Agenda packet — Gonzales City Council, May 6, 2024 (part 1 of 3)

Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

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A G E N D A

JOINT MEETING OF THE

GONZALES CITY COUNCIL, SUCCESSOR AGENCY, AND

GONZALES PUBLIC FINANCING AUTHORITY
CITY COUNCIL CHAMBERS – 117 FOURTH STREET
GONZALES, CA 93926
MONDAY, MAY 6, 2024
6:00 P.M.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

1. ROLL CALL- City Council/Successor Agency/Public Financing Authority Board Members Mayor Pro Tem/Vice Chair Scott Funk, Council/Agency/Board Member Liz Silva, Council/Agency/Board Member Lorraine Worthy, Council/Agency/Board Member Maria Orozco, Mayor/Chair Jose L. Rios
Successor Agency Item
 Financing Authority Item

If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

If you choose not to attend the City Council meeting but wish to make a comment on a specific agenda item, please submit your comment limited to 250 words or less by 12:00p.m. on the day of the meeting to the City Clerk at [email protected]

PRESENTATIONS

2. Consider Approval of, and Present Proclamation No. 2024-01, A Proclamation of the City Council of the City of Gonzales Proclaiming May 2024 as Poppy Month

BUSINESS FROM THE PUBLIC

3. Business from the Public not on the Agenda; any member of the Public may address the Council/Agency for a period not to exceed three minutes on any subject not on the Agenda. The Council/Agency will listen to all communications but may take no action.

*
Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

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

CONSENT AGENDA
All matters listed under the Consent Agenda are considered routine by the City Council and will be adopted by one action of the Council unless any Council Member has a question or wishes to make a statement or discuss an item. In that event, the Mayor will remove the item from the Consent Calendar for separate consideration.

4. Approve the Joint City Council and Successor Agency - Regular Meeting - April 15, 2024 Minutes

5. Approve City Accounts Payable Warrants #50111-50218

6. Consider Approval of Resolution No. 2024-13, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager to Execute the Letter of Intent from Towerpoint Acquisitions, LLC, Related to the Prepayment of Lease Agreements with Verizon, and T-Mobile, and Authorizing the City Manager to Negotiate the Lease Prepayment and Term Easement Agreement

7. Consider Approval of Resolution No. 2024-14, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager to withdraw the funding donated for the Dennis and Janice Caprara Community Center Complex from the Community Foundation Account

8. Consider Approval of Resolution No. 2024-15, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager or Designee to Execute and Submit a Clean Water State Revolving Fund Financial Assistance Application to the State Water Resources Control Board (SWRCB) for the Planning, Design, and Construction of the 1.0 Million Gallons a Day Industrial Wastewater System, and Execute SRF Financial Assistance Agreement and Any Amendments with the SWRCB

9. Authorize Issuance of a Notice to Proceed with Construction of Phase 1 Community Center Complex Project to Otto Construction at a Not-to-Exceed Amount of $18,869,395 Pending Concurrence from USDA Staff

10. Authorize Execution of a Non-Exclusive Master Services Agreement Between the City of Gonzales and Professional Service Industries and Approve Execution of Task Order 1 in the amount of $135,000 for Materials Testing and Special Inspection services during construction of Phase 1 of the Community Center Complex Project

REGULAR AGENDA

11. Public Hearing to Consider Approval of a) Resolution No. 2024-12, A Resolution of the City Council of the City of Gonzales Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Continuing Disclosure Certificate in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions; and
b) Resolution No. FA-2024-01, A Resolution of the Gonzales Public Financing Authority Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Assignment Agreement in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal, Amount of Not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions a) Staff Report
b) Public Hearing
c) Council/Board Discussion
d) Council/Board Action
Staff Recommended Action-Adopt Resolution No. 2024-12, and Resolution No. FA-2024-01 *
Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

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12. Fiscal Year 2022-2023 Audited Financial Statements and Management Report a) Staff Report
b) Public Comment
c) Council/Agency Discussion
d) Council/Agency Action
Staff Recommended Action-Accept the City and Successor Agency’s Audited Financial Statements and Management Report for Fiscal Year Ending June 30, 2023

13. Public Hearing to Introduce, Waive Reading and Read by Title Ordinance No. 2024-143, An Ordinance of the City Council of the City of Gonzales, Amending Chapter 12.116 Signs of Title 12 - Part 5 Regulations Applying in All Districts of the Gonzales City Code a) Staff Report
b) Public Hearing
c) Council Discussion
d) Council Action
Staff Recommended Action-Introduce, waive reading and read by title only Ordinance No. 2024-143

14. Introduce, Waive Reading and Read by Title Ordinance No. 2024-144, An Ordinance of the City Council of the City of Gonzales Amending Chapter 5.40 “Fireworks” of Title 5-Public Health and Safety, of the Gonzales City Code
a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Introduce, waive reading and read by title only Ordinance No. 2024-144

GONZALES YOUTH COUNCIL UPDATES

15. Oral Communications

BUSINESS FROM CITY COUNCIL

16. City Council Board/Committee Reports
a. Transportation Agency for Monterey County
b. Mayor Selection Committee
c. Salinas Valley Recycles

17. Oral Communications

BUSINESS FROM CITY MANAGER

18. Oral Communications

ADJOURNMENT

In compliance with the American with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (831) 675-5000. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (CFR 35.102-

35.104 ADA Title II). This is a public meeting and as such, can be seen live by people present or online and is being recorded; therefore; anything you say or do here is public information. The recordings are available online.
*
PROCLAMATION NO. 2024-01
WHEREAS, in support of the American Legion Auxiliary, Gonzales Unit 81 is Declaring May 2024 as Poppy Month; and
WHEREAS, the Poppy became a symbol of sacrifice of lives in war, and represented the hope that none had died in vain; and
WHEREAS, Poppy Month has become a tradition in almost every American Community; and
WHEREAS, the distribution of the bright red flower is one of the oldest and most widely recognized programs of the American Legion Auxiliary; and WHEREAS, the memorial Poppy is made by hospitalized veterans, then distributed to the public near Memorial Day, and all donations received are used only to benefit America’s veterans.

NOW, THEREFORE, BE IT RESOLVED that I, Mayor Jose L. Rios, on behalf of the City of Gonzales City Council, hereby proclaims, honors, and supports May 2024 as Poppy Month.

Jose L. Rios, The Honorable Mayor
May 6, 2024
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Attachment: Proclamation No. 2024-01 Poppy Month (2974 : Proclamation No. 2024-01 Proclaiming May 2024 as Poppy Month) AGENDA
ITEM
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MINUTES

JOINT MEETING OF THE

GONZALES CITY COUNCIL AND

GONZALES SUCCESSOR AGENCY
MONDAY, APRIL 15, 2024
6:00 P.M.

CALL TO ORDER
The meeting was called to order at 6:00 PM by Mayor Jose L. Rios.

PLEDGE OF ALLEGIANCE
Council Member Orozco led the flag salute.

1. ROLL CALL
Attendee Name Title Status
Jose L. Rios Mayor/Chair Present
Scott Funk Mayor Pro Tem/Vice Chair Present
Liz Silva Council/Agency Member Present
Lorraine Worthy Council/Agency Member Present
Maria Orozco Council/Agency Member Present

YOUTH COMMISSIONERS
Aliyah Castillo.

STAFF PRESENT
City Manager Carmen Gil, City Attorney Michael F. Rodriquez, Community Development Director Taven Kinison Brown, Executive Assistant to the City Manager/Deputy City Clerk Mary Villegas, Administrative Assistant II Marisol Gomez, Public Works Director/City Engineer Patrick Dobbins, and Fire Chief Jason Muscio.
* Successor Agency Item
Packet Pg. 5
Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA) AGENDA
ITEM
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PUBLIC NOTICE
This meeting is being conducted consistent with State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic. The public may participate in person or online via zoom at https://us06web.zoom.us/j/87020263943 or call 1 (669) 900-6833 and use Meeting ID: 870 2026 3943. If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

PRESENTATIONS

2. Certificates of Recognition to Gonzales High School Girls Soccer Team Mayor Pro Tem Funk read the certificates of recognition and Mayor Rios presented them to the students and Coaches.

Coach Tejeda thanked the Council for always supporting the students.

3. US 101 South of Salinas Project
Todd Muck, TAMC Executive Director, presented via powerpoint, the safety concerns, safety data, total collisions, the issue of the left turns and U-turns, uncontrolled intersections and railroad crossings, the public’s desire for improved safety, long term solution and improvements, stages to delivering projects, and flooding issues.

BUSINESS FROM THE PUBLIC

4. Business from the Public not on the Agenda; any member of the Public may address the Council for a period not to exceed three minutes on any subject not on the Agenda. The Council will listen to all communications, but may take no action.

Roberta Camacho, Grupos Unidos, invited the Council to the Dia del Niño event on Sunday, April 28th from 1:00pm-5:00pm. She invited the Mayor to say a few words to the community. She also announced the Cinco de Mayo event the following Sunday, where they will have about 20 agencies giving out information. She said they were able to put together the two events thanks to the Measure K Committee.

Roman Barba talked about an issue he had been having at 880 Center Street regarding a structure they have against his fence and damages from the dogs. He wanted to see the letters if the City was sending them to that property owner.

CONSENT AGENDA

5. Approve the Joint City Council and Successor Agency - Regular Meeting - April 1, 2024 Minutes

6. Approve City Accounts Payable Warrants #50066-50110

7. Approve Successor Agency Accounts Payable Warrants #1686-1687

8. City Manager’s Report
*
*
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Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA)

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9. Community Development Department Activity Report

10. Community Engagement & Recreation Departments Activity Report

11. Fire Department Activity Report

12. Police Department Activity Report

13. Public Works/City Engineer Department Activity Report RESULT: APPROVED [UNANIMOUS]
MOVER: Maria Orozco, Council Member
SECONDER: Scott Funk, Mayor Pro Tem
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco

REGULAR AGENDA

14. Community Center Complex Project Progress Report
Staff Report: Public Works Director Dobbins presented the staff report.

Public Comment: Henry Martinez Sr., 112 Tenth Street, thanked the City for getting here and he was happy to see it built.

Roman Barba said he had been waiting for this for a long time since the time they were knocking on people's doors. He suggested having the Mayor in the front of all the pictures since he was the one who wanted this, and thanked him for this project.

Mayor Rios told Mr. Barba he was only one vote and if it wasn't for the entire Council, none of this would be possible. He thanked the entire Council for supporting this.

Council Discussion: Council Member Orozco asked about the order of speakers and suggested having a table with information at the upcoming community events with information regarding the Community Center, and giving folks information as to how they can donate and to keep them informed on what's happening.

Mayor Rios suggested moving the lighting structures possibly behind the fire station and the wastewater treatment facility instead of discarding them.

City Manager Gil addressed the questions and mentioned that was not the order of speakers and the final list is still being worked on.

The Council shared their excitement about this project. The Council received the report. No action required.

15. Oral Presentation on the Fireworks Committee Recommendations Staff Report: City Manager Gil presented the staff report via powerpoint presentation. She informed who the Fireworks Committee appointees were; the meetings that were held, and the committee recommendations: update the City Code to include language around illegal fireworks which is to consider establishing in-house administrative fee, establish a 10:30pm curfew time on safe and sane fireworks, only allow use of safe and sane fireworks on the 4th of July, and assess whether we can include a violation for landlord if it can be proven that an illegal firework is Packet Pg. 7
Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA)

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connected to a parcel; establish a messaging campaign to include videos on fireworks effects on animals, veterans and messaging from the Fire and Police Departments, and potentially youth; and continue meeting as a committee through July. She also included an implementation timeline through June. She invited a committee member who was present at the meeting to the podium if he had anything to add.

Ruben Zurita, Committee Member, informed the committee worked hard to come up with these suggestions and everyone was present and active in the committee. He wanted to add that this was a tremendous opportunity to improve the safety of this community because we all knew the fireworks were out of control, and they would like to have the messaging in English and Spanish. He appreciated any help the Council could give.

Public Comment: Henry Maritnez Sr. commented about landlords not having control of the properties they rent and not being able to kick them out if they got in trouble with the cops. He disagreed with putting regulations on landlords, and the curfew due to limited time to pop the fireworks. He elaborated on the fire last year being the owner’s fault because of coating his roof with flammable material, and other parts of town not having major incidents.

Roman Barba commented about having signs and posters at the 4th of July event about illegal fireworks not being welcomed in Gonzales; and the issue with his neighbor about illegal fireworks landing on his property.

Henry Martinez Jr. (via zoom), asked why this committee was never promoted anywhere since he didn’t hear any of this, and he wasn’t invited. He strongly opposed to anything they want to do or are part of this. He disagreed with the curfew and said this is being done only because one house got burned last year, and people should clean their homes to be ready for the holiday. He also opposed any kind of penalties on the homeowners because he’ll pass that on to the tenants and elaborated on the problems this would cause such as penalties on the homeowners when they don’t have actual proof.

Council Discussion: Council Member Orozco suggested having informational flyers at the upcoming events at the park so residents know what’s coming. She liked the idea of the curfew and elaborated on the reasons like being school day the next day as well as people working early, and the effects they caused on kids with special needs.

Mayor Pro Tem Funk thanked the members of the committee, and elaborated this was something the Council talked about for quite some time over several meetings before we had members of the public be appointed, who were people that were for and against fireworks. He shared his frustration when he heard the comment about what side of town the incidents have happened which shouldn’t matter because someone passed away. He talked about the noise ordinance currently in place and agreed with the curfew.

