property damage, and automobile liability shall provide that they are primary, and that any insurance maintained by the City shall be excess insurance only. A. All insurance policies shall provide that the insurance coverage shall not be non -renewed, canceled, reduced, or otherwise modified (except through the addition of additional insureds to the policy) by the insurance carrier without the insurance carrier giving City thirty (30) day's prior written notice thereof. Consultant agrees that it will not cancei, reduce or otherwise modify the insurance coverage. S. All policies of insurance shall cover the obligations of Consultant pursuant to the terms of this Agreement; shall be issued by an insurance company which is admitted to do business in the State of California or which is approved in writing by the City; and shalt be placed with a current A.M. Best's rating of no less that A VI1, C. Consultant shall submit to City (1) insurance certificates indicating compliance with the minimum worker's compensation insurance requirements above, and (2) insurance policy endorsements indicating compliance with all other minimum insurance requirements above, not less than one (1) day prior to beginning of performance under this Agreement. Endorsements shall be executed on City's appropriate standard forms entitled "Additional Insured Endorsement", or a substantially similar form which the City has agreed in writing to accept. 10. Confidentiality. Consultant in the course of its duties may have access to confidential data of City, private individuals, or employees of the City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without written authorization by City. City shall grant such authorization If disclosure is required by law. All City data shall be returned to City upon the termination of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. Notwithstanding the foregoing, to the extent Consultant prepares reports of a proprietary nature specifically for and in connection with certain projects, the City shall not, except with Consultant's prior written consent, use the same for other unrelated projects. 11. Ownership of Materials. All materials provided by Consultant in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City. 12. Conflict of Interest. A. Consultant covenants that it presently has no interest and shall not acquire any interest, director or indirect, which may be affected by the services to be performed by Consultant under this Agreement, or which would conflict in any manner with the performance of its services hereunder. Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Consultant shall avoid the appearance of having any interest which would conflict in any manner with the performance of its services pursuant to this Agreement. S. Consultant covenants not to give or receive any compensation, monetary or otherwise, to or from the ultimate vendor(s) of hardware or software to City as a result of the performance of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. 13. Termination. Either party may terminate this Agreement with or without cause upon fifteen (15) days' written notice to the other party. However, Consultant shall not terminate this Agreement during the provision of services on a particular project. The effective date of termination shall be upon the date specified in the notice of termination, or, in the event no date is specified, upon the fifteenth (15th) day following delivery of the notice. In the event of such termination, City agrees to pay Consultant for services satisfactorily rendered prior to the effective date of -termination. Immediately upon receiving written notice of termination, Consultant shall discontinue performing services. 14. Personnel. Consultant represents that it has, or will secure at its own expense, all personnel required to perform the services under this Agreement. All of the services required under this Agreement will be performed by Consultant or under it supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant reserves the right to determine the assignment of its own employees to the performance of Consultant's services under this Agreement, but City reserves the right, for good cause, to require Consultant to exclude any employee from performing services on City's premises. 15. Non -Discrimination and Equal Employment Opportunity. A. Consultant shall not discriminate as to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation, in the performance of its services and duties pursuant to this Agreement, and will comply with all rules and regulations of City relating thereto. Such nondiscrimination shall include but not be limited to the following. employment, upgrading, demotion, transfers, recruitment or recruitment advertising; layoff or termination, rates of pay or other forms of compensation; and selection for training, including apprenticeship. B.. Consultant will, in all solicitations or advertisements for employees placed by or on behalf of Consultant state either that it is an equal opportunity employer or that all qualified applicants will receive consideration for employment without regard " to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation. C. . Consultant will cause the foregoing provisions to be inserted in all subcontracts for any work covered by this Agreement except contracts or subcontracts for standard commercial supplies or raw materials. 16. Assignment. Consultant shall not assign or transfer any interest in this Agreement :ti ,r the performance of any of Consultant's obligations hereunder, without the prior written consent of City, and any attempt by Consultant to so assign this Agreement or any rights, duties, or obligations arising hereunder shall be void and of no effect. 17. Performance Evaluation. For any contract in effect for twelve months or longer, a written annual administrative performance- evaluation shall be required within ninety (90) days of the first anniversary of the effective date of this Agreement, and each year thereafter throughout the term of this Agreement. The work product required by this Agreement shall be utilized as the basis for review, and any comments or . complaints received by City during the review period, either orally or in writing, shall be considered. City shall meet with Consultant prior to preparing the written report. If any noncompliance with the Agreement is found, City may direct Consultant to correct the inadequacies, or, in the alternative, may terminate this Agreement as provided herein. 18. Compliance with Laws. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state, and local govemments. 19. Non -Waiver of Terms, Rights and Remedies. Waiver by either party of any one or more of the conditions of performance under this Agreement shall not be a waiver of any other condition of performance under this Agreement. In no event shall the making by City of any payment to Consultant constitute or be construed as a waiver by City of any breach of covenant, or any default which may then exist on the part of Consultant, and the malting of any such payment by City shall in no way impair or prejudice any right or remedy available to City with regard to such breach or default. 20. Attorney's Fees. In the event that either party to this Agreement shall commence any legal or equitable action or proceeding to enforce or interpret the provisions of this Agreement, the prevailing party in such action or proceeding shall be entitled to recover its costs of suit, including reasonable attorney's fees and costs, including costs of expert witnesses and consultants. 21. Notices. Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on (a) the day of delivery if delivered by hand during regular business hours or by facsimile before or during regular business hours; or (b) on the third business day following deposit in the United States mail, postage prepaid, to the addresses heretofore set forth in the Agreement, or to such other addresses as the parties may, from time to time, designate in writing pursuant to the provisions of this section. 22. Governing Law. This Contract shall be interpreted, construed and enforced in accordance with the laws of the State of California. 23. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be the original, and all of which together shall constitute one and the same instrument. 24. Entire Agreement. This Agreement, and any other documents incorporated herein by specific reference, represent the entire and integrated agreement between Consultant and City. This Agreement supersedes all prior oral or written negotiations, representations or agreements. This Agreement may not be amended, nor any provision or breach hereof waived, except in a writing signed by the parties which expressly refers to this Agreement. Amendments on behalf of the City will only be valid if signed by the City Manager or the Mayor and attested by the City Clerk. 25, Exhibits. All exhibits referred to in this Agreement are incorporated herein by this reference. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. "City" ATTEST: CiTY OF DIAMOND BAR gy,���,���,o�� ey "Lynda Surgess, City Clerk Wen Chang, Mayor Approved as to form: By: City Attomey "CONSULTANT" p .vie( Evans ASsocioL4rJ�, inc. its:._ Vice- Prelsidgo+,__, CONSULTING SERVICES AGREEMENT THIS AGREEMENT is made as of the 19" day of November, 2002 by and between the City of Diamond Bar, a municipal corporation ("City") and David Evans and Associates, Inc., ("Consultant"). RECITALS A. City desires to utilize the services of Consultant as an independent contractor to provide consulting services to City as set forth in Exhibit "A", limited to tasks 1, 2, 3a, 4, 10, 11, 12, and 13. B. Consultant represents that it is fully qualified to perform such consulting services by virtue of its experience and the training, education and expertise of its principals and employees. NOW, THEREFORE, in consideration of performance by the parties of the covenants and conditions herein contained, the parties hereto agree as follows: 1. Consultant's Services. A. Scope of Services. The nature and scope of the specific services to be performed by Consultant are as described in Exhibit "A," limited to tasks 1, 2, 3a, 4, 10, 11, 12, and 13; the Consultant's Response, dated October 18, 2002 to the City's Request for Proposals. B. Level of Services/Time of Performance. The level of and time of the specific services to be performed by Consultant are as set forth in Exhibit "A," limited to tasks 1, 2, 3a, 4,.10, 11, 12, and 13. 2. Term of Agreement. This Contract shall take effect November 19, 2002, and shall continue until June 30, 2005 unless earlier terminated pursuant to the provisions herein. 3. Compensation. City agrees to compensate Consultant for each service which Consultant performs to the satisfaction of City in compliance with the schedule set forth in Exhibit "A", limited to tasks 1, 2, 3a, 4, 10, 11, 12, and 13. Payment will be made only after submission of proper invoices in the form specified by City. Total payment to Consultant pursuant to this Agreement shall not exceed $13,470.00. 4. Since this is a Federally assisted construction project, Davis -Bacon will be enforced, and if the State and f=ederal wage rates are applicable, then the higher of the two will be used. The Federal Labor Standards provisions (Form HUD -4010), HUD's Section 3 requirements Federal Minority Business Enterprise/ Women's Business Enterprise (MBE/WBE) requirements and the Federal Wage Determination are attached and made part of this agreement, and compliance will be enforced. Any prime contractor or subcontractor working on a Federally assisted project must be eligible to participate. Any agreement must contain the same Federal language. 5. General Terms and Conditions. In the event of any inconsistency between the provisions of this Agreement and Consultant's proposal, the provisions of this Agreement shall control, 6. Addresses. City: City Manager, Linda C. Lowry City of Diamond Bar 21825 East Copley Drive Diamond Bar, CA 91765-4177 7. Status as Independent Consultant. Consultant: David Evans & Associates, Inc. 800 N. Haven Ave., Suite 300 Ontario, CA 91764 A. Consultant is, and shall at all times remain as to City, a wholly independent contractor. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise act on behalf of City as an agent. Neither City nor any of its agents shal I have control over the conduct of Consultant or any of Consultant's employees, except as set forth in this Agreement. Consultant shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City. B. Consultant agrees to pay all required taxes on amounts paid to Consultant under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. In the event that City is audited by any Federal or State agency regarding the independent contractor status of Consultantand the audit in any way fails to sustain the validity of a wholly independent contractor relationship between City and Consultant, then Consultant agrees to reimburse City for all costs, including accounting and attorney's fees, arising out of such audit and any appeals relating thereto. C. Consultant shall fully comply with the workers' compensation law regarding Consultant and Consultant's employees. Consultant further agrees to indemnify and hold City harmless from any failure of Consultant to comply with applicable worker's compensation laws. City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant's failure to promptly pay to City any reimbursement or indemnification arising under this Section 6. S. Standard of Performance. Consultant shall perform all work at the standard of care and skill ordinarily exercised by members of the profession under similar conditions. 9. Indemnification. Consultant agrees to indemnify the City, its officers, agents, volunteers, employees, and attorneys against, and will hold and save them and each of them harmless from, and all actions, claims, damages to persons or property, penalties, obligations, or liabilities that may be asserted or claimed by any person, firm, entity, corporation, political subdivision or other organization arising out of the acts, errors or omissions of Consultant, its agents, employees, subcontractors, or invitees, including each person or entity responsible for the provision of services hereunder. In the event there is more than one person or entity named in the Agreement as a Consultant, then all obligations, liabilities, covenants and conditions under this Section 8 shall be joint and several. 10. Insurance. Consultant shall at all times during the term of this Agreement carry, maintain, and keep in full force and effect, with an insurance company admitted to do business in California and approved by the City (1) a policy or policies of broad -form comprehensive general liability insurance with minimum limits of $1,000,000.00 combined single limit coverage against any injury, death, loss or damage as a result of wrongful or negligent acts by Consultant, its officers, employees, agents, and independent contractors in performance of services under this Agreement; (2) property damage insurance with a minimum limit of $500,000.00; (3) automotive liability insurance, with minimum combined single limits coverage of $500,000.00; (4) professional liability insurance (errors and omissions) to cover or partially cover damages that may be the result of errors, omissions, or negligent acts of Consultant, in an amount of not less than $1,000,000 per occurrence; and (5) worker's compensation insurance with a minimum limit of $500,000.00 or the amount required by law, whichever is greater. City, its officers, employees, attorneys, and volunteers shall be named as additional insureds on the policy(ies) as to comprehensive general liability, property damage, and automotive liability. The policy (ies) as to comprehensive general liability, property damage,, and automobile liability shall provide thatthey are primary, and that any insurance maintained by the;City shall be excess insurance only. A. All insurance policies shall provide that the insurance coverage shall not be non - renewed, canceled, reduced, or otherwise modified (except through the addition of additional insureds to the policy) by the insurance carrier without the insurance carrier giving City thirty (30) day's prior written notice thereof. Consultant agrees that it will not cancel, reduce or otherwise modify the insurance coverage. B. All policies of insurance shall cover the obligations of Consultant pursuant to the terms of this Agreement; shall be issued by an insurance company which is admitted to do business in the State of California or which is approved in writing by the City; and shall be placed with a current A,M, Best's rating of no less that A VII. C. Consultant shall submit to City (1) insurance certificates indicating compliance with the minimum worker's compensation insurance requirements above, and (2) insurance policy endorsements indicating compliance with all other minimum insurance requirements above, not less that one (1) day prior to beginning of performance under this Agreement. Endorsements shall be executed on City's appropriate standard forms entitled "Additional Insured Endorsement", or a substantially similar form which the City has agreed in writing to accept. 11. Confidentiality. Consultant in the course of its duties may have access to confidential data of City, private individuals, or employees of the City. Consultant covenants that all data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without written authorization by City. City shall grant such authorization if disclosure is required by law. All City data shall be returned to City upon the termination of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. Notwithstanding the foregoing, to the extent Consultant prepares reports of a proprietary nature specifically for and in connection with certain projects, the City shall not, except with Consultant's prior written consent, use the same for other unrelated projects. 12. Ownership of Materials. All materials provided by Consultant in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City. 13. Conflict of Interest. A. Consultant covenants that it presently has no interest and shall not acquire any interest, director or indirect, which may be affected by the services to be performed by Consultant under this Agreement, or which would conflict in any manner with the performance of its services hereunder. Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be'employed by it. Furthermore, Consultant shall avoid the appearance of having any interest which would conflict in any manner with the performance of its services pursuant to this Agreement. B. Consultant covenants not to give or receive any compensation, monetary or otherwise, to or from the ultimate vendors) of hardware or software to City as a result of the performance of this Agreement. Consultant's covenant under this section shall survive the termination of this Agreement. 14. Termination. Either party may terminate this Agreement with or without cause upon fifteen (15) days' written notice to the other party. However, Consultant shall not terminate this Agreement during the provision of services on a particular project. The effective date of termination shall be upon the date specified in the notice of termination, or, in the event no date is'specified, upon the fifteenth (15th) day following delivery of the notice. In the event of such termination, City agrees to pay Consultant for services satisfactorily rendered prior to the effective date of termination. Immediately upon receiving written notice of termination, Consultant shall discontinue performing services. 15. Personnel. Consultant represents that it has, or will secure at its own expense, all personnel required to perform the services under this Agreement. All of the services required under this Agreement will be performed by Consultant or under it supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant reserves the right to determine the assignment of its own employees to the performance of Consultant's services under this Agreement, but City reserves the right, for good cause, to require Consultant to exclude any employee from performing services on City's premises. 16. Non -Discrimination and Equal Employment Opportunity. A. Consultant shall not discriminate as to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation, in the performance of its services and duties pursuant to this Agreement, and will comply with all rules and regulations of City relating thereto. Such nondiscrimination shall include but not be limited to the following: employment, upgrading, demotion, transfers, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. B. Consultant will, in all solicitations or advertisements for employees placed by or on behalf of Consultant state either that it is an equal opportunity employer or that all qualified applicants will receive consideration for employment without regard to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition, or sexual orientation. C. Consultant will cause the foregoing provisions to be inserted in all subcontracts for any work covered by this Agreement except contracts or subcontracts for standard commercial supplies or raw materials. 17. Assignment. Consultant shall not assign or transfer any interest in this Agreement nor the performance of any of Consultant's obligations hereunder, without the prior written consent of City, and any attempt by Consultant to so assign this Agreement or any rights, duties, or obligations arising hereunder shall be void and of no effect. 18. Performance Evaluation. For any contract in effect for twelve months or longer, a written annual administrative performance evaluation shall be required within ninety (90) days of the first anniversaryof the effective date of this Agreement, and each year thereafter throughout the term of this Agreement. The work product required by this Agreement shall be utilized as the basis for review, and any comments or complaints received by City during the review period, either orally or in writing, shall be considered. City shall meet with Consultant prior to preparing the written report. If any noncompliance with the Agreement is found, City may direct Consultant to correct the inadequacies, or, in the alternative, may terminate this Agreement as provided herein. 19. Compliance with Laws. Consultant shall comply with all applicable laws, ordinances, codes and regulations of the federal, state, and local governments. 20. Non -Waiver of Terms, Rights and Remedies. Waiver by either party of any one or more of the conditions of performance under this Agreement shall not be a waiver of any other condition of performance under this Agreement. In no event shall the making by City of any payment to Consultant constitute or be construed as a waiver by City of any breach of covenant, or any default which may then exist on the part of Consultant, and the making of any such payment by City shall in no way impair or prejudice any right or remedy available to City with regard to such breach or default. 21. Attorney's Fees. In the event that either party to this Agreement shall commence any legal or equitable action or proceeding to enforce or interpret the provisions of this Agreement, the prevailing party in such action or proceeding shall be entitled to recover its costs of suit, including reasonable attorney's fees and costs, including costs of expert witnesses and consultants. 22. Notices. Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on (a) the day of delivery if delivered by hand during regular business hours or by facsimile before or during regular business hours; or (b) on the third business day following deposit in the United States mail, postage prepaid, to the addresses heretofore set forth in the Agreement, or to such other addresses as the parties may, from time to time, designate in writing pursuant to the provisions of this section. 23. Governing Law. This Contract shall be interpreted, construed and enforced in accordance with the laws of the State of California. 24. Counterparts. Th is Agreement may be executed in any n umber of counterparts, each of which steal I be deemed to be the original, and all of which together shall constitute one and the same instrument. 25. Entire Agreement. This Agreement, and any other documents incorporated herein by specific reference, represent the entire and integrated agreement between Consultant and City. This Agreement supersedes all prior oral or written negotiations, representations or agreements. This Agreement may not be amended, nor any provision or breach hereof waived, except in a writing signed by the parties which expressly refers to this Agreement. Amendments on behalf of the City will only be valid if signed by the City Manager or the Mayor and attested by the City Clerk. 26. Exhibits. All exhibits referred to in this Agreement are incorporated herein by this reference. iN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. "City" ATTEST: CITY OF DIAMOND BAR By: By: Lynda Burgess Wen P. Chang City Clerk Mayor Approved as to form: "CONSULTANT" By: City Attorney 2 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY Name and address of named insured ("Named Insured'): Name and address of Insurance Company (Company"): General description of agreement(s), permit(s), license(s), and/or activity(ies) insured: Notwithstanding any inconsistent statement in the policy to which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The (`PublicAgencyj, its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured. The Additional Insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the Policy shall apply separately to each Additional Insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shall be construed to preclude coverage of a Claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. 5. The insurance afforded by the Policy for contractual liability insurance (subject to the J-1 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY terms, conditions and exclusions applicable to such insurance) includes liability assumed by the Named Insured underthe indemnification and/or hold harmless provision(s) contained in or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named Insured and the Additional insureds. 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereof. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. i. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds. 8. It is hereby agreed that the laws of the State of California shall apply,to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. 9. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD LIMITS OF THIS EN DORSEMENT ATTACHES FROM/TO LIABILITY J-2 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY 11. Scheduled items or locations are to be identified on an attached sheet. The following inclusions relate to the above coverages. includes: Contractual Liability Owners/Landlords/Tenants Man ufacturers/Contractors Products/Completed Operations Broad Form Property Damage Extended Bodily Injury Broad Form Comprehensive General Liability Endorsement Explosion Hazard Collapse Hazard Underground Property Damage Pollution Liability Liquor Liability 12. A deductible or self-insured retention (check one) of $ appliesto all coverage(s) except: (if none, so state). The deductible is applicable per claim or per occurrence (check one). 13. This is an occurrence or claims made policy (check one). 14. This endorsement is effective on Policy Number at 12:01 A.M. and forms a part of I, (print name), hereby declare under penalty of perjury under the laws of the State of California, that I have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed Phone No.: ( ) 20_ Signature of Authorized Representative (Original signature only; no facsimile signature or initialed signature accepted) J-3 ADDITIONAL INSURED ENDORSEMENT COMPREHENSIVE GENERAL LIABILITY ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Name and address of named insured ("Named Insured"): Name and address of Insurance Company ("Company"): General description of agreement(s), permit(s), license(s), and/or acuvity(ies) insured: Notwithstanding any inconsistent statement in the policy to which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The ("Public Agency"), its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured. The Additional Insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional Insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the .Policy shall apply separately to each Additional insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shall be construed to preclude coverage of a claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. 5. The insurance afforded by the Policy for contractual liability insurance (subject to the terms, conditions and exclusions applicable to such insurance) includes liability assumed by the J-4 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Named insured under the indemnification and/or hold harmless provision(s) contained or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named Insured and the Additional insureds. 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereto. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. 7. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds. 8. It is hereby agreed that the laws of the State of California shall apply to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD LIMITS OF THIS ENDORSEMENT ATTACHES FROM/To LIABILITY 11. Scheduled items or locations are to be identified on an attached sheet. The following inclusions relate to the above coverages. Includes: J-5 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY Any Automobiles All Owned Automobiles Non -owned Automobiles Hired Automobiles Scheduled Automobiles Garage Coverage Truckers Coverage Motor Carrier Act Bus Regulatory Reform Act Public Livery Coverage 12. A deductible or self-insured retention (check one) of $ applies to all coverage(s) except: (if none, so state}. The deductible is applicable per claim or per occurrence (check one). 13. This is an occurrence or claims made policy (check one). 14. This endorsement is effective on at 12:01 A. M. and forms a part of Policy Number 1, (print name), hereby declare under penalty of perjury under the laws of the State of California, that 1 have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed Phone No.: ( ) 20� Signature of Authorized Representative (Original signature only; no facsimilesignature or initialed signature accepted) J-6 ADDITIONAL INSURED ENDORSEMENT AUTOMOBILE LIABILITY ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY Name and address of named insured ("Named Insured"): Name and address of Insurance Company ("Company"): General description of agreement(s), permit(s), i'icense(s), and/or activity(ies) insured: Notwithstanding any inconsistent statement in the policy to which this endorsement is attached (the "Policy") or in any endorsement now or hereafter attached thereto, it is agreed as follows: 1. The ("Public Agency"), its elected officials, officers, attorneys, agents, employees, and volunteers are additional insureds (the above named additional insureds are hereafter referred to as the "Additional Insureds") under the Policy in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured. The Additional Insureds have no liability for the payment of any premiums or assessments under the Policy. 2. The insurance coverages afforded the Additional Insureds under the Policy shall be primary insurance, and no other insurance maintained by the Additional Insureds shall be called upon to contribute with the insurance coverages provided by the Policy. 3. Each insurance coverage under the Policy shall apply separately to each Additional Insured against whom claim is made or suit is brought except with respect to the limits of the Company's liability. 4. Nothing in this contract of insurance shall be construed to preclude coverage of a claim by one insured under the policy against another insured under the policy. All such claims shall covered as third -party claims, i.e., in the same manner as if separate policies had been issued to each insured. Nothing contained in this provision shall operate to increase or replicate the Company's limits of liability as provided under the policy. 5. The insurance afforded by the Policy for contractual liability insurance (subject to the J-7 ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY A r 1 0 terms, conditions and exclusions applicable to such insurance) includes liability assumed by the Named Insured under the indemnification and/or hold harmless provision(s) contained in or executed in conjunction with the written agreement(s) or permit(s) designated above, between the Named Insured and the Additional Insureds. 6. The policy to which this endorsement is attached shall not be subject to cancellation, change in coverage, reduction of limits (except as the result of the payment of claims), or non -renewal except after written notice to Public Agency, by certified mail, return receipt requested, not less than thirty (30) days prior to the effective date thereto. In the event of Company's failure to comply with this notice provision, the policy as initially drafted will continue in full force and effect until compliance with this notice requirement. 7. Company hereby waives all rights of subrogation and contribution against the Additional Insureds, while acting within the scope of their duties, from all claims, losses and liabilities arising out of or incident to the perils insured against in relation to those activities described generally above with regard to operations performed by or on behalf of the Named Insured regardless of any prior, concurrent, or subsequent active or passive negligence by the Additional Insureds. 8. It is hereby agreed that the laws of the State of California shall apply to and govern the validity, construction, interpretation, and enforcement of this contract of insurance. 9. This endorsement and all notices given hereunder shall be sent to Public Agency at: 10. Except as stated above and not in conflict with this endorsement, nothing contained herein shall be held to waive, alter or extend any of the limits, agreements, or exclusions of the policy to which this endorsement is attached. TYPE OF COVERAGES TO WHICH POLICY PERIOD THIS ENDORSEMENT ATTACHES FROM/TO Following Form Umbrella Liability 11. Applicable underlying coverages: INSURANCE COMPANY POLICY NO. 1--8 LIMITS OF LIABILITY AMOQNT ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY 12. The following inclusions, exclusions, extensions or specific provisions relate to the above coverages: 13. A deductible or self-insured retention (check one) of $ appliesto all coverage(s) except: Cdnapso state). The deductible is applicable per claim or per occurrence (check one). 13. This is an occurrence or claims made policy (check one). 14. This endorsement is effective on Policy Number at 12:01 A.M. and forms a part of I, (print name), hereby declare under penalty of perjury under the laws of the State of California, that I have the authority to bind the Company to this endorsement and that by my execution hereof, I do so bind the Company. Executed , 20 Phone No.: ( ) Signature of Authorized Representative (Original signature only; no facsimile signature or initialed signature accepted) J-9 ADDITIONAL INSURED ENDORSEMENT EXCESS LIABILITY Agenda # 6 . g Meeting Date: November 19 2002 CITY COUNCIL AGENDA REPORT TO: Honorable Mayor and Members f the City Council VIA: Linda C. Lowry, City Manager TITLE: AUTHORIZATION TO EXCEED THE CITY MANAGER'S PURCHASING AUTHORITY TO PURCHASE NETWORK SERVERS FROM DELL COMPUTER CORPORATION IN AN AMOUNT NOT -TO -EXCEED $25,000 RECOMMENDATION: It is recommended that the City Council provide authorization to exceed the City: Manager's purchasing authority to purchase the required network servers from Dell Computer Corporation (Dell) in an amount not to exceed $25,000 for a total purchasing authorization for FY 2002-03 of $40,000. FINANCIAL IMPACT: Sufficient funds for this purchase were included in the current fiscal year budget. The purchase of this equipment was anticipated and identified in the decision package submitted during the FY 2002- 03 budget process. BACKGROUND: During the current fiscal year the City has purchased approximately $15,000 worth of various computer hardware components from Dell. The City now requires additional computer hardware from Dell to facilitate the launch of its E -Government program. The purchase of this new equipment ($25,000), along with the previous purchases from Dell, will exceed the City Manager's purchasing authority of $15,000 and requires City Council approval, per City's Purchasing Policy. DISCUSSION On Oct. 15th City Council authorized purchase of a new Parks and Recreation reservation and registration software. This system will allow for eventual online registration of Parks and Recreation classes, registration of City excursions and reservation of City facilities. This is the first online system to be implemented as part of the City's long term E -Government program. The City's current network configuration is not sufficient to accommodate this new program or other future E -Gov. applications. The purchase of this hardware will enable the City to bring these new services online. All of the City's network servers are Dell servers. It is preferred that that all new network servers are also Dell for ease of maintenance and technical support. Dell servers have been very reliable over the past few years, City staff is trained and familiar with the required maintenance of Dell servers and, when necessary, the City has received excellent technical support from Dell. For the reasons above, the City did not request formal bids from other network server vendors. Prepared by: Jim DeFriend, MIS Technician REVIEWED BY: 9 - David Doyle Deputy City Manager Agenda # 6.10 Meeting Date: November 9 2002 CITY COUNCIL�� R+° AGENDA REPORT �r9s� TO: Honorable Mayor and Members the City Council VIA: Linda C. Lowry, City Manager TITLE: Authorize Verizon to upgrade the City's phone system and appropriate necessary funds from General f=und Reserves {$16,000} Recommendation: It is recommended that the City Council authorize Verizon to upgrade the City's phone system and appropriate $16,000 from General Fund Reserves. Budget Implication: During the last budget process the cost to upgrade the phone system was unknown; so, no monies were budgeted. In order to complete this work, $16,000 needs to be appropriated from General Fund Reserves. Sufficient funds are available in the General Fund Reserves for this appropriation. Background: At the time of incorporation the City purchased a telephone system and subsequently a voicemail system. As the number of employees increased, additional lines and phones were added and the voice mail system was upgraded. With the current configuration of the phone system, some departments only have departmental or "hunt" phone lines. In other departments each individual employee has a phone number. Still, in other departments, there is a combination of "hunt' lines and individual phone lines. This makes it difficult for the public to contact individual employees. Also, with the current phone system configuration, the City can not add any additional telephones. A few months ago, the City began talking to various phone system vendors to determine if we could upgrade our current system or if we would have to purchase a completely new system. Originally we were told we would have to purchase a completely new phone system. The cost for this new system was $65,000. Prior to purchasing the new system, the City hired a telecommunications consultant, Berton Communications Group, Inc. to assess the current phone system and evaluate our options to meet our telecommunications needs. Berten Communications reviewed our needs, determined our current system could be upgraded to meet these needs, contacted 3 vendors for bids on the related equipment and is recommending we utilize Verizon for this upgrade. The City received the following bids: VERIZON Integrated technology Volt $14,526.69 $12,764.50 $15,893.00 We are requesting an additional $1,400 contingency for issues that arise prior to and during installation. These funds will only be spent if required. Discussion: Verizon was not the lowest bidder. However, Berten Communications is still recommending the City utilize Verizon for the following reasons: • City would have a single source vendor for all telecommunication requirements • Verizon provides free maintenance for all of the individual stations (phones) • A single source vendor will allow for better coordination and minimize chances for service interruptions. • Verizon will provide free technical support A letter from David Bernal, President, Bertan Communications Group is attached. The scope of work for Verizon includes upgrading the current phone system and voice mail software, installing additional hardware, and installation of two (2) T1 subscriber lines. Once this work is completed each City employee will have their own Direct Inward/Outward Dialing (DIOD) number. This will facilitate access to City employees by members of the public. In addition, City employees will be directed to set up their phones so that a caller can choose to leave a voicemail message or opt out to speak to a live person, if they are away from their phone. Also, the change over to DIOD lines will not impact any of the City's existing public phone numbers. So the public won't have to learn new phone numbers to contact the various departments in City Hall. PREPARED BY: cw) Deputy ity anager Attachment: ®r,"C, Berten Communications Group r�� I N C O R P O R A i E D October 18, 2002 Mr. David Doyle Assistant City Manager City of Diamond Bar Dearoyle: Per our meeting this morning, Berten Communications formally recommends that the City of Diamond Bar select Verizon for the City's telephone system upgrade. Although Verizon is not the lowest bidder their cost is only 9%, or $1,090, higher than the low bid of $10,810 by Integrated Technology. We believe that the benefits to the City will more than offset the incremental difference. Benefits to the City are as follows: 1. The City would have a single -source vendor for their telecommunication requirements. This obviates the need for calls to multiple companies if there are any problems with the City's telecommunications system. 2. Verizon is currently providing free maintenance for the City's station equipment. If the City needed to purchase a maintenance agreement from another vendor it would cost approximately $2.50/digital part/month, or $300 per month. 3. A single -source vendor will ensure cleaner coordination at cutover. 4. Verizon is willing to provide free cutover support. This includes training on usage of the voice mail system for City employees. Integrated Technology stated they would charge the City for the additional training. Berten Communications will contact Verizon to let them know that they have won the bid, that two T-1 lines need to be ordered, and that they need to work with Nancy Whitehouse on the order. In addition, we will notify Integrated Technology and Volt that they were not awarded the bid. If you have any other requirements or questions please feel free to contact me at your convenience. Sincerely, David A. Bernal President cc: Nancy Vljitetr>s d, Jim DeFriend, Larry. Nelson 322' Corte matam • Temecula, California 92592 • Main: (909) 302-9101 • Fax: (909) 302-0178 • www.bercom7.com ?t Agenda # 7.1 eR Meeting Date: November 19, 2002 CITY COUNCIL AGENDA REPORT TO: Honorable Mayor and Members of the City Council VIA: Linda C. Lowry, City Manager TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; APPROVING A SITE LEASE, A LEASE AGREEMENT AND A BOND PURCHASE AGREEMENT; AUTHORIZING THE NEGOTIATION AND EXECUTION OF A REIMBURSEMENT AGREEMENT; AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECOMMENDATION: Staff recommends that the City Council approve the above titled resolution thereby accomplishing the following: 1. Enter the City into the Diamond Bar Public Financing Authority (DBPFA) 2. Lease the Community/Senior Center Site (Summitridge Park) to the DBPFA 3. Enter a 30 Year Lease and a Bond Purchase Agreement with the DBPFA to lease -back the Community Senior Center 4. Authorize a Reimbursement Agreement 5. Authorize other actions connected with the aforementioned FISCAL IMPACT: Approving this set of actions will net the City (through the newly created DBPFA's sale of 30 year lease/revenue bonds) $12,500,000 in cash to fund the construction of the Community/Senior Center and other facility projects. The costs of issuance of the bonds will incur a debt higher than the $12,500,000 proceeds. The interest rate of the debt will vary depending on the bond market since the bonds shall be variable with a rate cap for the first ten years. The debt service will also vary during the first ten years between an approximate average,of $651,000 per year to $798,000 depending on the market interest rates. The City will retire the debt through the payment of a Community/Senior Center annual lease in an amount that will mirror the annual debt service and trustee costs experienced by the DBPFA; Staff has estimated that a conservative projected revenue stream of the City General fund Will permit this amount of lease expense to be appropriated each year without threatening the funding of current services and programs. In addition, consideration of future annual operations has included generous costs to operate the new Community/Senior Center. Furthermore, if the City's financial condition were to materially change, the City could use funds on hand to pay off the Bonds as the Bonds variable rate allows them to be retired at any time without penalty. BACKGROUND: On November 5, 2002, this Council adopted Resolution No. 2002-76, declaring its intent to issue tax- exempt obligations for Community/ Senior Center and other capital improvement projects and to allow for the reimbursement of City expenditures made prior to the issuance of such obligations and appoint a financing team in connection therewith, A portion of the proceeds of such obligations was stated to be used to finance all or a portion of a community/senior center project (the "Project") within the City. By financing the facility construction rather than using reserves, the City may be able to use its reserves for economic development as opportunities emerge in the near future. DISCUSSION: What is being proposed is the issuance of variable rate lease revenue bonds (the "Bonds") that will be issued by a joint exercise of powers authority to be created by the City and the Redevelopment Agency of the City of Diamond Bar. The joint exercise of powers authority will be designated "City of Diamond Bar Public Financing Authority." Pursuant to the Act, under which the Authority is created, the Authority is authorized to borrow money for the purpose of financing the public capital improvements of public entities including the City and the Agency. The City will lease the site (retaining title) on which the Project will be built (the "Site") to the Authority pursuant to a Site Lease. The Authority will concurrently lease the Site and any improvements thereon (including the Project) (collectively, the "Leased Property") to the City pursuant to a Lease Agreement. Under the Lease Agreement, the City is obligated to make rental payments both in time and in amounts necessary to pay debt service on the Bonds. Under the Lease Agreement, the City will covenant to budget and -appropriate funds to pay such rental payments. The Bonds are secured solely by Revenue (comprising of such rental payments and interest earnings on funds established and held under the Indenture) and moneys and investments held in certain funds established under the Indenture. In addition to the Indenture, the Authority will utilize an Assignment Agreement, which assigns to the Trustee its right to receive the rental payments from the City. The interest rate on the Bonds will be determined on a daily or weekly basis until such time the City decides to convert to a fixed rate. Upon conversion to a fixed rate, the Bonds will accrue interest at the rate then set by the Remarketing Agent as required under the Remarketing Agreement. The Indenture is a contract between the Authority and the Trustee (acting as a fiduciary to the Bond owners) setting forth the terms of the Bonds (including payment and redemption provisions), the security for the Bonds and the rights and remedies of the Bond owners. Credit enhancement will be utilized by way of a direct pay letter of credit and possibly a confirming letter of credit. The entities providing these letters of credit have not been finalized. The Trustee will be authorized to draw on the direct pay letter of credit for each debt service payment on the Bonds, which draws will be reimbursed from the rental payments made by the City. If a confirming letter of credit is utilized, the confirming letter of credit provider will guarantee the payment of the direct pay letter of credit provider. The City will enter into a Reimbursement Agreement with the direct pay letter of credit provider agreeing to reimburse the provider for each draw under such direct pay letter of credit. US Bancorp Piper Jaffray, acting as the Underwriter, and pursuant to a Bond Purchase Agreement, will purchase the Bonds. The Bond Purchase Agreement sets forth the terms of the sale including the Underwriter's discount and conditions precedent to closing of the transaction. In connection with marketing of the Bonds, the Authority will prepare and authorize the Underwriter to 'distribute a Preliminary Official Statement relating to the Bonds. The Preliminary Official Statement is the Authority's offering document that the Underwriter will use to market the Bonds. The Preliminary Official Statement summarizes the provisions of the various legal documents described: above and provides financial information with respect to the City. ACTION OUTLINE: In order to complete the steps necessary to implement this concept, the City Council is asked to adopt the attached resolution, attachments and exhibits. 2. if the City Council approves the creation of the Diamond Bar Public Financing Authority, the Redevelopment Agency (RDA) shall be asked by separate action to adopt a resolution approving its participation (as the necessary second entity) in the Diamond Bar Financing Authority. 3. If the RDA approves participation in the DBPFA, the newly created authority shall convene and approve a resolution adopting its bylaws and the following items: a) The issuance of variable rate lease revenue bonds, 2002 Series A (Community Center Project) in the aggregate principal amount of not to exceed $15,000,000 b) An Indenture to the Trustee C) A Site Lease and a Lease -Back Agreement d) An Assignment Agreement of lease revenues to the Trustee e) A Bond Purchase Agreement f) A Remarketing Agreement g) A Preliminary Official Statement h) Authorization of certain other necessary and appropriate related actions Attachments: Resolution No. 2002-77 Joint Exercise of Powers Agreement Site Lease Lease Agreement Bond Purchase Agreement RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY; APPROVING A SITE LEASE, A LEASE AGREEMENT AND A BOND PURCHASE AGREEMENT; AUTHORIZING THE NEGOTIATION AND EXECUTION OF A REIMBURSEMENT AGREEMENT; AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City') and the Redevelopment Agency of the City ofDiamond Bar (the "Agency') desires to enter into a Joint Exercise ofPowers Agreement establishing the City of Diamond BarPublic Financing Authority (the "Authority) for the purpose, among other things, of issuing its bonds to be used to provide financing and refinancing forpublic capital improvements of the City and the Agency; and WHEREAS, upon its creation, the Authority will authorize the issuance of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of a community/senior centerproj ect (the "Project") and otherpubfic capital improvements within the City; WHEREAS, the City will lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to a Site Lease (the "Site Lease"); and WHEREAS, the Authority, concurrentlywith the execution ofthe Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the Citypursuant to a Lease Agreement (the "Lease"), in consideration for base rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), constituting Article 4 (commencing with Section 6584 of Chapter 5 ofDivision 7 of Title 1 of the Government Code of the State of California; and WHEREAS, the City has heretofore held a public hearing pursuant to Section 6586.5 of the Act; and WHEREAS, the City Council has reviewed the documentation related to the issuance of the Bonds which documentation is on file with the City Clerk of the City of Diamond Bar; #45248999v NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF -DIAMOND BAR, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The City hereby finds and determines that the foregoing recitals are true and correct. Section 2. The City hereby approves the creation of the Authority, its membership therein and the Joint Powers Agreement related thereto, substantially in the form on file with the City Clerk and presented to the City Council at this meeting. Any one of the Mayor, the City Manager or the City Clerk of the City, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers'), is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Joint Powers Agreement, with such insertions and changes as maybe approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 3. The City hereby finds and determines that (i) the Project is to be located within the boundaries of the City and (ii) there are significant public benefits arising from the Authority's issuance of the Bonds to finance the Project, including but not limited to employment benefits from undertaking the acquisition and construction of the Project in a timely fashion., as contemplated by Section 6586 of the Act. Section 4. The Site Lease, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Site Lease, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 5. The Lease Agreement, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Lease Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 6. The Bond Purchase Agreement, in substantially the form on file with the City Clerk of the City and presented to the City Council at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. The initial interest rate shall not exceed 2.5% and the underwriter's discount for the Bonds specified in the Bond Purchase Agreement shall not exceed 1.0%, exclusive of original issue discount. #45248999v2 Section 7. The City Manager is hereby authorized and directed to select a letter of credit bank and, if applicable, a confirming letter of credit bank (collectively, the `Bank"), and negotiate the terms of a Reimbursement Agreement, to be prepared and entered into by and between the City and the Bank, pursuant to which the Bank will issue its irrevocable direct pay letter of credit with respect to the Bonds. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Reimbursement Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 8. The Authorized Officers, the other officers and employees of the City, the members of the City Council, Bond Counsel and the other consultants to and agents of the City, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions, including, without limitation, closing documents in connection with the issuance of the Bonds are hereby ratified, approved and confirmed in every respect. Section 9. This Resolution shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED this day of , 2002. Ven Chang, Mayor ##45248999v2 I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of Diamond Bar, California at its regular meeting held on the day of , 2002, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAINED: COUNCIL MEMBERS: #145248999v2 0 Lynda Burgess, City Clerk City of Diamond Bar JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Dated as of December 1, 2002 45249478.1 TABLE OF CONTENTS Page ARTICLEI DEFINITIONS................................................................................................. 1 Section1.01 Definitions............................................................................................ 1 ARTICLE II GENERAL PROVISIONS.............................................................................. 3 Section2.01 Purpose................................................................................................. 3 Section 2.02 Creation of Authority........................................................................... 3 ARTICLE III BOARD OF DIRECTORS......................................................... ........ 4 Section 3.01 Board of Directors ................ ...................................................... ......:... 4 Section3.02 Powers.................................................................................................. 4 Section 3.03 Compensation...................................................................................... 4 Section 3.04 Meetings of the Board of Directors; Voting ........................................ 4 ARTICLE IV OFFICERS AND EMPLOYEES..................................................................... 5 Section4.01 Officers............................................................................ Section 4.02 Subordinate Officers............................................................................ 5 Section 4.03 Removal of Officers............................................................................. 5 Section 4.04 Chairperson........................................................................................... 5 Section 4.05 Vice Chairperson................................................................................. 5 Section 4.06 Executive Director............................................................................... 6 Section 4.07 Secretary.............................................................................................. 6 Section 4.08 Treasurer; Auditor................................................................................ 6 Section 4.09 Officers in Charge of Records, Funds and Accounts ........................... 6 Section 4.10 Other Employees.................................................................................. 6 Section 4.11 Conflict of Interest Code...................................................................... 6 ARTICLE V POWERS......................................................................................................... 7 Section 5.01 General Powers.................................................................................... 7 Section 5.02 Specific Powers.... ................................................................................ 7 Section 5.03 Restrictions on Exercise of Powers ...................................................... 8 Section 5.04 Liability; Contribution......................................................................... $ Section 5.05 Indemnity by Authority for Litigation Expenses of Officer, Board of Directors Member or Employee ........................................... 9 Section 5.06 Execution of Contracts......................................................................... 9 ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS ........................ 9 Section 6.01 Contributions....................................................................................... 9 Section 6.02 Accounts and Reports.......................................................................... 9 Section6.03 Funds.................................................................................................. 10 Section 6.04 Annual Budget and Administrative Expenses ................................... 10 ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION, ................................ 10 Section7.01 Term................................................................................................... 10 45249478.1 i TABLE OF CONTENTS Pau Section IU2 Addition ofMembers ............................................ ...... ...... .............. ll Section 7.03 Withdrawal orExclusion ofuMember .-----.---------ll ARTICLE VIII MISCELLANEOUS PROVISIONS --.--.---------.-----.—'l% Section8.01 Notices ............................................................................................... l2 Section 8.02 0oodoo Headings ----'.------'----------..--.-._.12 Section8.03 Consent ........................ ..................................................................... l2 Section 8.04 Law Governing .............................. ................................................... l2 Section8.05 Amendments ................................................................................... ^.l3 Section 8.06 Bofbzn«meot by Authority .---.----------_.---.--'-_l3 Section 8.07 Severability ............................................... ............................ ........... l3 Section 8.08 Successors and —.------.—.--_------.--.—'..lJ Section 8.09 Execution of Counterparts ............................................................... 45249478.1 ii JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY THIS JOINT POWERS AGREEMENT (the "Agreement"), is made and entered into as of December 1, 2002 by and among the Members (as defined herein); WITNESSETH: WHEREAS, the City and the Agency are each authorized to own, lease, purchase, receive and hold property necessary or convenient for their governmental operations; and WHEREAS, the financing of the acquisition of property by the City and the Agency acting separately may result in duplication of effort, inefficiencies in administration, and excessive cost, all of which, in the judgment of the City and the Agency, could be eliminated if the financing of the acquisition of property were capable of being performed through a single public agency, and such is the purpose of this Agreement; and WHEREAS, the Marks -Roos Local Bond Pooling Act of 1985 authorizes agencies formed under the Joint exercise of Powers Law (hereinafter defined as the "Joint Powers Law") to assist in the financing of public capital improvements to be owned by any of its members; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the Members do hereby agree as follows: DEFINITIONS Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, whether in the singular or in the plural, when used herein and initially capitalized shall have the meanings specified. "Agency" means the Redevelopment Agency of the City of Diamond Bar. "Agreement" means this Joint Exercise of Powers Agreement, as originally entered into or as amended from time to time in accordance with Section 8.05 hereof. "Authority" means the City of Diamond Bar Public Financing Authority established pursuant to Section 2.02 hereof. "Board" means the Board referred to in Section 3.01 hereof, which shall be the governing body of the Authority. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Joint Powers Law (commencing with Section 6584), as amended from time to time, Article 2 of the Joint Powers Law, as amended from time to time, or any other law available for use by the 45249475.1 Authority in the authorization and issuance of Indebtedness or to provide for the financing of Indebtedness and/or Public Capital Improvements, as amended from time to time. "Bond Purchase Agreement" means an agreement between the Authority and a Member or a Local Agency, pursuant to which the Authority agrees to purchase Indebtedness from a Member or a Local Agency, as the case may be. "City" means the City of Diamond Bar. "Fiscal Year" means the fiscal year of the Authority as established from time to time by the Board, being at the date of this Agreement the period from July 1 in any calendar year to and including June 30 in the succeeding calendar year. "Indebtedness" means bonds, notes or other evidences of indebtedness, and all other obligations, instruments and agreements constituting "Bonds" under the Joint Powers Law, which are issued or incurred by or on behalf of the Authority, a Member or a Local Agency pursuant to the Bond Law or pursuant to any other provision of law to finance the lease, acquisition, construction or improvement of Public Capital Improvements, Working Capital- Requirements, apitalRequirements, or liability or other insurance needs of any Local Agency (the "Local Obligations"). "Joint Powers Law" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, as amended from time to time. "Liability Share" means, with respect to any Member, the amount of a judgment for damages divided by the number of Members at the time the act or omission occurred, unless any portion of the judgment arises from an act or omission directly related to the studying, planning, financing, developing, acquiring, purchasing, construction, reconstructing, implementing, improving, enlarging, enhancing, operating, maintaining, selling, disposing of, or decommissioning of any project undertaken by the Authority under this Agreement, in which case, with respect to such portion, the term "Liability Share" shall mean, with respect to any Member, the amount of such portion multiplied by a fraction equal to (i) such Member's entitlement or right, if any, to participate in such project at the time the act or omission occurred, divided by (ii) the aggregate amount of all Members' entitlements or rights to participate in such project at the time the act or omission occurred. "Local Agency" means each of the Members, any agency or subdivision of a Member, and any other city, county, authority, district or public corporation of the State of California. "Members" means, collectively, all of the Members that are parties to this Agreement, which Members shall initially consist of the City and the Agency, and which shall include all additional Members that become parties hereto pursuant to the provisions of Section 7.02 hereof, provided, however, that the term "Member" shall not include any entity which shall have withdrawn or been excluded from the Authority pursuant to Section 7.03 hereof. "Public Agency" has the meaning given to the term "public agency" in Article 1 of the Joint Powers Law. 45249478.1 2 "Public Capital Improvements" has the meaning given such term in Section 6585(g) of the Bond Law, as such provision may be amended from time to time. "Working Capital Requirements" means the requirements of any Local Agency for funds to be used by, or on behalf of, such Local Agency for any purpose for which such Local Agency may borrow money pursuant to Section 53852 of the California Government Code, as amended from time to time. ARTICLE II GENERAL PROVISIONS Section 2.01 PurTiose. This Agreement is made pursuant to the Joint Powers Law providing for the joint exercise of powers common to two or more Members, and for other purposes as permitted under the Joint Powers Law and the Bond Law. The purpose of this Agreement is to provide for the financing of Public Capital Improvements for and Working Capital Requirements and insurance programs of, the Members and any Local Agency, including without limitation, service through the lease, acquisition or construction by the Authority of such Public Capital Improvements, the purchase by the Authority of Indebtedness of any of the Members or a Local Agency pursuant to Bond Purchase Agreements, the lending of funds by the Authority to a Member or a Local Agency or the entering into of contractual arrangements by the Authority with a Member or a Local Agency and any other transaction authorized by the Joint Powers Law and other laws; engaging in financings relating to the encouragement of economic development and the stimulation of public revenues in the City through the acquisition and financing by the Authority of such Public Capital Improvements; and to engage in any other transactions authorized by the Joint Powers Law and other laws. Section 2.02 Creation of Authority. Pursuant to the Joint Powers Law, there is hereby created a public entity to be known as the "City of Diamond Bar Public Financing Authority". The Authority shall be a public entity separate and apart from the Members, and shall administer this Agreement. 4524947$.1 ARTICLE III BOARD OF DIRECTORS Section 3.01 Board of Directors. The Authority shall be governed by a Board of Directors, which shall be comprised of members determined as provided in this Section 3.01. The Board of Directors shall be called the "Board of Directors of the City of Diamond Bar Public Financing Authority." Notwithstanding anything contained in this Section 3.01 to the contrary, no member of the Board of Directors shall hold membership on the Board of Directors after the expiration of his or her term as a member of the governing body of a Member, or until he or she resigns, is removed or for any other reason no longer serves as a member of the governing body of a Member. The members of the Board of Directors shall be the members of the City Council of the City of Diamond Bar. Section 3.02 Powers. Subject to the limitations of this Agreement and the laws of the State of California, the powers of this Authority shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. The Board of Directors shall have the responsibility for the general management of the affairs, property and business of the Authority and may, from time to time, adopt and modify such By -Laws and other rules and regulations for that purpose and for the conduct of its meetings as it may deem proper. Section 3.03 Compensation. Members of the Board of Directors shall serve with each compensation as shall be established from time to time. Each such member may be reimbursed for necessary and actual expenses, including travel incident to his or her services as member of the Board of Directors, pursuant to resolution of the Board of Directors. Any member of the Board of Directors may elect, however, to decline said compensation or reimbursement. Section 3.04 Meetings of the Board of Directors, Voting. (a) Call, Notice and Conduct of Meetings. All meetings of the Board of Directors, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the Ralph M. Brown Act, being Sections 54950 et seq. of the California Government Code, as amended from time to time. (b) Regular Meetings. The Board of Directors shall hold a regular meeting not less than once each calendar year. Regular meetings of the Board of Directors shall be held at such time as the Board of Directors may fix by resolution from time to time, and if any day so fixed shall fall upon a legal holiday, then, upon the next succeeding business day at the same hour. No notice of any regular meeting of the Board of Directors need be given to the members of the Board of Directors. (c) Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the President of the Authority or by a majority of the members of the Board of Directors, in accordance with the provisions of the California Government Code, as amended from time to time. 45244478.1 4 {d} Quorum. A majority of the total number of members of the Board of Directors shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. {e} Voting. Each member of the Board of Directors shall have one vote. The affirmative votes of at least a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be required for the Board of Directors to take any action. Every act or decision done or made by a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. ARTICLE IV OFFICERS AND EMPLOYEES Section 4.01 Officers. The officers of the Authority shall be a Chairperson, a Vice Chairperson, an Executive Director, a Secretary, a Treasurer, an Auditor and such other officers as the Board of Directors may appoint. The Chairperson shall be the Mayor of the City. The Vice Chairperson shall be the Mayor ProTem of the City. The Finance Director shall serve as the Treasurer and Auditor of the Authority. The City Manager shall serve as the Executive Director of the Authority. The City Clerk shall serve as the Secretary of the Authority. Section 4.02 Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those herein above mentioned as the business of the Authority may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in this Agreement, or as the Board of Directors, from time to time, may authorize or determine. Section 4.03 Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the members of the Board of Directors at any regular or special meeting of the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any members of the Board of Directors until such time as a successor for said office has been appointed. Section 4.04 Chairperson. The Chairperson shall be the presiding officer of the Authority. He or she shall be ex officio member of all standing committees, and shall have the such powers and duties as may be prescribed by the Board of Directors or this Agreement. The Chairperson shall preside at all meetings of the Board of Directors. Section 4.05 Vice ChairRerson. In the absence of disability of the Chairperson, the Vice Chairperson shall perform all the duties of the Chairperson and when so acting shall have all the powers of and be subject to all of the restrictions upon the Chairperson. The Vice Chairperson shall have such other powers and perform such other duties as may, from time to time, be prescribed for him or her by the Board of Directors or this Agreement. Section 4.06 Executive Director. The Executive Director shall be the chief executive officer of the Authority. He or she shall have the general powers and duties of management of 45249478.1 the Authority and shall have such other powers and duties as may be prescribed by the Board of Directors or this Agreement. Section 4.07 Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Board of Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names. of those present at Board of Directors meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors. The Secretary shall keep the Authority records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or this Agreement. Section 4.08 Treasurer; Auditor. Subject to the applicable provisions of any indenture or resolution providing for a trustee or other fiscal agent, the Treasurer is designated as the depositary of the Authority to have custody of all the money of the Authority, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law. The Auditor is hereby designated as the auditor of the Authority and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law including, without limitation, financial reporting responsibilities as provided therein. Section 4.09 Offlcers in Charge of Records, Funds and Accounts. The Treasurer to the extent such officer's duties and responsibilities require, is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond as required by Section 6505.1 of the Joint Powers Law in the amount of $25,000. Section 4.10 Other Em lovees. The Board of Directors shall have the power to appoint and employ such other officers, employees, consultants and independent contractors as it may deem necessary for the purposes of this Agreement, any of whom may be employees of a Member, and who shall have such powers, duties and responsibilities as are determined by the Board of Directors. All of the privileges and immunities from liability, exemptions from laws, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective functions shall apply to them to the same degree and extent while engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents, or employees directly employed by the Authority shall be deemed, by reason of their employment by the Authority to be employed by any of the Members or, by reason of their employment by the Authority, to be subject to any of the requirements of any of the Members. Section 4,11 Conflict of Interest Code. The Authority by resolution shall adopt by reference a Conflict of Interest Code as required by the Political Reform Act, commencing with section 81000 of the Government Code of the State of California. 45249478.1 6 ARTICLE V IDWAV Of Section 5.01 General Powers. The Authority shall exercise in the manner herein provided powers common to Members, or as otherwise permitted under the Joint Powers Law, and necessary or convenient to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 5.03 hereof. As provided in the Joint Powers Law; the Authority shall be a public entity separate from the Members. The Authority shall have all of the powers provided in the Joint Powers. Law, including but not limited to Article 4 of the Joint Powers Law (commencing with Section 6584), and including the power to issue or incur Indebtedness under the Bond Law. Section 5.02 Specife Powers. The Authority is hereby authorized, in its own name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a) to make and enter into contracts; (b) to employ agents or employees; (c) to plan, develop, acquire, construct, manage, maintain, repair, replace or operate any Public Capital Improvement, including the common power of the Members to acquire any Public Capital Improvement by the power of eminent domain; (d) to acquire (by the exercise of the power of eminent domain or otherwise), hold, lease, sell or otherwise dispose of any real or personal property, tangible or intangible', and any interests therein, wherever located; (e) to issue or incur Indebtedness and otherwise to incur debts, liabilities or obligations, provided that no such Indebtedness, debt, liability or obligation shall constitute a debt, liability or obligation of any of the Members; (f) to sue and be sued in its own name; (g) to establish a budget and authorize expenditures therefrom; (h) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States or of the State of California or from any private sources; (i) to enter into agreements for the creation of separate public entities. and agencies pursuant to the Joint Powers Law; 0) to invest any money in the treasury as determined by the Authority, in accordance with applicable provisions of the Joint Powers Law and Section 53601 of the California Government Code, as amended from time to time; 45249478.1 7 (k) to apply for letters of credit or other forms of financial guarantees in order to secure the repayment of Indebtedness and enter into agreements in connection therewith; (1) to carry out and enforce all the provisions of this Agreement; (m)to make and enter into Bond Purchase Agreements; (n) to purchase Indebtedness of a Member or any Local Agency; (o) to establish non-profit corporations or for-profit corporations to assist in accomplishing any of its objectives; and (p) to exercise any and all other powers as may be permitted by State law and/or the Joint Powers Law (including Section 6588 of the Joint Powers Law). Section 5.03 Restrictions on Exercise of Powers. The powers of the Authority shall be exercised in the manner provided in the Joint Powers Law and in the Bond Law subject only to the restrictions upon the manner of exercising such powers as are imposed upon the Members in the exercise of similar powers. Section 5.04 Liability, Contribution. Pursuant to the Joint Powers Law, the debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of any of the Members, except as provided by Section 895.2 of the California Government Code, as amended from time to time, in the case of injury caused by a negligent or wrongful act or omission occurring in the performance of this Agreement. In the event any Member is held liable upon any judgment for damages caused by a negligent or wrongful act or omission occurring in the performance of this Agreement, and pays in excess of its Liability Share of such judgment, such Member shall be entitled to contribution from each other Member and may require each other Member to pay an amount towards the judgment for damages, but in no event shall any such other Member be required to pay in excess of its Liability Share of such judgment. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by the instruments authorizing the issuance of any obligations of the Authority. Nothing contained in this Agreement shall in any way diminish the liability of any Member or other party with respect to any contract between such Member or other party and the Authority. Section 5.05 Indemnity by Authority for Litization Expenses of Officer, Board of Directors Member or Emplovee. In the event any member of the Board of Directors, officer or employee of the Authority be sued, either alone or with others, because he or she is or was a member of the Board of Directors, officer or employee of the Authority, in any proceeding arising out of his or her alleged misfeasance or nonfeasance in the performance of his or her duties or out of any alleged wrongful act against the Authority or by the Authority, indemnity to such person for reasonable expenses, including attorneys' fees incurred in the defense of the proceedings, may be assessed against the Authority or its receiver by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person 45249479.1 reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The amount of such indemnity shall equal the amount of the expenses, including attorneys' 'fees, incurred in the defense of the proceeding. Section 5.06 Execution of Contracts. The Board of Directors, except as otherwise provided in this Agreement, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on behalf of the Authority and such authorization may be in general or confined to specific instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Authority by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS Section 6.01 Contributions. In accordance with the California Government Code, the Members may in the appropriate circumstances when required hereunder: (a) make contributions from their treasuries as approved from time to time by the Board of Directors, for the purposes set forth herein, (b) make payments of public funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use their personnel, equipment or property in lieu of other contributions or advances. The provisions of Section 6513 of the Joint Powers Law are hereby incorporated into this Agreement. The Authority may make sudh arrangements relative to the repayment or return to the Members of such contributions, payments and advances as are approved from time to time by the Board of Directors. Any Member which fails to make or pay when due any required contribution, payment or advance to the Authority, may have its rights under this Agreement terminated and may be excluded from participation in the Authority as provided in Section 7.03(c) hereof. Any 'such Member shall continue to be liable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. Section 6.02 Accounts and Reports. There shall be strict accountability of all funds and reporting of all receipts and disbursements of the Authority. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any resolution, indenture or other instrument of the Authority securing its Indebtedness, except insofar as such powers, duties and responsibilities are assigned to a trustee appointed pursuant to such resolution, indenture or instrument. The books and records of the Authority shall be open to inspection at all reasonable times by the Members and their representatives. The Authority shall give an unaudited written report of all financial activities for each Fiscal Year to the Members within 210 days after the close of each Fiscal Year. 45249478.4 9 The Auditor, as auditor of the Authority, shall contract with a certified public accountant or public accountant to make an independent annual audit of the accounts and records of the Authority. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the California Government Code, as amended from time to time, and shall conform to generally accepted auditing standards. When such an audit of an account and record is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with each of the Members and with the county auditor of Riverside. Such report shall be filed within 12 months of the end of the Fiscal Year under examination. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants, in making an audit pursuant to this Section shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for the purpose. Section 6.03 Funds. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have the custody of and disburse Authority funds as neatly as possible in accordance with generally accepted accounting practices, and shall make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. Section 6.04 Annual Budget and Administrative Expenses. The Board of Directors shall adopt an annual budget for administrative expenses, which shall include all expenses not included in any financing issue of the Authority, annually prior to the beginning of each Fiscal Year. The estimated annual administrative expenses of the Authority shall be allocated by the Authority to the Members as appropriate. ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION Section 7.01 Term. This Agreement shall become effective as of the date first set forth above, and the Authority shall come into existence, on the date of execution and delivery hereof, and this Agreement shall thereafter continue in full force and effect until the later of December 1 2057 or the date on which all Indebtedness and other obligations of the Authority and the interest thereon shall have been paid in full or until adequate provision for such payment shall have been made in accordance with the instruments governing such Indebtedness, and no material contracts to which the Authority is a party remain in effect, unless earlier dissolved pursuant to Section 7.04 hereof. Section 7.02 Addition of Members. (a) Public Agencies possessing one or more of the powers specified in the first paragraph of the recitals to this Agreement may be added as parties to this Agreement, and become Members, upon the filing by such Public Agency with the Board of Directors of an instrument in form and substance satisfactory to the Board of Directors together with a certified copy of a resolution of its governing body, whereby the Public Agency (i) agrees to the provisions of this Agreement and (ii) requests to become a Member. In 45249478.1 10 reviewing an application for membership, the Board of Directors may reject said application based on the creditworthiness of the applicant or on any other matter which has affected or may affect the creditworthiness of the applicant and which may thereby affect the creditworthiness of the Authority. The Board of Directors also reserves the right to reject an applicant if the Board of Directors determines that the membership of such applicant would be detrimental to the effectiveness of the Authority or would interfere with the realization of the Authority's goals and purposes. (b) Notwithstanding Section 7.02(a) hereof, no such Public Agency shall become a Member until (i) its admission is approved by a vote of a majority of the Board of Directors voting on the matter and (ii) such Public Agency deposits or agrees to deposit with the Authority an amount equal to such share of the costs and expenses incurred by the Authority prior to the date of admission of such Public Agency as a Member as shall be determined by the Board of. Directors. (c) Upon satisfaction of the provisions of Section 7.02(a) and 7.02(b) hereof, such Public Agency shall be a Member for all purposes of this Agreement, and the instrument provided pursuant to Section 7.02(a) hereof shall become a part of the official records of the Authority. Neither the effectiveness of such membership nor such instrument shall constitute an amendment or modification of this Agreement for purposes of Section 8.05 hereof. Section 7.03 Withdrawal or Exclusion of a Member. (a) Any Member may withdraw from the Authority upon the following conditions: (i) the Member shall have filed with the Board of Directors a certified copy of a resolution of its governing body expressing its desire to so withdraw and (ii) if the Authority, prior to the filing of such resolution, shall have incurred any obligation payable from contributions, payments or advances in accordance with Section 6.01 hereof, which obligation matures after the date of such filing, the withdrawing Member shall have paid, or made arrangements satisfactory to the Board of Directors to pay to the Authority its pro rata portion of such obligation. (b) Upon compliance with the conditions specified in Section. 7.03(a) hereof, the withdrawing Member shall no longer be considered a Member for any reason or purpose under this Agreement and its rights and obligations under this Agreement shall terminate. The withdrawal of a Member shall not affect any obligations of such Member under any contract between the withdrawing Member and the Authority. (c) Any Member which has (i) defaulted under a contract with the Authority, or (ii) failed to pay any required contributions, payments or advances in accordance with Section 6.01 hereof, may have its rights under this Agreement terminated and may be excluded from participating in the Authority by a vote of a majority of the members of the Board of Directors voting on the matter (excluding from voting the member(s) of the Board of Directors, if any, representing the defaulting Member). Any excluded Member shall continue to be liable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. 45249478.1 11 No withdrawal from membership pursuant to Sections 7.03(a) and 7.03(b) hereof or exclusion from participation pursuant to Section 7.03(c) hereof shall constitute an amendment or modification of this Agreement for purposes of Section 8.05 hereof. Section 7.04 Dissolution. With the approval of the Board of Directors, the Authority may be dissolved, if at the time of such dissolution the Authority has no Indebtedness outstanding and is not a party to any contract remaining in effect (unless adequate provision shall have been made for the discharge of such contract). Upon the dissolution or termination of the Authority, and after payment or provision for payment, all debts and liabilities, the assets of the Authority shall be distributed to the Members in such manner as shall be determined by the Board of Directors. ARTICLE VIII MISCELLANEOUS PROVISIONS Section 8.01 Notices. (a) Any notice, demand or request to any Member provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to the person designated by such Member upon the commencement of its membership in the Authority. (b) A Member may, at any time, by written notice to each other Member and the Authority, designate different persons or different addresses for the giving of notices, demands or requests to it hereunder. (c) Any notice, demand or request to the Authority provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to Diamond Bar Utility Authority, c/o City of Diamond Bar, 21825 E. Copley Drive, Diamond Bar, California 91765, or at the notice address most recently provided by said Member pursuant to this Section 8.01. (d) The Authority may, at any time, by written notice to each Member, designate a different or additional person or a different address for giving notices, demands or requests to it hereunder. Section 8.02 Section Headings. All section headings in this Agreement are for convenience of reference only and are not to be construed as modifying or governing the language in the section referred to or to define or limit the scope of any provision of'this Agreement. Section 8.03 Consent. Whenever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section 8.04 Law Governing. This Agreement is made in the State of California under the constitution and laws of the State of California, and is to be so construed. Section 8.05 Amendments. This Agreement may be amended at any time, or from time to time, except as limited by contract with the owners of Indebtedness issued or incurred by the 45249478.1 12 Authority, a Member or a Local Agency or by applicable regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by all then current Members either as required in order to carry out any of the provisions of this Agreement or for any other purpose. Section 8.06 Enforcement by Authority. The Authority is hereby authorized to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 8.07 Severability. In the event that any term, covenant or condition of this Agreement or the application of such term, covenant or condition shall be held invalid as to any person or circumstance by any court having jurisdiction in the premises, all other terms, covenants and conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless a court holds that the provisions are not separable from all other provisions of this Agreement. Section 8.08 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Members. No Member may assign any right or obligation hereunder without the written consent of the other Members. .The immediately preceding sentence shall not affect, in any respect, any right of assignment under any contract between any Member and the Authority. Section 8.09 Execution of Counterparts. This Agreement may be executed in any number of counterparts. All such counterparts shall be deemed to be originals and shall together constitute but one and the same instrument. 45249478.1 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized, on the day and year first set forth above. CITY OF DIAMOND BAR Mayor ATTEST: City Clerk REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR Chairperson ATTEST: Secretary 452494478.1 14 a RECORDING REQUESTED BY: CHICAGO TITLE AND WHEN RECORDED MAIL TO: FULBRIGHT & JAWORSK.I L.L.P. 865 South Figueroa Street, 29`h Floor Los Angeles, California 90017-4518 Attention: Don Hunt, Esq. SITE LEASE by and between the CITY OF DIAMOND BAR and CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Dated as of December 1, 2002 This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of the California Revenue and Taxation Code. This Document is recorded for the benefit of the City of Diamond Bar Public Financing Authority and such recording fee is exempt under Section 6103 of the California Government Code. "+45248850x2 SITE LEASE THIS SITE LEASE, dated as of December 1, 2002 (the "Site Lease"), is by and between the CITY OF DIAMOND BAR, a municipal corporation duly organized and existing under the Constitution and laws ofthe State of California (the "City"), as lessors, and the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, a j oint exercise ofpowers agency organized and existing under the laws of the State of California (the "Authority"), as lessee,- WITNESSETH: essee; WITNESSETH: WHEREAS, the City ofDiamond Bar (the "City") and the Redevelopment Agency ofthe City of Diamond Bar (the "Agency") have formed the Authority under and pursuant to a j oint exercise ofpowers agreement, dated as ofDecember 1, 2002, by and between the City and the Agency under the provisions of Articles 1 through 4 (commencing with section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"); and WHEREAS, the Authority is authorized under the Marks -Roos Local Bond Pooling Act of 1985 (commencing with section 6584 ofthe Act) to incur indebtedness to finance public capital improvements (as such term is defined in the Act) and to lease and lease back such public capital improvements to its members and to others; and WHEREAS, the Authoritywishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior CenterProject) (the "Bonds") to provide forthe financing ofthe community/senior center project (the "Project") as well as other public improvements within the City; WHEREAS, the Citywill lease to the Authorityits fee interest in certain real property designated for the Project (the "Site") pursuant to this Site Lease; and WHEREAS, the Authority, concurrentlywith the execution ofthis Site Lease, will lease the Site and improvements to be constructed thereon, including the Proj ect, back to the City pursuant to a Lease Agreement, dated as ofDecember 1, 2002 (the "Lease"), in consideration forBase Rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Authority and the City have duly authorized the execution and delivery ofthis Site Lease; NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows: #f45248850v AL NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED, as follows: SECTION 1. Site Lease. The City hereby leases the Site to the Authority and the Authority hereby leases the Site from the City, on the terms and conditions hereinafter set forth, consisting of those certain parcels of real property situated in Los Angeles County, State of California, and described in Exhibit A. SECTION 2. Term. The term of this Site Lease shall commence on December 1, 2002, and shall end on _ 1, , unless such term is extended or sooner terminated as hereinafter provided. If, on 1, , the Indenture shall not be discharged by its terms or if the rental payable under the Lease shall have been abated at any time and for any reason, then the term of this Site Lease shall be extended until ten (10) days after the Indenture shall have been discharged. If, prior to 1, , the Indenture shall be discharged by its terms, the terra of this Site Lease shall thereupon end. SECTION 3. Rental. The City acknowledge receipt from the Authority as and for rental hereunder the proceeds of the Bonds in an amount sufficient to finance the Project and other public improvements within the City, on or before the date of delivery of this Site Lease. SECTION 4. Pint ose. The Authority shall use the Site solely for the purpose of acquiring leasehold title to the Site and leasing the Site and the Project to the City pursuant to the Lease and for such purposes as may be incidental thereto; provided, however, that in the event of default by the City under the Lease the Authority and its assigns may exercise the remedies provided in the Lease. SECTION 5. Reserved. SECTION 6. Assignment and Subleases. The Authoritymay not assign its rights under this Site Lease or sublet the Site, except as provided in the Lease, without the written consent of the Credit Entity and the City. SECTION 7. Right of Entry. The City reserve the right for any of its duly authorized representatives to enter upon the Site at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. SECTION S. Termination. The Authority agrees, upon the termination of this Site Lease, to quit and surrender the Site in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and the Authority and the City agree that any permanent improvements and structures existing upon the Site at the time of the termination of this Site Lease shall remain thereon and title thereto shall be vested in the City. SECTION 9. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this S ite Lease , which default continues for thirty (3 0) days following notice and demand for correction thereofto the Authority and the City #452488502 2 may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease shall be deemed to occur as a result thereof, provided, however, that the Base Rental (as . defined in the Lease) shall continue to be paid to the Trustee. SECTION 10. Quiet En'o ent. The Authority at all times during the term ofthis Site Lease shall peaceably and quietly have, hold and enjoy all of the Site subject to the provisions of the Lease. SECTION 11. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority are solely liabilities of the Authority and the City hereby release each and every, member, director, officer, employee and agent of the Authority of and from any personal or individual liability under this Site Lease. No member director, officer, employee or agent of the Authority shall at any time or under any circumstances be individually or personally liable under this Site Lease for anything done or omitted to be done by the Authority hereunder. SECTION 12. Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Site (including both land and improvements) and not paid by the City pursuant to the Lease. SECTION 13. Eminent Domain. In the event the whole or any part of the Site is taken by eminent domain proceedings, the interest of the Authority hereunder shall be recognized and is hereby determined to be the amount of the then unpaid principal of and interest on any then outstanding Bonds and all other obligations related to or in connection therewith, subject to the provisions of, and as described and provided in, the Lease, and the balance of the award, if any, shall be paid to the City as its interests shall appear. SECTION 14, Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 1 S. Section Headinus. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease. SECTION 16. Execution., This Site Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same lease. #4524885OV2 3 IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF DIAMOND BAR, as Lessor By Mayor CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, as Lessee 10 State of California ) ) SS County of Los Angeles ) On before me, personally appeared / / personally known to me, or / / proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by lis/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary 445248850x2 State of California ) ) SS County of Los Angeles ) On before me, personally appeared / / personally known tome, or / / proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signaturc(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Scall Signature of Notary 945245$50x2 State of California ) ) SS County of Los Angeles ) On before me, personally appeared / / personally known to me, or /_/ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. . WITNESS zxay hand and official seal. [Seal] Signature of Notary ##4524885M EXHIBIT A LEGAL DESCRIPTION OF THE SITE RECORDING REQUESTED BY: CHICAGO TITLE AND WHEN RECORDED MAIL TO: FULBRIGHT & JAWOR.SKI L.L.P. 865 South Figueroa Street, 29' Floor Los Angeles, California 90017-4518 Attention: Don Hunt, Esq. LEASE AGREEMENT by and between the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY and the CITY OF DIAMOND BAR RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Dated as of December 1, 2002 This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of the California Revenue and Taxation Code. This Document is recorded for the benefit of the City of Diamond Bar Public Financing Authority and such recording fee is exempt under Section 6103 of the California Government Code. #45248859v SECTION 1.01. SECTION 2.01. SECTION 2.02. SECTION 2.03. SECTION 2.04. SECTION 2.05. SECTION 2.06. SECTION 2.07. SECTION 2.08. SECTION 2.09. TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Definitions.................................................2 ARTICLE H THE LEASED PROPERTY Lease of the Leased Property ................................... 5 Quiet Enjoyment ............................................ 5 Right of Entry and Inspection .. 6 Prohibition Against Encumbrance or Sale .......................... 6 Liens................ ................................ ..6 Substitution or Removal of Leased Property ....................... 6 Changes to the Leased Property ................................. 8 Title to the Leased Property .................................... 8 Acquisition of Additional Property ........................... 8 ARTICLE III TERM OF THE LEASE SECTION 3.01. Commencement of the Lease ................................... 8 SECTION 3.02. Termination of the Lease ...................................... 8 ARTICLE IV USE OF PROCEEDS; POSSESSION OF THE LEASED PROPERTY; TAX COVENANTS SECTION 4.01. Use of Proceeds ............................................. 9 SECTION 4.02. Possession of the Leased Property ............................... 9 SECTION 4.03. Tax Covenants .............................................. 9 SECTION 4.04. Continuing Disclosure ................................... I ... 12 ARTICLE V RENTAL PAYMENTS SECTION 5.01. Rental Payments ............................................ 13 SECTION 5.02. Annual Budgets; Reporting Requirements ....................... 15 SECTION 5.03. Application of Rental Payments ............................... 15 SECTION 5.04. Rental Abatement ........................................... 16 SECTION 5.05. Prepayment of Rental Payments ................................ 16 SECTION 5.06. Obligation to Make Rental Payments ........................... 16 #45248859v H ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES SECTION 6.01. Maintenance of the Leased Property by the City ................... 17 SECTION 6.02. Tastes, Other Governmental Charges and Utility Charges ............ 17 SECTION 6.03. Insurance.................................................17 SECTION 6.04. Advances ................................................. 19 ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION SECTION 7.01. Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds .........................................................................•..19 ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY SECTION 8.01. Disclaimer of Warranties ...................................... 20 SECTION 8.02. Vendor's Warranties ...................................... 20 SECTION 8.03. Use of the Leased Property ................................. 21 ARTICLE TX SECTION 9.01. Assignment by Authority ..................................... 21 SECTION 9.02. Assignment by City ......................................... 22 SECTION 9.03. Indemnification ......................................... 22 ARTICLE X DEFAULT SECTION 10.01. Default ................................................... 22 SECTION 11.01. SECTION 11.02. SECTION 11.03. SECTION 11.04. SECTION 11.05. SECTION 11.06. SECTION 11.07. SECTION 11.08. SECTION 11.09. SECTION 11.10. SECTION 11.11. ARTICLE XI MISCELLANEOUS Notices................................................ .24 Binding Effect ............................................. 25 Third Party Beneficiaries ................... ............... 25 Net -Net -Net Lease .......................................... 25 Amendments..............................................26 Reserved................................................26 Partial Invalidity .................................... .... . 27 California Law .......................................... . 27 Section Headings ........................................ .27 Execution ........................ .27 Consent of Credit Entity [and Confirming Bank] Required......... 27 #45248859v iii EXHIBIT A - Description of Real Property And of Project A-1 EXHIBIT B - Aggregate Annual Base Rental Payment Schedule ....................... B-1 LEASE AGREEMENT This Lease Agreement (the "Lease"), is executed and entered into as of December 1, 2002, by and between the CityofDiamond BarPubhc Financing Authority, ajoint powers authority, duly created and validly existing under the Constitution and laws ofthe State ofCalifornia (the "Authority'), as lessor, and the City of Diamond Bar, a municipal corporation duly organized and existing under the Constitution and laws of the State of Califoniia (the "City"), as lessee; WITNESSETH: WHEREAS, the Authoritywishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of the community/senior center project (the "Project") as well as other public improvements within the City; WHEREAS, the Citywill lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to a Site Lease, dated as ofDecember 1, 2002 (the',"Site Lease"); and WHEREAS, the Authority, concurrentlywith the execution ofthe Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the Citypursuant to this Lease, in consideration for Base Rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into ofthis Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease. NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereofhave the meanings deed herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. All other capitalized terms used herein without definition shall have the meanings as set forth in the Indenture. #45248859Y 2 Additional Rental "Additional Rental" means all amounts payable by the City pursuant to Section 5.01(b). Author& "Authority" means the City ofDiamond Bar Public Financing Authority, a joint powers authority duly created and lawfully existing under the Constitution and laws of the State. Base Rental 5.01(a). CY "Base Rental" means all amounts payable by the City as Base Rental pursuant to Section "City"means the City ofDiamond Bar, a mumcipal corporation duly organized and existing under the Constitution and laws of the State. fConfirminz Bank "Confirming Bank" means (a) , and (b) any Alternate Confirming Bank.) Credit Entity "Credit Entity' means , as the issuer ofthe Credit Facilitybeing delivered on the Closing Date with respect to the Bonds and the issuer of any Alternate Credit Facility delivered under the Indenture from time to time. Hazardous Substances "Hazardous Substances" means any substances, wastes, pollutants or contaminants now or hereafter included in such (or any similar) term under any federal, state or local statute, regulation, ordinance or code now existing or hereafter enacted or amended. Indenture "Indenture" means that certain Indenture dated as of December 1, 2002, by and between the Authority and U. S. Bank, N.A., as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith. #45248859v 3 Insurance Consultant ' Ins=ce Consultant" means an individual or firm employed by the City as an independent insurance consultant, experienced in the field of risk management. Lease "Lease" means this Lease Agreement dated as ofDecember 1, 2002, by and between the City and the Authority, as originally executed and as it may from time to time be amended or supplemented in accordance herewith. Leased Property "Leased Property" means the Site together with improvements to be constructed thereon, including the Project, as described in Exhibit A hereto. Net Proceeds "Net Proceeds" means anyinsurance proceeds or condemnation award paid with respect to the Leased Propertyremaining after payment therefrom of all expenses incurred in the collection thereof Opinion of Counsel "Opinion ofCounsel" means awritten opinion ofcounsel ofrecognized national standing in the field of law relating to municipal bonds, appointed and paid by the City. Permitted Encumbrances "PerniittedEncumbrances"meansasofanyparticulartime: (i) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to Section 6.02, permit to remain unpaid; (ii) this Lease and the Site Lease; (iii) the Assignment Agreement; (iv) any right or claim ofanymechanic, laborer, materiahnan, supplier or vendor filed orperfected in the mannerprescribed by law afterthe date ofthis Lease; (v) easements, rights ofway, mineral rights, drillingrights and other rights, reservations, covenants, conditions orrestrictions which exist of record as ofthe date of initial issuance of the Bonds and which an independent third party certifies in writing will not materially impair the use ofthe Leased Propertybythe City; and (vi) easements, rights ofway, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the date ofrecordation of this Lease and to which the Authority and the City consent in writing. Project "Project" means the community/senior centerproj ect to be acquired and constructed on the Site. #45248859v 4 Removal "Removal" means the release of all or a portion of the Leased Property from the leasehold hereof as provided in Section 2.06. Site "Site" means'that certain real property described in Exhibit A to the Site Lease. Substituted Property "Substituted Property" shall have the meaning given to such term in Section 2.06. Substitution "Substitution" means the release of all or a portion of the Leased Property from the leasehold hereof, and the lease of substituted real property and improvements hereunder as provided in Section 2.06. Trustee "Trustee" means U.S. Bank, N.A., a national banking association existing under and by virtue of the laws of the United States of America, the trustee acting in its capacity as such under the Indenture, or any successor as therein provided. ARTICLE II THE LEASED PROPERTY SECTION 2.01. Lease ofthe Leased.ProRertv. The Authorityhereby leases to the City, and the City hereby rents and hires from the Authority, the Leased Property on the conditions and terms hereinafter set forth. The City hereby agrees and covenants that during the term hereof, except as hereinafter provided, it will use the Leased Property for public purposes so as to afford the public the benefits contemplated hereby and to permit the Authority to carry out its agreements and covenants contained herein and in the Indenture, and the City hereby further agrees and covenants that during the term hereof that it will not abandon or vacate the Leased Property. SECTION 2.02. Quiet Enj o ment. The parties mutually covenant that the City, so long as it observes and performs the agreements, conditions, covenants and terms required to be observed or performed by it contained herein and is not in default hereunder, shall at all times during the term hereof peaceably and quietlyhave, hold and enjoythe Leased Property without suit, trouble or hindrance from the Authority. #45248859v 5 SECTION 2.03. Right ofEntry_and Inspection. The Authority shall have the right to enter the Leased Property and inspect the Leased Property during reasonable business hours (and in emergencies at all times) for anypurpose connected with the Authority's rights or obligations hereunder and for all other lawful purposes. SECTION 2.04. Prohibition Against Encumbrance or Sale. The City and the Authority will not create or suffer to be created any mortgage, pledge, lien, charge or encumbrance upon the Leased Property, except Pennitted Encumbrances. The City and the Authority will not sell or otherwise dispose ofthe Leased Property or any property essential to the proper operation ofthe Leased Property, except as otherwise provided herein. SECTION 2.05. Liens. In the event the City shall at anytime during the term hereof cause any improvements to the Leased Property to be constructed or materials to be supplied in or upon or attached to the Leased Property, the City shall pay or cause to be paid when due all sums ofmoneythat maybecome due orpurporting to be due for any labor, services, materials, supplies orequipment furnished or alleged to have been fiarnished to or for the City in, upon, about or relating to the Leased Property and shall keep the Leased Property free of any and all liens (except for Permitted Encumbrances) against the Leased Property or the Authority's interest therein. In the event any such lien attaches to the Leased Property, the City shall cause such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due. If any such lien shall be reduced to final judgment and such judgment or anyprocess as maybe issued for the enforcement thereof is not promptly stayed, or ifso stayed and such staythereafter expires, the City shall forthwith pay and discharge or cause to be paid and discharged such judgment. The City shall, to the maximum extent permitted by law, indemnify and hold the Authority, the Trustee, the Credit Entity [and the Confirming Bank] and their respective directors, officers and employees harmless from, and defend each ofthem against, anyclaim, demand, loss, damage, liability or expense (including attorneys' fees) as a result ofany such lien or claim of lien against the Leased Property or the Authority's interest therein. SECTION 2.06. Substitution or Removal of Leased Pro e�rty. (a) The City may amend this Lease to substitute additional real property and/or improvements (the "Substituted Property") for existing Leased Property, or to remove real property or improvements from the definition ofLeased Property, upon compliance with all ofthe conditions set forth in subsection (b). After a Substitution or Removal, the part of the Leased Property for which the Substitution orRemoval hasbeen effected shall be released from the leasehold hereunder and all right, title and interest in and to such Leased Property shall vest in the City. In connection with such release ofpart ofthe Leased Property, the Authority shall execute such conveyances, deeds, and other documents, and shall take or cause to be taken all actions that are necessary to provide that such released Leased Property constitutes avalid legal parcel, the ownership ofwhich is recordable in the real property records ofthe County ofLos Angeles for which a title insurance policymaybe legally obtained, as maybe necessaryto effect such vesting of record. #{45248859v (b) No Substitution or Removal shall take place hereunder until the Citydelivers to the Authority, the Credit Entity, [the Confirming Bank] and the Trustee the following: (1) A Certificate of the City containing, in the event of a Removal, a description of all orpart ofthe Leased Propertyto be released and; in the event of a Substitution, a description ofthe Substituted Propertyto be substituted in its place and a certification that the remaining useful life of the Substituted Property is not less than remaining term of the Lease; (2) A Certificate ofthe City stating that the fair rental value of the Leased Property after a Substitution or Removal, in each year during the remaining term of this Lease is at least equal to the Base Rental payments in each such year attributable to the Leased Property prior to said Substitution or Removal, as determined by the City on the basis of an appraisal ofthe Leased Property performed by a qualified, independent consultant after said Substitution or Removal; (3) An Opinion of Counsel to the effect that the amendments hereto contemplating Substitution or RemovaI have been duly authorized, executed and delivered and constitute the valid and binding obligations ofthe City and the Authority enforceable in accordance with their terms; (4) In the event ofa Substitution, a policy oftitle insurance in an amount equal to the same proportion ofthe principal amount as the Base Rental payments for the Substituted Property bears to the total Base Rental payments, insuring the City's leasehold interest in the Substituted Property(except any portion thereofwhich is not real property) subject to Permitted Encumbrances, together with an endorsement thereto making said policypayable to the Trustee for the benefit of the Owners of the Bonds, the Credit Entity [and the Confirming Bank]; (S) Inthe event ofa Substitution, an opinion ofthe City Attorney ofthe City to the effect that the exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere with the beneficial use and occupancyofthe Substituted Property described in such policy by the City for the purposes of leasing or using the Substituted Property, (6) An Opinion of Counsel that the Substitution or Removal does not cause the interest on the Bonds to fail to be excluded from the gross income ofthe Owners thereof for federal income tax purposes; (7) Evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 with respect to the Substituted Property; (S) Evidence that the City has delivered to any rating agency then rating the Bonds copies ofthe certificates and appraisal described in clauses (1) and (2) above, and that the #45248859v 7 rating agencyhas indicated that such substitution, in and ofitself, will not result in a lower rating on the Bonds; and (9) Written Consent of the Credit Entity [and the Confirming Bank]. SECTION 2.07. Changes to the Leased Property. Subj ect to Sections 2.04, 2.05 and 4.02 and with the prior written consent ofthe Credit Entity [and the Confirming Bank], the City shall, at its own expense, have the right to remodel the Leased Property or to make additions, modifications and improvements to the Leased Property. All such additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in anyway damage the Leased Property or cause it to be used for purposes other than those authorized underthe provisions ofstate and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value which is at least equal to the value of the Leased Property irnmediatelyprior to the malting of such additions, modifications and improvements. SECTION 2.08. Title to the Leased Pro e . During the term ofthis Lease, title to the Leased Property shall remain in the City. SECTION 2.09. AGuisition ofAdditional Property. The City covenants to use its best effort to acquire such additional real property as maybe necessary or appropriate for the operation ofthe Leased Property, and, by executing appropriate amendments, to lease such property to the Authority pursuantto an appropriate ground lease and to sublease such property from the Authoritypursuant to this Lease. ARTICLE III TERM OF THE LEASE SECTION 3.01. Commencement ofthe Lease. The term hereof shall commence as of December 1, 2002, or the date this Lease or a memorandum thereof is recorded, whichever is later, and shall end on 1, , unless such term is sooner terminated or is extended as hereinafter provided. If on 1, , the Indenture shall not be discharged by its terms or if the rental payable hereunder shall have been abated at any time and for any reason, then the terra ofthis Lease shall be extended until ten (10) days after all Bbnds shall be fully paid. If prior to 1, the Indenture shall be discharged by its terms, the term of this Lease shall thereupon end. SECTION 3.02. Termination ofthe Lease. This Lease will terminate upon the earlier of either of the following events: #452488s9v (a) a default bythe City and the Authority's election to terminate this Lease under Article X; or (b) the payment by the City of all Base Rental payments, Additional Rental and all other amounts authorized or required to be paid by it hereunder. ARTICLE IV USE OF PROCEEDS; POSSESSION OF THE LEASED PROPERTY; TAX COVENANTS SECTION 4.01. Use ofProceeds. The parties hereto acknowledge and agree that the proceeds of the Bonds will be used to (i) provide for the financing of the Project and other public improvements within the City; and (ii) pay for Costs of Issuance. SECTION4.02. Possession ofthe Leased PMThe Citycurrentlyhas possession ofthe Site and upon completion ofthe Project will have possession ofthe Leased Propertyunderthe terms and provisions of this Lease. SECTION 4.03. Tax Covenants. (a) Definitions. When used in this Section, the following terms have the following meanings: "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Gross Proceeds" means any proceeds as defined in section 1.148-1(b) of the Tax Regulations, and any replacement proceeds as defined in section 1.148-1(c) of the Tax Regulations, of the Prior Bonds and the Bonds. "Investment "has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Nonpurpose Investment " means any investment property, as defined in section 148(b) ofthe Code, in which Gross Proceeds ofthe Bonds are invested and that is not acquired to carry out the governmental purposes of the Bonds. "RebateAmount"has the meaning set forth in section 1.148-1(b) ofthe Tax Regulations. "Tax Regulations"means the proposed, temporary and final Income Tax Regulations promulgated pursuant to sections 103 or 141-150 of the Code. #45248$59v 9 "Yield" of (1) any investment has the meaning set forth in section 1.148-5 of the Tax Regulations; and (2) the Bonds has the meaning set forth in section 1.148-4 ofthe Tax Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or any propertythe acquisition, construction or improvement ofwhich is to be financed directly or indirectly with Gross Proceeds) in a manner that i€made or omitted, respectively, would cause the interest on any ofthe Bonds to fail to be excluded pursuant to section 103(a) ofthe Code from the gross income ofthe owners thereoffor federal income tax purposes. Without lirhiting the generality ofthe foregoing, unless and until the Cityreceives a written opinion ofBond Counsel to the effect that failure to cornplywith such covenant will not adversely affect the exclusion from gross income of interest on anyBond, the City shall comply with each ofthe specific covenants in this Section, and agrees to comply with the provisions of the Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. (c) No Private Use or Private Payments. Except as would not cause any Bonds to become a "private activitybond" within the meaning of section 141 ofthe Code and the Tax Regulations and rulings thereunder, the City shall at all times prior to the final retirement of the Bonds: (1) require that one ormore state or local governmental agencies exclusively own, operate and possess all property the acquisition, construction or improvement ofwhich is to be financed or refinanced directly or indirectly with Gross Proceeds ofthe Bonds, and not use or permit the use ofsuch Gross Proceeds (including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by anyperson or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not permit the direct or indirect imposition of any charge or otherpayment on or otherwise with respect to the use by anyperson or entity who is treated as using Gross Proceeds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectlywith such Gross Proceeds, other than taxes of general application within the Cityor interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except as would not cause any Bond to become a "private activity bond" within the meaning of section 141 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not use or permit the use of Gross Proceeds ofthe Bonds to make or finance loans to anyperson or entity other than a state or local government. For purposes ofthe foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if, (1) property acquired, constructed or #45248859v 10 improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (2) capacityin or service from suchproperly is committed to such person or entity, under a take -or -pay, output or similar contractor arrangement; or (3) indirect benefits, orburdens and benefits ofownership, of such Gross Proceeds or anyproperty acquired, constructed or improved with such Gross Proceeds are otherwise transferred in a transaction that is the economic equivalent of a loan. (e) Not _to Invest at Higher Yield. Except as would not cause the Bonds to become "arbitrage bonds" within the meaning of section 148 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity ofthe Bonds directly or indirectly invest or pen -nit the investment of Gross Proceeds in any Investment, if as a result of such investment the Yield on Investments acquired with Gross Proceeds, whetherthen held orpreviously disposed of, materially exceeds the Yield ofthe Bonds within the meaning ofsaid section 148. Forpurposes ofthis paragraph, Yield on Investments shall be determined in accordance with the provisions of section 1.148-5 of the Tax Regulations (which, under certain circumstances, requires Yield to be determined on less than all such Investments. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) ofthe Code and the Tax Regulations and rulings thereunder, the City shall not take or omit to take, or permit, any'action that would cause any Bonds to be treated as "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and rulings thereunder. (g) Information Report. The City shall timely file or cause to be filed any information required by section 149(e) of the Code with respect to the Bonds with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate. Except to the extent otherwise provided in section 148(f) ofthe Code and the Tax Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is retired. However, to the extent permitted bylaw, the Citymaycommingle Gross Proceeds ofBonds with othermoneyofthe City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate or cause to be calculated the Rebate Amount in accordance with rules set forth in section 148(f) ofthe Code and the Tax Regulations and rulings thereunder, and to provide promptly to the City a copy ofsaid calculation, which the City shall maintain with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. #45248859v 11 (3) In orderto assure the excludability ofthe interest on Bonds from the gross income of the owners thereof for federal income tax purposes, the City shall make rebate payments at the times and in the amounts as are or may be required by section 148(f) ofthe Code and the Tax Regulations and rulings thereunder, which payments shall be accompanied by Form 8038-T or such other forms and information as is ormaybe requiredby section 148(f) of the Code and the Tax Regulations and rulings thereunder; provided, however, that the liability ofthe City to make any such payments shall be limited to amounts received by it for such purpose pursuant to this Agreement. (4) The Cityshall cause the exercise of reasonable diligence to assure that no errors are made in the calculations and payments required byparagraphs (2) and (3), and if an error is made, to discover and promptly correct such errorwithin a reasonable amount oftime thereafter (and in all events within one hundred eighty (180) days after discoveryofthe error), including payment to the United States ofany additional Rebate Amount owed to it, interest thereon, and any penalty imposed under section 1.148-3(h) of the Tax Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not enter into anytransaction that reduces the amount required to be paid to the United States pursuant to section 148(f) ofthe Code because such transaction results in a smallerprofit or a larger loss than would have resulted ifthe transaction had been at arm's length and the Yield of the Bonds -had been irrelevant to each party. 0) Bonds Not Hedge Bonds. (1) The City represents that the Bonds are not and will not become "hedge bonds" within the meaning of section 149(g) of the Code. (2) Without limitation ofclause (i) above, (A) on the date of issuance ofthe Bonds the City reasonably expects that at least 85% ofthe spendable proceeds ofthe Bonds will be expended within the three-yearperiod commencing on such date of issuance, and (B) no more than 50% of the proceeds ofthe Bonds will be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (k) Elections. The City shall make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as the City (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Tax Certificate or similar or other appropriate certificate, form or document. SECTION 4.04. Continuing Disclosure. The Cityhereby covenants and agrees that it will comply with the continuing disclosure requirements promulgated under Securities and Exchange Commission Rule 15c2 -12(b)(5), as it may from time to time hereafterbe amended or supplemented. The City further covenants and agrees that it will comply with and carry out all of the provisions ofthe Continuing Disclosure Agreement. Notwithstanding anyotherprovision ofthis Lease, failure ofthe City #45248859v 12 to complywith the Continuing Disclosure Agreement shall not be considered an Event ofDefault hereunder, however, the Trustee (as assignee ofthe Authority under the Indenture) may (and, at the request of any participating underwriter or the Owners of at least 25 % aggregate principal amount of Outstanding Bonds, the Credit Entity [or the Confirming Bank], shall) or anyBondownermaytake any such actions as maybe necessaryand appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section 4.04. ARTICLE V RENTAL PAYMENTS SECTION 5.01. Rental Payments. The City agrees to pay to the Authority, its successors or assigns, without deduction or offset of any l ind, as rental for the use and occupancy of the Leased Property, the following amounts at the following times: (a) Base Rental. The City shall pay to the Authority as Base Rental hereunderrental payments with interest andprincipal components in accordance with the Base Rental Payment Schedule set forth in Exhibit B attached hereto and made a part hereof. Base Rental Payments shall be made by the City on the twenty-fifth day ofthe month immediately preceding each Bond Payment Date (the "Lease Payment Date'), which shall be sufficient in both time and amount to paywhen due the principal ofthe Bonds, as set forth in Exhibit B hereto, as such Exhibit B maybe -amended and supplemented from time to time, together with interest on the Bonds to be calculated by the Trustee as provided in Section 2.02.A of the Indenture. The interest components ofthe Base Rental payable by the Cityhereunder shall be paid bythe City as and shall constitute interest paid on the principal components ofthe Base Rental payable by the City hereunder. Payment of Base Rental and Additional Rental for each rental payment period during the term hereof shall constitute the total rental for such rental payment period, and shall be paid bythe City in each rental payment period for and in consideration of the right to the use and occupancy, and the continued quiet enjoyment, ofthe Leased Property during the rental payment period for which such rental is paid. The City shall provide written notice to the Trustee, the Credit Entity, the [Conf rming Bank] and the Authority at least five (5) Business Days prior to any Lease Payment Date upon which the City expects to be unable to appropriate and pay the Base Rental payment due on such Lease Payment Date, informing the Trustee and the Authority of such inability to appropriate and pay. If the term of this Lease shall have been extended pursuant to Section 3.01, Base Rental payments shall continue to be due on Lease Payment Dates, and payable as hereinabove described, continuing to and including the date oftermination of this Lease. Upon such extension ofthis Lease, the principal and interest components ofthe Base Rental shall be established so that the principal components will inthe aggregate be sufficient to pay all unpaid principal components with interest components sufficient to pay all unpaid interest components plus interest on the extended principal components at a rate equal #45248859v 13 to the rate of interest on the principal component ofthe Base Rental payable on February 1 ofthe year after the date of such extension. The parties hereto have agreed and determined that the Base Rental payments shown in the Base Rental Payment Schedule set forth in Exhibit B hereto represent the fair market value of the Leased Property. In making such determination, consideration has been given to the costs ofthe Leased Property, the fair market value thereof, the other obligations ofthe parties hereunder, the uses and purposes which maybe served bythe Leased Property and the benefits therefrom which will accrue to the City, its residents and the general public. Each installment ofBase Rental and Additional Rental payable hereunder shall be paid in lawful money ofthe United States ofAmerica to or upon the order ofthe Authority at the office ofthe Trustee. To the extent permitted by law, any such installment ofBase Rental or Additional Rental accruing hereunder which shall not be paid when due shall bear interest at the rate equal to the interest rate applicable to the delinquent installment ofBase Rental or, in the case ofAdditional Rental (other than amounts owing to the Credit Entity under the Reimbursement Agreement [and to the Confirming Bank under the Confirmation Agreement] ), the interest rate on the Bonds on the date the Additional Rental was not paid and in the case of amounts owing to the Credit Entity under the Reimbursement Agreement [or to the Confirming Bank under the Confirmation Agreement], at the rate of interest set forth in the Reimbursement Agreement [or the Confirmation Agreement], as applicable. All such delinquent installments ofBase Rental and the interest thereon shall be deposited in the Lease Payment Account of the Debt Service Fund. All such delinquent installments ofAdditional Rental and interest thereon shall be paid to the order ofthe Authority, the Trustee, the Credit Entity [or the Confirming Bank], as applicable. Notwithstanding any dispute between the Authority, or the Trustee and the City, the City shall make all rental payments when due hereunder without deduction or offset ofany kind and shall not withhold any rental payments pending the final resolution of such dispute. (b) AdditionalRent. The City shall pay to the Authority as Additional Rental hereunder such amounts in each year as shall be requiredbythe Authority for the payment in full ofpayments'to the Credit Entity required bythe Reimbursement Agreement [and payments to the Confirming Bank required bythe Confirmation Agreement] (other than reimbursement for draws on the Credit Facility [or Confirming Letter of Credit] to pay Base Rental or constituting Tender Advances (as defined in the Reimbursement Agreement)), all costs and expenses incurred bythe Authority, and the Trustee in connection with the execution, performance or enforcement hereof or any assignment hereof, ofthe Indenture and ofthe lease ofthe Leased Propertyto the City, including but not limited to payment of all fees, costs and expenses and all administrative costs ofthe Authority, and the Trustee in connection with the Leased Property, the Lease, and the Indenture and all taxes, assessments and governmental charges ofanynature whatsoever hereafter levied or imposed by any governmental authority against the Authority, the Leased Property, or the rentals and the other payments required to be made by the City hereunder. Such Additional Rental shall be billed to the Cityby the Authority, or the Trustee from time to time, together with a statement certifying that the amount so billed has been paid by the Authority, or the Trustee for one or more of the items above described, or that such amount is then payable by the Authority, or the Trustee for one or more of such #45248859v 14 items, and all amounts so billed shall be due and payable bythe City within thirty (30) days after receipt of each bill therefor by the City. SECTION 5.02. AnnualBu ets, Reporting ftuirements. The Citycovenants to take action as maybe necessaryto include all such rental payments due hereunder in its annual budgets and to make the necessary annual appropriations for all such rental payments. For this budgetary purpose, and while the Bonds bear interest at the Variable Rate, the City shall assume an interest component for any Fiscal Year equal to the average interest rate borne by the Bonds during the 12 months preceding the time of consideration, plus [250] basis points. The City shall furnish to the Trustee at least 15 days before final adoption of the proposed budget for each Fiscal Year a certificate stating that it has included in the proposed budget all Base Rental and Additional Rental due hereunder in the Fiscal Year covered by such proposed budget and following adoption ofthe final budget acertificate stating that the Base Rental and Additional Rental was included in the final budget as adopted. The City shall file with the Trustee the certificate regarding adoption ofthe final budget by July 1 of each year unless the City is permitted by applicable law to adopt its final budget after such date, and has in fact not adopted its final budget by July 1. in which event, the Citywill file with the Trustee byJuly I a certificate stating the specified later date by which the City may adopt its final budget under applicable law and will file with the Trustee by such specified later date such certificate following such adoption. To the extent that the amount of any such payment becomes known after the adoption of the annual budget, such amounts shall be included and maintained in such budget as amended. The City covenants to tape such action as is necessaryto include such amounts in a supplemental budget ofthe City. The covenants on the part ofthe City herein contained shall be deemed to be and shall be construed to be ministerial duties imposed by law and it shall be the ministerial duty of each and everypublic official ofthe City to take such action and do such things as are required by law in the performance ofthe official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the City. The obligation of the City to pay Base Rental and Additional Rental hereunder shall constitute a current expense ofthe City and shall not in any way be construed to be a debt ofthe City, or the State, oranypolitical subdivision thereof, in contravention ofanyapplicable constitutional orstatutory limitation orrequirements concerning the creation of indebtedness by the City, the State, or any political subdivision thereof, nor shall anything contained herein constitute apledge ofgeneral revenues, funds or moneys ofthe Citybeyond the Fiscal Year for which the Cityhas appropriated funds to payBase Rental and Additional Rental hereunder or an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. SECTION 5.03. Alication ofRental Pa ents. All rental payments received shall be applied first to the interest components ofthe Base Rental payments due hereunder, then to the principal components (including anyprepayment premium components) ofthe Base Rental payments due hereunder and thereafter to all Additional Rental due hereunder, but no such application of anypayments which are less than the total rental due and owing shall be deemed a waiver of any default hereunder. #45248859v 15 SECTION 5.04. Rental Abatement. Except to the extent (i) amounts held by the Trustee in the Debt Service Fund, (ii.) amounts received m respect ofrental interruption insurance, and (iii) amounts, if any, otherwise legally available to the Trustee for payments in respect ofthe Bonds, during any period in which, by reason ofmaterial damage, destruction, title defect or condemnation there is substantial interference with the use and possession bythe City ofanyportion ofthe Leased Property, rental payments due hereunderwith respect to such portion ofthe Leased Property shall be abated proportionatelyby an amount such that the portion ofBase Rental remaining unabated represents the fair rental value ofthe remaining portion ofthe Leased Property, as calculated by the City and set forth in writing to the Authority, the Trustee, the Credit Entity [and the Confirming Bank] . Any abatement ofrental payments pursuant to this Section shall not be considered an event ofdefault as defined in Article X hereof. The City waives the benefits ofCivil Code Sections 1932(1),1932(2) and 1933(4) and any and all other rights to terminate the Lease by virtue of any such interference and the Lease shall continue in full force and effect. Such abatement shall continue for the period commencing with the date ofsuch damage, destruction, title defect orcondemnation and endingwith the substantial completion ofthe work ofrepair or replacement, ofthe portions of the Leased Property so damaged, destroyed, defective or condemned. In the event that rental is abated, in whole or in part, pursuant to this Section due to damage, destruction, title defect or condemnation ofanypart ofthe Leased Property and the City is unable to repair, replace or rebuild the Leased Property from the proceeds of insurance, if any, the City agrees to apply for and obtain, ifreasonably available, any appropriate state and/or federal disaster relief in order to obtain funds to repair, replace or rebuild the Leased Property. SECTION 5.05. Prepayment of Rental Payments. (a) Prepayment from Net, Proceeds. The City may prepay, from Net Proceeds received byit pursuant to Section 7.01, all oranyportion ofthe components ofBase Rental relating to any portion ofthe Leased Property then unpaid, in whole on any date, or inpart on any Bond Payment Date in Authorized Denominations. (B) Optional Prepayment. Subject to the terms and conditions of this Section, the Authorityhereby grants an option to the Cityto prepayin whole or in part theprincipal components of Base Rental payments relating to the Leased Property, to the extent, on the dates and at the redemption prices provided in Section 4.03 ofthe Indenture as such Section 4.03 maybe amended from time to time with respect to conversion to a Fixed Rate. The City shall execute said option by giving written notice to the Trustee thereof at least 45 days (or such shorter period as approved by the Trustee) prior to the date ofredemption ofBonds from suchprepayment and depositing with said notice cash inthe minimum amount of (1) accrued interest on the principal component ofBase Rental payments to be prepaid to the date of redemption ofBonds with the proceeds of such prepayment, plus (2) the principal component of anyBase Rental payments to be prepaid, plus (3) the applicable redemption premium described in such Section 4.03 of the Indenture. SECTION 5.06. Obligation to Make Rental Payments. The agreements and covenants on the part ofthe City contained herein shall be deemed to be and shall be construed to be duties imposed #45249859v 16 bylaw and it shall be the dutyof each and everypublic official ofthe Cityto take such action and do such things as are required bylaw in the performance of the official duty of such officials to enable the Cityto carry out and perform the agreements and covenants contained herein agreed to be carried out and performed by the City. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE SUCH BASE RENTAL PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA ORANYPOLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES SECTION6.01. MaintenanceoftheLeased Propertybythefi , The City agrees that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve and keep the Leased Property and everyportion thereofin good repair, working order and condition and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Authority shall have no responsibility in any of these matters or for the making of additions or improvements to the Leased Property. SECTION 6.02. Taxes, Other Governmental QIgges and Utility Charges. The parties hereto contemplate that the Leased Propertywill be used for public purposes by the City and, therefore, that the Leased Propertywill be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the City or the Authority ofthe Leased Property is found to be subject to taxation in any form, the Citywill pay during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Leased Property and any otherproperty acquired by the Cityin substitution for, as a renewal or replacement of, or a modification, improvement or addition to the Leased Property, as well as all gas, water, steam, electricity, heat, power, air conditioning, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Leased Property; provided, that with respect to any governmental charges ortaxes that may lawfullybe paid in installments over aperiod ofyears, the City shall be obligated to pay only such installments as are accrued during such time as this Lease is in effect. SECTION 6.03. Insurance. The City shall procure or cause to be procured and maintain or case to be maintained through the term hereof for the Leased Property insurance against the following risks in the following respective amounts: #45248e59v 17 (1) insurance against loss or damage to the Leased Property or such structure or item of furniture or equipment caused by fire or lightning, with an extended coverage endorsement and vandalism and malicious mischief insurance, which such extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, not, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such i isurance_ The insurance required by this paragraph shall be in an amount equal to the replacement cost (without deduction for depreciation) of improvements located or to be located on the Leased Property but shall be not less than the principal amount ofthe Outstanding Bonds (except that such insurance maybe subject to deductible clauses ofnot to exceed ten percent (10%) ofthe amount of any one loss); (2) rental interruption insurance against the Authority's loss of income due to events giving rise to the right ofabatement on the part ofthe City under this Lease in an amount sufficient to pay the total Base Rental payments attributable to the Leased Property for a 12 month period (measured by the Base Rental payments for the 12 months following the month in which the insurance commences and assuming for such purpose that Interest Components will be payable at a fixed rate of 8% per annum or such lesser amount as may be agreed upon by the Credit Entity [and the Confimiing Bank]); provided, that the amount of such insurance need not exceed the total remaining Base Rental payments attributable to the Leased Property; (3) workers' compensation insurance covering all employees working in or on the Leased Property, in the same amount and type as other workers' compensation insurance maintainedbythe City for similar employees doing similarwork; and the City shall also require any other person or entity working in or on the Leased Property to carry the foregoing amount of workers' compensation insurance; (4) a standard comprehensive public entity liability insurance policy orpolicies in protection ofthe City, the Authority, and their respective directors, officers and employees and the Trustee, indemnifying and defending such parties against all direct or contingent loss or liability for damages for personal injury, death or property damage occasioned by reason of the possession, operation or use ofthe Leased Property. Such public liability and property damage insurance shall be in the form of a single limit policy in the amount ofnot less thanthree million dollars ($3,000,000), subject to a deductible clause ofnot to exceed $250,000, covering all such risks; and (5) a CLTA standard coverage leasehold policy of title insurance on the Leased Property in an amount at least equal to the initial aggregate amount ofthe principal amount ofBase Rental payments issued by a company ofrecognized standing duly authorized to issue the same. The title policy or policies shall insure the City's Ieasehold estate hereunder with respect to the Leased Property, subject only to Permitted Encumbrances. Insurance coverage required byparagraphs (1), (2),Q) and (4) maybe maintained as part of or in conjunction with anyother insurance coverage carried bythe City, and maybe maintained in whole #45248859v 1s or in part in the form ofinsurance maintained through a joint exercise ofpowers agency created for such purpose or other program providing pooled insurance. Notwithstanding the above provisions, as an alternative to providing the insurance required by paragraphs (1), (2) and (4) above, with the prior written consent of the Credit Entity, the City may provide a self-insurance method orplan ofprotection. Any such self-insurance maintained by the City pursuant to the foregoing sections, shall be similar in nature and scope to self-insurance programs maintained by other California cities of comparable size and operations, and shall be reviewed annuallyby an Insurance Consultant. Any insurance policy issued pursuant to Section 6.03(l) shall be so written or endorsed as to make losses, if any, payable to the City, the Authority, and the Trustee as their respective interests may appear and the net proceeds ofthe insurance required in Section 6.03(1) shall be applied as provided in Section 7.01. The net proceeds, if any, ofthe insurance policy described in Section 6.03(2) shall be payable to the Trustee and deposited in the Debt Service Fund. Each insurance policyprovided forin this Section shall contain a provision to the effect that the insurance company shall not cancel the policy or modifyit materially and adverselyto the interests ofthe Authority, the Credit Entityor the Trustee without first giving written notice thereofto the Authority, the Credit Entity and the Trustee at least sixty (60) days in advance ofsuch intended cancellation ormodification; provided, that the Trustee shall not be responsible for the sufficiency ofany insurance herein required and shall be fullyprotected in accepting payment on account of such insurance or any adjustments, compromise or settlement of any loss agreed to by It. The City shall file a certificate with the Trustee and the Credit Entity not later than September I of each year certifying that the insurance required by this section is in full force and effect and that the Trustee and the Credit Entity are named as loss payees on each insurance policywhich this Lease requires to be so endorsed. SECTION 6.04. Advances. In the event the City shall fail to maintain the full insurance coverage required hereby or shall fail to keep the Leased Property in good repair and operating condition, the Authoritymay (but shall be under no obligation to) purchase the required policies ofinsurance and pay the premiums on the same or maymake such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Authority shall become Additional Rental, which amounts the City agrees to paywithin thirty (3 0) days of a written request therefor, together with interest thereon at the maximum rate allowed by law. ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION SECTION 7.01. Damage, Destruction, Title Defect and Condemnation, Use of Net Proceeds. Ifprior to the termination ofthe term hereof (a) the Leased Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty; or (b) title to, or the temporaryuse of, the Leased Property or any portion thereof or the estate of the City or the Authority in the Leased #45248859v 19 Property or anyportion thereof is defective or shall be taken under the exercise ofthe power of erninent domain by any governmental body orby anyperson or firm or corporation acting under governmental authority, then the Cityshall, as expeditiously as possible, continuously and diligently cause the repair or replacement thereof (unless the City elects not to repair or replace), and the City and the Authoritywill cause the Net Proceeds remaining after such work has been completed to be p aid to the City; provided, that the City, at its option and provided the Net Proceeds together with any other moneys then available for the purpose are at least sufficient to prepay the aggregate annual amounts ofprincipal of and interest on the Bonds attributable to the portion of the Leased Property so destroyed, damaged, defective or condemned (determined by reference to the proportion which the fair rental value ofthe entire Leased Property and such that the fair rental value ofthe remainingportion ofthe Leased Property is sufficient to pay the Principal Components and Interest Components (assuming that the Interest Components will accrue at the Maximum Rate or if a Fixed Rate has been established, then at the Fixed Rate)), may elect not to repair, reconstruct or replace the damaged, destroyed, defective or condemned portion of the Leased Property and thereupon shall cause said Net Proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of Section 4.02 of the Indenture. In the event that the Net Proceeds, if any, are insufficient either to (i) repair, rebuild or replace the Leased Property so that the fairrental value ofthe Leased Property would be at least equal to the Base Rental payments or (ii) to prepay the Outstanding Bonds, both as provided in the preceding paragraph, then the Citymay, in its sole discretion, budget and appropriate an amount necessary to effect such repair, rebuilding or replacement orprepayment; provided that the failure ofthe City to so budget and/or appropriate shall not be a breach of or default under this Lease. ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY SECTION S.01. Disclaimer of Warranties. NEITHER THE TRUSTEE NOR THE AUTHORITY MAKES ANY AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT NEITHER THE TRUSTEE NOR THE AUTHORITY IS A MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER THEREIN, THAT THE CITY LEASES THE LEASED PROPERTY AS -IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out ofthe Lease or the existence, furnishing, functioning or the City's use of the Leased Property as provided hereby. SECTION 8.02. Vendor's Warranties. The Authority hereby irrevocably appoints the City its agent and attorney-in-fact during the term of this Lease, so long as the City shall not be in default hereunder, to assert from time to time whatever claims and rights, including warranties ofthe Leased Property, which the Authority may have against the manufacturers, vendors and contractors ofthe Leased #45248859v 20 Property. The City's sole remedy for the breach of such warranty, indemnification or representation shall be against the manufacturer or vendor or contractor ofthe Leased Property, and not against the Authority or the Trustee, nor shall such matter have any effect whatsoever on the rights and obligations of the Authoritywith respect to this Lease, including the right to receive full and timelypayments hereunder. The City expressly acknowledges that neither the Trustee nor the Authority makes, and has made, any representation or warranties whatsoever as to the existence or availability of such warranties of the manufacturer, vendor or contractor. SECTION 8.03. Use of the Leased Property. (a) The City will not use, operate or maintain the Leased Property improperly, carelessly, in violation ofany applicable law or in a manner contraryto that contemplated hereby. The City shall provide all permits and licenses, if any, necessary for the use ofthe Leased Property. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each portion ofthe Leased Property) with all laws of the jurisdictions in which its operations involving any portion ofthe Leased Property may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Leased Property; provided, that the City may contest in good faith the validity or application of any such law or rule in anyreasonable manner which does not, .in the opinion ofthe City adversely affect the estate ofthe Authority or the Trustee in and to the Leased Property or its interest or rights hereunder. (b) The City herein covenants by and for itself and its successors and assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subj ect to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account ofrace, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment ofthe Leased Propertynor shall the City itself, or anyperson claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Leased Property. ARTICLE IX ASSIGNMENT AND INDEMNIFICATION SECTION 9.01. Assi an=ent by Authority. The parties understand that certain of the rights ofthe Authority, as assignee hereunder, will be assigned to the Trustee pursuant to the Assignment Agreement, and accordingly the City agrees to make all payments due hereunder to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the Citymay from time to time have against the Authority or the Trustee. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing #45248859v 21 statements which maybe reasonablyrequested by the Authority or the Trustee to protect their interests in the Leased Property during the term hereof. SECTION 9.02. Assignment by City. This Lease and the interest of the City in the Leased Propertymaynot be assigned or encumbered by the City except with the written consent of the Credit Entity and except as provided in Section 2.04. SECTION 9.03. Indemnification, The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Authority, the Trustee, and their respective directors, officers, employees, attorneys, consultants, receivers and agents from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless ofthe cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the entering into of this Lease or any accident in connection with the operation, use, condition orpossession ofthe Leased Property or any portion thereofresulting in damage to property orinjuryto or deathto anyperson including, without limitation, anyclaim alleging latent and other defects, whether or not discoverable by the City or the Authority; any claim for patent, trademark or copyright infringement, any claim arising out of strict liability in tort, and any claim arising out ofthe use, presence, storage, disposal orrelease ofanyHazardous Substances on or 'about the Leased Property. The indemnification arising under this Section shall continue in full force and effect notwithstanding the fail payment of all obligations hereunder or the termination hereof for any reason. The City and the Authority mutually agree to promptlygive notice to each other ofany claim or liability hereby indemnified against following either's learning thereof. ARTICLE X DEFAULT SECTION 10-01, Default. (a) The following events shall be events of default under this Lease: (i) the CityshaIl fail to pay any item ofAdditional Rental as and when the same shall become due and payable pursuant to Section 5.01(b); or (ii) the City shall fail to deposit with the Trustee any Base Rental payment required to be so depositedbythe close ofbusiness on the day such deposit is required pursuant to Section 5.01(a), provided, that any Base Rental payments abated pursuant to Section 5.04 shall not constitute an event of default; (iii) the City shall breach any other tenns, covenants or conditions contained herein, and shall fail to remedy any such breach with all reasonable dispatch within a period ofthirty (30) days after written notice thercof from the Authority, the Trustee or the Credit Entity to the City; provided, however, that ifthe failure stated in the notice cannot be corrected within such period, then the Authority shall not unreasonably withhold its consent to an extension of such time #45248859v 22 ifcorrective action is instituted bythe Citywithin such period and is diligentlypursued until the default is corrected. (b) In addition to any default resulting from breach by the City of any agreement, condition, covenant or term hereof, if (1) the City's interest herein or anypart thereof be assigned; sublet or transferred without the written consent ofthe Authority and the Credit Entity, either voluntarily or by operation of law; or (2) the City or any assignee shall file anypetition or institute any proc eedings under any act or acts, state or federat, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a pian of reorganization or for a read] ustment of its debts or for any other similar relief, or if the City shall make a general or any assignment for the benefit of its creditors; or (3) the City shall abandon or vacate the Leased Propertyor anyportion thereof; then in each and every such case the City shall be deemed to be in default hereunder. Upon thehappening of any ofthe events specified in subsection (a) or (b) ofthis Section (in either case an "Event of Default"), then it shall be lawful for the Authority to exercise any'and all remedies available or granted to it pursuant to law or hereunder. Upon the breach of any agreement, condition, covenant or term contained herein required to be observed or performed by the City, the Authoritymay, with the consent ofthe Credit Entity, or at the direction ofthe Credit Entity, shall exercise any and all rights of entry upon or repossession of the Leased Property, and also, at its option, with or without such entry, may, with the consent ofthe Credit Entity, or at the direction ofthe Credit Entity, shall terminate this Lease; provided, that no termination shall be effected either by operation of law or acts of the parties hereto except upon express written notice from the Authorityto the Cityterminating this Lease, as provided below. In the even of such default and notwithstanding any entry by the Authority, the Authority may at any time thereafter (with or without notice and demand and without limiting any other rights or remedies the Authority may have): (1) Maintain this Lease in full force and effect and recover rent and other monetary charges as they become due without terminating the City's right to possession ofthe Lease Property, regardless of whether or not the City has abandoned the Leased Property. In the event the Authority elects not to terminate this Lease, it shall have the right and the City hereby irrevocably appoints the Authority as its agent and attorney-in-fact for such purpose to attempt to relet the Lease Property at such rent, upon such conditions and for such term, so long as the Trustee obtains an Opinion of Counsel that the tax-exempt status ofthe interest components of Base Rental payments will be preserved, and to do all other acts to maintain or preserve the Leased Property, including removal ofpersons orpropertytherefrom or taking possession thereof, as the Authority deems desirable ornecessary, and the Cityhereby waives any and all claims for any damages that may result to the Leased Property thereby; provided, that no such actions shall be deemed to terminate this Lease and the City shall continue to remain liable for any deficiency #45248859 23 thatmayarise out ofsuch reletting, talang into account expenses incurredby the Authority due to such reletting, payable at the same time and manner as provided for Base Rental in Section 5.01. (2) Terminate the City's right to possession ofthe LeasedPropertyby giving awritten notice oftermination to the City. On the date specified in such notice (which shall be not less than three (3) days after the giving of such notice) the City's right to possession under this Lease shall terminate and the City shall surrenderpossession ofthe Lease Property, as the case maybe, to the Authority, unless on or before such date all arrears of rental and all other sums payable bythe Cityhereunder, and all costs and expenses incurred by or on behalfofthe Authority hereunder, including attorney's fees incurred in connection with such defaults, shall have been paid bythe City and all other defaults or breaches hereunder by the City at the time existing shall have bee fullyremedied to the satisfaction ofthe Authority. Upon such termination, the Authority may recover, in addition to all other damages available by contractor at law, to the extent permitted by law, from the City: (i) the worth at the time of award ofthe unpaid rental which had been earned at the time of termination; and (ii) the worth at the time of award ofthe amount by which the unpaid rental which would have been earned after termination until the time of award exceeds the amount of such rental loss that the City proves could have been reasonably avoided. The "worth at the time of award" ofthe amounts referred to in clauses (i) and (ii) above is computed by allowing interest at the rate of twelve per cent (12%) per annum. Without otherwise limiting any ofthe rights or remedies ofthe Authority set forth herein, the Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code. Each and all ofthe remedies given to the Authority hereunder or by any law now existing or hereafter enacted are cumulative and the exercise of any one remedy shall not impair the right ofthe Authority to any or all other remedies. (c) Neither the Citynorthe Authority shall beindefault inthe performance ofanyof its obligations hereunder (except for the obligation to pay Base Rental and Additional Rental pursuant to Section 5.01) unless an until it shall have failed to perform such obligation within thirty (30) day after notice bythe City or the Authority, as the case maybe, to the otherpartyproperly specifying wherein it has failed to perform such obligation. ARTICLE XI MISCELLANEOUS SECTION 11.01. Notices. All written notices to be given hereunder shall be given by first class mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: #45248859v 24 If to the Authority: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director If to the City: City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Attention: City Manager If to the Trustee: U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 Attention: Corporate Trust Department Fax: (415) Phone: (415) If to the Credit Entity: [If to the Confirming Bank:] Attention: Public Finance Unit Attention: Re: City of Diamond Bar SECTION 11.02. Binding Effect. The Lease shall inure to the benefit of an shall be binding upon the Authority and the City and their respective successors and assigns. SECTION 11.03. Third Pg= Beneficiaries, The Trustee, the Credit Entity and the [Confirming Bank] are hereby designated third party beneficiaries hereunder for the purpose of enforcing any of the rights hereunder assigned to the Trustee under the Indenture. In the event the Credit Entity wrongfully dishonors a properlypresented and conforming draw underthe Credit Facility or the Credit Entity repudiates the Credit Facility, [the Confirming Bank] shall succeed to all ofthe rights ofthe Credit Entity hereunder as if the Credit Entity was not in default under the Credit Facility. SECTION 11.04. Net -Net -Net Lease. It is the purpose and intent ofthe Authority and the City that lease payments hereunder shall be absolutely net to the Authority so that the Lease shall yield to the Authoritythe lease payments, free ofany charges, assessments orimpositions of anykind charged, assessed or imposed on or against the Leased Property, and without counterclaim, deduction, defense, deferment or set-offbythe City except as herein specifically otherwise provided. The Authority shall not #45248859v 25 be expected or required to gay any such charge, assessment or imposition, or be under any obligation or liabilityhereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation ofthe Leased Property which may arise orbecome due during the term of the Lease shall be paid by the City. SECTION 11.05. Amendments. The Lease may be amended in writing as may be mutually agreed bytheAuthorityand the City, subject to the written approval of the Credit Entity and the Trustee; provided, that no such amendment which materially adversely affects the rights ofthe Owners shall be effective unless it shall have been consented to by the Owners of more than majority in aggregate principal amount oftheBonds then Outstanding, and provided further, that no such amendment shall (a) extend the payment date of anyBase Rental payment, without the prior written consent ofthe Owner of each Bond so affected, or (b) reduce the percentage of the Bonds the consent of the Owners of which is required for the execution of any amendment hereof The Lease and the rights and obligations ofthe Authority and the City hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution by the Authority and the City without the written consents of any Owners, but with the written approval ofthe Credit Entity and only to the extent permitted by law and only for any one or more of the following purposes — (a) to add to the agreements, conditions, covenants and terms required by the Authorityor the City to be observed orperformed herein and other agreements, conditions, covenants and terms thereafter to be observed orperformed bythe Authority or the City, or to surrender any right or power reserved herein to or conferred herein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners; (b) to make such provisions for the purpose ofcuring any ambiguity ofcorrecting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners; (c) to effect a Substitution or Removal; (d) to increase the amount of Base Rental payable hereunder for the purpose of allowing the Authorityto issue Additional Bonds and to add anyreal property to be acquired and leased hereunder from the proceeds of such Additional Bonds to Exhibit A hereof, or Owners. (e) for any other purpose which shall not materially adversely affect the interests ofthe SECTION 11.06. Reserved. #45248859 26 SECTION11.07. Partiallnvalidity.Ifanyone ormore oftheagreements, conditions, covenants orterms hereofshall to anyextent be declared invalid, unenforceable, void orvoidable for any reason whatsoeverby a court ofcompetent jurisdiction, the finding ororderordecree ofwhich becomes final, none ofthe remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 11.08. California Law. This Lease shall be governed by and construed and interpreted in accordance with the laws of the State of California. SECTION 11.04. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or Iimit the scope of any provision hereof. SECTION 11.10. Execution. This Lease maybe executed and entered into in several counterparts, each ofwhich shall be deemed an original, and all ofwhich shall constitute but one and the same instrument. SECTION 11.11. Consent of Credit Entity rand Confirming, Bank.] Required. Notwithstanding anything in this Lease to the contrary, no amendment or supplement to this Lease shall become effective unless first approved bythe Credit Entity [and the Coniinning Bank], which approval shall not be unreasonably withheld. All references herein to Credit Entity or [Confining Bank] shall be ofno force or effect during anyperiod in which no Credit Facility [and/or Confirming Letter of Credit] is in effect. #45248859v 27 IN WITNESS WHEREOF, the parties herebyhave executed and entered into this Lease by their officers thereunto duly authorized as of the day and year first written above. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Executive Director CITY OF DIAMOND BAR Mayor #45248859v State of California ) ) SS County of Los Angeles ) On before me, personally appeared I / personally known to me, or l l proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248959v State of California ) ) SS County of Los Angeles ) On before me, personally appeared / / personally known to me, or / / proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248859v EXHIBIT A Description of Leased Property W11111:]M�ic3 Aggregate Annual Base Rental Payment Schedule' Period Ending ( 1) Principal Interest' Total * Maturity 'The interest component of the Base Rental payments shall equal the interest component due with respect to the Bonds as determined under Section 2.02.A of the Indenture and shall be due and payable on the twenty-fifth day ofthe month immediately preceding each Bond Payment Date as set forth in Section 5.01(a) hereof. City of Diamond Bax Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) Bond Purchase Agreement , 2002 City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Ladies and Gentlemen: US Bancorp Piper Jaffray (the "Underwriter") hereby offers to enter into this agreement with the City of Diamond Bar Public Financing Authority (the "Issuer") and the City of Diamond Bar (the "City"). Upon the acceptance hereof by the Issuer and the City, this offer will be binding upon the Issuer, the City and the Underwriter. This offer is made subject to (i) the written acceptance hereof by the Issuer and the City and (ii) withdrawal by the Underwriter upon written notice (by telegraph or otherwise) delivered to the Issuer and the City at any time prior to the acceptance hereof by the Issuer and the City. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Issuer at the'Closing Time on the Closing Date (both as defined herein), and the Issuer hereby agrees to sell and deliver to the Underwriter, $ aggregate principal amount of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds"). The Bonds shall be dated the date of their initial delivery, shall mature on I, and shall bear interest, be subject to redemption and have such other terms as are provided in the Indenture. The Initial Rate shall be %. The aggregate purchase price for the Bonds shall be $ 'being the $ aggregate principal amount thereof, less an Underwriter's discount of $ . (The date of such payment and delivery is referred to herein as the "Closing Date," the hour and date of such delivery and payment is referred to herein as the "Closing Time," and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the "Closing"). 2. The Bonds. The Bonds shall be described in, and shall be issued and secured pursuant to, the provisions of the Constitution and the laws of the State of California including the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 #45248890x2 (commencing with Section 6584), Division 7, Title 1 of the Government Code of the State of California (the `Bond Law"). The Bonds shall be issued and secured pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Issuer and U.S. Bank, N.A. (the "Trustee") authorizing the issuance of the Bonds. The Bonds are being issued in order to provide funds to finance a community/senior center project and other public improvements within the City. A portion of the proceeds of the Bonds will be used by the Trustee to pay costs of issuance of the Bonds. The Bonds are secured by Revenues (as defined in the Indenture). Revenues primarily consists amounts received by the Authority as lessor under a Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the City and the Issuer. Payments of principal of and. interest (but not any premium) on the Bonds will be initially supported by an irrevocable direct -pay letter of credit (the "Letter of Credit") issued by (the "Credit Entity") to the Trustee pursuant to a Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and the Credit Entity, the drawings under which will be used to pay the principal of and interest on the Bonds when due. The Letter of Credit will also be drawn on, if other funds are not available, to purchase Bonds tendered by Owners at the Purchase Price. (If the Credit EntitywrongfulIy dishonors a properlypresented and conforming draw on the Letter of Credit or if the Credit Entity repudiates the Letter of Credit, funds will be made available under an irrevocable confirming letter of credit (the "Confirming Letter of Credit") to be issued by the (the "Confirming Credit Entity") pursuant to a Confirmation Agreement, dated as of December 1, 2002 (the "Confirmation Agreement"), by and between. the Credit Entity and the Confirming Credit Entity.] Herein, the Indenture, the Lease, the Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the Issuer, the Remarketing Agreement (as defined in the Indenture) and this Bond Purchase Agreement are referred to collectively as the "Issuer Documents." The Site Lease, the Lease, the Reimbursement Agreement and this Bond Purchase Agreement are referred to collectively herein as the "City Documents." The Bonds shall be payable and shall be subject to redemption as provided in the Indenture and shall be as described in the Preliminary Official Statement of the Issuer dated , 2002 and the Official Statement of the Issuer dated of even date herewith. Such Official Statement, including the cover page, the appendices thereto relating to the Bonds, as amended to conform to the terms of this Bond Purchase Agreement and with such changes and amendments thereto as have been mutually agreed to by the Issuer, the City and the Underwriter, is hereinafter referred to as the "Official Statement." 3. Offering by the Underwriter. It shall be a condition to the Issuer's obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's obligation to purchase, to accept delivery of and to pay for the Bonds that the entire principal amount of the Bonds shall be issued, sold and delivered by the Issuer and purchased, accepted and paid for by the Underwriter at the Closing. It is understood that the Underwriter proposes to offerthe Bonds for sale to the public (which may include selected dealers) at prices or yields as set forth on the cover page of the Official Statement. Concessions from the public offering price may be allowed to selected dealers. It is understood that the initial public offering price and concessions set forth in the Official #4524$890x2 2 Statement may vary after the initial public offering. It is further understood that the Bonds may be offered to the public at prices other than the par value thereof. The net premium on the sale of the Bonds to the public, if any, shall accrue to the benefit of the Underwriter. 4. Official Statement, Delivery of Other Documents, Use of Documents. (a) The Issuer and the City hereby authorize the use by the Underwriter of the Preliminary Official Statement and the Official Statement (including any supplements or amendments to the Official Statement) and the Indenture and the information therein contained, in connection with the public offering and sale of the Bonds. (b) The Issuer shall deliver to the Underwriter, within seven business days from the date hereof, such number of copies of the final Official Statement executed on behalf of and approved for distribution by the Issuer as the Underwriter may reasonably request in order for the Underwriter to comply with the rules of the Municipal Securities Rulemaking Board and Rule 15c2 -12(b)(4) under the Securities Exchange Act of 1934. (c) As soon as practicable following receipt thereof, the Underwriter shall deliver the Official Statement, and any supplements or amendments thereto, to a nationally recognized municipal securities information repository. 5. Representations, Warranties and Agreements of the Issuer. The Issuer represents, warrants and agrees as follows: (a) The Issuer is an entity duly organized and validly existing under the laws of the State of California. (b) The Issuer has full legal right, power and authority (i) to enter into the Issuer Documents, to sell, issue and deliver the Bonds to the Underwriter as provided herein; and (ii) to carry out and consummate the transactions on its part contemplated by the Issuer Documents. (c) By all necessary official action, the Issuer has duly authorized and approved the Issuer Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the Issuer ofthe obligations in connection with the issuance of the Bonds on its part contained in the Bonds and the Issuer Documents and the consummation by it of all other transactions contemplated by the Issuer Documents in connection with the issuance of the Bonds. (d)- To the best of its knowledge, the Issuer is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Indenture) or other instrument to which the Issuer is a party which breach or default has or may have an adverse effect on the ability of the Issuer to perform its obligations under the Issuer Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the authentication and delivery of the Bonds, or the execution and delivery of the #45248890x2 3 Issuer Documents, and compliance with the provisions on the Issuer's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Indenture. (e) To the best of its knowledge, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Issuer of its obligations in connection with the issuance of the Bonds under this Bond Purchase Agreement or the Indenture have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Issuer of its obligations under the Indenture have been duly obtained. (f) The Bonds when issued will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT" and "THE BONDS"; and the Indenture when adopted will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS," and "SUMMARY OF LEGAL DOCUMENTS - The Indenture." (g) The Bonds, when issued, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations ofthe Issuer, entitled to the benefits of the Indenture, and upon such issuance and delivery, the Indenture will provide, for the benefit ofthe owners from time to time of the Bonds, the legally valid and binding pledge of and lien and security interest it purports to create. (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, notice of which has been served on the Issuer, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the Issuer executing this Bond Purchase Agreement, threatened against the Issuer, affecting the existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the pledge and Iien on the Revenues pursuant to the Indenture, or contesting or affecting as to the Issuer the validity or enforceability of the Bond Law, the Bonds, or the Issuer Documents or contesting the tax-exempt status ofinterest on the Bonds, or contesting the completeness or accuracy ofthe Preliminary Official Statement or the Official Statement, or contesting the powers of the Issuer for the issuance of the #4524889ov2 4 Bonds, or the execution and delivery or adoption by the Issuer of the Issuer Documents, or in any way contesting or challenging the consummation ofthe transactions contemplated hereby or thereby; nor, to the best knowledge of the Issuer, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bond Law, as to the Issuer, or the authorization, execution, delivery or performance by the Issuer of the Bonds, or the Issuer Documents. (i) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States of America as the Underwriter may designate (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution ofthe Bonds; provided, however, that the Issuer shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, provided, that the Underwriter shall bear all costs in connection with the Issuer's action under (i) and (ii) herein, and (iii) assure or maintain the tax-exempt status of the interest on the Bonds. 0) As of the date thereof, the Preliminary Official Statement does not, except for the omission of certain information permitted to be omitted in accordance with Rule 15c2-12, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein with respect to the Issuer, in light of the circumstances under which they were made, not misleading. (k) At the time of the Issuer's acceptance hereof, and (unless an event occurs of the nature described in paragraph (m) of this Section 5) at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and wan -antics of the Issuer shall apply only to the information contained in the Official Statement relating to the Issuer, (1) If the Official Statement is supplemented or amended pursuant to paragraph (m) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties ofthe Issuer shall apply only to the information contained in the Official Statement relating to the Issuer. (m) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event known to the Issuer shall occur affecting the Issuer which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official #45248890v2 5 Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light ofthe circumstances under which they were made, not misleading, the Issuer shall notify the Underwriter thereof, and if in the opinion ofthe Underwriter such event requires the preparation and publication ofa supplement or amendment to the Official Statement, the Issuer will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the Underwriter. (n) The Issuer will refrain from taking any action, or permitting any action to be taken, with regard to which the Issuer may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds. (o) Any certificate signed by any officer of the Issuer and delivered to the Underwriter pursuant to the Issuer Documents or any document contemplated thereby, shall be deemed a representation and warranty by the Issuer to the Underwriter as to the statements made therein. (p) The Issuer will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any ofthe Bonds are outstanding and except as maybe authorized by the Indenture, the Issuer will not issue or sell any bonds or other obligations, other than the Bonds sold thereby, the interest on and premium, if any, or principal of which will be payable from the Revenues and funds and accounts pledged under the Indenture. (q) The Issuer shall honor all other covenants on its part contained in the Issuer Documents which are incorporated herein and made a part of this Bond Purchase Agreement. 6. Representations, Warranties and Agreements of the City. The City represents, warrants and agrees as follows: (a) The City is a municipal corporation duly organized and validly existing under the laws of the State of California. (b) The City has full legal right, power and authority to enter into and to carry out the transactions on its part contemplated by the City Documents. (c) By all necessary official action, the City has duly authorized and approved the City Documents, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations in connection with the issuance of the Bonds on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the City Documents in connection with the issuance of the Bonds. (d) To the best of its knowledge, the City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States of America, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement #45248890x2 6 or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City to perform, its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving ofnotice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the City Documents, and compliance with the provisions on the City's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (e) To the best of its knowledge, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations in connection with the City Documents have been duly obtained; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) The City Documents when adopted will conform to the descriptions thereofcontained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS" and "SOURCES OF PAYMENT FOR THE BONDS." (g) Reserved. (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, notice of which has been served on the City, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Bond Purchase Agreement, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery ofthe Bonds or the pledge and lien on the Revenues pursuant to the Indenture, or contesting or affecting as to the City the validity or enforceability of the Bond Law, the Bonds, or the City Documents or contesting the tax-exempt status of interest on the Bonds, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or the execution and delivery or adoption by the City of the City Documents, or in any waycontesting or challenging the consummation ofthe transactions contemplated hereby or thereby; nor, to the best knowledge ofthe City, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the authorization, execution, delivery or performance by the City of the City Documents. #45248890x2 (i) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities Iaws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, provided, that the Underwriter shall bear all costs in connection with the City's action under (i) and (ii) herein, and (iii) assure or maintain the tax-exempt status of the interest on the Bonds. 0) As of the date thereof, the Preliminary Official Statement did not, except for the omission of certain information permitted to be omitted in accordance with Rule 1 Set -12, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (k) At the time of the City's acceptance hereof, and (unless an event occurs of the nature described in paragraph (m) of this Section 6) at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties of the City shall apply only to the information contained in the Official Statement relating to the City. (1) If the Official Statement is supplemented or amended pursuant to paragraph (m) of this Section 6, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties of the City shall apply only to the information contained in the Official Statement relating to the City. (m) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event known to the City shall occur affecting the City which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, .as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion ofthe Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will, in conjunction with and at the expense of the Issuer, prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the Underwriter. #4524889M 9 (n) The City will refrain from taking any action, or permitting any action to be taken, with regard to which the City may exercise control, that results in the Ioss of the tax-exempt status of the interest on the Bonds. (o) Any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the CityDocuments or any document contemplated thereby shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. 7. Closing. At 8:00 a.m., Los Angeles time, on , 2002, or on such earlier date or as soon thereafter as practicable, as may be mutually agreed upon by the Issuer, the City and the Underwriter, the Issuer will, subject to the terms and conditions hereof, cause the Trustee to deliver to The Depository Trust Company ("DTC") in New York, New York, on behalf of the Underwriter, the Bonds, in definitive form duly executed by the Trustee, together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery to DTC and will pay the purchase price of the Bonds in Los Angeles, California as set forth in Paragraph 1(a) hereof by delivering Federal or other immediately available funds in the amount of such purchase price to the Trustee. The Bonds shall be prepared in fully registered form without coupons in authorized denominations and registered in the name of or at the direction of the Underwriter. 8. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Issuer and the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer and the City of its respective obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Issuer and the City of their obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: (a) The representations and warranties ofthe Issuer and the Citycontained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At the time of the Closing, the Issuer Documents and the City Documents shall be in full force and effect in accordance with their terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) At the time of the Closing, all necessary official action of the Issuer, the City and of the other parties thereto relating to the Issuer Documents and the City Documents, respectively, shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; #452488900 9 (d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the Issuer, the City or the Bonds, as the foregoing matters are described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; (e) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) The Official Statement and each supplement or amendment, if any, thereto, executed by a designated officer of the Issuer; (2) A copy of the Indenture, executed by the Issuer and the Trustee; (3) Copy of the Lease, executed by the Issuer and the City along with evidence of its recordation; (4) Copy of the Site Lease, executed by the Issuer and. the City along with evidence of its recordation; (5) Title Insurance Policy; (6) Certificates of the Issuer and the City, respectively, with respect to the matters described in Sections 5 and 6 and in paragraphs (a), (b), (c) and (d) of this Section 8; (7) An opinion, (the "Final Approving Legal Opinion") dated the date of the Closing and addressed to the Issuer, of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form attached hereto as Exhibit A, accompanied by a reliance letter from Bond Counsel to the effect that such opinion may be relied upon by the Underwriter, the Credit Entity [and the Confirming Credit Entity], with the same effect as if such opinion were addressed to it; (8) An opinion, dated the date of the Closing and addressed to the Underwriter of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form attached hereto as Exhibit B; (9) An opinion, dated the date of the Closing and addressed to the Underwriter, of counsel for the Issuer, in substantially the form attached hereto as Exhibit C; (1 Q) An opinion, dated the date of the Closing and addressed to the Underwriter, of counsel for the City, in substantially the form attached hereto as Exhibit D; (11) An opinion, dated the date ofthe Closing and addressed to the Underwriter, of Fulbright & Jaworski L.L.P., Los Angeles, California, Disclosure Counsel for the Issuer, in substantially the form attached hereto as Exhibit E; #45248890x2 10 (12) A certificate of the Trustee to the effect that: (i) Due Organization and Existence - the Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States of America having the full power and authority to enter into and perform their respective duties under the Indenture, and to execute and deliver the Bonds to the Underwriter pursuant to the terms of the Indenture; (ii) Due Authorization: Valid and Binding Obligations - the Trustee is duly authorized to enter into the Indenture, and to execute and deliver the Bonds; and (iii) No Conflict - to the best of the knowledge of the Trustee, after due investigation, the execution and delivery by the Trustee of the Indenture, and the authentication and delivery ofthe Bonds, and compliance with the terms thereof will not, in any material respect, conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties, or (except with respect to the lien of the Indenture) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Trustee. (13) An opinion of counsel to the Trustee to the, effect that: (i) Due Organization and Existence - the Trustee has been duly organized and is validly existing and in good standing as a national banking association under the laws of the United States of America with full corporate power to undertake the trusts of the Indenture; (ii) Co orate Action - the Trustee has duly authorized, executed and delivered the indenture, and by all proper corporate action has authorized the acceptance of the duties and obligations of the Trustee under the Indenture, and to authorize in such capacity as Trustee the authentication and delivery of the Bonds; (iii) Due Authorization. Execution and Delivery- assuming due authorization, execution and delivery by the Issuer, the Indenture is the valid, legal and binding agreement ofthe Trustee, enforceable in accordance with its terms, except as such enforcement maybe limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights in general and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); #45248890v2 11 (iv) Consents - exclusive of federal or state securities laws and regulations, to the best of such counsel's knowledge after reasonable inquiry and investigation, other than routine filings required to be made with governmental agencies in order to preserve the Trustee's authority to perform a trust business (all of which routine filings such counsel believes, after reasonable inquiry and investigation, to have been made), no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee is or will be required for the execution and delivery by the Trustee of the Indenture or the authentication and delivery of the Bonds; and (v) No Litigation - to the best of such counsel's knowledge, there is no litigation pending or threatened against or affecting the Trustee to restrain or enjoin the Trustee's participation in, or in any way contesting the powers of the Trustee with respect to the transactions contemplated by the Bonds or the Indenture. (14) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of the Indenture, and the authentication and delivery of the Bonds by the Trustee. (15) A copy of the Remarketing Agreement. (16) A copy of the Letter of Credit. (17) A copy of the Reimbursement Agreement. (18) [A copy of the Confirming Letter of Credit.] (19) [A copy of the Confirmation Agreement.] (20) A certificate of an authorized representative of the Credit Entity to the effect that the financial and statistical information concerning the Credit Entity and the Letter of Credit set forth in the Official Statement under the caption "THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" and under the heading "CREDIT ENTITY" is materially accurate and does not contain any untrue statement of a material fact or omit any matter which should be disclosed in the Official Statement for the purpose for which it is to be used, or which it is necessary to disclose therein in order to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect; (21) [A certificate of an authorized representative of the (the "Confirming Bank") to the effect that the financial and statistical information concerning the Confirming Bank and the Confirming Letter of Credit, as set #45248890v2 12 forth in the Official Statement under the heading "THE CONFIRMING CREDIT ENTITY" is materially accurate;] (22) An Opinion of counsel to the Credit Entity addressed to the Authority, [the Confirming Bank] and the Underwriter to the effect that (i) each of the Letter of Credit, the Confirmation Agreement and the Reimbursement Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, the Credit Entity enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, arrangement and other similar laws affecting creditors' right, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on the legal remedies against public bodies and (ii) the statements contained in the Official Statement under the heading "LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" are materially accurate; (23) [An Opinion of counsel to the Confirming Bank addressed to the Authority and the Underwriter to the effect (i) the Confirming Letter of Credit has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Confirming Bank enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, arrangement and other similar laws affecting creditors' right, to the application ofequitable principles, to the exercise ofjudicial discretion in appropriate cases and to the limitations on the legal remedies against public bodies and (ii) the statements contained in the Official Statement under the heading "THE CONFIRMING LETTER OF CREDIT AND THE CONFIRMATION AGREEMENT" are materially accurate;] (24) Transcripts of all proceedings relating to the authorization and issuance of the Bonds certified by the Secretary or an Assistant Secretary of the Issuer; and (25) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's and the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer and the City on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by each of the Issuer and the City. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel, Counsel for the Underwriter, if any, and the Underwriter. The opinions and certificates referred to in clauses (7), (8), (9) and (10) of this paragraph (e) shall be deemed satisfactory provided they are substantially in the forms attached as exhibits to this Bond Purchase Agreement. If the Issuer and the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and #45248890v2 13 to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neitherthe Underwriter nor the Issuer nor the City shall be under any further obligation hereunder. 9. Termination. The Underwriter shall have the right to terminate the Underwriter's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Issuer and the City, in writing or by telegram, of their election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency; (b) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the States of New York or California; (c) an event shall have occurred or been discovered as described in paragraph (m) of Section 5 or paragraph (m) of Section 6 hereof which in the opinion of the Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter's reasonable opinion, materially adversely affects the marketprice ofthe Bonds; (e) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalfof the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of anyprovision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds or the Bonds, as contemplated hereby or by the Official Statement; (f) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (g) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations ofthe general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (h) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange; or (i) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market. If this Bond Purchase Agreement shall be terminated pursuant to Section 8 or this Section 9, or if the purchase provided for herein is not consummated because any condition to the Underwriter's obligation hereunder is not satisfied or because of any refusal, inability or failure on the part of the Issuer or the City to comply with any of the terms or to fulfill any of the conditions of this Bond Purchase Agreement, or if for any reason the Issuer or the City shall be unable to perform all of their respective obligations under this Bond Purchase Agreement, the Issuer and the #4524889ov2 14 City shall not be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Bond Purchase Agreement. 10. Payment of Costs and Expenses. (a) The Issuer shall pay or reimburse all costs and expenses incident to the sale and delivery of the Bonds to the Underwriter, including, but not limited to: (i) the fees and expenses of the Issuer and its Counsel; (ii) the fees and expenses of the City and its Counsel; (iii) the fees and expenses of Bond Counsel and Disclosure Counsel; (iv) all costs and expenses incurred in connection with the preparation and printing of the Bonds; (v) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (vi) the fees and expenses of the Trustee; and (vii) CUSIP Bureau fees. (b) The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred in underwriting the Bonds. 11. Representations, Warranties and Agreements to Survive Delivery. The representations, warranties, indemnities, agreements and other statements of the Issuer, the City and the Underwriter or their officers or partners set forth in, or made pursuant to, this Bond Purchase Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Issuer, the City or the Underwriter or any controlling person and will survive delivery of and payment for the Bonds. 12. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing: To the Issuer: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director To the City: City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director To the Underwriter: US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Attention: Mr. Eric Scriven 13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Issuer, the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Issuer's and the City's representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds #45248$900 15 pursuant to this Bond Purchase Agreement; and (iii) any termination of this Bond Purchase Agreement. 14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Agreement, the End of the Underwriting Period for the Bonds shall mean the earlier of (a) the day of the Closing unless the Issuer and the City have been notified in writing by the Underwriter, on or prior to the day of the Closing, that the "end of the underwriting period" for the Bonds for all purposes of Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934 (the "Rule") will not occur on the day of the Closing, or (b) the date on which notice is given to the Issuer and the City by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the Issuer and the City pursuant to clause (a) above that the "end of the underwriting period" for the Bonds will not occur on the day of the Closing, the Underwriter agrees to notify the Issuer and the City in writing as soon as practicable following the "end of the underwriting period" for the Bonds for all purposes of the Rule. 15. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance by the designee of the Issuer and the City and shall be valid and enforceable at the time of such acceptance. 16. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 17. Governing Law. This Bond Purchase Agreement shall be construed in accordance with the Iaws of the State of California. 18. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts. #45248890x2 16 If the foregoing is in accordance with your understanding of the Bond Purchase Agreement please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement among the Issuer, the City and the Underwriter in accordance with its terms. Very truly yours, US BANCORP PIPER JAFFRAY, as the Underwriter By: Title: Accepted: This day of '2002 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Executive Director CITY OF DIAMOND BAR By: City Manager #45248844x2 Exhibit A Opinion of Fulbright & Jaworski L.L.P. Bond Counsel Addressed to the Issuer City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar Public Financing Authority 21$25 E. Copley Drive Diamond Bar, California 91765 Ladies and Gentlemen: In our role as Bond Counsel to the City of Diamond Bar Public Financing Authority (the "Authority"), we have examined certified copies of the proceedings taken in connection with the issuance by the Authority of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the `Bonds") in the aggregate principal amount of $ We have also examined supplemental documents furnished to us and have obtained such certificates and documents from public officials as we have deemed necessary for the purposes of this opinion. The Bonds are issued under Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Bond Law"), pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"), and pursuant to an authorizing Resolution of the Authority adopted , 2002. The Bonds are payable from Revenues, as defined in the Indenture, consisting primarily of Base Rental payments to be made by the City of Diamond Bar (the "City") pursuant to a Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Authority and the City. The City has lease real property and improvements thereon to the Authority pursuant to a Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the Authority. The Bonds are being issued for the purpose of financing the community/senior center project and other public improvements within the City. Unless otherwise defined herein, all capitalized terms shall have the meaning given items in the Indenture. #4524889ov2 A-1 Based upon the foregoing, we are of the opinion that: 1. The Indenture has been duly and validly authorized, executed and delivered by the Authority and, assuming such Indenture constitutes the legally valid and binding obligation of the Trustee, constitutes the legally valid and binding obligation of the Authority, enforceable against the Authority in accordance with its terms, and the Bonds are entitled to the benefits of the Indenture. 2. The Lease has been duly and validly authorized, executed and delivered by the Authority and the City and constitutes the legally valid and binding obligations of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. 3. The Site Lease has been duly and validly authorized, executed and delivered by the Authority and the City and constitutes the legally valid and binding obligations of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. 4. The proceedings for the issuance of the Bonds have been taken in accordance with the laws and Constitution of the State of California, and the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchasers, constitute legal and binding special obligations of the Authority enforceable in accordance with their terms. 5. The Bonds are secured by a pledge of the Revenues and all moneys in the funds and accounts as described in the Indenture, including all amounts derived from the investment of such moneys, subject to the application thereof on the terms and conditions as set forth in the Indenture. 6. The Internal Revenue Code of 1986, as amended (the "Code') sets forth certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issue of the Bonds. The Authority has covenanted to maintain the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In our opinion, under existing law, interest on the Bonds is exempt from personal income taxation of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section 1 p3 (a) of the Code from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing statutes, regulations, rulings and court decisions, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, the interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on Bonds owned by a corporation may affect the #45248890x2 A-2 computation of the alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earnings over the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). Except as stated in the preceding two paragraphs, we express no opinion as to any federal or state tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other bond counsel. The foregoing opinions are qualified to the extent that the enforceability of the Indentures and the Bonds, respectively, may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Very truly yours, #4524889M A-3 Exhibit B Opinion of Fulbright & Jaworski L.L.P. Bond Counsel Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 [Credit Entity] Ladies and Gentlemen: We have this dayreleased to the CityofDiamond BarPublic Financing Authority(the "Issuer") our final approving legal opinion with respect to the subj ect bonds (the "Bonds"). You are authorized to rely on such opinion as if the same were addressed to you. In connection with rendering the above-described opinion, we examined the record of proceedings submitted to us relative to the issuance of the Bonds and such other documents as are in our opinion necessary to enable us to express an informed opinion with respect to the following matters. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Official Statement of the Issuer, dated , 2002 relating to the Bonds. Based upon the foregoing, in our opinion: 1. The Issuer has the right and power to perform all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the Issuer, #45248890v2 B-1 the City and US Bancorp Piper Jaffray (the "Underwriter"). The Issuer has duly authorized the Bond Purchase Agreement, and assuming due authorization, execution and delivery by the other parties thereto, the Bond Purchase Agreement constitutes the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with their terns, except as the enforceability thereofmay be limited bybankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. The City of Diamond Bar (the "City") has the right and power to perform all of its obligations under the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and . The City has duly authorized the Reimbursement Agreement, and assuming due authorization, execution and delivery by the other parties thereto, the Reimbursement constitute the legal, valid and binding obligations of the City enforceable against the Issuer in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 3. The Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. 4. The statements contained in the Official Statement relating to the Bonds (including the cover page and the Appendices thereto, but excluding any statements relating to financial or statistical information), insofar as such statements purport to summarize the provisions ofthe Bonds, the Indenture, the Site Lease, the Lease, the Bond Law and federal tax law, fairly and accurately summarize the information presented therein. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the Issuer, and this Ietter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #145248890x2 B-2 Exhibit C Opinion of Counsel for the Issuer Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 [Credit Entity] Ladies and Gentlemen: We are counsel to the City ofDiamond Bar Public Financing Authority (the "Issuer") in connection with the issuance of the above -referenced Bonds and in such capacity, we have examined the original, certified copies, or copies otherwise identified to our satisfaction as being true copies of such resolutions, documents, certificates, and records as we have deemed relevant and necessary (except as we have specifically limited the scope of our investigation herein) as the basis for the opinions set forth herein relying on such examination and pertinent law and subject to the limitations and qualifications hereinafter set forth, we are of the opinion that: 1. The Issuer is a duly organized and validly existing public body, corporate and politic, organized under the laws of the State of California acting pursuant to the Bond Law (as defined in the Official Statement respecting the Bonds) with full legal right, power and authority to perform all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the Issuer, the City of Diamond Bar (the "City") and US Bancorp Piper Jaffray (the "Underwriter"), the Indenture, dated as of December 1, 2002 (the "Indenture") by and between the Issuer and U.S. Bank, N.A. (the "Trustee"), the Site Lease, dated #4524889M C-1 as of December 1, 2002 (the "Site Lease"), by and between the Issuer and the City, the Tease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Issuer and the City, the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the Issuer. and [and the Acknowledgment (the "Acknowledgment," and together with the Bond Purchase Agreement, the Indenture, the Site Lease, the Lease and the Reimbursement Agreement, the "Legal Documents") to the Confirmation Agreement, dated as of December 1, 2002, by and between and .] The Issuer has duly authorized the Legal Documents and assuming due authorization, execution and deliveryby the other parties thereto, the Legal Documents constitute the legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as the enforceability thereof maybe limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. To the best of our knowledge, there is no action, suit or proceeding before or by any court, public board or body pending or threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the Issuer or the titles of its officers to their respective offices, (b) in any way question or affect the validity or enforceability of the Legal Documents, or (c) find illegal, invalid or unenforceable the Bond Purchase Agreement or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Issuer is a parry. 3. The execution and delivery of the Legal Documents and the other instruments contemplated by any of such documents to which the Issuer is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Issuer is a party or is otherwise subject or bound in a manner which would materially adversely affect the Issuer's performance under the Legal Documents. 4. All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Issuer of its obligations under the Legal Documents have been obtained and are in full force and effect. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the Issuer, and this letter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #4524889av2 C-2 Exhibit D Opinion of Counsel for the City Addressed to the Underwriter S City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 [Credit Entity] Ladies and Gentlemen: We are counsel to the City of Diamond Bar (the "City) in connection with the issuance of the above -referenced Bonds and in such capacity, we have examined the original, certified copies, or copies .otherwise identified to our satisfaction as being true copies of such resolutions, documents, certificates, and records as we have deemed relevant and necessary (except as we have specifically limited the scope of our investigation herein) as the basis for the opinions set forth herein relying on such examination and pertinent law and subject to the limitations and qualifications hereinafter set forth, we are of the opinion that; 1. The City is a duly organized and validly existing public body, corporate and politic, organized under the laws of the State of California with full legal right, power and authority to perform all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the City of Diamond Bar Public Financing Authority (the "Issuer"), the City and US Bancorp Piper Jaffray (the "Underwriter"), the Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the City of Diamond Bar Public #45248890x2 D-1 Financing Authority (the "Authority"), the Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Authority and the City, the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and and the Acknowledgment (the "Acknowledgment," and together with the Bond Purchase Agreement, the Site Lease, the Lease and the Reimbursement Agreement, the "Legal Documents") to the Confirmation Agreement, dated as of December 1, 2002, by and between and .] The City has duly authorized the Legal Documents and assuming due authorization, execution and delivery by the other parties thereto, the Legal Documents constitute legal, valid and binding obligations of the City enforceable against the City in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. To the best of our knowledge, there is no action, suit or proceeding before or by any court, public board or body pending or threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the City or the titles of its officers to their respective offices, (b) in any way question or affect the validity or enforceability of the Legal Documents, or (c) find illegal, invalid or unenforceable the Bond Purchase Agreement or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the City is a party. 3. The execution and delivery of the Legal Documents and the other instruments contemplated by any of such documents to which the City is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Issuer is a parry or is otherwise subject or bound in a manner which would materially adversely affect the City's performance under the Legal Documents. 4. All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence ofwhich would materially adversely affect, the performance by the City of its obligations under the Legal Documents have been obtained and are in full force and effect. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the City, and this letter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend'to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #45248840x2 D-2 _W_ * Exhibit E Opinion of Fulbright & Jaworski L.L.P., Disclosure Counsel Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (dated the Closing Date) City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Ladies and Gentlemen: We have acted as Disclosure Counsel to the City of Diamond Bar Public Financing Authority (the "Issuer") with respect to the above -captioned bonds (the `Bonds"). This opinion is rendered to the Issuer and the Underwriter named in the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement"), by and among the Underwriter, the City of Diamond Bar (the "City") and the Issuer, pursuant to which the Underwriter has agreed to purchase the Bonds. The Bonds are being issued pursuant to the provisions of the Constitution and the laws of the State of California including the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 (commencing with Section 6584), Division 7, Title 1 ofthe Government Code of the State of California. The Bonds shall be issued and secured pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), between the Issuer and U.S. Bank, N.A. authorizing the issuance of the Bonds. The Bonds are more fully described in the final Official Statement of the Issuer, dated , 2002 (the "Official Statement"). In rendering this opinion, we have reviewed such records, documents, certificates and opinions, and made such other investigations of law and fact as we have deemed necessary or appropriate. #4524889M E-1 With respect to the matters covered by the approving opinion rendered by us as Bond Counsel to the Issuer ("Bond Counsel'), dated the date hereof, the Underwriter has received a letter from Bond Counsel allowing the Underwriter to rely on such opinion. This letter is limited to matters governed by the federal securities law of the United States, and we assume no responsibility with respect to the applicability or effect of the laws of any other jurisdiction. In our capacity as Disclosure Counsel, we have rendered certain legal advice and assistance to the Issuer in connection with the preparation of the Official Statement. Rendering such legal advice and assistance involved, among other things, discussions and inquiries concerning various legal matters, review of certain records, documents and proceedings, and participation in conferences with, among others, Financing Consultant, your representatives and representatives of the Issuer and the City, and counsel to the Issuer and the City, at which conferences the contents of the Official Statement and related matters were discussed. On the basis of the information made available to us in the course of the foregoing (but without having undertaken to determine or verify independently, or assuming any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Official Statement), no facts have come to the attention of the personnel in our firm directly involved in rendering legal advice and assistance to you in connection with the preparation of the Official Statement which cause us to believe that the Official Statement as of its date (excluding therefrom financial, engineering and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; statements relating to credit enhancement and the provider of the credit enhancement; the book -entry only system; statements relating to the treatment of the Bonds or the interest, discount or premium related thereto for tax purposes under the law of any jurisdiction; and the statements contained in the Official Statement under the caption "LEGAL MATTERS -- Tax Matters;" as to all of which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. During the period from the date of the Official Statement to the date of this opinion, except for our review of the certificates and opinions regarding the Official Statement delivered on the date hereof, we have not undertaken any procedures or taken any actions which were intended or likely to elicit information concerning the accuracy, completeness or fairness of any of the statements contained in the Official Statement. We are furnishing this opinion to you, as Disclosure Counsel to the Issuer, pursuant to the Bond Purchase Agreement, solely for your benefit. This opinion is rendered in connection with the transaction described herein, and may not be relied upon by you for any other purpose. This opinion shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Our engagement with respect to this matter terminates upon the delivery of this opinion to you at the time of the closing relating to the Bonds, and we have no obligation to update this opinion. #k4524889M E-2 Very truly yours, Agenda No. RA3.1 REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR REGULAR MEETING OF THE BOARD OF DIRECTORS N APRIL 2, 2002 1. CALL TO ORDER: Chair/O'Connor called the meeting to order at 8:40 p.m. in the Auditorium of the South Coast Air Quality Management District/Government Center, 21865 E. Copley Dr., Diamond Bar, CA. ROLL CALL: Agency Members Chang, Herrera, Huff, VCIZirbes, Chair/O'Connor. Also present were: Linda Lowry, Executive Director; Mike Jenkins, Agency Attorney; James DeStefano, Deputy City Manager; David Doyle, Deputy City Manager; David Liu, Public Works Director; Bob Rose, Community Services Director; Linda Magnuson, Finance Director; Lynda Burgess, Agency Secretary. 2. PUBLIC COMMENTS: None offered. 3. CONSENT CALENDAR: Moved by VCIZirbes, seconded by AM/Herrera to approve the Consent Calendar as presented. Motion carried by the following Roll Call vote: AYES: AGENCY MEMBERS - Chang, Herrera, Huff, VCIZirbes, C/O'Connor NOES: AGENCY MEMBERS - None ABSENT: AGENCY MEMBERS - None 3.1 APPROVED MINUTES — Regular Meeting of December 4, 2001 — As submitted. 3.2 REVIEWED AND APPROVED TREASURER'S STATEMENT— dated March 31, 2002. 4. PUBLIC HEARINGS: None 5. AGENCY CONSIDERATION: None 6. AGENCY MEMBER COMMENTS: AM/Chang commented on the article regarding D.B.'s Redevelopment Agency that appeared in the San Gabriel Tribune. Many neighboring communities are using the redevelopment tool to attract businesses. D.B. is unable to attract businesses to its deteriorating shopping centers. There are no funds to improve the centers and no incentives to attract business. In addition, residents want a community center and library. Due to the loss of tax increment the City is now faced with having to find other means to finance the community center and library. The cost for the community center is $12 million. Only $6x million is budgeted which leaves a shortfall of $6 million. A library will cost $5-7 million. There is no money budgeted for the library. The Tribune editorial spoke in support of D.B.'s second attempt to propose a more focused and smaller project area. Without a reliable funding source, the City will not be able to turn around its deteriorating shopping centers. Council is not fighting to build a big shopping mall. There is no land in the City. APRIL 2, 2002 PAGE 2 REDEVELOPMENT AGENCY The Council is fighting to maintain the City's property values and quality of life at an acceptable level. Today, the City gets only 5.29% of each dollar it pays in property taxes. Neighboring cities with redevelopment get 49.8% of each property tax dollar back to use for improvement projects. 7. ADJOURNMENT: There being no further business to conduct, Chair/O'Connor adjourned the annual Redevelopment Agency meeting at 8:53 p.m. LYNDA BURGESS, Agency Secretary ATTEST: Deborah O'Connor, Chair Agenda # RA3_ 2 Meeting Date: November 19,2002 DIAMOND BAR REDEVELOPMENT AGENCY REPORT TO: Chairman and Members of the Board VIA: Linda C. Lowry, Executive Directo TITLE: Treasurer's Statement — October 31, 2002 RECOMMENDATION: Approve the October 2002, Treasurer's Statement for the Redevelopment Agency. FINANCIAL IMPACT: No Fiscal Impact BACKGROUND: Per Agency policy, the Finance Department presents the Treasurer's Statement for the Redevelopment Agency Board's review and approval. Due to the change in Redevelopment Agency meeting schedule the following Treasurer's report covers the period of April 1, 2002 through October 31, 2002. " #9= - 6X -1N Linda G. Magnuson, Finance Director REVIEWED BY: �j Departmen ead Attachments: Treasurer's Statement — October 31, 2002 W""11 Depu City Manager DIAMOND BAR REDEVELOPMENT AGENCY TREASURER'S CASH STATEMENT October 31, 2002 4/01:72002 TRANSFERS 10131/02 BALANCE RECEIPTS :: Dl56URSEMENTS "IN (OUT) BALANCE REDEVELOPMENT AGENCY CIP FD $0.00 LOW & MOD INCOME HOUSING FD - REDEVELOPMENT DEBT SVC FD - TOTALS DEMAND DEPOSITS: Linda C. Lowry, Treasurer $0.00 50.00 $0.00 $0.00 $0.00 $0.00 $0.00 GENERAL ACCOUNT TOTAL DEMAND DEPOSITS TOTAL CASH $0.00 ME $0,00 10 � f � ciir or DIAMOND PAR Agenda # RA5.1 Meeting Date: November 19, 2002 REDEVELOPMENT AGENCY STAFF REPORT TO: Chairman and Members of the Board FROM: Linda C. Lowry, Executive Director TITLE: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECOMMENDATION: Staff recommends that the Agency Board approve the above titled resolution making the Redevelopment Agency a member of the Diamond Bar Public Financing Authority (subject to a similar action being taken by the City Council of the City of Diamond Bar) thereby accomplishing the creation of the Diamond Bar Public Financing Authority (DBPFA). FISCAL IMPACT: There is no fiscal impact to the Redevelopment Agency to participate in this DBPFA.The fiscal outcome of the resulting sale of lease revenue by the DBPFA shall effect the City of Diamond Bar and the DBPFA only. BACKGROUND: In order to finance the construction of the Community/Senior Center without using a significant portion of the City of Diamond Bar's reserves, the option exists for the City to issue lease revenue bonds through a separate joint powers authority established for such a purpose. To this end, the City and the Redevelopment Agency can enter into a Joint Exercise of Powers Agreement to establish an entity to sell lease revenue bonds. Approving this set of actions will net the City (through the newly created DBPFA's sale of 30 year lease/revenue bonds) $12,500,000 in cash to fund the construction of the Community/Senior Center and other capital projects. The City will retire the debt through the payment of a Community/Senior Center annual lease in an amount that will mirror the annual debt service and trustee costs experienced by the DBPFA. On November 5, 2002, the City Council adopted Resolution No. 2002-76, declaring its intent to issue tax-exempt obligations for Community/ Senior Center and other capital improvement projects and to allow for the reimbursement of City expenditures made prior to the issuance of such obligations and appoint a financing team in connection therewith. A portion of the proceeds of such obligations was stated to be used to finance all or a portion of a community/senior center project (the "Project") within the City. By financing the facility construction rather than using reserves, the City may be able to use its reserves for economic development as opportunities emerge in the near future. Since the Redevelopment Agency has not obtained a project area to generate economic development resources, it is appropriate for the City to maximize the accessibility of its general fund reserves for to take advantage of economic development opportunities. DISCUSSION: What is being proposed by staff and the Finance Consultant, Kosmont and Associates, is the issuance of variable rate lease revenue bonds (the "Bonds") that will be issued by a joint exercise of powers authority to be created by the City and the Redevelopment Agency of the City of Diamond Bar. The joint exercise of powers authority will be designated "City of Diamond Bar Public Financing Authority." Pursuant to the Act, under which the Authority is created, the Authority is authorized to borrow money for the purpose of financing the public capital improvements. The City will lease the site (retaining title to the property) on which the Project will be built (the "Site") to the Authority pursuant to a Site Lease. The Authority will concurrently lease the Site and any improvements thereon (including the Project) (collectively, the "Leased Property") to the City pursuant to a Lease Agreement. Under the Lease Agreement, the City is obligated to make rental payments both in time and in amounts necessary to pay debt service on the Bonds. Underthe Lease Agreement, the City will covenant to budget and appropriate funds to pay such rental payments. ACTION OUTLINE: 1. In order to complete the steps necessary to implement this concept, the City Council is also considering approving the DBPFA Agreement. 2. If the City Council approves the creation of the Diamond Bar Public Financing Authority, it is appropriate for the Redevelopment Agency (RDA) Board to adopt a resolution approving its participation (as the necessary second entity) in the Diamond Bar Financing Authority. 3. If the RDA approves participation in the DBPFA, the newly created authority shall convene and approve a resolution adopting its bylaws and the following items: a) The issuance of variable rate lease revenue bonds, 2002 Series A (Community Center Project) in the aggregate principal amount of not to exceed $15,000,000 b) An Indenture to the Trustee, U.S.Bank C) A Site Lease and a Lease -Back Agreement d) An Assignment Agreement of lease revenues to the Trustee e) A Bond Purchase Agreement f) A Remarketing Agreement g) A Preliminary Official Statement and Final Official Statement h) Authorization of certain other necessary and appropriate related actions Attachments: Resolution No. 2002-01 Joint Exercise of Powers Agreement 4, RESOLUTION NO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR AUTHORIZING THE CREATION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY AND TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City") and the Redevelopment Agency of the City of Diamond Bar (the "Agency") desires to enter into a Joint Exercise of Powers Agreement establishing the City of Diamond Bar Public Financing Authority (the "Authority") for the purpose, among other things, of issuing its bonds to be used to provide financing and refinancing for public capital improvements of the City and the Agency; and WHEREAS, the Agency finds and declares that entering into the Joint Exercise of Powers Agreement will be beneficial to persons residing within the jurisdiction of the Agency; and WHEREAS, the Agency has reviewed the Joint Exercise of Powers Agreement and the Agency wishes to approve the Joint Exercise of Powers Agreement and matters related thereto; NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section l . The Agency hereby approves the creation of the Authority, its membership therein and the Joint Exercise of Powers Agreement related thereto, substantially in the form on file with the Secretary of the Agency and presented to the Agency at this meeting. Any one of the Chairperson, the Executive Director or the Secretary of the Agency, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver the Joint Exercise of Powers Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 2. The Authorized Officers, the other officers and employees of the Agency, the members of the Agency, Bond Counsel and the other consultants to and agents of the Agency, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions. Section 3. This Resolution shall become effective immediately upon adoption. #45249044v1 PASSED, APPROVED AND ADOPTED this day of , 2002. Deborah H. O'Connor, Chairperson I, LYNDA BURGESS, Secretary ofthe Redevelopment Agency of the City o£Diamond Bar, California do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Governing Board of the Redevelopment Agency of the City ofDiamond Bar, California at its regular meeting held on the day of , 2002, by the following vote: AYES: BOARD MEMBERS: NOES: BOARD MEMBERS: ABSENT: BOARD MEMBERS: Lynda Burgess, Secretary Redevelopment Agency of the City of Diamond Bar #45249044v 2 JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY TABLE OF CONTENTS Paye ARTICLE I DEFINITIONS................................................................................................. 