Council Member Silva echoed the Council’s comments and thanked the committee for working together to come up with a solution. She liked the idea of the curfew as well and the informational flyers. She suggested putting together a specific number to report so people don’t use 911. She elaborated on the main focus to try to eliminate or mitigate illegal fireworks due to the losses we’ve had, and this was not to ban people from having a good time on the 4th of July.

Council Member Worthy concurred with the rest of the Council Members and elaborated on the effects the illegal fireworks cause with people who suffer from PTSD like her husband, and also on animals. She agreed with the recommendations and commended the committee for working Packet Pg. 8
Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA)

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together considering it was a mixed group. She also agreed with possibly coming up with a separate phone number to report incidents.

Mayor Rios addressed comments from Mr. Martinez Jr. about not being informed. He stated that we did this at a public meeting where each Council Member got to nominate one person for the committee keeping it to five members, which they thought was more manageable than opening it to the entire public, and we had a pretty even split on the pro fireworks versus getting rid of fireworks all together. He said it was great to know there was collaboration from all of them to come up with a solution. He agreed with the recommendations and putting the flyers in English and Spanish in the water bills.

In regards to a the possibility of a separate phone number, Fire Chief Muscio informed that Gonzales can have a separate number but there is an issue with who will answer the calls. It’s best to call 911 since there is a record of the calls and they’re documented.

City Manager Gil elaborated on the issue of having a separate number not knowing if the call would turn into an actual emergency so calling 911 was the best option.

Council Member Orozco also suggested giving flyers to the students at the school since a lot of people didn't get a water bill if they lived in apartments.

It was the Council's consensus to direct staff to move forward with this.

City Attorney Rodriquez indicated that staff would bring back the introduction of the ordinance.

16. Consider Approval of Resolution No. 2024-11, A Resolution of the City Council of the City of Gonzales Establishing 5:30 P.M. as the New Start Time for Regular City Council Meetings Staff Report: City Manager Gil presented the staff report.

Public Comment: Henry Martinez Sr. expressed his opposition to changing the time.

Roman Barba suggested keeping it at 6:00pm since students were at practices and wouldn't make it to recognitions.

RESULT: After general discussion from each Council Member, the item died due to lack of a motion.

GONZALES YOUTH COUNCIL UPDATES

17. Oral Communications
Commissioner Castillo reported on the surveys the members distributed regarding the tenants rights, and mental health projects. She announced a meeting with Soledad and Greenfield's Youth Councils collaborating on a Youth Summit, and mentioned the Youth Council members will be present at the Groundbreaking Ceremony of the Community Center on April 27th.

BUSINESS FROM CITY COUNCIL

18. City Council Board/Committee Reports
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Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA)

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a. League of California Cities Monterey Bay Division
No report.
b. Association of Monterey Bay Area Governments
No report.
c. Monterey Salinas Transit
Council Member Worthy reported on the discussion of the MST circulators which have been approved and the intention is to be ready by fall. She also reported on the cost of the Surf project going up, and public comments received on the rail project. She shared a story of a 6 year-old girl and the trust with the MST Coach Operators.

19. Oral Communications
Council Member Worthy thanked her husband for bringing her cousin who was visiting from Switzerland to tonight's Council meeting so she could see what our City government did.

Council Member Silva thanked everyone who attended the Education Center opening at the Johnson Canyon Landfill on April 6th which was a great success. She also reported on the MCPOA Dinner she attended. She announced the monthly Senior Lunch on April 18th at St.

Theodore’s Hall at 11:00am, the Salinas Valley Fair Kickoff Dinner this Saturday in King City at 5:30pm; and informed the Hartnell School Board will be holding a mail in ballot special election for our district, which are due by June 4th.

Mayor Pro Tem Funk was looking forward to the many community events coming up.

Council Member Orozco thanked Council Member Worthy for serving on the MST Board and the great information she shares, and said that George would probably recall when the City was asked to be on this board, which was the first South County City that took the lead to form the joint authority. She congratulated Officer Macias and Community Services Officer Correa for their recognition at the MPCOA Dinner, which was a great event.

Mayor Rios said he also attended the MPCOA Dinner and was proud to also see Officer Solis from Salinas but wasn’t thrilled about the information he got regarding the amount for their signing bonus. He cleared to Mr. Barba about the Car Show still happening this weekend. He talked about the application of the roundup when Public Works cleaned up areas in town. He asked about the reason why City couldn’t just get a backpack which Green Valley offered, to apply to the weeds versus using the spray container to save time.

Public Works Director Dobbins responded the City used an organic spray, not roundup; and he said he would take a look at what was available through Green Valley Farm Supply.

BUSINESS FROM CITY MANAGER

20. Oral Communications
City Manager Gil congratulated our Officer of the Year Joshua Macias and Community Services Officer Ivan Correa for their recognition at the Monterey County Peace Officers Association Dinner on Friday night which was a great event. She reminded everyone that the Car Show was still on this Saturday. She mentioned that staff was debating about rescheduling it due to low preregistrations, but the numbers continued to go up, and cars will be showing up as early as 8:00am, and the show starts at 1:00pm.

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Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA)

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ADJOURNMENT
RESULT: APPROVED [UNANIMOUS]
MOVER: Lorraine Worthy, Council Member
SECONDER: Liz Silva, Council Member
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Maria Orozco The meeting was adjourned at 7:47 PM.

ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 11
Minutes Acceptance: Minutes of Apr 15, 2024 6:00 PM (CONSENT AGENDA) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 11:07 am
Date: 04/12/2024
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
50111 04/12/24 Printed 1922 A & G PUMPING, INC. Porta Potties-Centennial Park 342.50 ABAG PUBLICLY OWNED 1,970.04
ENERGY
50112 04/12/24 Printed 256 Levelized Nat. Gas Charges
AGILE OCCUPATIONAL 130.00

MEDICINE PC
50113 04/12/24 Printed 4362 Physical & Rapid Drug Screen -Efrain ALVAREZ TECHNOLOGY 6,494.41
GROUP, INC.
50114 04/12/24 Printed 3893 Monthly Billing - May
50115 04/12/24 Printed 137 AMERICAN SUPPLY CO. Supplies 439.62 ARMANASCO PUBLIC 9,133.50

RELATIONS,
50116 04/12/24 Printed 3284 PR Support
50117 04/12/24 Printed 341 PATRICK ASKEW Retiree Medical Insurance April 2024 361.00 50118 04/12/24 Printed 2830 AT&T Corp Yard Acct # 308309956 133.04 50119 04/12/24 Printed 86 AT&T Telephone Charges 2/19/24 - 3/18/24 1,305.68 50120 04/12/24 Printed 3805 BADGER METER INC. Meter Services 124.22 50121 04/12/24 Printed 4438 THEODORA CALDERON Water Deposits to be Refunded 50.00 50122 04/12/24 Printed 4439 OLIVIA CANALES Water Deposits to be Refunded 93.62 50123 04/12/24 Printed 770 CARLOS ALBERTO ESQUIVEL Cleaning Services 400.00 50124 04/12/24 Printed 212 CITY OF GONZALES Utilities 2,667.77 50125 04/12/24 Printed 1482 CSC OF SALINAS Dump Truck Repairs 215.01 50126 04/12/24 Printed 3028 D & J TIRE SERVICE Tire Replace/Tire Repair 466.91 DE LAGE LANDEN PUBLIC 24,855.33

FINANCE
50127 04/12/24 Printed 2895 Solar Lease Pmt.
50128 04/12/24 Printed 1771 EMPLOY AMERICA Janitorial & Carwash Services 1,315.56 50129 04/12/24 Printed 4129 ALEJANDRA FLORES Travel: King City Roundtable 3/28/24 161.65 50130 04/12/24 Printed 4440 ESMERALDA GARCIA Water Deposits to be Refunded 150.00 50131 04/12/24 Printed 4018 GOLDSTAR PRODUCTS, INC Herbicide 4,904.90 50132 04/12/24 Void 04/12/24 Void Check 0.00
GONZALES ACE HARDWARE 509.24
INC.
50133 04/12/24 Printed 3274 M12/M18 Rapid Charger, U-Bolt, Wire Brush
50134 04/12/24 Printed 225 GONZALES IRRIGATION Irrigation Supplies 4.55 50135 04/12/24 Printed 292 GONZALES ROTARY CLUB Rotary Dues 1/1/24-12/31/24 Taven 340.00 Brown
50136 04/12/24 Printed 3228 HARRIS & ASSOCIATES, INC. CM Services on Community Ctr. 16,116.00 50137 04/12/24 Printed 2215 HINDERLITER, DE LLAMAS & Sales Tax Audit Services 3,137.65 50138 04/12/24 Printed 3485 INFOSEND, INC. Mar. Utility Bills & CM Report 2,672.93 50139 04/12/24 Printed 4441 JHB SUPPLY LLC Parking Lot Wheel Stops 2,705.44 50140 04/12/24 Printed 2686 DAVID & DONA LLOYD After Hours Phone Service 99.00 50141 04/12/24 Printed 4773 M.K.S. DODSON INC Tank Rent 79.98 MANUEL PEREA TRUCKING, 877.50
INC.
50142 04/12/24 Printed 3395 Pull Pumps @ Sewer Plant
50143 04/12/24 Void 04/12/24 Void Check 0.00
50144 04/12/24 Printed 72 MISSION UNIFORM SERVICE Uniforms 1,143.48 MONTEREY CO BUSINESS 5,000.00

COUNCIL
50145 04/12/24 Printed 4442 Business Development Center 50146 04/12/24 Printed 2525 MY JEEP CHRYSLER DODGE Filter & Antifreeze 193.25 NATIONAL AQUATIC 2,369.03
SERVICES INC.
50147 04/12/24 Printed 4445 Vac Repair
50148 04/12/24 Printed 91 P. G. & E. Utilities 23,031.46 50149 04/12/24 Printed 4443 DANIEL QUAIR Refund Key Deposit & BBQ Fee 75.00 Canceled Park Reservation 3/24
50150 04/12/24 Printed 2878 RAFA'S AUTO BODY Van Repair 350.00 50151 04/12/24 Printed 4092 RAZZO LINK, INC. Internet Services 85.04 SAFETY-KLEEN SYSTEMS, 267.86
INC.
50152 04/12/24 Printed 189 Chemicals
SALINAS VALLEY SOLID 4,720.66
WASTE
50153 04/12/24 Printed 258 Contract Administration
50154 04/12/24 Printed 2685 SC FUELS Fuel 359.60
50155 04/12/24 Printed 4444 ROBERTO SOLIS Reimb Car Show Food Vendor Pmt 127.00 50156 04/12/24 Printed 2673 SPECTRUM Internet 1,199.00
50157 04/12/24 Printed SWINERTON SWINERTON BUILDERS PM Services 4,528.50 50158 04/12/24 Printed 3670 T-MOBILE City Cell Phones Acct # 963044810 961.56 AGENDA
ITEM
Packet Pg. 12
Attachment: Warrants #50111-50218 (2975 : Approve City Accounts Payable Warrants #50111-50218) 5 City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 2
Time: 11:07 am
Date: 04/12/2024
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
50159 04/12/24 Printed 3880 THE MAYNARD GROUP Zoom 297.60 TRANS UNION RISK AND 110.00

ALTERNATI
50160 04/12/24 Printed 3175 TLO - PD Investigative Program 50161 04/12/24 Printed 27 TRI - CITIES DISPOSAL March Trash Services 64,046.92 50162 04/12/24 Printed 3718 TRINI'S PLUMBING Shop: Cleaner & Zipties 488.72 50163 04/12/24 Printed 2192 TYLER TECHNOLOGIES, INC. System Conversion GL Mapping 14,666.50 50164 04/12/24 Printed 103 USA BLUE BOOK KOPkit & Suction ValveAssembly 3,194.85 50165 04/12/24 Printed 99 VOSTI'S, INC. Well #6 Maint. 2,244.39 Total Checks: 55 Checks Total (excluding void checks): 211,717.47 Total Payments: 55 Bank Total (excluding void checks): 211,717.47 Total Payments: 55 Grand Total (excluding void checks): 211,717.47 Packet Pg. 13
Attachment: Warrants #50111-50218 (2975 : Approve City Accounts Payable Warrants #50111-50218) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 10:58 am
Date: 04/26/2024
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
50166 04/26/24 Printed 4343 4LEAF, INC. Building Inspections & Building Official 43,709.56 Services
AGILE OCCUPATIONAL 779.00

MEDICINE PC
50167 04/26/24 Printed 4362 Pre-Employment Medical
50168 04/26/24 Printed 3168 AUTOZONE INC. Vehicle Maint. Supplies 201.18 50169 04/26/24 Printed 1618 AVAYA FINANCIAL SERVICES Maintenance 641.26 50170 04/26/24 Printed 3104 CESAR CASTILLO Per Diem: PSP Driving Training 35.00 4/19/2024
50171 04/26/24 Printed 3264 COASTAL TRACTOR Vehicle Maint. 95.19 50172 04/26/24 Printed 378 CWEA Membership Renewal 221.00 50173 04/26/24 Printed 3028 D & J TIRE SERVICE Backhoe 158.70 50174 04/26/24 Printed 507 EMC PLANNING GROUP INC. Vista Lucia SEIR Agreement 31,597.61 50175 04/26/24 Printed 3892 ESRI ESRI Subscription 15,500.00 50176 04/26/24 Printed 3550 ULYSES FIERROS Per Diem: PSP Driving Training 35.00 4/19/2024
FIRST-CITIZENS BANK & 317.04

TRUST CO
50177 04/26/24 Printed 4447 Maintenance
GONZALES ACE HARDWARE 144.08
INC.
50178 04/26/24 Printed 3274 Car Show - Staples
GONZALES TIRE & AUTO 6.45
SUPPLY
50179 04/26/24 Printed 3477 Female Disconn Dbl
50180 04/26/24 Printed 1109 GONZALES UNIFIED SCHOOL Gym Use - Jan. 2024 1,421.83 50181 04/26/24 Printed 3700 GRANICUS, LLC SmartGov Bldg Portal 13,985.97 50182 04/26/24 Printed 4071 GREAT AMERICA FINANCIAL Copier Lease 1,052.36 50183 04/26/24 Printed 2818 JARVIS FAY LLP. Legal Services 6,334.50 50184 04/26/24 Printed 4446 RICHARD LOPEZ Credit on Utility Account 905.46 50185 04/26/24 Printed 4426 JOSHUA MACIAS Per Diem: PSP Driving Training 35.00 4/19/2024
50186 04/26/24 Printed 1965 SANTIAGO MELGOZA Per Diem: PSP Driving Training 35.00 4/19/2024
50187 04/26/24 Void 04/26/24 Void Check 0.00
50188 04/26/24 Printed 72 MISSION UNIFORM SERVICE Fire Uniforms 1,035.33 50189 04/26/24 Printed 3970 MNS ENGINEERS, INC. IW PM Services 3,718.75 MONTEREY COUNTY 638.00

EMERGENCY
50190 04/26/24 Printed 470 911 Supplemental Invoice 23/24 MONTEREY COUNTY 1,575.83
MAYORS ASSOC.
50191 04/26/24 Printed 465 Annual Membership Dues
MONTEREY COUNTY 21,053.52

SHERIFF
50192 04/26/24 Printed 23 CJIS Jan-Mar 2024
50193 04/26/24 Printed 4402 MARCO NAVA DJ Dave - 2 Events Car Show & Ground 600.00 Breaking
50194 04/26/24 Printed 3787 NEW SV MEDIA Public Notice-Sign Code 213.71 50195 04/26/24 Printed 4776 PACE SYSTEMS, INC. Pace Schedule Software 2024/25 1,600.00 50196 04/26/24 Printed 4198 MIGUEL PEREZ Per Diem: PSP Driving Training 35.00 4/19/2024
PITNEY BOWES GLOBAL 742.03

FINANCIAL
50197 04/26/24 Printed 93 Postage Machine Lease
PUBLIC AGENCY 506.71

RETIREMENT
50198 04/26/24 Printed 3194 PARS Admin Fees
50199 04/26/24 Printed 2878 RAFA'S RESTORATION Van Repair 350.00 50200 04/26/24 Printed 2790 RDO EQUIPMENT CO. Maintenance Supplies 750.63 SAFEGUARD BUSINESS 405.15

SYSTEMS
50201 04/26/24 Printed 568 Utility Billing Notice
SALINAS VALLEY SOLID 29,770.72
WASTE
50202 04/26/24 Printed 258 Tonage
50203 04/26/24 Printed 2685 SC FUELS Fuel 159.11
50204 04/26/24 Printed 4318 BRENT SLAMA Vista Lucia Prof. Svcs. 22,083.75 50205 04/26/24 Printed 2449 SMITH & ENRIGHT Monthly Landscape Maint.-April 6,893.25 50206 04/26/24 Printed 2673 SPECTRUM Internet Service 513.93 THE SPCA OF MONTEREY 2,208.00
COUNTY
50207 04/26/24 Printed 1890 SPCA Services - March
50208 04/26/24 Printed 4401 TREETOP PRODUCTS, LLC Park Benches 3,538.79 50209 04/26/24 Printed 27 TRI - CITIES DISPOSAL Tonage 1,419.22 Packet Pg. 14
Attachment: Warrants #50111-50218 (2975 : Approve City Accounts Payable Warrants #50111-50218) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 2
Time: 10:58 am
Date: 04/26/2024
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
50210 04/26/24 Printed 2192 TYLER TECHNOLOGIES, INC. ERP Pro Annual License 1,445.63 50211 04/26/24 Printed 3577 U.S. BANK 4/8/2024 Planning Acct # 4866 9145 5550 155.50 8537
50212 04/26/24 Printed 3577 U.S. BANK 4/8/2024 City Hall Acct # 4866 9145 5550 4,019.44 8537
50213 04/26/24 Printed 103 USA BLUE BOOK Shroud-Rugged IntelliCal Probe 617.72 50214 04/26/24 Printed 4436 JESUS R. VELASQUEZ Car Show T-Shirts 484.49 50215 04/26/24 Printed 3471 VERIZON WIRELESS Cellphones - March Acct # 304.08 742128049-00001
50216 04/26/24 Printed 99 VOSTI'S, INC. Well#6 Maint. 778.60 50217 04/26/24 Printed 202 KEITH WISE Per Diem: MCPOA Conference 4/27/2024 370.00 - 5/1/2024
50218 04/26/24 Printed 101 ZUMAR INDUSTRIES Signs 441.31 Total Checks: 53 Checks Total (excluding void checks): 225,639.39 Total Payments: 53 Bank Total (excluding void checks): 225,639.39 Total Payments: 53 Grand Total (excluding void checks): 225,639.39 Packet Pg. 15
Attachment: Warrants #50111-50218 (2975 : Approve City Accounts Payable Warrants #50111-50218) City of Gonzales

FINANCE DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Mike Howard, Finance Director
THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2024-13, A Resolution of the City Council of the City of Gonzales authorizing the City Manager to execute the Letter of Intent from Towerpoint Acquisitions, LLC, related to the prepayment of lease agreements with Verizon, and T-Mobile, and authorizing the City Manager to negotiate the lease prepayment and term easement agreement.

BACKGROUND
Local governments in California and throughout the United States partner with cellular companies to construct towers on government owned property. In Gonzales, the City currently has two (2) active lease agreements (“Leases”) for wireless communication facilities on City-owned property. The location of both leases is at 700 5th Street. The partnership is of mutual benefit to the parties. The cellular company has the ability to provide better service both locally and regionally for the customers it serves since this partnership offers the ability to work with one property owner rather than multiple private owners in which land may or may not be available. The benefit to the City is that each lease provides a monthly rental payment to the City in the form of additional revenue.

On rare occasions, Cities can maximize these assets with a one-time large lump sum payment rather than smaller monthly payments over time. This occasion has presented itself to the City.

AGENDA
ITEM
6 Packet Pg. 16

REVIEW AND ANALYSIS
On September 18, 2023, the City entered into a Professional Services Agreement with SteepSteel to complete the negotiation and sale of the Leases. SteepSteel marketed to prospective, highly-qualified bidders directly, and began negotiations based on the responses received. SteepSteel received several inquiries from interested parties, and negotiated best and final written proposals from TowerPoint, Everest Infrastructure Partners, Unison, Symphony Wireless, and Landmark Dividend.

The following table lists the best and final written proposals that represents the result of several rounds of negotiation:

Purchaser Wireless Tenants Purchase
Price
Legal Structure Term
Length
Revenue
Sharing
TowerPoint Verizon/ T-Mobile $1,500,000 Telecommunication Easement
99 40% of New
Tenant Rent
Everest Verizon/ T-Mobile $1,425,000 Telecommunication
Easement
55 None
Unison Verizon/ T-Mobile $1,400,000 Telecommunication
Easement
99 None
Unison Verizon/ T-Mobile $1,333,000 Telecommunication
Easement
50 None
Symphony Verizon/ T-Mobile $1,367,859 Telecommunication Easement
99 None
Symphony Verizon/ T-Mobile $1,262,639 Telecommunication Easement
50 None
Landmark Verizon/ T-Mobile $1,340,000 Telecommunication Easement
99 None
Current Leases
Currently the City receives approximately $6,021 per month or just under $72,300 per year in lease revenue from the two (2) leases. Since the City of Gonzales operates on a $7.6 million-dollar operating budget, monthly revenue of $6,021 is not as impactful as a onetime lump-sum payment of $1,500,000, in addition to the proposed sharing of 60% of the value of new leases that are added to the Water Tower.

The proposed onetime payment would cover the next 99 years.

Wireless
Tenants
Current Rent Rent Payment
Frequency
Escalation
(CPI, % or $)
Escalation
Frequency
Date of Next
Escalation
Verizon $3,021.69 Monthly 3% Annual 01/01/2025
T-Mobile $2,999.22 Monthly CPI Annual 05/01/2024
Based on the considerable difference in revenue to the City ’s General Fund, Staff is recommending that the City Council adopt a resolution authorizing the City Manager to execute a Letter of Intent with Towerpoint for the transfer of the Leases. The resolution also authorizes the City Manager, City Attorney, and the Consultants to negotiate the terms of the Easement Agreements, associated Rent Redirect letters, and any other documents as may be required to complete the transfer of the existing leases and facilitate prepayment of lease revenue to the City. This proposed transaction also includes an option to add 500 square feet of land area among the Sites for installation of equipment and will provide the City 60% of the revenue received from any customer who installs equipment within the additional land area. Staff will Packet Pg. 17
bring back the final agreement for the transfer, prepayment and easements for Council consideration at a subsequent meeting.

Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.

Explain: Accepting pre-payment of long-term wireless communications leases will provide revenue that will enable the City to remain committed to the City’s vision.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ___No ___ NA
Explain: This is a way to bring in onetime revenue to shore up the General Fund Reserve City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. ___ Yes ___No X NA Explain: Please see above.

Strong fiscal reporting allows us to provide appropriate resources for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see above.

ALTERNATIVES
The following alternative are provided for Council Consideration.

1. Adopt the Resolution;

2. Modify and adopt the Resolution; or

3. Do not adopt the Resolution and direct staff to consider other options

BUDGET IMPACT
The fiscal year impact would be a onetime infusion of funds to the General Fund to build the City reserves to a comfortable level while the City continues to look for additional long term revenue sources to support the General Fund.

CONCLUSION
Based on the considerable difference in revenue to the City ’s General Fund, staff recommends that the City Council adopt Resolution No. 2024-13, which will authorize the City Manager to execute a Letter of Intent with TowerPoint to transfer leases for sites located at 700 5th Street in return for prepayment of rent Packet Pg. 18
over the term of the Leases. The Resolution will also allow the City Manager, City Attorney, and the Consultants to negotiate the terms of the Easement Agreements, associated Rent Redirect letters, and any other documents as may be required to complete the transaction. This includes an option to add 500 square feet of land area among the sites and will provide the City 60% of the revenue received from any customer who installs equipment within the additional land area.

Attachments:

1. Resolution No. 2024-13

2. Letter of Intent
Packet Pg. 19
RESOLUTION NO. 2024-13

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES AUTHORIZING

THE CITY MANAGER TO EXECUTE THE LETTER OF INTENT FROM TOWERPOINT

ACQUISITIONS, LLC, RELATED TO THE PREPAYMENT OF LEASE AGREEMENTS

WITH VERIZON, AND T-MOBILE, AND AUTHORIZING THE CITY MANAGER TO

NEGOTIATE THE LEASE PREPAYMENT AND TERM EASEMENT AGREEMENT WHEREAS, the City has two active cellular tower lease agreements for wireless communication facilities at a city-owned cellular sites at 700 5TH Street; and WHEREAS, the City Manager approved a Professional Services Agreement with SteepSteel, LLC (“SteepSteel”) to assist the City with negotiations and sale of the Verizon and T-Mobile lease agreements at the cellular sites; and
WHEREAS, the Contractor posted, solicited, and negotiated offers for the leases directly with professional cell tower lease buyers, after which multiple proposals were received, and of which all offers went to the best and final round of negotiation prior to recommendation; and WHEREAS, the proposals were reviewed by the Contractor and staff and the proposal from TowerPoint Acquisitions, LLC (“TPA V, LLC”) was determined to be the superior proposal; and WHEREAS, a tentative ground lease agreement and easement has been negotiated between the City and TPA V, LLC, a Delaware Limited Liability Corporation, for $1,500,000 for ninety-nine (99) years; and
WHEREAS, TPA V, LLC will also have the option to add 500 square feet of land area at the site, and, if added, TPA V, LLC will pay the City 60% of the revenue received from any customer who installs new equipment after closing.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Gonzales authorizes the City Manager to execute a Letter of Intent from TowerPoint Acquisitions, LLC, attached hereto as “Exhibit 1” and by this reference incorporated herein, related to the prepayment of lease agreements with Verizon and T-Mobile, and authorizing the City Manager to negotiate the lease prepayment and term easement agreement. The final draft documents will be brought back to the Council for consideration and approval.

PASSED AND ADOPTED by the City Council of the City of Gonzales at a regular meeting duly held on the 6th day of May, 2024, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 20
Attachment: Resolution No. 2024-13 (2973 : Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC) Packet Pg. 21
Attachment: Letter of Intent (2973 : Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC) Packet Pg. 22
Attachment: Letter of Intent (2973 : Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC) Packet Pg. 23
Attachment: Letter of Intent (2973 : Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC) Packet Pg. 24
Attachment: Letter of Intent (2973 : Resolution No. 2024-13 Letter of Intent from TowerPoint Aquisitions, LLC) City of Gonzales

CITY MANAGER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Carmen Gil, City Manager
SUBJECT: Resolution No. 2024-14 Withdraw Funding Donated for the Community Center

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2024-14, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager to withdraw the funding donated for the Dennis and Janice Caprara Community Center Complex from the Community Foundation Account.