1 Section1.01 Definitions............................................................................................1 ARTICLE II GENERAL PROVISIONS.............................................................................. 3 Section2.01 Purpose................................................................................................. 3 Section 2.02 Creation of Authority............................................................................ 3 ARTICLE III BOARD OF DIRECTORS.............................................................................. 4 Section 3.01 Board of Directors................................................................................ 4 Section3.02 Powers.................................................................................................. 4 Section 3.03 Compensation............................................................ ......... 4 Section 3.04 Meetings of the Board of Directors; Voting ........................................ 4 ARTICLE IV OFFICERS AND EMPLOYEES ..................................................................... 5 Section4.01 Officers................................................................................................ 5 Section 4.02 Subordinate Officers............................................................................ 5 Section 4.03 Removal of Officers............................................................................. 5 Section 4.04 Chairperson.......................................................................................... 5 Section 4.05 Vice Chairperson................................................................................. 5 Section 4.06 Executive Director............................................................................... 6 Section4.07 Secretary................................................................................. Section 4.08 Treasurer; Auditor................................................................................ 6 Section 4.09 Officers in Charge of Records, Funds and Accounts ........................... 6 Section 4.10 Other Employees..............................................................................:... 6 Section 4.11 Conflict of Interest Code...................................................................... 6 ARTICLE V POWERS......................................................................................................... 7 Section 5.01 General Powers.................................................................................... 7 Section 5.02 Specific Powers.................................................................................... 7 Section 5.03 Restrictions on Exercise of Powers ...................................................... 8 Section 5.04 Liability; Contribution......................................................................... 8 Section 5.05 Indemnity by Authority for Litigation Expenses of Officer, Board of Directors Member or Employee ........................................... 9 Section 5.06 Execution of Contracts......................................................................... 9 ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS ....................... 9 Section 6.01 Contributions........................................................................................ 9 Section 6.02 Accounts and Reports.......................................................................... 9 Section6.03 Funds.................................................................................................. 10 Section 6.04 Annual Budget and Administrative Expenses ................................... 10 ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION................................10 Section7.01 Tenn...................................................................................................'10 45249478.1 1 TABLE OF CONTENTS (continued) Pave Section 7.02 Addition of Members.........................................................................11 Section 7.03 Withdrawal or Exclusion of a Member .............................................. I 1 Section7.04 Dissolution......................................................................................... 12 ARTICLE VIII MISCELLANEOUS PROVISIONS.............................................................. 12 Section8.01 Notices............................................................................................... 12 Section 8.02 Section Headings............................................................................... 12 Section8.03 Consent.............................................................................................. 12 Section 8.04 Law Governing.................................................................................. 12 Section 8.05 Amendments...................................................................................... 13 Section 8.06 Enforcement by Authority................................................................. 13 Section 8.07 Severability........................................................................................ 13 Section 8.08 Successors and Assigns...................................................................... 13 Section 8.09 Execution of Counterparts................................................................. 13 JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY THIS JOINT POWERS AGREEMENT (the "Agreement"), is made and entered into as of December 1, 2002 by and among the Members (as defined herein); WITNESSETH: WHEREAS, the City and the Agency are each authorized to own, lease, purchase, receive and hold property necessary or convenient for their governmental operations; and WHEREAS, the financing of the acquisition of property by the City and the Agency acting separately may result in duplication of effort, inefficiencies in administration, and excessive cost, all of which, in the judgment of the City and the Agency, could be eliminated if the financing of the acquisition of property were capable of being performed through a single public agency, and such is the purpose of this Agreement; and WHEREAS, the Marks -Roos Local Bond Pooling Act of 1985 authorizes agencies formed under the Joint exercise of Powers Law (hereinafter defined as the "Joint Powers Law') to assist in the financing of public capital improvements to be owned by any of its members; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the Members do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, whether in the singular or in the plural, when used herein and initially capitalized shall have the meanings specified. "Agency" means the Redevelopment Agency of the City of Diamond Bar "Agreement" means this Joint Exercise of Powers Agreement, as originally entered into or as amended from time to time in accordance with Section 8.05 hereof. "Authority" means the City of Diamond Bar Public Financing Authority established pursuant to Section 2.02 hereof. "Board" means the Board referred to in Section 3.01 hereof, which shall be, the governing body of the Authority. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Joint Powers Law (commencing with Section 5584), as amended from time to time, Article 2 of the Joint Powers Law, as amended from time to time, or any other law available for use by'the 45249478.1 Authority in the authorization and issuance of Indebtedness or to provide for the financing of Indebtedness and/or Public Capital Improvements, as amended from time to time. "Bond Purchase Agreement" means an agreement between the Authority and a Member or a Local Agency, pursuant to which the Authority agrees to purchase Indebtedness from a Member or a Local Agency, as the case may be. "City" means the City of Diamond Bar. "Fiscal Year" means the fiscal year of the Authority as established from time to time by the Board, being at the date of this Agreement the period from July I in any calendar year to and including June 30 in the succeeding calendar year. "Indebtedness" means bonds, notes or other evidences of indebtedness, and all other obligations, instruments and agreements constituting `Bonds" under the Joint Powers Law, which are issued or incurred by or on behalf of the Authority, a Member or a Local Agency pursuant to the Bond Law or pursuant to any other provision of law to finance the lease, acquisition, construction or improvement of Public Capital Improvements, Working Capital Requirements, or liability or other insurance needs of any Local Agency (the "Local Obligations"). "Joint Powers Law" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, as amended from time to time. "Liability Share" means, with respect to any Member, the amount of a judgment for damages divided by the number of Members at the time the act or omission occurred, unless any portion of the judgment arises from an act or omission directly related to the studying, planning, financing, developing, acquiring, purchasing, construction, reconstructing, implementing, improving, enlarging, enhancing, operating, maintaining, selling, disposing of, or decommissioning of any project undertaken by the Authority under this Agreement, in which case, with respect to such portion, the term "Liability Share" shall mean, with respect to any Member, the amount of such portion multiplied by a fraction equal to (i) such Member's entitlement or right, if any, to participate in such project at the time the act or omission occu#red, divided by (ii) the aggregate amount of all Members' entitlements or rights to participate in such project at the time the act or omission occurred. "Local Agency" means each of the Members, any agency or subdivision of a Member, and any other city, county, authority, district or public corporation of the State of California. ' "Members" means, collectively, all of the Members that are parties to this Agreement, which Members shall initially consist of the City and the Agency, and which shall include all additional Members that become parties hereto pursuant to the provisions of Section 7.02 hereof; provided, however, that the term "Member" shall not include any entity which shall have withdrawn or been excluded from the Authority pursuant to Section 7.03 hereof. "Public Agency" has the meaning given to the term "public agency" in Article I of,the Joint Powers Law. 45249478.1 2 "Public Capital Improvements" has the meaning given such term in Section 6585(g) of the Bond Law, as such provision may be amended from time to time. "Working Capital Requirements" means the requirements of any Local Agency for funds to be used by, or on behalf of, such Local Agency for any purpose for which such Local Agency may borrow money pursuant to Section 53852 of the California Government Code, as amended from time to time. ARTICLE II GENERAL PROVISIONS Section 2.01 Purpose. This Agreement is made pursuant to the Joint Powers Law providing for the joint exercise of powers common to two or more Members, and for other purposes as permitted under the Joint Powers Law and the Bond Law. The purpose of this Agreement is to provide for the financing of Public Capital Improvements for and Working Capital Requirements and insurance programs of, the Members and any Local Agency, including without limitation, service through the lease, acquisition or construction by the Authority of such Public Capital Improvements, the purchase by the Authority of Indebtedness of any of the Members or a Local Agency pursuant to Bond Purchase Agreements, the lending of funds by the Authority to a Member or a Local Agency or the entering into of contractual arrangements by the Authority with a Member or a Local Agency and any other transaction authorized by the Joint Powers Law and other laws; engaging in financings relating to the encouragement of economic development and the stimulation of public revenues in the City through the acquisition and financing by the Authority of such Public Capital Improvements; and to engage in any other transactions authorized by the Joint Powers Law and other laws. Section 2.02 Creation of Authority. Pursuant to the Joint Powers Law, there is hereby created a public entity to be known as the "City of Diamond Bar Public Financing Authority". The Authority shall be a public entity separate and apart from the Members, and shall administer this Agreement. 45249478.1 ARTICLE III BOARD OF DIRECTORS Section 3.01 Board of Directors. The Authority shall be governed by a Board of Directors, which shall be comprised of members determined as provided in this Section 3.01. The Board of Directors shall be called the "Board of Directors of the City of Diamond Bar Public Financing Authority." Notwithstanding anything contained in this Section 3.01 to the contrary, no member of the Board of Directors shall hold membership on the Board of Directors after the expiration of his or her term as a member of the goveming body of a Member, or until he or she resigns, is removed or for any other reason no longer serves as a member of the governing body of a Member. The members of the Board of Directors shall be the members of the City Council of the City of Diamond Bar. Section 3.02 Powers. Subject to the limitations of this Agreement and the laws of the State of California, the powers of this Authority shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. The Board of Directors shall have the responsibility for the general management of the affairs, property and business of the Authority and may, from time to time, adopt and modify such By -Laws and other rules and regulations for that purpose and for the conduct of its meetings as it may deem proper. Section 3.03 Compensation. Members of the Board of Directors shall serve with each compensation as shall be established from time to time. Each such member may be reimbursed for necessary and actual expenses, including travel incident to his or her services as member of the Board of Directors, pursuant to resolution of the Board of Directors. Any member of the Board of Directors may elect, however, to decline said compensation or reimbursement. Section 3.04 Meetings of the Board of Directors;. Voting. (a) Call, _Notice and Conduct of Meetings. All meetings of the Board of Directors, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the Ralph M. Brown Act, being Sections 54950 et seq. of the California Government Code, as amended from time to time. (b) Regular_ Meetings. The Board of Directors shall hold a regular meeting not less than once each calendar year. Regular meetings of the Board of Directors shall be held at such time as the Board of Directors may fix by resolution from time to time, and if any day so fixed shall fall upon a legal holiday, then, upon the next succeeding business day at the same hour. No notice of any regular meeting of the Board of Directors need be given to the members of the Board of Directors. (c) Special Meeti=ss. Special meetings of the Board of Directors shall be held whenever called by the President of the Authority or by a majority of the members of the Board of Directors, in accordance with the provisions of the California Government Code, as amended from time to time. 45249478.1 4 (d) Quorum. A majority of the total number of members of the Board of Directors shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. (e) Voting. Each member of the Board of Directors shall have one vote. The affirmative votes of at least a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be required for the Board of Directors to take any action. Every act or decision done or made by a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. ARTICLE IV OFFICERS AND EMPLOYEES Section 4.01 Off eers. . The officers of the Authority shall be a Chairperson, a Vice Chairperson, an Executive Director, a Secretary, a Treasurer, an Auditor and such other officers as the Board of Directors may appoint. The Chairperson shall be the Mayor of the City. The Vice Chairperson shall be the Mayor ProTem of the City. The Finance Director shall serve as the Treasurer and Auditor of the Authority. The City Manager shall serve as the Executive Director of the Authority. The City Clerk shall serve as the Secretary of the Authority. Section 4.02 Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those herein above mentioned as the business of the Authority may require, each of whom shall hold office for such period, have such, authority and perform such duties as are provided in this Agreement, or as the Board of Directors, from time to time, may authorize or determine. Section 4.03 Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the members of the Board of Directors at any regular or special meeting of the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any members of the Board of Directors until such time as a successor for said office has been appointed. Section 4.04 Chairperson. The Chairperson shall be the presiding officer of the Authority. He or she shall be ex officio member of all standing committees, and shall have the such powers and duties as may be prescribed by the Board of Directors or this Agreement. The Chairperson shall preside at all meetings of the Board of Directors. Section 4.05 Vice Chairperson. In the absence or disability of the Chairperson, the Vice Chairperson shall perform all the duties of the Chairperson and when so .acting shall have all the powers of and be subject to all of the restrictions upon the Chairperson. The Vice Chairperson shall have such other powers and perform such other duties as may, from time to time, be prescribed for him or her by the Board of Directors or this Agreement. Section 4.06 Executive Director. The Executive Director shall be the chief executive officer of the Authority. He or she shall have the general powers and duties of management of 45249478.1 C the Authority and shall have such other powers and duties as may be prescribed by the Board of Directors or this Agreement. Section 4.07 Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Board of Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Board of Directors meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors. The Secretary shall keep the Authority records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or this Agreement. Section 4.08 Treasurer; Auditor. Subject to the applicable provisions of any indenture or resolution providing for a trustee or other fiscal agent, the Treasurer is designated as the depositary of the Authority to have custody of all the money of the Authority, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law. The Auditor is hereby designated as the auditor of the Authority and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law including, without limitation, financial reporting responsibilities as provided therein. Section 4.09 Officers in Charge of Records, Funds and Accounts. The Treasurer to the extent such officer's duties and responsibilities require, is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond as required by Section 6505.1 of the Joint Powers Law in the amount of $25,000. Section 4.10 Other Emplovees. The Board of Directors shall have the power to appoint and employ such other officers, employees, consultants and independent contractors as it may deem necessary for the purposes of this Agreement, any of whom may be employees of a Member, and who shall have such powers, duties and responsibilities as are determined by the Board of Directors. All of the privileges and immunities from liability, exemptions from laws, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective functions shall apply to them to the same degree and extent while engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents, or employees directly employed by the Authority shall be deemed, by reason of their employment by the Authority to be employed by any of the Members or, by reason of their employment by the Authority, to be subject to any of the requirements of any of the Members. Section 4.11 Conflict of Interest Code. The Authority by resolution shall adopt by reference a Conflict of Interest Code as required by the Political Reform Act, commencing with section 81000 of the Government Code of the State of California. 45249478.1 6 ARTICLE V POWERS Section 5,01 General Powers. The Authority shall exercise in the manner herein provided powers common to Members, or as otherwise permitted under the Joint Powers Law, and necessary or convenient to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 5.03 hereof. As provided in the Joint Powers Law, the Authority shall be a public entity separate from the Members. The Authority shall have all of the powers provided in the Joint Powers Law, including but not limited to Article 4 of the Joint Powers Law (commencing with Section 6584), and including the power to issue or incur Indebtedness under the Bond Law. Section 5.02 Specific Powers. The Authority is hereby authorized, in its own name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a) to make and enter into contracts; (b) to employ agents or employees; (c) to plan, develop, acquire, construct, manage, maintain, repair, replace or operate any Public Capital Improvement, including the common power of the Members to acquire any Public Capital Improvement by the power of eminent domain; (d) to acquire (by the exercise of the power of eminent domain or otherwise), hold, lease, sell or otherwise dispose of any real or personal property, tangible or intangible, and any interests therein, wherever located; (e) to issue or incur Indebtedness and otherwise to incur debts, liabilities or obligations, provided that no such Indebtedness, debt, liability or obligation shall constitute a debt, liability or obligation of any of the Members; (0 to sue and be sued in its own name; (g) to establish a budget and authorize expenditures therefrom; (h) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States or of the State of California or from any private sources; (i) to enter into agreements for the creation of separate public entities and agencies pursuant to the Joint Powers Law; 0) to invest any money in the treasury as determined by the Authority, in accordance with applicable provisions of the Joint Powers Law and Section 53601 of the California Government: Code, as amended from time to time; 45249478.1 (k) to apply for letters of credit or other forms of financial guarantees in order to secure the repayment of Indebtedness and enter into agreements in connection therewith; (1) to carry out and enforce all the provisions of this Agreement; (m)to make and enter into Bond Purchase Agreements; (n) to purchase Indebtedness of a Member or any Local Agency; (o) to establish non-profit corporations or for-profit corporations to assist in accomplishing any of its objectives; and (p) to exercise any and all other powers as may be permitted by State law and/or the Joint Powers Law (including Section 6588 of the Joint Powers Law). Section 5.03 Restrictions on Exercise of Powers. The powers of the Authority shall be exercised in the manner provided in the Joint Powers Law and in the Bond Law subject only to the restrictions upon the manner of exercising such powers as are imposed upon the Members in the exercise of similar powers. Section 5.04 Liability,,; Contribution. Pursuant to the Joint Powers Law, the debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of any of the Members, except as provided by Section 895.2 of the California Government Code, as amended from time to time, in the case of injury caused by a negligent or wrongful act or omission occurring in the performance of this Agreement. In the event any Member is held liable upon any judgment for damages caused by a negligent or wrongful act or omission occurring in the performance of this Agreement, and pays in excess of its Liability Share of such judgment, such Member shall be entitled to contribution from each other Member and may require each other Member to pay an amount towards the judgment for damages, but in no event shall any such other Member be required to pay in excess of its Liability Share of such judgment. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by the instruments authorizing the issuance of any obligations of the Authority. Nothing contained in this Agreement shall in any way diminish the liability of any Member or other party with respect to any contract between such Member or other party and the Authority. Section 5.05 Indemnity by Authority for Litigation EMLenses of Officer Board of Directors Member or Em to ee. In the event any member of the Board of Directors, officer or employee of the Authority be sued, either alone or with others, because he or she is or was a member of the Board of Directors, officer or employee of the Authority, in any proceeding arising out of his or her alleged misfeasance or nonfeasance in the performance of his or her duties or out of any alleged wrongful act against the Authority or by the Authority, indemnity to such person for reasonable expenses, including attorneys' fees incurred in the defense of the proceedings, may be assessed against the Authority or its receiver by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person 45249478.1 8 reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The amount of such indemnity shall equal the amount of the expenses, including attorneys' fees, incurred in the defense of the proceeding. Section 5.06 Execution of Contracts. The Board of Directors, except as otherwise provided in this Agreement, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on behalf of the Authority and such authorization may be in general or confined to specific instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Authority by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS Section 6.01 Contributions. In accordance with the California Government Code, the Members may in the appropriate circumstances when required hereunder: (a) make contributions from their treasuries as approved from time to time by the Board of Directors, for the purposes set forth herein, (b) make payments of public funds to defray the cost of such purposes, (c) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use their personnel, equipment or property in lieu of other contributions or advances. The provisions of Section 6513 of the Joint Powers Law are hereby incorporated into this Agreement. The Authority may make such arrangements relative to the repayment or return to the Members of such contributions, payments and advances as are approved from time to time by the Board of Directors. Any Member which fails to make or pay when due any required contribution, payment or advance to the Authority, may have its rights under this Agreement terminated and may be excluded from participation in the Authority as provided in Section 7.03(c) hereof. Any such Member shall continue to be Iiable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. Section 6.02 Accounts and Reports. There shall be strict accountability of all funds and reporting of all receipts and disbursements of the Authority. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any resolution, indenture or other instrument of the Authority securing its Indebtedness, except insofar as such powers, duties and responsibilities are assigned to a trustee appointed pursuant to such resolution, indenture or instrument. The books and records of the Authority shall be open to inspection at all reasonable times by the Members and their representatives. The Authority shall give an unaudited written report of all financial activities for each Fiscal Year to the Members within 210 days after the close of each Fiscal Year. 45249478.1 9 The Auditor, as auditor of the Authority, shall contract with a certified public accountant or public accountant to make an independent annual audit of the accounts and records of the Authority. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the California Government Code, as amended from time to time, and shall conform to generally accepted auditing standards. When such an audit of an account and record is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with each of the Members and with the county auditor of Riverside. Such report shall be filed within 12 months of the end of the Fiscal Year under examination. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants, in making an audit pursuant to this Section shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for the purpose. Section 6.03 Funds. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have the custody of and disburse Authority funds as nearly as possible in accordance with generally accepted accounting practices, and shall make the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. Section 6.04 Annual Budget and Administrative Expenses. The Board of Directors shall adopt an annual budget for administrative expenses, which shall include all expenses not included in any financing issue of the Authority, annually prior to the beginning of each Fiscal Year. The estimated annual administrative expenses of the Authority shall be allocated by the Authority to the Members as appropriate. ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION Section 7.01 Term. This Agreement shall become effective as of the date first set forth above, and the Authority shall come into existence, on the date of execution and delivery hereof, and this Agreement shall thereafter continue in full force and effect until the later of December 1 2057 or the date on which all Indebtedness and other obligations of the Authority and the interest thereon shall have been paid in full or until adequate provision for such payment shall have been made in accordance with the instruments governing such Indebtedness, and no material contracts to which the Authority is a party remain in effect, unless earlier dissolved pursuant to Section 7.04 hereof. Section 7.02 Addition of Members. (a) Public Agencies possessing one or more of the powers specified in the first paragraph of the recitals to this Agreement may be added as parties to this Agreement, and become Members, upon the filing by such Public Agency with the Board of Directors of an instrument in form and substance satisfactory to the Board of Directors together with a certified copy of a resolution of its governing body, whereby the Public Agency (i) agrees to the provisions of this Agreement and (ii) requests to become a Member. In 45244478.1 10 reviewing an application for membership, the Board of Directors may reject said application based on the creditworthiness of the applicant or on any other matter which has affected or may affect the creditworthiness of the applicant and which may thereby affect the creditworthiness of the Authority. The Board of Directors also reserves the right to reject an applicant if the Board of Directors determines that the membership of such applicant would be detrimental to the effectiveness of the Authority or would interfere with the realization of the Authority's goals and purposes. (b) Notwithstanding Section 7.02(a) hereof, no such Public Agency shall become a Member until (i) its admission is approved by a vote of a majority of the Board of Directors voting on the matter and (ii) such Public Agency deposits or agrees to deposit with the Authority an amount equal to such share of the costs and expenses incurred by the Authority prior to the date of admission of such Public Agency as a Member as shall be determined by the Board of Directors. (c) Upon satisfaction of the provisions of Section 7.02(a) and 7,02(b) hereof, such Public Agency shall be a Member for all purposes of this Agreement, and the instrument provided pursuant to Section 7.02(a) hereof shall become a part of the official records of the Authority. Neither the effectiveness of such membership nor such instrument shall constitute an amendment or modification of this Agreement for purposes of Section 8.05. hereof. Section 7.03 Withdrawal or Exclusion of a Member. (a) Any Member may withdraw from the Authority upon the following conditions: (i) the Member shall have filed with the Board of Directors a certified copy of a resolution of its governing body expressing its desire to so withdraw and (ii) if the Authority, prior to the filing of such resolution, shall have incurred any obligation payable from contributions, payments or advances in accordance with Section 6.01 hereof, which obligation matures after the date of such filing, the withdrawing Member shall have paid, or made arrangements satisfactory to the Board of Directors to pay to the Authority its pro rata portion of such obligation. (b) Upon compliance with the conditions specified in Section 7.03(a) hereof, the withdrawing Member shall no longer be considered a Member for any reason or purpose under this Agreement and its rights and obligations under this Agreement shall terminate. The withdrawal of a Member shall not affect any obligations of such Member under any contract between the withdrawing Member and the Authority. (c) Any Member which has (i) defaulted under a contract with the Authority, or (ii) failed to pay any required contributions, payments or advances in accordance with Section 6.01 hereof, may have its rights under this Agreement terminated and may be excluded from participating in the Authority by a vote of a majority of the members of the Board of Directors voting on the matter (excluding from voting the member(s) of the Board of Directors, if any, representing the defaulting Member). Any excluded Member shall continue to be liable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. 45249478.1 11 No withdrawal from membership pursuant to Sections 7.03(a) and 7.03(b) hereof or exclusion from participation pursuant to Section 7.03(c) hereof shall constitute an amendment or modification of this Agreement for purposes of Section 8.05 hereof. Section 7.04 Dissolution. With the approval of the Board of Directors, the Authority may be dissolved, if at the time of such dissolution the Authority has no Indebtedness outstanding and is not a party to any contract remaining in effect (unless adequate provision shall have been made for the discharge of such contract). Upon the dissolution or termination of the Authority, and after payment or provision for payment, all debts and liabilities, the assets of the Authority shall be distributed to the Members in such manner as shall be determined by the Board of Directors. ARTICLE VIII MISCELLANEOUS PROVISIONS Section 8.01 Notices. (a) Any notice, demand or request to any Member provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to the person designated by such Member upon the commencement of its membership in the Authority. (b) A Member may, at any time, by written notice to each other Member and the Authority, designate different persons or different addresses for the giving of notices, dert: ds or requests to it hereunder. (c) Any notice, demand or request to the Authority provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to Diamond Bar Utility Authority, c/o City of Diamond Bar, 21825 E. Copley Drive, Diamond Bar, California 91765, or at the notice address most recently provided by said Member pursuant to this Section 8.01. (d) The Authority may, at any time, by written notice to each Member, designate a different or additional person or a different address for giving notices, demands or requests to it hereunder. Section 8.02 Section Headings. All section headings in this Agreement are for convenience of reference only and are not to be construed as modifying or governing the language in the section referred to or to define or limit the scope of any provision of this Agreement. Section 8.03 Consent. Whenever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section 8.04 Law Governing. This Agreement is made in the State of California under the constitution and Iaws of the State of California, and is to be so construed. Section 8.05 Amendments. This Agreement may be amended at any time, or from time to time, except as limited by contract with the owners of Indebtedness issued or incurred by the 45249478.1 12 Authority, a Member or a Local Agency or by applicable regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by all then current Members either as required in order to carry out any of the provisions of this Agreement or for any other purpose. Section 8.06 Enforcement by Authority. The Authority is hereby authorized to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 8.07 Severabilitv. In the event that any term, covenant or condition of this Agreement or the application of such term, covenant or condition shall be held invalid as to any person or circumstance by any court having jurisdiction in the premises, all other terms, covenants and conditions of this Agreement and their application shall not be affected thereby, but shall remain in force and effect unless a court holds that the provisions are not separable from all other provisions of this Agreement. Section 8.08 _Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Members. No Member may assign any right or obligation hereunder without the written consent of the other Members. The immediately preceding sentence shall not affect, in any respect, any right of assignment under any contract between any Member and the Authority. Section 8.09 Execution of Counterparts. This Agreement may be executed in any number of counterparts. All such counterparts shall be deemed to be originals and shall together constitute but one and the same instrument. 45249478.1 13 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duly authorized, on the day and year first set forth above. ATTEST: City Clerk ATTEST: Secretary 45244478.1 CITY OF DIAMOND BAR Mayor REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR M Chairperson 14 Eld QJ 74m i w • I CD � cn � CD Ora o C -D CD' n O CDCD r CD o CD � " a • CD �C (p 1+ aCA (D ('DD 0 CD o tti It �s > � cn' o � o � � 0 CD CD 11 ME o � o n o N � U4 _f.�._.� .� �.�__,. - _ff i O � CD CrQ CD rL Cr CD C� �d 0 C y �z CD C CD � CS 0 CD � N O (A bd � o �. CD �71 o P7' o' ��• c� CD CD 0 CD C o � o C -D o CD CD Od CD o or cD �0 CD i O � CD CrQ CD rL Cr CD C� �d 0 C y CD CD O bd � o r o �71 o P7' o' ��• N �CDCD C -D CD CD CD o or cD CD CD •cD CD CD o CD CD i O � CD CrQ CD rL Cr CD C� �d 0 C y AUTHORITY TO: Honorable Chair and Board Members Agenda # PFA 4.1 Meeting Date: November 19 2002 AGENDA REPORT FROM: Linda C. Lowry, Executive Director TITLE: RESOLUTION OF THE CITY OF DIAMOND AR PUBLIC FINANCING AUTHORITY APPROVING AND ADOPTING ITS BYLAWS; APPROVING THE ISSUANCE OF ITS VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $15,000,000; APPROVING AN INDENTURE, A SITE LEASE, A LEASE AGREEMENT, AN ASSIGNMENT AGREEMENT, A BOND PURCHASE AGREEMENT, A REMARKETING AGREEMENT, A PRELIMINARY OFFICIAL STATEMENT AND FINAL OFFICIAL STATEMENT IN CONNECTION THEREWITH; AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECOMMENDATION: Staff recommends that the resolution titled above and its appurtenant documents be approved by the Board thereby accomplishing the following: 1. Establish a finding that the issuance of Bonds will result in significant public benefits 2. Approve Issuance of Bonds not to exceed $15,000,000 3. Approve Bylaws for the Public Financing Authority 4. Adopt the Investment Policy of the City of Diamond Bar and the Conflict of Interest Code of the City 5. Approve in substance an Indenture Agreement 6. Approve a Site Lease with the City of Diamond Bar for the Community/Senior Center 7. Approve a Lease Agreement with the City of Diamond Bar 8. Authorize an Assignment Agreement 9. Authorize a Remarketing Agreement ( due to Variable Rate Loan) 10. Approve the Bond Purchase Agreement 11. Approve in substance the Preliminary Official Statement and authorize preparation and distribution of the final Official Statement 12. Authorize described Officers and agents of the Authority to take all actions necessary to complete the actions set forth in the Resolution. FISCAL IMPACT: Approving this set of actions will initiate a bond sale intended to net $12,500,000 in cash to fund the construction of the Community/Senior Center and other facility projects. The costs of issuance of the bonds will incur a debt higher than the $12,500,00 proceeds. The interest rate of the debt will vary depending on the bond market since the bonds shall be variable with a rate cap for the first ten years. The debt service will also vary during the first ten years between an approximate average of $651,000 per year to $798,000 depending on the market interest rates. The City shall make annual lease payments to the Authority in an amount that will mirror the annual debt service on the bonds and trustee costs experienced by the DBPFA. BACKGROUND: On November 5, 2002, this Council adopted Resolution No. 2002-76, declaring its intent to issue tax- exempt obligations for Community/ Senior Center and other capital improvement projects and to allow for the reimbursement of City expenditures made prior to the issuance of such obligations and appoint a financing team in connection therewith. A portion of the proceeds of such obligations was stated to be used to finance all or a portion of a community/senior center project (the "Project") within the City. By financing the facility construction rather than using reserves, the City may be able to use its reserves for economic development as opportunities emerge in the near future. DISCUSSION: What is being proposed is the issuance of variable rate lease revenue bonds (the `Bonds") that will be issued by a joint exercise of powers authority to be created by the City and the Redevelopment Agency of the City of Diamond Bar. The joint exercise of powers authority will be designated "City of Diamond Bar Public Financing Authority." Pursuant to the Act, under which the Authority is created, the Authority is authorized to borrow money for the purpose of financing the public capital improvements of public entities including the City and the Agency. The City will lease the site (retaining title) on which the Project will be built (the "Site") to the Authority pursuant to a Site Lease. The Authority will concurrently lease the Site and any improvements thereon (including the Project) (collectively, the "Leased Property") to the City pursuant to a Lease Agreement. Under the Lease Agreement, the City is obligated to make rental payments both in time and in amounts necessary to pay debt service on the Bonds. Under the Lease Agreement, the City will covenant to budget and appropriate funds to pay such rental payments. The Bonds are secured solely by Revenue (comprising of such rental payments and interest earnings on funds established and held under the Indenture) and moneys and investments held in certain funds established under the Indenture. In addition to the Indenture, the Authority will utilize an Assignment Agreement, which assigns to the Trustee its right to receive the rental payments from the City. The interest rate on the Bonds will be determined on a daily or weekly basis until such time the City decides to convert to a fixed rate. Upon conversion to a fixed rate, the Bonds will accrue interest at the rate then set by the Remarketing Agent as required under the Remarketing Agreement. The Indenture is a contract between the Authority and the Trustee (acting as a fiduciary to the Bond Page 2 owners) setting forth the terms of the Bonds (including payment and redemption provisions), the security for the Bonds and the rights and remedies of the Bond owners. Credit enhancement will be utilized by way of a direct pay letter of credit and possibly a confirming letter of credit. The entities providing these letters of credit have not been finalized. The Trustee will be authorized to draw on the direct pay letter of credit for each debt service payment on the Bonds, which draws will be reimbursed from the rental payments made by the City. If a confirming letter of credit is utilized, the confirming letter of credit provider will guarantee the payment of the direct pay letter of credit provider. The City will enter into a Reimbursement Agreement with the direct pay letter of credit provider agreeing to reimburse the provider for each draw under such direct pay letter of credit. US Bancorp Piper Jaffray, acting as the Underwriter, and pursuant to a Bond Purchase Agreement, will purchase the Bonds. The Bond Purchase Agreement sets forth the terms of the sale including the Underwriter's discount and conditions precedent to closing of the transaction. In connection with marketing of the Bonds, the Authority will prepare and authorize the Underwriter to distribute a Preliminary Official Statement relating to the Bonds. The Preliminary Official Statement is the Authority's offering document that the Underwriter will use to market the Bonds. The Preliminary Official Statement summarizes the provisions of the various legal documents described above and provides financial information with respect to the City. ACTION OUTLINE: In order to complete the steps necessary to implement this concept, the Diamond Bar City Council must adopt a resolution approving Authority membership, Site Lease, Lease Agreement and Bond Purchase Agreement, Reimbursement Agreement and other steps necessary on behalf of the City to perfect necessary and appropriate documents. 2. If the City Council approves the creation of the Diamond Bar Public Financing Authority, then Redevelopment Agency (RDA) Board must adopt a resolution approving its participation (as the necessary second entity) in the Diamond Bar Financing Authority (DBPFA). 3. If the RDA approves participation in the DBPFA, the Authority shall approve this recommended resolution, agreements, and directives to Authority Officers and staff. Attachments: Resolution No. 2002-01 Joint Exercise of Powers Agreement Bylaws Indenture Site Lease Lease Agreement Assignment Agreement Bond Purchase Agreement Remarketing Agreement Preliminary Official Statement Page 3 RESOLUTION NO. RESOLUTION OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY APPROVING AND ADOPTING ITS BYLAWS; APPROVING THE ISSUANCE OF ITS VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $17,000,000, AND APPROVING AN INDENTURE, A SITE LEASE, A LEASE AGREEMENT, AN ASSIGNMENT AGREEMENT, A BOND PURCHASE AGREEMENT, A REMARKETING AGREEMENT, A PRELIMINARY OFFICIAL STATEMENT AND A FINAL OFFICIAL STATEMENT IN CONNECTION THEREWITH; AND AUTHORIZING THE TAKING OF CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Diamond Bar (the "City") and the Redevelopment Agency of the City of Diamond Bar (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement establishing the City of Diamond Bar Public Financing Authority (the "Authority') for the purpose, among other things, of issuing its bonds to be used to provide financing andrefnancing for public capital improvements of the City and the Agency; and WHEREAS, the Authority wishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of a community/senior center project (the "Project") and e1ier public capital improvements within the City; WHEREAS, the City will lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to a Site Lease (the "Site Lease"); and WHEREAS, the Authority, concurrently with the execution of the Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the City pursuant to a Lease Agreement (the "Lease"), in consideration for base rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Bonds are to be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), constituting Article 4 (commencing with Section 6584 of Chapter 5 ofDivision 7 of Title 1 of the Government Code of the State of California; and WHEREAS, the Authority has reviewed the documentation related to the issuance of the Bonds which documentation is on file with the secretary of the Authority; 4.5248970.2 NOW THEREFORE, THE BOARD OF DIRECTORS OF THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: S ection l . The Authority hereby finds and determines that the foregoing recitals are true and correct. Section 2. The Authority hereby finds and determines that the issuance of the Bonds will result in significant public benefits within the contemplation of Section 6586 of the Act. Section 3. The Authority hereby approves the issuance ofthe Bonds in an aggregate principal amount not to exceed $17,000,000. Section 4. The Bylaws, in substantially the form on file with the Secretary of the Authority and presented to the Board at this.meeting, are hereby approved and adopted. Section 5. Pursuant to the Joint Exercise ofPowers Agreement, the Contlict oflnterest Code ofthe City, on file with the Secretary of the Authority and incorporated by reference as if fully set forth herein, is hereby, adopted as the Conflict of Interest Code of the Authority. Section 6. The Statement of Investment Policy of the City, on file with the Secretary of the Authority and incorporated by reference as if fully set forth herein, is hereby adopted as the Investment Policy of the Authority. Section 7. The Indenture, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Chairperson, the Executive Director, the Treasurer or the Secretary of the Authority, or any designee of any of them (each, an "Authorized Officer" and collectively, the "Authorized Officers"), is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture, with such insertions and changes as may be approved by the Authorized. Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 8. The Site Lease, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Anyone ofthe Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Site Lease, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section. 9. The Lease Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to 45248970.2 2 execute and deliver the Lease Agreement, with such insertions and changes as may be approved by the Authorized. Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section_10. The Assignment Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 11. The Remarketing Agreement, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Remarketing Agreement, with such insertions and changes as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. Section 12. The Bond Purchase Agreement relating to the Bonds (the "Bond Purchase Agreement"), by and between the Authority and the Underwriter in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Agreement with such insertions and changes and as may be approved by the Authorized Officer executing the same, subject to the provisions of this Resolution, such approval to be conclusively evidenced by such execution and delivery. The initial interest rate shall not exceed 2.5% and the underwriter's discount for the Bonds specified in the Bond Purchase Agreement shall not exceed 1.0%, exclusive of original issue discount. Section 13. The form of Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"}, in substantially the form on file with the Secretary of the Authority and presented to the Board at this meeting, is hereby approved. Any one of the Authorized Officers is hereby authorized and directed, for and in the name and on behalf of the Authority, and to make such insertions and changes to the Preliminary Official Statement as may be approved by the Authorizing Officer, in consultation with l4ulbright & Jaworski L.L.P., Bond Counsel and Disclosure Counsel to the Authority ("Bond Counsel"), and to prepare the final Official Statement relating to the Bonds (the "Official Statement"}. Any one of the Authorized Officers is hereby authorized and directed to execute the Official Statement. The distribution of the Preliminary Official Statement to potential purchasers and the distribution of the Official Statement to actual purchasers of the Bonds is hereby authorized and approved. Section 14. The Authorized Officers, the other officers and employees of the Authority, the members of the Authority's Board of Directors, Bond Counsel and the other consultants to and 45248970.2 3 agents of the Authority, are each hereby authorized and directed to do all things and take all actions necessary or desirable to effectuate the transaction contemplated by this Resolution, and to execute such other assignments, agreements, certificates, receipts, endorsements, orders, opinions and other documents in connection with such transactions, including, without limitation, closing documents in connection with the issuance of the Bonds are hereby ratified, approved and confirmed in every respect. Section 15. This Resolution shall become effective immediately upon adoption. PASSED, APPROVED AND ADOPTED this day of , 2002. Wen Chang, Chairperson I, LYNDA BURGESS, Secretary of the City of Diamond Bar Public Financing Authority do hereby certify that the foregoing Resolution was duly and regularly passed and adopted by the Board of Directors of the City of Diamond Bar Public Financing Authority at its regular meeting held on the day of , 2002, by the following vote: AYES: AUTHORITY MEMBERS: NOES: AUTHORITY MEMBERS: ABSENT: AUTHORITY MEMBERS: ABSTAINED: AUTHORITY MEMBERS: 45248970.2 M Lynda Burgess, Secretary City of Diamond Bar Public Financing Authority JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY ofq, TABLE OF CONTENTS Page ARTICLEI DEFINITIONS................................................................................................. 1 Section1.01 Definitions............................................................................................ 1 ARTICLE II GENERAL PROVISIONS.............................................................................. 3 Section2.01 Purpose................................................................................................. 3 Section 2.02 Creation of Authority........................................................................... 3 ARTICLE III BOARD OF DIRECTORS.............................................................................. 4 Section 3.01 Board of Directors................................................................................ 4 Section3.02 Powers.................................................................................................. 4 Section 3.03 Compensation...................................................................................... 4 Section 3.04 Meetings of the Board of Directors; Voting ........................................ 4 ARTICLE IV OFFICERS AND EMPLOYEES ..................................................................... 5 Section4,01 Officers........................................................................................... Section 4.02 Subordinate Officers............................................................................ 5 Section 4.03 Removal of Officers........................................................................ . 5 Section 4.04 Chairperson.......................................................................................... 5 Section 4.05 Vice Chairperson................................................................................. 5 Section 4.06 Executive Director............................................................................... 6 Section 4.07 Secretary .............................................................................................. 6 Section 4.08 Treasurer; Auditor................................................................................ 6 Section 4.09 Officers in Charge of Records, Funds and Accounts ........................... 6 Section 4.10 Other Employees.................................................................................. 6 Section 4.11 Conflict of Interest Code...................................................................... 6 ARTICLE V POWERS........................................................................... ... 7 ........................... Section 5.01 General Powers.................................................................................... 7 Section 5.02 Specific Powers.................................................................................... 7 Section 5.03 Restrictions on Exercise of Powers ...................................................... 8 Section 5.04 Liability; Contribution......................................................................... 8 Section 5.05 Indemnity by Authority for Litigation Expenses of Officer, Board of Directors Member or Employee ........................................... 9 Section 5.06 Execution of Contracts......................................................................... 9 ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS ........................ 9 Section 6.01 Contributions....................................................................................... 9 Section 6.02 Accounts and Reports.......................................................................... 9 Section6.03 Funds.................................................................................................. 10 Section 6.04 Annual Budget and Administrative Expenses ................................... 10 ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION Section7.01 Term................................................................... 45249478.1 . i ........................ ......' 10 .............................. 10 TABLE OF CONTENTS (continued) Pam Section 7.02 Addition of Members......................................................................... 11 Section 7.03 Withdrawal or Exclusion of a Member .............................................. 11 Section7.04 Dissolution......................................................................................... 12 ARTICLE VIII MISCELLANEOUS PROVISIONS.............................................................. 12 Section8.01 Notices............................................................................................... 12 Section 8.02 Section Headings............................................................................... 12 Section8.03 Consent.............................................................................................. 12 Section 8.04 Law Governing.................................................................................. 12 Section 8.05 Amendments...................................................................................... 13 Section 8.06 Enforcement by Authority................................................................. 13 Section 8.07 Severability........................................................................................ 13 Section 8.08 Successors and Assigns ... .............. ..... ................................... I............ 13 Section 8.09 Execution of Counterparts................................................................. 13 JOINT EXERCISE OF POWERS AGREEMENT CREATING CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY THIS JOINT POWERS AGREEMENT (the "Agreement"), is made and entered into as of December 1, 2002 by and among the Members (as defined herein); WITNESSETH: WHEREAS, the City and the Agency are each authorized to own, lease, purchase, receive and hold property necessary or convenient for their governmental operations; and WHEREAS, the financing of the acquisition of property by the City and the Agency acting separately may result in duplication of effort, inefficiencies in administration, and excessive cost, all of which, in the judgment of the City and the Agency, could be eliminated if the financing of the acquisition of property were capable of being performed through a single public agency, and such is the purpose of this Agreement; and WHEREAS, the Marks -Roos Local Bond Pooling Act of 1985 authorizes agencies formed under the Joint exercise of Powers Law (hereinafter defined as the "Joint Powers Law") to assist in the financing of public capital improvements to be owned by any of its members; NOW, THEREFORE, in consideration of the above premises and of the mutual promises herein contained, the Members do hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, whether in the singular or in the plural, when used herein and initially capitalized shall have the meanings specified. "Agency" means the Redevelopment Agency of the City of Diamond Bar. "Agreement" means this Joint Exercise of Powers Agreement, as originally entered into or as amended from time to time in accordance with Section 8.05 hereof. "Authority" means the City of Diamond Bar Public Financing Authority established pursuant to Section 2.02 hereof. "Board" means the Board referred to in Section 3.01 hereof, which shall be the governing body of the Authority. "Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, being Article 4 of the Joint Powers Law (commencing with Section 6584), as amended from time to time, Article 2 of the Joint Powers Law, as amended from time to time, or any other law available for use by the 45249478.1 Authority in the authorization and issuance of Indebtedness or to provide for the financing of Indebtedness and/or Public Capital Improvements, as amended from time to time. "Bond Purchase Agreement" means an agreement between the Authority and a Member or a Local Agency, pursuant to which the Authority agrees to purchase Indebtedness from a Member or a Local Agency, as the case may be. "City" means the City of Diamond Bar. "Fiscal Year" means the fiscal year of the Authority as established from time to time by the Board, being at the date of this Agreement the period from July 1 in any calendar year to and including June 30 in the succeeding calendar year. "Indebtedness" means bonds, notes or other evidences of indebtedness, and all other obligations, instruments and agreements constituting `Bonds" under the Joint Powers Law, which are issued or incurred by or on behalf of the Authority, a Member or a Local Agency pursuant to the Bond Law or pursuant to any other provision of law to finance the lease, acquisition, construction or improvement of Public Capital Improvements, Working Capital Requirements, or liability or other insurance needs of any Local Agency (the "Local Obligations"). °Joint Powers Law" means Articles 1 through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title 1 of the California Government Code, as amended from time to time. "Liability Share" means, with respect to any Member, the amount of a judgment for damages divided by the number of Members at the time the act or omission occurred, unless any portion of the judgment arises from an act or omission directly related to the studying, planning, financing, developing, acquiring, purchasing, construction, reconstructing, implementing, improving, enlarging, enhancing, operating, maintaining, selling, disposing of, or decommissioning of any project undertaken by the Authority under this Agreement, in which case, with respect to such portion, the term "Liability Share" shall mean, with respect to any Member, the amount of such portion multiplied by a fraction equal to (i) such Member's entitlement or right, if any, to participate in such project at the time the act or omission occurred, divided by (ii) the aggregate amount of all Members' entitlements or rights to participate in such project at the time the act or omission occurred. "Local Agency" means each of the Members, any agency or subdivision of a Member, and any other city, county, authority, district or public corporation of the State of California. "Members" means, collectively, all of the Members that are parties to this Agreement, which Members shall initially consist of the City and the Agency, and which shall include all additional Members that become parties hereto pursuant to the provisions of Section 7.02 hereof; provided, however, that the term "Member' shall not include any entity which shall have withdrawn or been excluded from the Authority pursuant to Section 7.03 hereof. "Public Agency" has the meaning given to the term "public agency" in Article I of the Joint Powers Law, 45249475.1 2 "Public Capital Improvements" has the meaning given such term in Section 5585(g) of the Bond Law, as such provision may be amended from time to time. "Working Capital Requirements" means the requirements of any Local Agency for funds to be used by, or on behalf of, such Local Agency for any purpose for which such Local Agency may borrow money pursuant to Section 53852 of the California Government Code, as amended from time to time. ARTICLE H GENERAL PROVISIONS Section 2.01 Purpose. This Agreement is made pursuant to the Joint Powers Law providing for the joint exercise of powers common to two or more Members, and for other purposes as permitted under the Joint Powers Law and the Bond Law. The purpose of this Agreement is to provide for the financing of Public Capital Improvements for and Working Capital Requirements and insurance programs of, the Members and any Local Agency, including without limitation, service through the lease, acquisition or construction by the Authority of such Public Capital Improvements, the purchase by the Authority of Indebtedness of any of the Members or a Local Agency pursuant to Bond Purchase Agreements, the lending of funds by the Authority to a Member or a Local Agency or the entering into of contractual arrangements by the Authority with a Member or a Local Agency and any other transaction authorized by the Joint Powers Law and other laws; engaging in financings relating to the encouragement of economic development and the stimulation of public revenues in the City through the acquisition and financing by the Authority of such Public Capital Improvements; and to engage in any other transactions authorized by the Joint Powers Law and other laws. Section 2.02 Creation of Authority. Pursuant to the Joint Powers Law, there is hereby created a public entity to be known as the "City of Diamond Bar Public Financing Authority". The Authority shall be a public entity separate and apart from the Members, and shall administer this Agreement. 45249478.1 ARTICLE III BOARD OF DIRECTORS Section 3.01 Board of Directors. The Authority shall be governed by a Board of Directors, which shall be comprised of members determined as provided in this Section 3.01. The Board of Directors shall be called the "Board of Directors of the City of Diamond Bar Public Financing Authority." Notwithstanding anything contained in this Section 3.01 to the contrary, no member of the Board of Directors shall hold membership on the Board of Directors after the expiration of his or her term as a member of the governing body of a Member, or until he or she resigns, is removed or for any other reason no longer serves as a member of the governing body of a Member. The members of the Board of Directors shall be the members of the City Council of the City of Diamond Bar. Section 3.02 Powers. Subject to the limitations of this Agreement and the laws of the State of California, the powers of this Authority shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. The Board of Directors shall have the responsibility for the general management of the affairs, property and business of the Authority and may, from time to time, adopt and modify such By -Laws and other rules and regulations for that purpose and for the conduct of its meetings as it may deem proper. Section 3.03 Compensation. Members of the Board of Directors shall serve with each compensation as shall be established from time to time. Each such member may be reimbursed for necessary and actual expenses, including travel incident to his or her services as member of the Board of Directors, pursuant to resolution of the Board of Directors. Any member of the Board of Directors may elect, however, to decline said compensation or reimbursement. Section 3.04 Meetings of the Board of Directors,, Voting. (a) Call, Notice and Conduct of Meetings. All meetings of the Board of Directors, including without limitation, regular, adjourned regular and special meetings, shall be called, noticed, held and conducted in accordance with the Ralph M. Brown Act, being Sections 54950 et seq. of the California Government Code, as amended from time to time. (b) Regular Meetings. The Board of Directors shall hold a regular meeting not less than once each calendar year. Regular meetings of the Board of Directors shall be held at such time as the Board of Directors may fix by resolution from time to time, and if any day so fixed shall fall upon a legal holiday, then, upon the next succeeding business day at the same hour. No notice of any regular meeting of the Board of Directors need be given to the members of the Board of Directors. (c) Special Meetings. Special meetings of the Board of Directors shall be held whenever called by the President of the Authority or by a majority of the members of the Board of Directors, in accordance with the provisions of the California Government Code, as amended from time to time. 45249478.1 4 (d) Quorum. A majority of the total number of members of the Board of Directors shall constitute a quorum for the transaction of business, except that less than a quorum may adjourn from time to time. (e) Votin ~. Each member of the Board of Directors shall have one vote. The affirmative votes of at least a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be required for the Board of Directors to take any action. Every act or decision done or made by a majority of the members of the Board of Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. ARTICLE IV OFFICERS AND EMPLOYEES Section 4.01 Officers. The officers of the Authority shall be a Chairperson, a Vice Chairperson, an Executive Director, a Secretary, a Treasurer, an Auditor and such other officers as the Board of Directors may appoint. The Chairperson shall be the Mayor of the City. The Vice Chairperson shall be the Mayor ProTem of the City. The Finance Director shall serve as the Treasurer and Auditor of the Authority. The City Manager shall serve as the Executive Director of the Authority. The City Clerk shall serve as the Secretary of the Authority. Section 4.02 Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those herein above mentioned as the business of the Authority may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in this Agreement, or as the Board of Directors, from time to time, may authorize or determine. Section 4.03 Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the members of the Board of Directors at any regular or special meeting of the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any members of the Board of Directors until such time as a successor for said office has been appointed. Section 4.04 Chairperson, The Chairperson shall be the presiding officer of the Authority. He or she shall be ex officio member of all standing committees, and shall have the such powers and duties as may be prescribed by the Board of Directors or this Agreement. The Chairperson shall preside at all meetings of the Board of Directors. Sectio[ 4.05 Vice Chairperson. In the absence or disability of the Chairperson, the Vice Chairperson shall perform all the duties of the Chairperson and when so acting shall have all the powers of and be subject to all of the restrictions upon the Chairperson. The Vice Chairperson shall have such other powers and perform such other duties as may, from time to time, be prescribed for him or her by the Board of Directors or this Agreement. Section 4.06 Executive Director. The Executive Director shall be the chief executive officer of the Authority. He or she shall have the general powers and duties of management of 45249478.1 c the Authority and shall have such other powers and duties as may be prescribed by the Board of Directors or this Agreement. Section 4.07 Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Board of Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Board of Directors meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of ail meetings of the Board of Directors. The Secretary shall keep the Authority records in safe custody and shall have such other powers and perforin such other duties as may be prescribed by the Board of Directors or this Agreement. Section 4.08 Treasurer, Auditor. Subject to the applicable provisions of any indenture or resolution providing for a trustee or other fiscal agent, the Treasurer is designated as the depositary of the Authority to have custody of all the money of the Authority, from whatever source, and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law. The Auditor is hereby designated as the auditor of the Authority and, as such, shall have the powers, duties and responsibilities specified in Section 6505.5 of the Joint Powers Law including, without limitation, financial reporting responsibilities as provided therein. Section 4.09 Officers in Char LiFe of Records Funds and Accounts. The Treasurer to the extent such officer's duties and responsibilities require, is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond as required by Section 6505.1 of the Joint Powers Law in the amount of $25,000. Section 4.10 Other Employees. The Board of Directors shall have the power to appoint and employ such other officers, employees, consultants and independent contractors as it may deem necessary for the purposes of this Agreement, any of whom may be employees of a Member, and who shall have such powers, duties and responsibilities as are determined by the Board of Directors. All of the privileges and immunities from liability, exemptions from laws, ordinances and rules, all pension, relief, disability, workers' compensation and other benefits which apply to the activities of officers, agents, or employees of a public agency when performing their respective functions shall apply to them to the same degree and extent while engaged in the performance of any of the functions and other duties under this Agreement. None of the officers, agents, or employees directly employed by the Authority shall be deemed, by reason of their employment by the Authority to be employed by any of the Members or, by reason of their employment by the Authority, to be subject to any of the requirements of any of the Members. Section 4.11 Conflict of Interest Code. The Authority by resolution shall adopt by reference a Conflict of Interest Code as required by the Political Reform Act, commencing with section 81000 of the Government Code of the State of California. 45249478.1 4 ARTICLE V POWERS Section 5.01 General Powers, The Authority shall exercise in the manner herein provided powers common to Members, or as otherwise permitted under the Joint Powers Law, and necessary or convenient to the accomplishment of the purposes of this Agreement, subject to the restrictions set forth in Section 5.03 hereof. As provided in the Joint Powers Law, the Authority shall be a public entity separate from the Members. The Authority shall have all of the powers provided in the Joint Powers Law, including but not limited to Article 4 of the Joint Powers Law (commencing with Section 6584), and including the power to issue or incur Indebtedness under the Bond Law. Section 5.02 Specific Powers. The Authority is hereby authorized, in its own name, to do all acts necessary for the exercise of the foregoing powers, including but not limited to, any or all of the following: (a) to make and enter into contracts; (b) to employ agents or employees; (c) to plan, develop, acquire, construct, manage, maintain, repair, replace or operate any Public Capital Improvement, including the common power of the Members to acquire any Public Capital Improvement by the power of eminent domain; (d) to acquire, (by the exercise of the power of eminent domain or otherwise), hold, lease, sell or otherwise dispose of any real or personal property, tangible or intangible,and any interests therein, wherever located; (e) to issue or incur Indebtedness and otherwise to incur debts, liabilities or obligations, provided that no such Indebtedness, debt, liability or obligation shall constitute a debt, Iiability or obligation of any of the Members; (f) to sue and be sued in its own name; (g) to establish a budget and authorize expenditures therefrom; (h) to apply for, accept, receive and disburse grants, loans and other aids from any agency of the United States or of the State of California or from any private sources; (i) to enter into agreements for the creation of separate public entities and agencies pursuant to the Joint Powers Law; (j) to invest any money in the treasury as determined by the Authority, in accordance with applicable provisions of the Joint Powers Law and Section 53601 of the California Government Code, as amended from time to time; 45249478.1 7 (k) to apply for letters of credit or other forms of financial guarantees in order to secure the repayment of Indebtedness and enter into agreements in connection therewith; (1) to carry out and enforce all the provisions of this Agreement; (m)to make and enter into Bond Purchase Agreements; (n) to purchase Indebtedness of a Member or any Local Agency; (o) to establish non-profit corporations or for-profit corporations to assist in accomplishing any of its objectives; and (p) to exercise any and all other powers as may be permitted by State law and/or the Joint Powers Law (including Section 6588 of the Joint Powers Law), Section 5.03 Restrictions on Exercise of Powers. The powers of the Authority shall be exercised in the manner provided in the Joint Powers Law and in the Bond Law subject only to the restrictions upon the manner of exercising such powers as are imposed upon the Members in the exercise of similar powers. Section 5.04 Liability Contribution. Pursuant to the Joint Powers Law, the debts, liabilities and obligations of the Authority shall not be the debts, liabilities and obligations of any of the Members, except as provided by Section 895.2 of the California Government Code, as amended from time to time, in the case of injury caused by a negligent or wrongful act or omission occurring in the performance of this Agreement. In the event any Member is held liable upon any judgment for damages caused by a negligent or wrongful act or . omission occurring in the performance of this Agreement, and pays in excess of its Liability Share of such judgment, such Member shall be entitled to contribution from each other Member and may require each other Member to pay an amount towards the judgment for damages, but in no event shall any such other Member be required to pay in excess of its Liability Share of such judgment. No member, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on any obligations of the Authority or be subject to any personal liability or accountability by reason of any obligations of the Authority; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by the instruments authorizing the issuance of any obligations of the Authority. Nothing contained in this Agreement shall in any way diminish the liability of any Member or other party with respect to any contract between such Member or other party and the Authority. Section 5.05 Indemnitv by Authority for Litigation Expenses of Officer, Board of Directors Member or Emi loyee. In the event any member of the Board of Directors, officer or employee of the Authority be sued, either alone or with others, because he or she is or was a member of the Board of Directors, officer or employee of the Authority, in any proceeding arising out of his or her alleged misfeasance or nonfeasance in the performance of his or her duties or out of any alleged wrongful act against the Authority or by the Authority, indemnity to such person for reasonable expenses, including attorneys' fees incurred in the defense of the proceedings, may be assessed against the Authority or its receiver by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person 45249478.1 0 reasonably believed to be in the best interests of the Authority and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The amount of such indemnity shall equal the amount of the expenses, including attorneys' fees, incurred in the defense of the proceeding. Section 5.06 Execution of Contracts. The Board of Directors, except as otherwise provided in this Agreement, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on behalf of the Authority and such authorization may be in general or confined to specific instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Authority by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. ARTICLE VI CONTRIBUTION; ACCOUNTS AND REPORTS; FUNDS Section 6.01 Contributions. In accordance with the California Government Code, the Members may in the appropriate circumstances when required hereunder: (a) make contributions from their treasuries as approved from time to time by the Board of Directors, for the purposes set forth herein, (b) make payments of public funds to defray the cost of such purposes, (e) make advances of public funds for such purposes, such advances to be repaid as provided herein, or (d) use their personnel, equipment or property in lieu of other contributions or advances. The provisions of Section 6513 of the Joint Powers Law are hereby incorporated into this Agreement. The Authority may make such arrangements relative to the repayment or return to the Members of such contributions, payments and advances as are approved from time to time by the Board of Directors. Any Member which fails to make or pay when due any required contribution, payment or advance to the Authority, may have its rights under this Agreement terminated and may be excluded from participation in the Authority as provided in Section 7.03(c) hereof. Any such Member shall continue to be liable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. Section 6.02 Accounts and Reports. There shall be strict accountability of all funds and reporting of all receipts and disbursements of the Authority. The Authority shall establish and maintain such funds and accounts as may be required by good accounting practice or by any provision of any resolution, indenture or other instrument of the Authority securing its Indebtedness, except insofar as such powers, duties and responsibilities are assigned to a trustee appointed pursuant to such resolution, indenture or instrument. The books and records of the Authority shall be open to inspection at all reasonable times by the Members and their representatives. The Authority shall give an unaudited written report of all financial activities for each Fiscal Year to the Members within 210 days after the close of each Fiscal Year. 45249478.1 The Auditor, as auditor of the Authority, shall contract with a certified public accountant or public accountant to make an independent annual audit of the accounts and records of the Authority. In each case the minimum requirements of the audit shall be those prescribed by the State Controller for special districts under Section 26909 of the California Government Code, as amended from time to time, and shall conform to generally accepted auditing standards. When such an audit of an account and record is made by a certified public accountant or public accountant, a report thereof shall be filed as public records with each of the Members and with the county auditor of Riverside. Such report shall be filed within 12 months of the end of the Fiscal Year under examination. Any costs of the audit, including contracts with, or employment of, certified public accountants or public accountants, in making an audit pursuant to this Section shall be borne by the Authority and shall be a charge against any unencumbered funds of the Authority available for the purpose. Section 6.03 Funds. Subject to the applicable provisions of any instrument or agreement which the Authority may enter into, which may provide for a trustee to receive, have custody of and disburse Authority funds, the Treasurer of the Authority shall receive, have the custody of and disburse Authority funds as nearly as possible in accordance with generally accepted accounting practices, and shall mare the disbursements required by this Agreement or to carry out any of the provisions or purposes of this Agreement. Section 6.04 _Annual Bud2et_and Administrative_Exgenses. The Board of Directors shall adopt an annual budget for administrative expenses, which shall include all expenses not included in any financing issue of the Authority, annually prior to the beginning of each Fiscal Year. The estimated annual administrative expenses of the Authority shall be allocated by the Authority to the Members as appropriate. ARTICLE VII TERM; ADDITION OF MEMBERS; DISSOLUTION Section 7.01 Term. This Agreement shall become effective as of the date first set forth above, and the Authority shall come into existence, on the date of execution and delivery hereof, and this Agreement shall thereafter continue in full force and effect until the later of December 1 2057 or the date on which all Indebtedness and other obligations of the Authority and the interest thereon shall have been paid in full or until adequate provision for such payment shall have been made in accordance with the instruments governing such Indebtedness, and no material contracts to which the Authority is a party remain in effect, unless earlier dissolved pursuant to Section 7.04 hereof. Section 7.02 Addition of Members. (a) Public Agencies possessing one or more of the powers specified in the first paragraph of the recitals to this Agreement may be added as parties to this Agreement, and become Members, upon the filing by such Public Agency with the Board of Directors of an instrument in form and substance satisfactory to the Board of Directors together with a certified copy of a resolution of its goveming body, whereby the Public Agency (i) agrees to the provisions of this Agreement and (ii) requests to become a Member. In 45249478.1 10 reviewing an application for membership, the Board of Directors may reject said application based on the creditworthiness of the applicant or on any other matter which has affected or may affect the creditworthiness of the applicant and which may thereby affect the creditworthiness of the Authority. The Board. of Directors also reserves the right to reject an applicant if the Board of Directors determines that the membership of such applicant would be detrimental to the effectiveness of the Authority or would interfere with the realization of the Authority's goals and purposes. (b) Notwithstanding Section 7.02(a) hereof, no such Public Agency shall become a Member until (i) its admission is approved by a vote of a majority of the Board of Directors voting on the matter and (ii) such Public Agency deposits or agrees to deposit with the Authority an amount equal to such share of the costs and expenses incurred by the Authority prior to the date of admission of such Public Agency as a Member as shall be determined by the Board of Directors. (c) Upon satisfaction of the provisions of Section 7.02(a) and 7.02(b) hereof, such Public Agency shall be a Member for all purposes of this Agreement, and the instrument provided pursuant to Section 7.02(a) hereof shall become a part of the official records of the Authority. Neither the effectiveness of such membership nor such instrument shall constitute an amendment or modification of this Agreement for purposes of Section 8.05 hereof. Section 7.03 Withdrawal or Exclusion of a Member. (a) Any Member may withdraw from the Authority upon the following conditions: (i) the Member shall have filed with the Board of Directors a certified copy of a resolution of its governing body expressing its desire to so withdraw and (ii) if the Authority, prior to the filing of such resolution, shall have incurred any obligation payable from contributions, payments or advances in accordance with Section 6.01 hereof, which obligation matures after the date of such filing, the withdrawing Member. shall have paid, or made arrangements satisfactory to the Board of Directors to pay to the Authority its pro rata portion of such obligation. (b) Upon compliance with the conditions specified in Section 7.03(a) hereof, the withdrawing Member shall no longer be considered a Member for any reason or purpose under this Agreement and its rights and obligations under this Agreement shall terminate. The withdrawal of a Member shall not affect any obligations of such Member under any contract between the withdrawing Member and the Authority. (c) Any Member which has (i) defaulted under a contract with the Authority, or (ii) failed to pay any required contributions, payments or advances in accordance with Section 6.01 hereof, may have its rights under this Agreement terminated and may be excluded from participating in the Authority by a vote of a majority of the members of the Board of Directors voting on the matter (excluding from voting the member(s) of the Board of Directors, if any, representing the defaulting Member). Any excluded Member shall continue to be liable for its obligations under any contract with the Authority and for any unpaid contribution, payment or advance approved by the Board of Directors prior to such Member's exclusion and not objected to by such Member by written notice to the Authority within thirty (30) days after such approval. 45249478.1 11 No withdrawal from membership pursuant to Sections 7.03(a) and 7.03(b) hereof or exclusion from participation pursuant to Section 7.03(c) hereof shall constitute an amendment or modification of this Agreement for purposes of Section 8.05 hereof. Section 7.04 Dissolution. With the approval of the Board of Directors, the Authority may be dissolved, if at the time of such dissolution the Authority has no Indebtedness outstanding and is not a party to any contract remaining in effect (unless adequate provision shall have been made for the discharge of such contract). Upon the dissolution or termination of the Authority, and after payment or provision for payment, all debts and liabilities, the assets of the Authority shall be distributed to the Members in such manner as shall be determined by the Board of Directors. ARTICLE VIII MISCELLANEOUS PROVISIONS Section 8.01 Notices. (a) Any notice, demand or request to any Member provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to the person designated by such Member upon the commencement of its membership in the Authority. (b) A Member may, at any time, by written notice to each other Member and the Authority, designate different persons or different addresses for the giving of notices, demands or requests to it hereunder. (c) Any notice, demand or request to the Authority provided for in this Agreement shall be in writing and shall be deemed properly served, given, or made if delivered in person or sent by registered or certified mail, postage prepaid, to Diamond Bar Utility Authority, c/o City of Diamond Bar, 21825 E. Copley Drive, Diamond Bar, California 91765, or at the notice address most recently provided by said Member pursuant to this Section 8.01 (d) The Authority may, at any time, by written notice to each Member, designate a different or additional person or a different address for giving notices, demands or requests to it hereunder. Section 8.02 Section Headings. All section headings in this Agreement are for convenience of reference only and are not to be construed as modifying or governing the language in the section referred to or to define or limit the scope of any provision of this Agreement. Section 8.03 Consent. Whenever in this Agreement any consent or approval is required, the same shall not be unreasonably withheld. Section 8.04 Law Governing. This Agreement is made in the State of California under the constitution and laws of the State of California, and is to be so construed. Section 8.05 Amendments. This Agreement may be amended at any time, or from time to time, except as limited by contract with the owners of Indebtedness issued or incurred by the 45249478.1 12 Authority, a Member or a Local Agency or by applicable regulations or laws of any jurisdiction having authority, by one or more supplemental agreements executed by all then current Members either as required in order to carry out any of the provisions of this Agreement or for any other purpose. Section 8.06 Enforcement by Authority. The Authority is hereby authorized to take any or all legal or equitable actions, including but not limited to injunction and specific performance, necessary or permitted by law to enforce this Agreement. Section 8.07 Severability. In the event that any term, covenant or condition of this Agreement or the application of such term, covenant or condition shall be held invalid as to any person or circumstance by any court having jurisdiction in the prernises, all other terms, covenants and conditions of this Agreement and their application shall not he affected thereby, but shall remain in force and effect unless a court holds that the provisions are not separable from all other provisions of this Agreement. Section 8.08 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Members. No Member may assign any right or obligation hereunder without the written consent of the other Members. The immediately preceding sentence shall not affect, in any respect, any right of assignment under any contract between any Member and the Authority. Section 8.09 Execution of Counter arts. This Agreement may be executed in any number of counterparts. All such counterparts shall be deemed to be originals and shall together constitute but one and the same instrument. 45244478.1 13 4 f IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and attested by their proper officers thereunto duty authorized, on the day and year first set forth above. ATTEST: City Clerk ATTEST: Secretary 4524947&.1 CITY OF DIAMOND BAR :J Mayor REDEVELOPMENT AGENCY OF THE CITY OF DIAMOND BAR Chairperson 14 BYLAWS OF CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY 45249480.1 ARTICLE I Definitions In addition to the other terms defined herein, the following terms, whether in the singular or in the plural, when used herein and initially capitalized, shall have the meanings specified: (a) Agreement shall mean the Joint Exercise of Powers Agreement creating City of Diamond Bar Public Financing Authority, dated as of December 1, 2002 (the "Agreement") among the parties thereto. (b) Authority. Board, Member and Joint Powers Law shall have the respective meanings set forth in the Agreement. (c) State shall mean the State of California. ARTICLE II Offices Section 1. Principal Office. The principal office of the authority shall be located at 21825 E. Copley Drive, Diamond Bar, California 41765. Section 2. Additional Offices. The Authority may also have offices at such other places both within and outside the State, as the Board may from time to time determine or the business of the authority may require. ARTICLE III Board Section 1. Power and Duties of the Board. The Board shall have the responsibility for the general management of the affairs, property and business of the Authority and may, from time to time, adopt and modify these Bylaws and other rules and regulations for that purpose and for the conduct of its meetings as it may deem proper. The Board may exercise and shall be vested with all powers of the Authority insofar as not inconsistent with law, the Agreement or these Bylaws. Section 2. Adjournments and Adjourned Meetings. The Board may adjourn any regular, adjourned regular, special or adjourned special meeting to a time and place specified by the Board in accordance with law. If less than a majority is present at a meeting, a majority of those members of the Board present may adjourn the meeting from time to time. Section 3. Method of Votinu. In voting on any question on which a vote by ballot is required by law, the voting shall be by ballot signed by the member of the Board voting. On all other questions, the voting may be viva voce. 45249480.1 Section 4.Organization. Each meeting of the Board shall be presided over by the Chairperson or, in his or her absence, by the Vice Chairperson, or in the absence of both the Chairperson and Vice Chairperson, by any member of the Board selected to preside by vote of a majority of the members of the Board present. The Secretary, or in his or her absence any person designated by the individual presiding over the meeting, shall act as secretary of the meeting. ARTICLE IV Officers Section 1. Appointment of Officers. The Chairperson, the Vice Chairperson, the Treasurer, the Auditor, the Executive Director, and the Secretary of the Authority shall be the persons as set forth in Section 4.01 of the Agreement. Section 2. Term of Office and Oualification. Each officer elected or appointed pursuant to Section 1 of this Article IV shall hold office such time as such officer ceases (in the case of the Chairperson or Vice Chairperson) to be a member of the Board, resigns from such office in accordance with the provisions of Article V of these Bylaws or is unable to perform the duties of such. office. Section 3. Official Bond. The Treasurer to the extent such officer's duties and responsibilities pursuant to the Joint Powers Law may require is designated as the public officer or person who has charge of, handles, or has access to any property of the Authority, and such officer shall file an official bond as required by Section 6505.1 of the Joint Powers Law in the amount of $25,000. Section 4. Compensation. The compensation of all officers of the Authority shall be fixed from time to time by the Board, or pursuant to authority of (general or specific) resolutions of the Board. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a member of the Board of the Authority. ARTICLE V Resignations Section -1. Volunt@a Resignation, Notice of Effectiveness. Any member of the Board or officer of the Authority may, subject to contrary provision in any applicable contract, resign at any time by giving written notice to the Board or to the Chairperson or to the Secretary of the Authority. Any such resignation shall take effect at the time specified therein or, if the time be not specified, upon receipt thereof; and unless otherwise specified therein, acceptance of such resignation shall not be necessary to make it effective. Section 2; Involuntary Resignation; .Request. The Board, in the exercise of its discretion, may request the resignation of any officer elected or appointed pursuant to Article IV of these Bylaws. Pursuant to such request, subject to contrary provisions in any applicable contracts, such officer shall resign by giving written notice to the Board. Any such resignation shall take effect at the time specified in such request. 45249480.1 2 ARTICLE VI Vacancies Among Officers If the office of any officer elected or appointed pursuant to Article IV of these Bylaws becomes vacant at any time by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, such vacancy may be filled at any time by the Board. ARTICLE VII Official Seal The Authority may have an official seal which shall be circular in form, containing thereon the name of the Authority, the year of its organization and the words "Official Seal, State of California." Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced in any manner whatsoever. ARTICLE VIII Amendments These Bylaws may be modified, amended or repealed or new By-laws may be adopted by the affirmative vote of the Board at any regular or special meeting of the Board. ARTICLE IX Severabilitv Any adjudication that these Bylaws or any part thereof is invalid shall not affect the validity of the remainder of these Bylaws. 45249480.1 INDENTURE by and between the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY and U.S. BANK, N.A., Trustee Dated as of December 1, 2002 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) 45248817.2 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS SECTION 1.01. Definitions ................................................ 2 SECTION 1.02. Content of Certificates and Opinions ........................... 12 SECTION 1.03. Article and Section Headings and References .................... 13 ARTICLE II ffiffid: 6,tf_. SECTION 2.01. Authorization of Bonds ..................................... 13 SECTION 2.02. Terms of the Bands ........................................ 13 SECTION 2.02.A. Interest Rates ............................................. 15 SECTION 2.03. Transfer of Bonds .......................................... 19 SECTION 2.04. Use of Securities Depository ................................. 20 SECTION 2.05. Exchange of Bonds ......................................... 21 SECTION 2.06. Bond Register ............................................. 22 SECTION 2.07. Form and Execution of Bonds ................................ 22 SECTION 2.08. Temporary Bonds .......................................... 22 SECTION 2.09. Bonds Mutilated, Lost, Destroyed or Stolen ..................... 23 SECTION 2.10. CUSIP Numbers ........................................... 23 SECTION 2.11. Certain Contracts and Swaps ................................. 23 ARTICLE III APPLICATION OF PROCEEDS SECTION 3.01. Application of Proceeds of the Bonds 244 SECTION 3.02. Costs of Issuance Fund ...................................... 24 SECTION 3.03. Construction Fund ......................................... 24 ARTICLE IV REDEMPTION AND TENDER OF BONDS SECTION 4.01 Establishment of Redemption Fund ............................ 25 SECTION 4.02 Mandatory Redemption From Net Proceeds ..................... 26 SECTION 4.03 Optional Redemption of the Bonds ............................ 26 SECTION 4.04 Sinking Fund Redemption ................................... 27 SECTION 4.05 Selection of Bonds for Redemption ............................ 28 SECTION 4.06 Notice of Redemption ....................................... 28 45248817.2 1 SECTION 4.07 Partial Redemption of Bonds ................................. 29 SECTION 4.08 Effect of Notice of Redemption ............................... 29 SECTION 4.09 Surplus .................................................. 29 SECTION 4.10 Establishment of Tender Fund ................................. 30 SECTION 4.11 Mandatory Tender on Fixed Rate Conversion Date ................ 30 SECTION 4.12 Mandatory Tenders Other Than on Fixed Rate Conversion Date...... 30 SECTION 4.13 Mechanics of Mandatory Tender .............................. 31 SECTION 4.14 Option to Tender After Prior to Fixed Rate Conversion Date ........ 32 SECTION 4.15 Purchase of Bonds Delivered On a Tender Date .................. 33 SECTION 4.16 Remarketing of Bonds by Remarketing Agent .................... 34 SECTION 4.17 Delivery of Bonds .......................................... 34 SECTION 4.18 Alternate Credit Facility; [Alternate Confirming Letter of Credit ..... 35 SECTION 4.18.A [Release of Confirming Letter of Credit ......................... 36 SECTION 4.19 Restriction on Remarketing of Bonds to City .................... 36 ,SECTION 4.20 Book -Entry Tenders. Duties of Tender Agent with Respect to Purchase of Bonds ......................................... 36 ARTICLE V REVENUES AND FUNDS SECTION 5.01. Establishment of Funds ................................. . ... 37 SECTION 5.02. Pledge and Assignment; Equal Security ......................... 37 SECTION 5.03. Deposit of Revenues ........................................ 38 SECTION 5.04. Application of Moneys ...................................... 38 SECTION 5.05. Draws Under Credit Facility .................................. 39 SECTION 5.05.A [Drawings Under the Confirming Letter of Credit ................. 40 SECTION 5.06. Surplus .................................................. 40 SECTION 5.07. Investment of Moneys in Funds and Accounts .................... 40 ARTICLE VI PARTICULAR COVENANTS SECTION 6.01. Punctual Payment .......................................... 42 SECTION 6.02. Extension of Payment of Bonds ............................... 42 SECTION 6.03. Against Encumbrances ...................................... 42 SECTION 6.04. Against Additional Indebtedness .............................. 42 SECTION 6.05. Power to Issue Bonds and Make Pledge and Assignment ........... 43 SECTION 6.06. Accounting Records and Financial Statements ................... 43 SECTION 6.07, Tax Covenant ............................................. 43 SECTION 6.08. Waiver of Laws ........................................... 47 SECTION 6.09, Further Assurances ......................................... 47 45248817.2 ii ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS SECTION 7.01. Events of Default .......................................... 48 SECTION 7.02. Remedies on Default ....................................... 48 SECTION 7.03. Application of Revenues and Other Funds After Default ........... 48 SECTION 7.04. Trustee to Represent Bondowners ............................. 49 SECTION 7.05. Bondowners' Direction of Proceedings ......................... 50 SECTION 7.06. Limitation on Bondowners' Right to Sue ........................ 50 SECTION 7.07. Absolute Obligation of Authority .............................. 51 SECTION 7.08. Termination of Proceeding ................................... 51 SECTION 7.09. Remedies Not Exclusive .................................... 51 SECTION 7.10. No Waiver of Default ....................................... 51 SECTION 7.11. Rights of Credit Entity ...................................... 52 ARTICLE VIII THE TRUSTEE SECTION 8.01. Appointment, Duties and Immunities of Trustee .................. 52 SECTION 8.02. Merger or Consolidation ..................................... 54 SECTION 8.03. Liability of Trustee ......................................... 54 SECTION 8.04. Right of Trustee to Rely on Documents ......................... 55 SECTION 8.05. Preservation and Inspection of Documents ....................... 55 SECTION 8.06. Compensation and Indemnification ............................ 56 SECTION 8.07. Remarketing Agent. ........................................ 56 SECTION 8.08. Qualifications of Remarketing Agent ........................... 57 SECTION 8.09. Tender Agent ............................................. 57 SECTION 8.11. Co -Trustees ............................................... 58 ARTICLE IX MODIFICATION OR AMENDMENT OF INDENTURE AND LEASE SECTION 9.01. Amendments Permitted ..................................... 59 SECTION 9.02. Procedure for Amendment with Written Consent of Bond Owners .... 60 SECTION 9.03. Disqualified Bonds ......................................... 60 SECTION 9.04. Effect of Supplemental Agreement ............................ 61 SECTION 9.05. Endorsement or Replacement of Bonds Delivered After Amendments ......................................................................... 61 SECTION 9.06. Amendatory Endorsement of Bonds ............................ 61 SECTION 9.07. Consent of Credit Entity [and Confirming Bank] Required .......... 61 45248817.2 111 ARTICLE X DEFEASANCE SECTION 10.01. Discharge of Indenture ...................................... 62 SECTION 10.02. Reserved ................................................. 63 SECTION 10.03. Payment of Bonds After Discharge of Indenture .................. 63 ARTICLE XI MISCELLANEOUS SECTION 11.01. Liability of Authority Limited to Revenues ...................... 63 SECTION 11.02. Successor Is Deemed Included in All References to Predecessor ..... 64 SECTION 11.03. Limitation of Rights to Parties and Bondowners .................. 64 SECTION 11.04. Waiver of Notice .......................................... 64 SECTION 11.05. Destruction of Bonds ....................................... 64 SECTION 11.06. Severability of Invalid Provisions ............................. 64 SECTION 11.07. Notices .................................................. 64 SECTION 11.08. Evidence of Rights of Bondowners ............................ 66 SECTION 11.09. Disqualified Bonds ......................................... 66 SECTION 11.10. Money Held for Particular Bonds .............................. 66 SECTION 11.11. Funds and Accounts ........................................ 67 SECTION 11.12. Waiver of Personal Liability .................................. 67 SECTION 11.13. CUSIP Numbers ........................................... 67 SECTION 11.14. Business Days ............................................. 67 SECTION 11.15. Execution in Several Counterparts ............................. 67 SECTION 11.16, Governing Law ............................................ 67 SECTION 11.17. Provisions Relating to Rating Agencies ......................... 68 EXHIBIT A - (FORM OF 'WEEKLY RATE BOND) ............................. A-1 EXHIBIT B - (FORM OF DAILY RATE BOND) .... I ... I ...................... B-1 EXHIBIT C - (FORM OF FIXED RATE BOND) ............................... C-1 45248817.2 iv THIS INDENTURE, made and entered into as ofthe 1 st day of December, 2002 by and between. the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, a public body, corporate and politic, duly organized and existing under the laws ofthe State of California (the "Authority''), and U.S. BANK, N.A., as trustee, a national banking association organized and existing under the laws ofthe United States and qualified to accept and administer the trusts hereby created (the "Trustee"); WITNESSETH: WHEREAS, the Authorityis a jointpowers authontydulyorganized and existingunder and pursuant to that certain Joint Exercise of Powers Agreement, as ofDecember 1, 2002, by and between the CityofDiamond Bar (the "City'") and the Redevelopment Agency ofthe City ofDiamond Bar (the "Agency"); and WHEREAS, underArticle4(commencingwith Section 6584) ofChapter5 ofDivision 7 of Title 1 ofthe California Government Code (the "Law') the Authority is authorized to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing for public capital improvements of public entities including the City and the Agency; and WHEREAS, the Authority wishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds') to provide for the financing ofthe community/senior center proj ect (the "Project") as well as other public improvements within the City; WHEREAS, the City will lease to the Authority its fee interest in certain real property designated for the Proj ect ( the "Site"), pursuant to a Site Lease, dated as of December 1, 2002 (the "Site Lease"); and WHEREAS, the Authority, concurrentlywith the execution ofthe Site Lease, will lease the Site together the improvements to be constructed thereon, including the Project, back to the City pursuant to a Lease Agreement, dated as ofDeccmber 1, 2002 (the "Lease', in consideration for Base Rental payments equal to the principal and interest corning due on the Bonds; and WHEREAS, to provide liquidity for any -Bonds tendered forpurchase in accordance with this Indenture and to support further the payment of principal and interest evidenced and represented by the Bonds, the City will enter into that certain reimbursement agreement, dated as of even date herewith (the "Reimbursement Agreement"), by and between the City and (the "Credit Entity") with respect to the Credit Facility; and [WHEREAS, if the Credit Entity wrongfully dishonors a properly presented and conforming draw on the Credit Facility or ifthe Credit Entityrepudiates the Credit Facility, funds will be made available under an irrevocable confirming letter ofcredit to be issued by the and] 45248817.2 WHEREAS, in orderto provide for the authentication and deliveryof the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment ofthe principal thereofand interest and premium (ifany) thereon, the Authority and the Trustee have duly authorized the execution and delivery of this Indenture; and WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the legally valid and binding limited obligations ofthe Authority, and to constitute this indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium, if any, on all the Bonds at anytime issued and Outstanding underthis Indenture, according to theirtenor, andto secure the performance and observance of all the covenants and conditions therein and herein set forth, and to secure the obligations ofthe City set forth in the Reimbursement Agreement [and the Confirmation Agreement], and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration ofthe premises and ofthe mutual covenants herein contained and ofthe purchase and acceptance ofthe Bonds bythe Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit ofthe respective Owners from time to time ofthe Bonds, the Credit Entity [and the Confirming Bank], as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes ofthis Indenture, and ofany indenture supplemental hereto, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified: "Additional Rental" means the amounts specified as such in Section 5.01(b) ofthe Lease, as such amounts may be adjusted from time to time in accordance with the terms thereof ["Alternate Confirming Bank" means a commercial bank, savings and loan association, insurance company, orother financial institutionwhichhas issued anAlternate Confirming Letter of Credit.] ["Alternate Confirming Letter of Credit" means a Confirniing Lotter ofCredit issued by an Alternate Confirming Bank.] "Alternate Credit Facility" means a credit facility delivered to the Trustee pursuant to Section 4.18 hereof, including, but not limited to, an irrevocable letter of credit, an investment 45248817.2 2 contract, a guaranty, a bond insurance policy, a surety bond or other financial arrangement which secures the payment ofthe principal of and interest on the Bonds when due, or such an instrument, together with a separate instrument such as an irrevocable letter ofcredit, a guaranty, a committed line ofcredit or an investment contract, issued bya financial institution pursuant to Section 4.18 hereofwhich provides a method of purchasing Bonds tendered for purchase on a Tender Date. "Assignment Agreement" means that certain Assignment Agreement dated as of December 1, 2002 by and between the Authority and the Trustee. "Authority" means the CityofDiamond Bar Public Financing Authority, established pursuant to the laws of the State of California, organized and created pursuant to the terms and conditions of the Joint Powers Agreement. "Authorized Denominations" shall mean (i) with respect to the Bonds bearing interest at the Weekly Rate or Daily Rate, $100, 000 or any integral multiple of $ 5,000 in excess thereof and (ii) with respect to the Bonds bearing interest at the Fixed Rate, $5,000 or any integral multiple of $5,000. "Authorized Investments" means, if and to the extent permitted by law: (1) Direct obligations ofthe United States ofAmerica (including obligations issued or held inbook-entryform onthe books ofthe Department ofthe Treasury ofthe United States ofAmerica) or obligations the timelypayment ofthe principal of and interest on which are fully guaranteed bythe United States ofAmerica, including instruments evidencing a direct ownership interest in securities described in this clause such as Stripped Treasury Coupons rated or assessed in the highest Rating Category by S&P and Moody's and held by a custodian for safekeeping on behalf of holders of such securities. (2) Bonds or notes which are exempt from federal income taxes and for the payment ofwhich cash or obligations described in clause (1) ofthis definition in an amount sufficient to pay the principal of, premium, if any, and interest on when due have been irrevocably deposited with a trustee or other fiscal depositary and which are rated in the highest Rating Category by S&P and Moody's. (3) Obligations, debentures, notes or other evidence of indebtedness issued or guaranteed by any ofthe following: Federal Home Loan Bank System, Government National Mortgage Association, Farmer's Home Administration, Federal Home Loan Mortgage Corporation or Federal Housing Administration; provided that with respect to the funds and accounts established under this Indenture, such obligations shall at no time exceed an amount equal to ten percent (10%) of the aggregate principal amount of the Bonds Outstanding. 