BACKGROUND
The City embarked on a capital campaign in 2021 in support of the development of the Gonzales Community Center knowing that the project was going to take an outstanding amount of funding, but that there were generous people out there that believed in the community’s vision and wanted to support the development of the center.

An initial step for the Capital Campaign was to set up an account that could provide potential donors assurance that their donations would indeed go to the development of the center. For that, we had to identify a trusted partner that could provide that assurance and that believed in the project just as much as we did.

The Community Foundation for Monterey County is the go-to for setting up disaster funds, and they manage many other community funds and although they don’t typically do capital campaigns, they were gracious enough to work with us and establish a fund in which our Center’s donations could be held.

In November 2023, the City drew down $5.292 million, and currently have another $326,458.44 siting in the account. Although we are waiting on other funds to come in, it is important for us to draw these funds down as they are part of our commitment to finance the USDA loan.

AGENDA
ITEM
7 Packet Pg. 25

REVIEW & ANALYSIS
The funds in the account have been generously donated from members that support our community and that come from all walks of life. We have received donations ranging from $5 dollars to $5 million, showing that people from all sides of the economic spectrum believe in the project and want to support it.

We are fortunate to receive every single one of them, and every single donation makes a difference.

Now that the design development process is complete, we need to access all the cash we have as things are going to move fast and we will need to have the funding available to finance the USDA loan.

Explain: As we move into construction, we need to draw down the funding that has been made available to us.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes No X N/A
• Housing Yes No X N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see explanation above for the Vision.

ALTERNATIVES
If we don’t withdraw the funds and put them into our bank account, we may be delaying the USDA loan as USDA needs to see that we have the financing to back up the loan.

BUDGET IMPACT
The Community Center Construction fund balance will grow in revenue by $326,458.44 requiring a budget amendment to reflect the new amount.

CONCLUSION
It is recommended that the City Council adopt Resolution No. 2024-14, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager to withdraw the funding donated for the Dennis and Janice Caprara Community Center Complex from the Community Foundation Account.

Packet Pg. 26
Attachments:

1. Resolution No. 2024-14
Packet Pg. 27
RESOLUTION NO. 2024-14

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING THE CITY MANAGER TO WITHDRAW THE FUNDING DONATED

FOR THE DENNIS AND JANICE CAPRARA COMMUNITY CENTER COMPLEX

FROM THE COMMUNITY FOUNDATION ACCOUNT
WHEREAS, as the City of Gonzales embarked on its Capital Campaign for the Community Center Complex, it was important to provide potential donors with the assurance that all monies donated for the Complex would be held in one pot and would only be used for the development of the Community Cetner Complex; and
WHEREAS, to do that, we needed to find a reputable partner that understood our needs and supported the vision for the Community Center Complex; and WHEREAS, the Community Foundation for Monterey County was gracious enough to work with us and establish a fund in which such donations could be made to and held for the purposed Community Center Complex; and
WHEREAS, today, we are well on our way to making the Community Center Complex a reality, and will be starting construction in May of 2024; WHEREAS, we now are working to secure the construction loan that will help to keep the work advancing and on track; and
WHEREAS, we have drawn down $5.292 million already from the Community Foundation account and have $326,458.44 in the account ready to be drawn down; and WHEREAS, we need that money in our city account as we move into construction to secure the USDA loan.

NOW, THEREFORE, BE IT HEREBY RESOLVED, that the City Council of the City of Gonzales hereby authorizes the City Manager to withdraw the current amount of $326,458.44 and deposit it into the City’s Community Center Fund Balance.

PASSED AND ADOPTED by the City Council of the City of Gonzales at a regular meeting duly held on the 6
th day of May 2024, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 28
Attachment: Resolution No. 2024-14 (2972 : Resolution No. 2024-14 Withdraw Funding Donated for the Community Center) City of Gonzales

CITY MANAGER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Carmen Gil, City Manager
SUBJECT: Resolution No. 2024-15 SWRCB Application for the Planning, Design, and Construction of the 1.0 Million Gallons a Day Industrial Wastewater System and Execute SRF Financial Assistance Agreement and Any Amendments with the SWRCB

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2024-15, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager or Designee to Execute and Submit a Clean Water State Revolving Fund Financial Assistance Application to the State Water Resources Control Board (SWRCB) for the Planning, Design, and Construction of the 1.0 Million Gallons a Day Industrial Wastewater System, and Execute SRF Financial Assistance Agreement and Any Amendments with the SWRCB.

BACKGROUND
The City is in the process of securing funding for its Industrial Wastewater System Project. After looking at several options, Staff decided on funding the project through the State Revolving Loan Program with the State Water Resources Control Board. As a part of this process, the Council adopted Resolution No. 2022-81 in 2022. Resolution No. 2022-81 provided the Interim City Manager with authority to execute and submit an application for a loan and to execute related documents. (See Staff Report from November 21, 2022 attached hereto as Attachment A.)

REVIEW & ANALYSIS
Subsequent to the adoption of Resolution No. 2022-81, Carmen Gil, who was the Interim City Manager in 2022, was appointed as the City Manager. In order to maintain a clear record of signing authority, Staff is AGENDA
ITEM
8 Packet Pg. 29
requesting that the Council adopt Resolution No. 2024-15. Resolution No. 2024-15 is almost identical to Resolution No. 2022-81 except that it designates the City Manager as the individual with signing authority for relevant documents. A provision was also added to ensure that any documents signed by Manager Gil in her prior capacity as Interim City Manager are still valid. This is largely a ministerial matter, but when it comes to State loan programs, the devil is often in the details and we want to avoid any circumstances whereby we encounter delays due to ambiguity in signing authority.

How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.

Explain: Constructing an Industrial Wastewater System supports the City’s vision to expand the City’s wastewater system capacity and support economic development that will provide more local employment opportunities for City residents.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No N/A
Explain: Constructing an Industrial Wastewater Treatment Facility will enhance the community’s quality of life by providing for the continued treatment and safe disposal of the wastewater generated by the processing facilities in the Industrial Business Park.

City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes __ No N/A

Explain: N/A
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing X Yes ____ No N/A
• Recreation Yes X No N/A
• Environment X Yes ___ No N/A
• Education Yes X No N/A

ALTERNATIVES
• Consider adoption of Resolution No. 2024-15.
• Do not adopt Resolution No. 2024-15. This is not recommended as it may lead to future complications and delays in the loan process.
• Take no action at this time and provide Staff with direction.

BUDGET IMPACT
N/A.

Packet Pg. 30

CONCLUSION
It is recommended that the City Council adopt Resolution No. 2024-15, A Resolution of the City Council of the City of Gonzales Authorizing the City Manager or Designee to Execute and Submit a Clean Water State Revolving Fund Financial Assistance Application to the State Water Resources Control Board (SWRCB) for the Planning, Design, and Construction of the 1.0 Million Gallons a Day Industrial Wastewater System, and Execute SRF Financial Assistance Agreement and Any Amendments with the SWRCB.

Attachments:

1. November 2022 Staff Report

2. Resolution No. 2024-15
Packet Pg. 31

ATTACHMENT A
Packet Pg. 32
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 33
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 34
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 35
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 36
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 37
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 38
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) Packet Pg. 39
Attachment: November 2022 Staff Report (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System)

Page 1 of 2 ends

RESOLUTION NO. 2024-15

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE AND SUBMIT A

CLEAN WATER STATE REVOLVING FUND FINANCIAL ASSISTANCE APPLICATION

TO THE STATE WATER RESOURCES CONTROL BOARD (SWRCB) FOR THE PLANNING, DESIGN, AND CONSTRUCTION OF THE 1.0 MILLION GALLONS A DAY (MGD) INDUSTRIAL WASTEWATER SYSTEM, AND EXECUTE SRF FINANCIAL

ASSISTANCE AGREEMENTS AND ANY AMENDMENTS WITH THE SWRCB

R E C I T A L S
A. The State of California State Water Resources Control Board (the “Board”) has a funding program entitled “Clean Water State Revolving Fund” (“CWSRF”), and pursuant to this program, the Board makes funds available for various capital wastewater and recycled water‐ related projects.

B. The City of Gonzales (the “City”) owns and operates a Wastewater System (the “System”) and engages in various capital improvement projects to improve and maintain the System.

C. The City wishes to apply for CWSRF funds to cover the cost of the 1.0 MGD Industrial Wastewater System Project (the “Project”).

D. The Project will be implemented in multiple phases to increase industrial wastewater capacity.

The City is currently seeking CWSRF funding for Phase 1 of the Project.

E. On November 21, 2022, the Council approved and submitted a similar resolution (Resolution No. 2022-81) designating Interim City Manager Carmen Gil as the person with authority to execute and submit the involved financial assistance application and other related agreements and documents.

F. Subsequent to the approval of Resolution No. 2022-81, Ms. Gil was appointed as the Gonzales City Manager and as such, there is now a need to update the involved designation.

NOW, THEREFORE, the Council of the City of Gonzales RESOLVES as follows:

SECTION 1. The Council hereby finds that it is in the City and the public’s interest in the health, safety and welfare of the community to file a Financial Assistance Application with the Board to seek funds available under the State Revolving Fund for the Project.

SECTION 2. The Council hereby authorizes and directs the City Manager or the Director of Public Works, to:
▪ File and sign, for and on behalf of the City, a Financial Assistance Application for a financing agreement from the Board for the planning, design, and construction of the Project.

Packet Pg. 40
Attachment: Resolution No. 2024-15 (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System)

Page 2 of 2 ends

▪ Provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the Board and any amendments or changes thereto.
▪ Represent the City in carrying out the City’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the City and compliance with applicable state and federal laws.

SECTION 3. The Council finds that the filing of a Financial Assistance Application with the State Water Resources Control Board does not constitute a project requiring California Environmental Quality Act (CEQA) review. This action does not meet the definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. The Council further finds that the potential environmental effects of implementation of the Project were analyzed and discussed in the Industrial Wastewater Conveyance and Industrial Wastewater Treatment Facility Environmental Impact Report (SCH # 2020069049) certified in September 2021.

SECTION 4. This resolution is meant to supersede Resolution No. 2022- 81 without invalidating any document previously executed by the Interim City Manager.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Gonzales duly held on the 6
th day of May 2024, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 41
Attachment: Resolution No. 2024-15 (2977 : Resolution No. 2024-15 SWRCB Application for Industrial Wastewater System) City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Authorize Notice to Proceed for Phase 1 Community Center Complex Project

RECOMMENDATION
It is recommended that the City Council Authorize Issuance of a Notice to Proceed with Construction of Phase 1 Community Center Complex Project to Otto Construction at a not-to-exceed amount of $18,869,395 pending concurrence from USDA staff.

BACKGROUND
The Community Center Complex is estimated to cost $34,050,000. Construction of the project will be phased due to grant funding deadlines. Phase 1 will construct the Library, Teen Innovation Center, Courtyard, parking lot and landscaping. Phase 2 is the Community Center including the Community Hall, Fitness Center, commercial kitchen, meeting rooms and restrooms.

At the June 5, 2023 Council meeting, the Design-Build Contract for the Community Center Complex Project was awarded to the Otto Construction/WRNS Team. This included issuance of a Notice to Proceed with Design Services for Phases 1 and 2. During the design phase, the Design/Build team made the following submittals to the City:
• 50% Design Development plan set was submitted on September 9, 2023. • 100% Design Development plan set was submitted on October 30, 2023. • 75% Construction Document was submitted on January 19, 2024. • 100% Construction Documents were submitted on February 28, 2024 (submittal was a plan set with 212 sheets, structural calculations, and technical specifications).

AGENDA
ITEM
9 Packet Pg. 42
The Construction Documents were submitted for building code review on March 8th. Review comments were provided to the Design/Build team on March 22nd. The Design/Build team submitted revised plans for second review on April 17th. On April 26th, the Building Official advised City staff that the Construction Documents were ready for issuance of a building permit.

The City held a well-attended Groundbreaking Ceremony at the project site on April 27th.

REVIEW AND ANALYSIS
With issuance of the building permit and the City securing the interim financing for construction, staff recommends that the City Council authorize issuance of a Notice to Proceed with construction of Phase 1 of the Community Center Complex Project to Otto Construction at a not-to-exceed amount of $18,869,395.

Staff will issue the Notice to Proceed, upon concurrence from USDA on the following pending loan condition items:

1.2 – Interim Finance Agreement Documents (Pending USDA approval)

1.4 – Insurance and Bonding: City to provide proof of property insurance

1.9 – Building Permit Issuance

1.12 – Provide USDA a copy of the fully-executed Otto Agreement Amendment #2, which captures USDA supplemental conditions (construction contractual requirements)

1.16 – Provide USDA Quarterly financial reports: October 2023 – December 2023 and January 2024 – March 2024
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.

Explain: Constructing a Community Center will provide residents with a facility for a wide variety of public and private functions, recreation programs and other activities which will enhance the quality of life of Gonzales residents.

City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing Yes X No N/A
• Recreation X Yes No N/A
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• Environment X Yes No N/A
• Education X Yes No N/A

ALTERNATIVES
Amend or modify staff’s recommendation.

BUDGET IMPACT
The Notice to Proceed with Construction of Phase 1 will encumber $18,869,395 in fund GL100-850- 6235.

CONCLUSION
It is recommended that the City Council Authorize Issuance of a Notice to Proceed with Construction of Phase 1 Community Center Complex Project to Otto Construction at a not-to-exceed amount of $18,869,395 pending concurrence from USDA staff.

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City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Agreement with Professional Services Industries for Testing/Inspection Services for the Community Center Complex Project

RECOMMENDATION
It is recommended that the City Council Authorize Execution of a Non-Exclusive Master Services Agreement Between the City of Gonzales and Professional Service Industries and Approve Execution of Task Order 1 in the amount of $135,000 for Materials Testing and Special Inspection services during construction of Phase 1 of the Community Center Complex Project.

BACKGROUND
Construction of the Community Center Complex project will require the use of a consultant to provide Materials Testing and Special Inspection services. This includes inspection and/or testing of:
• Soils (sampling, monitoring of excavations and compaction testing) • Asphalt (verify mix design, temperature, and compaction testing) • Concrete (mix design, size and placement of reinforcing steel and compressive strength testing) • Masonry (mix design, confirm reinforcing placement, and mortar mixing) • Structural Steel fabrication and erection
• Structural Wood framing (nailing, anchoring, and fastenings) On April 1, 2024, staff issued a Request for Proposals to consultants for Materials Testing and Special Inspection services. On April 11, 2024, proposals were received from the following two firms.

1. Professional Service Industries

2. Pacific Crest Engineering
AGENDA
ITEM
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REVIEW & ANALYSIS
Staff reviewed the two proposals and recommends the City engage Professional Service Industries (PSI) for Materials Testing and Special Inspection services during the construction of the Community Center Complex Project. PSI was selected due to their ability to provide all Materials Testing and Special Inspection services in-house as Pacific Crest Engineering needed to subcontract for welding inspection services.

Staff anticipates executing the following Task Orders under PSI’s Master Services Agreement:

Project Phase Estimated fee
Task Order 1 Materials Testing and Special Inspection
services during construction of Phase 1 $135,000
Task Order 2 Materials Testing and Special Inspection
services during construction of Phase 2 $50,000
In conclusion, staff recommends the City Council authorize the City Manager to execute a Non-Exclusive Master Services Agreement with Professional Service Industries and Approve Execution of Task Order 1 in the amount of $135,000 for Materials Testing and Special Inspection services during the construction of Phase 1 of the Community Center Complex project.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: See Vision explanation above
City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
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• Education X Yes No N/A

ALTERNATIVES
Amend or modify staff recommendation.

BUDGET IMPACT
This contract will be funded by the various funding sources for the Community Center Complex project.

CONCLUSIONS
It is recommended that the City Council Authorize Execution of a Non-Exclusive Master Services Agreement Between the City of Gonzales and Professional Service Industries and Approve Execution of Task Order 1 in the amount of $135,000 for Materials Testing and Special Inspection services during construction of Phase 1 of the Community Center Complex Project.

Attachments:

1. Master Services Agreement with PSI Including Task Order 1 Packet Pg. 47
Consulting Services Agreement between May 6, 2024
City of Gonzales and PSI Page 1 of 13
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NON-EXCLUSIVE CONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF GONZALES

AND PROFESSIONAL SERVICES INDUSTRIES FOR MATERIALS TESTING AND SPECIAL

INSPECTION SERVICES FOR THE COMMUNITY CENTER COMPLEX PROJECT THIS AGREEMENT for consulting services is made by and between the City of Gonzales ("City") and Professional Services Industries, Inc. ("Consultant") (together sometimes referred to as the "Parties") as of May 6, 2024 (the "Effective Date").

Section 1. SCOPE OF SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in the Scope of Work attached as Exhibit A at the time and place and in the manner specified therein. In the event of a conflict in or inconsistency between the terms of this Agreement and Exhibit A, the Agreement shall prevail.

1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on December 30, 2027, unless the term of the Agreement is otherwise terminated or extended, as provided for in Section 8. The time provided to Consultant to complete the services required by this Agreement shall not affect the City's right to terminate the Agreement, as referenced in Section 8.

1.2 Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged.

1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from City of such desire of City, reassign such person or persons.

1.4 Time. All work performed under this Agreement shall be authorized in advance and in writing by a specific Task Order prior to the commencement of services. Each Task Order shall describe the nature of the specific task or service to be performed by the Consultant, the estimated number of hours within which such task or service must be completed and the compensation for such task or service. Details shall include a description of the task or service which Consultant shall perform, the format and schedule for deliverables, the schedule of performance, and the schedule of compensation. Consultant shall not perform any task or service unless authorized by a fully executed Task Order. Consultant shall advise city staff in writing of any anticipated change in any task or service, fee or time schedule, and shall obtain city staff’s written consent to the change prior to making any changes.

1.5 Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided in Section 1.1 above and to satisfy Consultant's obligations hereunder.

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Section 2. COMPENSATION. The City will pay Consultant’s invoices under each authorized Task Order per the rates outlined in Exhibit B. Consultant shall submit invoices to City in the manner specified herein. Except as specifically authorized by City in writing, Consultant shall not bill City for duplicate services performed by more than one person.

Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant's estimated costs of providing the services required hereunder, including salaries and benefits of employees and subcontractors of Consultant. Consequently, the parties further agree that compensation hereunder is intended to include the costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement.

2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information:
 Serial identifications of invoices; i.e., Progress Bill No. 1 for the first invoice, etc.;  The beginning and ending dates of the billing period;  A Task Summary containing the original contract amount, the amount of prior billings, the total due this period, the balance available under the Agreement, and the percentage of completion;
 For each work item under each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense;
 The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder;
 Consultant shall give separate notice to the City when the total number of hours worked by Consultant and any individual employee, agent, or subcontractor of Consultant reaches or exceeds 800 hours within a 12-month period under this Agreement and any other agreement between Consultant and City. Such notice shall include an estimate of the time necessary to complete work described in Exhibit A and the estimate of time necessary to complete work under any other agreement between Consultant and City, if applicable.

2.2 Payments. City shall make payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall have 30 days from the receipt of an invoice that complies with all of the requirements above to pay Consultant. Notwithstanding, Consultant and City acknowledge that payment for Consultant’s services are fully dependent on development applicants’ deposits and that the timing of City’s invoice payment may be adversely impacted by inadequate applicant funds. City shall make a good -faith effort to ensure that all development applicant accounts are maintained at a level to cover Consultant’s anticipated costs.

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Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Consulting Services Agreement between May 6, 2024
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2.3 <<Not Used>>

2.4 Total Payment. City shall pay for the services to be rendered by Consultant pursuant to this Agreement. City shall not pay any additional sum for any expense or cost whatsoever incurred by Consultant in rendering services pursuant to this Agreement. City shall make no payment for any extra, further, or additional service pursuant to this Agreement.

In no event shall Consultant submit any invoice for an amount in excess of the maximum amount of compensation provided above either for a task or for the entire Agreement, unless the Agreement is modified prior to the submission of such an invoice by a properly executed change order or amendment.

2.5 Hourly Fees. Fees for work performed by Consultant on an hourly basis shall not exceed the amounts shown on the compensation schedule attached hereto as Exhibit B.

2.6 Reimbursable Expenses. Any reimbursable expenses are included in the authorized contract amount and shall be approved by city staff in advance.

2.7 Payment of Taxes. Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes.

2.8 Payment upon Termination. In the event that the City or Consultant terminates this Agreement pursuant to Section 8, the City shall compensate the Consultant for all outstanding costs and reimbursable expenses incurred for work satisfactorily completed as of the date of written notice of termination. Consultant shall maintain adequate logs and timesheets to verify costs incurred to that date.

2.9 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this Agreement until receipt of authorization from the Contract Administrator.

Section 3. FACILITIES AND EQUIPMENT. Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement.

Section 4. INSURANCE REQUIREMENTS. Before beginning any work under this Agreement, Consultant, at its own cost and expense, unless otherwise specified below, shall procure the types and amounts of insurance listed below against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant and its agents, representatives, employees, and subcontractors. Consistent with the following provisions, Consultant shall provide proof satisfactory to City of such insurance that meets the requirements of this section and under forms of insurance satisfactory in all respects, and that such insurance is in effect prior to beginning work to the City. Consultant shall maintain the insurance policies required by this section throughout the term of this Agreement. The cost of such insurance shall be included in the Consultant's bid. Consultant shall not allow any subcontractor to commence work on any subcontract until Consultant has obtained all insurance Packet Pg. 50
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required herein for the subcontractor(s) and provided evidence that such insurance is in effect to City.

Verification of the required insurance shall be submitted and made part of this Agreement prior to execution. Consultant shall maintain all required insurance listed herein for the duration of this Agreement.

4.1 Workers' Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers' Compensation Insurance and Employer's Liability Insurance for any and all persons employed directly or indirectly by Consultant. The Statutory Workers' Compensation Insurance and Employer's Liability Insurance shall be provided with limits of not less than $1,000,000 per accident. In the alternative, Consultant may rely on a selfinsurance program to meet those requirements, but only if the program of self-insurance complies fully with the provisions of the California Labor Code. Determination of whether a self-insurance program meets the standards of the Labor Code shall be solely in the discretion of the Contract Administrator. The insurer, if insurance is provided, or the Consultant, if a program of self-insurance is provided, shall waive all rights of subrogation against the City and its officers, officials, employees, and volunteers for loss arising from work performed under this Agreement.

4.2 Commercial General and Automobile Liability Insurance.

4.2.1 General requirements. Consultant, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than $1,000,000 per occurrence, combined single limit coverage for risks associated with the work contemplated by this Agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this Agreement, including the use of owned and non-owned automobiles.

4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehensive General Liability on an "occurrence" basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001, Code 1 (any auto). No endorsement shall be attached limiting the coverage.

4.2.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy:
a. The Insurance shall cover on an occurrence or an accident basis, and not on a claims-made basis.

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b. City, its officers, officials, employees, and volunteers are to be covered as insureds as respects: liability arising out of work or operations performed by or on behalf of the Consultant; or automobiles owned, leased, hired, or borrowed by the Consultant.
c. For any claims related to this Agreement or the work hereunder, the Consultant's insurance covered shall be primary insurance as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Consultant's insurance and shall not contribute with it.
d. Each insurance policy required by this clause shall be endorsed to state that coverage shall not be canceled by either party, except after 30 days' prior written notice has been provided to the City, except for 10-days’ notice of cancellation may be given for nonpayment of premium.

4.3 Professional Liability Insurance.

4.3.1 General requirements. Consultant, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals performing work pursuant to this Agreement in an amount not less than $1,000,000 covering the licensed professionals' errors and omissions. Any deductible or self-insured retention shall not exceed $150,000 per claim.

4.3.2 Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form:
a. The retroactive date of the policy must be shown and must be before the date of the Agreement.
b. Insurance must be maintained and evidence of insurance must be provided for at least five years after completion of the Agreement or the work, so long as commercially available at reasonable rates. c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a retroactive date that precedes the date of this Agreement, Consultant shall purchase an extended period coverage for a minimum of five years after completion of work under this Agreement.
d. A copy of the claim reporting requirements must be submitted to the City for review prior to the commencement of any work under this Agreement.

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4.3.3 Additional Requirements. A certified endorsement to include contractual liability shall be included in the policy.

4.4 All Policies Requirements.

4.4.1 Acceptability of insurers. All insurance required by this section is to be placed with insurers with a Bests' rating of no less than A:VII.

4.4.2 Verification of coverage. Prior to beginning any work under this Agreement, Consultant shall furnish City with complete copies of all policies delivered to Consultant by the insurer, including complete copies of all endorsements attached to those policies. All copies of policies and certified endorsements shall show the signature of a person authorized by that insurer to bind coverage on its behalf. If the City does not receive the required insurance documents prior to the Consultant beginning work, it shall not waive the Consultant's obligation to provide them. The City reserves the right to require complete copies of all required insurance policies at any time.

4.4.3 Deductibles and Self-Insured Retentions. Consultant shall disclose to and obtain the written approval of City for the self-insured retentions and deductibles before beginning any of the services or work called for by any term of this Agreement. At the option of the City, either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, employees, and volunteers; or the Consultant shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration and defense expenses.

4.4.4 Wasting Policies. No policy required by this Section 4, except for the professional liability policy shall include a "wasting" policy limit (i.e., limit that is eroded by the cost of defense).

4.4.5 Waiver of Subrogation. Consultant hereby agrees to waive subrogation which any insurer or contractor may require from vendor by virtue of the payment of any loss. Consultant agrees to obtain any endorsements that may be necessary to affect this waiver of subrogation.

The Workers' Compensation policy shall be endorsed with a waiver of subrogation in favor of the entity for all work performed by the consultant, its employees, agents, and subcontractors.

4.4.6 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

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4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option exercise any of the following remedies, which are alternatives to other remedies City may have and are not the exclusive remedy for Consultant's breach:
 Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement;
 Order Consultant to stop work under this Agreement or withhold any payment that becomes due to Consultant hereunder, or both stop work and withhold any payment, until Consultant demonstrates compliance with the requirements hereof; and/or  Terminate this Agreement.