45248817.2 (4) Deposit accounts, certificates ofdeposit or savings accounts (i) fully insured by the Federal Deposit Insurance Corporation or (ii) with banks whose short term obligations are rated no lower than A-1 by S&P and P-1 by Moody's. (5) Federal funds or banker's acceptances with a maximum term ofone yearofany bank that has an unsecured, uninsured and unguaranteed obligation rating of"Prime-1 " or "A3" by Moody's and "A-1" or "A" or better by S&P (including the Trustee), (6) Repurchase obligations with a term not exceeding 30 days pursuant to a written agreement between the Trustee and eitheraprimarydealer on theFederal Reserve reporting dealer list which falls under the jurisdiction ofthe SIPC or a federallychartered commercial bank whose long-term debt obligations are rated A or better by S&P and Moody's, with respect to any security described in clause (1); provided that the securities which are the subject of such repurchase obligation (i) must be free and clear of all Iiens, (ii) in the case of a SIPC dealer, were not acquired pursuant to a repurchase or reverse repurchase agreement, (iii) must be deposited with the Trustee and maintained through weeklymarket valuations in an amount equal to 104% ofthe invested funds plus accrued interest; and furtherprovided that the Trustee must have a valid first perfected security interest in such securities. (7) Taxable government moneymarket portfolios that have a rating by S&P ofAm- G or Am or better and rated in one ofthe three highest rating categories ofMoody's consisting of securities issued or guaranteed as to payment ofprincipal and interest by the full faith and credit ofthe United States, subject to a maximum permissible limit equal to six months of principal and interest on the Bonds. (8) Tax-exempt government money market portfolios thathave aratingbyS&P ofAm-G or Am orbetter and rated in one ofthe three highest rating categories ofMoody's consisting of securities which are rated in the highest Rating Categories of S&P and Moody's subject to a maximum permissible limit equal to six months ofprincipal and interest on the Bonds. (9) Moneymarket funds registered under the Investment Company Act of 1940, the shares in which are registered under the Securities Act of 1933 and that have a rating by S&P ofAAAm-G or AAAm and rated in one ofthe two highest Rating Categories ofMoody's, including those managed or advised by the Trustee or its affiliates. (10) The Local Agency Investment Fund ofthe State, created pursuant to Section 16429.1 ofthe California Government Code, to the extent the Trustee is authorized to register such investment in its name. "Authorized Representative" means the Chairperson, Vice Chairperson, Executive Director, Treasurer, Secretary or any other person designated as an Authorized Representative by a 45248817.2 4 Written Certificate of the Authority signed as its Chairperson and filed with the Authority and the Trustee. "Available Moneys" means (a) with respect to any Bond Payment Date occurring during the term ofa Credit Facility, moneys (othertl=moneys received from draws under the Credit Facility for the Confirming Letter of Credit] or remarketing proceeds) which have been on deposit with and pursuant to written direction ofthe Authority and segregated by the Trustee for at least 123 days, during orprior to which no Event ofBankruptcy shall have occurred, as evidenced by a certificate of the Authority to the Trustee, upon which the Tnzstee may conclusivelyrely, (b) moneys received from draws under the Credit Facility, [the Confirming Letter ofCredit] and remarketing proceeds and (c) proceeds with respect to the refunding of any of the Bonds. "Base Rental" means the amounts specified as such in Section 5.01(a) ofthe Lease, as such amounts may be adjusted from time to time in accordance with the terms thereof. "Bond Counser' means an attorney or firm of attorneys ofrecognized national standing in the field of municipal finance selected by the Authority. "Bond Payment Date" means (a) until the Fixed Rate Conversion, the first Business Day of each month commencing [January 1, 2003], to and including the Fixed Rate Conversion Date, and (b) after the Fixed Rate Conversion Date, each 1 and 1 commencing on the first 1 or 1 which is at least 75 days after the Fixed Rate Conversion Date. "Bond Year" means each twelve-month period extending from 2 in one calendar year to I ofthe succeeding calendar year, both dates inclusive, except that the first Bond Year shall extend from the Closing Date to 1, 2003. "Bonds" means the CityofDiamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Senior Community Center Proj ect), authorized by, and at any time Outstanding pursuant to this Indenture. "Business Day" means any day other than a Saturday, Sunday, or a day on which banking institutions or governmental offices in the State are authorized or required to close, or a day on which the Federal Reserve System is closed. "Certificate," "Statement," "Request," "Requisition" or "Order" means, respectively, a written certificate, statement, request, requisition or order in its name by, with respect to the City, the City Manager, or by any other officer ofthe City duly authorized by the City for that purpose, and, with respect to the Authority, the Chairperson, Vice Chairperson, Member, Treasurer or Secretary ofthe Authority, or by any other officer ofthe Authority duly authorized by the Authority for that purpose. Any such instrument and supporting opinions or representation, and the two or more 45248817.2 so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02 hereof, each such instrument shall be the statement provided for in Section 1.02 hereof. "City" means the City of Diamond Bar, California. "Closing Date" means , 2002, the date on which the Bonds are delivered by the Authority to the original purchaser thereof. "Code" means the Internal Revenue Code of 1986, as amended and anyregulations promulgated from time to time thereunder. ["Confirmation Agreement" means the Confirmation Agreement dated as of December 1, 2002, between the Credit Entity and the Confirming Bank, providing for the Confirming Letter of Credit, or any similar agreement with respect to anyAlternate Confirming Letter of Credit, in each case as such agreement is originally executed or as such document maybe modified, supplemented or amended.] ["Confirming Banal" means (a) , and (ii) any Alternate Confirming Bank.] ["Confirming Letter of Credit" means (i) the irrevocable letter of credit issued bythe Confirming Bank in favor ofthe Trustee pursuant to the Confirmation Agreement, or (ii) anyAlternate Confirniing Letter of Credit.] "Continuing Disclosure Agreement" means anycontinuing disclosure agreement or continuing disclosure certificate bythe CityreIatingto the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means all items ofexpense directly or indirectly payable by or reimbursable to the Authority or the City, relating to the authorization, issuance, sale and delivery ofthe Bonds, including, but not limited to, printing expenses, title insurance policypremiums with respect to the Leased Property, rating agency fees, any premium or other fees with respect to insurance provided in connection with the issuance ofthe Bonds, including but not limited to, municipal bond insurance, rental interruption insurance and other types of insurance as maybe required by the Lease, filing and recording fees, any and all costs associated with condemnation proceedings with respect to the Leased Property, initial fees and charges and the first annual administrative fee ofthe Trustee, fees and costs associated with obtaining any Credit facility [or Confirming Letter of Credit] obtained in connection with the issuance ofthe Bonds, fees, charges and disbursements ofattorneys, financial advisors, accounting firms, consultants and otherprofessionals, fees and charges forpreparation, execution and safekeeping ofthe Bonds, and any other costs, charges or fees in connection with the original issuance ofthe Bonds. "Costs of Issuance Fund" means the fund so designated and established pursuant to Section 3.02 hereof. 45248817.2 6 "Credit Entity" means , as the issuer of the Credit Facility being delivered on the Closing Date with respect to the Bonds and the issuer of any Alternate Credit Facility delivered hereunder from time to time. All references and requirements herein with respect to notices or other communications to, or consents from, the Credit Entity shall include the providers of the Credit Facility. "Credit Facility" means an irrevocable letter of credit, an investment contract, a guaranty, a bond insurance policy, a surety bond or other financial arrangement which secures the payment ofthe principal and interest on the Bonds when due, or such an instrument, together with a separate instrument, such as an irrevocable letter ofcredit, a guaranty, a committed line of credit, an investment contract or a standby purchase agreement, issued by a financial institution, which provides a method ofpurchasing Bonds tendered €orpurchasc on a Tender Date, including an Alternate Credit Facility. "Credit Facility Account" means the account by that name in the Debt Service Fund established in accordance with Section 5.01(A) hereof. "Credit Facility Bond" means any Bank Bond, as defined in the Reimbursement Agreement. "Credit Facility Prepayment Account" means the account by that name in the Redemption Fund established in accordance with Section 4.01 hereof. I'Daily Conversion Date" means each Interest Payment Date on which the Bonds begin to bear interest at the Daily Rate pursuant to the provisions of this Indenture. "Daily Rate" means the interest rate with respect to the Daily Rate Period.. "Daily Rate Period" means each period during which Bonds bear interest at a Daily Rate. "Debt Service Fund" means the fund so designated and established pursuant to Section 5.01 hereof. `1DTC" means The Depository Trust Company, New York, New York, and its successors and assigns. "Event of Default" means any of the events specified in Section 7.01 hereof. "Financial Newspaper or Journal" means The Wall Street Journal or The Bond Buyer or any other newspaper or j ournal containing financial news, printed in the English language, customarilypublished on each Business Day and circulated in California, and selected bythe Trustee. 45248817.2 64Fiscal Year" means the year beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period hereinafter selected and designated as the official fiscal year period of the Authority. "Fixed Rate" means the fixed interest rate orrates applicable to the Bonds established in accordance with this Indenture. "Fixed Rate Conversion Date" means the date on which the rate of interest borne by the Bonds is converted to the Fixed Rate. "Indenture" means this Indenture, dated as ofDecember 1, 2002, by and between the Authority and the Trustee. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street,1 Oth Floor; Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal and Government," 5250 77 Center Drive, Suite 150, Charlotte, North Carolina 28217, Attention: Municipal News Reports; S&P's "Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other information services providing information with respect to called bonds as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee. "Interest Period" means the period from each Wednesday to and including the following Tuesday. "Joint Powers Agreement" means that certain Joint Exercise ofPowers Agreement, dated as ofDecember 1, 2002, by and between the City and the Agency creating the Authority for the purposes, among other things, of assisting in the financing ofPublic Capital Improvements, as such term is defined in Section 6585(g) ofthe California Government Code, togetherwith any amendments thereof and supplements thereto. "Law" means Article 4 (commencing with Section 65 84) of Chapter 5 of Division 7 of Title 1 of the California Government Code. "Lease" means that certain Lease Agreement dated as ofDecember 1, 2002 by and between the Authority, as lessor, and the City, as lessee. "Lease Payment Account" means the account by that name in the Debt Service Fund established in accordance with Section 5.01(A) hereof "Lease Prepayment Account" means the account bythat name established and held by the Trustee pursuant to Article V hereof 45248817.2 8 Lease. "Leased Property" means that certain land and facilities described in Exhibit A to the "Liquidity Account" means the account by that name in the Tender Fund established in accordance with Section 4.10 hereof "Mandatory Tender Date" means (1) the Bond Payment Date on orprior to the date at least five days prior to the date on which the Credit Facility [or Confirming Letter of Credit] is scheduled to expire or terminate in accordance with its respective terms and the Trustee has not received notice at least 40 days prior to such Bond Payment Date that an Alternate Credit Facility for Alternate Confmning L.etterofCredit], as applicable, will be provided, (2) the first Business Dayto occur on or afterthe seventh day following receipt bythe Trustee ofnotice from the Credit Entity [or the Confirming Bank] ofthe occurrence ofan event ofdefault under the Reimbursement Agreement [or the ConfinnationAgreement], as applicable, orthat the Credit Entitywill not reinstate the interest portion ofthe Credit Facility as provided in Section 4.12(b) hereof, (3) the Fixed Rate Conversion Date, (4) the last Business Day prior to the effective date of any Alternate Credit Facility [and/or Alternate Confirming Letter of Credit], [and (5) the date of any draw on the Confirming Letter of Credit.] "Maximum Rate" means 12% per annum calculated on the basis of a 365 -day year or 366-dayyear, as applicable, for actual days elapsed, during the WeeklyRate Period orDailyRate Period and 12% per annum calculated on the basis of a 360 -day year oftwelve 30 -day months on and after the Fixed Rate Conversion Date. 'Moody's" means Moody's Investors Service or any successor corporation thereto. "Net Proceeds" means any insurance proceeds or condemnation award paid with respect to the Leased Property remaining after payment therefrom of all expenses incurred in the collection thereof. "Nominee" means the nominee ofthe Depository, whichmaybe the Depository, or any nominee substituted by the Depository pursuant to Section 2.11 hereof. "Optional Tender Date" means the date designated by an Owner to the Tender Agent on which such Owner will tender his Bond in accordance with Section 4.14 hereof. "Outstanding," when used as of any particular time with reference to the Bonds, means (subj eet to the provisions of Section 11.09 hereof) all Bonds theretofore issued by the Authority except: (1) Bonds theretofore canceled bythe Trustee or surrendered to the Trustee for cancellation; 45248817.2 (2) Bonds for the payment or redemption ofwhich moneys or securities in the necessary amount (as provided in Section 10.01 hereof) shall have been theretofore deposited in trust (whetherupon orprior to the maturityor the redemption date ofsuch Bonds), provided that, if such Bonds are to be redeemed prior to the maturitythereof, notice ofsuch redemption shall have been given as provided in this Indenture; (3) Untendered Bonds; and (4) Bonds in lieu of, or in substitution for, other Bonds which shall have been authorized, executed, issued and delivered by the Authority pursuant to this Indenture. "Owner" or "Bondowner" means the Person or Persons whose name appears on the registration books maintained by the Trustee as the registered owner of a Bond or Bonds. "Participant" means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as a securities depository. "Person" means an individual, corporation, firm, association, partnership, trust, or other legal entity or group ofentities, including a governmental entity or any agency or political subdivision thereof. "Prepayment" means anypayment madebythe Citypursuant to Section 5.05 ofthe Lease as a prepayment of Base Rental payments. "Principal Office" means the principal corporate trust office ofthe Trustee in San Francisco, California, or the principal office ofthe Tender Agent in San Francisco, California, or the principal corporate trust office of any successor Trustee or Tender Agent. "Rating Category" means one ofthe general rating categories ofS&P orMoody's, as the case maybe, without regard to any refinement or graduation of such rating categoryby numerical modifier or otherwise. "Record Date" means, during the period during which the Bonds accrue interest at theFixedRate, the closeofbusiness onthe fifteenth day ofthe month immediatelypreceding each Bond Payment Date, and, during the WeeklyRate Period or a DailyRate Period, the close ofbusiness on the Business Day immediately preceding the Bond Payment Date. "Redemption Fund" means the fund so designated and established pursuant to Section 5.01 hereof. "Reimbursement Agreement" means the agreement or agreements entered into between the City and the Credit Entity setting forth the terms and conditions relating to the issuance of 45248817.2 10 the Credit Facility and the City's obligations to repaythe Credit Entity in the event moneys are drawn under the Credit Facility. "Remarketing Agent" means US Bancorp PiperJaffray, San Francisco, California, or any successor entityor entities appointed by the Authority to perforin the duties ofthe Remarketing Agent hereunder. "Remarketing Agreement" means the Remarketing Agreement, dated as of December 1, 2002, between the Authorityand the Remarketing Agent, and any other agreement relating to the services of the Remarketing Agent in effect at any time. "Remarketing Proceeds Account" means the account bythat name in the Tender Fund established in accordance with Section 4.10 hereof. "Revenues" means all amounts received by the Authority as lessor under the Lease, including, without limiting the generalityofthe foregoing, scheduled Base Rcntal payments, prepayments, and insurance and condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established under this Indenture. "Securities Depositories" means The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax -(516) 227-4039 or 4190, and, in accordance with then current guidelines ofthe Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authoritymaydesignate in a Written Certificate ofthe Authority delivered to the Trustee. "Serial Bonds" means the Bonds falling due by their teens in specified years, for which no mandatory sinking account payments are provided. "Special Record Date" means the date established by the Trustee pursuant to Section 2.02 hereof. "Supplemental Indenture" means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such- supplemental indenture is specifically authorized hereunder. "S&P" means Standard & Poor's or any successor corporation thereto. "State" means the State of California. "Tax Certificate" means the Tax Certificate delivered by the Authority and the City at the time of issuance and delivery ofthe Bonds, as the same may be amended or supplemented in accordance with its terms. 45248817.2 11 "Tender Agent" means U.S. Bank, N.A., or any successor entity appointed by the Authoriiyto perform the duties ofthe Tender Agent hereunder, which duties shall include those of acting as a co -transfer agent, co -paying agent for payment of principal and co -registrar hereunder. "Tender Date" means a Mandatory Tender Date or an Optional Tender Date. "Tender hand" means the fund bythat name established and held by the Tender Agent pursuant to Section 4.10 hereof. "Term Bonds" means the Bonds payable at or before their specified maturity date or dates from mandatory sinldng account payments established for that purpose and calculated to retire such Bonds on or before their specified maturity date or dates. "Trustee" means U.S. Bank, N.A., or any successor trustee appointed pursuant to the provisions of Section 8.01 hereof. "Untendered Bonds" means Bonds for which a Tender Date has become effective and for which the purchase price thereof has been irrevocably deposited intrust with the Tender Agent but for which the Tender Agent has not yet received the Bonds. "Weekly Rate" means the interest rate with respect to the Weekly Rate Period. "Weekly Rate Period" means the period from the Closing Date to the Fixed Rate Conversion Date. "Written Certificate," "Written Request" and "Written Requisition" of the Authority means, respectively, a written certificate, request or requisition signed in the name or the Authority by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. SECTION 1.02, Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof, excluding the certificate of destruction pursuant to Section 11.05 hereof, shall include (1) a statement that the individualmaking or giving such certificate or opinion has read such provisions and the definitions herein relating thereto; (2) abriefstatement as to the nature and scope ofthe examination or investigation upon which the certificate or opinion is based; (3) a statement that, in the opinion of such individual, such individual has made or caused to be made such examination or investigation as is necessaryto enable such individual to express an informed opinion with respect to the subject matter referred to in the instrument to which such individual's signature is affixed; and (4) a statement as to whether, in the opinion of such individual, such provision has been complied with. 45248817.2 12 Any such certificate or opinion made or given by an officer ofthe Authority or the City maybe based, insofar as it relates to a legal or accounting matter, upon a certificate or opinion of or representation by Bond Counsel or a consultant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion orrepresentation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by Bond Counsel or a consultant may be based, insofar as it relates to factual matters (with respect to which information is in the possession ofthe Authority or the City) upon a certificate or opinion ofor representation by an officer ofthe Authority or the City, as the case maybe, unless such Bond Counsel or consultant knows, or in the exercise ofreasonable care, should have known, that the certificate or opinion or representation with respect to the matters upon which such individual's certificate of said opinion or representation maybe based is erroneous. The same officer of the Authority or the City, or the same Bond Counsel or consultant,. as the case may be, need not certifyto all ofthe matters required to be certified under anyprovision oftWs Indenture, but different officers, Bond Counsel or consultants may certify to different matters. SECTION 1.03. Article and Section Headings and References. The headings or titles ofthe several articles and sections hereof, and anytable ofcontents appendedto copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding articles, sections or subdivisions of this Indenture; the words "herein," `hereof," "hereby," "hereunder" and other words ofsimilar import refer to this Indenture as a whole and not to anyparticular article, section or subdivision hereof; and words ofthe masculine gender shall mean and include words of the feminine and neuter genders. ARTICLE II THE BONDS SECTION 2.01. Authorization of Bonds. All acts, conditions and things required by law to exist, happen or be performed precedent to and in connection with the issuance ofthe Bonds do exist, have happened and have been performed in due time, form and manner as required bylaw, and the Authority is duly authorized, pursuant to each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. The Bonds will be issued initially in the aggregate principal amount of$ and will be designated the "CityofDiamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project)." SECTION 2.02. Terms of the Bonds. The Bonds shall be issued in fullyregistered form without coupons in Authorized Denominations. The Bonds shall be initially registered in the name of Cede & Co., as nominee of DTC, and shall be evidenced by one Bond for each ofthe maturities in the principal amounts set forth below, and DTC is hereby appointed depository for the Bonds, and registered ownership may not thereafterbe transferred except asset forth in Section 2.03. The Bonds 45248817.2 13 shall be dated the date oftheir initial delivery, and shall bear interest as set forth in Section 2.02A hereof until their maturity payable on each Bond Payment Date and shall mature on _ „ _ 1, Each Bond shall bear interest from the Bond Payment Date next preceding the date on which it is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event it shall bear interest from such Bond Payment Date, or (b) authenticated on or before the first Record Date, in which event it shall bear interest from the date ofits initial delivery; provided, however, that ifat the time of authentication ofany Bond interest is in default, such Bond shall bear interest from the date to which interest has been paid. The Bonds shall bear interest at the Weekly Rate or Daily Rate determined in accordance with Section 2.02A until the Fixed Rate Conversion Date, and on and after the Fixed Rate Conversion Date, at the Fixed Rate. The Bonds shall be numbered as the Trustee shall determine. Payment of interest with respect to any Bond on any Bond Payment Date or redemption date shall be made to the person appearing on the Registration Books ofthe Trustee as the Owner thereof as ofthe Record Date immediatelypreceding such Bond Payment Date or redemption date, as the case maybe, such interest to be paid by check mailed by first class mail on the Bond Payment Date to such Owner at his address as it appears on such registration books. Payments ofdefaulted interest shall be paid by check ofthe Trustee mailed to the registered Owners as of a special record date to be fixed by the Trustee in its sole discretion, notice ofwhich shall be given to the Owners not less than 10 days prior to such special record date. Payment of interest represented by the Bonds may, at the option of any Owner of at least $1,000,000 principal amount of Bonds (such option to be exercised by written request of such Owner to the Trustee), be transmitted by wire transfer to such Owner to the bank account number in the United States filed with the Trustee prior to the Record Date for a Bond Payment Date. The principal payable upon maturity or prior redemption with respect to the Bonds shall be payable upon surrender prior to the Fixed Rate Conversion Date at the Principal Office ofthe Trustee or Tender -Agent and thereafter at the Principal Office ofthe Trustee, with such principal to be paid by check mailed by the Trustee on the Bond Payment Date or redemption date by first class mail to each Owner at his address as it appears on the registration books; provided, however, thatpriorto the Fixed Rate Conversion Date, payment ofsuch principal shall be made bywire transfer to an Owner ofBonds who has exercised its option forpayment bywire transferpursuant to this Section 2.02. Saidamounts shall be payable in lawful money ofthe United States ofAmerica. The Trustee is herebyauthorized to pay orredeem the Bonds when dulypresented forpayment at maturity or on redemption and to cancel all Bonds uponpayment thereof; provided, however, that no such cancellation ofBonds shall affect the obligations ofthe Credit Entity arising under the Credit Facility; provided that the Credit Facility [and the Confirming Letter of Credit] are subject to reduction in accordance with its terms in connection with the payment at maturity or earlier redemption of the Bonds. Credit Facility Bonds shall bear interest and be payable as set forth in the Reimbursement Agreement or the [Confirmation Agreement], as applicable. 45248817.2 14 SECTION 2.02.A. Interest Rates. (a) Interest Rate Determination _Methods. (1) WeeklyRate. The rate ofinterest on the Bonds may, at the option of the City, be established at a Weekly Rate on any Bond Payment Date during a Daily Rate Period. So long as the Bonds bear interest at a Weekly Rate, the Remarketing Agent will set the WeeklyRate on the Second Business Dayof each calendarweek. The Remarketing Agent will give notice in writing to the Trustee, the Credit Entity [and the Confirming Bank] of each WeeklyRate as soon as possible following the determination of such rate. Each WeeklyRate will be the rate per annum equal to the minimum rate necessary (as determined by the Remarketing Agent) for the RemarketingAgent to sell the Bonds on the date the WeeklyRate is set at 100% ofthe principal amount thereofplus accrued interest; provided, however, that in no event shall the interest rate borne by the Bonds (other than Credit Facility Bonds) exceed the Maximum Rate. Each Weekly Rate will be effective Wednesday through the next succeeding Tuesday (or through the end ofthe period in which the Bonds bear interest at a Weekly Rate, whichever first occurs). If for any reason the Remarketing Agent does not set a Weekly Rate on the second Business Day of a calendar week, then the Weekly Rate for that period will be the WeeklyRate set for the immediatelypreceding Wednesday through Tuesday period. Ifa court holds that the WeeklyRate set for anyperiod is invalid or unenforceable, the Weekly Rate for that period will be the rate that is equal to the 30 -day tax-exempt commercial paper rate published in The Bond Buyer (or any successor to such publication) as of the date of determination ofthe unenforceable rate or, in the event The Bond Bu (or any such successor) is no longer published, any other newspaper or joumal containing financial news, printed in the English language and customarilypublished on each Business Day, ofgeneral circulation in New York, New York and selected by the Authority, whose decision shall be final and conclusive. (2) Daily Rate. The rate of interest on the Bonds may, at the option of the City, be established at a Daily Rate on any Bond Payment Date during a Weekly Period. So long as the Bonds bear interest at a Daily Rate, the Remarketing Agent will set the Daily Rate on or before 10.30 a.m., New York time, on each Business Day for that Business Day. The Daily Rate for anynon-Business Day shall be the DailyRate for the last day on which a Daily Rate was set. The Remarketing Agent will give notice in writing to the Trustee, the Credit Entity [and the Confxmiing Bank] of each Daily Rate as soon as possible following the determination of such rate. Each Daily Rate will be the rate per annum equal to the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the date the Weekly Rate is set at 100% of the principal amount thereofplus accrued interest; provided, however, that in no event shall the interest rate borne by the Bonds (other than Credit Facility Bonds) exceed the Maximum Rate. 45248817.2 15 If for any reason the Remarketing Agent does not set a Daily Rate on any Business Day, then the Daily Rate most recently determined shall remain in effect until such time as the Remarketing Agent determines the new Daily Rate. If a court holds that the Daily Rate set for anyperiod is invalid orunenforceable, the Daily Rate forthat period will be the rate that is equal to the 30 -day tax-exempt commercial paper rate published in The Bond Buyer (or any successorto such publication) as ofthe date ofdeter mination ofthe unenforceable rate or, in the event The Bond Buyer (or any such successor) is no longer published, any other newspaper or j ournal containing financial news, printed in the English language and customarily published on each Business Day, of general circulation in New York, New York and selected by the Authority, whose decision shall be final and conclusive. (3) Fixed Rate. The Remarketing Agent shall set the Fixed Rate on a date (the "Determination Date") no fewer than two nor more than 15 Business Days before the Fixed Rate Conversion Date. The Fixed Rate shall be the rate determined by the Remarketing Agent to be the rate per annum equal to the minimum interest rate which would be necessary for the Remarketing Agent to sell the Bonds on the Determination. Date at 100% of the principal amount thereofplus accrued interest; provided, however, that in no event shall the interest rate borne by the Bonds on and after the Fixed Rate Conversion Date exceed the Maximum Rate. A conversion of all or any sinking fund redemption to serial maturity dates shall be required to the extent, in the opinion ofthe Remarketing Agent delivered in writing to the Authority and the City prior to the Fixed Rate Conversion Date, such a conversion will reduce the total interest to be paid by the City as Base Rental and the Authority and the City may specify optional redemption provisions to be applicable to the Bonds (and prepayments under the Lease) different from that set forth in Section 4.03(b) hereof. In such case, all references to a Fixed Rate shall refer to the interest rates applicable to each maturity. (b) Change in Interest Rate Determination Method. (1) Notice and Opinion ofBond Counsel. The Citymayinitiate actionto convert the interest borne by all ofthe Bonds from the Weekly Rate or the Daily Rate to the Fixed Rate by notifying the Authority, the Trustee, the Tender Agent, the Credit Entity, [the Confirming Bank] and the Remarketing Agent ofthe proposed Fixed Rate ConvcrsionDate at least 60 days prior to such proposed date. The notice shall be accompanied by (i) an opinion ofBond Counsel stating that the conversion is not prohibited by the law ofthe State or this Indenture and that the conversion will not cause the interest on the Bonds to fail to be exempt from personal income taxes ofthe State, or to fail to be excluded pursuant to section 103 (a) of the Code from the gross income ofthe owners thereoffor federal income tax purposes, and (ii) written evidence of satisfaction ofthe limitations specified in subsection 2.02.A(b)(2) hereof. The Trustee shall have no obligation to provide notice to the Owners pursuant to Section 2.02.A(c) hereof of a change to a Fixed Rate unless the Trustee has received the notice from the City and the opinion ofBond Counsel and the written evidence of satisfaction in accordance with this Section. The City maynot request a conversion from the WeeklyRate or Daily Rate to the Fixed Rate during the existence of an Event ofDefault and the notice from the City shall 45248817.2 16 certify as to the absence thereof. Ifthe City's notice complies with this paragraph, and subject to the provisions of Sections 2.02A(e) and 4.13 hereof, the Fixed Rate shall be applicable from the effective date specified in the notice until maturity ofthe Bonds. Upon conversion from the Weekly Rate or Daily Rate to the Fixed Rate, the Trustee promptly shall surrender the Credit Facility to the Credit Entity pursuant to the terms of the Credit Facility and surrender [the Confirming Letter ofCredit to the Confirming Bank pursuant to the terms ofthe Confirming Letter of Credit.] (2) Limitations. A conversion from the Weekly Rate or Daily Rate to the Fixed Rate pursuant to subsection 2.02.A(b)(1) shall comply with the following: Date; and (i) the effective date ofthe conversion shall be a Bond Payment (ii) the Remarketing Agent shall have agreed to remarket the Bonds on the Fixed Rate Conversion Date. (c) Notice to Owners of Change to Fixed Rate. When a conversion from. the Weekly Rate or DailyRate to the Fixed Rate is to be made, the Trustee shall notify the Owners, the Credit Entity [and the Con firming Bank] by first class mail at least 30 but not more than 60 days prior to the proposed Fixed Rate Conversion Date. The notice shall be prepared and furnished by the City to the Trustee for mailing at least 60 days prior to the proposed Fixed Rate Conversion Date and shall state: (1) that the interest rate payable with respect to the Bonds will be converted to the Fixed Rate; (2) the effective date of the Fixed Rate; (3) the Bond Payment Dates and Record Dates following the Fixed Rate Conversion Date; (4) that following the Fixed Rate Conversion Date there will be no option to tender Bonds for purchase; (5) that all Bonds are subject to mandatory tender for purchase on the Fixed Rate Conversion Date and will be deemed to have been so tendered and shall be purchased on the Fixed Rate Conversion Date at the principal amount thereofplus interest accrued to such date; (6) any ratings assigned to the Bonds by a nationally recognized rating agencyto be effective on the Fixed Rate Conversion Date and that such ratings assigned to the Bonds may be reduced or withdrawn; 45248817.2 17 (7) the proposed maturity schedule for the Bonds following the Fixed Rate Conversion Date; (8) the redemption provisions to which the Bonds are subject following the Fixed Rate Conversion Date; (9) that following the Fixed Rate Conversion Date Bonds will be issued in denominations of $5,000 or integral multiples of $5,000; (10) that ifthe opinion ofBond Counsel required pursuant to subsection 2.02.A(b) is rescinded, the interest rate will not be converted to the Fixed Rate; and (11) that if a Credit Facility [and/or Confirming Letter ofCredit] is to be provided to secure the payment ofthe Bonds, the name ofthe institution providing such Credit Facility [and/or Confirming Letter of Credit] and the principal terms ofsuch Credit Facility [and/or Confirming Letter of Credit]; or, if a Credit Facility [and/or Confirming Letter of Credit] is not to be provided, the fact that a Credit Facility [and/or Confirming Letter of Credit] will not secure the payment of the Bonds. (d) Calculation oflnterest. During the WeeklyRate Period orDailyRate Period, interest with respect to the Bonds shall be computed onthe basis ofthe actual number ofdays elapsed in a year of 3 65 days (366 days in leap years) and will be payable on each Bond Payment Date. On and after the Fixed Rate Conversion Date, interest with respect to the Bonds shall be computed on the basis of a 360 -day year comprised of twelve 30 -day months and will be payable on each Bond Payment Date. Interest on overdue principal and, to the extent lawful, on overdue premium and interest with respect to any Bond shall be payable at the rate applicable to such Bond until paid. The Trustee shall compute the amount ofinterest payable with respect to the Bonds using the rates supplied to the Trustee by the Remarketing Agent. The Remarketing Agent shall send notice in writing to the Trustee and the Tender Agent, of the following: (1) on the Second Business Day of each week in which interest on the Bonds is payable at a WeeklyRate, ofthe Weekly Rate for the applicable Wednesday through Tuesday period; (2) on or before 10:30 a.m., New York time, on each Business Day of each week in which interest on the Bonds is payable at a DailyRate, ofthe Daily Rate for such Business Day; and (3) on the first Business Day after the Determination Date, the Fixed Rate set on such Determination Date. Using the rates supplied by such notices, the Trustee shall calculate the interest payable with respect to the Bonds for the applicable period. During the Weekly Rate Period or the Daily 45248817.2 18 Rate Period, the Trustee shall send the City at least five (5) days prior to each Bond Payment Date written notice ofthe interest that will have accrued with respect to the Bonds for the period from the preceding Band Payment Date to the upcoming Bond Payment Date. In the event that the Weekly Rate will be reset between the date such notice is sent and the upcoming Bond Payment Date, the Trustee shall make such calculation assuming that the WeeklyRate will be set at the Maximum Rate on such reset date. The Remarketing Agent shall inform the Trustee, the City, the Tender Agent, the Credit Entity [and the Confirming Bank] orally at the oral request of any ofthem of any interest rate set by the Remarketing Agent. The Trustee shall confirm the effective interest rate bytelephone or in writing to any Owner (at such Owner's cost) who requests it in any manner. The setting ofthe rates and the calculation of interest payable with respect to the Bonds as provided in this Indenture shall be conclusive and binding on all parties. (e) Rescission of inion ofBond Counsel. Notwithstanding anyprovision herein to the contrary, no conversion shall be made from the Weekly Rate orDaily Rate to the Fixed Rate if the Trustee and the Tender Agent shall receive written notice from Bond Counsel prior to such conversion that the opinion ofBond Counsel required pursuant to subsection 2.02.A(b)(1) hereofhas been rescinded. If the Trustee shall have sent any notice to the Owners, the Credit Entity [and the Confirming Bank] regarding the conversion to the Fixed Rate pursuant to subsection 2.02.A(c) hereof, then in the event ofrescission ofthe opinion ofBond Counsel, the Trustee shall promptlynotify all Owners, the Credit Entity [and the Confirming Bank] ofsuch rescission and that the rate will not be converted to the Fixed Rate. (f) Interest on the Bonds shall be payable on each Bond Payment Date to, but not including, the date ofmaturity or redemption, whichever is earlier. The proportionate share ofthe portion of Base Rental designated as interest with respect to anyBond shall be computed by multiplying the portion of Base Rental designated as principal with respect to such Bond by the interest rate applicable to such Bond. SECTION 2.03. Transfer of Bonds. AnyBond may, in accordance with its terms, be transferred, upon the registration books kept bythe Trustee for such purpose, bythe person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee or the Tender Agent; provided, however, that neither the Trustee nor the Tender Agent shall be required to register the transfer of any Bond during the period five (5) days prior to any date established bythe Trustee for the selection ofBonds for redemption nor anyBond actually selected by the Trustee for redemption. Whenever anyBond or Bonds shall be surrendered for registration oftransfer, the Authority shall execute and the Trustee shall deliver a new Bond or Bonds ofthe same maturity and interest rate and for alike aggregate principal amount. The Trustee or the Tender Agent shall require the Owner requesting such registration oftransfer to pay any tax or other governmental charge required to be paid 45248817-2 19 with respect to such transfer. The cost ofprinting any Bonds and any services rendered or any expenses incurred in connection with any transfer shall be paid by the Authority solely from Pledged Utility Revenues. The Authority, the Trustee and the Tender Agent may treat the registered owner o f any B and as the absolute owner thereoffor all purposes whatsoever in accordance with this Indenture, and the Authority and the Trustee shall not be affected by any notice to the contrary. SECTION 2.04. Use of Securities Depository. (a) The Bonds shall be initially registered as provided in Section 2.02. Registered ownership ofthe Bonds, or anyporiion thereof, may not thereafter be transferred except: (1) to any successor ofCede & Co., as nominee ofDTC, or its nominee, or to any substitute depository designated pursuant to clause (2) ofthis Section (a "substitute depository"); provided, that any successor of Cede & Co., as nominee of DTC or a substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (2) to anysubstitute depository, upon (1) the resignation ofDTC or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the Authority to substitute another depository for DTC (or its successor) because DTC or its successor (or any substitute depositoryor its successor) is no longer able to carry out its functions as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (3) to any person as provided below, upon (1) the resignation of DTC or its successor (or substitute depositoryor its successor) from its functions as depository, or (2) a determination by the Authority to remove DTC or its successor (or any substitute depository or its successor ) from its functions as depository. (b) In the case ofanytransfer pursuant to clause (1) orclause (2) of subsection (a) hereof, uponreceipt ofthe Outstanding Bonds bythe Trustee, togetherwith a Written Request ofthe Authority to the Trustee, a new Bond for each maturity shall be authenticated and delivered in the aggregate principal mount of the Bonds then Outstanding, registered in the name of such successor or such substitute depository, or theirnominees, as the case maybe, all as specified in such Written Request of the Authority. (c) In the case ofany transfer pursuant to clause (3) of subsection (a) hereof, upon receipt of the Outstanding Bonds by the Trustee, together with a Written Request of the Authority to the Trustee, new Bonds shall be authenticated and delivered in such denominations numbered in the manner determined by the Trustee and registered in the names of such persons as are requested in such a Written Request ofthe Authority, subject to the limitations ofSection 2.02 hereof; provided, the Trustee 45248817.2 20 shall not be required to deliver such Bonds within a period less than sixty (60) days from the date of receipt of such a Written Request ofthe Authority. After anytransfer pursuant to this subsection, the Bonds shall be transferred pursuant to Section 2.03. (d) The Authority and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the Owner thereof for all purposes ofthe Indenture and any applicable laws, notwithstanding anynotice to the contraryreceived by the Trustee or the Authority, and the Authority and the Trustee shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with anybeneficial owners ofthe Bonds, and neither the Authority nor the Trustee will have anyresponsibilityor obligations, legal or otherwise, to the beneficial owners or to any other party, including DTC or its successor (or substitute depository or its successor), except forthe Owner of any Bonds. (e) So long as the Outstanding Bonds are registered in the name of Cede & Co. or is registered assigns, the Authority and the Trustee shall cooperate with Cede & Co., as sole registered Owner, or its registered assigns in effecting payment of the principal of and interest on the Bonds by arranging for payment in such manner that funds for such payments areproperly identified and are made immediately available on the date they are due. (f) Notwithstanding anything to the contrary contained herein, so long as the Bonds are registered as provided in this Section 2.04, payment of principal of and interest on the Bonds shall be made in accordance with the Letter of Representations delivered to DTC with respect to the Bonds. (g) Notwithstanding the foregoing, in the event any Bond is tendered but not remarketed, with the result that such Bond becomes a Credit FacilityBond, the Trustee and the Authority shall take all such actions as shall be necessary to remove the Bonds from the full book -entry system of DTC and to (i) register such tendered but not remarketed Bonds in the name of the Credit Entity for the Confirming Bank], as applicable, and (ii) register tendered but remarketed Bonds in the name ofthe purchaser thereof, ortheirnomince. Credit Facility Bonds shall be held by the TenderAgent on behalf, and for the benefit, ofthe Credit Entity for the Confining Bank], as applicable, pursuant to the Custody Agreement (as such term is defined in the Reimbursement Agreement). At such time as all Credit FacilityBonds have been remarketed such that no Credit Facility Bonds remain Outstanding and the Credit Facility has been reinstated to the amount of its Commitment (as such term is defined in the Reimbursement Agreement), the Trustee and the Authority shall take all such actions as shall be necessary to return the Bonds to the full book -entry system of the DTC. SECTION 2.05. Exchange of Bonds. Bonds maybe exchanged at the corporate office ofthe Trustee or the TenderAgent for a like aggregate principal amount ofBonds ofthe same maturity in other authorized denominations. The Trustee or the Tender Agent shall require the Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange. The Trustee or the Tender Agent may also require the Owner requesting such exchange to pay a reasonable charge as maybe necessaryto cover customary expenses incurred and fees charged by the Trustee, the Tender Agent or the Authority with respect to such exchange. The Trustee or the 45248817.2 21 Tender Agent mayref ise to register the exchange of anyBond during the period five (5) days priorto the date established bythe Trustee forthe selection ofBonds for redemption or any Bond actually selected bythe Trustee for redemption pursuant to the terms hereof The cost ofprinting anyBonds and any services rendered or any expenses incurred in connection with any exchange shall be paid bythe Authority solely from Revenues. SECTION 2.06. Bond Register. The Trustee shall keep or cause to be kept, at the corporate office ofthe Trustee sufficient books for the registration and transfer ofthe Bonds, which shall at all times be open to inspection by the Authority with reasonable notice during regular business hours; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may proscribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided. SECTION 2.07. Form and Execution ofBonds. Prior to the Fixed Rate Conversion Date, the Bonds shall be substantialiyin the forms attached hereto as Exhibit A and herebymade apart hereof. After the Fixed Rate Conversion Date, the Bonds shall be substantially in the forms attached hereto as Exhibit B. The Bonds shall be signed in the name and on behalfofthe Authority with the manual or facsimile signatures of its Chairman and attested with the manual or facsimile signature ofits Secretary or any assistant duly appointed by the Board, and shall be delivered to the Trustee for authentication byit. In case any officer ofthe Authoritywho shall have signed anyofthe Bonds shall cease to be such officerbefore the Bonds so signed shall have been authenticated or delivered bythe Trustee or issued bythe Authority, such Bonds maynevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer ofthe Authority. Also, any Bond may be signed on behalf ofthe Authorityby any individual who on the actual date ofthe execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer. Only such ofthe Bonds as shall bear thereon a certificate ofauthentication in substantially the forms set forth in Exhibit A and Exhibit B, manually executed bythe Trustee, shall be valid or obligatory for anypurpose or entitled to the benefits ofthis Indenture, and such certificate ofthe Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture. SECTION 2.08. Temporary Bonds. The Bonds maybe issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporaryBonds maybe printed, lithographed or typewritten, shall be ofsuch denominations as maybe determined by the Authority, shall be in fullyregistered form without coupons and may contain such reference to any ofthe provisions of this Indenture as maybe appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. Ifthe Authority issues temporaryBonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds maybe surrendered, for cancellation, at the Principal Office and the Truster; shall authenticate and deliver in exchange for such 45248817.2 22 temporaryBonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporaryBonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder. SECTION 2.09. Bonds Mutilated, Lost. Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense ofthe Owner of said Bond, shall execute, and the Trustee or the TenderAgent shall thereupon authenticate and deliver, a new Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee or the Tender Agent ofthe Bond so mutilated. Every mutilated Bond so surrendered to the Trustee or the Tender Agent shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such destruction or theft may be submitted to the Authority, the Trustee or the Tender Agent and, if such evidence be satisfactory to both and an indemnity satisfactory to them shall be given, the Authority, at the expense ofthe Owner, shall execute, and the Trustee or the Tender Agent shall thereupon authenticate and deliver, anew Bond of like tenor and maturity in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured, or shall be about to mature or has been selected for redemption, instead of issuing a substitute bond, the Trustee may pay the same without surrender thereof). The Authoritymayrequire payment ofa sumnot exceeding the actual cost ofpreparing each new Bond issued under this Section 2.09 and ofthe expenses that maybe incurred bythe Authority or the Trustee. AnyBond issued under the provisions ofthis Section 2.09 in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part ofthe Authoritywhether ornot the Bond so alleged to be lost, destroyed or stolen is at anytime enforceable by anyone, and shall be entitled to the benefits ofthe Indenture with all other Bonds secured by this Indenture. SECTION 210. CUSIP Numbers. The Trustec and the Authority shall not be liable for any defect or inaccuracy in the CUSIP number that appears on any Bond or in any redemption notice. The Trustee may, in its discretion, include in any redemption notice a statement to the effect that the CUSIP numbers on the Bonds have been assigned by an independent service and are included in such notice solely for the convenience ofthe Owners and that neither the Trustee nor the Authority shall be liable for any inaccuracies in such numbers. SECTION 2.11. Certain Contracts and Swaps. Without entering into a supplement to this Indenture, anyAuthorized Representative ofthe Authority may, with the prior consent ofthe Credit Entity [and the Confirming Bank], at any time that the Bonds are Outstanding enter into one or more additional contracts (each a "Swap Agreement") in order to place the Bonds, or any portion thereof, on the interest rate, currency, cash-flow, or other basis desired by the City and the Authority, including, without limitation, interest rate swap agreements, currency swap agreements, forward payment conversion agreements, futures contracts, contracts providing for payments based on levels of or changes in interest rates, currency exchange rates, stock or other indices, or contracts to exchange cash 45248817.2 23 flows or a series ofpayments, and contracts including, without limitation, interest rate floors or caps, options, puts or calls to hedge payments, currency rate, spread or similar exposure; provided, however, the Authority will enter into such a contract only if either (i) the counterpart to any such contractor the guarantor ofthe obligations of such counterpart has an unsecured, uninsured and unguaranteed long-term obligation rated by Moody's or S&P in one of its two highest long-term rating categories (without reference to gradations such as "plus" or `!minus") or, (ii) each rating agency which then has a rating assigned by any Bond that would be secured on a parity with the Authority's obligation under said contract confirms in writing to the Trustee that the City's execution and delivery of such Swap Agreement will not result in a reduction or withdrawal of such rating. ARTICLE III APPLICATION OF PROCEEDS SECTION 3.01. Application of Proceeds of the Bonds. There shall be deposited in trust with the Trustee the sum of $ , representing the proceeds received from the sale of the Bonds. The Trustee shall immediately set aside such proceeds as follows: (a) The Trustee shall deposit the amount of $ in the Costs of lssuance Fund; (b) The Trustee shall deposit the amount of $ in the Lease Payment Account of the Debt Service Fund, representing capitalized interest through ; and (c) The Tnrstee shall transfer the amount of $ to the Construction Fund. SECTION 3A2. Costs of Issuance Fund. The Trustee shall establish and maintain a fund designated as the "Costs ofIssuance Fund." Moneys in the Costs oflssuance Fund shall be used and withdrawn by the Trustee from time to time to paythe Costs oflssuance of the Bonds for which such fund was established upon submission to the Trustee ofa Request ofthe Authority stating (i) the Person to whom payment is to be made, (ii) the amount to be paid, (iii) the purpose for which the obligation was incurred and (iv) that such payment is a proper charge against said fund. Upon receipt ofa Certificate ofthe Authority statingthat amounts in such fund are no longer required forthe payment ofsuch Costs ofIssuance or 180 days from the Closing Date, whichever is earlier, such account shall be terminated and any amounts then remaining in such account shall be withdrawn therefrom bythe Trustee and transferred to the Debt Service Fund upon such transfer, the Costs ofIssuance Fund shall be closed. SECTION 3.03. Construction Fund. The Trustee shall establish andmaintain a fund designated as the "Construction Fund." The Trustee shall disburse or transfer all amounts in the Construction Fund, as stated in a Request ofthe City (as described below) for the payment ofthe cost ofthe construction ofthe Proj ect or other public improvements (including reimbursement to the City for 452488 17.2 24 any such costs paid by it). Before any payment ofmoney is made from the Construction Fund, the Authority shall file or shall cause the City to file with the Trustee a requisition showing with respect to each payment of money to be made -- Fund. (a) the name and address of the person to whom payment is due; (b) the amount of money to be paid; (c) the purpose for which the obligation to be paid was incurred; and (d) that such amount has not been paid previously for suchpurpose from the Construction Each such requisition shall state and shall be sufficient evidence to the Trustee -- (a) that an obligation in the stated amount has been properly incurred under and pursuant to the Indenture and that such obligation is a proper charge against the Construction Fund; and (b) that there has not been filed with or served upon the City a stop notice or any other notice ofany lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any ofthe money payable to the person named in such requisition which has not been released or will not be released simultaneously with the payment of such obligation, other than liens accruing by more operation of law. Upon receipt of each such requisition, the Trustee shall pay the amount set forth in such requisition as directed by the terms thereof, When the construction ofthe Project and any other designated public improvements have been completed, the Authority shall deliver or shall cause the City to deliver to the Trustee a Certificate ofthe City, stating the fact and date of such completion and stating that all the Project costs have been determined and paid (or that all such costs have beenpaid less specified claims which are subject to dispute and for which a retention in the Construction Fund is to be maintained in the full amount of such claim until such dispute is resolved). Following the delivery of such certificate, the Trustee shall transfer amounts then on deposit in the Construction Fund (but less the amount of any such retention) to the Lease Payment Account of the Debt Service Fund. ARTICLE IV REDEMPTION AND TENDER OF BONDS SECTION 4.01 Establishment of Redemption Fund. Pursuant to Section 5.01(B) hereof, the trustee shall establish a special fund designated as the "Redemption Fund" in which the Trustee shall establish two special accounts designated as the "Lease Prepayment Account" and the 45248817.2 25 "Credit FacilityPrepayment Account." The Trustee shall keep such fund separate and apart from all other funds and moneys held by it and shall administer such fund and accounts as herein provided. Moneys from Prepayments to be used forredemption ofthe Bonds shall be deposited into the Lease Prepayment Account ofthe Redemption Fund and shall be used, as applicable, either to reimburse the Credit Entity [or the Confirming Bank] if money has been drawn on the Credit Facility [or the Confirming Letter of Credit], as applicable, or to redeem the Bonds, all as provided in the following sentence. Moneys drawn under the Credit Facility for the Confirming Letter ofCredit] to be used for redemption ofthe Bonds shall be deposited in the Credit Facility Prepayment Account forthe purpose ofredeeming the Bonds in advance oftheir maturity on the date designated for redemption and upon presentation and surrender ofsuch Bonds; provided, however, that ifthere shall no longerbe available a Credit Facility [or the Confirming Letter of Credit] to secure the payment ofprincipal and interest represented ofthe Bonds, or the Credit Facility [or the Confirming Letter of Credit] does not permit a draw with respect to Prepayments, moneys from Prepayments to be used forredemption ofthe Bonds shall be deposited into the Lease Prepayment Account of the Redemption Fund for the purpose of redeeming the Bonds as provided herein. Anything in this indenture to the contrarynotwithstanding, Credit Facility Bonds that are selected forredemption under Section 4.05 hereofshall be redeemed from amounts on deposit in the Lease Prepayment Account and not from amounts drawn on the Credit Facility [or the Confirming Letter of Credit] and deposited to the Credit Facility Prepayment Account. SECTION 4.02 Mandatory Redemption From Net Proceeds. The Bonds are subj ect to mandatoryredemption on anyBond Payment Date, in whole or inpart, from moneys drawn under the Credit Facility for the Confirming Letter of Credit], which shall be reimbursed from Net Proceeds following the deposit by the Trustee in the Lease Prepayment Account ofthe Redemption Fund of Net Proceeds deposited by the City under this Indenture, at least 45 days prior to a Bond Payment Date which have been credited towards the Prepayment made by the City pursuant to the Lease, at a redemption price equal to the principal amount ofthe Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium; provided, however, that ifthere shall no longer be available a Credit Facility [or the Confirming LetterofCredit] to secure the payment of principal and interest represented by the Bonds or ifthe Credit Facility [or the Confirming Letter of Credit] does not permit a draw with respect to Prepayments, the Bonds are subject to redemption from Net Proceeds which the Trustee shall deposit in the Lease Prepayment Account ofthe Redemption Fund, to be used to redeem the Bonds by the Trustee as provided in the Lease and as provided herein. In the event that amounts remain in the Lease Prepayment Account because such amounts did not constitute an Authorized Denomination of a Bond, then such amounts shall be transferred to the Lease Payment Account of the Debt Service Fund. SECTION 4.03 Optional Redemption of the Bon ds. The Bonds shall be subject to optional redemption as set forth in this Section 4.03. 45248817.2 26 (a) Dgrggthe WeeldyRatePeriod orDaily Rate Period. During the WeeklyRate Period or Daily Rate Period and on the Fixed Rate Conversion Date, the Bonds are subject to optional redemption in whole or in part (in an amount of $100,000 or any integral multiple of $5,000 in excess thereof) on anyBusiness Day, at the option ofthe Authority at aredemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium. (b) After the Fixed Rate Conversion Date. After the Fixed Rate Conversion Date and subject to modification pursuant to Section 2.02.A(a)(2), the Bonds are subject to optional redemption in whole or in part (in integral multiples of $5,000) on any Business Day, at the option ofthe Authority at a redemption price equal to the principal amount thereoftogetherwith accrued interest to the date fixed for redemption and following premium expressed as a percentage ofthe redeemed principal amount: Prepayment Date Premium Ninth anniversary of the Fixed Rate Conversion Date to the day before the tenth anniversary date of the Fixed Rate Conversion Date 2% Tenth anniversary of the Fixed Rate Conversion Date to the day before the eleventh anniversary date of the Fixed Rate Conversion Date 1 % Eleventh anniversary of the Fixed Rate Conversion Date and thereafter 0% (c) During the term of any Credit Facility no notice of any redemption pursuant to this Section shall be sent unless either (1) the Authority has deposited with the Trustee moneys in an amount sufficient to cover the principal of; premium, if any, and interest due on such redemption date (exclusive of anticipated investment earnings thereon), or (2) the Authority delivers to the Trustee the written consent of the Credit Entity. SECTION 4.04 Sinking Fund Redemption The Bonds are subject to mandatory redemption in part on the dates in the following years in the following amounts at a redemption price equal to the principal amount thereoftogetherwith accrued interest to the date fixed for redemption, without premium: 45248817.2 27 Redemption Date Redemption Date ( J) Principal f _ i ) Principal * Maturity At the Fixed Rate Conversion Date, any annual sinking fund redemption which has not yet become due may, pursuant to Section 2.02.A(a)(2) hereof, be treated as a serial maturityofprincipal bearing interest at the Fixed Rate payable on 1 and 1 thereafter to maturity. In the event of a partial redemption of Bonds pursuant to Section 4.02 or 4.03 above, the foregoing annual sinking fund payments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The City shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above. SECTION 4.05 Selection of Bonds for Redemption. Wherieverprovision is made in this Indenture for the redemption of Bonds and less than all Outstanding Bonds are called for redemption, the Trustee shall select Bonds forredemption, from the Outstanding Bonds not previously called forredemption, in Authorized Denominations, fust from CreditFacilityBonds, then with respect to a redemption under Section 4.02 on apro rata basis among maturities and by lot within a maturity, and in the case of a redemption under 5 ection 4.03 from such maturities as are designated in a City Certificate. The Trustee shall promptly notify the City and the Authority in writing ofthe Bonds so selected for redemption. SECTION 4.06 Notice of Redemption. When redemption is authorized or required pursuant to this Article IV, the Trustee shall give notice ofthe redemption ofthe Bonds. Such notice shall specify: (a) that the Bonds or a designated portion thereof are to be redeemed, (b) the CUSIP numbers and, if less than all ofthe Bonds ofa maturity are to be redeemed, the serial numbers ofthe Bonds to be redeemed, (c) the date ofredemption, (d) the place or places where the redemption will be made, (e) the following descriptive information regarding the Bonds: date, interest rates and stated maturity dates, and (f) that a new Bond in an amount equal to that portion not so redeemed will be executed bythe Trustee and delivered to the Owner in the event ofa partial redemption. Such notice shall further state that on the specified date there shall become due and payable upon each Bond to be redeemed, the portion ofthe principal amount of such Bond to be redeemed, together with interest accrued to said date, and that from and after such date, provided that moneys therefore have been deposited with the Trustee, interest with respect thereto shall cease to accrue and be payable. 45248817.2 28 Notice ofsuch redemption shall be mailed by first-class mail, postage prepaid, to the City, to all municipal Securities Depositories and to at least one national Information Service which the City shall designate to the Trustee, and the respective Owners of any Bonds designated for redemption at their addresses appearing on the Bond registration books, at least 30 days, but not more than 60 days, prior to the redemption date;ro�vided that neither failure to receive such notice nor any defect in anynotice so mailed shall affect the surf ciencyofthe proceedings for the redemption ofsuch Bonds, and provided, finther, however, that the Trustee shall, on the day it receives notice ofredemption by the City, provide telephonic, telegraphic ortelex notice ofsuch notice ofredemption to the Remarketing Agent, the Credit Entity [and the Confirming Bank.] SECTION 4.07 Partial Redemption of Bonds. Upon surrender by the Owner of a Bond forpartial redemption at the Principal Office, payment of such partial redemption ofthe principal amount of a Bond will be made to such Owner by check mailed by first class mail to the Owner at his address as it appears on the registration books ofthe Trustee, orprior to the Fixed Rate Conversion Date by wire transfer to any Ownerwho has exercised its option forpayment bywire transfer pursuant to Section 2.11(a) herein. Upon surrender of any Bond redeemed in part only, the Trustee or the Tender Agent shall execute and deliverto the Ownerthereof, at the expense ofthe City, anew Bond or Bonds which shall be of Authorized Denominations equal in aggregate principal amount to the unredeemed portion ofthe Bond surrendered and the ofthe same interest rate and the same maturity. Suchpartial redemption shall be valid upon payment ofthe amount therebyrequired to be paid to such Owner, and the City, the Authority and the Trustee shall be released and discharged from all liabilityto the extent of such payment. SECTION 4.08 Effect of Notice of Redemption. Notice having been given as aforesaid, and the moneys for the redemption (including the interest to the applicable date of redemption), having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date ofredemption, and, upon presentation and surrender thereof at the Principal Office, said Bonds shall be paid at the unpaid principal price with respect thereto, plus interest accrued and unpaid to said date of redemption. If, on said date ofredemption, moneys for the redemption of all the Bonds to be redeemed, together with interest to said date of redemption, shall be held by the Trustee so as to be available therefor on such date ofredemption, and, ifnotice ofredemption thereof shall have been given as aforesaid, then, from and after said date ofredemption, interest with respect to the Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption o f Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Article shall be canceled upon surrender thereof and delivered to or upon the order of the City. SECTION 4.09 Surplus. Any funds remaining in the Redemption Fund after redemption and payment of all Bonds outstanding, orprovision made therefor satisfactoryto the Trustee, including accrued interest, shall be withdrawn by the Trustee and remitted first to the Credit Entity [or the 45248817.2 29 Confirming Bank] to the extent that amounts are owed to the Credit Entity for the Confirming Bank] pursuant to the Reimbursement Agreement [orthe ConfrmationAereement], and second to the Trustee for the payment of any applicable fees and expenses to the Trustee (including the Trustee's legal fees and expenses), with the remainder, if any, being remitted to the City. SECTION 4.10 Establishment of Tender Fund. The Tender Agent shall establish a special fund designated as the "Tender Fund," in which the Tender Agent shall establish two special accounts designated as the "Remarketing Proceeds Account" and the "Liquidity Account;" shall keep such fund and accounts separate and apart from all other funds and moneys held by it; and shall administer such fund and accounts as herein provided. Moneys to be used with respect to the tender ofBonds shall be deposited in the Tender Fund as herein provided and used solely for the purpose of purchasing tendered Bonds. SECTION 4.11 Mandatory Tender on Fixed Rate Conversion Date. In the event the City has complied with the requirements of Section 2.02.A hereof to change the interest rate represented by the Bonds to a Fixed Rate, all Bonds shall be subject to mandatory tender and purchase on the Fixed Rate Conversion Date in accordance with the provisions of Section 4.13 hereof. SECTION 4.12 Mandatory Tenders Other Than on Fixed Rate Conversion Date. (a) The Bonds are subject to mandatorytender on the last Bond Payment Date occurring on or prior to the date at least five days priorto the date on which the Credit Facility [or the Confirming Letter of Credit] is scheduled to expire or terminate in accordance with its respective terms and if the Trustee has not received notice at least 40 days prior to such Bond Payment Date that an Alternate Credit Facility [or an Alternate Confirming Letter of Credit], as applicable, is to be provided. Not less than thirty days before each such Mandatory Tender Date under this Section 4.12(a), the Trustee shall send anotice to all Owners by first class mail, postage prepaid, which notice shall contain the following information: (1) that the Credit Facility [or the Confirming Letter of Credit] is scheduled to expire or ternunate and no Alternate Credit Facility [or Alternate Confirming Letter of Credit], as applicable, will be provided, (2) that each Owner's Bond is subj ect to mandatory tender as provided in such notice, and (3) if any ofthe nationally recognized rating agencies which has a credit rating outstanding on the Bonds has indicated to the Trustee in writing that it will lower or withdraw its rating on the Bonds as of such Mandatory Tender Date, notice of such new rating, or if no new rating is available, notice that any of such rating agencies may Iower or withdraw such rating as of such Mandatory Tender Date. [Provided, however, there shall be no mandatory tender of Bonds pursuant to this Section 4.12 for failure to provide an Alternate Confirming Letter of Credit if the Bonds, without such AIternate Confirming Letter of Credit, will be rated at least the same rating by each rating agency then rating the Bonds as the Bonds were rated at the time the Confirming Letter ofCredit was in effect as evidenced by written notice from each rating agency then rating the Bonds to the Trustee.] (b) The Bonds are subject to mandatory tender under this Section 4.12(b) on the first Business Day to occur on or after the seventh day following receipt by the Trustee ofnotice from the Credit Entity [or the Confirming Bank] of the occurrence of an event ofdefault under the Reimbursement 45248817.2 30 Agreement [or the Confirmation Agreement], as applicable, orthat the Credit Entitywill notreinstate the interest portion ofthe Credit Facility. Not later than the third Business Day after receipt by the Trustee of such notice, the Trustee shall send to all Owners by first class mail, postage prepaid, and to the Depository also by facsimile, a notice which shall contain the following information: (1) that an event ofdefault has been declared under the Reimbursement Agreement [or the Confirmation. Agreement], or that the Credit Entity will not reinstate interest portion of the Credit Facility, and (2) that each Owner's Bond is subject to mandatory tender on the first Business Day to occur on after the seventh day following the receipt by the Trustee of such notice from the Credit Entity [or the Confirming Bank.] (c) The Bonds are subject to mandatory tender on the last Business Day prior to the effective date of any Alternate Credit Facility [and/or Alternate Confirming Letter of Credit] in accordance with the provisions of Section 4.13 hereof. (d) The Bonds are subject to mandatorytender on the date of any draw on [the Confirming Letter of Credit] in accordance with the provisions of Section 4.13 hereof. (e) All notices ofa Mandatory TenderDate shall also be mailedbythe Trustee to the Credit Entity, [Confirming Bank], the Remarketing Agent and the Tender Agent, SECTION 4.13 Mechanics of Mandatory Tender. Owners of Bonds shall be required to tender the Bonds to the Tender Agent by 11:00 a.m. New York time on the Mandatory Tender Date for purchase at a purchase price equal to the principal amount thereofplus accrued interest thereon to and including the Mandatory Tender Date. So long as the Bonds are registered in the name ofthe Nominee, such tenders shall be made through the book -entry system. AnyUntendered Bonds shall be deemed to have been tendered. In the event of a failure by Owners ofBonds to tender Bonds on the Mandatory Tender Date, said Owners of Untendered Bonds shall not be entitled to any payment (including any interest to accrue subsequent to the Mandatory Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds shall no longer be entitled to the benefits ofthis Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding under this indenture. However, the purchase price will be paid only upon presentation of the Bonds to the Tender Agent. . In the case of the Fixed Rate Conversion Date only, if the Remarketing Agent notifies the Trustee not less than fifteen days before the Fixed Rate Conversion Date that it cannot remarket all of the Bonds or ifthe requirements for the effectiveness ofaFixed Rate Conversion Date are not satisfied before the Fixed Rate Conversion Date, the Trustee shall give notice thereof by first-class mail, postage prepaid, to all Owners, the Remarketing Agent, the Credit Entity, [the Confirming Bank] and the City and each of such parties shall be restored to their respective positions as ifnotice of the Fixed Rate Conversion Date had not been given and no mandatory tender shall occur. In addition to the mailed notice required by the preceding sentence, the Trustee shall deliver a duplicate copy of such notice to the Depository, the Credit Entity [and the Confirming Bank] by telecommunications or overnight delivery. 4524$$17.2 31 SECTION 4.14 Option to Tender After Prior to Fixed Rate Conversion Date. Prior to the Fixed Rate Conversion Date, any Owner ofthe Bonds may give irrevocable written notice to the Tender Agent at its Principal Office and request that the Tender Agent purchase all or anypart (in Authorized Denominations) ofthe Bonds then outstanding and registered in the name of such Owner at an amount or price equal to the unpaid principal amount thereof plus accrued and unpaid interest thereon to, but not including, the Business Dayon which the Bonds are to be tendered to the Tender Agent (the "Optional Tender Date') and without premium. Such notice (the "Optional TenderNotice") shall be substantially in the form set forth in Exhibit A hereto and shall specify the Optional Tender Date (which, during a WeeklyRate Period, shall not be less than seven (7) days after the date of receipt by the Tender Agent of such Optional Tender Notice, and during a DailyRate Period, shall be the date of receipt ofthe Optional Tender Notice by the Tender Agent, provided with respect to a tender during a DailyRate Period, the Optional TenderNotice shall be received by the Tender Agent prior to 9:3 0 a.m.; New York time, on the Optional Tender Date), the CUSIP Number, the principal amount being tendered in integral multiples ofAuthorized Denominations and, so long as the Bonds are registered in the name ofthe Nominee, such notice shall also specify the Participant number and the contact person ofthe Participant. Uponreceipt of an Optional TenderNotice, the Tender Agent shall, as soon as is practicable but in no event later than the close of business on the Business Day following the day of receipt of such Optional Tender Notice, give notice to the Trustee, the Authority, the Credit Entity, [the Confirming Bank] and the Remarketing Agent ofthe Optional Tender Notice, the Optional Tender Date specified therein and the principal amount of Bonds to be purchased on such Optional Tender Date. Owners providing an Optional Tender Notice shall be required to tender the Bonds to the Tender Agent for purchase by 11:00 A.M., New York time, on the Optional Tender Date. hi the event of a failure by Owners ofBonds to tender Bonds on the Optional Tender Date, said Owners ofBonds shall not be entitled to any payment (including any interest to accrue subsequent to the Optional Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds shall no longer be entitled to the benefits of thus Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding under this Indenture. However, the purchase price will be paid only upon presentment ofthe Bonds to the Tender Agent. Upon the cancellation ofUntendered Bonds, the Trustee shall execute new Bonds in the same aggregate principal amount as, and in substitution for the Bonds not so tendered by such Owner and shall hold, deliver and make available such new Bonds to the new Owner thereof in accordancewith the provisions of this Indenture which shall be fully applicable notwithstanding that such new Bonds are executed in substitution for the Bonds not so tendered. From and after the Fixed Rate Conversion Date, the Tender Agent will not be required to purchase such Bonds on demand and optional tender by the Owners thereof in accordance with this Section 4.14. 45248517.2 32 SECTION 4.15 Purchase of Bonds Delivered On a Tender Date. (a) Bonds purchased from Owners on any TenderDate shall be purchased ata price equal to the principal amount thereofplus accrued interest, if any, to the Tender Date in immediately available funds, but solely from the following sources of funds in the following order of priority: (1) moneys deposited into the Remarketing Proceeds Account, other than moneys representing remarketing proceeds from the sale of Bonds to the Authority or the City, in accordance with Section 4.16 hereof; (2) moneys deposited into the Liquidity Account in accordance with Section 5.05 (b) hereof; (3) moneys representing proceeds of a drawing by the Trustee under the [Confirming Letter of Credit] pursuant to Section 5.05.A hereof; (4) other Available Moneys furnished to the Trustee for such purpose; and (5) other moneys made available to the Trustee for such purpose from the Authority or the City. (b) The Tender Agent or Trustee, as applicable, shall promptly give notice to the Credit Entity, [the Confirming Bank], the Remarketing Agent, the Tender Agent, the Trustee and the City of anynotice given by or to an Owner pursuant to the provisions of Sections 4.11, 4.12, 4.13 and 4.14 hereof. (c) No later than 2:00 p.m. New York time on the Business Day next preceding each TenderDate, the Remarketing Agent shall give telex or telephonic notice, promptly confirmed in writing, to the Tender Agent and the Trustee and specifying the amount of the proceeds of the sale of such Bonds, if any, sold by the Remarketing Agent pursuant to Section 4.16 hereof and the name, address and tax identification number ofthe purchasers thereof as well as the denominations of such remarketed Bonds. (d) The purchase price of any Bonds tendered for purchase shall be payable by check mailed to the Owners ofrecord as of the close of business on the daynext preceding the Tender Date; provided, however, that the purchase price of such tendered Bonds for purchase may, at the option of any Owner, be transferred to such Owner bywire transfer on the Tender Date ifprior to such Tender Date such Owner has delivered to the Tender Agent a request in writing for such wire transfer specifying the bank account number to which such transfer is to be made. On the Business Daynext preceding each TenderDate, the Trustee shall draw on the Credit Facility in accordance with Section 5.05(b) hereof and shall deposit the amount of such draw in the Liquidity Account to pay for the purchase price of any Bonds that will not be paid from remarketing 45248817.2 33 proceeds in the Remarketing Proceeds Account. [In the event a draw by the Trustee under the Credit Facilityhas been wrongfully dishonored bythe Credit Entity, the Trustee shall draw on the Confirming Letter ofCredit in accordance with Section 5.05A hereof and shall deposit the amount ofsuch draw in the Liquidity Account to pay for the purchase price of any Bonds that cannot be paid from remarketing proceeds in the Remarketing Proceeds Account.] In the event that the Trustee has not received notice from the Remarketing Agent as to the availability ofremarketing proceeds prior to the time ofits draw on the Credit Facility on the Business Day next preceding a Tender Date [or its draw on the Confirming Letter of Credit on a Tender Date], the Trustee shall draw on the Credit Facility [or the Confirming Letter of Credit] in accordance with Section 5.05(b) and 5.05A hereof to pay the purchase price of all Bonds tendered for purchase on such Tender Date. The Tender Agent shall pay, to the extent that it has received funds therefor, the purchase price of such tendered Bonds, plus accrued interest, if any, no later than 5:00 p.m. New York time on any Optional Tender Date or Mandatory Tender Date. SECTION 4.16 Remarketing of Bonds by Remarketing Agent. Subject to the terms ofthe Remarketing Agreement, the Remarketing Agent shall use its best efforts to remarket Bonds subj ect to purchase on a Tender Date (other than those tendered pursuant to Section 4.12 (a), (b) or (d)) and to remarket such Bonds registered in the name ofthe Credit Entity [or the Confirming Bank] pursuant to Section 4.17(b) hereof. The proceeds of any sale with respect to a Tender Date shall be delivered to the TenderAgent for deposit in the Remarketing Proceeds Account byno laterthan 11:00 a.m., New York time, on each Tender Date. The proceeds of the sale of any Bonds registered to or on behalfofthe Credit Entity [or the Confirming Bank] shall be delivered to the Tender Agent for deposit in the Remarketing Proceeds Account by 11:00 a.m., New York time, on the date of sale and the Tender Agent shall remit such amounts to the Credit Entity [or the Confirming Bank], as applicable, no later than 4:00 p.m., New York time, on such date. In the event that any Bonds are purchased for the benefit ofthe Credit Entity [or the Confirming Bank] pursuant to Section 4.17(b) hereof, the Remarketing Agent shall continue to offer for sale and use its best efforts to sell such Bonds. Prior to the release of any Credit Facility Bonds or the remarketing ofanyBonds purchased following the mandatorytender thereofpursuant to Section 4.12(a) or (b), the Tender Agent shall have received notice from the Trustee that the Credit Facility has been, or will be upon such remarketing, reinstated or an Alternate Credit Facility has b eery delivered in an amount equal to the principal amount ofthe Credit FacilityBonds to be released and interest thereon in accordance with its terms. SECTION 4.17 Delivery of Bonds. (a) Bonds remarketed bythe Remarketing Agent pursuant to Section 4.16 hereof shall be delivered to the Remarketing Agent, and registered in the name, or at the direction of, the respective purchasers. (b) Bonds purchased with moneys drawn under the Credit Facility [or the ConfirY g Letter ofCredit] shall be registered in the name, or at the direction, ofthe Credit Entity [or the Confirming 45248817.2 34 Bank] or their respective nominees and delivered to and held by the Tender Agent for the account of the Credit Entity [or the Confirming Bank], as applicable, as secured party, unless the Credit Entity [or the Confirming Bank], as applicable, shall make other arrangements with the Tender Agent. The Tender Agent shall notify the Remarketing Agent when Bonds are registered to or on behalf of the Credit Entity [or the Confirming Bank] ortheir respective nominees, as applicable, and the Remarketing Agent shall remarket such Bonds in accordance with Section 4.16 hereof. (c) Bonds purchased with Available Moneys or othermoneys provided by the Authority to the Tender Agent shall be delivered to the Trustee for cancellation. (d) Moneys in the Liquidity Account and the Remarketing Proceeds Account shall be held in trust for the persons who delivered such Bonds for purchase. Following payment to persons who delivered such Bonds for purchase, to the extent that any fees or obligations are owed to the Trustee, the Credit Entity [or the Confirming Bank], moneys remaining in the Remarketing Proceeds Account and the Liquidity Account shall be paid bythe Tender Agent first to the Credit Entity [or the Confirming Bank] for the repayment of amounts owing under the Reimbursement Agreement [or the Confirmation Agreement], as applicable, as certified to the Tender Agent in writing by the Credit Entity [or the Confirming Bank], as applicable, and then to the Trustee to the extent of fees and obligations owing thereto. Money remaining in such Accounts following such payments shall be paid to the City. SECTION 4.18 Alternate Credit Facilitv; lAtternate Confirming Letter of Credit]. (a) Not less than forty days prior to the Bond Payment Date occurring at least 5 days before the proposed effective date of an Alternate Credit Facility [and/or Alternate Confirming Letter ofCredit], the City shall notify the Trustee, the Tender Agent, the Remarketing Agent, the Credit Entity [and the Confirming Bank] of its intention to provide such Alternate Credit Facility [and/or AIternate Confirming Letter ofCredit]. Provided that the Trustee has received the notice required by the previous sentence and the items required by Sections 4.18(b)(ii), (b)(iii) and (b)(iv) below, then, not less than fifteen days before the effective date of any Alternate Credit Facility [and/or Alternate Confinning Letter of Credit], the Trustee shall send a notice of all Owners by first class mail, postage prepaid, whichnotice shall contain the following information: (1) that the Credit Facility [or the Confirming Letter ofCredit], as applicable, will expire ortenninate and that an Alternate Credit Facility [or an Alternate Confirming Letter of Credit], as applicable, will be provided, (2) the identity ofthe provider of such Alternate Credit Facility for Alternate Confirming Letter of Credit] and (3) that all Bonds are subject to mandatory tender on the last Business Daywhich is at least five days prior to the expiration date ofthe Alternate Credit Facility [or Alternate Letter of Credit], as applicable. (b) If at anytime there shall have been delivered to the Trustee (i) an Alternate Credit Facility [and/or Alternate Confirming Letter of Credit], which shall be for a term of not less than the stated expiration date ofthe Credit Facility [and/or Confirming Letter ofCredit] then in effect forwhich it substitutes, (ii) an opinion ofBond Counsel stating that the delivery of such Alternate Credit Facility [and/or Alternate Confirming Letter of Credit] to the Trustee is authorized under this Indenture, and complies with the terms ofthis Indenture and (iii) written confirmation from the Credit Entity that no 45245817.2 35 amounts are then due and unpaid under the Reimbursement Agreement and a written confirmation from [the Confirming Bank] that no amounts are then due and unpaid under the [Confirmation Agreement], then the Trustee shall accept such Alternate Credit Facility [and/or Alternate Confirming Letter of Credit] and promptly surrender the Credit Facility [and/or Confirming Letter of Credit], as applicable, then in effect to the respective providers thereof in accordance with its terms for cancellation. If at any time there shall cease to be anyBonds outstanding hereunder, the Trustee shall thereafter surrender the Credit Facility [and the Confirming ming Letter of Credit], if applicable, then in effect to the respective providers thereof in accordance with the terms thereof for cancellation. SECTION 418.A jRelease of Confirming_ Letter of Credit. Notwithstanding any other provision of this Indenture, in the event the rating assigned to the Credit Entity for its long-term unsecured debt is upgraded to a rating which is the same or better than the rating assigned by Moody's, ifMoody's shall have rated the Bonds, and S&P, if S&P shall have rated the Bonds, to the unsecured debt ofthe Confirnming Bank at such time, the Citymayregpest the Trustee to release the Confirming Letter of Credit, but only after the Trustee shall have received: (a) written confirmation from Moody's, ifMoody's shall have rated the Bonds, and S&P, if S&P shall have rated the Bonds, of the upgraded rating of the Credit Entity as set forth above; (b) written confirmation from the Confirming Bank that the City has paid to the Confirming Bank all amounts owing to it pursuant to the terms of the Confirmation Agreement; and (c) an opinion ofcounsel that all conditions precedent to the release ofthe Confirming Letter of Credit have been met. The Trustee shall return the Confinmring Letter of Credit to the Confirming Bank, and the Bonds shall thereafterbesecured soielybytheCredit Facility. The Trustee shall provide prompt written notice of release of the Confirming Letter of Credit to each Owner of the Bonds.] SECTION 4.19 Restriction on Remarketing of Bonds to City. So long as the Credit Facility is effective, no Bond tendered pursuant to this Article shall be remarketed to the City. The Tender Agent shall not be required to monitor the actions ofthe Remarketing Agent to insure that it will not sell Bonds to the City. SECTION 4.20 Boob -Ent Tenders: Duties of Tender Agent with Respect to Purchase of Bonds. (a) Notwithstanding any other provision of this Article to the contrary, all tenders for purchase during any period in which the Bonds are registered in the name of the Nominee (or the nominee of any successor Depository) shall be subject to the terms and conditions set forth in the Representations Letter and anynotes and regulations promulgated by The Depository Trust Company, New York, New York. Subject thereto, the Bonds maybe tendered bymeans ofa book -entry credit of such Bonds to the account of the Remarketing Agent; provided, however, that under certain 45248817.2 36 circumstances notice oftender shall be given by a Participant on behalfofthe beneficial owner of such Bonds; and provided fa therthat, ifthe Remarketing Agent notifies the Trustee that such Bonds have been remarketed pursuant to this Indenture, such Bonds maybe treated as being tendered upon a book- entrytransfer of such Bonds from the account ofthe tendering party to the credit of the account of the purchase of such Bonds. Bonds: (b) The Tender Agent agrees, with respect to any optional or mandatory tender of the (i) To hold all moneys, other than moneys delivered to it by or on behalfofthe City for the purchase ofBonds, delivered to it hereunder for the purchase ofBonds as agent and bailee of, and in escrow for the benefit of, the person or entitywhich shall have so delivered such moneys'until the Bonds purchased with such moneys shall have been delivered to or for the account of such person or entity; (ii) To hold all moneys delivered to it hereunderby or on behalfofthe City for the purchase ofBonds as agent and bailee of, and in escrow for the benefit of, the Owners who shall deliver Bonds to it for the purchase until the Bonds purchased with such moneys shall have been delivered to or for the account of the City. ARTICLE V REVENUES AND FUNDS SECTION 5.01. Establishment of Funds. In addition tothe funds established herein, the Trustee shall fiuther establish, maintain and hold in trust the following funds and accounts: (A) Debt Service Fund, in which there is further established a Lease Payment Account and a Credit Facility Account. (B) Redemption Fund inwhich there is finther established pursuant to Section 4.01 hereof a Lease Prepayment Account and a Credit Facility Prepayment Account. SECTION 5.02. Pledge and Assignment; Equal Security. (a) The Bonds are secured by a pledge of and lien on all of the Revenues (except as otherwise provided in Section 5.08 and Section 8.06) and upon all of the moneys in the funds and accounts established hereunder. Except for the Revenues and such moneys, no funds orproperties of the Authority shall be pledged to, or otherwise liable for, the payment ofprincipal of, premium (if any) or interest on the Bonds. (b) The Authority and the City, as their interests may appear, hereby grant to the Credit Entity, [the Confirming Bank] and to the Trustee, for the benefit ofthe Owners, a lien on and a security 45248817.2 37 interest in the Lease and the Revenues, including all moneys in the funds held by the Trustee under this Indenture (excepting only the moneys set aside bythe Trustee to satisfythe requirements of Section 10.03 hereof and amounts in the Remarketing Proceeds Account to be applied to pay the purchase price ofBonds), including, without limitation, the Debt Service Fund and the TenderFund, and all such moneys shall be held bythe Trustee in trust and applied to the respective purposes specified herein and in the Lease; provided, however, that no security interest is granted to the Credit Entity, [the Confirming Bank] or to the Trustee for the purpose ofpaying its fees or expenses in money drawn by the Trustee under the Credit Facility [or the Confirming Letter of Credit] to the extent such moneys are applied to the payment ofthe amounts due to the Owners. The Trustee shall be entitled to and shall collect and receive all ofthe Revenues, and anyRevenues collected or received by the Authority shall be deemed to be held, and to have been collected orreceived, bythe Authority as the agent ofthe Trustee and shall forthwith be paid by the Authorityto the Trustee. The Trustee also shall be entitled to and shall take all steps, actions andproceedings reasonablynecessaryin its judgment to enforce, eitherjointlywith the Authority or separately, all ofthe rights ofthe Authoritythat have been assigned to the Trustee and all of the obligations of the City under the Lease. (c) In consideration ofthe acceptance ofthe Bonds by those who shall own them from time to time, this Indenture shall be deemed to be and shall constitute a contract between the Authority and the Owners from time to time ofthe Bonds and the covenants and agreements herein set forth to be performed on behalfofthe Authority shall be for the equal and proportionate security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof, of the time of sale, execution and deliverythereof, or otherwise for any cause whatsoever, except as expresslyprovided therein or herein. SECTION 5.03. Deposit of Revenues. (a) There shall be deposited in the Lease Payment Account ofthe Debt Service Fund all Base Rental (otherthan Prepayments, which shall be deposited in the Lease Prepayment Account of the Redemption Fund pursuant to Section 4.01 hereof) received by the Trustee. (b) There shall be deposited in the Credit Facility Account ofthe Debt Service Fund all amounts drawn under the Credit Facility [or the Confirming Letter of Credit], except for amounts drawn thereunder with respect to Prepayments which shall be deposited in the Credit Facility Prepayment Account ofthe Redemption Fund pursuant to Section 4.01 hereof and amounts drawn thereunderwith respect to the payment of the purchase price of tendered Bonds. SECTION 5.04. Application of Monevs. (a) Except as provided in subsection (b) hereof, all amounts in the Lease Payment Account ofthe Debt Service Fund shall be used and withdrawn bythe Trustee solely for the purpose ofpaying the principal of and interest on the Bonds as the same shall become due and payable, in accordance with the provisions of Article II and Article IV. 45248817.2 38 (b) During the term ofany Credit Facility [or Conf7rnungLetter ofCredit], on each Bond Payment Date, following a draw on the Credit Facility [or the Confirming Letter of Credit], as applicable, as provided in Section 5.05(a) or 5.05Ahereof, and receipt ofthe proceeds ofsuch draw, the Trustee shall -withdraw the amounts, if any, on deposit in the Lease Payment Account and, to the extent moneys are owed to the Credit Entity under the Reimbursement Agreement [or the Confirming Bank under the Confirmation Agreement], pay such amounts to the Credit Entity [or the Confirming Bank], as applicable; provided, however, the Trustee shall not be required to pay amounts to the Credit Entityin excess ofthe amount drawn on the Credit Facilityunless the Credit Entityhas certified to the Trustee and to the City, in writing, the additional amounts due and owing and specifying the section in the Reimbursement Agreement pursuant to which such additional amounts are due and such additional amounts are on deposit in the Lease Payment Account. (c) Sources of funds for the payment ofthe Bonds shall be applied in the following order of priority to pay principal and interest with respect to the Bonds: (i) moneys deposited in the Credit Facility Account or the Credit Facility Prepayment Account, as appropriate; (ii) [draws under the Confirming Letter of Credit]; (iii) other Available Moneys furnished to the Trustee; and (iv) any other money made available to the Trustee for such purpose. Payment ofBonds registered to or on behalf ofthe Credit Entity shall be made from amounts on deposit in the Lease Payment Account ofthe Debt Service Fund and the Lease Prepayment Account of the Redemption Fund, as applicable. SECTION 5.05. Draws Under Credit Facili (a) The Trustee shall draw under the Credit Facility in accordance with the terms thereof on the Business Dayprior to the day such funds are required bythe Trustee hereunder at the times, in the manner and in an amount equal to the full amount ofthe installments ofprincipal and interest conning due on each Bond Payment Date and each date that Bonds are to be redeemed hereunder. The Trustee shall deposit the amounts so drawn: (i) in the Credit FacilityAccount and shall use the amounts therein solely to pay such principal and interest as it comes due and (ii) in the Credit Facility Prepayment Account and shall use the amounts therein solelyto paysuch redemption ofBonds in advance oftheir maturity, as appropriate; provided, however, the Trustee shall not draw on the Credit Facility to make payments due with respect to Bonds registered to or on behalf of the Credit Entity. (b) So long as a Credit Facilityis available therefor, the Trustee shall draw under the Credit Facility in accordance with the terms thereofto the extent necessaryto purchase, together with moneys in the Remarketing Proceeds Account, all Bonds tendered on a Tender Date. The Trustee shall send 45248817.2 39 the amounts so drawn to -the Tender Agent for deposit in the Liquidity Account and the Tender Agent shall use the amounts therein solely to accomplish such purchase. (c) The Trustee shall return the Credit Facility to the Credit Entity following the termination or substitution of such Credit Facility. SECTION 5.05.A rawin s Under the Coufirudn Letter of Credit. In the event that the Credit Entitywrongfully dishonors a properly presented and conforming draw on the Credit Facility or ifthe Credit Entityrepudiates the Credit Facility (payment failure by 12:00 p.m. Californiatime on each Interest Payment Date, the date fixed for redemption of the Bonds or the Tender Date for any Bonds for which funds are not on deposit with the Tender Agent), in whole or in part, or the Trustee has received notice ofthe insolvency ofthe Credit Entity, the Trustee shall, as soon as is practicable, but not later than the time set forth in the Confirming Letter of Credit (12:3 0 p.m. New York time on such date), draw upon the Confirming Letter of Credit in accordance with the terms thereofto assure payment of all amounts required to be paid by the Credit Entity in accordance with this Indenture and shall immediately declare a mandatorytender ofthe Bonds in accordance with Section 4.12(c) hereof In such event, the Confirming Bank shall succeed ,to all of the rights of the Credit Entity hereunder. The Trustee shall return the Confinning Letter of Credit to the Confirming Bank following the termination or substitution of such Confirming Letter of Credit.] SECTION 5.06. Surplus. (a) Any funds remaining in the Lease Payment Account after payment of all Bonds Outstanding, or provisionmade therefor satisfactory to the Trustee, shall be withdrawn bythe Trustee and remitted to the Credit Entity [or to the Confirming Bank] to the extent moneys are owed to the Credit Entity [or to the Confirming Bank] under the Reimbursement Agreement [orthe Confirmation Agreement], as applicable, with the remainder, if any, being applied first to the payment of any fees and expenses owed to the Trustee and then being remitted to the City. (b) Any funds remaining in the Credit Facility Account after payment of all Bonds Outstanding, orprovisionmade therefor satisfactory to the Trustee, including accrued interest, shall be withdrawn by the Trustee and remitted, first, to the Credit Entity [or to the Confirming Bank] to pay amounts owing to it under the Reimbursement Agreement [or the Confirmation Agreement], as applicable, and, second, to the Trustee for the payment of any applicable expenses owed to the Trustee, with any excess being paid to the City. SECTION 5.07. Investment of Monevs in Funds and Accounts. All moneys in any ofthe funds and accounts established pursuant to this Indenture (otherthan the Credit FacilityAccount, Credit Facility Prepayment Account and the Tender Fund, which moneys shall be held uninvested) shall be invested bythe Trustee solely in Authorized Investments. Upon telephonic request ofan Authorized Representative of the Authority, the Trustee shall invest all moneys as directed by such Authority representative, provided such moneys areinvested solely in Authorized Investments; provided, however, 45248817.2 40 that the Trustee shall have received at least two (2) Business Days prior to the date of any such proposed investment or reinvestment, written directions of the Authority specifying the Authority's request for investment or reinvestment. In the absence of Request from the Authority, the Trustee shall invest such moneys solely in the investments described in subparagraph (9) of the definition of "Authorized Investments." Authorized Investments maybe purchased at such prices as the Authority may in its discretion determine. All Authorized Investments shall be acquired subject to the limitations set forth in Section 6.07, the limitations as to maturities hereinafter set forth in this Section 5.07 and such additional limitations orrequirements consistent with the foregoing as maybe established byRequest of the Authority and are consistent with the fiduciary duties of the Trustee. Moneys in the funds and accounts shall be invested in Authorized investments maturing not later than the date on which it is estimated that such moneys will be required by the Trustee or the Authority. Authorized Investments purchased under a repurchase agreement may be deemed to mature on the date or dates on which the Trustee may deliver such Authorized Investments for repurchase under such agreement. Authorized Investments acquired as an investment of moneys in any fund or account established under this Indenture shall be credited to such fiend or account. Except as otherwise provided in the last paragraph of this Section 5.07, all interest, profits and other income received from the investment of moneys in any fund or account shall be deposited therein. For the purpose of determining the amount in any fund, all Authorized Investments credited to such fund shall be valued at the lesser of (i) cost (exclusive ofbrokerage commissions or accrued interest, if any); (ii) the par amount thereof; or (iii) the market value thereof. Except for moneys held by the Trustee in the Credit Facility Account, the Credit Facility Prepayment Account, the Tender Fund and the Remarketing Proceeds Account therein, the Trustee may commingle moneys on deposit in any of the fiends or accounts established pursuant to this indenture and held by the Trustee into a separate fund or funds for investment purposes only, provided that all funds or accounts held by the Trustee hereunder shall be accounted for separately as required by this Indenture. The Trustee or an affiliate may act as principal or agent in the making or disposing ofany investment and shall be entitled to its customary fees therefor. The Trustee may sell at the best price obtainable, or present for redemption, any Authorized Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the Rind or account to which such Authorized Investment is credited, and, subject to the provisions of Section 8.03, the Trustee shall not be liable or responsible for any loss on any investment made pursuant to this Section 5.07 or resulting from any such sale which the Trustee reasonably makes in good faith. Any Authorizcd Investments that are registerable securities shall be registered in the name ofthe Trustee. The Trustee shall, using its best efforts, sell or present for redemption, any Authorized Investment so purchased bythe Trustee whenever it shall be necessary in orderto provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Authorized Investment is credited. The Trustee shall conclusively be deemed to have used its best efforts if the Trustee obtains three bids and sells the Authorized Investments to the highest bidder. 45248817.2 41 The Trustee shall furnish to the Authority, not less than monthly, and to the Credit Entityupon request, an accounting of all investments made bythe Trustee. The Trustee shall keep accurate records of all funds administered by it and all Bonds paid and discharged. Investment earnings in the Debt Service Fund shall first be applied to the payment of Additional Rental. If no Additional Rental is owing, investment earnings within the Debt Service Fund shall be transferred to the City on 2 ofeach year while the Bonds remain Outstanding. Unless otherwise directed herein, investment earnings in all other funds and accounts established hereunder shall remain in such funds and accounts. ARTICLE VI PARTICULAR COVENANTS SECTION 6.01. Punctual Payment. The Authority covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each ofthe Bonds together with the premium thereon, ifany, on the date, at the place and in the mannerprovided in said Bonds, solely from the Revenues and other funds as herein provided, and thereafter to amounts owing to the Credit Entity under the Reimbursement Agreement [and the Confirming Bank under the Confirmation Agreement]. SECTION 5.02. Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension ofthe maturity of any ofthe Bonds or to a change in the amount or time of any mandatory sinking account payment or the time ofpayrment of any claims for interest, whether by the purchase or funding of such Bonds or claims of interest or by any other arrangement, and in case the maturity of any ofthe Bonds or the time of payment of, or claims for, interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of anydefault hereunder, to the benefits ofthis Indenture, except subject to thepriorpayment in full oftheprincipal of all ofthe Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section 6.02 shall be deemed to limit the right ofthe Authorityto issue Bonds forthepurpose of refunding any Outstanding Bonds and such issuance shall not be deemed to constitute an extension of maturity of Bonds. SECTION 6.03. Against Encumbrances. The Authoritycovenants and agrees that it will not issue any other obligations payable as to either principal or interest from the Revenues which have, orpurport to have any lien upon the Revenues superiorto or on aparitywith the lien ofthe Bonds. SECTION 6.04. Against Additional Indebtedness. The Authority covenants and agrees that it will not issue any other bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in anycase payable, as to either principal or interest, from all or any part of Revenues. 45248817.2 42 SECTION 6.05. Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legally valid and binding limited obligations ofthe Authority in accordance with their terms, and the Authority and Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment ofRevenues and other assets and all the rights ofthe Bondowners under this Indenture against all claims and demands of all persons whomsoever. The Authority shaIl preserve and protect the security of the Bonds and the rights ofthe Owners, the Credit Entity [and the Confirming Bank] and defend theirrights against all claims and demands of all persons. Until such time as an amount has been set aside sufficient to pay at maturity, or to call and redeem prior to maturity, all Outstanding Bonds plus unpaid interest thereon to maturity, and thereafter to pay amounts owing to the Credit Entity under the Reimbursement Agreement [and all amounts owing to the Confirming Bank under the Confirmation Agreement], the Authority will (through its proper members, officers, agents or employees) faithfullyperform and abide by all the covenants, undertakings and provisions contained in this Indenture or in any Bond issued hereunder for the benefit ofthe Owners, the Credit Entity [and the Confirming Bank]. SECTION 6.06. Aecouniting Records and Financial Statements. The Authority covenants and agrees that it will at all times keep, or cause to be kept, proper and current books and accounts (separate from all other records and accounts) in which complete and accurate entries shall be made of all transactions relating to the Revenues and ofthe funds and accounts herein provided for. Such books ofrecord and accounts shall at all times during business hours be subject to the inspection of the Trustee, the Credit Entity, [the Confirming Bank] or the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding or their representative authorized in writing. The parties hereto acknowledge that any such books, records or accounts will be maintained by the Trustee so long as all Base Rental Payments are made directly from the City to the Trustee and that the Authority shall not be responsible for keeping such books, records or accounts unless Base Rental Payments are received by it. SECTION 6.07. Tax Covenant. (a) Special Definitions. When used in this Section, the following terns have the following meanings: "Code" means the Internal Revenue Code of 1986, as amended. "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. 45248817.2 43 "Gross Proceeds "means anyproceeds as defined in section 1.148-1(b) ofthe Tax Regulations (referring to sales, investment and transferred proceeds), and anyreplacement proceeds as defined in section 1.148-1(c) of the Tax Regulations, of the Bonds. "Investment "has the meaning set forth in section 1.148-1(b) ofthe Tax Regulations. "Nonpurpose Investment " means any investment property, as defined in section 148(b) ofthe Code, in which Gross Proceeds ofthe Bonds are invested and that is not acquired to carry out the governmental purposes of that series of Bonds. "Rebate Amount ", has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Tax Regulations " means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 ofthe Code, or section 103 ofthe 1954 Code, as applicable. "Yield" of any -Investment has the meaning set forth in section 1.148-5 of the Tax Regulations; and ofany issue ofgovernmental obligations has the meaning set forth in section 1.148-4 of the Tax Regulations. (b) Not to Cause Interest to Become Taxable. The Authority covenants that it shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement ofwhich is to be financed directly or indirectly with Gross Proceeds) in a manner that ifmade or omitted, respectively, could cause the interest on any Bond to fail to be excluded pursuant to Section 103 (a) ofthe Code from the gross income ofthe owner thereof for federal income tax purposes. Without limiting the generality ofthe foregoing, unless and until the Trustee receives awritten opinion ofBond Counsel to the effect that failure to comply with such covenant will not adversely affect such exclusion ofthe interest on anyBond from the gross income of the owner thereof for federal income tax purposes, the Authority shall complywith each ofthe specific covenants in this Section. (c) Private Use and Private Payments. Except as would not cause any Bond to become a "private activitybond" within the meaning of section 141 ofthe Code and the Tax Regulations, the Authority shall take all actions necessary to assure that the Authority at all times prior to the final cancellation of the last of the Bonds to be retired: (1) exclusively owns, operates and possesses all property the acquisition, construction or improvement ofwhich is to be financed or refinanced directly or indirectlywith Gross Proceeds ofthe Bonds and not use orpermit the use of such Gross Proceeds (including through any contractual arrangement with terms different than those applicable to the general public) or anyproperty acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the United States or any agency, 45248817.2 44 department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) does not directly or indirectly impose or accept any charge or other paymcnt by any person or entity (other than a state or local government) who is treated as using any Gross Proceeds ofthe Bonds or anypropertythe acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds. (d) No Private Loan. Except as would not cause anyBond to become a "private activity bond" within the meaning of section 141 ofthe Code and the Tax Regulations and rulings thereunder, the Authority shall not use orpermit the use of Gross Proceeds ofthe Bonds to make or finance loans to anyperson or entity other than a state or local government. For purposes ofthe foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if. (i) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, orburdens and benefits ofownership of anyproperty acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. (e) Not to Invest at Higher Yield. Except as would not cause the Bonds to become "arbitrage bonds" within the meaning of section 148 ofthe Code and the Tax Regulations and rulings thereunder, the Authority shall not (and shall not permit anyperson to), at anytime prior to the final cancellation ofthe last Bond to be retired, directly or indirectly invest Gross Proceeds in any Investment, if as a result of such investment the Yield of any Investment acquired with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield ofthe Bonds within the meaning of said section 148. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Tax Regulations and rulings thereunder, the Authority shall take or omit to take (and shall not permit anyperson to take or omit to take) any action that would cause any Bond to be "federally guaranteed" within the meaning of section 149(b) ofthe Code and the Tax Regulations and rulings thereunder. (g) Information R effort. The Authority shall timely file any information required by section 149(e) ofthe Code with respect to Bonds withthe Secretary ofthe Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate ofArbitra a Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Tax Regulations: (1) The Authority shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all 45248817.2 45 other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Bond is discharged. However, to the extentpermitted bylaw, the Authoritymaycommingle Gross Proceeds ofBonds with its other monies, provided that it separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequentlythan each Computation Date, the Authority shall calculate, the Rebate Amount in accordance with rules set forth in section 148(f) ofthe Code and the Tax Regulations and rulings thereunder. The Authority shall maintain a copy ofthe calculation with its official transcript ofproceedings relating to the issuance ofthe Bonds until six years afterthe final ComputationDate. The Trustee mayrelyconclusivelyuponthe Authority's determinations, calculations and certifications. The Trustee shall haven responsibility to independentlymake any calculation or determination or to review the Authority's calculations hereunder. (3) In order to assurethe excludability pursuant to section 103(a) ofthe Code of the interest on the Bonds from the gross income ofthe owners thereof for federal income tax purposes, the Authority shall pay to the United States the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of the Final Computation Date as defined in section 1.148-3(e)(2) of the Tax Regulations, onehundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. Upon the Request ofthe Authority, the Trustee shall payover to the Authority amounts in the Rebate Account for such purpose. In all cases, such rebate payments shall be made bythe Authority at the times and in the amounts as are ormaybe required by section 148(f) ofthe Code and the Tax Regulations and rulings thereunder, and shall be accompanied byFomi 8038-T prepared by the Authority or such other forms and information as is or maybe required by section 148(f) of the Code and the Tax Regulations and rulings thereunder for execution and filing by the Authority. (i) Not to Divert Arbitrage Profits. Except to the extent permitted bysection 148 of the Code and the Tax Regulations and rulings thereunder, the Authority shall not and shall not permit any person to, at anytime prior to the final cancellation ofthe last ofthe Bonds to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to paragraph (h) ofthis Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm's length and had the Yields on the Bonds not been relevant to either party. 0) Bonds Not Hedge Bonds. (i) The Authorityrepresents that none ofthe Bonds will become a "hedge bond" within the meaning of section 149(g) of the Code. 45248817.2 46 (ii) Without limitation of paragraph (i) above: the Authority believes (upon appropriate investigation) (A) that on the date ofissuance ofthe Bonds the Authority reasonably expected that at least 85% ofthe spendable proceeds ofthe Bonds would be expended within the three-year period commencing on such date of issuance, and (B) no more than 50% ofthe proceeds oftheBonds would be invested inNonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (k) Elections. The Authorityherebydirects and authorizes anyAuthorityRepresentative to make elections permitted or required pursuant to the provisions ofthe Code or the Tax Regulations, as such Representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (1) Closing Certificate. The Authorityagrees to execute and deliver in connection with the issuance of the Bonds a Tax Certificate as to Arbitrage and the Provisions ofSections 141-150 of the Internal Revenue Code of 1986, or similar document containing additional representations and covenants pertaining to the exclusion of interest on the Bonds from the gross income ofthe owners thereof for federal income tax purposes, which representations and covenants are incorporated as though expressly set forth herein. The Authority shall at all times do and perform all acts and things permitted by law and this indenture which are necessary or desirable in order to assure that interest paid on the Bonds (or any of them) will be excluded from gross income for federal income tax purposes and shall take no action that would result in such interest not being so excluded. Without limiting the generality of the foregoing, the Authority agrees to complywith the provisions of the Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. SECTION 6.08. Waiver of Laws. The Authority shall not at anytime insist upon or plead in anymanner whatsoever, or claim to take the benefit or advantage of, any stay or extension of law now or at anytime hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law, SECTION 6.09. Further Assurances. The Authority shall make, execute and deliver any and all such further indentures, instruments and assurances as maybe reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners ofthe Bonds and the Credit Entity [and the ConfirmingBank] of the rights and benefits provided in this Indenture. 45248817.2 47 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS SECTION 7.01. Events of Default. The following events shall be Events ofDefault: (a) Default by the Authority in the due and punctual payment ofthe principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by declaration or otherwise; (b) Default by the Authority in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable; (c) Default bytheAuthorityinthe observance ofanyofthecovenants, agreements or conditions on its part contained in this Indenture or in the Bonds if such default shall have continued for aperiod ofsixty (60) days allerwritten notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authorityby the Trustee, or to the Authority and the Trustee bythe Credit Entity orthe Owners of not less than twenty-five percent (25%) in aggregate principal amount ofthe Bonds at the time Outstanding; provided, however, that such default shall not constitute an Event ofDefault hereunder ifthe Authority shall commence to cure such defaultwithin said sixty-dayperiod and thereafter diligentlyand in good faith proceed to cure such default within a reasonable period of time. SECTION 7.02. Remedies on Default. Subject to the rights ofthe Credit Entity and provided that the Credit Entity is not in default underthe Credit Facility and is in compliance with all terms ofthe Credit Facility, upon the occurrence and continuance of any Event ofDefault specified in Section 7.01(a) or (b), the Trustee, upon the direction ofthe Credit Entity, shall proceed, or upon the occurrence and continuance of anyEvent ofDefault specified in Section 7.01(c) hereof, the Trustee mayproceed (and upon written request ofthe Credit Entity or upon written request ofthe Owners of not less than a majority in aggregate principal amount ofthe Bonds then Outstanding and the consent ofthe Credit Entity so long as the Credit Facility remains in effect and the Credit Entity is not in default thereunder and, receipt of indemnity satisfactory to it, shall proceed), to exercise the remedies set forth in Section 10.01 ofthe Lease or available to the Trustee hereunder; provided, however, that there shall be no right to accelerate maturities ofthe Bonds or otherwise to declare any Base Rental not then in default to be immediately due and payable. Upon the occurrence and continuance of any Event of Default, the Trustee shall exercise the rights and remedies invested in it bythis indenture with the same degree of care and skill as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. SECTION 7.03. ALIplication of Revenues and Other Funds After Default. If an Event ofDefault shall occur and be continuing, all Revenues and any other funds (other than moneys drawn under any Credit Facility [or Confimiing Letter of Creditj which shall be deposited into the Credit Facility Account and moneys in the Remarketing Proceeds Account, such moneys in both such accounts 45248817.2 48 to be applied only to the payment ofprincipal and interest on the Bonds) then held or thereafter received by -the Trustee under any ofthe provisions ofthis Indenture shall be applied by the Trustee as follows and in the following order of priority: (1) To the payment of any expenses necessary in the opinion ofthe Trustee to protect the interests ofthe Owners ofthe Bonds and payment of all reasonable charges and expenses ofthe Trustee incurred in and about the performance of its powers and duties under this Indenture; and (2) To the payment ofthe principal of and interest then due on the Bonds (upon presentation ofthe Bonds to be paid, and stamping thereon ofthe payment ifonlypartiallypaid, or surrender thereof if fully paid), subject to the provisions of this Indenture, as follows: First: To the payment to the Persons entitled thereto, including the Credit Entity [or the Confirming Bank], ofall interest then due and payable, and, ifthe amount available shall not be sufficient to pay in full all such interest, then to the payment thereofratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; Second: To the payment to the Persons entitled thereto, including the Credit Entity [or the Confirming Bank], ofthe unpaid principal ofany Bonds which shall have become due and payable, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue principal at the rate bome by the respective Bonds from the respective dates upon which such Bonds became due and payable, and, ifthe amount available shall not be sufficient to pay in full all the principal ofthe Bonds due on any date, together with such interest, then to the payment first of such interest, ratably, according to the amount of interest due on such date, and then to the payment of such principal, ratably, according to the amounts ofprincipal due on such date to the Persons entitled thereto, without any discrimination or preference; and Third: To the payment ofthe interest on and the principal ofthe Bonds, the purchase and retirement ofthe Bonds and to the redemption ofthe Bonds, all in accordance with the provisions of this Indenture. (3) To the payment of -any obligations due and owing to the Credit Entity under the Reimbursement Agreement [or to the Confirming Bank under the Confirmation Agreement]. SECTION 7.04. Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners ofthe Bonds, bytaking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact ofthe Owners ofthe Bonds forthe purpose of exercising and prosecuting on theirbehalf such rights and remedies as maybe available to such Owners under the provisions ofthe Bonds, this Indenture, and applicable provisions ofthe Law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to aright in the Trustee to represent the Bondowners, the Trustee 45248817.2 49 in its discretion maywith the consent ofthe Credit Entity so long as the Credit Facilityremains in effect and the Credit Entity is not in default thereunder, and upon the written request ofthe Owners ofnot less than twenty-five percent (25%) in aggregate principal amount ofthe Bonds then Outstanding and with the consent ofthe Credit Entity so long as the Credit Facility remains in effect and the Credit Entity is not in default thereunder, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights ofsuch Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Owners under this Indenture or any law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter ofright, to the appointment of a receiver ofthe Revenues and other assets pledged underthis Indenture orthe Bonds pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any ofthe Bonds or the production thereof in any proceeding relating thereto, and any such suit, action orproceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Owners of such Bonds, subject to the provisions of this Indenture. SECTION 7.05. Bopdowners' Direction of Proceedings. Subject to the prior rights ofthe Credit Entity to direct proceedings, anything in this Indenture to the contrary notwithstanding, the Owners of a maj ority in aggregate principal amount ofthe Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, to direct the method ofconducting all remedial proceedings taken bythe Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions ofthis Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion ofthe Trustee would be unjustly prejudicial to Bondowners not parties to such direction. SECTION 7.0(. Limitation on Bondowners' Rightto Sue. No Ownerofany Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement ofanyright orremedyunder this Indenture or anyapplicable law with respect to suchBond unless (1) such Owner previously shall have given to the Trustee and the Credit Entity written notice of the occurrence ofan Event ofDefault; (2) the Owners ofnot less than twenty-five percent (25%) in aggregate principal amount ofthe Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action orproceeding in its own name; (3) such Owner or said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee shall have refused or omitted to complywith such request for a period ofsixty (60) days after such written request shall have been received by, and said tender ofindemnity shall have been made to, the Trustee, and in every case, the Credit Entity shall have approved such request so long as the Credit Facility is in effect and the Credit Entity is not in default thereunder. 45248817.2 ' 50 Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner ofBonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in anymannerwhatsoeverby his or their action to affect, disturb orprejudice the security ofthis Indenture or the rights of any other Owners of Bonds, or to enforce any right under this Indenture or applicable law with respect to the Bonds, except in the mannerhereinprovided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners ofthe Outstanding Bonds, subject to the provisions of this Indenture. SECTION 7.07. Absolute Obligation ofAuthoritv. Nothing in Section 7.06 or in any other provision ofthis Indenture, or in the Bonds, contained, shall affect orimpair the obligation ofthe Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners ofthe Bonds at their respective dates of maturity or upon call for redemption, as herein provided, but only out ofthe Revenues and other assets herein pledged therefor, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds. SECTION 7.08. Termination of Proceeding . In case any proceedings taken by the Trustee or any one or more Bondowners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bondowners, then in every such case the Authority, the Trustee, the Credit Entity, [the Confirming Bank] and the Bondowners, subject to anydetermination in such proceedings, shall be restored to their formerpositions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties ofthe Authority, the Trustee, the Credit Entity, [the Confirming Bank] and the Bondowners shall continue as though no such proceedings had been taken. SECTION 7.09. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners ofthe Bonds or the Credit Entity is intended to be exclusive ofanyother remedy orremedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder ornow or hereafter existing at law or in equity or otherwise. SECTION 7.10. No Waiver of Default. No delay or omission of the Trustee, the Credit Entity or of any Owner ofthe Bonds to exercise any right or power arising upon the occurrence of any Event ofDefault shall impair any such right orpower or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this Indenture to the Trustee, the Credit Entityor to the Owners ofthe Bonds may be exercised from time to time and as often as may be deemed expedient. 45248817.2 51 SECTION 7.11. Rights of Credit Entity. (a) Notwithstanding any other provision of this Indenture, so long as the Credit Facilityhas not been terminated and the Credit Entity is in compliance with all terms ofthe Credit Facility or any amounts remain owing to the Credit Entity, the rights ofthe Credit Entity shall be subrogated to the rights of any Owners to the extent that it has paid the principal or interest represented bythe Bonds of such Owners. (b) [Subject to Section 5.05.A hereof, ifthe Credit Entitywrongfully dishonors a properly presented and conforming draw on the Credit Facility or if the Credit Entity repudiates the Credit Facility, all rights ofthe Credit Entity hereunder, other than its right to receive payments on the Credit Facility, shall cease and all such rights shall be vested in the Confirming Bank, and all references to the Credit Entity and the Credit Facility shall be deemed to be references to the Confirming Bank and the Confirming Letter of Credit]. ARTICLE VIII THE TRUSTEE SECTION 8.01. Appointment, Duties and Immunities of Trustee. (A) The Authority hereby appoints U.S. Bank, N.A., as Trustee and designates San Francisco, California, as the principal place of payment for the Bonds, such appointment and designation to remain in effect until notice of change is filed with the Trustee. The Trustee shall, prior to an Event of Default, and after the curing ofall Events ofDefault which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee shall, during the existence of any Event ofDefault (which has not been cured), exercise such ofthe rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as aprudent manwould exercise or use under the circumstances in the conduct of his own affairs. (B) The Authority, with the consent ofthe City, and subject to the prior written consent of the Credit Entity, may remove the Trustee at anytime upon thirty (30) days written notice to the Trustee unless an Event ofDefault shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners ofnot less than a majority in aggregate principal amount ofthe Bonds then Outstanding (or their attorneys duly authorized in writing) or if at anytime, to the knowledge ofthe Authority, the Trustee shall cease to be eligible in accordance with subsection (E) ofthis Section 8.01 or shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver ofthe Trustee or its property shall be appointed, or any public officer shall take control or charge ofthe Trustee or its property or affairs for the purpose ofrehabiEtation, conservation or liquidation; in each case by giving written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing. 45248817.2 52 (C) The Trustee may at anytime resign by giving written notice of such resignation to the Authority, the City, the Credit Entity, [the Con%ining Bank] and by giving the Bondowners notice of such resignation by mail at their addresses appearing on the bond registration books maintained by the Trustee. Upon receiving such notice of resignation, the Authority, with the approval ofthe City, and subject to the priorwritten approval ofthe Credit Entity, shall promptly appoint a successor Trustee by an instrument in writing. (D) Anyremoval or resignation ofthe Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days after the Authority has given anotice ofremoval or has received a notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf ofhimself and all otherBondowners) may petition any court of competent j urisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any resignation or removal ofthe Trustee and appointment of a successor Trustee shall become effective upon transfer ofthe Credit Facility [and/or Confirming Letter of Credit], if any, to the successor Trustee in accordance with the provisions of the Credit Facility [and/or Confirming Letter of Credit], and the Reimbursement Agreement [and/or Confirmation Agreement], as appropriate, and the acceptance of appointment and assumption ofthe Trustee's duties bythe successor Trustee. Upon such acceptance and assumption, the successor Trustee shall mail notice thereofto the Credit Entity, [the Confirming Bank], Moody's if the Bonds are rated by Moody's, S&P if the Bonds are rated by S&P, and the Owners at their respective addresses set forth in the Bond registration books maintained pursuant to the Indenture. Any successor Trustee appointed under this Indenture shall signify its acceptance ofsuch appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein, but, nevertheless, at the Request ofthe Authorityor the request ofthe successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments ofconveyance or further assurance and do such other things as may reasonablybe required formore fully and certainlyvesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to anyproperty held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request ofthe successor Trustee, the Authority shall execute and deliver any and all instruments as maybe reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. (E) The Trustee, and any Trustee appointed under the provisions ofthis Section 8.01 in succession to the Trustee, shall be a trust company or bank having the powers of a trust company, having a corporate trust office in California, having (or, in the case of a corporation or trust company included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition 45248817.2 53 at least annually, pursuant to law or to the requirements of any supervising or examining authorityabove referred to, then for the purpose ofthis subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report ofcondition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions ofthis subsection (E), the Trustee shall resign immediately in the manner and with the effect specified in this Section 8.01. SECTION 8.02. MeMerorConsohdation. Any companyinto which the Trustee 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 Trustee may sell or transfer all or substantially all its corporate trust business, provided such company shall be eligible under subsection (E) of Section 8.01, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding, except that it shall comply with any terms stated with respect to such an event in the Credit Facility [or the Confirming Letter of Credit]. SECTION 8.03. Liability of Trustee. (A) The recitals of facts herein and in the Bonds shall be taken as statements of the Authority, and the Trustee assumes no responsibility for the correctness ofthe same, and makes no representations as to the validity or sufficiency ofthis Indenture or ofthe Bonds, and shall incur no responsibility in respect thereof other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its Certificate ofAuthentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or default. The Trustee may become the owner of Bonds with the same rights it would have ifit were not Trustee, and, to the extent permitted bylaw, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights ofBondowners, whether or not such committee shall represent the Owners of a majorityinprincipal amount ofthe Bonds then Outstanding. The Trustee shall not be responsible for monitoring the City's compliance with the insurance requirements set forth in the Lease. (B) The Trustee shall not be liable for any error of j udgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. (C) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction ofthe Owners ofnot less than a maj ority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (D) The Trustee shall be under no obligation to exercise any ofthe rights orpowers vested in it by this Indenture at the request, order or direction of any ofthe Bondowners or the Credit Entity pursuant to the provisions ofthis Indenture unless such Bondowners or the Credit Entity shall have 45248817.2 54 offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. (E) The Trustee shall have no responsibility, opinion or liability with respect to any information, statement or recitalin any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. (F) No provision ofthis Indenture shall require the Trustee to advance, 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 ofits rights orpowers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (G) The Tnistee's rights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance ofthe Bonds. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee. (H) The Trustee shall not be deemed to have knowledge of anyEvent ofDefault hereunder or under the Lease unless and until it shall have actual knowledge thereof. SECTION 8.04. Richt of Trustee to Rely on Documents. The Trustee shall be protected in acting upon anynotice, resolution, requisition, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. The Trustee shall not be bound to recognize anyperson as the Owner ofaBond unless and until such Bond is submitted for inspection, ifrequired, and his title thereto is satisfactorily established, if disputed., Whenever in the administration ofthe trusts imposed upon it bythis Indenture the Trustee 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 inrespect thereofbe herein specificallyprescribed) may be deemed to be conclusivelyproved and established by a Certificate ofthe Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions ofthis Indenture in reliance upon such certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence ofsuch matter or mayrequire such additional evidence as to it may seem reasonable. SECTION 8.05. Preservation and Ins ection ofDocurnents. All documents received bythe Trustee under the provisions ofthis Indenture shall be retained in its possession so long as any 45248817.2 55 Bonds remain Outstanding and shallbe subject at all reasonable times to the inspection ofthe Authority, the Credit Entity, [the Confirming Barak] and any Bondowner, and their agents and representatives duly authorized in writing, upon reasonable notice and under reasonable conditions. SECTION 8.06. Compensation and Indemnification. The Authority shall pay, but solely out ofpayments received from the Cityas Additional Rental, to the Trustee from time to time reasonable compensation for all services rendered under this Indenture in accordance with the letter proposal from the Trustee approved bythe Authority and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this indenture. Upon the occurrence of an Event of Default, the Trustee shall have a first lien on the Revenues and all funds and accounts held by the Trustee hereunder to secure the payment to the Trustee of all fees, costs and expenses, including reasonable compensation to its experts, attorneys and counsel incurred in declaring such Event of Default and in exercising the rights andremedies set forth in Article VII hereof, except the Trustee shall have no lien on anymoneys held on deposit inthe RebateFund, the Credit FacilityAccount, the Credit Facility Prepayment Account, anymoneys held bythe TenderAgent in the Credit FaciiityAccount or the Remarketing Proceeds Account or on any draws cinder the Credit Facility [or the Confirming Letter of Credit] or any moneys held by the Trustee to satisfy the requirements of Section 10.03 hereof. The Authority shall to the extent permitted by law indemnify and save the Trustee, the Remarketing Agent and the Tender Agent, their its officers, employees, directors and agents harmless from and against all claims, losses, costs, expenses, liability and damages, including legal fees and expenses arising out ofthe Trustee's, the Remarketing Agent's or the Tender Agent's exercise and performance oftheir powers and duties hereunder and under the Indenture. Such indemnification shall include the costs and expenses of defending against any claim or liability arising underthe Indenture. No indemnification will be made for willful misconduct ornegligence by the Trustee, the Remarketing Agent and the Tender Agent, their officers or employees. The Authority's obligations hereunder shall remain valid and binding notwithstanding maturity and payment ofthe Bonds or resignation or removal of the Trustee. SECTION 8.07. Remarketing Agent. The Authority shall appoint the Remarketing Agent forthe Bonds, subj ect to the conditions set forth in Section 8.08 hereof. The Remarketing Agent shall designate its principal office to the Trustee, the Credit Entity, [the Conforming Bank] and the Tender Agent and signify its acceptance ofthe duties and obligations imposed upon it hereunder and under the Lease by a written instrument of acceptance delivered to the City, the Credit Entity and the Trustee under which the Remarketing Agent will agree, particularly: (a) to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the City, the Trustee, the Credit Entity, [the Confirming Bank] and the Authority at all reasonable times and upon reasonable notice; and 45248817.2 56 (b) otherwise to perform and observe all duties and obligations herein and in the Remarketing Agreement imposed upon the Remarketing Agent. The Authority shall cooperate with the Trustee, the Tender Agent and the City to cause the necessary arrangements to be made and to be thereafter continued whereby funds from the sources specified herein and in the Lease will be made available for the purchase of Bonds presented to the Trustee or the Tender Agent and wherebyBonds, executed by the Trustee or the Tender Agent, will be remarketed by the Remarketing Agent. SECTION 8.08. QuaHcations of Remarketing Agent Any successor Remarketing Agent shall be (a) a commercial bank ortrust companyor (b) a member ofthe National Association of Securities Dealers, Inc., having a capitalization of at least $5,000,000 and authorized by law to perform all the duties imposed upon it bythis Indenture. The Remarketing Agent may at anytime resign and be discharged of the duties and obligations created by this Indenture by giving notice to the Authority, the Tender Agent, the City, the Credit Entity, [the Confirming Bank] and the Trustee. The Remarketing Agent maybe removed, as provided in the Remarketing Agreement by an instrument, signed bythe Authority, filed with the Remarketing Agent, the Tender Agent, the Trustee, the Credit Entity, the [Confirming Bank], the City, Moody's ifthe Bonds are rated byMoody's, S&P ifthe Bonds are rated by S&P, and the Trustee. In the event ofthe resignation or removal ofthe Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver any moneys and B onds held by it in such capacity to its successor or, if there be no successor, to the Trustee. Any resignation or removal of the Remarketing Agent and appointment of a successor Remarketing Agent shall become effective at the end ofthe notice period prescribed as the Remarketing Agreement for such removal or resignation. SECTION 8.09. Tender Agent. The Authority hereby appoints U.S. Bank, N.A., as the initial Tender Agent and shall appoint any successor Tender Agent, subject to the conditions set forth in Section 8:10 hereof The Tender Agent shall designate to the Trustee, the Remarketing Agent, the Credit Entity, [the Confirming Bank] and the Authority its principal office and signify its acceptance of the duties and obligations imposed upon it hereunder by a written instrument of acceptance delivered to the Authority, the Credit Entity, [the Confirming Bank] and the Trustee under which the Tender Agent will agree, particularly: (a) to keep suchbooks and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the City, the Trustee, the Credit Entity, [the Confirming Bank], the Remarketing Agent and the Authority at all reasonable times upon reasonable notice; and (b) otherwise to perform and observe all duties and obligations herein imposed upon the Tender Agent. 45248817.2 57 Whenever in this Indenture, certain rights or duties are conferred upon the Tender Agent, and no Tender Agent is appointed, such rights and duties shall be performed by the Trustee. In the event that the Authority fails to appoint a Tender Agent hereunder, or in the event that the Tender Agent shall resign orbe removed, or be dissolved, or ifthe property or affairs ofthe Tender Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, and the Authority shall not have appointed a successor, the Trustee, notwithstanding the provisions ofthe first paragraph of this Section, shall be deemed to be the Tender Agent for all purposes of this Indenture until the appointment of a successor Tender Agent, as the case may be, notwithstanding the fact that the Trustee may not meet the qualifications set forth in the first paragraph of this Section 8.08. SECTION 8.10. Qualifications of Tender Agent. The Tender Agent shall be a bank with trust powers or a trust company with an office in New York, New York or San Francisco, California and any successor thereto shall have the same qualifications required ofthe Trustee pursuant to Section 8.01(E) hereof, except that the Tender Agent need have a combined capital and surplus of only Ten Million Dollars (S 10,000,000), and such Tender Agent shall be authorized by law to perform all the duties imposed upon it by this Indenture. The Tender Agent may at any time resign and be discharged ofthe duties and obligations created bythis Indenture by giving at least sixty (60) days prior written notice to the City, the Credit Entity, [the Confirming Bank], the Remarketing Agent, the Trustee and the Authority. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Tender Agent subject to the prior written consent ofthe Credit Entity. In the event the City does not name a successor Tender Agent within 30 days of receipt of notice ofthe Tender Agent's resignation, then the Tender Agent maypetition a court of suitable jurisdiction to seek the immediate appointment ofa successor Tender Agent. Subject to the prior written consent ofthe Credit Entity, the TenderAgent maybe removed at anytime, with the approval ofthe Authorityby an instrument, signed bythe Authority, filed with the Tender Agent, the Remarketing Agent, the Trustee, the Credit Entity, [the Confirming Bank] and the Authority. Anyresignation orremoval ofthe TenderAgent and appointment of a successor Tender Agent shall become effective upon acceptance of appointment and assumption of the Tender Agent's duties by the successor Tender Agent. SECTION 8.11. Co -Trustees. (a) At anytime, for the purpose ofinecting the legal requirements of any applicable jurisdiction, the Trustee shall have power to appoint one or more persons to act as co -trustee under this Indenture, with such powers as maybe provided in the instrument of appointment, and to vest in such person or persons any property, title, right or power deemed necessary or desirable, subject to the remaining provisions of this Section. (b) Each co -trustee shall, to the extent permitted by applicable law, be appointed subject to the following terms: 45248817.2 58 (1) The rights, powers, duties and obligations conferred or imposed upon any such co -trustee shall not be greater than those conferred or imposed upon the Trustee, and such rights and powers shall be exercisable only j ointly with the Trustee, except to the extent that, under any law of any j urisdiction in which anyparticular act or acts are to be performed, the Trustee shall be incompetent or -unqualified to perform such act or acts, in which event such rights and powers shall be exercised by such co - trustee subject to the provisions of Section 8.11(b)(4) hereof. (2) The Trustee may at anytime, by an instrument in writing executed by it, accept the resignation of or remove any co -trustee appointed under this Section 8.11. (3) No co -trustee under this indenture shall be liable byreason of any act or omission of any other co -trustee appointed under this Indenture. (4) No power given to such co -trustee shall be separately exercised hereunder by such co -trustee except with the consent in writing ofthe Trustee, anything herein contained to the contrary notwithstanding. (c) The provisions of Section 8.6 hereofshall extend to any co -trustee, its officers, employees, agents, successors and assigns appointed hereunder. ARTICLE IX MODIFICATION OR AMENDMENT OF INDENTURE AND LEASE SECTION 9.01. Amendments Permitted. (a) With Consent. Amer first requesting and obtaining the prior written approval ofthe Credit Entity, this Indenture and the rights and obligations ofthe Owners ofthe Bonds and the Lease and the rights and obligations ofthe parties thereto, maybe modified or amended at any time by a supplement which shall become effective when the written consents of the Owners of at least a majority in aggregate principal amount ofthe Bonds then Outstanding, exclusive ofBonds disqualified as provided in Section 9.03 hereof, shall have been filed with the Trustee and Moody's if the Bonds are ratedbyMoody's or S&P if the bonds are rated by S&P. No such modification or amendment shall (1) extend or have the effect of extending the fixed maturity of any Bond or reducing the interest rate with respect thereto or extending the time ofpayment of interest, or reducing the amount ofprincipal thereof orreducing any premium payable upon the redemption thereof, without the express consent of the Owner of such Bond, or (2) reduce or have the effect ofreducing the percentage ofBonds required for the affirmative vote or written consent to an amendment or modification of this Indenture or the Lease, or (3) modify any ofthe rights or obligations ofthe Trustee without its written assent thereto. Any such supplemental agreement shall become effective as provided in Section 9.02 hereof. 45248817.2 59 (b) Without Consent. This Indenture and the rights and obligations ofthe Owners ofthe Bonds, and the Lease and the rights and obligations ofthe parties thereto, maybe modified or amended at any time by a supplemental agreement, without the consent of any such Owners, but with the written consent o f the Credit Entity and only to the extent permitted by law and only (1) to cure, correct or supplement any ambiguous or defective provision contained herein or therein, and which shall not adversely affect the interest ofthe Owners ofthe Bonds, (2) to reflect the comments ofS&P and/or Moody's in order to maintain any applicable rating on the Bonds, or (3) in regard to matters arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which shall not adversely affect the interest ofthc Owners ofthe Bonds. Any such supplemental agreement shall become effective upon execution and deliverybythe parties hereto or thereto as the case maybe and shall be provided to Moody's, if the Bonds are rated by Moody's or S&P, ifthe Bonds are rated by S&P. SECTION 9.02. Procedure for Amendment with Written Consent ofBond Owners. This Indenture or the Lease maybe amended by supplemental agreement as provided in this Section 9.02 in the event the consent ofthe Owners ofthe Bonds and the Credit Entity is required pursuant to Section 9.01 (a) hereof A copy of such supplemental agreement, together with a request to the Owners ofthe Bonds for their consent thereto, shall be mailed first class mail by the Trustee to the Credit Entity, [the Confm- ingBatik] and to each Owner of aBond at his address asset forth in the Bond registration books maintained, but failure to receive copies of such supplemental agreement and request so mailed shall not affect the validity ofthe supplemental agreement when assented to as in this Sectionprovided. Such supplemental agreement shall not become effective unless there shall be filed with the Trustee the written consent ofthe Owners of at least a maj ority in aggregate principal amount ofthe Bonds then Outstanding (exclusive ofBonds disqualified as provided in Section 9.03 hereof) and notices shall have been mailed as hereinafter in this Section provided. Each such consent bythe Owners ofthe Bonds shallbe effective only ifaccompaniedbyproofofownership ofthe Bonds forwhich such consent is given. Any such consent shall be binding upon the Owner ofthe Bond giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing bythe Owner giving such consent or a subsequent Ownerby filing such revocation with the Trustee prior to the date when the supplemental agreement has become effective. After the Owners ofthe required percentage of Bonds shall have filed their consents to such supplemental agreement, the Trustee shall mail a notice to the Owners ofthe Bonds in the manner hereinbefore provided in this Section for the mailing of such supplemental agreement, stating in substance that such supplemental agreement has been consented to by the Owners ofthe required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of such supplemental agreement or consents thereto). A record, consisting ofthe papers required bythis Section to be filed with the Trustee, shall be proof ofthe matters therein stated until the contrary is proved. SECTION 9.03. Disqualified Bonds. Bonds owned or held by or for the account of the City or the Authority or by any person directly or indirectly controlled or controlled by, or under 45248817.2 60 direct or indi ect common control with the City of the Authority (except any Bonds held in any pension or retirement fund) shall not be deemed Outstanding for the purpose ofanyvote, consent, waiver or other action or any calculation of Outstanding Bonds provided for in this Indenture, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Agreement except that forpurposes ofdeterminingwhether the Trustee shall be protected in relying on such vote, consent, waiver or other action, onlyBonds so owned ofwhich the Trustee has knowledge shall be disqualified. SECTION 9.04. Effect of Supplemental Agreement. From and after the time any supplemental agreement becomes effective pursuant to this Article IX, this Indenture or the Lease, as the case maybe, shall be deemed to bemodified and amended in accordance therewith, the respective rights, duties and obligations ofthe parties hereto or thereto and all Owners ofBonds Outstanding, as the case may be, shall thereafter be determined, exercised and enforced hereunder and thereunder subject in all respects to such modification and amendment, and all the terms and conditions of any supplemental agreement shall be deemed to be part ofthe terms and conditions of this Indenture or the Lease, as the case may be, for any and all purposes. The Authority orthe Trustee may adopt appropriate regulations to require each Owner, before his consent provided for in this Article IX shall be deemed effective, to reveal ifthe Bonds as to which such consent is given are disqualified as provided in Section 9.03 hereof. SECTION 9.05. Endorsement or Replacement of Bonds Delivered After Amendments. The Trustee may determine that Bonds delivered after the effective date ofany action taken as provided in this Article IX shall bear a notation, by endorsement, in form approved by the Trustee, as to such action. In that case, upon demand ofthe Owner of any Outstanding Bond at such effective date and presentation of his Bond for the purpose at the Principal Office, a suitable notation shall be made on such Bond at the cost ofthe Authority. The Trustee may determine that new Bonds, so modified as in the opinion ofthe Trustee is necessaryto conform to such Bond Owners' action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bond then Outstanding, such new Bond shall be exchanged in the Principal Office, without cost to such Owner, for a Bond ofthe same character then Outstanding, upon surrender of such Bond at the cost of the Authority. SECTION 9.06. Amendatory Endorsement of Bonds. Subject to Section 9.01 hereof, the provisions of this Article IX shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by him, provided that due notification thereofis made on such Bonds. SECTION 9.07. Consent of Credit Entily [and Confirming Bank] Reguired. Notwithstanding anything in this Indenture to the contrary, no amendment or supplement to this Indenture or the Lease shall become effective unless first approved by the Credit Entity [and the Confirming Bank], which approval shall not be unreasonably withheld. 45248817.2 61 ARTICLE X DEFEASANCE SECTION 10.01. Discharee of Indenture. The Bonds maybe paid, in whole or in part, by the Authority in any ofthe following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority: (a) bywell and trulypaying or causing to be paid the principal ofand interest and redemption premiums, if any, on such Bond, as and when the same become due and payable; (b) if prior to maturity and having given notice of redemption by irrevocably depositing with the Trustee, in trust, at or before maturity, an amount of cash which, together with amounts then on deposit in the Lease Payment Account and available for such purpose, is sufficient to pay in Available Moneys or from the proceeds of a draw under the Credit Facility all principal of and interest and redemption premiums, if any, on such Bonds; or (c) by irrevocably depositing with the Trustee, in trust, noncallable Authorized Investments described in paragraph (1) or (2) of the definition thereof purchased with Available Moneys, or draws underthe Credit Facilitytogether with cash, ifrequired, in such amount as will in the opinion ofau independent certified public accountant, together with interest to accrue thereon and moneys then on deposit in the Lease Payment Account and available for such purpose, together with the interest to accrue thereon, be fully sufficient to pay and discharge in Available Moneys or draws under the Credit Facility such Bond (including all principal and interest represented thereby and redemption premiums, if any). If all Outstanding Bonds shall be discharged and paid in one ormore ofthe preceding ways and all Additional Rental shall have been paid or arrangements satisfactoryto the Trustee shall have been made for the payment of such Additional Rental, then, notwithstanding that any Bonds shall not have been surrendered for payment, all obligations ofthe Authority, the Trustee and the Citywith respect to all Outstanding Bonds shall cease and terminate, except only the covenants of the Authority hereunder to complywith the Code and the obligation ofthe Trustee to payor cause to be paid, from Base Rental paid byor on behalfofthe City from funds deposited pursuant to paragraphs (b) and (c) of this Section, to the Owners of the Bonds not so surrendered and paid all sums due with respect thereto, and in the event of deposits pursuant to paragraphs (b) and (c) ofthis Section, the Bonds shall continue to represent direct and proportionate interests ofthe Owners thereof in Basc Rental under the Lease, provided, however, during the Weekly Rate Period or DailyRate Period no such defeasance shall be deemed to have occurred unless the Trustee shall receive written evidence from anyrating agency then rating the Bonds that such defeasance will not cause a reduction or withdrawal of any then existing rating on the Bonds. Any funds held bythe Trustee, at the time ofthe defeasance of all Outstanding Bonds, which are not required for payment as required therein, shall be paid over to the Credit Entity [or the 45248817.2 62 Confirming Bank] to the extent of any amounts owed under the Reimbursement Agreement (or the Confirmation Agreement], as applicable, then to the Trustee to pay any amounts owed to the Trustee under this Indenture, and the remainder, if any, shall be paid over to the City. During the term of any Credit Facility, prior to or at the time ofa deposit pursuant to paragraph (b) or (c) of this Section, there shall be delivered to the Trustee an opinion ofnationally recognized bankruptcy counsel to the effect that payments to the Owners of Bonds defeased from such Available Moneys or draws under the Credit Facility on deposit with the Trustee will not constitute avoidable preferences under Title 11 and Title 9 ofthe United States Bankruptcy Code upon the occurrence of an Event of Bankruptcy. SECTION 10.02. Reserved. SECTION 10.03. Payment ofBonds. After Discharge of Indenture. In anyevent any Bond shall not be presented forpayment when the principal with respect thereofbecomes due, either at maturity, or at the date fixed for redemption thereof, ifmoneys sufficient to pay such Bond shall have been deposited in the Credit Facility Account or ifAvailable Moneys suff cient to pay such Bond shall have been deposited in the Lease Payment Account, all liability ofthe Authority to the Owner thereof for payment of such Bond shall forthwith cease, tenninate and be completely discharged, and thereupon it shall be the duty ofthe Trustee to hold such moneys, without liability for interest thereon, for the benefit ofthe Owner of such Bond who shall thereafter be restricted exclusivelyto such moneys, for any claim . of whatever nature on his or her part under this Indenture or on, or with respect to, said Bond. Any moneys so deposited with and held by the Trustee not so applied to the payment ofBonds within two (2) years afterthe date on which the same were deposited with the Trustee due shall be paid bythe Trustee to the City. Thereafter, Owners shall be entitled to look only to the City for payment, and then only to the extent ofthe amount so disbursed by the Trustee. The City shall not be labile for any interest on the sums paid to it pursuant to this section and shall not be regarded as a trustee or trustees of such money. Any moneys held in accordance with this Section 10.03 shall be held uninvested. ARTICLE XI MISCELLANEOUS SECTION 11.01. Liabilitv of Authority Limited to Revenues. Notwithstanding anything contained in this Indenture or in the Bonds to the contrary, the Authority shall not be required to advance any moneys derived from any source other than the Revenues and the monies on deposit in the funds and accounts established under this Indenture which are pledged under this Indenture pursuant to Section 5.02 hereof for anyofthe purposes mentioned in this Indenture, whether for the payment ofthe principal of, premium (if any) or interest on the Bonds or for any other purpose ofthis Indenture. Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes. 45248877.2 63 . SECTION 11.02. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority 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 indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. SECTION 11..03. Limitation ofRights to Parties and Bondowners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to anyperson other than the Authority, the Trustee, the Credit Entity, [the Confirming Bank] and the Owners ofthe Bonds any legal or equitable right, remedy or claim under or in respect ofthis Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit ofthe Authority, the Trustee, the Credit Entity, [the Confirming Bank] and the Owners of the Bonds. SECTION 11.04. Waiver of Notice. Whenever in this Indenture the giving ofnotice by mail or otherwise is required, the giving of such notice maybe waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 11.05. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee shall destroy such Bond and deliver a certificate of such destruction to the Authority. SECTION 11.06. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for anyreason be held to be invalid, illegal or unenforceable in anyrespect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any otherprovision ofthis Indenture, and this Indenture shall be construed as ifsuch invalid or illegal orunenforceablepmvisionhad never been contained herein, The Authority herebydeclares that it would have entered into this Indenture and each and every other article, section, paragraph, sentence, clause or phrase hereof and authorized the issuance ofthe Bonds pursuant thereto irrespective ofthe fact that anyone or more articles, sections, paragraphs, sentences, clauses orphrases ofthis Indenture may be held illegal, invalid or unenforceable. SECTION 11.07. Notices. All written notices to be given under this Indenture shall be given bymail orpersonal deliveryto the party entitled thereto at its address set forth below, or at such address as the partymayprovide to the otherparty in writing from time to time. Notice to the Trustee shall be effective upon receipt. Notice to all other parties shall be deemed to have been received upon the earlier of actual receipt or five Business Days after deposit in the United States mail, in first class form, postage prepaid or, in the case ofpersonal delivery, upon delivery to the address set forth below: 45248817.2 64 If to the City: City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Attention: City Manager If to the Authority: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director If to the Trustee: U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 Attention: Corporate Trust Department If to the Credit Entity: [If to the Confirming Bank]: Attention: Public Finance Attention: Re: City of Diamond Bar If to the Remarketing Agent: US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Attention: If to the Tender Agent: U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 Attention: Corporate Trust Department Notwithstanding anyprovision contained in this Indenture to the contrary, the Trostee shall notify S&P, ifthe Bonds are rated by S&P, and Moody's ifthe Bonds are ratedbyMoody's, but without any liability for any failure to do so of any of the following occurrences of which the Trustee has actual 45248817.2 65 knowledge: (1)renewal,expiration, substitution or termination ofthe Credit Facility [or the Confirming Letter ofCredit], (2) redemption of any Bonds, (3) modifications or amendments to (i) this Indenture, (ii) the Lease, (iii) the Assignment Agreement, (iv) the Credit Facility or (v) [the Confirming Letter of Credit], (4) change or replacement of Remarketing Agent, (5) defeasance of the Bonds, (6) any conversion ofthe interest rate borne by the Bonds, and (7) any mandatory tenders of Bonds, to the address set forth in Section 11.1$ below. The City shall notifythe rating agencythen maintaining arating on the Bonds and the Trustee of any modification or amendment to the Reimbursement Agreement to which the City has consented. Notwithstanding anyprovision in this Indenture to the contrary, the Cityshall notify the Trustee of any Event of Bankruptcy ofwhich the City has actual knowledge, which shall have occurred with respect to moneys held by the Trustee pursuant to this Indenture. . SECTION 11.08. Evidence ofRiLyhts ofBondowners. Any request, consent or other instrument required orpermitted by this Indenture to be signed and executed byBondowners; maybe in anynumber ofconcurrent instruments ofsubstantially similar tenor and shall be signed or executed by such Bondowners in person or by an agent or agents duly appointed in writing. Proof of the execution ofany such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for anypurpose of this Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section. The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any Jurisdiction, authorizedby the laws thereofto take acknowledgments ofdeeds, certifying that the person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership ofthe Bonds shall be proved bythe bond registration books held bythe Trustee. Anyrequest, consent, or otherinstrument orwriting ofthe Owner ofanyBond shall bind every future Owner ofthe same Bond and the Owner ofeveryBond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon. SECTION 11.09. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver underthis Indenture, Bonds which are owned by or for the account ofthe Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Upon request, the Authority shall certify to the Trustee which Bonds are disqualified pursuant to this Section 11.09. SECTION 11.10. Mongy Held for Particular Bonds. Thernoneyheld bythe Trustee for the payment ofthe principal, premium (if any) or interest due on any date with respect to particular 45248817.2 66 Bonds (orportions ofBonds in the case ofBonds redeemed in part only) shall, on and after such date and pending suchpayment, beset aside on its books and held in trust by it for the Owners ofthe Bonds entitled thereto, subject, however, to the provisions of Section 10.03, SECTION 11.11. Funds and Accounts. Any fund required by this Indenture to be established and maintained bythe Trustee maybe established and maintained in the accounting records ofthe Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereofand any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with standard trust accounting principles, to the extent practicable, and with due regard for the requirements imposed on the Authority pursuant to Section 6.0.6 hereof and for the protection ofthe security ofthe Bonds and the rights of every Owner thereof. The Trustee may establish such funds and accounts as it deems appropriate to perform its obligations hereunder. SECTION 11.12. Waiver of Personal Liability. No member, officer, agent or employee ofthe Authority shall be individually or personally liable for the payment ofthe principal of, premium (if any) or interest on the Bonds or be subject to any personal liability or accountabilityby reason ofthe issuance thereof; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law or by this Indenture. SECTION 11.13. CUSIPNumbers. Neither the Trustee northe Authority shall be liable for any defect or inaccuracy in the CUSIP number that appears on any Bond or in any redemption notice. The Trustee may, in its discretion, include in any redemption notice a statement to the effect that the CUSIP numbers onthe Bonds have been assigned by an independent service and are included in such notice solely for the convenience ofthe Owners and that neither the Authority nor the Trustee shall be liable for any inaccuracies in such numbers. SECTION 11.14. Business Days. If any date specified herein shall not be a Business Day, any action required on such date may be made on the next succeeding Business Daywith the same effect as ifmade on such date, and ifpayment is made on such succeeding Business Day, no additional interest shall accrue for the period after such date. SECTION 11.15. Execution in Several Counterparts. This Indenture maybe executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many ofthem as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 11.16. Governing Law. This Indenture shall be construed in accordance with and governed by the Constitution and laws of the State. 45248817.2 67 SECTION 11.17. Provisions Relatine to Ratine ALyencies. (a) All notices given bythe Trustee pursuant to Sections 4.12, 8.01(D), 9.01 and 9.03 hereof shall also be sent to S&P if the Bonds are rated by S&P, and Moody's if the Bonds are rated by Moody's. (b) If at any time S&P and/or Moody's does not have a rating outstanding on the Bonds, then references herein to such entity shall not be effective. (c) Notice to Moody's shall be sent to Moody's Investors Service, 99 Church Street, New York, New York 10007, Attention: Public Finance Department - Structured Finance Group. (d) Notice to S&P shall be sent to Standard & Poor's Authority, 25 Broadway, New York, New York 10004, Attention: Municipal Department - Structured Finance Group. IN WITNESS WHEREOF, THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY and U.S. BANK, N.A., as Trustee, have caused this Indenture to be executed by their respective officers all as of the day and year first above written. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Executive Director U.S. BANK, N.A., as Trustee By: Authorized Signatory ACKNOWLEDGMENT AND CONSENT OF CITY The City ofDiamond Barhereby acknowledges and consents to theterms and provisions ofthe foregoing Indenture. Date: As of December 1, 2002 CITY OF DIAMOND BAR Mayor 45248817.2 EXHIBIT A (FORM OF WEEKLY RATE BOND) UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. ORIN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OFTHE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IF REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN 02nl a\9] CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BOND 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Principal Interest Rate Payment Date Dated Date CUSIP weekly rate Registered Owner: Cede & Co. Principal Amount: THE CITY OF DIAMOND BARPUBLIC FINANCING AUTHORITY, apublic body corporate and politic, duly organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay (but solely from the funds hereinafter mentioned) to the above -referenced registered owner (the "Owner") or registered assigns subj ect to the terms of the Indenture, hereinafter mentioned, and any right to redemption, the Principal Amount stated above on the Principal Payment Date stated above upon surrender of this Bond at the corporate 45248 S 17.2 A-1 office of U.S. Bank, N.A. (the "Trustee") in San Francisco, California, and to pay the registered owner by check mailed by first class mail, postage prepaid, on each Bond Payment Date to the person whose name appears in the Bond register as the Owner thereof as ofthe Record Date immediatelypreceding such Bond Payment Date (as each such term is hereinafter defined), interest on the balance of said Principal Amount from time to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date next preceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on orbefore the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paidbywire transfer of immediately available funds to an account in the United States of America to any registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Both principal and interest on this Bond are payable in lawful money ofthe United States of America, and (except forinterest which is payable as stated above) are payable upon presentation ofthis Bond at the corporate office ofthe Trustee. The Bonds are secured in part by the Authority's right to receive certain lease payments ("Base Rental") under and pursuant to that certain Lease Agreement dated as ofDecember 1, 2002 (the "Lease"), by and between the City of Diamond Bar (the "City', a municipal corporation duly organized and existing under the laws and constitution ofthe State of Cahfomia, as lessee, and the Authority, as lessor, all ofwhich rights to receive such Base Rental have been assigned without recourse pursuant to that certain Assignment Agreement dated as ofDecember 1, 2002, by the Authority to the Trustee under the Indenture dated as of December 1, 2002 (the "Indenture"), by and between the Authority and the Trustee. This Bond is one of a duly authorized issue ofBonds ofthe Authority designated as the City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the `Bonds"), all issued pursuant to and in conformitywith the Constitution and laws ofthe State of California and, particularly the Marks -Roos Local Bond Pooling Act of 1485 (Article 4 of Chapter 5 of Division 7 ofthe California Government Code, as amended) and the Indenture. Reference is hereby made to the Indenture for a specific description ofthe security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants and agreements made for the benefit ofthe Bondowners, and for a statement ofthe rights of the Bondowners, and by the acceptance of this Bond the owner hereof assents to all of the terms, conditions and provisions of the Indenture. The principal ofthis Bond, the interest hereon and any premium payable upon redemption hereof, are secured by an irrevocable pledge of, and are payable solely from, the Revenues (as defined in the Indenture) and the moneys on deposit in certain other funds, all as more particularly set forth in the Indenture. THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS IS LIMITED TO THE REVENUES, INCLUDING BASE RENTAL PAYABLE BY THE CITY, PLEDGED THEREFOR 45248817.2 A-2 PURSUANT TO THE INDENTURE AND DOES NOT CONSTITUTE AN OBLIGATION OF THE AUTHORITY FOR WHICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL IS ABATED DURING ANY PERIOD IN WHICH, BY REASON OF MATERIAL DAMAGE, DESTRUCTION OR CONDEMNATION, THERE IS SUBSTANTIAL INTERFERENCE WITH THE USE AND RIGHT OF POSSESSION BY THE CITY OF THE LEASED PROPERTY. FAILURE OF THE CITY TO PAY BASE RENTAL DURING ANY SUCH PER10D SHALL NOT CONSTITUTE A DEFAULT UNDER THE LEASE, THE INDENTURE OR THIS BOND. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. The Owner of this Bond is entitled to receive, subject to the terms of the Indenture and anyright ofpayment, redemption orpurchase hereinafterprovided for, (i) on the Principal Payment Date set forth above, upon surrender of this Bond at the corporate office of the Trustee, the Principal Amount specified above on the Principal Payment Date specified above or upon earlier redemption, and (ii) by check mailed by first class mail, postage prep aid, on each interest payment date to the person whose name appears in the Bond register as the Owner thereof as ofthe Record Date immediately preceding such Bond Payment Date (as each such term is hereinafter defined), interest on the balance of said Principal Amount from time to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date next preceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paid by wire transfer of immediately available funds to any registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Pursuant to that certain Reimbursement Agreement dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and (the `Bank"), the Bank has agreed to issue its irrevocable direct-pay letter ofcredit (the "Credit Facility") to support the City's obligation to pay the portion of the Base Rental evidenced by this Bond and to pay the purchase price of this Bond, if required to be purchased pursuant to the Indenture on or prior to the Fixed Rate 45248817.2 A-3 Conversion Date. Subject to certain conditions, the Credit Facility maybe replaced by an Alternate Credit Facility and, if so, references herein to the Credit Facility or the Bank shall refer to such Alternate Credit Facility or to the issuer thereof, respectively. [Pursuant to a Confirmation Agreement (the "Confirmation Agreement") dated as of December 1, 2002 between the Bank and the (the "Confirming Bank"), the Confirming Bank has agreed to issue its irrevocable confirming letter of credit (the "Confirming Letter of Credit") in favor ofthe Trustee to be drawn on in the event the Bank wrongfully dishonors a properly presented and conforming draw on the Credit Facility or the Bank repudiates the Credit Facility]. Until the Fixed Rate Conversion Date, the Bonds shall bear interest at the Weekly Rate; provided that the interest rate shall never exceed the Maximum Rate. Interest due with respect to the Bonds bearing the Fixed Rate or Fixed Rates shall be computed on the basis of a 360 -day year consisting oftwelve 30-daymonths and interest due with respect to Bonds bearing a WeeklyRate shall be computed on the basis of actual days elapsed and a 365- or 366 -day year, as applicable. Interest on the Bonds will be payable, from the date of execution and delivery ofthe Bonds to before the Fixed Rate Conversion Date, the first Business Day of each month commencing [January 1, 2003], to and including the Fixed Rate Conversion Date. - The method of calculation ofinterest may, in accordance with and subject to the terms ofthe Indenture, be changed from calculation at the Weekly Rate then in effect to calculation at a Fixed Rate. The conditions for conversion ofthe method of calculation of interest include, but are not limited to, the delivery of a written opinion of Bond Counsel to the effect that such conversion will not cause the interest on the Bonds to be included within gross income for purposes of calculating State personal income taxes. The Remarketing Agent shall determine the Weekly Rate from time to time, and such determination by the Remarketing Agent shall be conclusive and binding. The Indenture provides that ifthe Remarking Agent fails to determine the WeeklyRate, the Weekly Rate will be detem-►ined asset forth therein. The Bonds are delivered in fully registered form and shall be in Authorized Denominations. Bonds maybe exchanged at the Principal Office of the Trustee, in the manner and subject to the limitations and conditions provided in the Indenture, for an equal aggregate principal amount ofBonds of any Authorized Denominations. The transfer ofthis Bond is registerable by the Owner hereofin person or by his attorney or legal representative at the corporate office ofthe Trustee, but only in the manner and subj ect to the limitations and conditions provided in the Indenture and upon surrender and cancellation of this Bond. Upon any such registration oftransfer, the Trustee shall execute and deliver in exchange for this Bond a new Bond or Bonds, registered in the name ofthe transferee, of Authorized Denominations, in an aggregate principal amount equal to the principal amount of this Bond. 45248817.2 A-4 In the event the Authority has complied with the requirements of the Indenture to change the interest rate represented bythe Bonds to a Fixed Rate, all Bonds shall be subject to mandatorytender andpurchase on the FixedRate ConversionDate in accordance with the provisions ofthe Indenture. The Bonds are subject to mandatory tender on the last Bond Payment Date occurring on or prior to the date at least five days prior to the date on which the Credit Facility [or the Confirming Letter of Credit] is scheduled to expire orterminate in accordance with its respective terms and ifthe Trustee has not received notice at least 40 days prior to such Bond Payment Date that an Alternate Credit Facility [or an Alternate Confirming Letter of Credit], as applicable, is to be provided. Not less than thirty days before each such Mandatory Tender Date under this paragraph, the Trustee shall send a notice to all Owners by first class mail, postage prepaid, which notice shall contain the following information: (1) that the Credit Facility [or the Confirming Letter of Credit] is scheduled to expire or terminate and no Alternate Credit Facility [orAlternate Confirming Letterof Credit], as applicable, will be provided, (2) that each Owner's Bond is subj ect to mandatory tender as provided in such notice, and (3) if any ofthe nationally recognized rating agencies which has a credit rating outstanding on the Bonds has indicated to the Trustee in writing that it will lower or withdraw its rating on the Bonds as of such Mandatory Tender Date, notice of such new rating, or if no new rating is available, notice that any of such rating agencies may lower or withdraw such rating as of such Mandatory Tender Date. [Provided, however, there shall be no mandatory tender ofBonds pursuant to the Indenture for failure to provide an Alternate Confirming Letter of Credit ifthe Bonds, without such Alternate Confirming Letter of Credit, will be rated at least the same rating by each rating agency then rating the Bonds as the Bonds were rated at the time the Confirming Letter of Credit was in effect as evidenced by written notice from each rating agency then rating the Bonds to the Trustee.] The Bonds are subject to mandatory tender under this paragraph on the first Business Day to occur on or after the seventh day following receipt bythe Trustee ofnotice from the Credit Entity [or the Confirming Bank] ofthe occurrence of an event ofdefault under the Reimbursement Agreement [or the Confirmation Agreement, as applicable], or that the Credit Entitywill not reinstate the interest portion ofthe Credit Facility. Not later than the third Business Day after receipt by the Trustee of such notice, the Trustee shall send to all Owners by first class mail, postage prepaid, and to the Depository also by facsimile, a notice which shall contain the following information: (1) that an event of default has been declared under the Reimbursement Agreement [or the Confirmation Agreement], or that the Credit Entity will not reinstate interest portion ofthe Credit Facility, and (2) that each Owner's Bond is subj ect to mandatory tender on the first Business Dayto occur on after seventh day following the receipt bythe Trustee of such notice from the Credit Entity [or the Confirming Bank]. The Bonds are subj ect to mandatorytender on the last Business Dayprior to the effective date of any Alternate Credit Facility [and/orAltemate Confirming Letter of Credit] in accordance with the provisions of the indenture. [The Bonds are subject to mandatory tender on the date of any draw on the Confirming Letter of Credit in accordance with the provisions of the Indenture.] 45248817.2 A-5 Owners of Bonds shall be required to tender the Bonds to the Tender Agent by 11:00 A.M., New York time, on any Mandatory Tender Date forpurchase at apurchase price equal to the principal amount thereof, plus accrued interest thereon to the Mandatory Tender Date. So long as the Bonds are registered in the name ofthe Nominee, such tenders shall be made through the book -entry system. Any Untendered Bonds shall be deemed to have been tendered on a Mandatory Tender Date, whether or not the Bonds are in fact surrendered to the Tender Agent. In the event of a failure by Owners of Bonds to tender Bonds on the Mandatory Tender Date, said Owners of Untendered Bonds shall not be entitled to anypayment (including any interest to accrue subsequent to the MandatoryTenderDate) other than the purchase price for such Untendered Bonds, and anyUntendered Bonds shall no longer be entitled to the benefits ofthis Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding under this Indenture. However, the purchase price will be paid onlyupon presentation ofthe Bonds to the Tender Agent. In the case of a Fixed Rate Conversion Date only, if the Remarketing Agent notifies the Trustee not less than fifteen days before the Fixed Rate Conversion Date that it cannot remarket all ofthe Bonds or if the requirements forthe effectiveness of a Fixed Rate Conversion Date are not satisfied before the Fixed Rate Conversion Date, the Trustee shall give notice thereofby first-class mail, postage prepaid, to all Owners, the Remarketing Agent, the Credit Entity, [the Confirming Bank] and the Authority and each of such parties shall be restored to their respective positions as if notice of the Fixed Rate Conversion Date had not been given and no mandatorytender shall occur. In addition to the mailed notice required by the preceding sentence, the Trustee shall deliver a duplicate copy of such notice to the Depository, the Credit Entity [and the Confirming Bank] by telecommunications or overnight delivery. Prior to the Fixed Rate Conversion Date with respect to the Bonds, any Owner ofthe Bonds may give irrevocable written notice to the Tender Agent at its Principal Office and request that the Tender Agent purchase all or any part (in Authorized Denominations) ofthe Bonds then outstanding and registered in the name of such Owner at an amount or price equal to the unpaid principal amount thereof plus accrued and unpaid interest thereon to, but not including, the Business Day on which the Bonds are to be tendered to the Tender Agent (the "Optional Tender Date") and without premium. Such notice (the "Optional Tender Notice") shall be substantially in the form set forth in the Indenture and shall specify the Optional Tender Date (which shall not be less than seven (7) days after the date ofreceipt by the Tender Agent of such Optional Tender Notice), the CUSIP Number, the principal amount being tendered in integral multiples of Authorized Denominations and, so long as the Bonds are registered in the name ofthe Nominee, such notice shall also specifythe Participant number and the contact person ofthe Participant. Upon receipt of an Optional Tender Notice, the Tender Agent shall, as soon as is practicable but in no event later than the close ofbusiness on the Business Day following the day of receipt of such Optional Tender Notice, give notice to the Trustee, the Authority, the Credit Entity, [the Confirming Credit Entity] and the Remarketing Agent ofthe Optional TenderNotice, the Optional Tender Date specified therein and the principal amount of Bonds to be purchased on such Optional Tender Date. 45248817.2 A-6 Owners providing an Optional Tender Notice shall be required to tender the Bonds to the Tender Agent for purchase by 11:00 A.M., New York time, on the Optional Tender Date. In the event ofa failure by Owners ofBonds to tender Bonds on the Optional Tender Date, said Owners of B onds shall not be entitled to any payment (including any interest to accrue subsequent to the Optional Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds shall no longer be entitled to the benefits ofthis Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding underthis Indenture. However, the purchase price will be paid only uponpresentment ofthe Bonds to the Tender Agent. Upon the cancellation of-Untendered Bonds, the Trustee shall execute new Bonds in the same aggregate principal amount as, and in substitution for the Bonds not so tendered by such Owner and shall hold, deliver and make available such new Bonds to the new Owner thereof in accordance with the provisions ofthis Indenture which shall be fully applicable notwithstanding that such new Bonds are executed in substitution for the Bonds not so tendered. From and after the Fixed Rate Conversion Date, the Tender Agent will not be required to purchase such Bonds on demand and optional tender by the Owners thereof in accordance with the Indenture. During the Weekly Rate Period and on the Fixed Rate Conversion Date, the Bonds are subject to optional redemption in whole or in part (in an amount of $100,000 or any integral multiple of 55,000 in excess thereof) on anyBusiness Day, at the option ofthe Authority, at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed far redemption, without premium. The Bonds are subj eet to mandatory redemption in part on the dates in the following years in the following amounts at a redemption price equal to the principal amount thereoftogether with accrued interest to the date fixed for redemption, without premium: Redemption Date Redemption Date { 1) Principal ( 1) Principal * Maturity The Bonds are subj ect to mandatoryredemption on any Bond Payment Date, in whole or in part, from moneys drawn under the Credit Facility [or the Confirming Letter of Credit] which shall be reimbursed from Net Proceeds following the deposit by the Trustee in the Lease Prepayment Account ofthe Redemption Fund ofNet Proceeds deposited by the City under this Indenture, at least 45 days 45248817.2 A-7 prior to a Bond Payment Date which have been credited towards the Prepayment made by the City pursuant to the Lease, at a redemptionprice equal to the principal amount ofthe Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium; provided, however, that if there shall no longer be available a Credit Facility [or the Confiraiing Letter of Credit] to secure the payment of principal and interest represented by the Bonds or if the Credit Facility [or the Confirming Letter of Credit] does not permit a draw with respect to Prepayments, the Bonds are subject to redemption fiomNet Proceeds which the Trustee shall deposit in the Lease Prepayment Account of the Redemption Fund, to be used to redeem the Bonds bythe Trustee as provided in the Lease and as provided herein. In addition, the Bonds are subj ect to special mandatory redemption as a whole or in part on any date, pro rata by maturity and by lot within a maturity (as determined by the Trustee), to the extent excess Bond proceeds remain following completion or abandonment ofthe acquisition, expansion and improvement of the Wastewater Enterprise or Water Enterprise. In the event of apartial redemption of Bonds from Net Proceeds or an optional redemption as described above, the forgoing annual sinking fund payments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. If this Bond is called for redemption and payment is dulyprovided therefor as specified in the Indenture, interest shall cease to accrue thereon from and after the date fixed for redemption. The Authority and the Trustee may treat the Owner ofthis Bond (as evidenced bythe Bond. register) as its absolute owner for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. In the manner provided in the Indenture, the rights and obligations ofthe Authority and ofthe Owners ofthe Bonds, may (with certain exceptions as stated in the Indenture) be modified or amended with the consent ofthe Bank, [the Confirming Bank] and the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding. No modification or amendment shall (1) extend the fixed maturity of any Bond, orreduce the amount ofprincipal thereof or the rate of interest thereon, or extend the time ofpayment of interest thereon, or change the method of computing the rate of interest thereon, or extend the time ofpayment of interest thereon, without the consent of the Owner of each Bond so affected, or (2) reduce the percentage ofBonds the consent ofthe Owners ofwhichis required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under the Indenture prior to or on a paritywith the lien created by the Indenture except as otherwise provided therein, or deprive the Owners ofthe Bonds of the lien created by the Indenture on such Revenues and other assets (except as expresslyprovided in this Indenture), without the consent ofthe Owners of all the Bonds then Outstanding, or (3) modify anyofthe rights or obligations ofthe Trustee without its written consent. 45248817.2 A-8 It is herebyrecited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, form and manner as required by the Constitution and the statutes of the State of California. This Bond shall not be valid and the Owner hereof shall not be entitled to any benefit hereunder unless this Bond shall have been authenticated by the Trustee by the signature of a duly authorized signatory. 45248817.2 iii -9 IN WITNESS WHEREOF, THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY has caused this Bond to be executed on its behalfby the signature ofthe Chairperson' ofthe governing board ofthe Authority and attested by the Secretary ofthe governing board of the Authority and this Bond to be authenticated manuallybythe Trustee and dated as ofthe dated date first above written. ATTEST: CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Ulm Secretary Chairperson CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within -mentioned Indenture. Date of Authentication: U.S. SANK, N.A., as Trustee to Authorized Signatory 45248817.2 A-10 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE) the within Bond, and does hereby irrevocably constitute and appoint attorney to transfer said Bond on the books of the bond Registrar with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution. 45248817.2 A -i l NOTICE: The signature(s) on this assignment must correspond with the name(s) as written upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. TENDER NOTICE The undersigned (a) hereby certifies that the undersigned is the lawful registered owner (or his duly authorized attorney) ofthis Bond on the date shown below as the "Date ofExercise of Owner's's Option," (b) hereby gives notice to the Tender Agent ofthe exercise by the undersigned of its option to have this Bond, or aportion of this Bond, purchased on the purchase date in the principal amount (which amount shall be $100,000 or anyintegral multiple of $5,000 in excess thereof) indicated below plus accrued interest, if any, with respect thereto pursuant to the terms of the Indenture, and (c) in order to exercise said option, hereby tenders and delivers this Bond to the Tender Agent for purchase on the purchase date designated below for a purchase price equal to the sum ofthe principal amount hereof tendered and accrued but unpaid interest to the date of purchase. Name and Address of Owner: Tax I. D. Date of Exercise of Owner's Option: Aggregate Principal Amount to be Purchased and Bond numbers (must be an Authorized Denomination): Bond CUSIP(s): Purchase Date: Signature of Owner: Signature Guaranteed by: If applicable: Participant # Participant Contact Person: 45248517.2 A-12 EXHIBIT B (FORM OF DAILY RATE BOND) UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHERNAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IF REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN No. R-1 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BOND 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Principal Interest Rate Payment Date Dated Date CUSIP daily rate Registered Owner: Cede & Co. Principal Amount: THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, apublic body corporate and politic, duly organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promises to pay (but solely from the funds hereinafter mentioned) to the above -referenced registered owner (the "Owner") or registered assigns subject to the terms ofthe Indenture, hereinafter mentioned, and any right to redemption, the Principal Amount stated above on the Principal Payment Date stated above upon surrender of this Bond at the corporate 45245817.2 B-1 office ofU. S. Bank, N.A. (the "Trustee') in San Francisco, California, and to paythe registered owner by check mailed by first class mail, postage prepaid, on each Bond Payment Date to the person whose name appears in the Bond register as the Owner thereof as of the Record Date immediately preceding such Bond Payment Date (as each such term is hereinafter defined), interest on the balance of said Principal Amount from tune to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date nextpreceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on orbefore the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on or before the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paid bywire transfer ofimmediately available funds to an account in the United States of Americato any registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Both principal and interest on this Bond are payable in lawful money ofthe United States ofAmerica, and (except for interest which is payable as stated above) are payable upon presentation ofthis Bond at the corporate office ofthe Trustee. The Bonds are secured in part by the Authority's right to receive certain lease payments ("Base Rental") under and pursuant to that certain Lease Agreement dated as ofDecember 1, 2002 (the "Lease"), by and between the City ofDiamond Bar (the "City, a municipal corporation duly organized and existing under the laws and constitution ofthe State of California, as lessee, and the Authority, as lessor, all ofwhich rights to receive such Base Rental have been assigned without recourse pursuant to that certain Assignment Agreement dated as ofDecember 1, 2002, by the Authority to the Trustee under the Indenture dated as of December 1, 2002 (the "Indenture"), by and between the Authority and the Trustee. This Bond is one of a duly authorized issue of Bonds ofthe Authority designated as the City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the `Bonds '), all issued pursuant to and inconformity with the Constitution and laws ofthe State ofCalifornia and particularly the Marks -Roos Local Bond Pooling Act of 1985 (Article 4 ofChapter 5 ofDivision 7 ofthe California Government Code, as amended) and the Indenture. Reference is hereby made to the Indenture for a specific description ofthe security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants and agreements made for the benefit ofthe Bondowners, and for a statement ofthe rights of the Bondowners, and by the acceptance of this Bond the owner hereof assents to all of the terms, conditions and provisions of the Indenture. The principal ofthis Bond, the interest hereon and any premium payable upon redemption hereof, are secured by an irrevocable pledge of, and are payable solely from, the Revenues (as defined in the Indenture) and the moneys on deposit in certain other funds, all as more particularly set forth in the Indenture. THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS IS LIMITED TO THE REVENUES, INCLUDING BASE RENTAL PAYABLE BY THE CITY, PLEDGED THEREFOR 45248817.2 B-2 PURSUANT TO THE INDENTURE AND DOES NOT CONSTITUTE AN OBLIGATION OF THE AUTHORITY FOR WHICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS DOES NOT CONSTITUTE AN INDEBTEDNES S OF THE AUTHORITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL IS ABATED DURING ANY PERIOD IN WHICH, BY REASON OF MATERIAL DAMAGE, DESTRUCTION OR CONDEMNATION, THERE IS SUBSTANTIAL INTERFERENCE WITH THE USE AND RIGHT OF POSSESSION BY THE CITY OF THE LEASED PROPERTY. FAILURE OF THE CITY TO PAY BASE RENTAL DURING ANY SUCH PERIOD SHALL NOT CONSTITUTE A DEFAULT UNDER THE LEASE, THE INDENTURE OR THIS BOND. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. The Owner of this Bond is entitled to receive, subj ect to the ten s of the Indenture and any right of payment, redemption or purchase hereinafter provided for, (i) on the Principal Payment Date set forth above, upon surrender of this Bond at the corporate office of the Trustee, the Principal Amount specified above on the Principal Payment Date specified above or upon earlier redemption, and (ii) by check mailed by first class mail, postage prepaid, on each interest payment date to the person whose name appears in the Bond register as the Owner thereof as of the Record Date immediatelypreceding such Bond Payment Date (as each such term is hereinafter defined), interest on the balance of said Principal Amount from time to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date next preceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paid by wire transfer of immediately available funds to any registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Pursuant to that certain Reimbursement Agreement dated as of December 1, 2002 (the "Reimbursement Agreement', by and between the City and (the `Bank"), the Bank has agreed to issue its irrevocable direct -pay letter of credit (the "Credit Facility") to support the City's obligation to pay the portion of the Base Rental evidenced by this Bond and to pay the purchase price of this Bond, if required to be purchased pursuant to the Indenture on or prior to the Fixed Rate 45248817.2 B-3 Conversion Date. Subj ect to certain conditions, the Credit Facility maybe replaced by an Alternate Credit Facility and, if so, references herein to the Credit Facility or the Bank shall refer to such Alternate Credit Facility or to the issuer thereof, respectively. [Pursuant to a Confirmation Agreement (the "Confirmation Agreement") dated as of December 1, 2002 between the Bank and the (the "Confinning Bank"), the Confirming Bank has agreed to issue its irrevocable confirming letter of credit (the "Confirming Letter ofCredif) in favor ofthe Trustee to be drawn on in the event the Bank wrongfully dishonors a properlypresented and conforming draw on the Credit Facility or the Bank repudiates the Credit Facility.] Until the Fixed Rate Conversion Date, the Bonds shallbear interest at the Daily Rate; provided that the interest rate shall never exceed the Maximum Rate. Interest due with respect to the Bonds bearing the Fixed Rate or Fixed Rates shall b e computed on the basis of a 360 -day year consisting of twelve 30 -day months and interest due with respect to Bonds bearing a Daily Rate shall be computed on the basis of actual days elapsed and a 365- or 366 -day year, as applicable. Interest on the Bonds will be payable, from the date of execution and delivery ofthe Bonds to before the Fixed Rate Conversion Date, the first Business Day of each month commencing [January 1, 2003], to and including the Fixed Rate Conversion Date. The method ofcalculation of interest may, in accordance with and subject to the terms ofthe Indenture, be changed from calculation at the Daily Rate then in effect to calculation at a Fixed. Rate. The conditions for conversion ofthe method of calculation of interest include, but are not limited to, the delivery of a written opinion of Bond Counsel to the effect that such conversion will not cause the interest on the Bonds to be included within gross income for purposes of calculating State personal income taxes. The Remarketing Agent shall determine the Daily Rate from time to time, and such determination by the Remarketing Agent shall be conclusive and binding. The Indenture provides that ifthe Remarking Agent fails to determine the Daily Rate, the Daily Rate will be determined asset forth therein.. The Bonds are delivered in fullyregistered form and shall be in Authorized Denominations. Bonds maybe exchanged at the Principal Office of the Trustee, in the manner and subject to the limitations and conditions provided in the Indenture, for an equal aggregate principal amount ofBonds of any Authorized Denominations. The transfer of this Bond is registerable by the Owner hereof in person or by his attorney or legal representative at the corporate office of the Trustee, but only in the manner and subject to the limitations and conditions provided in the Indenture andupon surrender and cancellation ofthis Bond. Upon any such registration oftransfer, the Trustee shall execute and deliver in exchange for this Bond anew Bond or Bonds, registered in the name ofthe transferee, of Authorized Denominations, in an aggregate principal amount equal to the principal amount of this Bond. 45248817.2 B-4 In the event the Authority has complied with the requirements ofthe Indenture to change the interest rate represented by the Bonds to a Fixed Ratc, all Bonds shall be subject to mandatorytender and purchase on the Fixed Rate Conversion Date in accordance with the provisions ofthe Indenture. The Bonds are subj ect to mandatory tender on the last Bond Payment Date occurring on or prior to the date at least five days prior to the date on which the Credit Facility [or the Confirming Letter of Credit] is scheduled to expire or terminate in accordance with its respective terms and ifthe Trustee has not received notice at least 40 days prior to such Bond Payment Date that an Alternate Credit Facility [or an Alternate Confirming Letter of Credit, as applicable], is to be provided. Not less than thirty days before each such Mandatory Tender Date under this paragraph, the Trustee shall send a notice to all Owners by first class mail, postage prepaid, which notice shall contain the following information: (1) that the Credit Facility [or the Confirming Letter ofCredit] is scheduled to expire or terminate and no Alternate Credit Facility [or Alternate Confirming Letter of Credit], as applicable, will be provided, (2) that each Owner's Bond is subject to mandatory tender as provided in such notice, and (3) if any ofthe nationally recognized rating agencies which has a credit rating outstanding on the Bonds has indicated to the Trustee in writing that it will lower or withdraw its rating on the Bonds as of such Mandatory Tender Date, notice of such new rating, or ifno new rating is available, notice that any of such rating agencies may lower or withdraw such rating as of such Mandatory Tender Date. [Provided, however, there shall be no mandatorytender ofBonds pursuant to the Indenture for failure to provide an Alternate Confirming Letter of Credit if the Bonds, without such Alternate Confirming Letter of Credit, will be rated at least the same rating by each rating agency then rating the Bonds as the Bonds were rated at the time the Confirming Letter of Credit was in effect as evidenced by written notice from each rating agency then rating the Bonds to the Trustee.] The Bonds are subject to mandatory tender under this paragraph on the first Business Day to occur on or after the seventh day following receipt by the Trustee of notice from the Credit Entity [or the Confirming Bank] ofthe occurrence ofan event ofdefault under the Reimbursement Agreement [or the Confirmation Agreement], as applicable, or that the Credit Entitywili not reinstate the interest portion ofthe Credit Facility. Not later than the third Business Day after receipt bythe Trustee of suchnotice, the Trustee shall send to all Owners by first class mail, postage prepaid, and to the Depository also by facsimile, a notice which shall contain the following information: (1) that an event of default has been declared under the Reimbursement Agreement [or the Confirmation Agreement], or that the Credit Entitywill not reinstate interest portion ofthe Credit Facility, and (2) that each Owner's Bond is subject to mandatory tender on the first Business Dayto occur on after seventh day following the receipt by the Trustee of such notice from the Credit Entity [or the Confirming Bank]. The Bonds are subject to mandatory tender on the last Business Daypriorto the effective date of any Alternate Credit Facility [and/or Alternate Confirming Letter of Credit] in accordance with the provisions of the Indenture. [The Bonds are subj ect to mandatorytender on the date of any draw on the Confirming Letter of Credit in accordance with the provisions of the Indenture.] 45248817.2 B-5 Owners o fBonds shall be required to tender the Bonds to the Tender Agent by 11:00 A.M., New York time, on anyMandatory Tender Date forpurchase at apurchase price equal to the principal amount thereof, plus accrued interest thereon to the MandatoryTender Date. So long as the Bonds are registered in the name ofthe Nominee, such tenders shall be made through the book -entry system. Any Untendered Bonds shall be deemed to have been tendered on a Mandatory Tender Date, whether or not the Bonds are in fact surrendered to the Tender Agent. In the event of a failure by Owners of Bonds to tender Bonds on the Mandatory Tender Date, said Owners ofUntendered Bonds shall not be entitled to any payment (including any interest to accrue subsequent to the Mandatory Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds shall no longer be entitled to the benefits ofthis Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding under this Indenture. However, the purchase price will be paid onlyupon presentation ofthe Bonds to the Tender Agent. In the case ofa Fixed Rate Conversion Date only, ifthe Remarketing Agent notifies the Trustee not less than fifteen days before the Fixed Rate Conversion Date that it cannot remarket all ofthe Bonds or if the requirements for the effectiveness of a Fixed Rate Conversion Date are not satisfied before the Fixed Rate Conversion Date, the Trustee shall give notice thereofbyfrrst-class mail, postage prepaid, to all Owners, the Remarketing Agent, the Credit Entity, [the Confirming Bank] and the Authority and each of such parties shall be restored to their respective positions as if notice of the Fixed Rate Conversion Date had not been given and no mandatory tender shall occur. In addition to the mailed notice required by the preceding sentence, the Trustee shall deliver a duplicate copyof such notice to the Depository, the Credit Entity [and the Confirming Bank] by telecommunications or overnight delivery. Prior to the Fixed Rate Conversion Date with respect to the Bonds, any Owner ofthe Bonds may give irrevocable written notice to the Tender Agent at its Principal Office and request that the Tender Agent purchase all or any part (in Authorized Denominations) ofthe Bonds then outstanding and registered in the name of such Owner at an amount or price equal to the unpaid principal amount thereof plus accrued and unpaid interest thereon to, but not including, the Business Day on which the Bonds are to be tendered to the Tender Agent (the "Optional Tender Date") and without premium. Such notice (the "Optional Tender Notice") shall be substantially in the form set forth in the Indenture and shall specify the Optional Tender Date (which shall not be less than seven (7) days after the date ofreceipt bythe TenderAgent of such Optional TenderNotice), the CUSIP Number, the principal amount being tendered in integral multiples ofAuthorized Denominations and, so long as the Bonds are registered in the name ofthe Nominee, such notice shall also specify the Participant number and the contact person ofthe Participant. Upon receipt ofan Optional TenderNotice, the Tender Agent shall, as soon as is practicable but in no event later than the close ofbusiness on the Business Day following the dayof receipt ofsuch Optional Tender Notice, give notice to the Trustee, the Authority, the Credit Entity, [the Confirming Credit Entity] and the Remarketing Agent of the Optional Tender Notice, the Optional Tender Date specified therein and the principal amount ofBonds to be purchased on such Optional Tender Date. 45248817.2 B-6 Owners providing an Optional Tender Notice shall be required to tender the Bonds to the Tender Agent forpurchase by 11:00 A.M., New York time, on the Optional TenderDate. In the event of a failure by Owners ofBonds to tender Bonds on the Optional Tender Date, said Owners of Bonds shall not be entitled to anypayment (including any interest to accrue subsequent to the Optional Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds shall no longer be entitled to the benefits ofthis Indenture, except for the purpose ofpayment ofthe purchase price thereof. Such Untendered Bonds shall be deemed purchased, canceled and no longer Outstanding under this Indenture. However, the purchase price will be paid onlyupon presentment ofthe Bonds to the TenderAgent. Upon the cancellation ofUntendered Bonds, the Trustee shall execute new Bonds in the same aggregate principal amount as, and in substitution for the Bonds not so tendered by such Owner and shall hold, deliver and make available such new Bonds to the new Owner thereof in accordance with the provisions of this Indenture which shall be frilly applicable notwithstanding that such new Bonds are executed in substitution for the Bonds not so tendered. From and after the Fixed Rate Conversion Date, the Tender Agent will not be required to purchase such Bonds on demand and optional tender by the Owners thereof in accordance with the Indenture. During the DailyRate Period and on the Fixed Rate Conversion Date, the Bonds are subject to optional redemption in whole or in part (in an amount of $100,000 or any integral multiple of $5,000 in excess thereof) on any Business Day, at the option ofthe Authority, at a redemption price equal to the principal amount thereoftogether with accrued interest to the date fixed for redemption, without premium. The Bonds are subject to mandatoryredemption in part on the dates in the following years in the following amounts at aredemptionprice equal to theprincipal amountthereoftogetherwith accrued interest to the date fixed for redemption, without premium: Redemption Date Redemption Date 1) Principal ( _ D Principal * Maturity The Bonds are subject to mandatoryredemption on any Bond Payment Date, in whole or in part, from moneys drawn under the Credit Facility [or the Confirming Letter of Credit] which shall be reimbursed from Net Proceeds fallowing the depositby the Trustee in the Lease Prepayment Account ofthe Redemption Fund ofNet Proceeds deposited bythe City underthis Indenture, at least 45 days 45248817.2 B-7 prior to a Bond Payment Date which have been credited towards the Prepayment made by the City pursuant to the Lease, at a redemption price equal to the principal amount ofthe Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium; provided, however, that ifthere shall no longer be available a Credit Facility [or the Confirming Letter of Credit] to secure the payment of principal and interest represented by the Bonds or if the Credit Facility [or the Confirming Letter of Credit] does not permit a draw with respect to Prepayments, the Bonds are subject to redemption from Net Proceeds which the Trustee shall deposit in the Lease Prepayment Account of the Redemption Fund, to be used to redeem the Bonds by the Trustee as provided in the Lease and as provided herein. In addition, the Bonds are subj ect to special mandatory redemption as a whole or in part on any date, pro rata by maturity and by lot within a maturity (as determined bythe Trustee), to the extent excess Bond proceeds remain following completion or abandonment ofthe acquisition, expansion and improvement of the Wastewater Enterprise or Water Enterprise. In the event ofa partial redemption ofBonds from Net Proceeds or an optional redemption as described above, the forgoing annual sinking fund payments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. If this Bond is called for redemption and payment is dulyprovided therefor as specified in the Indenture, interest shall cease to accrue thereon from and after the date fixed for redemption. The Authority and the Trustee maytreat the Owner ofthis Bond (as evidenced bythe Bond register) as its absolute owner for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. In the mannerprovided in the Indenture, the rights and obligations ofthe Authority and ofthe Owners ofthe Bonds, may (with certain exceptions as stated in the Indenture) be modified or amended with the consent ofthe Bank, [the Confirming Bank] and the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding. No modification or amendment shall (1) extend the fixed maturity of any Bond, orreduce the amount ofprincipal thereof or the rate of interest thereon, or extend the time ofpayment ofinterest thereon, or change the method of computing the rate of interest thereon, or extend the time ofpayment of interest thereon, without the consent of the Owner of each Bond so affected, or (2) reduce the percentage ofBouds the consent ofthe Owners ofwhich is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged under the Indenture priorto or on a paritywith the lien created bythe Indenture except as otherwise provided therein, or deprive the Owners ofthe Bonds ofthe lien created by the Indenture on such Revenues and other assets (except as expresslyprovided in this Indenture), without the consent ofthe Owners ofall the Bonds then Outstanding, or (3) modify any ofthe rights or obligations ofthe Trustee without its written consent. 45248817.2 13-8 It is herebyrecited, certified and declared that anyand all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have beenperformed in due time, form and manner as required by the Constitution and the statutes of the State of California. This Bond shall not be valid and the Owner hereof shall not be entitled to any benefit hereunder unless this Bond shall have been authenticated by the Trustee by the signature of a duly authorized signatory. 45248817.2 B-9 IN WITNESS WHEREOF, THE CITY OF DIAMOND BARPUBLIC FINANCING AUTHORITY has caused this Bond to be executed on its behalfbythe signature ofthe Chairperson ofthe governing board of the Authority and attested by the Secretary of the governing board of the Authority and this Bond to be authenticated manuallybythe Trustee and dated as ofthe dated date first above written. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY By: ATTEST: By: Secretary Chairperson CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within -mentioned Indenture. Date of Authentication: U.S. BANK, N.A., as Trustee Authorized Signatory 45248917.2 B-10 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE) the within Bond, and does hereby irrevocably constitute and appoint attorney to transfer said Bond on the books of the bond Registrar with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signatures) must be guaranteed by an eligible guarantor institution. 45248817.2 B-1 1 NOTICE: The signature(s) on this assignment must correspond with the name(s) as written upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. TENDER NOTICE The undersigned (a) hereby certifies that the undersigned is the lawful registered owner (or his duly authorized attorney) ofthis Bond on the date shown below as the "Date ofExercise of Owner's's Option," (b) hereby gives notice to the Tender Agent ofthe exercise by the undersigned ofits option to have this Bond, or a portion of this Bond, purchased on the purchase date in the principal amount (which amount shall be $100,000 or any integral multiple of $5,000 in excess thereof) indicated below plus accrued interest, if any, with respect thereto pursuant to the terms ofthe Indenture, and (c) in order to exercise said option, herebyteriders and delivers this Bond to the Tender Agent for purchase on the purchase date designated below for apurchase price equal to the sum ofthe principal amount hereof tendered and accrued but unpaid interest to the date of purchase. Name and Address of Owner: Tax I. D. Date of Exercise of Owner's Option: Aggregate Principal Amount to be Purchased and Bond numbers (must be an Authorized Denomination): Bond CUSIP(s): Purchase Date: Signature of Owner: Signature Guaranteed by: If applicable: Participant # Participant Contact Person: 45248817.2 B-12 EXHIBIT C (FORM OF FIXED RATE BOND) UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BYANAUTHORIZED REPRESENTATIVE OFTHE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHERENTITY AS IF REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN No. R-1 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY FIXED RATE LEASE REVENUE BOND 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Principal Interest Rate Payment Date Dated Date CUSIP Registered Owner: Cede & Co. Principal Amount: THE CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, a public body corporate and politic, duly organized and existing under the laws of the State of California (the "Authority"), for value received, hereby promisees to pay (but solely from the funds hereinafter mentioned) to the above -referenced registered owner (the "Owner") or registered assigns subject to the terms ofthe Indenture, hereinaftermentioned, and anyrightto redemption, the Principal Amount stated above on the Principal Payment Date stated above upon surrender of this Bond at the corporate 45248817.2 C-1. office ofU.S. Bank, N.A. (the "Trustee") in San Francisco, California, and to paythe registered owner by check mailed by first class mail, postage prepaid, on each Bond Payment Date to the person whose name appears in the Bond register as the Ownerthereofas oftheRecord Date immediatelypreceding such Bond Payment Date (as each such tern is hereinafter defined), interest on the balance of said Principal Amount from time to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date next preceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on or before the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paid bywire transfer ofimmediately available funds to an account in the United States ofAmerica to any registered Owner of at least $1,000,000 in aggregate principal amount of the Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Both principal and interest on this Bond are payable in lawful money ofthe United States ofAmerica, and (except for interest which is payable as stated above) are payable upon presentation ofthis Bond at the corporate office ofthe Trustee. The Bonds are secured in part by the Authority's right to receive certain lease payments ("Base Rental") under and pursuant to that certain Lease Agreement dated as of December 1, 2002 (the "Lease'), by and between the City ofDiamond Bar (the "City'), a municipal corporation dulyorganized and existing underthe laws and constitution ofthe State ofCalifornia, as lessee; and the Authority, as lessor, all ofwhich rights to receive such Base Rental have been assigned without recourse pursuant to that certain Assignment Agreement dated as ofDecember 1, 2002, by the Authority to the Trustee under the Indenture dated as of December 1, 2002 (the "Indenture"), by and between the Authority and the Trustee. This Bond is one of a duly authorized issue ofBonds ofthe Authority designated as the City of Diamond Bar Public Financing Authority Fixed Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Proj ect) (the "Bonds" ), all issued pursuant to and inconformity with the Constitution and laws ofthe State of California and particularly the Marks -Roos Local Bond Pooling Act of 1985 (Article 4 of Chapter 5 ofDivision 7 ofthe California Government Code, as amended) and the Indenture. Reference is hereby made to the Indenture for a specific description ofthe security therein provided for said Bonds, for the nature, extent and manner of enforcement of such security, for the covenants and agreements made for the benefit ofthe Bondowners, and for a statement ofthe rights of the Bondowners, and by the acceptance of this Bond the owner hereof assents to all of the terns, conditions and provisions of the Indenture. The principal ofthis Bond, the interest hereon and anypremium payable upon redemption hereof, are secured by an irrevocable pledge of, and are payable solely from, the Revenues (as defined in the Indenture) and the moneys on deposit in certain other funds, all as more particularly set forth in the Indenture. THE OBLIGATION OF THE AUTHORTTY TO PAY THE BONDS IS LIMITED TO THE REVENUES, INCLUDING BASE RENTAL PAYABLE BY THE CITY, PLEDGED THEREFOR 45248817.2 C-2 PURSUANT TO THE INDENTURE AND DOES NOT CONSTITUTE AN OBLIGATION OF THE AUTHORITY FOR WHICH THE AUTHORITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE AUTHORITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE AUTHORITY TO PAY THE BONDS DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE AUTHORITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL IS ABATED DURING ANY PERIOD IN WHICH, BY REASON OF MATERIAL DAMAGE, DESTRUCTION OR CONDEMNATION, THERE IS SUBSTANTIAL INTERFERENCE WITH THE USE AND RIGHT OF POSSESSION BY THE CITY OF THE LEASED PROPERTY. FAILURE OF THE CITY TO PAY BASE RENTAL DURING ANY SUCH PERIOD SHALL NOT CONSTITUTE A DEFAULT UNDER THE LEASE, THE INDENTURE OR THIS BOND, THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO PAY BASE RENTAL DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. The Owner ofthis Bond is entitled to receive, subject to the terms ofthe Indenture and anyright ofpayment, redemption orpurchase hereinafterprovided for, (i) on the Principal Payment Date set forth above, upon surrender of this Bond at the corporate office of the Trustee, the Principal Amount specified above on the Principal Payment Date specified above or upon earlier redemption, and (ii) by check mailed by first class mail, postage prepaid, on each interest payment date to the person whose name appears in the Bond register as the Owner thereof as ofthe Record Date immediatelypreceding such Bond Payment Date (as each such term is hereinafter defined), interest on the balance of said Principal Amount from time to time remaining unpaid, at the rate per annum determined as hereinafter set forth, from the Bond Payment Date next preceding the date on which this Bond is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment Date, in which event from such Bond Payment Date, or (b) authenticated on the first Record Date, in which event from the dated date set forth above; provided, however, that interest shall be paid by wire transfer of immediately available funds to any registered Owner of at least $1,000,000 in aggregate principal amount ofthe Bonds, at the option of such Owner, according to wire instructions given in writing to the Trustee in accordance with procedures prescribed by the Trustee. Interest on the Bonds will be payable each I and 1 commencing on the first 1 or 1 which is at least 75 days after the Fixed Rate Conversion Date. 45248817.2 C-3 Interest due withrespect to Bonds shall be computed on the basis ofa 3 60-dayyear consisting of twelve 3 0 -day months. The Bonds are delivered in fullyregistered form and shall be in Authorized Denominations. Bonds may be exchanged at the Principal Office of the Trustee, in the manner and subject to the limitations and conditions provided in the Indenture, for an equal aggregate principal amount of Bonds of any Authorized Denominations. The transfer ofthis Bond is registerable bythe Owner hereofin person orby his attorneyor legal representative at the corporate office of the Trustee, but only in the manner and subject to the limitations and conditions provided in the Indenture and upon surrender and cancellation of this Bond. Upon any such registration oftransfer, the Trustee shall execute and deliver in exchange for this Bond anew Bond or Bonds, registered in the name of the transferee, ofAuthorized Denominations, in an aggregate principal amount equal to the principal amount of this Bond. [The following optional redemption provisions maybe modified as determined by the Remarketing Agent pursuant to the Indenture. Replace the following optional redemption provisions with any modified optional redemption provisions, as appropriate.] The Bonds are subject to optional redemption in whole or in part (in integral multiples of $5,000) on anyBusiness Day, at the option of the Authority at a redemption price equal to the principal amount thereoftogether with accrued interest to the date fixed for redemption and following premium expressed as a percentage of the redeemed principal amount: Prenavment Date Premium Ninth anniversary of the Fixed Rate Conversion Date to the day before the tenth anniversary date of the Fixed Rate Conversion Date 2% Tenth anniversary of the Fixed Rate Conversion Date to the day before the eleventh anniversary date of the Fixed Rate Conversion Date 1% Eleventh anniversary of the Fixed Rate Conversion Date and thereafter 0% The Bonds are subject to mandatoryredemption in part on the dates in the following years in the following amounts at a redemptionprice equal to the principal amount thereoftogetherwith accrued interest to the date fixed for redemption, without premium: 45248817.2 C-4 Redemption Date Principal * Maturity [At the Fixed Rate Conversion Date, any annual sinking fund redemption which has not yet become due may be treated as a serial maturity of principal bearing interest at the Fixed Rate payable on 1 and 1 thereafter to maturity. In such event the mandatory redemption provision above needs to be deleted.] The Bonds are subject to mandatory redemption on any Bond Payment Date, in whole or in part, from moneys from Net Proceeds following the deposit bythe Trustee in the Lease Prepayment Account of the Redemption Fund ofNet Proceeds deposited by the Cityunder this Indenture, at least 45 days prior to a Bond Payment Date which have been credited towards the Prepayment made by the City pursuant to the Lease, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium. In the event ofa partial redemption of Bonds from Net Proceeds or an optional redemption as described above, the forgoing annual sinking fund payments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000, 45248817.2 C-5 Ifthis Bond is called for redemption and payment is dulyprovided therefor as specified in the Indenture, interest shall cease to accrue thereon from and after the date fixed for redemption. The Authority and the Trustee maytreat the Owner of this Bond (as evidenced bythe Bond register) as its absolute owner for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. In the mannerprovided in the Indenture, the rights and obligations ofthe Authority and ofthe Owners ofthe Bonds, may (with certain exceptions as stated in the Indenture) be modified or amended with the consent ofthe Owners of at least a maj ority in aggregate principal amount ofthe Bonds then Outstanding. No modification or amendment shall (1) extend the fixed maturity of anyBond, or reduce the amount of principal thereof or the rate ofi;nterest thereon, or extend the time ofpayment of interest thereon, or change the method of computing the rate of interest thereon, or extend the time ofpayment of interest thereon without the consent ofthe Owner of each Bond so affected, or (2) reduce the percentage ofBonds the consent of the Owners ofwhich is required to effect any such modification or amendment, or permit the creation of any', lien on the Revenues and other assets pledged under the Indenture prior to or on a paritywith the lien created bythe Indenture except as otherwise provided therein, or deprive the Owners ofthe Bonds ofthe lien created bythe Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent ofthe Owners of all the Bonds then Outstanding, or (3) modify any ofthe rights or obligations ofthe Trustee without its written consent. It is herebyrecited, certified and declared that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond exist, have happened and have been performed in due time, fora and manner as required bythe Constitution and the statutes of the State of California. This Bond shall not be valid and the Owner hereof shall not be entitled to any benefit hereunder unless this Bond shall have been authenticated by the Trustee by the signature of a duly authorized signatory. 