Section 5. INDEMNIFICATION AND CONSULTANT'S RESPONSIBILITIES. Consultant shall, to the fullest extent allowed by law, with respect to all Services performed in connection with this Agreement, defend with counsel reasonably acceptable to City, indemnify, and hold City, its officers, employees, agents, and volunteers, harmless from and against any and all claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, ("Claims"). Consultant will bear all losses, costs, damages, expense and liability of every kind, nature and description that arise out of, pertain to, or relate to such Claims, whether directly or indirectly ("Liability"). Such obligations to defend, hold harmless and indemnify the City shall not apply to the extent that such Liabilities are caused by the sole negligence, active negligence, or willful misconduct of the City.

With respect to third party claims against the Consultant, the Consultant waives any and all rights of any type of express or implied indemnity against the Indemnitees.

Section 6. STATUS OF CONSULTANT.

6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of City. City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement and assignment of personnel pursuant to Subparagraph 1.3; however, otherwise City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. Notwithstanding any other City, state, or federal policy, rule, regulation, law, or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any and all claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in the California Public Employees Retirement System (PERS) as an employee of City and entitlement to any contribution to be paid by City for employer contributions and/or employee contributions for PERS benefits.

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6.2 Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

Section 7. LEGAL REQUIREMENTS.

7.1 Governing Law. The laws of the State of California shall govern this Agreement.

7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with all laws and regulations applicable to the performance of the work hereunder, including but not limited to, the California Building Code, the Americans with Disabilities Act, and any copyright, patent or trademark law. Consultant's Failure to comply with any law(s) or regulation(s) applicable to the performance of the work hereunder shall constitute a breach of contract.

7.3 Other Governmental Regulations. To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Consultant and any subcontractors shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program.

7.4 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. Consultant represents and warrants to City that Consultant and its employees, agents, any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid Business Licenses from City.

7.5 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person's race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby.

Consultant shall include the provisions of this Subsection in any subcontract approved by the Contract Administrator or this Agreement.

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Section 8. TERMINATION AND MODIFICATION.

8.1 Termination. City may cancel this Agreement at any time and without cause upon written notification to Consultant.

Consultant may cancel this Agreement upon 30 days' written notice to City and shall include in such notice the reasons for cancellation.

In the event of termination, Consultant shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Consultant delivering to City any or all documents, photographs, computer software, video and audio tapes, and other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement.

8.2 Extension. City may, in its sole and exclusive discretion, extend the end date of this Agreement beyond that provided for in Subsection 1.1. Any such extension shall require a written amendment to this Agreement, as provided for herein. Consultant understands and agrees that, if City grants such an extension, City shall have no obligation to provide Consultant with compensation beyond the maximum amount provided for in this Agreement. Similarly, unless authorized by the Contract Administrator, City shall have no obligation to reimburse Consultant for any otherwise reimbursable expenses incurred during the extension period.

8.3 Amendments. The parties may amend this Agreement only by a writing signed by all the parties.

8.4 Assignment and Subcontracting. City and Consultant recognize and agree that this Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant's unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Consultant.

Consultant may not assign this Agreement or any interest therein without the prior written approval of the Contract Administrator. Consultant shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the Contract Administrator.

8.5 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Consultant shall survive the termination of this Agreement.

8.6 Options upon Breach by Consultant. If Consultant materially breaches any of the terms of this Agreement, City's remedies shall include, but not be limited to, the following:

8.6.1 Immediately terminate the Agreement;
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8.6.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement;

8.6.3 Retain a different consultant to complete the work described in Exhibit A not finished by Consultant; or

8.6.4 Charge Consultant the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Consultant pursuant to Section 2 if Consultant had completed the work.

Section 9. KEEPING AND STATUS OF RECORDS.

9.1 Records Created as Part of Consultant's Performance. All reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver those documents to the City upon termination of the Agreement. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Consultant agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential and will not be released to third parties without prior written consent of both parties.

9.2 Consultant's Books and Records. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the City under this Agreement for a minimum of three (3) years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement.

9.3 Inspection and Audit of Records. Any records or documents that Section 9.2 of this Agreement requires Consultant to maintain shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Under California Government Code Section 8546.7, if the amount of public funds expended under this Agreement exceeds $10,000.00, the Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Agreement.

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Section 10 MISCELLANEOUS PROVISIONS.

10.1 Attorneys' Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in the County of Monterey or in the United States District Court for the Northern District of California.

10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.

10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement.

10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties.

10.6 Use of Recycled Products. Consultant shall prepare and submit all reports, written studies and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper.

10.7 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a "conflict of interest," as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq.

Consultant shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq.

Consultant hereby warrants that it is not now, nor has it been in the previous 12 months, an employee, agent, appointee, or official of the City. If Consultant was an employee, agent, appointee, or official of the City in the previous twelve months, Consultant warrants that it did not participate in any manner in the forming of this Agreement. Consultant understands that, if this Agreement is made in violation of Government Code §1090 et seq., the entire Agreement is void and Consultant will not be entitled to any compensation Packet Pg. 58
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Consulting Services Agreement between May 6, 2024
City of Gonzales and PSI Page 12 of 13
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for services performed pursuant to this Agreement, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid to the Consultant.

Consultant understands that, in addition to the foregoing, it may be subject to criminal prosecution for a violation of Government Code § 1090 and, if applicable, will be disqualified from holding public office in the State of California.

10.8 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials.

10.9 Contract Administration. This Agreement shall be administered by the City’s Public Works Director ("Contract Administrator"). All correspondence shall be directed to or through the Contract Administrator or his or her designee.

10.10 Notices. Any written notice to Consultant shall be sent to:

Deborah Priest
Professional Services Industries
16170 Vineyard Blvd, Suite 170
Morgan Hill, CA 95037
.

Any written notice to City shall be sent to:

Carmen Gil, City Manager
City of Gonzales
P.O. Box 647
Gonzales, CA 93926

10.11 Professional Seal. Where applicable in the determination of the contract administrator, the first page of a technical report, first page of design specifications, and each page of construction drawings shall be stamped/sealed and signed by the licensed professional responsible for the report/design preparation. The stamp/seal shall be in a block entitled "Seal and Signature of Registered Professional with report/design responsibility," as in the following example.
_________________________________________
Seal and Signature of Registered Professional with
report/design responsibility.

10.12 Integration. This Agreement, including the scope of work attached hereto and incorporated herein as Exhibits A and B represents the entire and integrated agreement between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral.

Packet Pg. 59
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Consulting Services Agreement between May 6, 2024
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Exhibit A Scope of Services – Phase 1 of the Community Center Project Exhibit B PSI’s April 26, 2024 Proposal Letter

10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

10.14 Non-Responsibility for General Contractor Responsibilities and Duties. Unless otherwise agreed by City and Consultant in writing, nothing in Consultant's services shall be construed to mean that Consultant assumes any of the contractual responsibilities or duties of the general contractor. The general contractor is solely responsible for construction means, methods, sequences and procedures used in the construction of a project and for related performance in accordance with its contract with the City. The general contractor shall not be relieved of its responsibility for the safety of the workplace or for the method or manner of construction. The Consultant and its personnel have no authority to exercise any control over or charge of acts or omissions of the general contractor or their employees in connection with the construction work.

The Parties have executed this Agreement as of the Effective Date.

CITY OF GONZALES PROFESSIONAL SERVICES INDUSTRIES
Carmen Gil, City Manager Deborah Priest, Principal Consultant Attest:

Mary Villegas, Deputy City Clerk
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Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Consulting Services Agreement between May 6, 2024
City of Gonzales and PSI - Exhibit A Page 1 of 1
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EXHIBIT A
TASK ORDER 1

SCOPE OF SERVICES
Consultant shall provide Materials Testing and Special Inspection services during construction of Phase 1 of the Community Center Complex project. This is presented in PSI’s April 26, 2024 Letter Proposal and includes inspection and/or testing of:

1. Soils (sampling, monitoring of excavations and compaction testing)

2. Asphalt (verify mix design, temperature, and compaction testing)

3. Concrete (mix design, size and placement of reinforcing steel and compressive strength testing)

4. Masonry (mix design, confirm reinforcing placement, and mortar mixing)

5. Structural Steel fabrication and erection

6. Structural Wood framing (nailing, anchoring, and fastenings) Compensation for all efforts under this Task Order shall be provided for a not-to-exceed fee of $135,000 as authorized at the May 6, 2024 City Council meeting.

Packet Pg. 61
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Consulting Services Agreement between May 6, 2024
City of Gonzales and PSI - Exhibit B Page 1 of 1
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EXHIBIT B
PSI’s April 26, 2024 Proposal Letter
Packet Pg. 62
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the April 26, 2024
Mr. Luis Flores
Harris & Associates
450 Lincoln Avenue, Suite 103
Salinas, California 93901
Phone: (831) 840-5207
Email: [email protected]
Re: Proposal for Construction Materials Testing and Special Inspection Services Gonzales Community Center Phase 1 & Phase 2
5 th Street, Gonzales, California 93926
PSI Proposal Number 0587-423300 Rev 2 (Phase 1) & 0587-423302 (Phase 2) Dear Mr. Flores,
Professional Service Industries, Inc., (PSI), is pleased to submit the following proposal for providing construction materials testing and special inspection services for the above referenced project.

PSI is operated by registered professional engineers and meets criteria set forth by (ASTM E-329) and the American Association of State Highway and Transportation Officials (AASHTO).

PSI understands that our services will consist of inspection and/or testing the following:
• Soils
• Asphalt
• Concrete Construction
• Masonry Construction
• Structural Steel Fabrication
• Structural Steel Erection
• Structural Wood Framing
PSI proposes to provide the described services on a unit-price basis. Total fees will be determined by the actual amount of technical time expended for this project and the actual quantity of laboratory tests performed. For preliminary budgeting purposes, PSI has prepared the following estimated budget for testing services based on information procured online, which included a review of the construction plans and specifications dated 02/28/2024.

PSI retained electronic copies of the project documents. The work performed by PSI will depend on the actual construction schedule. All work will be performed at the direction of the contractors’ representative on an On-Call basis. Prior to starting work on the project, it would be beneficial to meet to discuss a detailed schedule of your testing needs after which we can more accurately determine the total project testing budgets.

Please note that our services do not include supervision or direction of the actual work. Also, be aware that neither the presence of our field representative nor the observation and testing by our firm shall imply PSI's responsibility for defects discovered in the construction work. It is understood that our firm will not be responsible for job or site safety on this project. Job site safety will be the sole responsibility of others.

PROJECT DESCRIPTION
This is the new construction of the Dennis & Janice Caprara Community Center Complex located in Gonzales, California. The community center will be constructed in 2 phases. Phase 1 will include Building A (10,000 SF), parking and sitework. Phase 2 will include Building B (8,900 SF). The two C shaped buildings will create a courtyard area featuring an amphitheater, play/discovery area, seating & outdoor classrooms.

Packet Pg. 63
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024

DEFINED SCOPE OF WORK
Provide Special Inspection and materials testing in accordance with the 2022 International Building Code with California State Amendments and project specifications as directed by the client and/or their designated site representative. Special inspections anticipated are soils, asphalt, concrete construction, masonry construction, structural steel, lateral wood framing, and mass timber. The following is a description of the anticipated services.

Soils – The on-site inspector will observe and test soil excavation and structural compaction fills. Soils and base materials will be sampled for laboratory analysis for compliance with the project specifications. Laboratory analysis can typically include maximum dry density determination (Proctor) and grain size distribution (sieve). The on-site inspector will monitor structural fill operations and perform in-place density testing by nuclear densometer.

Not Geo of Record-No Report
Professional Service Industries, Inc. will provide “Harris & Associates” with a source of advice and opinion regarding the suitability of earthwork and foundation preparation with respect to the project documents provided. PSI understands there is no geotechnical report available for the project at this time. PSI is not providing the role of geotechnical engineer of record. PSI accepts no liability or responsibility for any errors or omissions in the original project documents. PSI’s work shall be limited to observing and testing for compliance with the recommendations made in the project documents. In the event that at any time there are determined to be defects in the original documents, client agrees to look solely to the original engineer for damages arising out of the report, and agrees to indemnify PSI for any claims out of those documents.

Asphalt - The on-site inspector will monitor delivery of hot mix asphalt and verify tickets for compliance with the approved mix design. The hot mix asphalt will be monitored for temperature as delivered and placed. During placement of hot mix asphalt the on-site inspector will perform in-place compaction by use of a nuclear densometer.

Samples of the hot mix asphalt delivered to the site will be tested for the Theoretical Maximum Specific Gravity (Rice) in addition to additional laboratory testing required by the project specifications..

Concrete Construction - The on-site inspector will provide periodic inspection of the placement of reinforcing steel for compliance with the project requirements for correct size, grade of steel, location, and clearance to forms and/or earthwork. The on-site inspector will continuously monitor placement of cast-in-place concrete for adherence to the project specifications. Each load, as required, will be checked for proper mix design, water/cement ratio, batch weights, adherence to slump requirements, air content, as well as proper methods of placement and consolidation.

Compressive strength samples will be cast on concrete delivered to the project.

Masonry Construction – The on-site inspector will provide inspection of reinforcing placement and continuous observation of grout and verify compliance with project specifications. Inspection of grouting mix will include compliance of batch tickets, mix design, consolidation during and after grouting, and verification of compressive strength using the Prism Method. The mixing of mortar will be observed for compliance.

Structural Steel Erection – The on-site inspector will monitor erection of structural steel members and joists, including location and fit of anchorages and inserts.

For purposes of this project PSI assumes that a fabricator meeting the 2021 International Building Code requirements, specifically:
1704.2.5.1 Fabricator Approval. Special inspections during fabrication are not required where the work is done on the premises of a fabricator approved to perform such work without special inspection. Approval shall be based upon review of the fabricator’s written fabrication procedures and quality control manuals that provide a basis for control of materials and workmanship, with periodic auditing of fabrication and quality control practices by an approved agency or the building official. At completion of fabrication, the approved fabricator shall submit a certificate of compliance to the owner or owner’s authorized agent for submittal to the building official as specified in Section 1704.5 stating that the work was performed in accordance with the approved construction documents.

In accordance with the project specifications PSI assumes that a certified fabricator fully capable of providing all visual or all visual and non-destructive testing, including NDE Level III oversight, with in house or subcontract forces. PSI has not provided any budget for fabricator inspections.

Packet Pg. 64
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024 The inspector will verify adjustments to fit inaccuracies with the engineer and perform visual weld inspection of field welding in accordance with AWS D1.1, SJI specifications and AWS D1.8 when required. Installation of high strength bolted connections will be monitored and proper installation and tensioning of high strength bolts will be monitored.

Feeler gauges provided by the manufacturer will be used to ensure proper tensioning of bolts that use load indicator washers. Verification of metal decking installation will include: gauge and type of decking, support and anchorage welding, and button punching and seam stitch welding in accordance with design drawings and project specifications.

These services apply to the structural steel elements, including metal decking, joists, stairs and miscellaneous shapes, and welding of reinforcing steel. Nondestructive examination of full penetration welds using ultrasonic examination methods will be performed. Fillet welds will be examined using magnetic particle examination methods when required.

Structural Wood Framing – The on-site inspector will observe the erected structural support elements for adherence to the approved project drawings and specifications. The structural elements will be continuously inspected during field gluing operations and periodically inspected for nailing, bolting, anchoring and other fastening of elements of the seismic/wind force resisting system, including wood Shearwalls, wood diaphragms, drag struts, braces, shear panels and hold-downs.

Packet Pg. 65
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024 Phase 1

DESCRIPTION OF SERVICE UNIT RATE QUANTITY TOTAL
Soils
Soils Technician
Grading & Backfill- 35 trips @ 8 hours each
Proctor ASTM D1557 $350.00 5 $1,750.00
Sieve Analysis ASTM C136 $160.00 5 $800.00
Atterberg Limits (LL & PL) ASTM D4318 $250.00 5 $1,250.00 Sample Pickups for Laboratory Testing
5 trips @ 4 hours each
$47,340.00
Asphalt
Asphalt Technician
HMA Paving- 2 trips @ 8 Reg Hours
HMA Paving- 2 trips @ 4 OT Hours $222.00 8 $1,776.00
Rice ASTM D2041 $250.00 2 $500.00
Extraction/Gradation ASTM D6307 $632.00 2 $1,264.00
Asphalt Subtotal $5,908.00
Concrete Construction
Reinforced Concrete Special Inspector
Footings- 2 trips @ 8 hours each for rebar & 2 trips @ 8 hours each for concrete observation & sampling
Reinforced Concrete Special Inspector
Stem Walls/Columns Plinths- 2 trips @ 8 hours each for rebar & 2 trips @ 8 hours each for concrete observation & sampling
Reinforced Concrete Special Inspector
Slab on Grade- 1 trip @ 8 hours each for rebar & 1 trip @ 8 hours each for concrete observation & sampling
Reinforced Concrete Special Inspector
Sidewalks, Pavement, Trash Enclosure & Misc. Site Concrete- 6 trips @ 8 hours each for rebar & 6 trips @ 8 hours each for concrete observation & sampling Cylinders/Compressive Strength Testing ASTM C39
11 sets of 5 cylinders
Sample Pickups
11 trips @ 4 hours each
Concrete Construction Subtotal $34,727.00
Masonry Construction
Masonry Technician on-site Regular time
CMU Walls- 2 trips @ 8 hours each
Grout Cubes/Compressive Strength Testing ASTM C109
1 set of 4 prisms
Sample Pickups
1 trips @ 4 hours each
Masonry Construction Subtotal $3,067.00
Structural Steel Fabrication & Erection
Welding/Bolting Special Inspector
Field Welding & Bolting- 4 trips @ 8 hours each
Welding Special Inspector
Fabrication Shop Visual Inspection- 2 trip @ 8 hours each Structural Steel Fabrication & Erection Subtotal $7,680.00 Structural Wood Framing
Structural Wood Special Inspector
Shear Walls, Holdowns, Diaphragms & SWFRS- 8 trips @ 4 hours each Structural Wood Framing Subtotal $5,024.00
Project Management, Report Review & Pre Construction Meetings $165.00 50 $8,250.00 Administrative $80.00 46 $3,680.00
Trip Charges $75.00 92 $6,900.00
Senior Engineer for Final Letter of Compliance $225.00 10 $2,250.00 Project Management & Administration Subtotal $21,080.00 Estimated Total $124,826.00
$105.00 4 $420.00
$157.00 32 $5,024.00
$160.00 32 $5,120.00
$160.00 16 $2,560.00
$157.00 16 $2,512.00
$45.00 3 $135.00
$45.00 55 $2,475.00
$105.00 44 $4,620.00
$157.00 16 $2,512.00
$157.00 96 $15,072.00
$157.00 32 $5,024.00
$157.00 32 $5,024.00
$148.00 280 $41,440.00
Soils Subtotal
$148.00 16 $2,368.00
$105.00 20 $2,100.00
Packet Pg. 66
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024 Phase 2

DESCRIPTION OF SERVICE UNIT RATE QUANTITY TOTAL
Concrete Construction
Reinforced Concrete Special Inspector
Footings- 2 trips @ 8 hours each for rebar & 2 trips @ 8 hours each for concrete observation & sampling
Reinforced Concrete Special Inspector
Stem Walls/Columns Plinths- 2 trips @ 8 hours each for rebar & 2 trips @ 8 hours each for concrete observation & sampling
Reinforced Concrete Special Inspector
Slab on Grade-1 trip @ 8 hours each for rebar & 1 trip @ 8 hours each for concrete observation & sampling
Cylinders/Compressive Strength Testing ASTM C39
5 sets of 5 cylinders
Sample Pickups for Laboratory Testing
5 trips @ 4 hours each
Concrete Construction Subtotal $14,623.00
Structural Steel Fabrication & Erection
Welding/Bolting Special Inspector
Field Welding & Bolting- 4 trips @ 8 hours each
Welding Special Inspector
Fabrication Shop Visual Inspection- 2 trip @ 8 hours each Structural Steel Fabrication & Erection Subtotal $7,680.00 Structural Wood Framing
Structural Wood Special Inspector
Shear Walls, Holdowns, Diaphragms & SWFRS- 5 trips @ 4 hours each Structural Wood Framing Subtotal $3,140.00
Project Management, Report Review & Pre Construction Meetings $165.00 18 $2,970.00 Administrative $80.00 15 $1,200.00
Trip Charges $75.00 29 $2,175.00
Senior Engineer for Final Letter of Compliance $225.00 5 $1,125.00 Project Management & Administration Subtotal $7,470.00
Estimated Total $32,913.00
$105.00 20 $2,100.00
$157.00 20 $3,140.00
$160.00 32 $5,120.00
$160.00 16 $2,560.00
$157.00 16 $2,512.00
$45.00 55 $2,475.00
$157.00 32 $5,024.00
$157.00 16 $2,512.00
Packet Pg. 67
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024

PROJECTED BUDGET ESTIMATE
The projected rates are for special inspections and materials testing for the Gonzales Community Center Project in Gonzales, California. Based upon the anticipated scope of work, the total estimated budget for Phase 1 is $124,826.00 and $32,913.00 for Phase 2. The attached cost estimate is anticipated to be used as a budget for services only it does not represent a maximum or minimum fee. Services requested but not listed herein will be billed at our standard unit rates. This proposal is subject to the attached terms and conditions.

Table 1: Service Options
Service Options Estimated Fee Authorization
Check [✓]
Special Inspections –Phase 1 $124,826.00
Special Inspections – Phase 2 $32,193.00
Respectfully submitted,
Professional Service Industries, Inc.

Mariel Renteria Deborah Priest, PE
Project Manager Principal Consultant
Construction Services Construction Services
[email protected] [email protected] Attachments: Project Data Sheet
General Notes
General Conditions
PROPOSAL ACCEPTANCE:

AGREED TO, THIS ___________ DAY OF ________________________ , 2024 BY (please print
name):
_________________________________________________________ TITLE: _________________________________________________________ COMPANY: _________________________________________________________ SIGNATURE: _________________________________________________________ Packet Pg. 68
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024

PSI GENERAL NOTES

1. Testing is conducted in general accordance with ASTM procedure and project specifications.

2. All hourly testing will be on a portal-to-portal basis from 16170 Vineyard Blvd Suite 170, Morgan Hill, CA 95037.

3. All rates are based upon a 4-hour minimum charge for assignments of up to 4 hours. A minimum charge of 8 hours will apply for all assignments in excess of 4 hours up to 8 hours.

4. The minimum billing increment for regular and overtime is the full hour.

5. PSI requires notification at least twenty-four (24) hours in advance of the schedule job starting time. Forty-eight (48) hours’ notice is requested for night, weekend or out of town work.

6. Cancellation of field testing and observation services is required no less than the working day prior to the date the services are to be performed. Services cancelled without advance and/or inadequate notice will be assessed a minimum 2-hour charge.

7. A one-time project set-up charge at a rate of $250.00 applies to all projects.

8. Premium Rates for Inspectors, Technicians, and NDE Personnel will be invoiced at 1.5 times the applicable rate listed above for hours worked outside of 7 am to 5 pm. And for the following:
a. 1.5 times the rate on weekdays outside of the hours listed above. b. 1.5 times the hourly rate on Saturday
c. 2.0 times the hourly rate after 12 hours on weekdays, after 8 hours on Saturdays, and for the 1st 8 hours on Sunday. d. 2.5 times the hourly rate over 8 hours on Sundays and Holidays. e. Minimum hourly charges of 4 and 8 hours per day for services

9. PSI observes the following paid holidays, New Year’s Day 01/01/2024, Memorial Day-05/27/2024, Juneteenth National Independence Day-06/19/2024, Independence Day-07/04/2024, Labor Day-09/02/2024, Thanksgiving Day-11/28/2024, Thanksgiving Holiday11/29/2024, Christmas Eve Holiday-12/24/2024, and Christmas Day-12/25/2024. Work requested on these holidays will be invoiced at 2X our standard labor rate.

10. Re-testing and re-inspection will be performed at the unit rates indicated and will be in addition to the estimated costs. Furthermore, discrepancies and non-conformance resolution may require additional Project Management time at the rates referenced above.

11. Laboratory testing required to be performed outside normal working hours shall be charged at 1.5 times the normal test rate.

12. Surcharges for laboratory services during overtime hours or for expedited results may apply (these surcharges will be 1.5 times the applicable unit rate).

13. Rented equipment, consumables, commercial travel, shipping, reproductions, long distance phone calls and/or any outside services performed will be billed at cost plus 20% unless billed directly to and paid by the client.

14. Project Manager and Admin/Clerical time to schedule and supervise personnel and evaluate and review reports will be billed at a minimum of 0.5 hours per report issued.

15. Invoices will be billed monthly. Invoices will be mailed/emailed on or about the third business day after the month to which services were rendered.

16. Based on our understanding this project is subject to prevailing wages.

17. Concrete test cylinder sizes will be in accordance with ASTM C31 and ACI 318.

18. ACI 301-10 section 1.6.2.2.d, states that the contractor is responsible for “[providing] space and source of electrical power on the project site for facilities to be used for initial curing of concrete test specimens as required by ASTM C31/C31M, for the sole use of the Owner’s quality assurance testing agency.” PSI understands the term “space” to mean “an environmentally controlled and secure space” for initial curing in the field, and the contractor is required to provide electricity and security of the space. Accordingly, this proposal does not include provisions or the associated fee for PSI to provide this service. The initial curing box can be provided by PSI at the project site for additional fees which shall include the daily rental cost and associated mobilization cost of the curing box. In the event the curing box is stolen or damaged as the site security is the responsibility of the contractor, PSI shall invoice our client the cost of the same at cost plus 10%.

19. Subcontracted labor or testing will be invoiced at cost plus 30%.

20. Reports will be provided to the client electronically using Construction Hive. Distribution using other methods will be billed at hourly project administration rates.

21. At the client's request, a Final Compliance Letter will be prepared and submitted to the client within 30 calendar days of the completion of all materials testing conducted by PSI at the site. The Final Compliance Letter will be an additional hourly charge at the Senior Registered Professional rate referenced above. Furthermore, no Final Letter will be issued without payment in full for all outstanding invoices.

Requests for additional or supplemental letters will be invoiced based on Senior Registered Professional hourly rate with a minimum charge of $300 per letter.

22. Unit prices/rates are in effect for the calendar year of this proposal and are subject to a 6% change on an annual basis thereafter.

GENERAL CONDITIONS
Packet Pg. 69
Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024

1. PARTIESAND SCOPE OF WORK: Professional Service Industries Inc. (“PSI”) shall include said company or its particular division, subsidiary or affiliate performing the work. “Work” means the specific service to be performed by PSI as set forth in PSl’s proposal, Client’s acceptance thereof and these General Conditions.