45248817.2 C-6 IN WITNESS WHEREOF, THE CITY OFDIAMOND BAR PUBLIC FINANCING AUTHORITY has caused this Bond to be executed on its behalfby the signature ofthe Chairperson ofthe governing board ofthe Authority and attested by the Secretary ofthe governing board ofthe Authority and this Bond to be authenticated manually by the Trustee and dated as ofthe dated date first above written. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Chairperson ATTEST: CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within -mentioned Indenture Date of Authentication: U.S. BANK, N.A., as Trustee R -A ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto (PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE) the within Bond, and does hereby irrevocably constitute and appoint attorney to transfer said Bond "on the books of the bond Registrar with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution. NOTICE: The signature(s) on this assignment must correspond with the name(s) as written upon the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. . 't RECORDING REQUESTED BY: CHICAGO TITLE AND WHEN RECORDED MAIL TO: FULBRIGHT & JAWORSKI L.L.P. 865 South Figueroa Street, 291h Floor Los Angeles, California 90017-4518 Attention: Don Hunt, Esq. SITE LEASE by and between the • t LAI U • 2 113 :." and CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Dated as of December 1, 2002 This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of the California Revenue and Taxation Code. This Document is recorded for the benefit of the City of Diamond Bar Public Financing Authority and such recording fee is exempt under Section 6103 of the California Government Code. #4524885Uv2 SITE LEASE THIS SITE LEASE, dated as of December 1, 2002 (the "Site Lease"), is by and between the CITY OF DIAMOND BAR, a municipal corporation duly organized and existing under the Constitution and laws ofthe State of California (the "City'), as lessors, and the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, a j oint exercise of powers agency organized and existing under the laws of the State of California (the "Authority"), as lessee; WITNESSETH: WHEREAS, the CityofDiamond Bar (the "City") and the Redevelopment Agency ofthe City of Diamond Bar (the "Agency") have formed the Authority under and pursuant to a joint exercise ofpowers agreement, dated as ofDecember 1, 2002, by and between the City and the Agency under the provisions of Articles 1 through 4 (commencing with section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act"); and WHEREAS, the Authority is authorized under the Marks -Roos Local Bond Pooling Act of 1985 (commencing with section 6584 ofthe Act) to incur indebtedness to financepublic capital improvements (as such term is defined in the Act) and to lease and lease back such public capital improvements to its members and to others; and WHEREAS, the Authority wishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing ofthe community/senior center project (the "Project") as well .as other public improvements within the City; WHEREAS, the Citywill lease to the Authority its fee interest in certain real property designated for the Project (the "Site") pursuant to this Site Lease; and WHEREAS, the Authority, concurrently with the execution of this Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the City pursuant to a Lease Agreement, dated as ofDecember 1, 2002 (the "Lease"), in consideration for Base Rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, the Authority and the City have duly authorized the execution and delivery ofthis Site Lease; NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows: #4524ss5ov NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED, as follows: SECTION 1. Site Lease. The City hereby leases the Site to the Authority and the Authority hereby leases the Site from the City, on the terms and conditions hereinafter set forth, consisting of those certain parcels of real property situated in Los Angeles County, State of California, and described in Exhibit A. SECTION 2. Term. The term of this Site Lease shall commence on December 1, 2002, and shall end on 1, , unless such terra is extended or sooner terminated as hereinafter provided. If, on 1, , the Indenture shall not be discharged by its terms or if the rental payable under the Lease shall have been abated at any time and for any reason, then the term of this Site Lease shall be extended until ten (10) days after the Indenture shall have been discharged. If, prior to 1, , the Indenture shall be discharged by its terms, the term of this Site Lease shall thereupon end. SECTION 3. Rental. The City acknowledge receipt from the Authority as and for rental hereunder the proceeds of the Bonds in an amount sufficient to finance the Project and other public improvements within the City, on or before the date of delivery of this Site Lease . SECTION 4. P=ose. The Authority shall use the Site solely for the purpose of acquiring leasehold title to the Site and leasing the Site and the Project to the City pursuant to the Lease and for such purposes as maybe incidental thereto; provided, however, that in the event of default by the City under the Lease the Authority and its assigns may exercise the remedies provided in the Lease. SECTION 5. Reserved. SECTION 6. Assignment and Subleases. The Authoritymay not assign its rights under this Site Lease or sublet the Site, except as provided in the Lease, without the written consent of the Credit Entity and the City. SECTION 7. _Right of Entry. The City reserve the right for any of its duly authorized representatives to enter upon the Site at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. SECTION S. Termination. The Authority agrees, upon the termination of this Site Lease, to quit and surrender the Site in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and the Authority and the City agree that any permanent improvements and structures existing upon the Site at the time of the termination of this Site Lease shall remain thereon and title thereto shall be vested in the City. SECTION 4. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the Authority and the City #4524885M may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease shall be deemed to occur as a result thereof, provided, however, that the Base Rental (as defined in the Lease) shall continue to be paid to the Trustee. SECTION 10. Quiet Enjoyment. The Authority at all times during the term of this Site Lease shall peaceably and quietly have, hold and enjoy all of the Site subj ect to the provisions of the Lease. SECTION 11. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority are solely liabilities of the Authority and the City hereby release each and every, member, director, officer, employee and agent of the Authority of and from any personal or individual liability under this Site. Lease . No member director, officer, employee or agent of the Authority shall at anytime or under any circumstances be individually or personally liable under this Site Lease for anything done or omitted to be done by the Authority hereunder. SECTION 12. Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Site (including both land and improvements) and not paid by the City pursuant to the Lease. SECTION 13. Eminent Domain. In the event the whole or any part of the Site is taken by eminent domain proceedings, the interest of the Authority hereunder shall be recognized and is hereby determined to be the amount of the then unpaid principal of and interest on any then outstanding Bonds and all other obligations related to or in connection therewith, subject to the provisions of, and as described and provided in, the Lease, and the balance of the award, if any, shall be paid to the City as its interests shall appear. SECTION 14. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 15. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease. SECTION 16. Execution. This Site Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same lease. #45248850v2 IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF DIAMOND BAR, as Lessor an Mayor CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY, as Lessee .A #45248850v2 Executive Director State of California ) ) SS County of Los Angeles } On before me, personally appeared / personally known to me, or /_/ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #452488SOv2 State of California } ) SS County of Los Angeles ) On before me, personally appeared / personally known to me, or / / proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248850x2 State of California ) ) SS County of Los Angeles ) On before me, personally appeared / personally known to me, or // proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary 945248850x2 LEGAL DESCRIPTION OF THE SITE City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) Bond Purchase Agreement , 2002 City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Ladies and Gentlemen: US Bancorp Piper Jaffray (the "Underwriter") hereby offers to enter into this agreement with the City of Diamond Bar Public Financing Authority (the "Issuer") and the City of Diamond Bar (the "City'. Upon the acceptance hereof by the Issuer and the City, this offer will be binding upon the Issuer, the City and the Underwriter. This offer is made subject to (i) the written acceptance hereof by the Issuer and the City and (ii) withdrawal by the Underwriter upon written notice (by telegraph or otherwise) delivered to the Issuer and the City at any time prior to the acceptance hereof by the Issuer and the City. L Purchase and Sale. Upon the terms and conditions and upon the basis ofthe representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Issuer at the Closing Time on the Closing Date (both as defined herein), and the Issuer hereby agrees to sell and deliver to the Underwriter, $ aggregate principal amount of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds"). The Bonds shall be dated the date of their initial delivery, shall mature on 1, and shall bear interest, be subject to redemption and have such other terms as are provided in the Indenture. The Initial Rate shall be %. The aggregate purchase price for the Bonds shall be $ , being the $ aggregate principal amount thereof, less an Underwriter's discount of $ . (The date of such payment and delivery is referred to herein as the "Closing Date," the hour and date of such delivery and payment is referred to herein as the "Closing Time," and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the "Closing"). 2. The Bonds. The Bonds shall be described in, and shall be issued and secured pursuant to, the provisions of the Constitution and. the laws of the State of California including the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 #45248890v2 (commencing with Section 6584), Division 7, Title 1 of the Government Code of the State of California (the "Bond Law"). The Bonds shall be issued and secured pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Issuer and U.S. Bank, N.A. (the "Trustee") authorizing the issuance of the Bonds. The Bonds are being issued in order to provide funds to finance a community/senior center project and other public improvements within the City. A portion of the proceeds of the Bonds will be used by the Trustee to pay costs of issuance of the Bonds. The Bonds are secured by Revenues (as defined in the indenture). Revenues primarily consists amounts received by the Authority as lessor under a Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the City and the Issuer. Payments of principal of and interest (but not any premium) on the Bonds will be initially supported by an irrevocable direct -pay letter of credit (the "Letter of Credit") issued by (the "Credit Entity") to the Trustee pursuant to a Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and the Credit Entity, the drawings under which will be used to pay the principal of and interest on the Bonds when due. The Letter of Credit will also be drawn on, if other funds are not available, to purchase Bonds tendered by Owners at the Purchase Price. [If the Credit Entity wrongfully dishonors a properly presented and conforming draw on the Letter of Credit or if the Credit Entity repudiates the Letter of Credit, funds will be made available under an irrevocable confirming letter of credit (the "Confirming Letter of Credit") to be issued by the (the "Confinning Credit Entity") pursuant to a Confirmation Agreement, dated as of December 1, 2002 (the "Confirmation Agreement"), by and between the Credit Entity and the Confirming Credit Entity.] Herein, the Indenture, the Lease, the Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the Issuer, the Remarketing Agreement (as defined in the Indenture) and this Bond Purchase Agreement are referred to collectively as the "Issuer Documents." The Site Lease, the Lease, the Reimbursement Agreement and this Bond Purchase Agreement are referred to collectively herein as the "City Documents." The Bonds shall be payable and shall be subject to redemption as provided in the Indenture and shall be as described in the Preliminary Official Statement of the Issuer dated 2002 and the Official Statement of the Issuer dated of even date herewith. Such Official Statement, including the cover page, the appendices thereto relating to the Bonds, as amended to conform to the terms of this Bond Purchase Agreement and with such changes and amendments thereto as have been mutually agreed to by the Issuer, the City and the Underwriter, is hereinafter referred to as the "Official Statement." 3. Offering by the Underwriter. It shall be a condition to the Issuer's obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's obligation to purchase, to accept delivery of and to pay for the Bonds that the entire principal amount of the Bonds shall be issued, sold and delivered by the Issuer and purchased, accepted and paid for by the Underwriter at the Closing. It is understood that the Underwriter proposes to offer the Bonds for sale to the public (which may include selected dealers) at prices or yields as set forth on the cover page of the Official Statement. Concessions from the public offering price may be allowed to selected dealers. It is understood that the initial public offering price and concessions set forth in the Official 945248890x2 2 Statement may vary after the initial public offering. It is further understood that the Bonds may be offered to the public at prices other than the par value thereof. The net premium on the sale of the Bonds to the public, if any, shall accrue to the benefit of the Underwriter. 4. Official Statement, Delivery of Other Documents, Use of Documents. (a) The Issuer and the City hereby authorize the use by the Underwriter of the Preliminary Official Statement and the Official Statement (including any supplements or amendments to the Official Statement) and the Indenture and the information therein contained, in connection with the public offering and sale of the Bonds. (b) The Issuer shall deliver to the Underwriter, within seven business days from the date hereof, such number of copies of the final Official Statement executed on behalf of and approved for distribution by the Issuer as the Underwriter may reasonably request in order for the Underwriter to comply with the rules of the Municipal Securities Rulemaking Board and Rule 15c2 -12(b)(4) under the Securities Exchange Act of 1934. (c) As soon as practicable following receipt thereof, the Underwriter shall deliver the Official Statement, and any supplements or amendments thereto, to a nationally recognized municipal securities information repository. 5. Representations, Warranties and Agreements of the Issuer. The Issuer represents, warrants and agrees as follows: (a) The Issuer is an entity duly organized and validly existing under the laws of the State of California. (b) The Issuer has full legal right, power and authority (i) to enter into the Issuer Documents, to sell, issue and deliver the Bonds to the Underwriter as provided herein; and (ii) to carry out and consummate the transactions on its part contemplated by the Issuer Documents. (c) By all necessary official action, the Issuer has duly authorized and approved the Issuer Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations in connection with the issuance of the Bonds on its part contained in the Bonds and the Issuer Documents and the consummation by it of all other transactions contemplated by the Issuer Documents in connection with the issuance of the Bonds. (d) To the best of its knowledge, the Issuer is not in any material respect inbreach of or default under anyapplicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Indenture) or other instrument to which the Issuer is a party which breach or default has or may have an adverse effect on the ability of the Issuer to perform its obligations under the Issuer Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the authentication and delivery of the Bonds, or the execution and delivery of the #4524889av2 Issuer Documents, and compliance with the provisions on the Issuer's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Indenture. (e) To the best of its knowledge, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence ofwhich would materially adversely affect the due performance by, the Issuer of its obligations in connection with the issuance of the Bonds under this Bond Purchase Agreement or the Indenture have been duly obtained, except for such approvals, consents and orders as maybe required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Issuer of its obligations under the Indenture have been duly obtained. (f) The Bonds when issued will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT" and "THE BONDS"; and the Indenture when adopted will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS," and "SUMMARY OF LEGAL DOCUMENTS - The Indenture." (g) The Bonds, when issued, authenticated and delivered in accordance with the Indenture, and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations ofthe Issuer, entitled to the benefits of the Indenture, and upon such issuance and delivery, the Indenture will provide, for the benefit of the owners from time to time ofthe Bonds, the legally valid and binding pledge of and lien and security interest it purports to create. (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, notice of which has been served on the Issuer, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the Issuer executing this Bond Purchase Agreement, threatened against the Issuer, affecting the existence of the Issuer or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the pledge and lien on the Revenues pursuant to the Indenture, or contesting or affecting as to the Issuer the validity or enforceability of the Bond Law, the Bonds, or the Issuer Documents or contesting the tax-exempt status ofinterest onthe Bonds, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Issuer for the issuance of the #45248840x1 4 Bonds, or the execution and delivery or adoption by the Issuer of the Issuer Documents, or in any way contesting or challenging the consummation ofthe transactions contemplated hereby or thereby; nor, to the best knowledge of the Issuer, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bond Law, as to the Issuer, or the authorization, execution, delivery or performance by the Issuer of the Bonds, or the Issuer Documents. (i) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States of America as the Underwriter may designate (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution ofthe Bonds; provided, however, that the Issuer shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, provided, that the Underwriter shall bear all costs in connection with the Issuer's action under (i) and (ii) herein, and (iii) assure or maintain the tax-exempt status of the interest on the Bonds. 0) As of the date thereof, the Preliminary Official Statement does not, except for the omission of certain information permitted to be omitted in accordance with Rule 15c2-12, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein with respect to the Issuer, in light of the circumstances under which they were made, not misleading. (k) At the time of the Issuer's acceptance hereof, and (unless an event occurs of the nature described in paragraph (m) of this Section 5) at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties of the Issuer shall apply only to the information contained in the Official Statement relating to the Issuer. (1) If the Official Statement is supplemented or amended pursuant to paragraph (m) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties ofthe Issuer shall apply only to the information contained in the Official Statement relating to the Issuer. (m) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event known to the Issuer shall occur affecting the Issuer which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official #45248890v2 Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Issuer will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the Underwriter. (n) The Issuer will refrain from taking any action, or permitting any action to be taken, with regard to which the Issuer may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds. (o) Any certificate signed by any officer of the Issuer and delivered to the Underwriter pursuant to the Issuer Documents or any document contemplated thereby, shall be deemed a representation and warranty by the Issuer to the Underwriter as to the statements made therein. (p) The Issuer will cause the proceeds from the sale of the Bonds to be paid to the Trustee for the purposes specified in the Indenture and the Official Statement. So long as any of the Bonds are outstanding and except as maybe authorized by the Indenture, the Issuer will not issue or sell anybonds or other obligations, other than the Bonds sold thereby, the interest on and premium, if any, or principal of which will be payable from the Revenues and funds and accounts pledged under the Indenture. (q) The Issuer shall honor all other covenants on its part contained in the Issuer Documents which are incorporated herein and made a part of this Bond Purchase Agreement. 6. Representations, Warranties and Agreements of the City. The City represents, warrants and agrees as follows: (a) The City is a municipal corporation duly organized and validly existing under the laws of the State of California. (b) The City has full legal right, power and authority to enter into and to carry out the transactions on its part contemplated by the City Documents. (c) By all necessary official action, the City has duly authorized and approved the City Documents, has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations in connection with the issuance of the Bonds on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the City Documents in connection with the issuance of the Bonds. (d) To the best of its knowledge, the City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States of America, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement #4524$$9M 6 or other instrument to which the City is a party which breach or default has or may have an adverse effect on the ability of the City to perform its obligations under the City Documents, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the City Documents, and compliance with the provisions on the City's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Documents. (c) To the best of its knowledge, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations in connection with the City Documents have been duly obtained; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Documents have been duly obtained. (f) The City Documents when adopted will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS" and "SOURCES OF PAYMENT FOR THE BONDS." (g) Reserved. (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, notice of which has been served on the City, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Bond Purchase Agreement, threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the pledge and lien on the Revenues pursuant to the Indenture, or contesting or affecting as to the City the validity or enforceability of the Bond Law, the Bonds, or the City Documents or contesting the tax-ekempt status of interest on the Bonds, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or the execution and delivery or adoption by the City of the City Documents, or in any waycontesting or challenging the consummation ofthe transactions contemplated hereby or thereby; nor, to the best knowledge ofthe City, is there anybasis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the authorization, execution, delivery or performance by the City of the City Documents. #45248890x2 7 (i) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, provided, that the Underwriter shall bear all costs in connection with the City's action under (i) and (ii) herein, and (iii) assure or maintain the tax-exempt status of the interest on the Bonds. (j) As of the date thereof, the Preliminary Official Statement did not, except for the omission of certain information permitted to be omitted in accordance with Rule 15c2-12, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (k) At the time of the City's acceptance hereof, and (unless an event occurs of the nature described in paragraph (m) of this Section 6) at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties of the City shall apply only to the information contained in the Official Statement relating to the City. (1) If the Official Statement is supplemented or amended pursuant to paragraph (m) of this Section 6, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that these representations and warranties of the City shall apply only to the information contained in the Official Statement relating to the City. (m) If between the date of this Bond Purchase Agreement and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 14 hereof) any event known to the City shall occur affecting the City which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessaryto snake the statements therein, in light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion ofthe Underwriter such event requires the preparation and publication ofa supplement or amendment to the Official Statement, the City will, in conjunction with and at the expense of the Issuer, prepare and furnish to the Underwriter a reasonable number of copies of such supplement to, or amendment of, the Official Statement in a form and in a manner approved by the Underwriter. #45248890x2 g (n) The City will refrain from taking any action, or permitting any action to be taken, with regard to which the City may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds. (o) Any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the City Documents or any document contemplated thereby shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein. 7. Closing. At 8:00 a.m., Los Angeles time, on I , 2002, or on such earlier date or as soon thereafter as practicable, as may be mutually agreed upon by the Issuer, the City and the Underwriter, the Issuer will, subject to the terms and conditions hereof, cause the Trustee to deliver to The Depository Trust Company ("DTC") in New York, New York, on behalf of the Underwriter, the Bonds, in definitive form duly executed by the Trustee, together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery to DTC and will pay the purchase price of the Bonds in Los Angeles, California as set forth in Paragraph 1(a) hereof by delivering Federal or other immediately available funds in the amount of such purchase price to the Trustee. The Bonds shall be prepared in fully registered form without coupons in authorized denominations and registered in the name of or at the direction of the Underwriter. S. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the Issuer and the City contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer and the City of its respective obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Issuer and the City of their obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: (a) The representations and warranties ofthe Issuer and the City contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At the time of the Closing, the Issuer Documents and the City Documents shall be in full force and effect in accordance with their terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; (c) At the time of the Closing, all necessary official action of the Issuer, the City and of the other parties thereto relating to the Issuer Documents and the City Documents, respectively, shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; #4524889Ov2 (d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the Issuer, the City or the Bonds, as the foregoing matters are described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; (e) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) The Official Statement and each supplement or amendment, if any, thereto, executed by a designated officer of the Issuer; Trustee; (2) A copy of the Indenture, executed by the Issuer and the (3) Copy of the Lease, executed by the Issuer and the City along with evidence of its recordation; (4) Copy of the Site Lease, executed by the Issuer and the City along with evidence of its recordation; (5) Title Insurance Policy; (6) Certificates of the Issuer and the City, respectively, with respect to the matters described in Sections 5 and 6 and in paragraphs (a), (b), (c) and (d) of this Section 8; (7) An opinion, (the "Final Approving Legal Opinion") dated the date of the Closing and addressed to the Issuer, of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form attached hereto as Exhibit A, accompanied by a reliance letter from Bond Counsel to the effect that such opinion may be relied upon by the Underwriter, the Credit Entity [and the Confirming Credit Entity], with the same effect as if such opinion were addressed to it; (8) An opinion, dated the date of the Closing and addressed to the Underwriter of Fulbright & Jaworski L.L.P., Bond Counsel, in substantially the form attached hereto as Exhibit B; (9) An opinion, dated the date of the Closing and addressed to the Underwriter, of counsel for the Issuer, in substantially the form attached hereto as Exhibit C; (10) An opinion, dated the date of the Closing and addressed to the Underwriter, of counsel for the City, in substantially the form attached hereto as Exhibit D; (11) An opinion, dated the date of the Closing and addressed to the Underwriter, of Fulbright & Jaworski L.L.P., Los Angeles, California, Disclosure Counsel for the Issuer, in substantially the form attached hereto as Exhibit E; "5248890v2 10 (12) A certificate of the Trustee to the effect that: (i) Due Organization and Existence - the Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States of America having the full power and authority to enter into and perform their respective duties under the Indenture, and to execute and deliver the Bonds to the Underwriter pursuant to the terms of the indenture; (ii) Due Authorization, Valid and Binding Obligations - the Trustee is duly authorized to enter into the Indenture, and to execute and deliver the Bonds; and (iii) No Conflict - to the best of the knowledge of the Trustee, after due investigation, the execution and delivery by the Trustee of the Indenture, and the authentication and delivery of the Bonds, and compliance with the terms thereof will not, in any material respect, conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties, or (except with respect to the lien of the Indenture) result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Trustee. (13) An opinion of counsel to the Trustee to the effect that: (i) Due Organization and Existence - the Trustee has been duly organized and is validly existing and in good standing as a national banking association under the laws of the United States of America with full corporate power to undertake the trusts of the Indenture; (ii) Corporate Action - the Trustee has duly authorized, executed and delivered the Indenture, and by all proper corporate action has authorized the acceptance of the duties and obligations of the Trustee under the Indenture, and to authorize in such capacity as Trustee the authentication and delivery of the Bonds; (iii) Due Authorization. Execution and Delivery- assuming due authorization, execution and delivery by -the Issuer, the Indenture is the valid, legal and binding agreement of the Trustee, enforceable in accordance with its terms, except as such enforcement may be limited bybankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights in general and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); #4524889ov2 11 (iv) Consents - exclusive of federal or state securities laws and regulations, to the best of such counsel's knowledge after reasonable inquiry and investigation, other than routine filings required to be made with governmental agencies in order to preserve the Trustee's authority to perform a trust business (all of which routine filings such counsel believes, after reasonable inquiry and investigation, to have been made), no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee is or will be required for the execution and delivery by the Trustee of the Indenture or the authentication and delivery of the Bonds; and (v) No Litigation - to the best of such counsel's knowledge, there is no litigation pending or threatened against or affecting the Trustee to restrain or enjoin the Trustee's participation in, or in any way contesting the powers of the Trustee with respect to the transactions contemplated by the Bonds or the Indenture. (14) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of the Indenture, and the authentication and delivery of the Bonds by the Trustee. (15) A copy of the Remarketing Agreement. (16) A copy of the Letter of Credit. (17) A copy of the Reimbursement Agreement. (18) [A copy of the Confirming Letter of Credit.] (19) [A copy of the Confirmation Agreement.] (20) A certificate of an authorized representative of the Credit Entity to the effect that the financial and statistical information concerning the Credit Entity and the Letter of Credit set forth in the Official Statement under the caption "THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" and under the heading "CREDIT ENTITY" is materially accurate and does not contain any untrue statement of a material fact or omit any matter which should be disclosed in the Official Statement for the purpose for which it is to be used, or which it is necessary to disclose therein in order to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect; (21) [A certificate of an authorized representative of the (the "Confirming Bank") to the effect that the financial and statistical information concerning the Confirming Bank and the Confirming Letter of Credit, as set 945248890v2 12 forth in the Official Statement under the heading "THE CONFIIZMING CREDIT ENTITY" is materially accurate;] (22) An'Opinion of counsel to the Credit Entity addressed to the Authority, [the Confirming Bank] and the Underwriter to the effect that (i) each of the Letter of Credit, the Confirmation Agreement and the Reimbursement Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding agreement of, the Credit Entity enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, arrangement and other similar laws affecting creditors' right, to the application of equitable principles, to the exercise ofjudicial discretion in appropriate cases and to the limitations on the legal remedies against public bodies and (ii) the statements contained in the Official Statement under the heading "LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" are materially accurate; (23) [An Opinion of counsel to the Confirming Bank addressed to the Authority and the Underwriter to the effect (i) the Confirming Letter of Credit has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Confirming Bank enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, arrangement and other similar laws affecting creditors' right, to the application ofequitable principles, to the exercise ofjudicial discretion in appropriate cases and to the limitations on the legal remedies against public bodies and (ii) the statements contained in the Official Statement under the heading "THE CONFIRMING LETTER OF CREDIT AND THE CONFIRMATION AGREEMENT" are materially accurate;] (24) Transcripts of all proceedings relating to the authorization and issuance of the Bonds certified by the Secretary or an Assistant Secretary of the Issuer; and (25) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the date of the Closing, of the Issuer's and the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Issuer and the City on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by each of the Issuer and the City. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel, Counsel for the Underwriter, if any, and the Underwriter. The opinions and certificates referred to in clauses (7), (8), (9) and (10) of this paragraph (e) shall be deemed satisfactory provided they are substantially in the forms attached as exhibits to this Bond Purchase Agreement. If the Issuer and the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and 445248890x2 13 to pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the issuer nor the City shall be under any further obligation hereunder. 9. Termination. The Underwriter shall have the right to terminate the Underwriter's obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds by notifying the Issuer and the City, in writing or by telegram, of their election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency; (b) there shall have occurred the declaration of a general banking moratorium by any authority ofthe United States or the States of New York or California; (c) an event shall have occurred or been discovered as described in paragraph (m) of Section 5 or paragraph (m) of Section 6 hereof which in the opinion of the Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter's reasonable opinion, materially adversely affects the market price ofthe Bonds; (c) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds or the Bonds, as contemplated hereby or by the Official Statement; (f) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (g) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations ofthe general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (h) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange; or (i) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market. If this Bond Purchase Agreement shall be terminated pursuant to Section 8 or this Section 9, or if the purchase provided for herein is not consummated because any condition to the Underwriter's obligation hereunder is not satisfied or because of any refusal, inability or failure on the part of the Issuer or the City to comply with any of the terms or to fulfill any of the conditions of this Bond, Purchase Agreement, or if for any reason the Issuer or the City shall be unable to perform all of their respective obligations under this Bond Purchase Agreement, the Issuer and the #45248890x2 14 City shall not be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Bond Purchase Agreement. 10. Payment of Costs and Expenses. (a) The Issuer shall pay or reimburse all costs and expenses incident to the sale and delivery of the Bonds to the Underwriter, including, but not limited to: (i) the fees and expenses of the Issuer and its Counsel; (ii) the fees and expenses of the City and its Counsel; (iii) the fees and expenses of Bond Counsel and Disclosure Counsel; (iv) all costs and expenses incurred in connection with the preparation and printing of the Bonds; (v) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (vi) the fees and expenses of the Trustee; and (vii) CUSIP Bureau fees. (b) The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred in underwriting the Bonds. 11. Representations, Warranties and Agreements to Survive Delivery. The representations, warranties, indemnities, agreements and other statements of the Issuer, the City and the Underwriter or their officers or partners set forth in, or made pursuant to, this Bond Purchase Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Issuer, the City or the Underwriter or any controlling person and will survive delivery of and payment for the Bonds. 12. Notices. Any notice or other communication to be given under this Bond Purchase Agreement may be given by delivering the same in writing: To the Issuer: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director To the City: City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director To the Underwriter: US Bancorp Piper Jaffray 345 California Street, Suite 2240 San Francisco, California 94104 Attention: Mr. Eric Scriven 13. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the Issuer, the City and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. All of the Issuer's and the City's representations, warranties and agreements contained in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds #45248$90x2 15 pursuant to this Bond Purchase Agreement; and (iii) any termination of this Bond Purchase Agreement. 14. Determination of End of the Underwriting Period. For purposes of this Bond Purchase Agreement, the End of the Underwriting Period for the Bonds shall mean the earlier of (a) the day of the Closing unless the Issuer and the City have been notified in writing by the Underwriter, on or prior to the day of the Closing, that the "end of the underwriting period" for the Bonds for all purposes of Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934 (the "Rule") will not occur on the day of the Closing, or (b) the date on which notice is given to the Issuer and the City by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the Issuer and the City pursuant to clause (a) above that the "end of the underwriting period" for the Bonds will not occur on the day of the Closing, the Underwriter agrees to notify the Issuer and the City in writing as soon as practicable following the "end of the underwriting period" for the Bonds for all purposes of the Rule. 15. Effectiveness. This Bond Purchase Agreement shall become effective upon the execution of the acceptance by the designee of the Issuer and the City and shall be valid and enforceable at the time of such acceptance. 16. Headings. The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 17. Governing Law. This Bond Purchase Agreement shall be construed in accordance with the laws of the State of California. 18. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts. #4524889M 16 If the foregoing is in accordance with your understanding of the Bond Purchase Agreement please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement among the Issuer, the City and the Underwriter in accordance with its terms. Very truly yours, US BANCORP PIPER JAFFRAY, as the Underwriter By: Title: Accepted: This day of , 2002 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Executive Director CITY OF DIAMOND BAR City Manager #452G889M Exhibit A Opinion of Fulbright & Jaworski L.L.P. Bond Counsel Addressed to the Issuer City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Ladies and Gentlemen: In our role as Bond Counsel to the City of Diamond Bar Public Financing Authority (the "Authority"), we have examined certified copies of the proceedings taken in connection with the issuance by the Authority of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") in the aggregate principal amount of $ We have also examined supplemental documents furnished to us and have obtained such certificates and documents from public officials as we have deemed necessary for the purposes of this opinion. The Bonds are issued under Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the `Bond Law"), pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"), and pursuant to an authorizing Resolution of the Authority adopted , 2002. The Bonds are payable from Revenues, as defined in the Indenture, consisting primarily of Base Rental payments to be made by the City of Diamond Bar (the "City") pursuant to a Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Authority and the City. The City has lease real property and improvements thereon to the Authority pursuant to a Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the Authority. The Bonds are being issued for the purpose of financing the community/senior center project and other public improvements within the City. Unless otherwise defined herein, all capitalized terms shall have the meaning given items in the Indenture. ##4524889Ov2 A-1 Based upon the foregoing, we are of the opinion that: 1. The Indenture has been duly and validly authorized, executed and delivered by the Authority and, assuming such Indenture constitutes the legally valid and binding obligation of the Trustee, constitutes the legally valid and binding obligation of the Authority, enforceable against the Authority in accordance with its terms, and the Bonds are entitled to the benefits of the Indenture. 2. The Lease has been duly and validly authorized, executed and delivered by the Authority and the City and constitutes the legally valid and binding obligations of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. 3. The Site Lease has been duly and validly authorized, executed and delivered by the Authority and the City and constitutes the legally valid and binding obligations of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. 4. The proceedings for the issuance of the Bonds have been taken in accordance with the laws and Constitution of the State of California, and the Bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by the purchasers, constitute legal and binding special obligations of the Authority enforceable in accordance with their terms. 5. The Bonds are secured by a pledge of the Revenues and all moneys in the funds and accounts as described in the Indenture, including all amounts derived from the investment of such moneys, subject to the application thereof on the terms and conditions as set forth in the Indenture. 6. The Internal Revenue Code of 1986, as amended (the "Code") sets forth certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issue of the Bonds. The Authority has covenanted to maintain the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In our opinion, under existing law, interest on the Bonds is exempt from personal income taxation of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing statutes, regulations, rulings and court decisions, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, the interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on Bonds owned by a corporation may affect the #452488902 A-2 computation of the alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earnings over the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). Except as stated in the preceding two paragraphs, we express no opinion as to any federal or state tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other bond counsel. The foregoing opinions are qualified to the extent that the enforceability of the Indentures and the Bonds, respectively, may be limited by any applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Very truly yours, #45248890v2 A-3 Exhibit B Opinion of Fulbright & Jaworski L.L.P. Bond Counsel Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 [Credit Entity] Ladies and Gentlemen: We have this dayreleased to the City ofDiamond Bax Public Financing Authority (the "Issuer") our final approving legal opinion with respect to the subject bonds (the `Bonds"). You are authorized to rely on such opinion as if the same were addressed to you. In connection with rendering the above-described opinion, we examined the record ofproceedings submitted to us relative to the issuance of the Bonds and such other documents as are in our opinion necessary to enable us to express an informed opinion with respect to the following matters. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Official Statement of the Issuer, dated , 2002 relating to the Bonds. Based upon the foregoing, in our opinion: 1. The Issuer has the right and power to perform all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the Issuer, #45248890x2 B- I the City and US Bancorp Piper Jaffray (the "Underwriter"). The Issuer has duly authorized the Bond Purchase Agreement, and assuming due authorization, execution and delivery by the other parties thereto, the Bond Purchase Agreement constitutes the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with their terms, except as the enforceability thereof may be limited bybankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. The City of Diamond Bar (the "City") has the right and power to perform all of its obligations under the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"}, by and between the City and . The City has duly authorized the Reimbursement Agreement, and assuming due authorization, execution and delivery by the other parties thereto, the Reimbursement constitute the legal, valid and binding obligations of the City enforceable against the Issuer in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 31. The Bonds are not required to be registered under the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. 4. The statements contained in the Official Statement relating to the Bonds (including the cover page and the Appendices thereto, but excluding any statements relating to financial or statistical information), insofar as such statements purport to summarize the provisions ofthe Bonds, the Indenture, the Site Lease, the Lease, the Bond Law and federal tax law, fairly and accurately summarize the information presented therein. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the Issuer, and this letter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #45248890v2 B-2 Exhibit C Opinion of Counsel for the Issuer Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar Public Financing Authority 21$25 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 [Credit Entity] Ladies and Gentlemen: We are counsel to the City ofDiamond Bar Public Financing Authority (the "Issuer") in connection with the issuance of the above -referenced Bonds and in such capacity, we have examined the original, certified copies, or copies otherwise identified to our satisfaction as being true copies of such resolutions, documents, certificates, and records as we have deemed relevant and necessary (except as we have specifically limited the scope of our investigation herein) as the basis for the opinions set forth herein relying on such examination and pertinent law and subject to the limitations and qualifications hereinafter set forth, we are of the opinion that: 1. The Issuer is a duly organized and validly existing public body, corporate and politic, organized under the laws of the State of California acting pursuant to the Bond Law (as defined in the Official Statement respecting the Bonds) with full legal right, power and authority to perform all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the Issuer, the City of Diamond Bar (the "City") and US Bancorp Piper Jaffray (the "Underwriter"), the Indenture, dated as of December 1, 2002 (the "Indenture") by and between the Issuer and U.S. Bank, N.A. (the "Trustee"), the Site Lease, dated #45248890v2 C_ I as of December 1, 2002 (the "Site Lease"), by and between the Issuer and the City, the Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Issuer and the City, the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the Issuer and [and the Acknowledgment (the "Acknowledgment," and together with the Bond Purchase Agreement, the Indenture, the Site Lease, the Lease and the Reimbursement Agreement, the "Legal Documents") to the Confirmation Agreement, dated as of December 1, 2002, by and between and .] The Issuer has duly authorized the Legal Documents and assuming due authorization, execution and delivery by the other parties thereto, the Legal Documents constitute the legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, except as the enforceability thereof maybe limited bybankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. To the best of our knowledge, there is no action, suit or proceeding before or by any court, public board or body pending or threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the Issuer or the titles of its officers to their respective offices, (b) in any way question or affect the validity or enforceability of the Legal Documents, or (c) find illegal, invalid or unenforceable the Bond Purchase Agreement or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Issuer is a party. 3. The execution and delivery of the Legal Documents and the other instruments contemplated by any of such documents to which the Issuer is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Issuer is a party or is otherwise subject or bound in a manner which would materially adversely affect the Issuer's performance under the Legal Documents. 4. All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence ofwhich would materially adversely affect, the performance by the Issuer of its obligations under the Legal Documents have been obtained and are in full force and effect. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the Issuer, and this letter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #45248890x2 C-2 Exhibit D Opinion of Counsel for the City Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 [Credit Entity] Ladies and Gentlemen: We are counsel to the City of Diamond Bar (the "City") in connection with the issuance of the above -referenced Bonds and in such capacity, we have examined the original, certified copies, or copies otherwise identified to our satisfaction as being true copies of such resolutions, documents, certificates, and records as we have deemed relevant and necessary (except as we have specifically limited the scope of our investigation herein) as the basis for the opinions set forth herein relying on such examination and pertinent law and subject to the limitations and qualifications hereinafter set forth, we are of the opinion that: 1. The City is a duly organized and validly existing public body, corporate and politic, organized under the laws of the State of California with full legal right, power and authority to perforin all of its obligations under the Bond Purchase Agreement dated , 2002 (the "Bond Purchase Agreement") among the City of Diamond Bar Public Financing Authority (the "Issuer"), the City and US Bancorp Piper Jaffray (the "Underwriter"), the Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the City of Diamond Bar Public #45248890x2 D-1 Financing Authority (the "Authority"), the Lease Agreement, dated as of December 1, 2002 (the "Lease"), by and between the Authority and the City, the Reimbursement Agreement, dated as of December 1, 2002 (the "Reimbursement Agreement"), by and between the City and and the Acknowledgment (the "Acknowledgment," and together with the Bond Purchase Agreement, the Site Lease, the Lease and the Reimbursement Agreement, the "Legal Documents") to the Confirmation Agreement, dated as of December 1, 2002, by and between and .] The City has duly authorized the Legal Documents and assuming due authorization, execution and delivery by the other parties thereto, the Legal Documents constitute legal, valid and binding obligations of the City enforceable against the City in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting creditors' rights generally or as to the availability of any particular remedy. 2. To the best of our knowledge, there is no action, suit or proceeding before or by any court, public board or body pending or threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the City or the titles of its officers to their respective offices, (b) in any way question or affect the validity or enforceability of the Legal Documents, or (c) find illegal, invalid or unenforceable the Bond Purchase Agreement or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the City is a party. 3. The execution and delivery of the Legal Documents and the other instruments contemplated by any of such documents to which the City is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Issuer is a party or is otherwise subject or bound in a manner which would materially adversely affect the City's performance under the Legal Documents. 4. All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence ofwhich would materially adversely affect, the performance by the City of its obligations under the Legal Documents have been obtained and are in full force and effect. We are furnishing this letter to the addressees hereof with respect to the Bonds at the request of the City, and this letter may not be relied upon for any purpose other than in connection with the issuance of the Bonds. This letter shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Respectfully submitted, #45248890x2 D-2 Exhibit E Opinion of Fulbright & Jaworski L.L.P., Disclosure Counsel Addressed to the Underwriter City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) [dated the Closing Date] City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Ladies and Gentlemen: We have acted as Disclosure Counsel to the City of Diamond Bar Public Financing Authority (the "Issuer") with respect to the above -captioned bonds (the "Bonds"). This opinion is rendered to the Issuer and the Underwriter named in the Bond Purchase Agreement dated 2002 (the "Bond Purchase Agreement"), by and among the Underwriter, the City of Diamond Bar (the "City") and the Issuer, pursuant to which the Underwriter has agreed to purchase the Bonds. The Bonds are being issued pursuant to the provisions of the Constitution and the laws of the State of California including the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 (commencing with Section 6584), Division 7, Title 1 of the Government Code of the ,State of California. The Bonds shall be issued and secured pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), between the Issuer and U.S. Bank, N.A. authorizing the issuance of the Bonds. The Bonds are more fully described in the final Official Statement of the Issuer, dated , 2002 (the "Official Statement"). In rendering this opinion, we have reviewed suchrecords, documents, certificates and opinions, and made such other investigations of law and fact as we have deemed necessary or appropriate. #4524889M E-1 With respect to the matters covered by the approving opinion rendered by us as Bond Counsel to the Issuer ("Bond Counsel"), dated the date hereof, the Underwriter has received a letter from Bond Counsel allowing the Underwriter to rely on such opinion. This letter is limited to matters governed by the federal securities law of the United States, and we assume no responsibility with respect to the applicability or effect of the laws of any other jurisdiction. In our capacity as Disclosure Counsel, we have rendered certain legal advice and assistance to the Issuer in connection with the preparation of the Official Statement. Rendering such legal advice and assistance involved, among other things, discussions and inquiries concerning various legal matters, review of certain records, documents and proceedings, and participation in conferences with, among others, Financing Consultant, your representatives and representatives of the Issuer and the City, and counsel to the Issuer and the City, at which conferences the contents of the Official Statement and related matters were discussed. On the basis of the information made available to us in the course of the foregoing (but without having undertaken to determine or verify independently, or assuming any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Official Statement), no facts have come to the attention of the personnel in our firm directly involved in rendering legal advice and assistance to you in connection with the preparation of the Official Statement which cause us to believe that the Official Statement as of its date (excluding therefrom financial, engineering and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; statements relating to credit enhancement and the provider of the credit enhancement; the book -entry only system; statements relating to the treatment of the Bonds or the interest, discount or premium related thereto for tax purposes under the law of any jurisdiction; and the statements contained in the Official Statement under the caption "LEGAL MATTERS -- Tax Matters;" as to all of which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to mare the statements therein, in the light of the circumstances under which they were made, not misleading. During the period from the date of the Official Statement to the date of this opinion, except for our review of the certificates and opinions regarding the Official Statement delivered on the date hereof, we have not undertaken any procedures or taken any actions which were intended or likely to elicit information concerning the accuracy, completeness or fairness of any of the statements contained in the Official Statement. We are furnishing this opinion to you, as Disclosure Counsel to the Issuer, pursuant to the Bond Purchase Agreement, solely for your bencfit. This opinion is rendered in connection with the transaction described herein, and may not be relied upon by you for any other purpose. This opinion shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Our engagement with respect to this matter terminates upon the delivery ofthis opinion to you at the time of the closing relating to the Bonds, and we have no obligation to update this opinion. Very truly yours, #45248890x2 E-2 dk RECORDING REQUESTED BY: CHICAGO TITLE AND WHEN RECORDED MAIL TO: FULBRIGHT &'JAWORSKI L.L.P. 865 South Figueroa Street, 29ffi Floor Los Angeles, California 90017-4518 Attention: Don Hunt, Esq. LEASE AGREEMENT by and between the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY and the CITY OF DIAMOND BAR RELATING TO CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Dated as of December 1, 2002 This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of the California Revenue and Taxation Code. This Document is recorded for the benefit of the City of Diamond Bar Public Financing Authority and such recording fee is exempt under Section 6103 of the California Government Code. #45248859v TABLE OF CONTENTS Page ARTICLE I DEFINITIONS SECTION 1.01. Definitions ................................................. 2 ARTICLE IT THE LEASED PROPERTY SECTION 2.01. Lease of the Leased Property ................................... 5 SECTION 2.02. Quiet Enjoyment ............................................ 5 SECTION 2.03. Right of Entry and Inspection .................................. 6 SECTION 2.04. Prohibition Against Encumbrance or Sale ......................... 6 SECTION 2.05. Liens......................................................6 SECTION 2.06. Substitution or Removal of Leased Property ....................... 6 SECTION 2.07. Changes to the Leased Property ................................. 8 SECTION 2.08. Title to the Leased Property .................................... 8 SECTION 2.09. Acquisition of Additional Property .............................. 8 ARTICLE III TERM OF THE LEASE SECTION 3.01. Commencement of the Lease ................................... 8 SECTION 3.02. Termination of the Lease ...................................... 8 ARTICLE IV USE OF PROCEEDS; POSSESSION OF THE LEASED PROPERTY; TAX COVENANTS SECTION 4.01. Use of Proceeds ............................................. 9 SECTION 4.02. Possession of the Leased Property ............................... 9 SECTION 4.03. Tax Covenants .............................................. 9 SECTION 4.04. Continuing Disclosure ....................................... 12 ARTICLE V RENTAL. PAYMENTS SECTION 5.01. Rental Payments ............................................ 13 SECTION 5.02. Annual Budgets; Reporting Requirements ....................... 15 SECTION 5.03. Application of Rental Payments ............................... 15 SECTION 5.04. Rental Abatement ........................................... 16 SECTION 5.05. Prepayment of Rental Payments ... I ...... I ......... I .......... 16 SECTION 5.06. Obligation to Make Rental Payments ........................... 16 #45248859v 11 El ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES SECTION 6.01. Maintenance of the Leased Property by the City ................... 17 SECTION 6.02. Taxes, Other Governmental Charges and Utility Charges ............ 17 SECTION 6.03. Insurance ................................................ 17 SECTION 6.04. Advances.................................................19 ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION SECTION 7.01. Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds ............:..............................................................19 ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY SECTION 8.01. Disclaimer of Warranties ..................................... 20 SECTION 8.02. Vendor's Warranties ..................................... 20 SECTION 8.03. Use of the Leased Property ................................... 21 ARTICLE IX ASSIGNMENT AND INDEMNIFICATION SECTION 9.01. Assignment by Authority ..................................... 21 SECTION 9.02. Assignment by City ......................................... 22 SECTION 9.03. Indemnification ............................................ 22 ARTICLE X DEFAULT SECTION 10.01: Default ................................................... 22 SECTION 11.01. SECTION 11.02. SECTION 11.03. SECTION 11.04. SECTION 11.05. SECTION 11.06. SECTION 11.07. SECTION 11.08. SECTION 11.09. SECTION 11.10. SECTION 11.11. #45248859v ARTICLE XI MISCELLANEOUS Notices...................................................24 Binding Effect.............................................25 Third Party Beneficiaries ..................................... 25 Net -Net -Net Lease .......................................... 25 Amendments..............................................26 Reserved..................................................26 Partial Invalidity............................................27 California Law ............................................. 27 Section Headings ........................................... 27 Execution.................................................27 Consent of Credit Entity [and Confirming Bank] Required. .......... 27 iii EXHIBIT A - Description of Real Property And of Project .......................... A-1 EXHIBIT B - Aggregate Annual Base Rental Payment Schedule ....................... B-1 LEASE AGREEMENT This Lease Agreement (the "Lease"), is executed and entered into as of December 1, 2002, by and between the City ofDiamond Bar Public Financing Authority, a j oint powers authority, duly created and validly existing underthe Constitution and laws ofthe State ofCalifornia (the "Authority"), as lessor, and the City of Diamond Bar, a municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "City"), as lessee; WITNESSETH: WHEREAS, the Authoritywishes to issue its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds") to provide for the financing of the community/senior center project (the "Project") as well as other public improvements within the City; WHEREAS, the Citywill lease to the Authority its fee interest in certain real property designated for the Proj ect (the "Site") pursuant to a Site Lease, dated as of December 1, 2002 (the "Site Lease"); and WHEREAS, the Authority, concurrentlywith the execution ofthe Site Lease, will lease the Site and improvements to be constructed thereon, including the Project, back to the City pursuant to this Lease, in consideration for Base Rental payments equal to the principal and interest coming due on the Bonds; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into ofthis Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease. NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUALAGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any ofthe terms defined herein. All other capitalized terms used herein without definition shall have the meanings as set forth in the Indenture. #45248859v 2 Additional Rental "Additional Rental" means all amounts payable by the City pursuant to Section 5.01(b). Authori "Authority" means the City of Diamond Bar Public Financing Authority, a j oint powers authority duly created and lawfully existing under the Constitution and laws of the State. Base Rental 5.01(a). C& "Base Rental" means all amounts payable by the City as Base Rental pursuant to Section "City" means the City ofDiamond Bar, a municipal corporation duly organized and existing under the Constitution and laws of the State. Confirming Bank "Confirming Bank" means (a) , and (b) any Alternate Conf rniing Bank.] Credit Entity "Credit Entity" means , as the issuer ofthe Credit Facility being delivered on the Closing Date with respect to the Bonds and the issuer of any Alternate Credit Facility delivered under the Indenture from time to time. Hazardous Substances "Hazardous Substances" means any substances, wastes, pollutants or contanninants now or hereafter included in such (or any similar) term under any federal, state or local statute, regulation, ordinance or code now existing or hereafter enacted or amended. Indenture "Indenture" means that certain Indenture dated as ofDecember 1, 2002, by and b etween the Authority and U.S. Bank, N.A., as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith. #145248859v Insurance Consultant "Insurance Consultant" means an individual or firm employed bythe Cityas an independent insurance consultant, experienced in the field of risk management. Lease "Lease" means this Lease Agreement dated as ofDecember 1, 2002, byand between the City and the Authority, as originally executed and as it may from time to time be amended or supplemented in accordance herewith. Leased Property "Leased Property" means the Site together with improvements to be constructed thereon, including the Project, as described in Exhibit A hereto. Net Proceeds "Net Proceeds" means any insurance proceeds or condemnation award paid with respect to the Leased Property remaining afterpayment therefrom of all expenses incurred in the collection thereof. Opinion of Counsel "Opinion of Counsel" means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the City. Permitted Encumbrances "Permitted Encumbrances" means as of anyparticular time: (i) liens for general ad valorem taxes and assessments, if any, not then delinquent, orwhich the Citymay, pursuant to Section 6.02, permit to remain unpaid; (ii) this Lease and the Site Lease; (iii) the Assignment Agreement; (iv) anyright or claim ofanymechanic, laborer, materialman, supplier or vendor filed or perfected in the manner prescribed by law after the date of this Lease; (v) easements, rights ofway, mineral rights, drilling rights and other rights, reservations, covenants, conditions orrestrictions which exist ofrecord as ofthe date of initial issuance of the Bonds and which an independent third party certifies in writing will not materially impair the use of the Leased Propertybythe City; and (vi) easements, rights ofway, mineral rights, drillingrights and other rights, reservations, covenants, conditions or restrictions established following the date of recordation of this Lease and to which the Authority and the City consent in writing. Project "Prof ect" means the community/senior center proj ect to be acquired and constructed on the Site. #45248859v 4 Removal "Removal" means the release of all or a portion of the Leased Property from the leasehold hereof as provided in Section 2.06. Site "Site" means that certain real property described in Exhibit A to the Site Lease. Substituted Property "Substituted Property" shall have the meaning given to such term in Section 2.06. Substitution "Substitution" means the release of all or a portion of the Leased Property from the leasehold hereof, and the lease of substituted real property and improvements hereunder as provided in Section 2.06. Trustee "Trustee" means U.S. Bank, N.A., a national banking association existing under and by virtue of the laws of the United States of America, the trustee acting in its capacity as such under the Indenture, or any successor as therein provided. ARTICLE II THE LEASED PROPERTY SECTION 2.01. Lease ofthe Leased Property. The Authorityherebyleases to the City, and the City hereby rents and hires from the Authority, the Leased Property on the conditions and terms hereinafter set forth. The City hereby agrees and covenants that during the term hereof, except as hereinafter provided, it will use the Leased Property for public purposes so as to afford the public the benefits contemplated hereby and to permit the Authority to carry out its agreements and covenants contained herein and in the Indenture, and the City hereby further agrees and covenants that during the term hereof that it will not abandon or vacate the Leased Property. SECTION 2.02.uiet En o ent. The parties mutuallycovenant that the City, so long as it observes and performs the agreements, conditions, covenants and terns required to be observed or performed by it contained herein and is not in default hereunder, shall at all times during the term hereof peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority. #45248859v SECTION 2.03. Ri t of Entry and Inspection. The Authority shall have the right to enter the Leased Property and inspect the Leased Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority's rights or obligations hereunder and for all other lawful purposes. SECTION 2.04. Prohibition Against Encumbrance or Sale. The City and the Authority will not create or suffer to be created anymortgage, pledge, lien, charge or encumbrance upon the Leased Property, except Permitted Encumbrances. The City and the Authority will not sell or otherwise dispose ofthe Leased Property or anyproperty essential to the proper operation ofthe Leased Property, except as otherwise provided herein. SECTION 2.05. Liens. In the event the City shall at anytime during the term hereof cause any improvements to the Leased Property to be constructed or materials to be supplied in or upon or attached to the Leased Property, the City shall pay or cause to be paid when due all sums ofmoneythat maybecome due or purporting to be due for any labor, services, materials, supplies or equipment furnished or alleged to have been fiunished to or for the City in, upon, about or relating to the Leased Property and shall keep the Leased Property free of any and all liens (except for Permitted Encumbrances) against the Leased Property or the Authority's interest therein. In the event any such lien attaches to the Leased Property, the City shall cause such lien to be fully discharged and released at the time the performance of any obligation secured by any such lienmatures orbecomes due. If any such lien shall be reduced to final judgment and such judgment or anyprocess as maybe issued for the enforcement thereof is not promptly stayed, orif so stayed and such staytherea$er expires, the City shall forthwith pay and discharge or cause to be paid and discharged such judgment. The City shall, to the maximum extent permitted by law, indemnify and hold the Authority, the Trustee, the Credit Entity [and the Confirming Bank] and their respective directors, officers and employees harmless from, and defend each ofthem against, any claim, demand, loss, damage, liability or expense (including attorneys' fees) as a result of any such lien or claim of lien against the Leased Property or the Authority's interest therein. SECTION 2.06. Substitution or Removal of Leased Property: (a) The City may amend this Lease to substitute additional real property and/or improvements (the "Substituted Property") for existing Leased Property, or to remove real property or improvements from the definition ofLeased Property, upon compliance with all ofthe conditions set forth in subsection (b). After a Substitution or Removal, the part of the Leased Property for which the Substitution or Removal has been effected shall be released from the leasehold hereunder and all right, title and interest in and to such Leased Property shall vest in the City. In connection with such release ofpart ofthe Leased Property, the Authority shall execute such conveyances, deeds, and other documents, and shall take or cause to be taken all actions that are necessary to provide that such released Leased Property constitutes a valid legal parcel, the ownership ofwhich is recordable in the real property records ofthe County of Los Angeles forwhich a title insurance policy maybe legally obtained, as maybe necessaryto effect such vesting of record. #45248859v (b) No Substitution or Removal shall take place hereunder until the City delivers to the Authority, the Credit Entity, [the Confirming Bank] and the Trustee the following: (1) A Certificate of the City containing, in the event of a Removal, a description of all or part ofthe Leased Property to be released and, in the event of a Substitution, a description ofthe Substituted Propertyto be substituted in its place and a certification that the remaining useful life of the Substituted Property is not less than remaining term of the Lease; (2) A Certificate of the City stating that the fair rental value ofthe Leased Property after a Substitution orRemoval, in each year during the remaining term of this Lease is at least equal to the Base Rental payments in each such year attributable to the Leased Property prior to said Substitution orRemoval, as determined bythe Cityon the basis ofan appraisal ofthe Leased Property performed by a qualified, independent consultant after said Substitution or Removal; (3) An Opinion of Counsel to the effect that the amendments hereto contemplating Substitution or Removal have been duly authorized, executed and delivered and constitute the valid and binding obligations ofthe City and the Authority enforceable in accordance with their terms; (4) In the event of a Substitution, a policy of title insurance in an amount equal to the same proportion ofthe principal amount as the Base Rental payments for the Substituted Property bears to the total Base Rental payments, insuring the City's leasehold interest in the Substituted Property (except anyportionthereofwhich is not real property) subject to Permitted Encumbrances, togetherwith an endorsement thereto malting said policypayable to the Trustee for the benefit of the Owners of the Bonds, the Credit Entity [and the Confirming Bank]; (5) In the event of a Substitution, an opinion ofthe City Attorney ofthe City to the effect that the exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere with the beneficial use and occupancyofthe Substituted Propertydescribed in such policy by the City for the purposes of leasing or using the Substituted Property; (6) An Opinion ofCounsel that the Substitution orRemoval does not cause the interest on the Bonds to fail to be excluded from the gross income ofthe Owners thereof for federal income tax purposes; (7) Evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 with respect to the Substituted Property; (S) Evidence that the Cityhas delivered to anyrating agencythen rating the Bonds copies ofthe certificates and appraisal described in clauses (1) and (2) above, and that the #45248859v 7 rating agencyhas indicated that such substitution, in and of itself, will not result in a lower rating on the Bonds; and (9) Written Consent of the Credit Entity [and the Confirming Bank]. SECTION 2.07. Changes to the Leased,ZLgpy. Subject to Sections 2.04, 2.05 and 4.02 and with the priorwritten consent of the Credit Entity [and the Confirming Bank], the City shall, at its own expense, have the right to remodel the Leased Property or to make additions, modifications and improvements to the Leased Property. All such additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in anyway damage the Leased Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Leased Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value which is at least equal to the value of the Leased Property immediately prior to the making of such additions, modifications and improvements. SECTION 2.08. Title to the Leased Property. During the term ofthis Lease, title to the Leased Property shall remain in the City. SECTION 2.09. Muisition ofAdditional Property. The City covenants to use its best effort to acquire such additional real property as may be necessary or appropriate for the operation of the Leased Property, and, by executing appropriate amendments, to lease such property to the Authority pursuant to an appropriate ground lease and to sublease such property from the Authoritypursuant to this Lease. ARTICLE III TERM OF THE LEASE SECTION3.01. Commencement ofthe Lease. The term hereofshall commence as of December I, 2002, or the date this Lease or a memorandum thereofis recorded, whichever is later, and shall end on 1, , unless such term is soonerterminated or is extended as hereinafter provided. If on 1, , the Indenture shall not be discharged by its terms or ifthe rental payable hereunder shall have been abated at any time and for any reason, then the term of this Lease shall be extended until ten (10) days after all Bonds shall be fully paid. If prior to I, the Indenture shall be discharged by its terms, the term of this Lease shall thereupon end. SECTION 3.02. Termination ofthe Lease. This Lease will terminate upon the earlier of either of the following events. #45248859v (a) a defaultbythe City and the Authority's election to terminate this Lease under Article X; or (b) the payment by the City -of all Base Rental payments, Additional Rental and all other amounts authorized or required to be paid by it hereunder. ARTICLE IV USE OF PROCEEDS; POSSESSION OF THE LEASED PROPERTY; TAX COVENANTS SECTION 4.01. Use ofProceeds. The parties hereto acknowledge and agree that the proceeds of the Bonds will be used to (i) provide for the financing of the Project and other public improvements within the City; and (ii) pay for Costs of Issuance. SECTION4.02. Possession ofthe ,Leased Pronerty The City currently has possession ofthe Site and upon completion ofthe Project will have possession ofthe Leased Propertyunder the terms and provisions of this Lease. SECTION 4.03. Tax Covenants. (a) Definitions. When used in this Section, the following terms have the following meanings: "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Gross Proceeds" means any proceeds as defined in section 1.148-1(b) of the Tax Regulations, and any replacement proceeds as defined in section 1.148-1(c) of the Tax Regulations, of the Prior Bonds and the Bonds. "Investment" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Nonpurpose Investment " means any investment property, as defined in section 148(b) ofthe Code, in which Gross Proceeds ofthe Bonds are invested and that is not acquired to carry out the governmental purposes of the Bonds. "RebateAmount"has the meaning set forth in section 1.148-1(b) ofthe Tax Regulations. "Tax Regulations"means the proposed, temporary and final Income Tax Regulations promulgated pursuant to sections 103 or 141-150 of the Code. #45248859v � 1 "Yield" of (1) any Investment has the meaning set forth in section 1.148-5 of the Tax Regulations; and (2) the Bonds has the meaning set forth in section 1.148-4 ofthe Tax Regulations. (b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts (or anypropertythe acquisition, construction or improvement ofwhich is to be financed directly or indirectlywith Gross Proceeds) in a manner that if made or omitted, respectively, would cause the interest on any of the Bonds to fail to be excluded pursuant to section 103(a) ofthe Code from the gross income ofthe owners thereof for federal income tax purposes. Without limiting the generalityofthe foregoing, unless and until the City receives a written opinion ofBond Counsel to the effect that failure to comply with such covenant will not adversely affect the exclusion from gross income of interest on any Bond, the City shall complywith each ofthe specific covenants in this Section, and agrees to comply with the provisions of the Tax Certificate. This covenant shall survive payment in full or defeasance of the Bonds. (c) No Private Use or Private Payments. Except as would not cause any Bonds to become a "private activitybond" within the meaning ofsection 141 ofthe Code and the Tax Regulations and rulings thereunder, the City shall at all times prior to the final retirement of the Bonds: (1) require that one or more state or local governmental agencies exclusively own, operate and possess all propertythe acquisition, construction or improvement of which is to be financed orrefinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds (including all contractual arrangements with terms different than those applicable to the generalpublic) or anyproperty acquired, constructed or improved with such Gross Proceeds in any activitycatried on by anyperson or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (2) not permit the direct or indirect imposition of any charge or other payment on or otherwise with respect to the use by any person or entitywho is treated as using Gross Proceeds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectlywith such Gross Proceeds, other than taxes ofgencral application within the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes. (d) No Private Loan. Except as would not cause any Bond to become a "private activity bond" within the meaning of section 141 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not use orpermit the use of Gross Proceeds ofthe Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if`. (1) property acquired, constructed or #45248854v 10 improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (2) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or (3) indirect benefits, orburdens and benefits ofownership, of such Gross Proceeds or anyproperty acquired, constructed or unproved with such Gross Proceeds are otherwise transferred in a transaction that is the economic equivalent of a loan. (e) Not to Invest atffighcrYield. Except as would not cause the Bonds to become "arbitrage bonds" within the meaning ofsection 148 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not at any time prior to the final Stated Maturity ofthe Bonds directly or indirectly invest or permit the investment of Gross Proceeds in any Investment, if as a result of such investment the Yield on Investments acquired with Gross Proceeds, whether then held or previously disposed of, materially exceeds the Yield ofthe Bondswithin the meaning of said section 148. Forpurposes ofthis paragraph, Yield on Investments shall be determined in accordance with the provisions of section 1.148-5 of the Tax Regulations (which, under certain circumstances, requires Yield to be determined on less than all such Investments. (f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) ofthe Code and the Tax Regulations and rulings thereunder, the City shall not take or omit to take, or permit, any action that would cause any Bonds to be treated as "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and rulings thereunder. (g) Information Report. The City shall timely file or cause to be filed anyinformation required by section 149(e) of the Code with respect to the Bonds with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate. Except to the extent otherwise provided in section 148(f) ofthe Code and the Tax Regulations and rulings thereunder: (1) The City shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Outstanding Bond is retired. However, to the extent permitted bylaw, the City may commingle Gross Proceeds of Bonds with other money of the City, provided that the City separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. (2) Not less frequently than each Computation Date, the City shall calculate or cause to be calculated the Rebate Amount in accordance with rules set forth in section 148(f) ofthe Code and the Tax Regulations and rulings thereunder, and to provide promptlyto the City a copy of said calculation, which the City shall maintain with its official transcript ofproceedings relating to the issuance of the Bonds until six years after the final Computation Date. #45248859v 11 (3) In order to assure the excludability ofthe interest on Bonds from the gross income o f the owners thereof for federal income tax purposes, the City shall make rebate payments at the times and in the amounts as are or maybe required by section 148(f) of the Code and the Tax Regulations and rulings thereunder, which payments shall be accompanied byForin 8038-T or such other forms and information as is or may be required by section 148(f) ofthe Code and the Tax Regulations and rulings thereunder; provided, however, that the liability ofthe City to make any such payments shall be limited to amounts received by it for such purpose pursuant to this Agreement. (4) The City shall cause the exercise ofreasonable diligence to assure that no errors are made in the calculations and payments required byparagraphs (2) and (3), and ifan error is made, to discover and promptly correct such error within a reasonable amount oftime thereafter (and in all events within one hundred eighty (180) days after discovery ofthe error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under section 1.148-3(h) of the Tax Regulations. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 ofthe Code and the Tax Regulations and rulings thereunder, the City shall not enter into any transaction that reduces the amount required to be paid to the United States pursuant to section 148(f) ofthe Code because such transaction results in a smaller profit or a larger loss than would have resulted ifthe transaction had been at arm's length and the Yield of the Bonds had been irrelevant to each party. 0) Bonds Not Hedge Bonds. (1) The Cityrepresents that the Bonds are not and will not become "hedge bonds" within the meaning of section 149(8) of the Code. (2) Without limitation ofclause (i) above, (A) on the date of issuance ofthe Bonds the City reasonably expects that at least 85% ofthe spendable proceeds of the Bonds will be expended within the three-yearperiod commencing on such date of issuance, and (B) no more than 50% of the proceeds of the Bonds will be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (k) Elections. The City shall make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as the City (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Tax Certificate or similar or other appropriate certificate, form or document. SECTION 4.04. Continuing Disclosure. The Cityhereby covenants and agrees that it will complywith the continuing disclosure requirements promulgated under Securities and Exchange Commission Rule 15c2 -12(b)(5), as it may from time to time hereafterbe amended or supplemented. The City further covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any otherprovisionofthis Lease, failure ofthe City #45248859v 12 to complywith the Continuing Disclosure Agreement shall not be considered an Event ofDefault hereunder; however, the Trustee (as assignee ofthe Authority under the Indenture) may (and, at the request of any participating underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, the Credit Entity [or the Confirming Bank], shall) or anyBondowner may take any such actions as maybe necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section 4.04. ARTICLE V RENTAL PAYMENTS SECTION 5.01. Rental Payments. The City agrees to pay to the Authority, its successors or assigns, without deduction or offset of anykind, as rental for the use and occupancy ofthe Leased Property, the following amounts at the following times: (a) Base Rental. The City shall pay to the Authority as Base Rental hereunder rental payments with interest and principal components in accordance with the Base Rental Payment Schedule set forth in Exhibit B attached hereto and made apart hereof. Base Rental Payments shall be made by the City on the twenty-fifth day ofthe month immediatelypreceding each Bond Payment Date (the "Lease Payment Date'D, which shall be sufficient in both time and amount to paywhen due the principal ofthe Bonds, as set forth in Exhibit B hereto, as such Exhibit B maybe amended and supplemented from time to time, togetherwith interest on the Bonds to be calculated by the Trustee as provided in Section 2.02.A ofthe Indenture. The interest components ofthe Base Rental payable bythe Cityhereunder shall be paid by the City as and shall constitute interestpaid on the principal components ofthe Base Rental payable by the City hereunder. Payment ofBase Rental and Additional Rental for each rental payment period during the term hereof shall constitute the total rental for such rental payment period, and shall be paid by the City in each rental payment period for and in consideration of the right to the use and occupancy, and the continued quiet enjoyment, ofthe Leased Property during the rental payment period for which such rental is paid. The City shall provide written notice to the Trustee, the Credit Entity, the [Confirming Bank] and the Authority at least five (5) Business Days prior to any Lease Payment Date upon which the City expects to be unable to appropriate and pay the Base Rental p ayment due on such Lease P ayment Date, informing the Trustee and the Authority of such inability to appropriate and pay. Ifthe term of this Lease shall have been extended pursuant to Section 3.0 1, Base Rental payments shall continue to be due on Lease Payment Dates, and payable as hereinabove described, continuing to and including the date oftermination of this Lease. Upon such extension of this Lease, the principal and interest components ofthe Base Rental shall be established so that the principal components will in the aggregate be sufficient to pay all unpaid principal components with interest components sufficient to pay all unpaid interest components plus interest on the extended principal components at a rate equal #45248859v 13 IV to the rate of interest on the principal component ofthe Base Rental payable on February 1 ofthe year after the date of such extension. The parties hereto have agreed and determined that the Base Rental payments shown in the Base Rental Payment Schedule set forth in Exhibit B hereto represent the fair market value of the Leased Property. In making such determination, consideration has been given to the costs ofthe Leased Property, the fair market value thereof, the other obligations ofthe parties hereunder, the uses and purposes which maybe served by the Leased Property and the benefits therefrom which will accrue to the City, its residents and the general public. Each installment ofBase Rental and Additional Rental payable hereunder shall be paid in lawful money of the United States of America to or upon the order ofthe Authority at the office ofthe Trustee. To the extent permitted by law, any such installment ofBase Rental or Additional Rental accruing hereunder which shall not be paid when due shall bear interest at the rate equal to the interest rate applicable to the delinquent installment ofBase Rental or, in the case ofAdditional Rental (other than amounts owing to the Credit Entity under the Reimbursement Agreement [and to the Confirming Bank under the Confirmation Agreement]), the interest rate on the Bonds on the date the Additional Rental was not paid and in the case of amounts owing to the Credit Entity under the Reimbursement Agreement [or to the Confirming Bank under the Confirmation Agreement], at the rate of interest set forth in the Reimbursement Agreement [or the Confirmation Agreement], as applicable. All such delinquent installments ofBase Rental and the interest thereon shall be deposited in the Lease Payment Account of the Debt Service Fund. All such delinquent installments of Additional Rental and interest thereon shall be paid to the order ofthe Authority, the Trustee, the Credit Entity [or the Confirming Bank], as applicable. Notwithstanding any dispute between the Authority, or the Trustee and the City, the City shall make all rental payments when due hereunder without deduction or offset of any kind and shall not withhold any rental payments pending the final resolution of such dispute. (b) Additional Rent. The City shall payto the Authorityas Additional Rental hereunder such amounts in each year as shall be required bythe Authority for the payment in full ofpayments to the Credit Entity required by the Reimbursement Agreement [and payments to the Confirming Bank required by the Confirmation Agreement] (other than reimbursement for draws on the Credit Facility [or Confirming Letter of Credit] to pay Base Rental or constituting Tender Advances (as defined in the Reimbursement Agreement)), all costs and expenses incurred by the Authority, and the Trustee in connection with the execution, performance or enforcement hereof or any assignment hereof, ofthe Indenture and ofthe lease ofthe Leased Propertyto the City, including but not limited to payment of all fees, costs and expenses and all administrative costs ofthe Authority, and the Trustee in connection with the Leased Property, the Lease, and the Indenture and all taxes, assessments and governmental charges of any nature whatsoever hereafter levied or imposed by any governmental authority against the Authority, the Leased Property, or the rentals and the other payments required to be made by the City hereunder. Such Additional Rental shall be billed to the Cityby the Authority, or the Trustee from time to time, together with a statement certifying that the amount so billed has been paid by the Authority, or the Trustee for one or more of the items above described, or that such amount is then payable by the Authority, or the Trustee for one or more of such #45248859v 14 items, and all amounts so billed shall be due and payable by the City within thirty (3 0) days after receipt of each bill therefor by the City. SECTION 5.02. AmualBud e�eportint Requirements. The Citycovenants to take action as maybe necessaryto include all such rental payments due hereunder in its annual budgets and to make the necessary annual appropriations for all such rental payments. For this budgetary purpose, and while the Bonds bear interest at the Variable Rate, the City shall assume an interest component for any Fiscal Year equal to the average interest rate borne by the Bonds during the 12 months preceding the time ofconsideration, plus [250] basis points. The City shall furnish to the Trustee at least 15 days before final adoption of the proposed budget for each Fiscal Year a certificate stating that it has included in the proposed budget all Base Rental and Additional Rental due hereunder in the Fiscal Year covered by such proposed budget and following adoption ofthe final budget a certificate stating that the Base Rental and Additional Rental was included in the final budget as adopted. The City shall file with the Trustee the certificate regarding adoption ofthe final budget by July 1 of each year unless the City is permitted by applicable law to adopt its final budget after such date, and has in fact not adopted its final budget by July 1, in which event, the City will file with the Trustee by July 1 a certificate stating the specified later date by which the City may adopt its final budget under applicable law and will file with the Trustee by such specified later date such certificate following such adoption. To the extent that the amount of any such payment becomes known after the adoption of the annual budget, such amounts shall be included and maintained in such budget as amended. The City covenants to take such action as is necessary to include such amounts in a supplemental budget ofthe City. The covenants on the part ofthe Cityherein contained shall be deemed to be and shall be construed to be ministerial duties imposed by law and it shall be the ministerial dutyofeach and everypublic official ofthe City to take such action and do such things as are required by law in the performance ofthe official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the City. The obligation of the City to pay Base Rental and Additional Rental hereunder shall constitute acurrent expense ofthe City and shall not in any waybe construed to be a debt ofthe City, or the State, or anypolitical subdivision thereof, in contravention of any applicable constitutional or statutory limitation or requirements concerning the creation of indebtedness by the City, the State, or anypolitical subdivision thereof, nor shall anything contained herein constitute apledge of general revenues, funds or moneys ofthe City beyond the Fiscal Year for which the City has appropriated funds to pay Base Rental and Additional Rental hereunder or an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. SECTION 5.03. Application ofRental Payments. All rental payments received shall be applied first to the interest components ofthe Base Rental payments due hereunder, then to the principal components (including anyprepayment premium components) ofthe Base Rental payments due hereunder and thereafter to all Additional Rental due hereunder, but no such application of any payments which are less than the total rental due and owing shall be deemed a waiver of any default hereunder. #45248859v 15 k SECTION 5.04. Rental Abatement. Except to the extent (i) amounts held by the Trustee in the Debt Service Fund, (ii) amounts received mrespect ofrental interruption insurance, and (iii) amounts, ifany, otherwise legally available to the Trustee for payments in respect ofthe Bonds, during any period in which, by reason ofmaterial damage, destruction, title defector condemnation there is substantial interference with the use and possession by the City of any portion ofthe Leased Property, rental payments due hereunder with respect to such portion ofthe Leased Property shall be abated proportionately by an amount such that the portion ofBase Rental remaining unabated represents the fair rental value ofthe remaining portion ofthe Leased Property, as calculated by the City and set forth in writing to the Authority, the Trustee, the Credit Entity f and the Confining Bank]. Any abatement ofrental payments pursuant to this Section shall not be considered an event of default as defined in Article X hereof. The City waives the benefits ofCivil Code Sections 1932(1),1932(2) and 1933 (4) and any and all other rights to terminate the Lease by virtue of any such interference and the Lease shall continue in full force and effect. Such abatement shall continue for the period commencing with the date ofsuch damage, destruction, title defect or condemnation and ending with the substantial completion ofthe work of repair or replacement ofthe portions of the Leased Property so damaged, destroyed, defective or condemned. In the event that rental is abated, in whole or in part, pursuant to this Section due to damage, destruction, title defect or condemnation of any part ofthe Leased Property and the City is unable to repair, replace or rebuild the Leased Property from the proceeds of insurance, if any, the City agrees to apply for and obtain, ifreasonably available, any appropriate state and/or federal disaster relief in order to obtain funds to repair, replace or rebuild the Leased Property. SECTION 5.05. Prepayment of Rental Payments. (a) Prepayment from Net Proceeds. The City may prepay, from Net Proceeds received by it pursuant to Section 7.01, all or any portion ofthe components ofBase Rental relating to any portion ofthe Leased Property then unpaid, in whole on any date, orinpart on any Bond Payment Date in Authorized Denominations. (B) Optional Prog3ment. Subject to the terms and conditions of this Section, the Authorityhereby grants an option to the City to prepay in whole or in part the principal components of Base Rental payments relating to the Leased Property, to the extent, on the dates and at the redemption prices provided in Section 4.03 ofthe Indenture as such Section 4.03 maybe amended from time to time with respect to conversion to a Fixed Rate. The City shall execute said option by giving written notice to the Trustee thereof at least 45 days (or such shorter period as approved by the Trustee) prior to the date ofredemption ofBonds from such prepayment and depositing with said notice cash in the minimum amount of (1) accrued interest on the principal component ofBase Rental payments to be prepaid to the date of redemption ofBonds with the proceeds ofsuch prepayment, plus (2) the principal component of any Base Rental payments to be prepaid, plus (3) the applicable redemption premium described in such Section 4.03 of the Indenture. SECTION 5.06. Obligation to Make Rental Payments. The agreements and covenants on the part ofthe City contained herein shall be deemed to be and shall be construed to be duties imposed #45248859v 16 s I& bylaw and it shall be the duty of each and everypublic official ofthe City to take such action and do such things as are required bylaw in the performance ofthe official duty of such officials to enable the City to carry out and perform the agreements and covenants contained herein agreed to be carried out and performed by the City: THE OBLIGATION OF THE CITY TO MAKE BASE RENTALPAYMENTS DOES NOT CONSTITUTE AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION ORFOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE SUCH BASE RENTAL PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA ORANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES SECTION6.01. Maintenance ofthcLeasedhopertvbytheCi. The City agrees that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve and keep the Leased Property and everyportion thereofin good repair, working order and condition and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Authority shall have no responsibility in any ofthese matters or for the making of additions or improvements to the Leased Property. SECTION 6.02. Taxes, Other Governmental Charges and. Utilt Charges. The parties hereto contemplate that the Leased Propertywill be used forpublic purposes by the City and, therefore, that the Leased Property will be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the City or the Authority ofthe Leased Property is found to be subject to taxation in any form, the City will pay during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Leased Property and any other property acquired by the City in substitution for, as arenewal or replacement of, or a modification, improvement or addition to the Leased Property, as well as all gas, water, steam, electricity, heat, power, air conditioning, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Leased Property; provided, that with respect to any governmental charges ortaxes that maylawfullybe paid in instalhnents over aperiod ofyears, the City shall be obligated to pay only such installments as are accrued during such time as this Lease is in effect. SECTION 6.03. Insurance. The City shall procure or cause to be procured and maintain or case to be maintained through the term hereof for the Leased Property insurance against the following risks in the following respective amounts: #45249859v 17 iW (1) insurance against loss or damage to the Leased Property or such structure or item of furniture or equipment caused by fire or lightning, with an extended coverage endorsement and vandalism and malicious mischief insurance, which such extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. The insurance required by this paragraph shall be in an amount equal to the replacement cost (without deduction for depreciation) of improvements located or to be Iocated on the Leased Propertybut shall benot less than the principal amount ofthe Outstanding Bonds (except that such insurance maybe subj ect to deductible clauses ofnot to exceed ten percent (10%) ofthe amount of any one loss); (2) rental interruption insurance against the Authority's loss of income due to events giving rise to the right of abatement on the part of the Cityunder this Lease in an amount sufficient to pay the total Base Rental payments attributable to the Leased Property for a 12 month period (measured by the Base Rental payments for the 12 months following the month in which the insurance commences and assuming for such purpose that Interest Components will be payable at a fixed rate of 8 % per annum or such lesser amount as maybe agreed upon by the Credit Entity [and the Confirming Bank]); provided, that the amount of such insurance need not exceed the total remaining Base Rental payments attributable to the Leased Property; (3) workers' compensation insurance covering all employees working in or on the Leased Property, in the same amount and type as other workers' compensation insurance maintained by the City for similar employees doing similar work; and the City shall also require any other person or entity working in or on the Leased Property to carry the foregoing amount of workers' compensation insurance; (4) a standard comprehensive public entityliability insurance policy or policies in protection ofthe City, the Authority, and theirrespective directors, officers and employees and the Trustee, indemnifying and defending such parties against all direct or contingent loss or liability for damages for personal injury, death or property damage occasioned by reason of the possession, operation or use ofthe Leased Property. Such public liabilityand property damage insurance shall be in the form of a single limit policy in the amount ofnot less than three million dollars ($3,000,000), subj ect to a deductible clause of not to exceed $250,000, covering all such risks; and (5) a CLTA standard coverage leasehold policy of title insurance on the Leased Property in an amount at least equal to the initial aggregate amount ofthe principal amount ofBase Rental payments issued by a company of recognized standing duly authorized to issue the same. The title policy orpolicies shall insure the City's leasehold estate hereunder with respect to the Leased Property, subject only to Permitted Encumbrances. Insurance coverage required byparagraphs (1), (2), (3) and (4) maybe maintained as part of or in conjunction with any other insurance coverage carried by the City, and maybe maintained in whole #45248859v 18 Kr. or in part in the form of insurance maintained through a joint exercise ofpowers agency created for such purpose or other program providing pooled insurance. Notwithstanding the above provisions, as an alternative to providing the insurance required by paragraphs (1), (2) and (4) above, with the prior written consent of the Credit Entity, the City may provide a self-insurance method orplan ofprotection. Any such self-insurance maintained by the City pursuant to the foregoing sections, shall be similar in nature and scope to self-insurance programs maintainedby other California cities of comparable size and operations, and shall be reviewed annuallyby an Insurance Consultant. Any insurance policy issued pursuantto Section 6.03(1) shall be so written or endorsed as to make losses, if any, payable to the City, the Authority, and the Trustee as theirrespective interests may appear and the net proceeds ofthe insurance required in Section 6.03(1) shall be applied as provided in Section 7.01. The net proceeds, ifany, ofthe insurance policy described in Section 6.03(2) shall be payable to the Trustee and deposited in the Debt Service Fund. Each insurance policyprovided for in this Section shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interests ofthe Authority, the Credit Entity or the Trustee without first giving written notice thereof to the Authority, the Credit Entity and the Trustee at least sixty (60) days in advance of such intended cancellation or modification; provided, that the Trustee shall not be responsible for the sufficiency of any insurance herein required and shall be fallyprotected in accepting payment on account of such insurance or any adjustments, compromise or settlement of any loss agreed to by it. The City shall file a certificate with the Trustee and the Credit Entity not later than September I of each year certifying that the insurance required by this section is in full force and effect and that the Trustee and the Credit Entity are named as loss payees on each insurance policywhich this Lease requires to be so endorsed. SECTION 6.04. Advances. In the event the City shall fail to maintain the full insurance coverage required hereby or shall fail to keep the Leased Propertyin good repair and operating condition, the Authoritymay (but shall beunder no obligation to) purchase the requiredpolicies ofinsurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Authority shall become Additional Rental, which amounts the City agrees to paywithin thirty (3 0) days of a written request therefor, together with interest thereon at the maximum rate allowed by law. ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION SECTION 7.01. Damage _Destruction, Title Defect and Condemnation: Use of Net Proceeds. Ifprior to the termination ofthe term hereof (a) the Leased Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty; or (b) title to, or the temporary use of, the Leased Property or any portion thereof or the estate of the City or the Authority in the Leased #45248859v 19 Property or any portion thereofis defective or shall be taken under the exercise ofthe power of eminent domain by any governmental body or by anyperson or firm or corporation acting under governmental authority, then the City shall, as expeditiously as possible, continuously and diligently cause the repair or replacement thereof (unless the City elects not to repair or replace), and the City and the Authoritywill cause the Net Proceeds remaining after such work has been completed to be paid to the City; provided, that the City, at its option and provided the Net Proceeds together with any other moneys then available for the purpose are at least sufficient to prepaythe aggregate annual amounts ofprincipal ofand interest on the Bonds attributable to the portion of the Leased Property so destroyed, damaged, defective or condemned (determined by reference to the proportion which the fair rental value ofthe entire Leased Property and such that the fairrental value ofthe remaining portion ofthe Leased Property is sufficient to paythe Principal Components and Interest Components (assuming that the Interest Components will accrue at the Maximum Rate or if aFixed Rate has been established, then at the Fixed Rate)), may elect not to repair, reconstruct or replace the damaged, destroyed, defective or condemned portion of the Leased Property and thereupon shall cause said Net Proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of Section 4.02 of the Indenture. In the event that the Net Proceeds, if any, are insufficient either to (i) repair, rebuild or replace the Leased Property so that the fair rental value ofthe Leased Property would be at least equal to the Base Rental payments or (ii) to prepay the Outstanding Bonds, both as provided in the preceding paragraph, then the City may, in its sole discretion, budget and appropriate an amount necessaryto effect such repair, rebuilding orreplacement or prepayment; provided that the failure ofthe City to so budget and/or appropriate shall not be a breach of or default under this Lease. ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY SECTION S.01. Disclaimer of Warranties. NEITHER THE TRUSTEE NOR THE AUTHORITY MAKES ANY AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS ORM'LIED, AS TO THE VALUE, DESIGN, CONDI'T`ION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT NEITHER THE TRUSTEE NOR THE AUTHORITY IS A MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR ADEALER THEREIN, THAT THE CITY LEASES THE LEASED PROPERTY AS -IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out ofthe Lease or the existence, furnishing, functioning or the City's use of the Leased Property as provided hereby. SECTION8.02. Vendor's Warranties. The Authorityherebyirrevocably appoints the City its agent and attorney-in-fact during the term ofthis Lease, so long as the City shall not be in default hereunder, to assert from time to time whatever claims and rights, including warranties ofthe Leased Property, which the Authoritymay have against the manufacturers, vendors and contractors ofthe Leased #45248854x+ 20 .X 1M6 Property. The City's sole remedy for the breach of such warranty, indemnification or representation shall be against the manufacturer or vendor or contractor ofthe Leased Property, and not against the Authority or the Trustee, nor shall such matter have any effect whatsoever on the rights and obligations of the Authority with respect to this Lease, including the right to receive full and timelypayments hereunder. The City expressly acknowledges that neither the Trustee nor the Authority makes, and has made, any representation or warranties whatsoever as to the existence or availability of such warranties of the manufacturer, vendor or contractor. SECTION 8.03. Use of the Leased Property. (a) The City will not use, operate or maintain the Leased Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. The City shall provide all permits and licenses, if any, necessary for the use ofthe Leased Property. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation ofeach portion ofthe Leased Property) with all laws ofthe jurisdictions in which its operations involving anyportion ofthe Leased Propertymay extend and any legislative, executive, administrative or judicial body exercising anypower or j urisdiction over the Leased Property; provided, that the City may contest in good faith the validity or application of any such law or rule in anyreasonable manner which does not, in the opinion ofthe City adversely affect the estate ofthe Authority or the Trustee in and to the Leased Property or its interest or rights hereunder. (b) The City herein covenants by and for itself and its successors and assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of anyperson or group of persons, on account ofrace, color, creed, religion, sex, marital status, national origin, or ancestry, in the Ieasing, subleasing, transferring, use, occupancy, tenure, or enjoyment ofthe Leased Propertynor shall the Cityitself, oranyperson claiming under or through it, establish or permit any such practice orpractices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the Leased Property. ARTICLE IX ASSIGNMENT AND INDEMNIFICATION SECTION9.01. AssignmentbyAuthority. The parties understand that certain of the Tights ofthe Authority, as assignee hereunder, will be assigned to the Trustee pursuant to the Assignment Agreement, and accordingly the City agrees to make all payments due hereunder to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereofor otherwise) that the Citymay from time to time have against the Authority or the Trustee. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing 945248859v 21 statements which maybe reasonably requested by the Authority or the Trustee to protect their interests in the Leased Property during the term hereof SECTION 9.02. Assent by City. This Lease and the interest of the City in the Leased Propertymaynot be assigned or encumbered by the City except with the written consent ofthe Credit Entity and except as provided in Section 2.04. SECTION 9.03. Indemnification. The City shall, to the full extent then pemlitted bylaw, indemnify, protect, hold harmless, save and keep harmless the Authority, the Trustee, and their respective directors, officers, employees, attorneys, consultants, receivers and agents from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless ofthe cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the entering into of this Lease or any accident in connection with the operation, use, condition orpossession ofthe Leased Property or anyportion thereofresulting in damage to propertyor injury to or death to anyperson including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the City or the Authority; any claim forpatent, trademark or copyright infringement, any claim. arising out of strict liability in tort, and any claim arising out of the use, presence, storage, disposal orrelease of anyHazardous Substances on or about the Leased Property. The indemnification arising under this Section shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason. The City and the Authority mutually agree to promptly give notice to each other of any claim or liabilityhereby indemnified against following either's learning thereof. ARTICLE X DEFAULT SECTION 10.01. Default. (a) The following events shall be events of default under this Lease: (i) the City shall fail to pay any item of Additional Rental as and when the same shall become due and payable pursuant to Section 5.01(b); or (ii) the City shall fail to deposit with the Trustee any Base Rental payment required to be so deposited bythe close ofbusiness onthe day such deposit is required pursuant to Section 5.01(a), provided, that anyBase Rental payments abatedpursuant to Section 5.04 shall not constitute an event of default; (iii) the City shall breach any other terms, covenants or conditions contained herein, and shall fail to remedy any such breach with all reasonable dispatch within a period ofthirty (3 0) days after written notice thereof from the Authority, the Trustee or the Credit Entity to the City; provided, however, that ifthe failure stated in the notice cannot be corrected within such period, then theAuthorityshall not unreasonably withhold its consent to an extension of suchtime #45248859v 22 �_A ifcorrective action is instituted by the City within such period and is diligently pursued until the default is corrected. (b) In addition to any default resulting from breach by the City of any agreement, condition, covenant or term hereof, if (1) the City's interest herein or any part thereofbe assigned, sublet or transferred without the written consent ofthe Authority and the Credit Entity, either voluntarily or by operation of law; or (2) the City or any assignee shall file any petition or institute anyproceedings under any act or acts, state or federal, dealing with or relating to the subject ofbankruptcy or insolvency orunder any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for areadjustment of its debts or for any other similar relief, or ifthe City shall make a general or any assignment forthe benefit ofits creditors; or (3) the City shall abandon or vacate the Leased Property or any portion thereof; then in each and every such case the City shall be deemed to be in default hereunder. Upon the happening of any of the events specified in subsection (a) or (b) of this Section (in either case an "Event of Default"), then it shall be lawful for the Authority to exercise any and all remedies available or granted to it pursuant to law or hereunder. Upon the breach of any agreement, condition, covenant or term contained herein required to be observed or performed by the City, the Authoritymay, with the consent ofthe Credit Entity, or at the direction ofthe Credit Entity, shall exercise any and all rights of entry upon or repossession of the Leased Property, and also, at its option, with or without such entry, may, with the consent ofthe Credit Entity, or at the direction ofthe Credit Entity, shall terminate this Lease; provided, that no termination shall be effected either by operation of law or acts of the parties hereto except upon express written notice from the Authority to the City terminating this Lease, as provided below. In the even of such default and notwithstanding any entry by the Authority, the Authoritymay at any time thereafter (with or without notice and demand and without limiting any other rights or remedies the Authority may have): (1) Maintain this Lease in full force and effect and recover rent and other monetary charges as they become due without terminating the City's right to possession ofthe Lease Property, regardless ofwhether or not the City has abandoned the Leased Property. In the event the Authority elects not to terminate this Lease, it shall have the right and the City hereby irrevocably appoints the Authority as its agent and attorney-in-fact for such purpose to attempt to relet the Lease Property at such rent, upon such conditions and for such term, so long as the Trustee obtains an Opinion ofCounsel that the tax-exempt status ofthe interest components of Base Rental payments will be preserved, and to do all other acts to maintain or preserve the LeasedProperty, including removal ofpersons or property therefrom ortakingpossession thereof, as the Authority deems desirable or necessary, and the City herebywaives any and all claims for any damages that may result to the Leased Property thereby; provided, that no such actions shall be deemed to terminate this Lease and the City shall continue to remain liable for any deficiency #45248859v 23 k f that may arise out of such reletting, taking into account expenses incurred by the Authority due to such reletting, payable at the same time and manner as provided for Base Rental in Section 5.01. (2) Terminate the City's right to possession ofthe Leased Propertyby giving a written notice of termination to the City. On the date specified in such notice (which shall be not less than three (3) days after the giving of such notice) the City's right to possession under this Lease shall terminate and the City shall surrender possession ofthe Lease Property, as the case maybe, to the Authority, unless on or before such date all arrears of rental and all other sums payable bythe Cityhereunder, and all costs and expenses incurredby or on behalf ofthe Authority hereunder, including attorney's fees incurred in connection with such defaults, shall have been paid by the City and all other defaults or breaches hereunder by the City at the time existing shall have bee fully remedied to the satisfaction ofthe Authority. Upon such termination, the Authoritymay recover, in addition to all other damages available by contractor at law, to the extent permitted by law, from the City: (i) the worth at the time of award ofthe unpaid rental which had been earned at the time of termination; and (ii) the worth at the time of award ofthe amount by which the unpaid rental which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Cityproves could have been reasonably avoided. The "worth at the time of award" ofthe amounts referred to in clauses (i) and (ii) above is computed by allowing interest at the rate of twelve per cent (12%) per annum. Without otherwise limiting any ofthe rights or remedies ofthe Authority set forth herein, the Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code. Each and all ofthe remedies given to the Authority hereunder or by any law now existing or hereafter enacted are cumulative and the exerci se of any one remedy shall not impair the right ofthe Authority to any or all other remedies. (c) Neither the City nor the Authority shall be in default in the performance of any of its obligations hereunder (except for the obligation to pay Base Rental and Additional Rental pursuant to Section 5.01) unless anuntil it shall have failed to perform such obligation within thirty (30) day after notice bythe Cityorthe Authority, as the case maybe, to the otherpartyproperly specifying wherein it has failed to perform such obligation. ARTICLE XI MISCELLANEOUS SECTION 11.01. Notices. All written notices to be given hereunder shall be given by first class mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: #45248859v 24 If to the Authority: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attention: Executive Director If to the City: City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 Attention: City Manager If to the Trustee: U.S. Bank, N.A. One California Street, Suite 2550 San Francisco, California 94111 Attention: Corporate Trust Department Fax: (415) Phone: (415) If to the Credit Entity: Attention: Public Finance Unit [If to the Confirming Bank:] Attention: Re: City of Diamond Bar SECTION 11.02. Binding Effect. The Lease shall inure to the benefit of an shall be binding upon the Authority and the City and their respective successors and assigns. SECTION 11.03. Third Party Beneficiaries. The Trustee, the Credit Entity and the [Confirming Bank] are hereby designated third party beneficiaries hereunder forthe purpose of enforcing any of the rights hereunder assigned to the Trustee under the Indenture. In the event the Credit Entity wrongfully dishonors a properlypresented and conforming draw under the Credit Facility or the Credit Entityrepudiates the Credit Facility, [the Confirming Bank] shall succeed to all of the rights of the Credit Entity hereunder as if the Credit Entity was not in default under the Credit Facility. SECTION 11.04. Net -Net -Net Lease. It is the purpose and intent ofthe Authority and the Citythat lease payments hereunder shall be absolutelynet to the Authority so that the Lease shall yield to the Authoritythe lease payments, free ofany charges, assessments or impositions of any kind charged, assessed or imposed on or against the Leased Property, and without counterclaim, deduction, defense, deferment or set-offbythe City except as herein specifically otherwise provided. The Authority shall not #45248$59v 25 be expected orrequired to pay anysuch charge, assessment or imposition, orbe under anyobligation or liabilityhereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation ofthe Leased Propertywhich may arise or become due during the term of the Lease shall be paid by the City. SECTION 11.05. Amendments. The Lease may be amended in writing as may be mutually agreed by the Authority and the City, subj ect to the written approval of the Credit Entity and the Trustee; provided, that no such amendment which materially adversely affects the rights ofthe Owners shall be effective unless it shall have b een consented to by the Owners of more than maj ority in aggregate principal amount ofthe Bonds then Outstanding, and provided further, that no such amendment shall (a) extend the payment date ofanyBase Rental payment, without the prior written consent ofthe Owner of each Bond so affected, or (b) reduce the percentage ofthe Bonds the consent ofthe Owners ofwhich is required for the execution of any amendment hereof. The Lease and the rights and obligations ofthe Authority and the Cityhereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution by the Authority and the Citywithout the written consents of any Owners, but with the written approval ofthe Credit Entity and only to the extent permitted by law and only for any one or more of the following purposes — (a) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein and other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein to or conferred herein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners; (b) to make such provisions for the purpose ofcuring any ambiguity of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Authority or the Citymay deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners; (c) to effect a Substitution or Removal; (d) to increase the amount of Base Rental payable hereunder for the purpose of allowing the Authorityto issue Additional Bonds and to add any real propertyto be acquired and leased hereunder from the proceeds of such Additional Bonds to Exhibit A hereof; or (e) for any other purpose which shall not materially adversely affect the interests ofthe Owners. SECTION 11.06. Reserved. #45248854v `101 ', SECTION11.07. Partiallnvalidity.Ifanyone ormore oftheagreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree ofwhich becomes final, none ofthe remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 11.08. California Law. This Lease shall be governed by and construed and interpreted in accordance with the laws of the State of California. SECTION 11.09. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision hereof. SECTION 11.10. Execution. This Lease maybe executed and entered into in several counterparts, each ofwhich shall be deemed an original, and all ofwhich shall constitute but one and the same instrument. SECTION 11.11. Consent of Credit Entity and Confirming B ankl Re uired. Notwithstanding anything in this Lease to the contrary, no amendment or supplement to this Lease shall become effective unless first approved by the Credit Entity [and the Confirming Bank], which approval shall not be unreasonablywithheld. All references herein to Credit Entity or [Confirming Bank] shall be of no force or effect during anyperiod in which no Credit Facility [and/or Confirming Letter of Credit] is in effect. #45248859v 27 IN WTTNESS'WHEREOF, theparties herebyhave executed and entered into this Lease by their officers thereunto duly authorized as of the day and year first written above. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY By: Executive Director CITY OF DIAMOND BAR By: Mayor #45248859v State of California ) ) SS County of Los Angeles ) On before me, personally appeared I I personally Down to me, or /__/ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that byhis/her/their signature(s) onthe instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248859v State of California ) ) SS County of Los Angeles ) On before me, personally appeared L_/ personally known to me, or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248859v EXHIBIT A Description of Leased Property #45248859v A-1 E=IT B Aggregate Annual Base Rental Payment Schedule' Period Ending 1) Principal Interest' Total * Maturity 'The interest component of the Base Rental payments shall equal the interest component due with respect to the Bonds as determined under Section 2.02.A of the Indenture and shall be due and payable on the twenty-fifth day ofthe month immediately preceding each Bond Payment Date as set forth in Section 5.01(a) hereof. #45248859v B-1 RECORDING REQUESTED BY: CHICAGO TITLE AND WHEN RECORDED MAIL TO: FULBRIGHT & JAWORSKI L.L.P. 865 South Figueroa Street, 29' Floor Los Angeles, California 90017-4518 Attention: Don Hunt, Esq. ASSIGNMENT AGREEMENT by and between the CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY and U.S. BANK. N.A., as Trustee Dated as of December 1, 2002 This transaction is exempt from California documentary transfer tax pursuant to Section 11929 of the California Revenue and Taxation Code. This Document is recorded for the benefit of the City of Diamond Bar Public Financing Authority and such recording fee is exempt under Section 6103 of the California Government Code. #45248871v2 ASSIGNMENT AGREEMENT This Assignment Agreement (the "Assignment Agreement), dated as of December 1, 2002, by and between the City of Diamond Bar Public Financing Authority, a joint powers authority, duly organized and existing under and by virtue of the Constitution and laws of the State of California (the "Authority"), and U.S. Bank, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the "Trustee"); WITNESSETH: WHEREAS, the Authority and the City of Diamond Bar, a municipal corporation organized and existing under and by virtue of the Constitution and laws of the State of California (the "City'), have executed and entered into a Lease Agreement, dated as of December 1, 2002 (the "Lease"); r . WHEREAS, under and pursuant to the Lease, the City is obligated to make scheduled base rental payments (the "Base Rental") and additional rental payments (the "Additional Rental") to the Authority; WHEREAS, the Authority desires to assign to the Trustee without recourse all its rights to receive the Base Rental payments to be paid by the City under and pursuant to the Lease and certain other rights thereunder; WHEREAS, in consideration of such assignment and the execution and entering into of an Indenture, dated as of December 1, 2002 (the "Indenture'), by and between the Authority and Trustee, the Trustee will authenticate. and deliver the City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds"), which Bonds shall be payable in part from payments made by the City pursuant to the Lease; and WHEREAS, the Authority hereby certifies that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into ofthe Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into the Assignment Agreement; NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: #4524887tv2 -1- SECTION 1. Assignment. The Authority hereby assign and transfer, without recourse, to the Trustee for the benefit of the registered owners of the Bonds, the Credit Entity and the Confirming Bank (as defined in the Indenture) each and all of its rights under the Lease (but not including the right of the Authority to receive payment of its fees, expenses and reimbursements), including its right to receive the Base Rental from the City under the Lease and its right to exercise such rights and remedies conferred on the Authority under the Lease as may be necessary to enforce payment of the Base Rental when due or otherwise to protect its interests in the event of a default by the City, and all rights of entry in and upon the Leased Property, as defined in the Lease, as provided in the Lease, which property is described in Exhibit A thereto. SECTION 2. Acceptance. The Trustee hereby accepts the foregoing assignment for the benefit of registered owners of the Bonds, the Credit Entity and the Confirming Bank, subject to the conditions and terms of the Indenture, and all Base Rental payments and Additional Rental received by the Trustee shall be applied and all such rights so assigned shall be exercised by the Trustee as provided in the Indenture. SECTION 3. Conditions. The Assignment Agreement shall confer no rights and shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture. SECTION 4. California Law. The Assignment Agreement shall be governed by and construed and interpreted in accordance with the law of the State of California. SECTION 5. Severability. If any agreement, condition, covenant or term thereof or any application hereof shall be held by a court of competent jurisdiction to be invalid, void or unenforceable, in whole or in part, all agreements, conditions, covenants and terms hereof and all applications thereof not held invalid, void or enforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. SECTION 6. Execution in Counterparts. The Assignment Agreement may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. #45248871v2 -2- IN WITNESS WHEREOF the parties hereto have executed and entered into the Assignment Agreement by their officers thereunto duly authorized as of the day and year first above written. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY LIM Executive Director U.S. BANK, N.A., as Trustee w By: #45248871v2 Authorized Signatory State of California ) ) SS County of Los Angeles ) On before me, personally appeared personally known to me, or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #45248871v2 State of California ) ) SS County of Los Angeles ) On before me, personally appeared !_/ personally known to me, or / / proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ties), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. WITNESS my hand and official seal. [Seal] Signature of Notary #!45248871 v2 _ XM•11# I A LEGAL DESCRIPTION OF THE LEASED PROPERTY City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) REMARKETING AGREEMENT City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Ladies and Gentlemen: This is to confirm the agreement between the undersigned, US Bancorp Piper Jaffray ("Piper Jaffray" or the " Remarketing Agent") and the City of Diamond Bar Public Financing Authority, (the "Authority"), for Piper Jaffrayto act as exclusive Remarketing Agent in connection with the offering and sale of $ aggregate principal amount of the City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the `Bonds"), all issued pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture") between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"). All capitalized terms used herein and not defined herein shall have the meanings specified in the Indenture. Concurrently with the execution and delivery of this Agreement, the Authority is entering into a Reimbursement Agreement dated as of December 1, 2002 (the "Reimbursement Agreement") with (the "Credit Entity"). The Trustee is entitled to draw under the letter of credit issued by the Credit Entity (the "Letter of Credit") pursuant to the Reimbursement Agreement to pay (i) the principal; redemption amounts and interest but not premium on the Bonds, and (ii) the purchase price of any Bonds tendered but not remarketed. [The Credit Entity and (the "Confirming Credit Entity") are entering into a Confirmation Agreement, dated as of December 1, 2002 (the "Confirmation Agreement"). The Confirming Credit Entity has issued its Confirming Letter of Credit (the "Confirming Letter of Credit") confirming the obligation of the Credit Entity to make payments under the Letter of Credit.] The Bonds will be as described in and will bear interest in accordance with, the Indenture. 1. Appointment and Res onsibilities of Remarketing Agent. (a) Subject to the terms and conditions herein contained, Piper Jaffray is hereby appointed, and Piper Jaffray hereby accepts such appointment, as exclusive remarketing agent in connection with the determination of Variable: Rate, the offering and sale of the Bonds from time to time in the secondary market subsequent to the initial offering, determination of the Fixed Rate, the offering and sale of the Bonds upon conversion to a Fixed Rate in the secondary market subsequent to the initial offering, and the performance and discharge of all other responsibilities stated to be that of the Remarketing Agent under the Indenture. #45248876x2 (b) The Authority agrees that, unless this Agreement has been previously terminated pursuant to the terms hereof, Piper Jaffray shall act as exclusive Remarketing Agent with respect to the Bonds on the terms and conditions herein contained and contained in the Indenture. (c) The Remarketing Agent agrees to perform all duties required to be performed by it under the Indenture; provided, however, that no amendment to the Indenture purporting to affect the rights or duties of the Remarketing Agent shall be binding on the Remarketing Agent unless the Remarketing Agent shall have consented to such amendment. (d) It is understood and agreed that the Remarketing Agent's responsibilities hereunder and under the Indenture will include (i) exercising its best efforts in its sale of the Bonds, (ii) effecting and processing such purchases, (iii) billing and receiving payment of Bond purchases, (iv) causing the proceeds from the secondary sale of the Bonds to be transferred to the Tender Agent, (v) determining the Fixed Rate, and (vi) performing such other related functions as (1) may be provided for in the Indenture by the Remarketing Agent; (2) necessary for the Remarketing Agent to perform its duties contemplated under the Indenture or this Agreement; or (3) reasonably requested by the Authority and agreed to by the Remarketing Agent. (e) The obligations of the Remarketing Agent hereunder and under the Indenture, with respect to the date on which the Bonds are to be remarketed at a Variable Rate or Fixed Rate pursuant to this Agreement, are also subject to the further condition that on and prior to such date the Indenture, the Letter of Credit [and the Confirming Letter of Credit] shall be in full force and effect and shall not have been amended, modified or supplemented in any way which would materially and adversely affect the duties ofthe Remarketing Agent, except as may have been agreed to in writing by the Remarketing Agent, and there shall be in full force and effect such additional resolutions, agreements, certificates (including such certificates as may be required by regulations of the Internal Revenue Service in order to establish or preserve the tax-exempt character of interest on the Bonds) and opinions, which resolutions, agreements, certificates and opinions shall be reasonably satisfactory in form and substance to Bond Counsel, to the Trustee, to the Authority, to the Credit Entity, [to the Confirming Credit Entity] and to counsel for the Remarketing Agent. 2. Disclosure Covenants. (a) The Authority agrees to comply with all applicable laws, including state and federal securities laws in connection with each remarketing of the Bonds including, but not limited to, providing such information and undertakings as may be required by Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission if the Bonds are to be remarketed in a transaction to which the Rule applies. (b) The Authority agrees to not cause the Remarketing Agent to violate any state or federal law or regulation, including rules of the Securities and Exchange Commission, regarding disclosure in connection with the remarketing of the Bonds. #45248876v2 2 3, The Bonds. As more fully described in the Indenture, the Bonds will be issuable, subject to the terms and conditions of the Indenture, in the form of fully registered Bonds in the denominations, and having such redemption, payment and other terms, as specified in the Indenture. 4. Furnishing of Offering Materials. (a) The Authority agrees to pay the preparation costs of as many copies of the Official Statement as the Remarketing Agent may reasonably request to comply with Securities and Exchange Commission Rule 15c2 -12(b)(4) and the Rules of the Municipal Securities Rulemaking Board, including all the Appendices thereto and information incorporated by reference therein and such other information associated with the Authority and the Bonds as the Remarketing Agent shall reasonably request from time to time, provided, however that no such material shall be finalized unless the Remarketing Agent conducting the remarketing and its counsel have had opportunity to review and comment upon it. (b) The description of the Authority and the other documents or agreements referred to in the Official Statement relating to the Bonds, dated , 2002 (the "Official Statement"), including, without limitation, the information contained under the headings "THE PROTECT," "DEBT STRUCTURE," "FINANCIAL INFORMATION" and "APPENDIX B - CITY AUDITED FINANCIAL STATEMENTS," and all information related to the Authority and the City incorporated therein and any amendments or supplements thereto as have been approved by the Authority and the Underwriter, both at the date hereof and the date of the Closing, are true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make such statements therein concerning the Authority or the City or the other documents or agreements referred to in the Official Statement related to the Authority or the City, in light ofthe circumstances under which they were made, not misleading. If, at any time during the term of this Agreement, any event known to the Authority relating to or affecting the Authority, the City, the Credit Entity, [the Confirming Credit Entity], the Indenture, the Letter of Credit, [the Confirming Letter of Credit], the Reimbursement Agreement, [the Confirmation Agreement], the Bonds or the other documents or agreements referred to in the Official Statement or any material adverse change in the Authority or the City which affects the correctness or completeness of any statement of a material fact contained in the Official Statement, the Authoritywill immediatelynotify the Remarketing Agent bytelephone, promptly confirmed in writing, of the circumstances and details of such event. 5. Representation, Warranties. Covenants and Agreements of the Authority. The representations, warranties and agreements of .the Authority and the City set forth in the Bond Purchase Agreement for the Bonds (the "Purchase Contract"), the representations, warranties and agreements from the Authority and the City to Piper Jaffray, the representative of the Underwriter, are hereby incorporated herein as being made as of the date hereof. The Authority shall deliver to the Remarketing Agent such additional information concerning the business and financial condition of the Authority or the City as the Remarketing Agent may reasonably request. #45248876v2 6. Representations and Warranties of Remarketing Agent. The Remarketing Agent represents and warrants to the Authority as follows: (a) The Remarketing Agent has been duly incorporated and is validly existing and in good standing under the laws of the state of its incorporation; (b) The Remarketing Agent has full power and authority to take all action required to be taken and to perform and observe the covenants and agreements on its part contained in, this Agreement; (c) The Remarketing Agent has, on or before the date hereof, duly taken all action necessary to be taken by it prior to such date for the execution, delivery and performance of this Agreement and the carrying out, giving effect to, consummation and performance of the transactions and obligations contemplated hereby; and (d) This Agreement, when executed and delivered by the parties hereto, will constitute a valid and binding obligation ofthe Remarketing Agent enforceable against the Remarketing Agent in accordance with its terms, except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws, judicial decisions or principles of equity relating to or affecting the enforcement of creditors' rights or contractual obligations generally. 7. Conditions to Obli ations to Remarket. The obligations of the Remarketing Agent under this Agreement have been undertaken in reliance upon, and shall be subject to, the due performance of the obligations and agreements hereunder to be performed by the Authority and to the accuracy of and compliance with the representations, warranties, covenants and agreements of the Authority contained herein, in each case on and as of the date of delivery of this Agreement and on and as of each date on which Bonds are to be remarketed by the Remarketing Agent pursuant to this Agreement. The obligations of the Remarketing Agent hereunder with respect to each date on which Bonds are subject to optional or mandatory tender are subject, and the obligations of the Remarketing Agent with respect to the conversion of the Bonds to a Fixed Rate, in the discretion of the Remarketing Agent, to the following conditions: (a) The indenture, the Letter of Credit, [the Confirming Letter of Credit], the Reimbursement Agreement, [the Confirmation Agreement] and all other documents and agreements referenced in the Indenture or the Official Statement shall be in full force and effect and shall not have been amended, modified or supplemented in any way which would materially and adversely affect the Bonds, except as may have been agreed to in writing by the Remarketing Agent, and there shall be in full force and effect additional resolutions, agreements, certificates and opinions which shall be reasonably satisfactory in form and substance to Bond Counsel and counsel for the Remarketing Agent. (b) At or prior to the closing date (the "Closing Date") under the Purchase Contract, the Remarketing Agent shall have received or waived receipt of all closing documents required by, and delivered pursuant to, the Purchase Contract and all conditions precedent to the delivery of the Bonds shall have been satisfied or waived. #45248876v2 4 (c) The Remarketing Agent shall not remarket Bonds to the Authority or any affiliate thereof. (d) The Remarketing Agent shall not be required to remarket Bonds if there is no Tender Agent or Trustee. (e) The Remarketing Agent shall not be required to remarket Bonds or perform any other obligations under this Agreement or under the Indenture during anyperiod in which the Remarketing Agent reasonably believes that the most current official statement for the Bonds contains any untrue or misleading statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or to remarket Bonds or perform any other obligations under this Agreement or under the Indenture in a transaction which the Remarketing Agent has determined is subject to the Rule unless such transaction meets the requirements of and is in compliance with the Rule and the Remarketing Agent's actions will not cause it to be in violation of the Rule. (f) The Remarketing Agent shall not be required to remarket Bonds or perform any other obligations under the Indenture if any of the following events has occurred and the event or its consequences are continuing and the Remarketing Agent has certified in writing to the Authority and the Credit Entity that such event has occurred: (i) the Authority and the Remarketing Agent have not agreed upon a satisfactory fee to be paid to the Remarketing Agent or any such fee is due and unpaid; (ii) anyproceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority, the Credit Entity [or the Confirming Credit Entity]; (iii) the Credit Entity shall have defaulted under or rescinded, repudiated or terminated the Letter ofCredit, or any material provision thereof or the Credit Entity or any governmental body with jurisdiction over the Credit Entity shall have challenged the validity of any material provision thereof, or the Issuer or the Trustee or the Remarketing Agent shall have received notice from the Credit Entity that it will be unable to perform its obligations thereunder and, in any such case, a substitute Letter of Credit is not in place (unless the Bonds are to be remarketed at a fixed interest rate to maturity without a letter of credit); (iv) any court, authority or administrative or regulatory body of the country under whose laws the Credit Entity or substitute credit provider is organized shall have taken action materially adversely affecting or questioning the ability of (i) banks to issue or perform under letters of credit in transactions similar to the transactions contemplated by this Agreement or (ii) the Credit Entity to perform its obligations under the Letter of Credit or substitute credit facility #45248876v2 not affected by such action is not in place (unless the Bonds are to be remarketed at a fixed interest rate to maturity without a letter of credit); (v) an Event of Default has occurred under the Indenture; (vi) the Indenture has been amended without the consent of the Remarketing Agent and such amendment adversely affects the Remarketing Agent; (vii) any representation or warranty of the Authority under this Agreement shall be false or misleading in any material respect; (viii) the Authority shall have committed a material default in the performance of any of its obligations under this Agreement; and (ix) any litigation or legal or governmental action, proceeding, inquiry or investigation is pending or threatened against the Authority, the Credit Entity [or the Confirming Credit Entity] which in reasonable opinion of the Remarketing Agent makes the Bonds unmarketable. 8. Conditions to Authority's Obligations. The obligations of the Authority under this Agreement have been undertaken in reliance upon, and shall be subject to, the due performance of the obligations and agreements hereunder to be performed by the Remarketing Agent and to the accuracy of and compliance with the representations, warranties, covenants and agreements of the Remarketing Agent contained herein, in each case on and as of the date of delivery of this Agreement and on and as of each date on which Bonds are to be remarketed by the Remarketing Agent pursuant to this Agreement. 9. Term and Termination of Remarketing_ Agreement. (a) This Remarketing Agreement shall be in effect from the execution hereof until the earliest to occur of (i) the redemption of all the Bonds, or (ii) the date of termination of any letter of credit or alternate credit facility without replacement, or (iii) resignation or removal of the Remarketing Agent pursuant to the Indenture provided, however, that the obligations of the Authority to pay any amounts then owed to the Remarketing Agent shall survive the termination of this Agreement. On the termination date, the Authority shall pay to the Remarketing Agent any fees and expenses due not previously paid. (b) In addition to the provisions of paragraph (a) of this section, the Remarketing Agent may terminate its obligations under this Agreement at any time by notifying the Authority in writing or by telegram, facsimile or other electronic communications of its election so to do, if: (i) Legislation shall be favorably reported, recommended by committee or enacted by the Congress or adopted by either House thereof or a decision by a Court of the United States of America or the United States Tax Court shall be rendered or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United 445248876x2 6 States ofAmerica, the Internal Revenue Service or other governmental agency shall be made, with respect to federal taxation of receipts, revenues or other income of the general character expected to be received by the Authority or of interest received on obligations of the general character of the Bonds, or which would have the effect of changing directly or indirectly the federal income tax consequences of interest on bonds of the general character of the Bonds in the hands of the holders thereof, which, in the opinion of the Remarketing Agent, materially adversely affects the market price of the Bonds; (ii) Legislation shall be introduced by committee, by amendment or otherwise, in, or be enacted by, the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the United States Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the offering or sale of obligations of the general character of the Bonds, as contemplated hereby, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby. (iii) Any information shall have become known, which, in the Remarketing Agent's reasonable opinion, is untrue, incorrect or misleading in any material respect any statement or information contained in the Official Statement, as the information contained therein has been supplemented or amended by other information, as of the date furnished or supplemented to the Remarketing Agent in accordance with Section 4 hereof, or causes the Official Statement, as so supplemented or amended, to contain an untrue, incorrect or misleading statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (iv) Except as provided in clause (i) hereof, any legislation, resolution, ordinance, rule or regulation shall be introduced in, or be enacted by, any government body, department or agency of the United States or the State of California shall be rendered which, in the Remarketing Agent's reasonable opinion, materially adversely affects the marketability of the Bonds; (v) Additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (vi) Any governmental authority shall impose, as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force; #45248876v2 7 (vii) A general banking moratorium shall have been established by federal, New York or California authorities; (viii) Any rating of the Bonds shall have been downgraded or withdrawn by a national rating service, which, in the Remarketing Agent's reasonable, opinion, materially adversely affects the marketability of the Bonds; (ix) A war involving the United States shall have been declared, or any existing conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the operation of government or the financial community shall have occurred, which, in the Remarketing Agent's reasonable opinion materially adversely affects the marketability -of the Bonds; (x) An event, including, without limitation, the bankruptcy or default of any other issuer of or obligor on obligations of the general character of the Bonds or on similar commercial paper, shall have occurred which, in the opinion of the Remarketing Agent, makes the marketability of obligations of the general character of the Bonds impossible over an extended period of time. 10. Dealing in Bonds by Rernarketing_Agent. The Remarketing Agent, either as principal or agent, may, in good faith, buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Bondholder may be entitled to take with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority and may act as depository, trustee or agent for any committee or body of Bondholders or other obligations of the Authority as freely as if it did not act in any capacity hereunder. 11. Pa ent of Fees and Expenses of Remarketing, Agent. In consideration of the services to be performed by the Remarketing Agent under this Agreement, the Authority agrees to pay to the Remarketing Agent while the Bonds bear interest at a Variable Rate, [and so long as the Confirming Credit Entity maintains the highest short term rating maintained by S&P], an annual fee equal to [1/8 of 1%] of the weighted average daily principal amount of such Bonds Outstanding calculated on the basis of a 360 -day year consisting of twelve 30 -day months, payment of such fee shall be made on a quarterly basis in arrears on the first calendar day of [January, April, July and October] beginning on the first such quarterly payment date after the Closing Date. In the event the short term rating of the Credit Entity drops below the highest short term rating, the Remarketing Agent and the Authority agree to renegotiate the annual fee in good faith. In consideration of the services to be performed by the Remarketing Agent under this Agreement at the time of the Conversion to a Fixed Rate, the Authority agrees to pay to the Remarketing Agent a fee to be agreed upon between the Authority and the Remarketing Agent at the time of the Conversion to a Fixed Rate. In addition to the above paragraph, the Authority agrees to pay the reasonable costs of remarketing the Bonds at a Variable Rate or Fixed Rate, including, but not limited to, the costs of updating the Official Statement from time to time and any and all out of pocket disbursements and #45248876v2 legal fees of counsel to the Remarketing Agent in connection with the remarketing of the Bonds at a Variable Rate or Fixed Rate, but only if reasonably necessary for the remarketing of the Bonds. 12. Indemni1y and Contribution. To the extent, if any, that a court of competent jurisdiction would enforce such agreement as not contrary to law or public policy, the Authority agrees as follows: (a) In the event that the Remarketing Agent (which term in this Paragraph 12 shall be deemed to include any partner, officer, director, employee, agent or counsel of the Remarketing Agent) become involved in any capacity in any action, proceeding or investigation in connection with any matter referred to in this Agreement and to the extent not arising out of the negligence or wilful misconduct of the Remarketing Agent, the Authority will periodically reimburse the Remarketing Agent for any legal and other expenses (including the cost of any investigation and preparation incurred by the Remarketing Agent in connection therewith to the maximum extent allowed by law. The Authority also will indemnify and hold harmless the Remarketing Agent against any losses, claims, damages or liability to which it may become subject in connection with any matter referred to in this Agreement, except to the extent that any such loss, claim, damage or liability results from the wilful misconduct or negligence of the Remarketing Agent in performing the services which are the subject of this Agreement, (b) Promptly after receipt by the Remarketing Agent of notice of the commencement of any action, the Remarketing Agent shall, if a claim in respect thereof under subsection (a) above is to be made, notify the Authority of such action; but the omission so to notify the Authority shall not relieve it of any liability that it may have to the Remarketing Agent otherwise than under such subsection arising after receipt of such notification. In such event, the Authority shall be entitled to assume the defense of such action with counsel satisfactory to the Remarketing Agent and, thereafter, the Authority shall not be liable to the Remarketing Agent for any legal expenses subsequently incurred bythe Remarketing Agent in connection with the defense of such action, other than the reasonable costs of investigation. (c) if for any reason the foregoing indemnification is unavailable to the Remarketing Agent or insufficient to hold the Remarketing Agent harmless, then the Authority shall contribute to the amount paid or payable by the Remarketing Agent as a result of such loss, claim, damage or liability or action in respect thereof (including such legal or other expenses) in such proportion that the Remarketing Agent is responsible for that portion represented by the percentage that the remarketing fees set forth in Section 11 hereof, as appropriate, bears to the aggregate principal amount of Bonds outstanding and the Authority is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Authority's reimbursement, indemnity and contribution obligations under this paragraph shall be in addition to any liability which the Authority may otherwise have, shall extend upon the same terms and conditions to the partners, employees and controlling persons (if any) of the Remarketing Agent and shall be binding upon and inure to the benefit of any successors, 445248875v2 9 assigns, heirs and personal representatives of the Authority, the Remarketing Agent and any such person. 13. Miscellaneous. (a) Except as otherwise specifically provided in this Agreement, all notices and formal communications under this Agreement shall be in writing and mailed, telegraphed or delivered to: The Remarketing Agent: US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Attn: Telephone: (415) Facsimile: (415) The Authority: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attn: Executive Director Telephone: (909) Facsimile: (909) The Credit Entity: [The Confirming Credit Entity:] The parties to this Agreement may, by notice given under this Agreement, designate other addresses to which subsequent notices, requests, reports or other communications shall be directed. (b) The obligations of the respective parties hereto may not be assigned or delegated to any other person without the consent of the other parties hereto. This Agreement will inure to the benefit of and be binding upon the Authority and the Remarketing Agent and their respective successors and assigns, and will not confer any rights upon any other person, partnership, association or corporation other than persons, if any, controlling the Remarketing Agent within the meaning of the Securities Act. (c) All of the representations, warranties and agreements contained in this Agreement of the Authority and the Remarketing Agent shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of the Remarketing Agent or the Authority, (ii) delivery of and any payment for any Bonds hereunder or (iii) termination or cancellation of this Agreement. (d) Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not apart this Agreement and will not be used in the interpretation of any provision of this Agreement. (e) If any provision of this Agreement shall be held or deemed to be or in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstances, or of rendering any other provisions inoperative or unenforceable to any extent whatever. (f) This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. (g) This Agreement shall be governed by and construed in accordance with the laws of the State of California, except that the obligation of the Authority shall be governed by and construed in accordance with the laws of the State of California. If the foregoing is in accordance with your understanding of this Remarketing Agreement, please indicate your acceptance thereof by signing the enclosed duplicate copies hereof. Very truly yours, Accepted and agreed to as of the date first above written: CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY En Executive Director #45248876x2 City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) REMARKETING AGREEMENT City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91755 Ladies and Gentlemen: This is to confirm the agreement between the undersigned, US Bancorp Piper Jaffray ("Piper Jaffray" or the " Remarketing Agent") and the City of Diamond Bar Public Financing Authority, (the "Authority"), for Piper Jaffray to act as exclusive Remarketing Agent in connection with the offering and sale of $ aggregate principal amount of the City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds'), all issued pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture") between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"). All capitalized terms used herein and not defined herein shall have the meanings specified in the Indenture. Concurrently with the execution and delivery of this Agreement, the Authority is entering into a Reimbursement Agreement dated as of December 1, 2002 (the "Reimbursement Agreement") with (the "Credit Entity"). The Trustee is entitled to draw under the letter of credit issued by the Credit Entity (the "Letter of Credit") pursuant to the Reimbursement Agreement to pay (i) the principal, redemption amounts and interest but not premium on the Bonds, and (ii) the purchase price of any Bonds tendered but not remarketed. [The Credit Entity and (the "Confirming Credit Entity") are entering into a Confirmation Agreement, dated as of December 1, 2002 (the "Confirmation Agreement"). The Confirming Credit Entity has issued its Confirming Letter of Credit (the "Confirming Letter of Credit") confirming the obligation of the Credit Entity to make payments under the Letter of Credit.] The Bonds will be as described in and will bear interest in accordance with, the Indenture. Appointment and Responsibilities of Remarketing Agent. (a) Subject to the terms and conditions herein contained, Piper Jaffray is hereby appointed, and Piper Jaffray hereby accepts such appointment, as exclusive remarketing agent in connection with the determination of Variable Rate, the offering and sale of the Bonds from time to time in the secondary market subsequent to the initial offering, determination of the Fixed Rate, the offering and sale of the Bonds upon conversion to a Fixed Rate in the secondary market subsequent to the initial offering, and the performance and discharge of all other responsibilities stated to be that of the Remarketing Agent under the Indenture. #45248876v2 (b) The Authority agrees that, unless this Agreement has been previously terminated pursuant to the terms hereof, Piper Jaffray shall act as exclusive Remarketing Agent with respect to the Bonds on the terms and conditions herein contained and contained in the Indenture. (c) The Remarketing Agent agrees to perform all duties required to be performed by it under the Indenture; provided, however, that no amendment to the Indenture purporting to affect the rights or duties of the Remarketing Agent shall be binding on the Remarketing Agent unless the Remarketing Agent shall have consented to such amendment. (d) It is understood and agreed that the Remarketing Agent's responsibilities hereunder and under the Indenture will include (i) exercising its best efforts in its sale of the Bonds, (ii) effecting and processing such purchases, (iii) billing and receiving payment of Bond purchases, (iv) causing the proceeds from the secondary sale of the Bonds to be transferred to the Tender Agent, (v) determining the Fixed Rate, and (vi) performing such other related functions as (1) may be provided for in the Indenture by the Remarketing Agent; (2) necessary for the Remarketing Agent to perform its duties contemplated under the Indenture or this Agreement; or (3) reasonably requested by the Authority and agreed to by the Remarketing Agent. (e) The obligations of the Remarketing Agent hereunder and under the Indenture, with respect to the date on which the Bonds are to be remarketed at a Variable Rate or Fixed Rate pursuant to this Agreement, are also subject to the further condition that on and prior to such date the indenture, the Letter of Credit [and the Confirming Letter of Credit] shall be in full force and effect and shall not have been amended, modified or supplemented in any way which would materially and adversely affect the duties of the Remarketing Agent, except as may have been agreed to in writing by the Remarketing Agent, and there shall be in full force and effect such additional resolutions, agreements, certificates (including such certificates as may be required by regulations of the Internal Revenue Service in order to establish or preserve the tax-exempt character of interest on the Bonds) and opinions, which resolutions, agreements, certificates and opinions shall be reasonably satisfactory in form and substance to Bond Counsel, to the Trustee, to the Authority, to the Credit Entity, [to the Confirming Credit Entity] and to counsel for the Remarketing Agent. 2. Disclosure Covenants. (a) The Authority agrees to comply with all applicable laws, including state and federal securities laws in connection with each remarketing of the Bonds including, but not limited to, providing such information and undertakings as may be required by Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission if the Bonds are to be remarketed in a transaction to which the Rule applies. (b) The Authority agrees to not cause the Remarketing Agent to violate any state or federal law or regulation, including rules of the Securities and Exchange Commission, regarding disclosure in connection with the remarketing of the Bonds. #45248876v2 2 3. The Bonds. As more fully described in the Indenture, the Bonds will be issuable, subject to the terms and conditions of the indenture, in the form of fully registered Bonds in the denominations, and having such redemption, payment and other terms, as specified in the Indenture. 4. Furnishing of Offering Materials. (a) The Authority agrees to pay the preparation costs of as many copies of the Official Statement as the Remarketing Agent may reasonably request to comply with Securities and Exchange Commission Rule 15c2 -12(b)(4) and the Rules of the Municipal Securities Rulemaking Board, including all the Appendices thereto and information incorporated by reference therein and such other information associated with the Authority and the Bonds as the Remarketing Agent shall reasonably request from time to time, provided, however that no such material shall be finalized unless the Remarketing Agent conducting the remarketing and its counsel have had opportunity to review and comment upon it. (b) The description of the Authority and the other documents or agreements referred to in the Official Statement relating to the Bonds, dated '2002 (the "Official Statement"), including, without limitation, the information contained under the headings "THE PROJECT," "DEBT STRUCTURE," "FINANCIAL INFORMATION" and "APPENDIX B - CITY AUDITED FINANCIAL STATEMENTS," and all information related to the Authority and the City incorporated therein and any amendments or supplements thereto as have been approved by the Authority and the Underwriter, both at the date hereof and the date of the Closing, are true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make such statements therein concerning the Authority or the City or the other documents or agreements referred to in the Official Statement related to the Authority or the City, in light of the circumstances under which they were made, not misleading. If, at any time during the term of this Agreement, any event known to the Authority relating to or affecting the Authority, the City, the Credit Entity, [the Confirming Credit Entity], the Indenture, the Letter of Credit, [the Confirming Letter of Credit], the Reimbursement Agreement, [the Confirmation Agreement], the Bonds or the other documents or agreements referred to in the Official Statement or any material adverse change in the Authority or the City which affects the correctness or completeness of any statement of a material fact contained in the Official Statement, the Authority will immediately notify the Remarketing Agent bytelephone, promptly confirmed in writing, of the circumstances and details of such event. 5. Representation, Warranties, Covenants and Agreements of the Authority. The representations, warranties and agreements of the Authority and the City set forth in the Bond Purchase Agreement for the Bonds (the "Purchase Contract"), the representations, warranties and agreements from the Authority and the City to Piper Jaffray, the representative of the Underwriter, are hereby incorporated herein as being made as of the date hereof. The Authority shall deliver to the Remarketing Agent such additional information concerning the business and financial condition of the Authority or the City as the Remarketing Agent may reasonably request. #45248876x2 6. Representations and Warranties of Remarketing Agent. The Remarketing Agent represents and warrants to the Authority as follows: (a) The Remarketing Agent has been duly incorporated and is validly existing and in good standing under the laws of the state of its incorporation; (b) The Remarketing Agent has full power and authority to take all action required to be taken and to perform and observe the covenants and agreements on its part contained in, this Agreement; (c) The Remarketing Agent has, on or before the date hereof, duly taken all action necessary to be taken by it prior to such date for the execution, delivery and performance of this Agreement and the carrying out, giving effect to, consummation and performance of the transactions and obligations contemplated hereby; and (d) This Agreement, when executed and delivered by the parties hereto, will constitute a valid and binding obligation of the Remarketing Agent enforceable against the Remarketing Agent in accordance with its terms, except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws, judicial decisions or principles of equity relating to or affecting the enforcement of creditors' rights or contractual obligations generally. 7. Conditions to Obligations to Remarket. The obligations of the Remarketing Agent under this Agreement have been undertaken in reliance upon, and shall be subject to, the due performance of the obligations and agreements hereunder to be performed by the Authority and to the accuracy of and compliance with the representations, warranties, covenants and agreements of the Authority contained herein, in each case on and as of the date of delivery of this Agreement and on and as of each date on which Bonds are to be remarketed by the Remarketing Agent pursuant to this Agreement. The obligations of the Remarketing Agent hereunder with respect to each date on which Bonds are subject to optional or mandatory tender are subject, and the obligations of the Remarketing Agent with respect to the conversion of the Bonds to a Fixed Rate, in the discretion of the Remarketing Agent, to the following conditions: (a) The Indenture, the Letter of Credit, [the Confirming Letter of Credit], the Reimbursement Agreement, [the Confirmation Agreement] and all other documents and agreements referenced in the Indenture or the Official Statement shall be in full force and effect and shall not have been amended, modified or supplemented in any way which would materially and adversely affect the Bonds, except as may have been agreed to in writing by the Remarketing Agent, and there shall be in full force and effect additional resolutions, agreements, certificates and opinions which shall be reasonably satisfactory in form and substance to Bond Counsel and counsel for the Remarketing Agent. (b) At or prior to the closing date (the "Closing Date") under the Purchase Contract, the Remarketing Agent shall have received or waived receipt of all closing documents required by, and delivered pursuant to, the Purchase Contract and all conditions precedent to the delivery ofthe Bonds shall have been satisfied or waived. #45248876v2 4 (c) The Remarketing Agent shall not remarket Bonds to the Authority or any affiliate thereof (d) The Remarketing Agent shall not be required to remarket Bonds ifthere is no Tender Agent or Trustee. (e) The Remarketing Agent shall not be required to remarket Bonds or perform any other obligations under this Agreement or under the Indenture during any period in which the Remarketing Agent reasonably believes that the most current official statement for the Bonds contains any untrue or misleading statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or to remarket Bonds or perform any other obligations under this Agreement or under the Indenture in a transaction which the Remarketing Agent has determined is subject to the Rule unless such transaction meets the requirements of and is in compliance with the Rule and the Remarketing Agent's actions will not cause it to be in violation of the Rule. (f) The Remarketing Agent shall not be required to remarket Bonds or perforin any other obligations under the Indenture if any of the following events has occurred and the event or its consequences are continuing and the Remarketing Agent has certified in writing to the Authority and the Credit Entity that such event has occurred: (i) the Authority and the Remarketing Agent have not agreed upon a satisfactory fee to be paid to the Remarketing Agent or any such fee is due and unpaid; (ii) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority, the Credit Entity [or the Confirming Credit Entity]; (iii) the Credit Entity shall have defaulted under or rescinded, repudiated or terminated the Letter of Credit, or any material provision thereof or the Credit Entity or any governmental body with jurisdiction over the Credit Entity shall have challenged the validity of any material provision thereof, or the Issuer or the Trustee or the Remarketing Agent shall have received notice from the Credit Entity that it will be unable to perform its obligations thereunder and., in any such case, a substitute Letter of Credit is not in place (unless the Bonds are to be remarketed at a fixed interest rate to maturity without a letter of credit); (iv) any court, authority or administrative or regulatory body of the country under whose laws the Credit Entity or substitute credit provider is organized shall have taken action materially adversely affecting or questioning the ability of (i) banks to issue or perform under letters of credit in transactions similar to the transactions contemplated by this Agreement or (ii) the Credit Entity to perform its obligations under the Letter of Credit or substitute credit facility #45248876v2 5 not affected by such action is not in place (unless the Bonds are to be remarketed at a fixed interest rate to maturity without a letter of credit); (v) an Event of Default has occurred under the Indenture; (vi) the Indenture has been amended without the consent of the Remarketing Agent and such amendment adversely affects the Remarketing Agent; (vii) any representation or warranty of the Authority under this Agreement shall be false or misleading in any material respect; (viii) the Authority shall have committed a material default in the performance of any of its obligations under this Agreement; and (ix) any litigation or legal or governmental action, proceeding, inquiry or investigation is pending or threatened against the Authority, the Credit Entity [or the Confirming Credit Entity) which in reasonable opinion of the Remarketing Agent makes the Bonds unmarketable. 8. Conditions to Authority's Obligations. The obligations of the Authority under this Agreement have been undertaken in reliance upon, and shall be subject to, the due performance of the obligations and agreements hereunder to be performed by the Remarketing Agent and to the accuracy of and compliance with the representations, warranties, covenants and agreements of the Remarketing Agent contained herein, in each case on and as of the date of deliveryof this Agreement and on and as of each date on which Bonds are to be remarketed by the Remarketing Agent pursuant to this Agreement. Term and Termination of Remarketing Agreement. (a) This Remarketing Agreement shall be in effect from the execution hereof until the earliest to occur of (i) the redemption of all the Bonds, or (ii) the date of termination of any letter of credit or alternate credit facility without replacement, or (iii) resignation or removal of the Remarketing Agent pursuant to the Indenture provided, however, that the obligations of the Authority to pay any amounts then owed to the Remarketing Agent shall survive the termination of this Agreement. On the termination date, the Authority shall pay to the Remarketing Agent any fees and expenses due not previously paid. (b) In addition to the provisions of paragraph (a) of this section, the Remarketing Agent may terminate its obligations under this Agreement at any time by notifying the Authority in writing or by telegram, facsimile or other electronic communications of its election so to do, if: (i) Legislation shall be favorably reported, recommended by committee or enacted by the Congress or adopted by either House thereof or a decision by a Court of the United States of America or the United States Tax Court shall be rendered or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United #45248876v2 6 States ofAmerica, the Internal Revenue Service or other governmental agency shall be made, with respect to federal taxation of receipts, revenues or other income of the general character expected to be received by the Authority or of interest received on obligations of the general character of the Bonds, or which would have the effect of changing directly or indirectly the federal income tax consequences of interest on bonds of the general character of the Bonds in the hands of the holders thereof, which, in the opinion of the Remarketing Agent, materially adversely affects the market price of the Bonds; (ii) Legislation shall be introduced by committee, by amendment or otherwise, in, or be enacted by, the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the United States Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be inade or proposed, to the effect that the offering or sale of obligations of the general character of the Bonds, as contemplated hereby, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby. (iii) Any information shall have become known, which, in the Remarketing Agent's reasonable opinion, is untrue, incorrect or misleading in any material respect any statement or information contained in the Official Statement, as the information contained therein has been supplemented or amended by other information, as of the date furnished or supplemented to the Remarketing Agent in accordance with Section 4 hereof, or causes the Official Statement, as so supplemented or amended, to contain an untrue, incorrect or misleading statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (iv) Except as provided in clause (i) hereof, any legislation, resolution, ordinance, rule or regulation shall be introduced in, or be enacted by, any government body, department or agency of the United States or the State of California shall be rendered which, in the Remarketing Agent's reasonable opinion, materially adversely affects the marketability of the Bonds; (v) Additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (vi) Any governmental authority shall impose, as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force; ##45248876v2 7 (vii) A general banking moratorium shall have been established by federal, New York or California authorities; (viii) Any rating of the Bonds shall have been downgraded or withdrawn by a national rating service, which, in the Remarketing Agent's reasonable, opinion, materially adversely affects the marketability of the Bonds; (ix) A war involving the United States shall have been declared, or any existing conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the operation of government or the financial community shall have occurred, which, in the Remarketing Agent's reasonable opinion materially adversely affects the marketability of the Bonds; (x) An event, including, without limitation, the bankruptcyor default ofany other issuer of or obligor on obligations of the general character of the Bonds or on similar commercial paper, shall have occurred which, in the opinion of the Remarketing Agent, makes the marketability of obligations ofthe general character of the Bonds impossible over an extended period of time. 10. Dealing in Bonds by Remarketing Agent. The Remarketing Agent, either as principal or agent, may, in good faith, buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Bondholder may be entitled to take with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority and may act as depository, trustee or agent for any committee or body of Bondholders or other obligations of the Authority as freely as if it did not act in any capacity hereunder. 11. PaMent of Fees and -Expenses of Remarketing Agent. In consideration of the services to be performed by the Remarketing Agent under this Agreement, the Authority agrees to pay to the Remarketing Agent while the Bonds bear interest at a Variable Rate, [and so long as the Confirming Credit Entity maintains the highest short term rating maintained by S&P], an annual fee equal to [1/S of 1%] of the weighted average daily principal amount of such Bonds Outstanding calculated on the basis of a 360 -day year consisting of twelve 30 -day months, payment of such fee shall be made on a quarterly basis in arrears on the first calendar day of [January, April, July and October] beginning on the first such quarterly payment date after the Closing Date. In the event the short term rating of the Credit Entity drops below the highest short term rating, the Remarketing Agent and the Authority agree to renegotiate the annual fee in good faith. In consideration of the services to be performed by the Remarketing Agent under this Agreement at the time of the Conversion to a Fixed Rate, the Authority agrees to pay to the Remarketing Agent a fee to be agreed upon between the Authority and the Remarketing Agent at the time of the Conversion to a Fixed Rate. In addition to the above paragraph, the Authority agrees to pay the reasonable costs of remarketing the Bonds at a Variable Rate or Fixed Rate, including, but not limited to, the costs of updating the Official Statement from time to time and any and all out of pocket disbursements and #4524$876v2 legal fees of counsel to the Remarketing Agent in connection with the remarketing of the Bonds at a Variable Rate or Fixed Rate, but only if reasonably necessary for the remarketing of the Bonds. 12. Indenuriiy and Contribution. To the extent, if any, that a court of competent jurisdiction would enforce such agreement as not contrary to Iaw or public policy, the Authority agrees as follows: (a) In the event that the Remarketing Agent (which term in this Paragraph 12 shall be deemed to include any partner, officer, director, employee, agent or counsel of the Remarketing Agent) become involved in any capacity in any action, proceeding or investigation in connection with any matter referred to in this Agreement and to the extent not arising out of the negligence or wilful misconduct of the Remarketing Agent, the Authority will periodically reimburse the Remarketing Agent for any legal and other expenses (including the cost of any investigation and preparation incurred by the Remarketing Agent in connection therewith to the maximum extent allowed by law. The Authority also will indemnify and hold harmless the Remarketing Agent against any losses, claims, damages or liability to which it may become subject in' connection with any matter referred to in this Agreement, except to the extent that any such loss, claim, damage or liability results from the wilful misconduct or negligence of the Remarketing Agent in performing the services which are the subject of this Agreement, (b) Promptly after receipt by the Remarketing Agent of notice of the commencement of any action, the Remarketing Agent shall, if a claim in respect thereof under subsection (a) above is to be made, notify the Authority of such action; but the omission so to notify the Authority shall not relieve it of any liability that it may have to the Remarketing Agent otherwise than under such subsection arising after receipt of such notification. In such event, the Authority shall be entitled to assume the defense of such action with counsel satisfactory to the Remarketing Agent and, thereafter, the Authority shall not be liable to the Remarketing Agent for any legal expenses subsequently incurred by the Remarketing Agent in connection with the defense of such action, other than the reasonable costs of investigation. (c) If for any reason the foregoing indemnification is unavailable to the Remarketing Agent or insufficient to hold the Remarketing Agent harmless, then the Authority shall contribute to the amount paid or payable by the Remarketing Agent as a result of such loss, claim, damage or liability or action in respect thereof (including such legal or other expenses) in such proportion that the Remarketing Agent is responsible for that portion represented by the percentage that the remarketing fees set forth in Section 11 hereof, as appropriate, bears to the aggregate principal amount of Bonds outstanding and the Authority is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section I l(i) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Authority's reimbursement, indemnity and contribution obligations under this paragraph shall be in addition to any liability which the Authority may otherwise have, shall extend upon the same terms and conditions to the partners, employees and controlling persons (if any) of the Remarketing Agent and shall be binding upon and inure to the benefit of any successors, #45248$76x2 9 assigns, heirs and personal representatives of the Authority, the Remarketing Agent and any such person. 13. Miscellaneous. (a) Except as otherwise specifically provided in this Agreement, all notices and formal communications under this Agreement shall be in writing and mailed, telegraphed or delivered to: The Remarketing Agent: US Bancorp Piper Jaffray 345 California Street, Suite 2200 San Francisco, California 94104 Attn: Telephone: (415) Facsimile: (415) The Authority: City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 Attn: Executive Director Telephone: (909) Facsimile: (909) The Credit Entity: Telephone: Facsimile: [The Confirming Credit Entity:] Attention: Telephone: Facsimile: #45248876v2 10 The parties to this Agreement may, by notice given under this Agreement, designate other addresses to which subsequent notices, requests, reports or other communications shall be directed. (b) The obligations of the respective parties hereto may not be assigned or delegated to any other person without the consent of the other parties hereto. This Agreement will inure to the benefit of and be binding upon the Authority and the Remarketing Agent and their respective successors and assigns, and will not confer any rights upon any other person, partnership, association or corporation other than persons, if any, controlling the Remarketing Agent within the meaning of the Securities Act. (c) All of the representations, warranties and agreements contained in this Agreement of the Authority and the Remarketing Agent shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of the Remarketing Agent or the Authority, (ii) delivery of and any payment for any Bonds hereunder or (iii) termination or cancellation of this Agreement. (d) Section headings have been inserted in this Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part this Agreement and will not be used in the interpretation of any provision of this Agreement. (e) If any provision ofthis Agreement shall be held or deemed to be or in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with anyprovisions of any constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstances, or of rendering any other provisions inoperative or unenforceable to any extent whatever. (fl This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. (g) This Agreement shall be governed by and construed in accordance with the laws of the State of California, except that the obligation of the Authority shall be governed by and construed in accordance with the laws of the State of California. n45248976v2 11 If the foregoing is in accordance with your understanding of this Remarketing Agreement, please indicate your acceptance thereof by signing the enclosed duplicate copies hereof. Very truly yours, US BANCORP PIPER JAFFRAY By:_ Title: Accepted and agreed to as of the date first above written: CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY Executive Director 045248876v2 PRELIMINARY OFFICIAL STATEMENT DATED , 2002 NEW ISSUE — BOOK -ENTRY ONLY RATINGS: Moody's: " / " S&P: GG 1 13, (See "RATINGS" herein) In the opinion of Fulbright &Jaworski L.L.P., Los Angeles, California, Bond Counsel, under existing law, interest on the Bonds is exempt from personal income taxes of the Slate of Califjornia and, assuming complaance with the lax covenants described herein, interest on the Bonds is excluded pursuant to section 103(a) of the Internal Revenue Code of 1986 from the gross income of the owners thereo{for federal income tax purposes and is not an item of rax preference for purposes of rhe federal alternative minimum tax. See, however "TAX EXEMPTION, hherein regarding certain other tax considerations. Dated: Date of Delivery CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) Due: The City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) the Bonds") will be issued by the City of Diamond Bar Public Financing Authority (the "Authority") under an Indenture, dated as. of December 1, 2002 the "Indenture'by and between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"). The proceeds of the Bonds will be used (i) to finance a community. error center project (the "Project'. and other public improvements within the City, (ii) to fund capitalized interest on the Bonds through and (iii) to pay costs of issuance of the Bonds. See "FLAN OF FINANCING" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers in Authorized Denominations as described herein, under the book -entry system maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds.. Interest on the Bonds will be payable on the first Business Day of each month, commencing [January 1, 20031, so long as the Bonds bear interest at a Weekly Rate or Daily Rate and, after conversion to a fixed interest rate, interest will be payable on each I and 1, commencing I or 1 that is at least 75 days after the Fixed Rate Conversion Date (as defined herein) The Trustee wclimake payments of the principal v�um, if any; and interest on the Bonds directly to DTC, or its nominee, Cede & Co,, so long as DTC or Cede. & Co. is the registered owner of the Bonds. Disbursements of such payments to the Beneficial Owners of the Bonds is the responsibility of DTC's Participants and Indirect Participants, as more fully described herein. See "APPENDIX D — BOOK -ENTRY ONLY SYSTEM." The Bonds are subject to optional redemption, mandatory sinking fund redemption and mandatory redemption from net proceeds as described herein. The bonds are also subject to mandatory tender and optional tender as described herein. The Authority has leased certain real property designated for the Project (the "Site") from the City of Diamond Bar (the "City") pursuant to a Site Lease, dated as of December 1, 2002, by and between the Authority and the City, and has leased the Site and improvements to be constructed thereon, including the Project (collectively, the "Leased Property"), back to the City pursuant to a Lease Agreement, dated as of December 1, 2002, by and between the Authority and the City. Under the Lease, the City will pay to the Authority certain base rental payments (the "Base Rental Payments'? in amounts. equal to the scheduled debt service on the Bonds. Pursuant to the Indenture and an Assignment Agreement, dated as of December 1, 2002 (the Assignment Agreement") by and between the Authority and the Trustee, the Authority will assign its right to receive the Base Rental Paymentsto the Trustee for the benefit of the Owners of the Bonds. The Bonds are special limited obligations of the Authority secured by andayable solely from Revenues, consisting primarily of (i) all Base Rental Payments payable by the City under the Lease (including prepayments), (ii) any proceeds of Bonds originally deposited with the Trustee and all moneys on deposit in the funds and accounts established under the Indenture, (iii) investment income with respect to such moneys held by the Trustee and (iv) any insurance proceeds or condemnation awards received by or payable to the Trustee with respect to the Leased Property, including rental interruption -insurance. See "SECURITY FOR THE BONDS" herein. Payments of principal and interest (but not any premium) on the Bonds will be initially supported by an irrevocable direct -pay letter of credit (the "Letter of Crcdit" or `SCredit Facility) issued to the Trustee, the drawings under which will be used to pay the. principal of and interest on the Bonds when due. 'The Letter of Credit will also be drawn on, if other funds are not available, to purchase Bonds tendered by Owners at the purchase price of such Bonds. The Letter of Credit will be issued by [INSERT LOC PROVIDER] (the "Credit Entity" or the `Bank"). [If the Credit Entity wrongfully dishonors a properly presented and conforming draw on the Letter of Credit or if the Credit Entity repudiates the Letter of Credit, funds will be made available under an irrevocable confirming letter of credit (the "Confirming Letter of Credit") to be issued by the [INSERT CONFIRMING LOC] (the "Confirming Credit Entity").] The Letter of Credit will expire on 200 [and the Confirming Letter of Credit will expire on 200J unless extended or unless a substitute letter of credit or [substitute confirming letter of credit] or other replacement securities meeting the requirements of the Indenture is provided. The City is required under the Lease to make Base Rental Payments in each year in consideration for the use and occupancy of the Leased Property from anysource of legally available fiends, and in an amount sufficient to pay the annual principal of and interest on the Bonds. The City's obligation to make Base Rental Payments is subject to abatement in the event of substantial interference with the use and possession of all or a part of the Leased Property. See "RISK FACTORS — Abatement" herein. The City has covenanted under the Lease to take such action as may be necessary to include and maintain all Base Rental Payments in its annual budget and to make the necessary appropriations therefor, subject to such abatement. THE BONDS ARE NOT A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (OTHER THAN THE AUTHORITY), AND NONE OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS (OTHER THAN THE AUTHORITY) IS LIABLE THEREFOR. THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM REVENUES, CONSISTING PRIMARILY OF BASE RENTAL PAYMENTS PAID. BY THE CITY PURSUANT TO THE LEASE AND AMOUNTS HELD IN THE FUNDS AND ACCOUNTS ESTABLISHED UNDER THE INDENTURE, THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement to obtain information essential to make an informed investment decision. The Bonds are offered when, as and if issued and accepted by the Underwriter; subject to the approval as to legality by Fulbrigght & Jaworski L.L.P., Los Angeles, California, Bond Counsel. Certain legal matters will be passed on for the Authority and the City by Fulbrsght c& Jaworski L.L.P., Los Angeles, California, Disclosure Counsel, and for the Authority and the City by the City Attorney of the City of Diamond Bar. It is anticipated that the Bonds will be available for delivery through the facilities ofDTC on or about . 2002. US Bancorp Piper Jaffray Dated: 2002. Preliminary; su ject to change 45246965.4 CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY CITY OF DIAMOND BAR AUTHORITY BOARD OF DIRECTORS AND CITY COUNCIL Wen P. Chang, Chairperson/Mayor Deborah H. O'Connor, Vice Chairperson/Mayor Pro Tem Carol Herrera, Director/Couneilmember Robert S. Huff, Director/Councilmember Robert P. Zirbes, Director/Councilmember ADMINISTRATIVE OFFICERS Linda C. Lowry, Executive Director/City Manager James Destefano, Deputy City Manager Linda G. Magnuson, Authority Treasurer/Finance Director Lynda Burgess, Secretary/City Clerk Michael Jenkins, City Attorney SPECIAL SERVICES Financial Advisor Kosmont Companies Los Angeles, California Bond Counsel and Disclosure Counsel Fulbright & Jaworski L.L.P. Los Angeles, California Trustee U.S. Bank, N.A. San Francisco, California 45246965.4 No dealer, broker, salesperson or other person has been authorized by the Authority, the City or the Underwriter to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. The Official Statement does not constitute an offer to sell or the solicitation of an offer to buy by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Authority, the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder, under any circumstances, shall create any implication that there has been no change in the affairs of the Authority, the City or any other parry described herein subsequent to the date as of which such information is presented. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 45246965.4 TABLE OF CONTENTS Page Page INTRODUCTORY STATEMENT .........................1 Confirmation Agreement .........................19 Authorization..............................................1 Use of Proceeds .......................................... l Security for the Bonds................................1 Further Information....................................2 THE BONDS...........................................................2 General Provisions.....................................2 Interest Rate Determination Reimbursement Agreement ...................... Methods.........................................4 THE CREDIT ENTITY........................................18 Conversion of Interest to Fixed THE CONFIRMING LETTER OF Rate...............................................5 CREDIT AND THE Trustee and Tender Agent ..........................7 CONFIRMATION Remarketing Agent....................................7 AGREEMENT.........................................18 Redemption................................................7 Property Taxes ............................27 Mandatory Tender of Bonds - Tax Levies, Collections and Fixed Rate Conversion Delinquencies .............................. Date.. ........................................... 10 Mandatory Tender of Bonds - Sales and Use Tax....................................29 Other than on Fined Commercial Activity................................29 Rate Conversion Date .................10 City Investment Policy ............................. Mechanics of Mandatory Long -Term General Fund Tender.........................................10 Obligations .................................. Option to Tender Prior to Fixed Direct and Overlapping Bonded Rate Conversion Date ................. I I Purchase of Bonds Delivered Employees and Labor Relations ..............33 On a Tender Date ........................12 Defined Benefit Pension Plan ..................33 Remarketing of Bonds by Insurance .................................................. Remarketing Agent .....................12 Delivery of Bonds....................................13 Book -Entry Only System .........................13 SECURITY FOR THE BONDS ...........................14 Revenues..................................................14 Base Rental Payments..............................14 Insurance..................................................14 Additional Obligations... .......................... 15 THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT.........................................16 Letter of Credit.........................................16 21 Reimbursement Agreement ...................... 16 THE CREDIT ENTITY........................................18 22 THE CONFIRMING LETTER OF CREDIT AND THE CONFIRMATION 36 AGREEMENT.........................................18 Confirming Letter of Credit .....................18 45246965.4 THE CONFIRMING CREDIT ENTITY..............20 ESTIMATED SOURCES AND USES OFFUNDS..............................................21 PLAN OF FINANCING ....................................... 21 CITY FINANCIAL INFORMATION..................21 General.... -- •............................................. 21 Budgetary Process....................................21 34 Financial Statements ................................ 22 General Fund............................................22 Management's Discussion and Analysis......................................27 36 Assessed Valuation and Property Taxes ............................27 Tax Levies, Collections and Delinquencies .............................. 27 Principal Property Taxpayers...................28 Sales and Use Tax....................................29 Commercial Activity................................29 37 City Investment Policy ............................. 30 Long -Term General Fund 37 Obligations .................................. 31 Direct and Overlapping Bonded Debt............................................. 31 Employees and Labor Relations ..............33 Defined Benefit Pension Plan ..................33 Insurance .................................................. 34 RISK FACTORS..................................................34 Substitution of Property ...........................34 Base Rental Payments Not Debt .............. 34 Abatement ................................................ 35 Risk of Uninsured Loss ............................35 Seismic Risks...........................................35 Bankruptcy ......................................:........ 36 Enforcement of Remedies Under the Lease ..........................36 No Liability of Authority to the Owners ........................................ 37 County of Orange vs. Orange County Assessment Appeals Board ............................. 37 Risks Related to Taxation in California .................................... 37 Future Initiatives......................................39 THE AUTHORITY..............................................39 UNDERWRITING ................................................ 40 CERTAIN LEGAL MATTERS ............................40 TAX EXEMPTION..............................................40 TABLE OF CONTENTS (continued) Page LITIGATION.......................................................41 FINANCIAL ADVISOR.......................................42 RATINGS..............................................................42 NO CONTINUING DISCLOSURE .....................42 MISCELLANEOUS..............................................42 APPENDIX A - CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION CONCERNING THE CITY OF DIAMOND BAR .............................. A-1 APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2001 ............ B-1 APPENDIX C - SUMMARY OF PRINCIPAL LEGAL DOCUMENTS........................................0-1 APPENDIX D - BOOK -ENTRY ONLY SYSTEM.............................................................. D-1 APPENDIX E - FORM OF BOND COUNSEL OPINION............................................................... E-1 45246965.4 11 OFFICIAL STATEMENT CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY VARIABLE RATE LEASE REVENUE BONDS, 2002 SERIES A (COMMUNITY/SENIOR CENTER PROJECT) INTRODUCTORY STATEMENT Authorization This Official Statement, including the cover page and appendices, is provided to furnish information in connection with the sale by the City of Diamond Bar Public Financing Authority (the "Authority") of $ * aggregate principal amount of City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (the "Bonds"). This Introductory Statement is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement. The Bonds will be issued under the provisions of the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6584) of the California Government Code (the "Bond Law"). The Bonds will be issued pursuant to an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Authority and U.S. Bank, N.A., as trustee (the "Trustee"). Use of Proceeds The proceeds of the Bonds will be used (i) to finance a community/senior center project and other public improvements within the City, (ii) to fund capitalized interest through and (iii) to pay costs of issuance of the Bonds. See "PLAN OF FINANCING" and "ESTIMATED SOURCES AND USES OF FUNDS". Security for the Bonds The Bonds are special obligations of the Authority secured by and payable solely from Revenues, defined in the Irdenture as (i) all Base Rental Payments payable by the City under the Lease (including prepayments), (ii) any proceeds of Bonds originally deposited with the Trustee and all moneys on deposit in the funds and accounts established under the Indenture, (iii) investment income with respect to such moneys held by the Trustee and (iv) any insurance proceeds or condemnation awards received by or payable to the Trustee with respect to the Leased Property, including rental interruption insurance. Under the Lease, the City is obligated to budget and appropriate from its General Fund amounts sufficient to make Base Rental Payments. See "SECURITY FOR THE BONDS." Pursuant to an Assignment Agreement, dated as of December 1, 2002 (the "Assignment Agreement"), by and between the Authority and the Trustee, the Authority will assign to the Trustee certain of its rights under the Lease, as additional security for the performance of its obligations under the Preliminary; subject to change. 45246965.4 Bonds and the Indenture, including its right to receive Base Rental Payments and Additional Rental Payments under the Lease. The Base Rental Payments and the Additional Rental Payments are to be applied, and the rights so assigned are to be exercised, by the Trustee as provided in the Indenture. The obligation of the City to make Base Rental Payments under the Lease is an unsecured obligation of the City, payable from its general fund. See "SECURITY FOR THE BONDS" herein. Under the Lease, the City has covenanted to budget and appropriate sufficient funds to make all payments required to be made under the Lease, subject only to abatement as provided therein. .See "RISK FACTORS -- Base Rental Payments Not Debt" and "-- Abatement." Letter of Credit. Payments of principal, redemption amount (but not any premium) and interest on the Bonds will be initially supported by an irrevocable direct -pay letter of credit (the "Letter of Credit") issued by (the "Credit Entity"). Drawings under the Letter of Credit will be used to pay the principal of and interest on the Bonds when due. The Letter of Credit will also be drawn on, if other funds are not available, to purchase Bonds tendered by Owners. See "THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" and "THE CREDIT ENTITY" herein. [Confirming Letter of Credit. The Bonds are further supported by an irrevocable, transferable confirming letter of credit (the "Confirming Letter of Credit") issued by (the "Confirming Credit Entity"). Under the Confirming Letter of Credit, the Trustee will be permitted to draw an amount not exceeding the stated amount indicated in the Confirming Letter of Credit to pay all of the outstanding principal amount of and interest on the Bonds when due or, if other fluids are not available, to purchase Bonds tendered by Owners at the Purchase Price in the event the Credit Entity wrongfully dishonors a properly presented and conforming draw on the Letter of Credit or if the Credit Entity repudiates the Letter of Credit. Rating on the Bonds will therefore be based solely on the credit of the Confirming Credit Entity rather than the credit of the Authority or the City. , See "THE CONFIRMING LETTER OF CREDIT AND THE CONFIRMATION AGREEMENT" and "THE CONFIRMING CREDIT ENTITY" herein.] Further information Brief descriptions of the Bonds, the Indenture, the Site Lease, the Lease Agreement, the Assignment Agreement, the Authority and the City and other information are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. The descriptions herein of the Bonds, the Indenture, the Lease and other documents are qualified in their entirety by reference to the forms thereof. For definitions of certain capitalized terms used herein and not otherwise defined, and a description of certain terms relating to the Bonds, see "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS." THE BONDS General Provisions The Bonds will be dated the Closing Date thereof and will bear interest until their maturity, payable on each Bond Payment Date, except that interest due with respect to any Bonds purchased by the Trustee by means of a drawing on the Letter of Credit pursuant to the tender of Bonds on a Tender Date and which Bonds are registered in the name of and owned by the Credit Entity and held by the Tender Agent ("Credit Facility Bonds"), will accrue from the date such Bonds become Credit Facility Bonds at the rate set forth in the Reimbursement Agreement and shall be payable as set forth therein. Each Bond will bear interest from the Bond Payment Date next preceding the date on which it is authenticated unless it is (a) authenticated after a Record Date and on or before the next Bond Payment 45246965.4 "1 Date, in which event it will bear interest from such Bond Payment Date or (b) authenticated on or before the first Record Date, in which event it will bear interest from the Closing Date; provided, however, that if at the time of authentication of any Bond interest is in default, such Bond will bear interest from the date to which interest has been paid. The Bonds will bear interest at the Weekly Rate or Daily Rate until the Fixed Rate Conversion Date, and on and after the Fixed Rate Conversion Date, at the Fixed Rate. Interest on the Bonds during the Weekly Rate Period or Daily Rate Period will be computed upon the basis of a 365-- or 366 -day year, as applicable, for the number of days actually elapsed prior to the Fixed Rate Conversion Date. On and after the Fixed Rate Conversion Date interest on the Bonds will be computed upon the basis of a 360 -day year, consisting of twelve 30 -day months. Payment of interest with respect to any Bond on any Bond Payment Date or Redemption Date will be made to the person appearing on the registration books of the Trustee as the Owner thereof as of the Record Date immediately preceding such Bond Payment Date or Redemption Date, as the case may be, such interest to be paid by check mailed by first class mail on the Bond Payment Date to such Owner at his address as it appears on such registration books. Payments of defaulted interest will be paid by check of the Trustee mailed to the registered Owners as of a special record date to be fixed by the Trustee in its sole discretion, notice of which will be given to the Owners not less than 10 days prior to such special record date. Payment of interest represented by the Bonds may, at the option of any Owner of at least $1,000;000 principal amount of Bonds of a series (such option to be exercised by written request of such Owner to the Trustee), be transmitted by wire transfer to such Owner to the bank account number in the United States filed with the Trustee prior to the Record Date for a Bond Payment Date. The principal payable upon maturity or prior redemption with respect to the Bonds will be payable upon surrender prior to the Fined Rate Conversion Date at the Principal Office of the Trustee or the Principal Office of the Tender Agent and thereafter at the Principal Office of the Trustee with such principal to be paid by check mailed by the Trustee on the Bond Payment Date by first class mail to each Owner at his address as it appears on the registration books; provided, however, that prior to the Fixed Rate Conversion Date payment of such principal will be made by wire transfer to an Owner of Bonds who has exercised his/her option for payment by wire transfer pursuant to the Indenture. Said amounts will be payable in lawful money of the United States of America. The Trustee is authorized to pay or redeem the Bonds when duly presented for payment at maturity or on redemption and to cancel all Bonds upon payment thereof; provided, however, that no such cancellation of Bonds will affect the obligations of the Credit Entity arising under the Credit Facility; provided that the Credit Facility is subject to reduction in accordance with its terms in connection with the payment at maturity or earlier redemption of the Bonds. Upon surrender by the Owner of a Bond for partial redemption at the Principal Office, payment of such partial redemption of the principal amount of a Bond will be made to such Owner by check mailed by first class mail to the Owner at his address as it appears on the registration books of the Trustee, or prior to the Fixed Rate Conversion Date by wire transfer to any Owner who has exercised its option for payment by wire transfer pursuant to the Indenture. Upon surrender of any Bond redeemed in part only, the Trustee will execute and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same series which will be of Authorized Denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered and of the same interest rate mode and the same maturity. Such partial redemption will be valid upon payment of the amount thereby required to be paid to such Owner the Authority and the Trustee will be released and discharged from all liability to the extent of such payment_ Subject to the book -entry only system, Bonds may be exchanged or substituted for or in lieu of mutilated, lost, stolen or destroyed Bonds by request to the Trustee. The Trustee and the Tender Agent may require payment of an appropriate fee and expenses with respect to any such exchange or substitution. 45246965.4 Interest Rate Determination Methods Weekly Rate. The rate of interest on the Bonds may, at the option of the City, be established at a Weekly Rate on any Bond Payment Date during a; Daily Rate Period. So long as the Bonds bear interest at a Weekly Rate, the Remarketing Agent will set the Weekly Rate on the second Business Day of each calendar week. The Remarketing Agent will give notice in writing to the Trustee, the Credit Entity and the Confirming Credit Entity of each Weekly Rate as soon as possible following the determination of such rate. Each Weekly Rate will be the rate per annum equal to the minimum rate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to remarket the Bonds on the date the Weekly Rate is set at a price equal to 100% of the principal amount thereof plus accrued interest; provided, however, that in no event will the interest rate borne by the Bonds (other than Credit Facility Bonds) exceed the Maximum Rate. Each Weekly Rate will be effective Wednesday through the next succeeding Tuesday (or through the end of the period in which the Bonds bear interest at a Weekly Rate, whichever first occurs). If for any reason the Remarketing Agent does not set a Weekly Rate on the second Business Day of a calendar week, then the Weekly Rate for that period will remain at the Weekly Rate set for the immediately preceding Wednesday through Tuesday period. If a court holds that the Weekly Rate set for any period is invalid or unenforceable, the Weekly Rate for that period, will be set, as determined by the Remarketing Agent, as the rate that is equal to the 30 -day tax-exempt or taxable. commercial paper rate, as appropriate, published in The Bond Buyer (or any successor to such publication) as of the date of determination of the unenforceable rate or, in the event The Bond Buyer (or any such successor) is no longer published, any other newspaper or journal containing financial news, printed in the English language and customarily published on each Business Day, of general circulation in New York, New York and selected by the Authority, whose decision will be final and conclusive. Daily Rate. The rate of interest on the Bonds may, at the option of the City, be established at a Daily Rate on any Bond Payment Date during a Weekly Period. So long as the Bonds bear interest at a Daily Rate, the Remarketing Agent will set the Daily Rate on or before 10:30 a.m., New York time, on each Business Day for that Business Day. The Daily Rate for any non -Business Day shall be the Daily Rate for the last day on which a Daily Rate was set. The Remarketing Agent will give notice in writing to the Trustee, the Credit Entity [and the Confirming Bank] of each Daily Rate as soon as possible following the determination of such rate.. Each Daily Rate will be the rate per annum equal to the minimumxate necessary (as determined by the Remarketing Agent) for the Remarketing Agent to sell the Bonds on the date the Weekly Rate is set at 100% of the principal amount thereof plus accrued interest; provided, however, that in no event shall the interest rate borne by the Bonds (other than Credit Facility Bonds) exceed the Maximum Rate. If for any reason the Remarketing Agent does not set a Daily Rate on any Business Day, then the Daily Rate most recently determined shall remain in effect until such time as the Remarketing Agent determines .the new Daily Rate. If a court holds that the Daily Rate set for any period is invalid or unenforceable, the Daily Rate for that period will be the rate that is equal to the 30 -day tax-exempt commercial paper rate published in The Bond Buyer (or any successor to such publication) as of the date of determination of the unenforceable rate or, in the event The Bond Buyer (or any such successor) is no longer published, any other newspaper or journal containing financial news, printed in the English language and customarily published on each Business Day, of general circulation in New York, New York and selected by the Authority, whose decision shall be final and conclusive. Fixed Rate. The Remarketing Agent will set the Fixed Rate on a date (the "Determination Date") no fewer than two nor more than fifteen (15) Business Days before the Fixed Rate Conversion Date. The Fixed Rate will be the rate determined by the Remarketing Agent to be the rate per annum equal to the minimum interest rate which would be necessary for the Remarketing Agent to remarket the Bonds on the 45246965.4 4 Determination Date at 100% of the principal amount thereof plus accrued interest; provided, however, that in no event will the interest rate borne by the Bonds on and after the Fixed Rate Conversion Date exceed the Maximum Rate. A conversion of all or any sinking fund redemptions to serial maturity dates will be required to the extent, in the opinion of the Remarketing Agent, such a conversion will reduce the total interest to be paid by the Authority. In such case, all references to a Fixed Rate will refer to the interest rates applicable to each maturity. Conversion of Interest to Fixed Rate Notice and Opinion of Bond Counsel. The Authority may initiate action to convert the interest borne by all of the Bonds from the Weekly Rate or Daily Rate to the Fixed Rate by notifying the Trustee, the Tender Agent, the Credit Entity, the Confirming Credit Entity and the Remarketing Agent of the proposed Fixed Rate Conversion Date at least 60 days prior to such proposed date. The notice will.be accompanied by (i) an opinion of Bond Counsel stating that the conversion is not prohibited by the law of the State or the Indenture and that the conversion will not cause the interest on the Bonds to fail to be exempt from personal income taxes of the State, or to fail to be excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes, and (ii) written evidence of satisfaction of the limitations specified in the Indenture. The Trustee will have no obligation to provide notice to the Owners of a change to a Fixed Rate unless the Trustee has received the notice from the Authority and the opinion of Bond Counsel in accordance with the provisions set forth under this heading. The Authority may not request a conversion from the Weekly Rate or Daily Rate to the Fixed Rate during .the existence of an Event of Default and the notice from the Authority will certify as to the absence thereof. If the Authority's notice complies with the provisions of this paragraph, the Fixed Rate will be applicable from the effective date specified in the notice until maturity of the Bonds. Upon conversion from the Weekly Rate or Daily Rate to the Fixed Rate, the Trustee promptly will surrender the Letter of Credit to the Credit Entity required by the terms of the Letter of Credit. Limitation. A conversion from the Weekly Rate or Daily Rate to the Fixed Rate pursuant to the paragraph above will comply with the following: (i) the effective date of the conversion will be a Bond Payment Date; and (ii) the Remarketing Agent will have agreed to remarket the Bonds on the Fixed Rate Conversion Date. Notice to Owners of Change to Fixed Rate. When a conversion from the Weekly Rate or Daily Rate to the Fixed Rate is to be made, the Trustee will notify the Owners, the Credit Entity and the Confirming Credit Entity by first class mail at least 30 but not more than 60 days prior to the proposed Fixed Rate Conversion Date. The notice will be prepared and furnished by the Authority to the Trustee for mailing at least 60 days prior to the proposed Fixed Rate Conversion Date and will state: (1) that the interest rate payable with respect to the Bonds will be converted to the Fixed Rate; (2) the effective date of the Fixed Rate; (3) the Bond Payment Dates and Record Dates following the Fixed Rate Conversion Date; (4) that following the Fixed Rate Conversion Date there will be no option to tender Bonds for purchase; (5) that all Bonds are subject to mandatory tender for purchase on the Fixed Rate Conversion Date and will be deemed to have been so tendered and will be purchased on the Fixed Rate Conversion Date at the principal amount thereof plus interest accrued to such date; 45246965.4 (6) any ratings assigned to the Bonds by a nationally recognized rating agency to be effective on the Fixed Rate Conversion Date and that such ratings assigned to the Bonds may be reduced or withdrawn; (7) the proposed maturity schedule for the Bonds following the Fixed Rate Conversion Date; (8) the redemption provisions to which the Bonds are subject following the Fixed Rate Conversion Date; (9) that following the Fixed Rate Conversion Date Bonds may be issued in denominations of $5,000 or integral multiples of $5,000; (10) that if the opinion of Bond Counsel described under the heading "Notice and Opinion of Bond Counsel" above is rescinded, the interest rate will not be converted to the Fixed Rate; and (11) that if a Credit Facility and/or Confirming Letter of Credit is to be provided to secure the payment of the Bonds, the name of the institution providing such Credit Facility and/or Confirming Letter of Credit and the principal terms of such Credit Facility and/or Confirming Letter of Credit; or, if a Credit Facility and/or Confirming Letter of Credit is not to be provided, the fact that a Credit Facility and/or Confirming Letter of Credit will not thereafter secure the payment of the Bonds. Calculation of Interest. During the Weekly Rate Period or Daily Rate Period, interest with respect to the Bonds will be computed on the basis of the actual number of days elapsed in a year of 365 days (366 days in leap years) and will be payable on each Bond Payment Date as set forth in the Indenture. On and after the Fixed Rate Conversion Date, .interest with respect to the Bonds will be computed on the basis of a 360 -day year comprised of twelve 30 -day months and will be payable on each Bond Payment Date as set forth in the Indenture. Interest on overdue principal and, to the extent lawful, on overdue premium, and interest with respect to any Bond will be payable at the rate applicable to such Bond until paid. Provisions in the Reimbursement Agreement may make different arrangements with respect to interest accruing on Credit Facility Bonds. The Trustee will compute the amount of interest payable with respect to the Bonds using the rates supplied to the Trustee by the Remarketing Agent. The Remarketing Agent will send notice in writing to the Trustee and the Tender Agent, of the following: (t) on the second Business Day of each week in which interest on the Bonds is payable at a Weekly Rate, of the Weekly Rate for the applicable Wednesday through Tuesday period; (2) on or before 10:30 a.m., New York time, on each Business Day of each week in which interest on the Bonds is payable at a Daily Rate, of the Daily Rate for such Business Day; and (3) on the first Business Day after the Determination Date, of the Fixed Rate set on such Determination Date. Using the rates supplied by such notices, the Trustee will calculate the interest payable with respect to the Bonds for the applicable period. During the Weekly Rate Period or the Daily Rate Period, the Trustee will send the Authority at least five (5) days prior to each Bond Payment Date as set forth in the Indenture written notice of the interest that will have accrued with respect to the Bonds for the period from the preceding Bond Payment Date to the upcoming Bond Payment Date. The Remarketing Agent will inform the Trustee, the Authority, the Tender Agent, the Credit Entity and the Confirming Credit Entity orally at the oral request of any of theta of any interest rate established by the Remarketing Agent. The Trustee will confirm the effective interest rate by telephone or in writing to any Owner (at such Owner's cost) who requests it in any manner. 45246965.4 The setting of the rates and the calculation of interest payable with respect to the Bonds as provided in the Indenture will be conclusive and binding on all parties. Rescission of Opinion of Bond Counsel. Notwithstanding any provision in the Indenture to the contrary, no. conversion will be made from the Weekly Rate or Daily Rate to the Fixed Rate if the Trustee and the Tender Agent receive written notice from Bond Counsel prior to such conversion that the opinion of Bond Counsel required as described under the heading "Notice and Opinion of Bond Counsel" above has been rescinded.. If the Trustee has sent any notice to the Owners, the Credit Entity and the Confirming Credit Entity regarding the conversion to the Fixed Rate pursuant to Indenture, then in the event of rescission of the opinion of Bond Counsel, the Trustee will promptly notify all Owners, the Credit Entity and the Confirming Credit Entity of such rescission and that the rate will not be converted to the Fixed Rate. Trustee. and Tender Agent U.S. Bank, N.A., San Francisco, California has been appointed Trustee for all of the Bonds under the Indenture. The Trustee may be removed or replaced by the Authority as provided in the Indenture. U.S. Bank, N.A., San Francisco, California, has been appointed Tender Agent under the Indenture. The Tender Agent may be removed or replaced by the Authority as provided in the Indenture. Remarketing Agent US Bancorp Piper Jaffray, San Francisco, California, has been appointed Remarketing Agent for the Bonds. The Remarketing Agent may be removed or replaced by the Authority and may resign, all as provided in the Remarketing Agreement, dated as of December 1, 2002, by and among the Authority, the Trustee, and the Remarketing Agent. Redemption Mandatory Redemption from Net Proceeds. The Bonds are subject to mandatory redemption on any Bond Payment Date, in whole or in part, from moneys drawn under the Credit Facility, which shall be reimbursed from Net Proceeds following the deposit by the Trustee in the Installment Prepayment Account of the Redemption Fund of Net Proceeds deposited by the City under the Indenture, at least 45 days prior to a Bond Payment Date which have been credited towards the Prepayment made by the City pursuant to the Installment Sale Agreement, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest to the date fixed for redemption, without premium; provided, however, that if there shall no longer be available a Credit Facility to secure the payment of principal and interest represented by the Bonds or if the Credit Facility does not permit a draw with respect to Prepayments, the Bonds are subject to redemption from Net Proceeds which the Trustee shall deposit in the Installment Prepayment Account of the Redemption Fund, to be used to redeem the Bonds by the Trustee as provided herein. In the event that amounts remain in the Installment Prepayment Account because such amounts did not constitute an Authorized Denomination of a Bond, then such amounts shall be transferred to the Installment Payment Account of the Debt Service Fund. Optional Redemption. During the Weekly Rate Period, the Daily Rate Period and on the Fixed Rate Conversion Date, the Bonds are subject to optional redemption in whole or in part (in an amount of $100,000 or any integral multiple of $5,000 in excess thereof) on any Business Day, at the option of the Authority at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium. 45246965.4 7 After the Fixed Rate Conversion Date and subject to modification pursuant to the Indenture, the Bonds are subject to optional redemption in whole or in part (in integral multiples of $5,000) on any Business Day, at the option of the Authority at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption and following premium expressed as a percentage of the redeemed principal amount: Prepayment Date Premium Ninth anniversary of the Fixed Rate Conversion Date to the day before the tenth anniversary date of the Fixed Rate Conversion Date 2% Tenth anniversary of the Fixed Rate Conversion Date to the. day before the eleventh anniversary date of the Fixed Rate Conversion Date I% Eleventh anniversary of the Fixed Rate Conversion Date and thereafter 0% During the term of any Credit Facility no notice of any optional redemption shall be sent unless either (1) the Authority has deposited with the Trustee moneys in an amount sufficient to cover the principal of, premium, if any, and interest due on such redemption date (exclusive of anticipated investment earnings thereon), or (2) the Authority delivers to the Trustee the written consent of the Credit Entity and the confirming Credit Entity. Sinking Fund Redemption. The Bonds are subject to mandatory redemption in part on the dates in the following years in the following amounts at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium: Redemption Date Principal Amount At the Fixed Rate Conversion Date, any annual sinking fund redemption which has not yet become due may be treated as a serial maturity of principal bearing interest at the Fixed Rate payable on 1 and I thereafter to maturity. In the event of a partial redemption of Bonds pursuant to mandatory redemption from Net Proceeds or optional redemption as described in the Indenture, the foregoing annual sinking fund payments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The City shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above. Selection of Bonds for Redemption. Whenever provision is "made in this Indenture for the redemption of Bonds and less than all Outstanding Bonds are called for redemption, the Trustee shall select Bonds for redemption, from the Outstanding Bonds not previously called for redemption, in Authorized Denominations, first from Credit Facility Bonds, then with respect to a mandatory redemption from Net Proceeds on a pro rata basis among maturities and by lot within a maturity, and in the case of an optional redemption from such maturities as are designated in a City Certificate. The Trustee shall promptly notify the City and the Authority in writing of the Bonds so selected for redemption. 45246965.4 Partial Redemption of Bonds. Upon surrender by the Owner of a Bond for partial redemption at the Principal Office, payment of such partial redemption of the principal amount of a Bond will be made to such Owner by check mailed by first class mail to the Owner at his address as it appears on the registration books of the Trustee, or prior to the Fixed Rate Conversion Date by wire transfer to any Owner who has exercised its option for payment by wire transfer pursuant to the Indenture. Upon surrender of any Bond redeemed in part only, the Trustee or the Tender Agent shall execute and deliver to the Owner thereof, at the expense of the City, a new Bond or Bonds which shall be of Authorized Denominations equal in aggregate principal amount to the unredeemed portion of the Bond surrendered and of the same interest rate and the same maturity. Such partial redemption shall be valid upon payment of the amount thereby required to be paid to such Owner, and the City, the Authority and the Trustee shall ,be released and discharged from all liability to the extent of such payment. Notice of Redemption. When redemption is authorized or required pursuant to the Indenture, the Trustee shall give notice of the redemption of the Bonds. Such notice shall specify: (a) that the Bonds or a designated portion thereof are to be redeemed, (b) the CUSIP numbers and, if less than all of the Bonds of a maturity are to be redeemed, the serial numbers of the Bonds to be redeemed, (c) the date of redemption, (d) the place or places where the redemption will be made, (e) the following descriptive information regarding the Bonds: date, interest rates and stated maturity dates, and (f) that a new Bond in an amount equal to that portion not so redeemed will be executed by the Trustee and delivered to the Owner in the event of a partial redemption. Such notice shall further state that on the specified date there shall become due and payable upon each Bond to be redeemed, the portion of the principal amount of such Bond to be redeemed, together with interest accrued to said date, and that from and after such date, provided that moneys therefore have been deposited with the Trustee, interest with respect to such Bonds to be redeemed shall cease to accrue and be payable. Notice of such redemption shall be mailed by first-class mail, postage prepaid, to the City, to all municipal Securities Depositories and to at least one national Information Service which the City shall designate to the Trustee, and to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Bond registration books, at least 30 days, but not more than 60 days, prior to the redemption date•, provided that neither failure to receive such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of such Bonds, and provided, further, however, that the Trustee shall, on the day it receives notice of redemption by the City, provide telephonic, telegraphic or telex notice of such notice of redemption to the Remarketing Agent, the Credit Entity and the Confirming Credit Entity. Effect of Notice of Redemption. Notice having been given as described above, and the moneys for the redemption (including the interest to the applicable date of redemption), having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date of redemption, and, upon presentation and surrender thereof at the Principal Office, said Bonds shall be paid at the unpaid principal price with respect thereto, plus interest accrued and unpaid to said date of redemption. If, on said date of redemption, moneys for the redemption of all the Bonds to be redeemed, together with interest to said date of redemption, shall be held by the Trustee so as to be available therefor on such date of redemption, and, if notice of redemption thereof shall have been given as aforesaid, then, from and after said date of redemption, interest with respect to the Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of the Indenture shall be canceled upon surrender thereof and delivered to or upon the order of the City. 45246965.4 Mandatory Tender of Bonds - Fixed Rate Conversion Date In the event the Authority has complied with the requirements of the Indenture to change the interest rate represented by the Bonds to a Fixed Rate, all Bonds will be subject to mandatory tender and purchase on the Fixed Rate Conversion Date in accordance with the provisions of the Indenture and as described herein under the heading "Mechanics of Mandatory Tender." Mandatory Tender of Bonds - Other than on Fixed Rate Conversion Date The Bonds are subject to mandatory tender on the last Bond Payment Date occurring on or prior to the date at least five days prior to the date on which the Credit Facility is scheduled to expire or terminate in accordance with its terms and if the Trustee has not received notice at least 40 days prior to such Bond Payment Date that an Alternate Credit Facility is to be provided. Not less than thirty days before each such Mandatory Tender Date under this paragraph, the Trustee shall send a notice to all Owners by first class mail, postage prepaid, which notice shall contain the following information: (1) that the Credit Facility is scheduled to expire or terminate and no Alternate Credit Facility will be provided, (2) that each Owner's Bond is subject to mandatory tender as provided in such notice, and (3) if any of the nationally recognized rating agencies which has a credit rating outstanding on the Bonds has indicated to the Trustee in writing that it will lower or withdraw its rating on the Bonds as of such Mandatory Tender Date, notice of such new rating, or if no new rating is available, notice that any of such rating agencies may lower or withdraw such rating as of such Mandatory Tender Date. The Bonds are subject to mandatory tender under this paragraph on the first Business Day to occur on or after the seventh day following receipt by the Trustee of notice from the Credit Entity or the Confirming Credit Entity of the occurrence of an event of default under the Reimbursement Agreement or the Confirmation Agreement, as applicable, or that the Credit Entity will not reinstate the interest portion of the Credit Facility. Not later than the third Business Day after receipt by the Trustee of such notice, the Trustee shall send to all Owners by first class mail, postage prepaid, and to the Depository also by facsimile, a notice which shall contain the following information: (1) that an event of default has been declared under the Reimbursement Agreement or the Confirmation Agreement, or that the Credit Entity will not reinstate interest portion of the Credit Facility, and (2) that each Owner's Bond is subject to mandatory tender on the first Business Day to occur on the seventh day following the receipt by the Trustee of such notice from the Credit Entity or the Confirming Credit Entity. The Bonds are subject to mandatory tender on the last Business Day prior to the effective date of any Alternate Credit Facility in accordance with the provisions of the Indenture. See "THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT" for a description of the Events of Default which could cause a mandatory tender under the Letter of Credit and the Reimbursement Agreement. All notices of a Mandatory Tender Date will also be mailed by the Trustee to the Credit Entity, the Confirming Credit Entity, the Remarketing Agent and the Tender Agent. Mechanics of Mandatory Tender Owners of Bonds will be required to tender the Bonds to the Tender Agent by 11:00 a.m., New York time, on any Mandatory Tender Date for purchase at a purchase price equal to the principal amount thereof plus accrued interest thereon to and including the Mandatory Tender Date. So long as the Bonds are registered in the name of the Nominee, such tenders shall be made through the book -entry system. Any Untendered Bonds will be deemed to have been tendered on a Mandatory Tender Date, whether or not the Bonds are in fact surrendered to the Tender Agent. In the event of a failure by Owners of Bonds to tender Bonds on the Mandatory Tender Date, said Owners of Untendered Bonds will not be entitled to any payment (including any interest to accrue subsequent to the Mandatory Tender Date) other than the 45246965.4 10 purchase price for such Untendered Bonds, and any Untendered Bonds will no longer be entitled to the benefits of the Indenture, except for the purpose of payment of the purchase price thereof. Such Untendered Bonds will be deemed purchased, cancelled and no longer Outstanding under the Indenture. However, the purchase price will be paid only upon presentation of the Bonds to the Tender Agent. In the case of the Fined Rate Conversion Date only, if the Remarketing Agent notifies the Trustee not less than fifteen days before the Fixed Rate Conversion Date that it cannot remarket all of the Bonds or if the requirements for the effectiveness of a Fixed Rate Conversion Date are not satisfied before the Fixed Rate Conversion Date, the Trustee will give notice thereof by first-class mail, postage prepaid, to all Owners, the Remarketing Agent, the Credit Entity and the Authority and each of such parties will be restored to their respective positions as if notice of the Fixed Rate Conversion Date had not been given and no mandatory tender will occur. In addition to the mailed notice required by the preceding sentence, the Trustee will deliver a duplicate copy of such notice to the Depository, the Credit Entity and the Confirming Credit Entity by telecommunications or overnight delivery. Option to Tender Prior to Fixed Rate Conversion Date Prior to the Fixed Rate Conversion Date, any Owner of the Bonds may give irrevocable written notice to the Tender Agent at its Trust Office and request that the Tender Agent purchase all or any part (in Authorized Denominations) of the Bonds then outstanding and registered in the name of such Owner at an amount or price equal to the unpaid principal amount thereof plus accrued and unpaid interest thereon to, but not including, the Business Day on which the Bonds are to be tendered to the Tender Agent (the "Optional Tender Date") and without premium. Such notice (the "Optional Tender Notice") will specify the Optional Tender Date (which, during a Weekly Rate Period, shall not be less than seven (7) days after the date of receipt by the Tender Agent of such Optional Tender Notice, and during a Daily Rate Period, shall be the date of receipt of the Optional Tender Notice by the Tender Agency, provided with respect to a tender during a Daily Rate Period, the Optional Tender Notice shall be received by the Tender Agency prior to 9:30 a.m., New York time, on the Optional Tender Date), the CUSIP number, the principal amount being tendered in integral multiples of Authorized Denominations and, so long as the Bonds are registered in the name of the Nominee, such notice shall also specify the Participant number and the contact person of the Participant. Upon receipt of an Optional Tender Notice, the Tender Agent will, as soon as is practicable but in no event later than the close of business on the Business Day following the day of receipt of such Optional Tender Notice, give notice to the Trustee, the Authority, the Credit Entity, the Confirming Credit Entity and the Remarketing Agent of the Optional Tender Notice, the Optional Tender Date specified therein and the principal amount of Bonds to be purchased on such Optional Tender Date. Owners providing an Optional Tender Notice will be required to tender the Bonds to the Tender Agent for purchase by 11:00 A.M. New York time on the Optional Tender Date. Any Untendered Bonds will be deemed to have been tendered. In the event of a failure by Owners of Bonds to tender Bonds on the Optional Tender Date, said Owners of Bonds will not be entitled to any payment (including any interest to accrue subsequent to the Optional Tender Date) other than the purchase price for such Untendered Bonds, and any Untendered Bonds will no longer be entitled to the benefits of the Indenture, except for the purpose of payment of the purchase price thereof. However, the purchase price will be paid only upon presentment of the Bonds to the Tender Agent. Upon the cancellation of Untendered Bonds, the Trustee will execute new Bonds in the same aggregate principal amount as, aild in substitution for, the Bonds not so tendered by such Owner and will hold, deliver and make available such new Bonds to the new Owner thereof in accordance with the provisions of the Indenture which will be fully applicable notwithstanding that such new Bonds are executed in substitution for the Bonds not so tendered. 45246965.4 11 From and after the Fined Rate Conversion Date, the Tender Agent will not be required to purchase such Bonds on demand and optional tender by the Owners thereof in accordance with the provisions set forth under this heading. Purchase of Bonds Delivered On a Tender Date Bonds purchased from Owners on any Tender Date will be purchased at a price equal to the principal amount thereof plus accrued interest, if any, to the Tender Date in immediately available fluids, but solely from the following sources of funds in the following order of priority: (1) moneys deposited into the Remarketing Proceeds Account, other than moneys representing remarketing proceeds from the sale of Bonds to the Authority, in accordance with the Indenture; (2) moneys deposited into the Liquidity Account in accordance with the Indenture; (3) other Available Moneys (as described in the Indenture) furnished to the Trustee; and (4) other moneys made available to the Trustee for such purpose from the Authority or the City. The Tender Agent or Trustee, as applicable, will promptly give notice to the Credit Entity, the Confirming Credit Entity, the Remarketing Agent, the Tender Agent, the Trustee and the Authority of any notice given by or to an Owner pursuant to certain provisions of the Indenture. No later than 2:00 p.m. New York time on the Business Day next preceding each Tender Date, the Remarketing Agent will give telegraphic, telex or telephonic notice, promptly confirmed in writing, to the Tender Agent and the Trustee and specifying the amount of the proceeds of the sale of such Bonds, if any, sold by the Remarketing Agent pursuant to the Indenture and the name, address and tax identification number of the purchasers thereof as well as the denominations of such remarketed Bonds. The purchase price of any Bonds tendered for purchase will be payable by check mailed to the Owners of record as of the close of business on the day preceding the Tender Date; provided, however, that the purchase price of such tendered Bonds for purchase may, at the option of any Owner, be transferred to such Owner by wire transfer on the Tender Date if prior to such Tender Date such Owner has delivered to the Tender Agent a request in writing for such wire transfer specifying the bank account number to which such transfer is to be made. Not later than noon, Los Angeles time, on the Business Day next preceding each Tender Date, the Trustee shall draw on the Credit Facility and shall deposit the amount of such draw in the Liquidity Account to pay for the purchase price of any Bonds that cannot be paid from remarketing proceeds in the Remarketing Proceeds Account. In the event that the Trustee has not received notice from the Remarketing Agent as to the availability of remarketing proceeds prior to the time of its draw on the Credit Facility on the Business Day next preceding each Tender Date, the Trustee shall draw on the Credit Facility to pay the purchase price of all Bonds tendered for purchase on such Tender Date. The Tender Agent shall pay, to the extent that it has received funds therefor, the purchase price of such tendered Bonds, plus accrued interest, if any, no later than 5:00 p.m., New York time, on any Optional Tender Date or Mandatory Tender Date. Remarketing of Bonds by Remarketing Agent Subject to the terms of the Remarketing Agreement, the Remarketing Agent will use its best efforts to remarket Bonds subject to purchase on a Tender Date and to remarket Bonds registered in the 45.246965.4 12 name of the Credit Entity or the Confirming Credit Entity. The proceeds of any sale with respect to a Tender Date will be delivered to the Tender Agent for deposit into the Remarketing Proceeds Account by no later than 11:00 a.m., New York time,. on each Tender Date. The proceeds of the sale of any Bonds registered to or on behalf of the Credit Entity or the Confirming Credit Entity will be delivered to the Tender Agent for deposit in the Remarketing Proceeds Account by 11:00 a.m., New York time, on the date of sale and the Tender Agent will remit such amounts to the Credit Entity or the Confirming Credit Entity, as applicable, no later than 4:00 p.m., New York time, on such date. In the event that any Bonds are purchased for the benefit of the Credit Entity or the Confirming Credit Entity pursuant to the Indenture, the Remarketing Agent will continue to offer for sale and use its best efforts to sell such Bonds. So long as the Credit Facility is in effect, prior to the release of any Credit Facility Bonds or the remarketing of any Bonds purchased following the mandatory tender thereof pursuant to the Indenture, the Tender Agent shall have received notice from the Trustee that the Letter of Credit has been reinstated in an amount equal to the principal amount of the Credit Facility Bonds and interest thereon in accordance with its terms. Delivery of Bonds Bonds remarketed by the Remarketing Agent pursuant to the Indenture will be delivered to the Remarketing Agent, and registered in the name, or at the direction, of the respective purchasers. Bonds purchased with moneys drawn under the Letter of Credit will be registered in the name, or at the direction, of the issuer of the Letter of Credit or its nominee and delivered to and held by the Tender Agent for the account of such issuer of the Letter of Credit as secured party, unless the issuer of the Letter of Credit will make other arrangements with the Tender' Agent. The Tender Agent will notify the Remarketing Agent when Bonds are registered to or on behalf of the provider of the Letter of Credit and the Remarketing Agent will remarket such Bonds in accordance with the Indenture. Bonds purchased with Available Moneys will be delivered to the Trustee for cancellation. Moneys in the Liquidity Account and the Remarketing Proceeds Account will be held in trust for the persons who delivered such Bonds for purchase. Following payment to persons who delivered such Bonds for purchase, to the extent that any fees or obligations are owed to the Trustee, the Credit Entity or the Confirming Credit Entity, moneys remaining in the Remarketing Proceeds Account and the Liquidity Account will be paid by the Tender Agent first to the Credit Entity or the Confirming Credit Entity for the repayment of amounts owing under the Credit Facility Agreement as certified to the Tender Agent in writing by the Credit Entity or the Confirming Credit Entity, as applicable, and then to the Trustee to the extent of fees and obligations owing thereto. Money remaining in such Accounts following such payments will be paid to the Authority. Book -Entry Only System The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the Bonds. The Bonds will be registered in the name of Cede & Co. (DTC's partnership nominee), and will be available to ultimate purchasers in the denomination of $5,000 or any integral multiple thereof, under the book -entry system maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners shall mean Cede & Co., and shall not mean the ultimate purchasers of the Bonds. Payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC's Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is 45246965.4 13 the responsibility of DTC's Participants and Indirect Participants. See "APPENDIX D -- BOOK -ENTRY ONLY SYSTEM." SECURITY FOR THE BONDS Revenues THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM REVENUES, CONSISTING PRIMARILY OF BASE RENTAL PAYMENTS PAID BY THE CITY PURSUANT TO THE LEASE AND AMOUNTS HELD IN THE FUNDS AND ACCOUNTS ESTABLISHED UNDER THE INDENTURE. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. The Indenture provides that, subject to certain rights of the Trustee, the Bonds are secured by a first lien on and pledge of all of the Revenues and a pledge of moneys in all Funds and Accounts established and held by the Trustee under the Indenture including the investments thereof and the proceeds of such investments. "Revenues" are defined in the Indenture to mean: (i) all Base Rental Payments payable by the City pursuant to the Lease (including prepayments), (ii) any proceeds of Bonds originally deposited with the Trustee and all moneys on deposit in the funds and accounts established under the Indenture, (iii) investment income with respect to such moneys held by the Trustee and (iv) any insurance proceeds or condemnation awards received by or payable to the Trustee relating to the Base Rental Payments, including rental interruption insurance. Base Rental Payments As security for the Bonds, the Authority will assign to the Trustee for the payment of the Bonds certain rights of the Authority in the Lease, including the right to receive the Base Rental Payments to be made by the City. Under the Lease, the City agrees to make Base Rental Payments for the beneficial use and occupancy of the Leased Property, and to take such action as is necessary to budget for and to appropriate such amounts. See "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -- The Lease." The Base Rental Payments are equal to the principal of and interest on the Bonds, and are payable in semiannual installments 15 days prior to each Interest Payment Date. The Base Rental Payments will be paid by the City to the Trustee for the benefit of the Owners of the Bonds. The City's obligation to make Base Rental Payments is subject to abatement in the event of substantial interference with the use and possession of all or a part of the Leased Property. See "RISK FACTORS -- Abatement." Insurance The Lease requires the City to maintain insurance coverage on the Leased Property, consisting of the following: 45246965.4 14 (1) A policy or policies of insurance against loss or damage to the Leased Property known as "all risk," including flood and earthquake. Such insurance shall be maintained at any time in an amount not less than the lesser of the full replacement value of the Leased Property or the aggregate principal amount of Bonds at such time Outstanding. The term "full replacement value" as used in the Lease means the cost of repair or replacement of the Leased Property, without deduction for depreciation. Such insurance may at any time include a deductible clause providing for a deductible not to exceed $1,000,000 from all losses in any year; provided, however, that in the event the City is unable to secure and maintain, or cause to be secured and maintained, the insurance described in this clause (1), the City shall self -insure to the extent necessary to enable it to repair or replace the Leased Property in accordance with the Lease. (2) Comprehensive general liability coverage against claims for damages including death, personal injury, bodily injury or property damage arising from operations involving the Leased Property. Such insurance shall afford protection with a combined single limit of not less than $1,000,000 per occurrence with respect to bodily injury, death or property damage liability, or such greater amount as may from time to time be recommended by the City's risk management officer or an independent insurance consultant retained by the City for that purpose; provided,. however, that the City's obligations described in this clause (2) may be satisfied by self- insurance. (3) Workers' compensation insurance issued by a responsible carrier authorized under the laws of the State to insure employers against liability for compensation under the Labor Code of the State, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers' compensation insurance to cover all persons employed by the City in connection with the Leased Property and to cover full liability for compensation under any such act; provided, however, that the City's obligations described in this clause (3) may be satisfied by self-insurance. (4) Rental interruption insurance to cover loss, total or partial, of the use of any part of the Leased Property as a result of any of the hazards covered by the insurance required pursuant to clause (1) above, in an amount not less than two years' maximum annual Base Rental Payments for the entire Leased Property. The Lease further requires that the proceeds of the insurance described in clauses (1) and (4) above be payable to the trustees for the Bonds and any parity bonds on a pro rata basis. See "Existing Parity Obligations" below and "RISK FACTORS -- Parity Base Rental Payments." Notwithstanding the foregoing, the Lease does not require the City to maintain more insurance than is specifically referred to above or any policies of insurance other than standard policies of insurance with standard deductibles offered by reputable insurers at a reasonable cost on the open market. See "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -- The Lease -- Insurance." Additional Obligations Other than refunding bonds, the Authority may not issue bonds, notes or indebtedness that are payable out of Revenues in whole or in part. See "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -- The Indenture -- Additional Obligations." However, the City may incur additional lease or other obligations payable from the City's general fund without the consent of or notice to the Owners of the Bonds. See "RISK FACTORS -- Base Rental Payments Not Debt." 45246965.4 15 THE LETTER OF CREDIT AND THE REIMBURSEMENT AGREEMENT The following are brief outlines of certain provisions contained in the Letter of Credit established in favor of the Trustee and the Reimbursement Agreement between the Authority and the Credit Entity and are not to be considered a full statement pertaining thereto. The provisions apply to the Bonds and the Reimbursement Agreement. Reference is made to the Letter of Credit and the Reimbursement Agreement on file with the Authorityfor the complete text thereof. Letter of Credit Concurrently with the execution and delivery of the Bonds, the Bank will deliver the Letter of Credit to the Trustee_ The Trustee will be permitted to draw an aggregate amount not to exceed $ (comprised of the principal amount to the Bonds plus interest calculated at an assumed rate of 12% for _ days, based upon a 365 day year, as applicable, for the number of days actually elapsed), and subject to reductions and reinstatements as provided in the Letter of Credit. The Letter of Credit will permit the Trustee to draw thereunder, in accordance with the terms thereof, to pay (i) the principal, redemption amounts and interest but not premiums on the Bonds, and (ii) the purchase price of any Bonds tendered but not remarketed by the Remarketing Agent. The Letter of Credit provides that the Trustee may draw upon the Letter of Credit up to the Available Amount (subject to reduction as provided in the Letter of Credit) for any of the following purposes: (a) "Payment Draft" - in the form of (i) an "interest Drawing" representing the payment of interest due with respect to the Bonds; (ii) a "Partial Prepayment Drawing" representing the payment of principal plus accrued and unpaid interest upon redemption or prepayment of less than all of the Bonds Outstanding (as defined in the Indenture), (iii) a "Final Drawing" representing the payment of the unpaid principal and interest on Bonds either at a stated maturity, upon a prepayment, redemption or mandatory tender for purchase of all of the Bonds (other than Bonds presently held of record by the City or the Authority, or by the Trustee for the account of the City or the Authority) where the Bonds are not to be remarketed with the support of the Letter of Credit. (b) gender Draft" - representing the payment of unpaid principal and interest due with respect to all or less than all of the Bonds Outstanding upon a tender to the Trustee for purchase pursuant to .the indenture (other than Bonds presently held of record by the City or the Authority, or by the Trustee for the account of the City or the Authority). The Letter of Credit shall terminate (the "Stated Termination Date") upon the earliest to occur of (i) the date on which the Bank receives written notice from the Trustee that there are no longer any Bonds Outstanding; (ii) the date on which the Bank receives written notification from the Trustee that its Letter of Credit has been replaced with an Alternate Credit Facility; (iii) the date on which the Bank honors a "Final Draft"; (iv) the date on which the Bonds begin to earn interest at the Fixed Rate, as described in the notice from the Trustee to the Bank; and (v) the close of banking business at the Bank's office on (the "Maturity Date"). The Maturity Date may be extended from time to time, at the option of the Bank by amendments to the Letter of Credit. Reimbursement Agreement Pursuant to the Reimbursement Agreement, the Bank is to be reimbursed for drawings made by the Trustee upon the Letter of Credit in accordance with the Reimbursement Agreement. In satisfaction of the City's obligation to reimburse the Bank for such drawings, the Trustee shall reimburse the Bank from the Installment Payment Account. If an event of default occurs under the Reimbursement 45246965.4 16 Agreement, on account of any failure to reimburse the Bank or otherwise, the Bank may direct the Trustee to exercise any remedy available to the Trustee under the Indenture_ Such actions shall in no way limit the rights of the Trustee to make draws under the Letter of Credit in accordance therewith. Any of the following shall constitute an event of default under the Reimbursement Agreement (each, an "Event of Default" under the Reimbursement Agreement). (a) The Authority or the City shall fail to pay any amount payable under any provision for payment contained in the Reimbursement Agreement when due; or (b) Any representation or warranty made, or deemed made, by the Authority or the City (or any of their respective officers) in connection with the Reimbursement Agreement shall prove to have been incorrect in any material respect when made or deemed made; or (c) The Authority or the City shall fail to perform or observe any term, covenant or agreement as specified in the Reimbursement Agreement; or (d) The Authority or the City shall fail to perforin or observe any other term, covenant or agreement contained in the Reimbursement Agreement on its part to be performed or observed and any such failure shall remain unremedied for ten (10) days after written notice thereof shall have been given to the Authority or the City by the Bank; or (e) The Authority or the City shall default in the payment of any Debt as defined in the Reimbursement Agreement (other than Debt arising under the Reimbursement Agreement), whether such Debt now exists or shall be created after the issuance of the Letter of Credit, and any period of grace with respect thereto shall have expired, or an event of default. as defined in any mortgage, indenture or instrument under which there may be issued or by which:there may be secured or evidenced, any Debt, whether such Debt now exists or may be hereafter created shall occur, which default in payment or event of default shall result in such Debt becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; or (f) An order for relief shall have been entered against the Authority or the City under the Bankruptcy Code or any other similar applicable Federal or State law, and such decree or order shall have continued undischarged and unstayed for a period of ninety (90) days, or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, trustee or custodian of the Authority or the City or of their property, or for the winding up or liquidation of their affairs, shall have been entered, and such decree or order shall have remained in force undischarged and unstayed for a period of ninety (90) days; or (g) The Authority or the City shall institute a voluntary case, or shall consent to the institution of an involuntary case against it, or shall file a petition or answer or consent seeking reorganization or arrangement under the Bankruptcy Code or any other similar applicable Federal or State law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver, trustee, liquidator or custodian of it or of its property or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or corporate action shall be taken by the City in fifrtherance of any of the aforesaid purposes; or (h) Any provisions of the Reimbursement Agreement shall at any time for any reason cease to be valid and binding on the Authority or the City, or shall be declared to be null and void, or the validity or enforceability thereof shall be contested by the Authority or the City or the Authority or the City shall deny that it has any or further liability or obligation under the Reimbursement Agreement; or 45246965.4 17 (i) Any Event of Default under and as defined respectively in the Indenture, the Installment Sale Agreement or any other Related Document shall have occurred and be continuing; or 0) Any event which materially and adversely affects the financial condition of the Authority or the City, or the ability of the Authority or the City to observe and perform the terms of the Reimbursement Agreement shall have occurred and be continuing or any notice of an "Event of Default" under and as defined in the Confirmation Agreement have been delivered by the Confirming Credit Entity to the Trustee; or (k) A draw shall have occurred under the Confirming Letter of Credit. Should an Event of Default under the Reimbursement Agreement occur and be continuing, the Bank may (but shall not be obligated to), by notice to the City, declare the obligation of the Bank to issue the Letter of Credit to be terminated, whereupon the same shall forthwith terminate, or, if the Letter of Credit shall have been issued, (i) give notice to the Trustee pursuant to the Indenture requesting the Trustee to declare a mandatory tender for purchase of all Bonds then outstanding and all interest accrued and unpaid thereon to be due and payable, (ii) take such action as may be necessary to cure such Event of Default on behalf and for the account of the City, (iii) require immediate payment in full by the City of any payment or amount owed by it to the Bank under the Reimbursement Agreement, and (iv) exercise all or any combination of the remedies provided for in the Reimbursement Agreement or rights and remedies. available at law or in equity or under any other agreement. THE CREDIT ENTITY The following information concerning the Credit Entity has been provided by representatives of the Credit Entity and has not been confirmed or verified by any of the Authority, the City, the Underwriter or the Remarketing Agent. No representation is made herein to the accuracy or adequacy of such information or as to the absence of material adverse changes to such information subsequent to the date hereof, or that the information contained or incorporated herein by reference is correct as of any time subsequent to its date. [TO COME] THE CONFIRMING LETTER OF CREDIT AND THE CONFIRMATION AGREEMENT The following is a summary of certain provisions of the Confirming Letter of Credit and Confirmation Agreement. This summary is not to be considered a full statement of the terms the Confirming Letter of Credit or the Confirmation Agreement and accordingly, is qualified by reference thereto and is subject to the full text thereof. Unless otherwise defined, capitalized terms used herein shall have the same meanings given such terms in the Confirming Letter of Credit and the Confirmation Agreement. Confirming Letter of Credit Concurrently with the issuance of Letter of Credit, the Confirming Credit Entity will issue the Confirming Letter of Credit. The Confirming Letter of Credit will be an irrevocable, transferable confirming letter of credit which provides that the Trustee shall draw moneys under the Confirming Letter 45246965.4 is of Credit for the benefit of the Registered Owners of the Bonds only if the Credit Entity has wrongfully dishonored a properly presented and conforming draw on the Letter of Credit or if the Credit Entity repudiates the Letter of Credit. In such event, the Trustee shall declare a default under the Indenture and accelerate the maturity of the Bonds. Upon such acceleration, the Trustee shall make a drawing under and in accordance with the Confirming Letter of Credit to pay the principal of and interest on the Bonds when due. The Confirming Letter of Credit may only be drawn upon once, and shall be drawn upon for the full principal amount of the Outstanding Bonds, together with interest thereon. In such event, the Trustee will use the proceeds of the draw on the Confirming Letter of Credit to immediately pay the Bonds in full. The Confirming Letter of Credit shall automatically terminate upon the earliest of (a) the termination of the Letter of Credit, (b) close of business on , as such date may be extended at the Confirming Credit Entity's sole discretion (the "Scheduled Expiration Date of the Confirming Letter of Credit'), (c) ninety (90) days following the Trustee's receipt of a certificate from the Confirming Credit Entity to the effect that an Event of Termination under the Confirmation Agreement dated as of December 1, 2002, between the Credit Entity and the Confining Credit Entity, has occurred, (d) five (5) days following the date of payment of a drawing under the Letter of Credit or under the Confirming Letter of Credit for payment of the Purchase Price of the Bonds following a mandatory tender of the Bonds pursuant to the Indenture following the Trustee's receipt of the notice referred to in clause (c) above; (e) the date on which the Bonds earn interest at the Fixed Interest Rate; (f) the date on which the Trustee receives an Alternate Credit Facility and/or Alternate Liquidity Facility and/or Alternate Confirming Credit Facility; (g) the date on which the Stated Amount of the Confirming Letter of Credit is reduced to zero; or (h) ninety (90) days following the Confirming Credit Entity's receipt of a certificate from the Trustee stating that the Credit Entity has delivered to the Trustee notice of the termination of the Confirming Letter of Credit pursuant to the Confirmation Agreement. The Scheduled Expiration Date of the Confirming Letter of Credit shall be extended on the date which is two years prior to the then existing Scheduled Expiration Date of the Confining Letter of Credit, for a period of one year, unless the Trustee shall have received notice from the Confining Credit Entity not less than 30 days prior to the date which is two years prior to the then existing Scheduled Expiration Date of the Confirming Letter of Credit, that the Confirming Letter of Credit will not be extended beyond its then existing Scheduled Expiration Date of the Confining Letter of Credit. Confirmation Agreement Upon the occurrence and continuance of an Event of Termination under the Confirmation Agreement, the Confirining Credit Entity may give notice to the Trustee and the Credit Entity of the occurrence of an Event of Termination, thereby causing the Confirming Letter of Credit to expire ninety (90) days after such notice is given to the Trustee. Promptly upon receipt of such notice, the Trustee shall declare the principal of all Bonds then outstanding and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable. An Event of Termination under the Confirmation Agreement includes the following: (a) the Confirming Letter of Credit shall be drawn upon at any time; (b) the Credit Entity shall fail to pay when due (whether at maturity, by reason of acceleration or otherwise) any amounts payable by the Credit Entity to the Confirming Credit Entity under the Confirmation Agreement; provided, however, that failure to pay certain amounts owed for expenses, fees, increased costs, indemnification or taxes shall not cause an Event of Termination unless 45246965.4 19 the Credit Entity shall fail to pay such amounts within five (5) days following written demand therefor by the Confirming Credit Entity; (c) any representation or warranty made by the Credit Entity in the Confirmation Agreement or in any statement or certificate furnished by it pursuant to the Confirmation Agreement shall prove to have been untrue in any material respect as of the date of the issuance or making thereof; (d) there shall be a material failure by the Credit Entity to observe or perform any covenant contained in the Confirmation Agreement and such material failure shall continue for a period of thirty (30) business days after receipt of written notice by the Credit Entity from the Confirming Credit Entity; (e) the Credit Entity shall (i) not pay, or admit in writing its inability to pay, its debts generally as they become due or suspend payment of its obligations, (ii) make a general assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, conservator, liquidator or similar official for it or any substantial part of its property, (iv) institute any proceeding seeking dissolution; winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) fail to contest in good faith any appointment or proceeding described in (fl below, or (vi) take any corporate action in furtherance of the foregoing purposes; (f) a custodian, receiver, trustee, conservator, liquidator or similar official shall be appointed for the Credit Entity or any substantial part of its property, or a proceeding described in (e) above shall be instituted against the Credit Entity and such appointment shall continue undischarged or any such proceeding shall continue undismissed or unstayed for a period of sixty (60) days; (g) any governmental authority having jurisdiction shall have taken or instituted any action or proceeding for the dissolution or disestablishment of the Credit Entity or for the suspension of its operations, or the ongoing business operations of the Credit Entity shall be displaced or curtailed by any seizure, vesting or intervention by or under authority of .any government or governmental agency other than a temporary suspension, seizure or intervention applicable to the United States Credit Banking industry generally or a substantial portion thereof; (h) the Credit Entity shall fail to maintain a long-terrn letter of credit rating of at least "Baa3" from Moody's Investors ,Service, Inc. and "BBB-" from Standard and Poor's; (i) there shall have been delivered an Alternate Credit Facility and/or Alternate Liquidity Facility and/or Alternative Confirming Credit Facility under the Indenture; and {j} the Bonds shall have been converted to a Fixed Interest Rate under the Indenture. THE CONFIRMING CREDIT ENTITY [TO COME] 45246965.4 20 ESTIMATED SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds related to the issuance of the Bonds. Sources of Funds: Principal Amount of Bonds.............................................................................. Less: Underwriter's Discount.......................................................................... Total Sources of Funds. ........... ................................................................... Uses of Funds: Deposit to Construction Fund.......................................................................... Deposit to Debt Service Fund)) ....................................................................... Deposit to Costs of Issuance Fund(2)................................................................ TotalUses of Funds.................................................................................... �1) Capitalized interest through (z) Costs of issuance include fees and expenses of Bond Counsel, Disclosure Counsel, the Financial Advisor and the Trustee, . rating agency fees, fees of Credit Entity, printing expenses. and other costs of issuance of the Bonds. PLAN OF FINANCING [DESCRIBE THE COMMUNITY/SENIOR CENTER PROJECT IN TERMS OF ESTIMATED COSTS/SCHEDULE OF CONSTRUCTION, ADDITIONAL SOURCE OF FINANCING, IF ANY, ETC.] The Lease permits the City to substitute other premises for the Leased Property or portions thereof under the Lease, provided that the fair market value and the fair rental value of the substitute premises are at Ieast equal those of such portion of the Leased Property as is to be removed from the Lease, and provided certain other criteria are met. See "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -- The Lease -- Substitution of Property." CITY FINANCIAL INFORMATION General The City of Diamond Bar is located in Los Angeles County approximately thirty miles east of downtown Los Angeles. The City, incorporated on May 18, 1989, has a 2002 population of approximately 58,100 according to the California State Department of Finance. See "APPENDIX A — CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION CONCERNING THE CITY OF DIAMOND BAR' for additional information relating to the City. Budgetary Process [CONFIRM] The fiscal year of the City begins on the first day of July of each year and ends on the thirtieth day of June of the following year. The City Manager and City staff review estimates of revenues and 45246965.4 21 expenditures for each department for the ensuing fiscal year. At least thirty (30) days prior to the beginning of eacb fiscal year, the City Manager submits to the Council the proposed budget. After reviewing and making such revisions as it deems advisable, the City Council determines the time for the holding of a public meeting thereon. At the conclusion of the public meeting, the City Council further considers the proposed budget and makes any revision thereof that it deems advisable. On or before June 30 it adopts the budget with revisions, if any, by the affirmative vote of at least a majority of the total members of the City Council. From the effective date of the budget, the amounts stated as proposed expenditures become appropriated to the several departments, offices and agencies for the objects and purposes named, provided that the City Manager may transfer the appropriations from one object or purpose to another within the divisional budget. All appropriations lapse at the end of the fiscal year to the extent that they have not been expended or lawfully encumbered. The City Council employs, at the beginning of each fiscal year, an independent certified public accountant who, at such time or times as specified by the City Council, and at such other times as it shall determine, examines the books, records, inventories and reports of all officers and employees who receive, control, handle or disburse public funds and of all such other officers, employees or departments as the City Council may direct. As soon as practicable after the end of the fiscal year, a final audit and report is submitted by such accountant to the City Council and a copy of the financial statements as of the close of the fiscal year is published. Financial Statements A copy of the most recent financial statements of the City audited by Conrad and Associates, L.L.P. (the "Auditor") are included hereto as "APPENDIX B -- AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2001." The Auditor's letter concludes that the general purpose financial statements present fairly, in all material respects, the financial position of the City as of June 30, 2001 and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with account principals generally accepted in the United States of America. The City has not requested nor did the City obtain permission from the Auditor to include the audited financial statements as an appendix to this Official Statement. Accordingly, the Auditor has not performed any post -audit work on the financial statements. General Fund The two major General Fund revenue sources of the City, which together accounted for approximately 37.8% of the General Fund revenues in Fiscal Year 2000-01, were the Property Tax (approximately 16.3% of total general fund revenues) and Sales and Use Tax (approximately 21.5%). See "APPENDIX B -- AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED JUNE 30,2001." For Fiscal Year 2001-02 (which is currently under audit) the two major revenues sources accounted for approximately 39.9% of the General Fund revenues. Property Tax accounted for 17.6% and Sales and Use Tax accounted for 22.2% of total general fund revenues. The following tables reflect the City's General Fund balance sheet and revenues, expenditures and fund balances for the Fiscal Years ended June 30, 1998 through June 30, 2002 and the City's General Fund budgeted revenues and expenditures for the Fiscal Year ended June 30, 2003. The budget was adopted in June, 2002. This information has been derived from the audited financial statements of the 45246965.4 22 City for the fiscal years shown. This information should be read in conjunction with "APPENDIX B -- AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED JUNE 30,2001" attached hereto. TABLE NO. i CITY OF DIAMOND BAR GENERAL FUND BALANCE SHEET For Fiscal Years Ended June 30, 1998 Through June 30, 2002 2002 1998 1999 _ 2000 2001_- _ (unaudited) Assets Cash and investments Accounts receivable Interest receivable Due from employees Due from other funds Due from other governments Prepaid expenditures Advances to other funds Total Assets Liabilities Accounts payable Accrued payroll Retentions payable Deferred revenue Due to other funds Deposits Total Liabilities Equity and Other Credits Fund balances: Reserved Unreserved: Designated Undesignated Total Equity and Other Credits Total Liabilities, Equity and Other Credits $12,727,816 $12,766,083 $15,176,278 $18,122,750 $20,321,597 194,671 259,729 170,054 216,319 165,658 296,678 304,685 377,860 374,092 193,257 -- 9,490 1,891 -- -- 443,209 76,635 -- 9,764 615,454 1,007,207 1,126,947 1,029,524 897,586 945,964 -- -- -- 2,250 13,851 741,527 4,556,753 5,693,462 -- -- $15,411,108 119,100,322 $22,449,069 $19,622,761 $22,255,781 $ 1,266,109 $ 1,220,177 $.1,261,998 $ 830,888 $ 1,163,839 115,455 117,106 119,667 182,961 144,741 -- 300 -- 6,020 -- 38,384 144,824 440,236 -- -_ 254,620 852,273 828,268 -- -- 493,814 548,442 742,932 844,047 895,062 $ 2,168,382 $ 2,883,122 $ 3,393,101 $ 1,863,916 $ 2,203,642 $ 850,367 $ 4,770,517 $ 5,886,785 $ 422,972 $ 134,613 115,239 110,719 114,104 114,597 88,066 12,277,120 11,335,964 13,055,079 17,221,276 19,829,460 13,242,726 16,217,200 19,055,968 17,758,845 20,052,139 $15,411,108 $19,100,322 $22,449,069 $19,622,761 $22,255,781 Source: City of Diamond Bar Comprehensive Annual Financial Reports. 45246965.4 23 TABLE NO.2 CITY OF DIAMOND BAR GENERAL FUND REVENUES, EXPENDITURES AND FUND BALANCES For Fiscal Years Ended June 30, 1998 Through June 30, 2002 Expenditures: 563,324 927,620 868,722 863,331 2002 Current: 1998 1999 2000 2001 (unaudited) Revenues: $ 2,542,140 $ 2,498,905 $ 2,868,907 $ 3,308,606 3,148,538 Taxes $ 5,511,755 $ 5,878,376 $ 6,294,104 $ 6,579,488 $ 7,010,691 Special assessments -- -- -- -- -- Licenses, permits and fees 1,247,155 2,145,623 1,575,501 2,012,263 1,704,259 Intergovernmental 3,341,094 3,346,107 3,629,212 3,315,489 3,281,198 Fines and forfeits 219,075 573,449 556,527 509,676 529,921 Charges for services -- -- -- __ 98,522 Investment income 633,803 596,019 760,874 1,072,675 656,675 Other revenues 32,382 61,309 54,443 77,227 86,120 Total revenues $10,985,264 $12,600,883 $12,870,661 $13,566,818 $13,268,864 Expenditures: 563,324 927,620 868,722 863,331 717,520 Current: X481,965) (290,358) (354,076) (396,335) (565,275) General government $ 2,542,140 $ 2,498,905 $ 2,868,907 $ 3,308,606 3,148,538 Public safety 4,088,861 4,715,346 4,638,999 4,921,756 4,836,091 Highways and streets -- -- _ __ -- Public works 1,265,894 1,224,045 1,188,335 1,288,795 1,307,307 Community development -- -- -- -- -- Parks, recreation and culture 1,256,426 1,464,357 1,713,011 1,710,226 1,737,357 Capital outlay 247,987 361,018 137,287 468,673 98,522 Bad debt -- -- -- 3,447,929 -- Debt service -- __ __ _- Total expenditures $ 9,401,308 $10,263,671 $10,546,539 $15,145,985 $11,127,8154 Excess (deficiency) of revenues over (under) expenditures $ 1,583,956 $ 2,337,212 $ 2,324,122 $ (].,579,167) $2,141,049 Other financing sources (uses): Operating transfers in 563,324 927,620 868,722 863,331 717,520 Operating transfers out X481,965) (290,358) (354,076) (396,335) (565,275) Total other financing sources (uses) 81,359 637,262 514,646 466,996 152,245 Excess of revenues and other sources over expenditures and other uses 1,665,315 2,974,474 2,838,768 (1,112,171) 2,293,294 Fund balances at beginning of year 11,577,411 13,242,726 16,217,200 18,871,016 17,758,845 Fund balances at end of year $13,242,726 $16,217,200 $19,055,968 $17,758,845 $20,052,139 Source: City of Diamond Bar Comprehensive Annual Financial Reports. 45246965.4 24 TABLE NO.3 CITY OF DIAMOND BAR BUDGETED REVENUES, EXPENDITURES AND FUND BALANCES For Fiscal Year Ended June 30, 2003 ESTIMATED RESOURCES Property Taxes Other Taxes State Subventions From Other Agencies Fines and Forfeitures Current Services Charges Use of Money & Property Transfers -In Other Funds Reserved Fund Balance Total Estimated Resources APPROPRIATIONS City Council City Attorney City Manager City Clerk Finance Human Resources Information Systems General Government Public Information Law Enforcement Volunteer Patrol Fire Animal Control Emergency Preparedness Community Development/Planning Building & Safety Neighborhood Improvement Economic Development Community Services Administration Park Operations Recreation Public Works/Engineering. Engineering Road Maintenance Landscape Maintenance Transfers -Out Other Funds Total Appropriations NET CHANGE IN FUND BALANCE TOTAL FUND BALANCE RESERVES* * Based on Projections 45246965.4 25 FY 2002-03 Adopted $ 2,415,000 4,320,000 3,151,200 78,000 447,000 1,730,950 865,800 1,166,860 5.793.630 $19,968,440 $ 136,800 190,000 551,775 294,150 340,750 133,250 249,800 752,520 400,075 4,332,500 12,250 7,360 80,250 12,510 545,980 503,000 280,850 294,800 383,700 498,790 1,070,260 670,950 203,450 973,400 319,400 6,204,580 19,443,150 $ 525.290 13.651.825 Management's Discussion and Analysis [TO COME] Assessed Valuation and Property Taxes Taxes are levied for each Fiscal year on taxable real and personal property which is situated in the City as of the preceding January 1. For assessment and collection purposes, property is classified as either "secured" or "unsecured." Secured property is that part of the assessment roll containing State assessed property and property secured by a lien on real property which is sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll." The County of Los Angeles (the "County") levies a 1% property tax on behalf of all taxing agencies in the County, including the City. The taxes collected are allocated on the basis of a formula established by State law. Under this formula, the City and all other taxing entities receive a base year allocation plus an allocation on the basis of "situs" growth in assessed value (new construction, change of ownership and inflation) among the jurisdictions which serve the tax rate areas within which the growth occurs. Tax rate areas are specifically defined geographic areas which were developed to permit the levying of taxes for less than county -wide or less than city-wide special districts. Assessed valuations in the County are established by the County Assessor, except for utility property which is assessed by the State Board of Equalization. Property is assessed at 100% of actual market value and tax rates are expressed in terms of the ratio of "full cash value" to actual market value. During each County fiscal year, property which is improved or with respect to which a change in ownership occurs, is subject to reassessment to the then current market value. Property that is not subject to reassessment is subject to a maximum 2% increase per year. Such increases in assessed value during each County fiscal year are compiled as the County's "supplemental roll," and supplemental taxes are levied on such increases in assessed value during the County's Fiscal year. State law currently exempts $7,000 of the assessed value of an owner occupied dwelling, but the City does not suffer any revenue loss because an amount equivalent to the tax on such exempt amount is paid by the State. State law also exempts the full value of business inventories from taxation, but provides agencies based on their respective shares of the revenues derived from the application of the maximum tax rate, adjusted to. reflect changes in population and the consumer price index. Since the 1984-85 County fiscal year, the reimbursement for the business inventory exemption has been consolidated into the State motor vehicle in -lieu fee revenue, which currently more than restores the revenue lost through the business inventory exemption., See "RISK FACTORS -- Risks Related to Taxation in California" for additional information relating to taxation and collection of taxes. Tax Levies, Collections and Delinquencies Property taxes on the secured roll are due in two installments, on November I and February 1. If unpaid, such taxes become delinquent on December 10 and April 10, respectively, and a ten percent penalty attaches to any delinquent payment. In addition, property on the secured roll becomes tax delinquent on June 30. Such property may thereafter be prepaid by payment of the delinquent taxes plus the delinquency penalty, plus a prepayment penalty of one and one-half percent per month to the time of prepayment. If taxes remain unpaid for a period of five years or more, the property is subject to sale by the County Tax Collector. 45246965.4 26 Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent, if unpaid, on August 31. A ten percent (10%) penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of one and one-half percent per month begins to accrue on November 1. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer, (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer, (3) tiling a certificate of delinquency for record in the County Recorder's office in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvements or possessory interests, belonging or assessed to the taxpayer. Each county levies (except for levies to support prior voter -approved indebtedness) and collects all property taxes for properly located within that county's taxing boundaries. The County has not established a property tax distribution program commonly referred to as the "Teeter Plan." Taxes are distributed to taxing agencies within the County on the basis of actual tax collections rather than on the basis of tax levy. See "RISK FACTORS -- Risks Related to Taxation in California" for additional information relating to taxation and collection of taxes. The following tables present information regarding the assessed valuation of property within the City. All assessed valuations include homeowner exemptions. TABLE NO.4 CITY OF DIAMOND BAR ASSESSED AND ESTIMATED ACTUAL VALUES OF TAXABLE PROPERTY (unaudited) Secured Unsecured Public Percentage Fiscal Year Gross Value Gross Value utility Exemptions Total Increase 1992-93 $3,493,803,851 $45,032,160 $ 0 $27,932,643 $3,510,903,368 -- 1993-94 3,536,453,242 49,709,273 844,313 25,119,688 3,561,887,140 1.45% 1994-95 3,619,436,021 57,158,841 820,862 33,523,553 3,643,892,171 2.30 1995-96 3,659,337,876 60,689,091 825,138 35,979,540 3,684,872,565 1.12 1996-97 3,660,223,979 64,187,086 828,963 27,479,616 3,697,760,412 0.35 1997-98 3,645,994,575 67,863,390 884,347 37,731,129 3,677,011,183 -0.56 1998-99 3,730,370,102 74,441,058 876,688 38,373,706 3,767,314,142 2.46 1999-00 3,873,275,798 63,844,054 125,921 36,494,583 3,900,751,190 3.54 2000-01 4,098,200,125 67,438,047 116,405 40,088,648 4,125,665,929 5.77 2001-02 Source: City of Diamond Bar Comprehensive Annual Financial Report, Year Ended June 30, 2001 and Los Angeles County Auditor/Controller, Hdl Coren & Cone. Principal Property Taxpayers The following table provides a list of the principal property taxpayers within the City. The ten largest taxpayers account for about 3.27% of the total net assessed valuation. 45246965.4 27 TABLE NO.5 CITY OF DIAMOND BAR PRINCIPAL TAXPAYERS .Tune 30, 2001 (unaudited) % of Total 1999-2000 Net Assessed Taxpayer Primary Use Assessed Valuation Valuation [RPM Muller Associates LLC Commercial S 21,624,000 0.517% M & H Realty Partners II Commercial 19,006,800 0.455 Diamond Bar Business Associates Commercial 15,495,213 0.371 Martin Brattrud Properties Commercial 13,889,845 0.332 HR Barros Family Limited Partnership Commercial 13,668,000 0.327 Shea Homes Limited Partnership Industrial 11,827,729 0.283 Lakeview Village Corporation Commercial 11,611,777 0.278 Arden Realty Finance III L.L.C. Commercial 10,648,728 0.255 Kilroy Realty Limited Partnership Industrial 8,482,761 0.203 Diamond Bar Hotel Fund Limited Commercial 7,780.677 0.186 "TOTAL $131035,530 3.206 Source: City of Diamond Bar, 2001 Comprehensive Annual Financial. Report. Sales and Use Tax Sales Tax revenues of the City have trended upward through Fiscal Year 2001-02 as shown in the following table. TABLE NO.6 CITY OF DIAMOND BAR SALES AND USE TAX REVENUES Fiscal Years 1997-98 Through 2001-02 (unaudited) )Fiscal Years Totals Percentage Change 1997-98 $2,417,361 -- 1998-99 2,666,743 9.35% 1999-00 2,814,441 5.25 2000-01 2,918,415 3.56 2001-02 2,947,710 0.99 Source: City of Diamond Bar Comprehensive Annual Financial Report. Commercial Activity The following table shows the dollar value of taxable transactions within the City for the years shown. 45246965.4 28 TABLE NO. 7 CITY OF DIAMOND BAR TAXABLE TRANSACTIONS, BY TYPE OF BUSINESS Calendar Years 1999 through 2001 (Dollar Amounts in Thousands) * 2001 Figures through the. Third Quarter 2001. Source: State Board of Equalization, Taxable Sales in California City Investment Policy [TO CONFIRM] The City Council annually adopts, by resolution, a statement of investment policy (the "Investment Policy') for the City's funds. The Investment Policy defines the objects and priorities of the investment program, stressing safety and liquidity of funds, as the highest priority. The third priority stated by the Investment Policy is the achievement of the maximum yield possible within the constraints of the primary objectives. The Investment Policy permits investment in repurchase agreements in an amount not to exceed ten million dollars, and only with primary dealers of the Federal Reserve Bank of New York, for a period not greater than seven days, and for which the market value of the collateral is not less than the greater of 102% of the funds borrowed against the securities taken by the City as collateral and the sum of the funds borrowed against the securities plus accrued interest. The Investment Policy permits investment in reverse repurchase agreements only in amounts up to ten million dollars, with primary dealers of the Federal Reserve Bank of New York with which the City has a current safekeeping agreement. The City may not use as underlying securities in reverse repurchase agreements any security the City has not fully owned and paid for at least 30 days prior to the reverse repurchase transaction date. A maximum of ten percent of the general portfolio may be reversed at any time, the face value of the collateral is to equal the proceeds received, and the term of the transaction may 45246965.4 29 1999 2000 2001 Retail Stores: Apparel stores $ 1,290 $ 1,342 $ 971 General merchandise stores 22,247 24,264 17,765 Food stores 22,405 19,051 13,256 Eating and drinking places 40,318 43,048 33,099 Home furnishings and Appliances 4,994 5,281 1,052 Building materials and farm Implements 3,080 5,164 5,216 Automobile dealers and automobile supplies 28,678 32,497 24,903 Service stations 38,798 49,536 44,088 Other retail stores 39,248 47,387 38,829 Retail stores Totals 201,058 227,570 179,179 All other outlets 37,357 35,308 23,112 Total $238,415 $262,878 202 2 1 Number of retail outlets 1,243 1,197 2,387 * 2001 Figures through the. Third Quarter 2001. Source: State Board of Equalization, Taxable Sales in California City Investment Policy [TO CONFIRM] The City Council annually adopts, by resolution, a statement of investment policy (the "Investment Policy') for the City's funds. The Investment Policy defines the objects and priorities of the investment program, stressing safety and liquidity of funds, as the highest priority. The third priority stated by the Investment Policy is the achievement of the maximum yield possible within the constraints of the primary objectives. The Investment Policy permits investment in repurchase agreements in an amount not to exceed ten million dollars, and only with primary dealers of the Federal Reserve Bank of New York, for a period not greater than seven days, and for which the market value of the collateral is not less than the greater of 102% of the funds borrowed against the securities taken by the City as collateral and the sum of the funds borrowed against the securities plus accrued interest. The Investment Policy permits investment in reverse repurchase agreements only in amounts up to ten million dollars, with primary dealers of the Federal Reserve Bank of New York with which the City has a current safekeeping agreement. The City may not use as underlying securities in reverse repurchase agreements any security the City has not fully owned and paid for at least 30 days prior to the reverse repurchase transaction date. A maximum of ten percent of the general portfolio may be reversed at any time, the face value of the collateral is to equal the proceeds received, and the term of the transaction may 45246965.4 29 not exceed 92 days unless a written agreement is in place guaranteeing the minimum earning spread for the entire period of the sale of the security. The Investment Policy explicitly recognizes the high degree of risk involved in investment in derivative products, and permits investment in derivatives only upon resolution of the City Council acting on advice of the City Treasurer, only for specific financing purposes, and not in the normal course of managing the portfolio. For each derivative investment the City must provide a written statement of purpose and objective for the derivative, establish written monitoring procedures for the derivative, have sufficient expertise and technical resources to oversee derivative programs, provide sufficiently detailed record keeping systems to allow governing bodies, auditors and examiners to determine if the program is functioning in accordance with established objectives, fully disclose the use of any derivative instruments in all official statements and other disclosure documents, and be aware of any conflicts of interest involving the broker or dealer with whom the City is anticipating dealing. The City Treasurer is charged with the responsibility of custody and investment of surplus City funds. The City Treasurer is required to submit a monthly investment report to the City Council that provides a summary of the status of the current investment portfolio and material transactions entered into during the month. Long -Term General Fund Obligations As of June 30, 2001, the City had no bonded indebtedness. Direct and Overlapping Bonded Debt The following table presents a statement of the City's outstanding direct and overlapping debt as of , 2002. 45246965.4 30 TABLE NO.8 CITY OF DIAMOND BAR DIRECT AND OVERLAPPING BONDED DEBT [TO COME] Employees and Labor Relations The City currently employs approximately 41 full-time employees and 53 part-time employees. A historical summary of City employment levels is set forth below. TABLE NO.9 CITY OF DIAMOND BAR EMPLOYMENT LEVELS Fiscal Years 1996-97 Through 2000-2001 Permanent Seasonal and Fiscal Year Full Time Part. Time 1996-97 25 -- 1997-98 26 -- 1998-99 30 11 1999-00 46 23 2000-01 41 53 Source: City of Diamond Bar. The City, pursuant to Government Code Section 3500, provides for a "meet and confer" process with City employees, individually or collectively, to negotiate wages, hours and working conditions. Matters involving merits, necessity or organization of any service or activity provided for by law are excluded from this process. Executive, mid -management and confidential employees are not represented by a formal bargaining unit. Of the 41 permanent employees _ are represented by one of the following bargaining units: the Diamond Bar Municipal Employees Association, and the Diamond Bar Safety Support Personnel Association. The Municipal Employees - Part Time Unit represents regular part-time and hourly employees of the City, and its Memorandum of Understanding with the City expires in The bargaining units described above all have memoranda of understanding in effect, until either June 30, 2003 or June 30, 2004. Generally, all terms and conditions of labor agreements continue in full force and effect until further modified through the negotiation process. [UPDATE] The City has never experienced a work stoppage by its employees. Defined Benefit Pension Plan The City has contracted with the California Public Employees Retirement System ("PERS") to provide retirement, disability, death and survivor benefits for all eligible full and part-time City employees. The City's contribution to the system based on actuarially determined requirements was $215,521 for Fiscal Year 2000-2001. For the three years ended June 30, 1999, 2000 and 2001, the total contribution to PERS was 13.16%, 10.95% and 11.05% respectively, of the annual covered payroll. The total contribution paid by the City included employer contributions as well as member contributions for which the City is contractually obligated to pay on behalf of its employees, 45246965.4 32 Insurance The City has initiated self-insurance programs to provide for general liability, special liability (including employment practices insurance, employee benefits, administration injury and discrimination injury) and pollution and remediation legal liability. These activities are accounted for in the self- insurance internal service funds which are accounted for as a proprietary fund type. Self-insurance fund revenues are primarily premium charges to other City operating funds and are planned to match estimated payments resulting from self-insurance programs, operating expenses and reinsurance premiums. The self-insurance fund expenses the estimated liability for claims in cases where such amounts are reasonably determinable and where liability is probable. Additionally, an estimate has been accrued for claims incurred but not reported. The City is insured for workers' compensation claims by commercial insurance. The commercial insurance policy covers up to the California statutory limit of $1,000,000 for employers liability including costs of defending claims. RISK FACTORS The, following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating any purchase of the Bonds. The following is not an exhaustive listing of risks and other considerations which may be relevant to an investment in the Bonds. In addition, the order in which the following factors are presented is not intended to reflect the relative importance of any such risks. Substitution of Property The Lease permits the City to substitute other premises for the Leased Property or portions thereof under the Lease, provided that the fair market value and the fair rental value of the substitute premises are at least equal to such portion of the Leased Property to be removed from the Lease, and provided certain other criteria are met. See "APPENDIX C -- SUMMARY OF PRINCIPAL LEGAL DOCUMENTS -- The Lease -- Substitution of Property." Base Rental Payments Not Debt The obligation of the City to snake the Base Rental Payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. Neither the Bonds nor the obligation of the City to make Base Rental Payments constitute a debt of the City, the State of California or any political subdivision thereof (other than the Authority) within the meaning of any constitutional or statutory debt limitation or restriction. The Bonds are not general obligations of the Authority, but are limited obligations payable solely from and secured by a pledge of Revenues, consisting primarily of Base Rental Payments. The Authority has no taxing power. Although the Lease does not create a pledge, lien or encumbrance upon the funds of the City, the City is obligated under the Lease to pay the Base Rental Payments from any source of legally available funds and the City has covenanted in the Lease that, for so long as the Leased Property is available for its use, it will make the necessary annual appropriations within its budget for the Base Rental Payments. The City is currently liable and may become liable on other obligations payable from general revenues, some of which may have a priority over the Base Rental Payments. 45246965.4 33 The City has the capacity to enter into other obligations payable from the City's general fund, without the consent of or prior notice to the Owners of the Bonds. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event the City's revenue sources are less than its total obligations, the City could choose to find other activities before making Base Rental Payments and other payments due under the Lease. The same result could occur if state constitutional expenditure limitations were to prohibit the City from appropriating and spending all of its otherwise available revenues. Abatement In the event of loss or substantial interference in the use and occupancy by the City of all or any portion of the Leased Property caused by material damage, title defect, destruction to or condemnation of the Leased Property, Base Rental Payments will be subject to abatement. In the event that such component of the Leased Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time that proceeds of the City's rental interruption insurance will be available in lieu of Base Rental Payments, or in the event that casualty insurance proceeds or condemnation proceeds are insufficient to provide for complete repair or replacement of such component of the Leased Property or prepayment of the Bonds, there could be insufficient funds to make payments to Owners in full. Risk of Uninsured Loss The City covenants under the Lease to maintain certain insurance policies on the Leased Property. See "SECURITY FOR THE BONDS -- Insurance." These insurance policies do not cover all types of risk. For instance, the City does not covenant to maintain earthquake insurance. The Leased Property could be damaged or destroyed due to earthquake or other casualty for which the Leased Property is uninsured. Additionally, the Leased Property could be the subject of an eminent domain proceeding. Under these circumstances an abatement of Base Rental Payments could occur and could continue indefinitely. There can be no assurance that the providers of the City's liability and rental interruption insurance will in all events be able or willing to make payments under the respective policies for such loss should a claim be made under such policies. Further, there can be no assurances that amounts received as proceeds from insurance or from condemnation of the Leased Property will be sufficient to repair the Leased Property or to redeem the Bonds and any other obligations secured by Base Rental Payments. Certain of the City's insurance policies provide for deductibles up to $1,000,000. Should the City be required to meet such deductible expenses, the availability of General Fund revenues to make Base Rental Payments may be correspondingly affected. Seismic Risks The State of California, including the Los Angeles County Area, is a seismically active region. There are several geological faults in the area which have the potential to cause serious earthquakes and damage to the Leased Property. Although the Leased Property is currently covered for earthquake damage and notwithstanding the provisions relating to required property insurance, the City is not obligated under the Lease to procure and maintain, or cause to be procured and maintained, earthquake insurance on the Leased Property. Should an earthquake occur such that extensive damage is caused to the Leased Property that results in substantial interference with the use and occupancy of the Leased Property, under the abatement provisions of the Lease, the City would not be obligated to make the Base Rental Payments. See "RISK FACTORS - Abatement" above. 45246965.4 34 Bankruptcy The City is a unit of State government and therefore is not subject to the involuntary procedures of the United States Bankruptcy Code (the `Bankruptcy Code"). However, pursuant to Chapter 9 of the Bankruptcy Code, the City may seek voluntary protection from its creditors for purposes of adjusting its debts. In the event the City were to become a debtor under the Bankruptcy Code, the City would be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 proceeding. Among the adverse effects of such a bankruptcy might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the City or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the City; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the fling of a bankruptcy petition; (iii) the existence of unsecured or court -approved secured debt which may have a priority of payment superior to that of Owners of Bonds; and (iv) the possibility of the adoption of a plan for the adjustment of the City's debt (a "Plan") without the consent of the Trustee or all of the Owners of Bonds, which Plan may restructure, delay, compromise or reduce the amount of any claim of the Owners if the Bankruptcy Court finds that the Plan is fair and equitable. In addition, the City could either reject the Lease or assume the Lease despite any provision of the Lease which makes the bankruptcy or insolvency of the City an event of default thereunder. In the event the City rejects the Lease, the Trustee, on behalf of the Owners of the Bonds, would have a pre-petition claim that may be limited under the Bankruptcy Code and treated in a manner under a Plan over the objections of the Trustee or Owners of the Bonds. Moreover, such rejection would terminate the Lease and the City's obligations to make payments thereunder. The Authority is a public agency and, like the City, is not subject to the involuntary procedures of the Bankruptcy Code. The Authority may also seek voluntary protection under Chapter 9 of the Bankruptcy Code. In the event the Authority were to become a debtor under the Bankruptcy Code, the Authority would be entitled to all of the protective provisions of the Bankruptcy Code as applicable in a Chapter 9 proceeding. Such a bankruptcy could adversely affect the payments under the Indenture. Among the adverse effects might be: (i) the application of the automatic stay provisions of the Bankruptcy Code, which, until relief is granted, would prevent collection of payments from the Authority or the commencement of any judicial or other action for the purpose of recovering or collecting a claim against the Authority; (ii) the avoidance of preferential transfers occurring during the relevant period prior to the filing of a bankruptcy petition; (iii) the existence of unsecured or court -approved secured debt which may have priority of payment superior to that of the Owners of the Bonds; and (iv) the possibility of the adoption of a plan for the adjustment of the Authority's debt without the consent of the Trustee or all of the Owners of the Bonds, which plan may restructure, delay, compromise or reduce the amount of any claim of the Owners if the Bankruptcy Court finds that the Plan is fair and equitable. However, the bankruptcy of the Authority, and not the City, should not affect the Trustee's rights under the Lease. The Authority could still challenge the assignment, and the Trustee and/or the Owners of the Bonds could be required to litigate these issues in order to protect their interests. Enforcement of Remedies Under the Lease If the City defaults on its obligation to -make Base Rental Payments with respect to the Leased Property, the Authority's only effective remedy is to sue for Base Rental Payments as they become due. In the event of a default, there is no remedy of acceleration of the total Base Rental Payments due over the term of the Lease. The City, while it is the lessee under the Lease, will only be Iiable for Base Rental Payments on a semiannual basis, and the Authority would be required to seek a separate judgment for each year's defaulted Base Rental Payment. Any such suit for money damages would be subject to limitations on legal remedies against cities in the State. 45246965.4 35 In addition, any exercise of remedies to recover shortfalls in the receipt of Base Rental Payments will be subject to the parity claims of holders of any other parties entitled to receive Base Rental Payments. No Liability of Authority to the Owners Except as expressly provided in the Indenture, the Authority will not have any obligation or liability to the Owners of the Bonds with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease or the Indenture, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Indenture. County of Orange vs. Orange County Assessment Appeals Board On November 2, 2001, the Orange County Superior Court issued a Minute Order holding that the Orange County Assessor (the "Assessor") had violated the 2% maximum annual inflation adjustment limit of Article XIIIA of the California Constitution. The Assessor had attempted to compensate for its failure to increase the taxable value of a single family residential property the previous year when the market value of the property declined below its taxable value, by increasing the assessed value by 4% the following year.. The Assessor established the 4% value increase by determining that the property's then - current market value to be greater than if the 2% annual inflation adjustment had been applied the previous year. He attempted to aggregate two years of inflation adjustments. The State Board of Equalization had approved this methodology for increasing assessed values in similar circumstances. The Orange County Superior Court has not ruled on a motion to restate the complaint as a class action, which could extend this ruling to similar cases. The.City is unable to predict the outcome of this litigation and what effect, if any, it might have on the City's general fund. Any reduction in property taxes received by the City may have an adverse affect on the ability of the City to pay Base Rental under the Lease. Risks Related to Taxation in California Constitutional Amendments Affecting Tax Revenues. Article XIIIA of the California Constitution limits the amounts of ad valorem tax on real property to 1% of "full cash value" as determined by the county assessor. Article XIIIA defines "full cash value" to mean "the City Assessor's valuation of real property as shown on the 1975-76 tax bill under `full cash value', or thereafter the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment period." Furthermore, all real property valuation may be increased to reflect the inflation rate, as shown by the consumer price index, not to exceed 2% per year, or may be reduced in the event of declining property values caused by damage, destruction or other factors. Article XIIIA exempts from the 1% tax limitation any taxes to repay indebtedness approved by the voters prior to July 1, 1978, and any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978 by two-thirds of the voters voting on the proposition approving such bonds, and requires a vote of two-thirds of the qualified electorate to impose special taxes, while totally precluding the imposition of any additional ad valorem, sales or transaction tax on real property. In addition, Article XIIIA requires the approval of two-thirds of all members of the State legislature to change any State tax law resulting in increased tax revenues. Article XIIIB of the California Constitution limits the annual appropriations from the proceeds of taxes of the State and any city, county, school district, authority or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, 45246965.4 36 population and services rendered by the governmental entity. Article X M includes a requirement that if an entity's revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax or fee schedules over the subsequent two years. On November 5, 1996, California voters approved an initiative to amend the California Constitution known as the Right to Vote on Taxes Act ("Proposition 218"), which added Article XHIC and XIIID to the California Constitution. Among other provisions, Proposition 218 requires majority voter approval for the imposition, extension or increase of general taxes and two-thirds voter approval for the imposition, extension or increase of special taxes by a local government, which is defined in Proposition 218 to include cities. Proposition 218 also provides that any general tax imposed, extended or increased without voter approval by any local government on or after January 1, 1995 and prior to November 6, 1996 will continue to be imposed only if approved by a majority vote in an election held within two years of November 6, 1996. Proposition 218 also provides that the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. This extension of the initiative power is not limited by the terms of Proposition 218 to impositions after November 6, 1996 and absent other legal authority, could result in retroactive reduction in any existing taxes, assessments, fees and charges. In addition, Proposition 218 limits the application of assessments, fees and charges and requires certain existing, new and increased assessments, fees and charges to be submitted to property owners for approval or rejection, after notice and public hearing. The City does not expect Proposition 218 to have any immediate material effect on the revenues from which Base Rental Payments are expected to be appropriated. Implementing Legislation. Legislation enacted by the California Legislature to implement Article XIIIA (Statutes of 1978, Chapter 292, as amended) provides that, notwithstanding any other law, local agencies may not levy any property tax, except to pay debt service on indebtedness approved by the voters prior to July 1, 1978, and that each county will levy the maximum tax permitted by Article XIIIA of $4.00 per $100 assessed valuation (based on the traditional practice of using 25% of full cash value as the assessed value for tax purposes). The legislation further provided that, for Fiscal Year 1978-79 only, the tax levied by each county was to be appropriated among all taxing agencies within the county in proportion to their average share of taxes levied in certain previous years. Future assessed valuation growth allowed under Article X1IIA (i.e., new construction, change of ownership, and 2% annual value growth) will be allocated on the basis of "situs" among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools will share the growth of "base" revenue from the tax rate area. Each year's growth allocation becomes part of each agency's allocation in the following year. The Authority is unable to predict the nature or magnitude of future revenue sources which may be provided by the State to replace lost property tax revenues. Article XIIIA effectively prohibits the levying of any other ad valorem property tax above those described above, even with the approval of the affected voters. Constitutional Challenges to Property Tax System. There have been many challenges to Article XIIIA of the California Constitution. The United States Supreme Court heard the appeal in Nordlinger V. Hahn, a challenge relating to residential property. Based upon the facts presented in Nordlinger, the United States Supreme Court held that the method of property tax assessment under Article XHIA did not violate the federal Constitution. The Authority cannot predict whether there will'be any future challenges to California's present system of property tax assessment and cannot evaluate the ultimate effect on the Agency's receipt of tax increment revenues should a future decision hold unconstitutional the method of assessing property. Statutory Revenue Limitations — Proposition 62. Proposition 62 is a statewide statutory initiative adopted by the voters at the November 4, 1986 general election. It added Sections 53720 to 53730 to the Government Code to require that all new local taxes be approved by the voters. The statute 45246965.4 37 provides that all local taxes are either general taxes or special taxes. General taxes are imposed for general governmental purposes. Special taxes are imposed for specific purposes only. General taxes may not be imposed by local government unless approved by a two-thirds vote of the entire legislative body and a majority of the voters voting on the proposed general tax. Special taxes may not be imposed by local government unless approved by a majority of the entire legislative body and by two-thirds'of the voters voting on the special tax. Soon after Proposition 62 was adopted by the voters, legal challenges to taxes adopted contrary to its provisions were filed. In 1991, in the most significant case, City of Woodlake v. Logan, the California Court of Appeal held that the statutory voter approval requirement for general taxes was unconstitutional. The California Supreme Court refused to review Woodlake. On September 28, 1995, the California Supreme Court, on a 5-2 vote, in a decision entitled Santa Clara County Local Transportation Authority v. Guardino (Case No. S036269), "disapproved" Woodlake and held that the voter approval requirements of Proposition 62 are valid. On December 14, 1995, the Supreme Court made minor nonsubstantive changes to its written opinion and denied the petition for rehearing. The decision provides that the voter approval requirements of Proposition 62 for both general and special taxes are valid. The Guardino case fails to say (1) whether the decision is retroactively applicable to general taxes adopted prior to the decision; (2) whether taxpayers have any remedies for refund of taxes paid under a tax ordinance that was not voter approved; (3) what statute of limitations applies to taxes adopted without voterapproval prior to Guardino-, (4) whether Proposition 62 applies only to new taxes or to tax increases as well. The Court of Appeals in a December 15, 1997 decision entitled McBearty v. City of Brawley (Case No. D027877) addressed some of these issues. In Brawley, a taxpayer challenged the city's utility tax that was passed by the city council in 1991 without a vote of the electorate. The Court of Appeals held that (i) a three year statute of limitations applies to challenges to a tax ordinance subject to Proposition 62; and (ii) the statute of limitations did not begin to run until September 1995 when the Guardino case determined that Proposition 62 was constitutional. The effect of the holding in Brawley is that any tax ordinances passed between November 1986 and December 1995 that were not approved by the electorate would be subject to .a challenge until December 1998. The court ordered the city to either cease collecting the tax or seek voter approval to continue levying the tax. The Authority cannot predict the outcome of any pending or future litigation concerning the validity of proposition 62, nor can it predict the scope of the Guardino or Brawley decisions discussed above. Proposition 62 could affect the ability of the City to continue the imposition of, or to retain, certain taxes, and restrict the City's ability to raise revenue. Future Initiatives Articles XIHA, XIIIB, XIIIC and XIIID were each adopted as measures that qualified for the ballot pursuant to California's initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City's ability to expend revenues. The nature and impact of these measures cannot be anticipated by the Authority or the City. THE AUTHORITY The Authority was established pursuant to a Joint Exercise of Powers Agreement dated as of December 1, 2002, by and between the City and the Redevelopment Agency of the City of Diamond Bar in accordance with the provisions of the Bond Law. The Authority was created for the purpose of providing financing for public capital improvements for the City through the acquisition by the Authority of such public capital improvements and/or the purchase by the Authority of local obligations within the meaning of the Bond Law. Under the Bond Iaw, the Authority has the power to pay and finance the costs of acquiring, installing and constructing the Leased Property. The Authority has no independent staff and 4-5246965.4 38 consequently will be dependent upon the City's officers and employees to administer its programs on its behalf. The Board of Directors of the Authority is composed of the members of the City Council. UNDERWRITING The Underwriter has agreed to purchase the Bonds at a purchase price of $ , which includes an Underwriter's discount of $ . The Underwriter intends to offer the Bonds to the public initially at the prices set forth on the inside cover page of this Official Statement, plus accrued interest from the dated date of the Bonds to their date of delivery, which prices may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may reallow any such discounts on sales to other dealers. CERTAIN LEGAL MATTERS Fulbright & Jaworski L.L.P., _Los Angeles, California will render an opinion with respect to the validity and enforceability of the Bonds, the Indenture, the Lease and the Site Lease, substantially in the form set forth in APPENDIX E hereto. Certain other legal matters will be passed upon for the Authority and the City by Fulbright & Jaworski L.L.P., Los Angeles, California, Disclosure Counsel, and for the Authority and the City by the City Attorney of the City of Diamond Bar. TAX EXEMPTION The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in the gross income of the owners thereof for federal income tax purposes retroactive to the date of issuance of the Bonds. The Authority and the City have covenanted to maintain the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, under existing law, interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Bond Counsel is also of the opinion that, assuming compliance with the aforementioned covenant, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, the interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on the Bonds owned by a corporation may affect the computation of its alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earnings over the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Bonds may affect the tax status of interest on the Bonds or the tax consequences of the ownership of the Bonds. No assurance can be given that future legislation, or amendments to the Code, if 45246965.4 39 enacted into law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of interest on the Bonds from personal income taxation by the State of California or of the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. Furthermore, Bond Counsel expresses no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of bond counsel if such advice or approval is given by counsel other than Bond Counsel. Although Bond Counsel is of the opinion that interest on the Bonds is exempt from state personal income tax and excluded from the gross income of the owners thereof for federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the owner's other items of income or deduction. Without limiting the generality of the foregoing, prospective purchasers of the Bonds should be aware that (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of an owner's interest expense allocated to interest on the Bonds, (ii) with respect to insurance companies subject to the tax imposed by section 831 of the Code, section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds, (iii) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by section 884 of the Code, (iv) passive investment income, including interest on the Bonds, may be subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds and (vi) under section 32(i) of the Code, receipt of investment income, including interest on the Bonds, may disqualify the recipient thereof from obtaining the earned income credit. Bond Counsel has expressed no opinion regarding any such other tax consequences. Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the Authority described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Bonds is commenced, under current procedures the Service is likely to treat the Authority as the "taxpayer", and the Owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Bonds, the Authority may have different or conflicting interest from the Owners. Further, the disclosure of the initiation of an audit may adversely affect the market price of the Bonds, regardless of the final disposition of the audit. LITIGATION [CITY TO CONFIRM] There is no action, suit or proceeding known to the Authority to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds, the Indenture or the Lease or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority taken with respect to any of the foregoing. The City has pending against it several claims and lawsuits arising in the normal course of City operations. The City is of the view that, if determined adversely to the City, such claims and lawsuits 45246965.4 40 would not, in the aggregate, materially impair the City's ability to make payments of Base Rental and Additional Rental when due. FINANCIAL ADVISOR The City has retained Kosmont Companies as Financial Advisor in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement nor the information, covenants and representations contained in any of the Bond documentation with respect to the federal income tax status of the Bonds. Kosmont Companies is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Financial Advisor's fee for services rendered with respect to the Bonds is contingent upon the issuance and delivery of the Bonds. RATINGS Moody's Investors Service ("Moody's") and Standard & Poor's ("S&P") are expected to assign the ratings of " " and " ", respective, to the Bonds, based upon issuance of the Letter of Credit [and Confirming Letter of Credit]. [Moody's and S&P are also expected to assign underlying ratings of " and " ", respectively, to the Bonds.] Such ratings reflect only the view of such rating agency, and explanation of the significance of the ratings may be obtained from such rating agency. There is no assurance that the ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of the rating agency circumstances so warrant. Any such downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. NO CONTINUING DISCLOSURE With respect to any time prior to the Fixed Rate Conversion Date, neither the City nor the Authority has covenanted in the Indenture or the Lease that it will undertake any continuing disclosure with respect to the Bonds. MISCELLANEOUS All of the preceding summaries of the Indenture, the Lease, the Site Lease, the Assignment Agreement, the Bond Law, other applicable legislation, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Authority for further information in connection therewith. This Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. 45246965.4 41 The execution and delivery of this Official ,Statement by the Executive Director of the Authority have been duly authorized by the Board of Directors of the Authority. CITY OF DIAMOND BAR PUBLIC FINANCING AUTHORITY 10 Executive Director APPENDIX A CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION CONCERNING THE CITY OF DIAMOND BAR General The City of Diamond Bar is located in Los Angeles County approximately thirty miles east of downtown Los Angeles. The City, incorporated on May 18, 1989, has a 2002 population of approximately 5 8, 100 according to the California State Department of Finance. Location The City is a 14.9 square -mile area centrally located between the Los Angeles, Orange, and San Bernardino counties. The City is adjacent to the Pomona (60) and Orange (57) freeways. Within a short distance are three major airports, two shipping ports and a variety of commercial/commuter rail facilities. The City is served by 137 miles of paved streets and alleys, 146.88 miles of sanitary sewers and 31.95 miles of storm drains. City Government Diamond Bar is a general law city operating under California state law. The five City Council members who govern the City are elected for overlapping four-year terms. The Mayor is selected by the Council from among its members, and serves in that special capacity for a one-year term. The only other elected official of the City is the City Treasurer, whose term of office is four years. The City Council appoints a City Manager, City Attorney and City Clerk. In addition, the Council appoints the members of the Planning Commission, Traffic and Parking Commission, Architectural Commission, Civil Service Commission and Solicitations Advisory Commission. The City employs a staff of approximately 41 full- time employees under the direction of the City Manager. Services and Facilities The City provides a number of municipal services including administration, community development (which includes planning, economic development, building and safety management and code enforcement), public works (which includes engineering, capital projects administration, street maintenance contract management, traffic and transportation matters, engineering contract management, solid waste contract management and subsidized transit ticket sales), community services (which includes senior services, park maintenance, recreation services and landscape maintenance) and community relations. A total of 41 permanent employees help provide these services. The City also relies on contracted services which benefits the City by reducing expenses while providing a high degree of flexibility in responding to changing economic conditions. Contracted services include police protection, building and safety, street maintenance, park maintenance, capital improvement projects, animal control, attorney services and engineering. The City's primary public safety services are provided by the County of Los Angeles. The L.A. County Fire Department serves residents and business operators from three strategically located sites within the City, and support from the Los Angeles County Sheriffs Department is dispatched from the Walnut substation facility. Other public safety services — animal control, emergency services and risk management — are either provided by the City, or are supplied by outside contract agencies. 45246965.4 A-1 Population The 2002 population of Diamond Bar was estimated at 58,100. The estimated population over the last five years is set forth below: CITY OF DIAMOND BAR POPULATION Year Population 2001 57,000 2000 56,287 1999 55,200 1998 54,600 1997 54,200 Source: California State Department of Finance. Construction The following table shows the number of construction permits issued, and the related construction value, for the five Fiscal Years shown. CITY OF DIAMOND BAR (1) Includes multiple dwellings Source: City of Diamond Bar's Contract Building Safety Provider, Findley Reports. 45246965.4 A-2 RESIDENTIAL AND COMMERCIAL CONSTRUCTION Last. Five Fiscal Years (unaudited) New Construction Fiscal Residential (11 Commercial Year Units Value Units Value 1996-97 15 $ 9,516,000 1 $4,300,000 1997-98 66 32,539,000 0 0 1998-99 88 36,303,000 5 21,516,000 1999-00 28 18,274,000 2 1,706,000 2000.01 92 42,558,001 3 8,431,000 Alterations and Additions Fiscal Residential (t) Commercial Year Units Value Units Value 1996-97 595 $12,150,400 58 $ 3,826,800 1997-98 639 8,618,400 52 2,453,000 1998-99 751 19,163,240 53 10,099,900 1999-00 632 8,255,620 99 8,324,100 2000.01 716 10,06,605 57 4,614,427 (1) Includes multiple dwellings Source: City of Diamond Bar's Contract Building Safety Provider, Findley Reports. 45246965.4 A-2 Educational Facilities The City's educational facilities are provided by the Pomona Unified and Walnut Valley Unified School Districts. The City has nine elementary schools, three middle schools, two high schools and a public library. Local colleges and universities include: Mt. San Antonio Community College, Cal State Fullerton, Cal Poly Pomona, Claremont Colleges, Claremont Graduate School, University of La Verne and the University of Phoenix. APPENDIX C SUMMARY OF PRINCIPAL LEGAL DOCUMENTS The following statements are summaries of the provisions of the Indenture and the Lease. These statements are qualified in their entirety by reference to the full terms of such documents, copies of which may be obtained from the Trustee. APPENDIX D BOOK -ENTRY ONLY SYSTEM The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy thereof. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Bond will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, GSCC, MBSCC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both U.S. and non - U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtoc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (`Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the: name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration 45246965.4 D-1 in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be prepaid. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority (or the Trustee on behalf thereof) as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority or Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant's interest in the Bonds, on DTC's records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered Bonds to the Trustee's DTC account. DTC may discontinue providing .its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bonds are required to be printed and delivered. The Authority may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered. 45246965.4 D-2 APPENDIX E FORM OF BOND COUNSEL OPINION [Closing Date] Board of Directors City of Diamond Bar Public Financing Authority 21825 E. Copley Drive Diamond Bar, California 91765 City Council City of Diamond Bar 21825 E. Copley Drive Diamond Bar, California 91765 City of Diamond Bar Public Financing Authority Variable Rate Lease Revenue Bonds, 2002 Series A (Community)Senior Center Project) Ladies and Gentlemen: We have acted as bond counsel to the City of Diamond Bar Public Financing Authority, a joint exercise of powers entity established. under the Constitution and laws of the State of California (the "Issuer"), in connection with the issuance of $ aggregate principal amount of its Variable Rate Lease Revenue Bonds, 2002 Series A (Community/Senior Center Project) (the "Bonds"). The Bonds are being issued pursuant to Article 4 of Chapter 5 of Division 7 of Title I of the California Government Code and an Indenture, dated as of December 1, 2002 (the "Indenture"), by and between the Issuer and U.S. Bank, N.A., as trustee (the "Trustee"). The Bonds are payable from Revenues, as defined in the Indenture, consisting primarily of Base Rental Payments to be made by the City of Diamond Bar, California (the "City") pursuant to a Lease Agreement, dated as of December 1, 2002, each by and between the Issuer and the City. The City has leased the real property and improvements encumbered by the Lease to the Issuer pursuant to a Site Lease, dated as of December 1, 2002 (the "Site Lease"), by and between the City and the Issuer. Proceeds of the Bonds will be applied by the Authority to finance a community/senior center and other public improvements, to fund a reserve fund for the Bonds and to pay costs of issuance of the Bonds. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Indenture or the Lease, as applicable. As bond counsel, we have examined copies certified to us as being true and complete copies of the proceedings of the Issuer and the City in connection with the issuance of the Bonds. We have also examined such certificates of officers of the Issuer and the City and others as we have considered necessary for the purposes of this opinion. Based upon the foregoing, we are of the opinion that: 1. The Indenture has been duly and validly authorized, executed and delivered by the Issuer and, assuming such Indenture constitutes the legally valid and binding obligation of the Trustee, constitutes the legally valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms. 45246965.4 E-1 2. The Lease has been duly and validly authorized, executed and delivered by the City and the Issuer, and constitutes the legally valid and binding obligation of the City and the Issuer, enforceable against the City and the Issuer in accordance with its terms. 3. The Site Lease has been duly and validly authorized, executed and delivered by the Issuer and the City, and constitutes the legally valid and binding obligation of the Issuer and the City, enforceable against the Issuer and the City in accordance with its terms. 4. The Bonds constitute valid and binding limited obligations of the Issuer as provided in the Indenture, and are entitled to the benefits of the Indenture. 5. The Bonds are secured by a valid pledge of the Revenues and all moneys in the Revenue Fund and the Reserve Account, including all amounts derived from the investment of such moneys, subject to the application thereof on the terms and conditions as set forth in the Indenture. 6. The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross income retroactive to the date of issue of the Bonds. The Issuer has covenanted in the Indenture to maintain the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In our opinion, under existing law, interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing statutes, regulations, rulings and court decisions, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, that interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on Bonds owned by a corporation may affect the computation of the alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earningsover the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). Except as stated in the preceding three paragraphs, we express no opinion as to any federal or state tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other bond counsel. The opinions expressed in paragraphs 1, 2, 3 and 4 above are qualified to the extent the enforceability of the Indenture, the Lease, the Site Lease and the Bonds may be limited by applicable bankruptcy, insolvency, debt adjustment, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally or as to the availability of any particular remedy. The enforceability of the Indenture, the Lease, the Site Lease and the Bonds is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, 45246965.4 E-2 reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the limitations on legal remedies against governmental entities in California. We advise you that we have not made or undertaken to make any investigation of the state of title to any of the real property or ownership of any property described in the Lease and the Site Lease, or of the accuracy or sufficiency of the description of such property contained therein, and we express no opinion with respect to such matters. No opinion is expressed herein on the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds. We call attention to the fact that the opinions expressed herein and the exclusion from gross income of the interest on the Bonds as described above may be affected by actions taken or omitted or events occurring or not occurring after the date hereof. We have not undertaken to determine, or to inform any person or entity, whether any such actions or events are taken, omitted, occur or fail to occur. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Very truly yours, 45246965.4 E-3