Additional work ordered by Client shall also be subject to these General Conditions. “Client” refers to the person or business entity ordering the work to be done by PSI. If Client is ordering the work on behalf of another, Client represents and warrants that it is the duly authorized agent of said party for the purpose of ordering and directing said work. Unless otherwise stated in writing, Client assumes sole responsibility for determining whether the quantity and the nature of the work ordered by the client is adequate and sufficient for Client’s intended purpose. Client shall communicate these General Conditions to each and every third party to whom Client transmits any part of PSI’s work. PSI shall have no duty or obligation to any third party greater than that set forth in PSI’s proposal, Client’s acceptance thereof and these General Conditions. The ordering of work from PSI, or the reliance on any of PSI’s work, shall constitute acceptance of the terms of PSI’s proposal and these General Conditions, regardless of the terms of any subsequently issued document.

2. TESTS AND INSPECTIONS: Client shall cause all tests and inspections of the site, materials and work performed by PSI or others to be timely and properly performed in accordance with the plans, specifications and contract documents and PSI’s recommendations. No claims for loss, damage or injury shall be brought against PSI by Client or any third party unless all tests and inspections have been so performed and unless PSI’s recommendations have been followed. Client agrees to indemnify, defend and hold PSI, its officers, employees and agents harmless from any and all claims, suits, losses, costs and expenses, including, but not limited to, court costs and reasonable attorney’s fees in the event that all such tests and inspections are not so performed or PSl’s recommendations are not so followed.

3. PREVAILING WAGES: This proposal specifically excludes compliance with any project labor agreement, labor agreement, or other union or apprenticeship requirements. In addition, unless explicitly agreed to in the body of this proposal, this proposal specifically excludes compliance with any state or federal prevailing wage law or associated requirements, including the Davis Bacon Act. It is agreed that no applicable prevailing wage classification or wage rate has been provided to PSI, and that all wages and cost estimates contained herein are based solely upon standard, non-prevailing wage rates. Should it later be determined by the Owner or any applicable agency that in fact prevailing wage applies, then it is agreed that the contract value of this agreement shall be equitably adjusted to account for such changed circumstance. Client will reimburse, defend, indemnify and hold harmless PSI from and against any liability resulting from a subsequent determination that prevailing wage regulations cover the Project, including all costs, fines and attorney’s fees.

4. SCHEDULING OF WORK: The services set forth in PSI’s proposal and Client’s acceptance will be accomplished by PSI personnel at the prices quoted. If PSI is required to delay commencement of the work or if, upon embarking upon its work, PSI is required to stop or interrupt the progress of its work as a result of changes in the scope of the work requested by Client, to fulfill the requirements of third parties, interruptions in the progress of construction, or other causes beyond the direct reasonable control of PSI, additional charges will be applicable and payable by Client.

5. ACCESS TO SITE: Client will arrange and provide such access to the site and work as is necessary for PSI to perform the work. PSI shall take reasonable measures and precautions to minimize damage to the site and any improvements located thereon as the result of its work or the use of its equipment.

6. CLIENT’S DUTY TO NOTIFY ENGINEER: Client warrants that it has advised PSI of any known or suspected hazardous materials, utility lines and pollutants at any site at which PSI is to do work, and unless PSI has assumed in writing the responsibility of locating subsurface objects, structures, lines or conduits, Client agrees to defend, indemnify and save PSI harmless from all claims, suits, losses, costs and expenses, including reasonable attorney’s fees as a result of personal injury, death or property damage occurring with respect to PSI’s performance of its work and resulting to or caused by contact with subsurface or latent objects, structures, lines or conduits where the actual or potential presence and location thereof were not revealed to PSI by Client.

7. RESPONSIBILITY: PSI’s work shall not include determining, supervising or implementing the means, methods, techniques, sequences or procedures of construction. PSI shall not be responsible for evaluating, reporting or affecting job conditions concerning health, safety or welfare. PSI’s work or failure to perform same shall not in any way excuse any contractor, subcontractor or supplier from performance of its work in accordance with the contract documents. Client agrees that it shall require subrogation to be waived against PSI and for PSI to be added as an Additional Insured on all policies of insurance, including any policies required of Client’s contractors or subcontractors, covering any construction or development activities to be performed on the project site. PSI has no right or duty to stop the contractor’s work.

8. SAMPLE DISPOSAL: Test specimens will be disposed immediately upon completion of the test.All drilling samples will be disposed sixty (60) days after submission of PSI’s report.

9. PAYMENT: The quantities and fees provided in this proposal are PSI’s estimate based on information provided by Client and PSI’s experience on similar projects.

The actual total amount due to PSI shall be based on the actual final quantities provided by PSI at the unit rates provided herein. Where Client directs or requests additional work beyond the contract price it will be deemed a change order and PSI will be paid according to the fee schedule. Client shall be invoiced once each month for work performed during the preceding period. Client agrees to pay each invoice within thirty (30) days of its receipt. Client further agrees to pay interest on all amounts invoiced and not paid or objected to for valid cause in writing within said thirty (30) day period at the rate of eighteen (18) percent per annum (or the maximum interest rate permitted under applicable law), until paid. Client agrees to pay PSI’s cost of collection of all amounts due and unpaid after thirty (30) days, including court costs and reasonable attorney’s fees. PSI shall not be bound by any provision or agreement requiring or providing for arbitration of disputes or controversies arising out of this agreement, any provision wherein PSI waives any rights to a mechanics’ lien, or any provision conditioning PSI’s right to receive payment for its work upon payment to Client by any third party. These General Conditions are notice, where required, that PSI shall file a lien whenever necessary to collect past due amounts. Failure to make payment within 30 days of invoice shall constitute a release of PSI from any and all claims which Client may have, whether in tort, contract or otherwise, and whether known or unknown at the time.

GENERAL CONDITIONS
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Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the Gonzales Community Center Professional Service Industries, Inc.

Time and Materials Proposal Rev 2 Engineering • Consulting • Testing PSI Proposal No. 0587-423300 (phase 1) 0587-423302 (phase 2) 4/26/2024

10. ALLOCATION OF RISK: CLIENT AGREES THAT PSI’S SERVICES WILL NOT SUBJECT PSI’S INDIVIDUAL EMPLOYEES, OFFICERS OR DIRECTORS TO ANY

PERSONAL LIABILITY, AND THAT NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, CLIENT AGREES THAT ITS SOLE AND EXCLUSIVE REMEDY SHALL BE TO DIRECT OR ASSERTANY CLAIM, DEMAND, OR SUIT ONLYAGAINST PSI.

SHOULD PSI OR ANY OF ITS EMPLOYEES BE FOUND TO HAVE BEEN NEGLIGENT IN THE PERFORMANCE OF ITS WORK, OR TO HAVE MADE AND

BREACHED ANY EXPRESS OR IMPLIED WARRANTY, REPRESENTATION OR CONTRACT, CLIENT, ALL PARTIES CLAIMING THROUGH CLIENT AND ALL PARTIES CLAIMING TO HAVE IN ANY WAY RELIED UPON PSI’S WORK AGREE THAT THE MAXIMUM AGGREGATE AMOUNT OF THE LIABILITY OF PSI,

ITS OFFICERS, EMPLOYEES AND AGENTS SHALL BE LIMITED TO
$25,000.00 OR THE TOTALAMOUNT OF THE FEE PAID TO PSI FOR ITS WORK PERFORMED ON THE PROJECT, WHICHEVER AMOUNT IS GREATER. IN THE EVENT CLIENT IS UNWILLING OR UNABLE TO LIMIT PSI’S LIABILITY IN ACCORDANCE WITH THE PROVISIONS SET FORTH IN THIS PARAGRAPH, CLIENT MAY, UPON WRITTEN REQUEST OF CLIENT RECEIVED WITHIN FIVE DAYS OF CLIENT’S ACCEPTANCE HEREOF, INCREASE THE LIMIT OF PSI’S LIABILITY TO $250,000.00 OR THE AMOUNT OF PSI’S FEE PAID TO PSI FOR ITS WORK ON THE PROJECT, WHICHEVER IS THE GREATER, BY AGREEING TO PAY PSI A SUM EQUIVALENT TO AN ADDITIONAL AMOUNT OF 5% OF THE TOTAL FEE TO BE CHARGED FOR PSI’S SERVICES. THIS CHARGE IS NOT

TO BE CONSTRUED AS BEING A CHARGE FOR INSURANCE OF ANY TYPE, BUT IS INCREASED CONSIDERATION FOR THE GREATER LIABILITY INVOLVED. IN ANY EVENT, ATTORNEY’S FEES EXPENDED BY PSI IN CONNECTION WITH ANY CLAIM SHALL REDUCE THE AMOUNT AVAILABLE, AND ONLY ONE SUCH AMOUNT WILLAPPLY TO ANY PROJECT.

NEITHER PARTY SHALL BE LIABLE TO THE OTHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND BREACH OF STATUTORY DUTY) OR OTHERWISE

FOR LOSS OF PROFIT (WHETHER DIRECT OR INDIRECT) OR FOR ANY INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL LOSS OR DAMAGE, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, REVENUE, BUSINESS, OR ANTICIPATED SAVINGS (EVEN WHEN ADVISED OF THEIR POSSIBILITY).

NO ACTION OR CLAIM, WHETHER IN TORT, CONTRACT, OR OTHERWISE, MAY BE BROUGHT AGAINST PSI, ARISING FROM OR RELATED TO PSI’S WORK, MORE THAN TWO YEARS AFTER THE CESSATION OF PSI’S WORK HEREUNDER, REGARDLESS OF THE DATE OF DISCOVERY OF SUCH CLAIM.

11. INDEMNITY: Subject to the above limitations, PSI agrees not to defend but to indemnify and hold Client harmless from and against any and all claims, suits, costs and expenses including reasonable attorney’s fees and court costs to the extent arising out of PSI’s negligence as finally determined by a court of law. Client shall provide the same protection to the extent of its negligence. In the event that Client or Client’s principal shall bring any suit, cause of action, claim or counterclaim against PSI, the Client and the party initiating such action shall pay to PSI the costs and expenses incurred by PSI to investigate, answer and defend it, including reasonable attorney’s and witness fees and court costs to the extent that PSI shall prevail in such suit.

12. TERMINATION: This Agreement may be terminated by either party upon seven days’ prior written notice. In the event of termination, PSI shall be compensated by Client for all services performed up to and including the termination date, including reimbursable expenses.

13. EMPLOYEES/WITNESS FEES: PSI’s employees shall not be retained as expert witnesses except by separate, written agreement. Client agrees to pay PSI’s legal expenses, administrative costs and fees pursuant to PSI’s then current fee schedule for PSI to respond to any subpoena. For a period of one year after the completion of any work performed under this agreement, Client agrees not to solicit, recruit, or hire any PSI employee or person who has been employed by PSI within the previous twelve months. In the event Client desires to hire such an individual, Client agrees that it shall seek the written consent of PSI, and shall pay PSI an amount equal to one- half of the employee’s annualized salary, without PSI waiving other remedies it may have.

14. FIDUCIARY: PSI is not a financial advisor, does not provide financial advice or analysis of any kind, and nothing in our reports can create a fiduciary relationship between PSI and any other party.

15. RECORDING: Photographs or video recordings of the Client’s own project may be taken by and used for the Client’s own internal purposes. Photographs or video recordings may not be used for marketing or publicity, or distributed to a third party or otherwise published without PSI’s prior review and consent in writing. Taking photographs of other Clients’ samples, test setups, or facilities, or recording in any manner any test specimen other than the test specimen related to the Client’s project is prohibited; and the Client agrees to hold in strict confidence and not use any proprietary information disclosed either advertently or inadvertently. The Client shall defend, hold harmless, and indemnify PSI for any breach of this clause.

16. CHOICE OF LAW AND EXCLUSIVE VENUE: All claims or disputes arising or relating to this agreement shall be governed by, construed, and enforced in accordance with the laws of Illinois. The exclusive venue for all actions or proceedings arising in connection with this agreement shall be either the Circuit Court in Cook County, Illinois, or the Federal Court for the Northern District of Illinois.

17. PROVISIONS SEVERABLE: The parties have entered into this agreement in good faith, and it is the specific intent of the parties that the terms of these General Conditions be enforced as written. In the event any of the provisions of these General Conditions should be found to be unenforceable, it shall be stricken and the remaining provisions shall be enforceable.

18. ENTIRE AGREEMENT: This agreement constitutes the entire understanding of the parties, and there are no representations, warranties or undertakings made other than as set forth herein. This agreement may be amended, modified or terminated only in writing, signed by each of the parties hereto.

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Attachment: Master Services Agreement with PSI Including Task Order 1 (2970 : Agreement with PSI for Testing/Inspection Services for the City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 6, 2024
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Carmen Gil, City Manager
SUBJECT: Resolution No. 2024-12 and Resolution No. FA-2024-01 Issuance of the Public Financing Authority Lease Revenue Bonds Series 2024A

RECOMMENDATION
It is recommended that the City Council of the City of Gonzales and the Authority Board of Directors receive this staff report, hold a public hearing, and consider adoption of the following Resolutions:
• Resolution 2024-12, A Resolution of the City Council of the City of Gonzales Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Continuing Disclosure Certificate in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions.
• Resolution FA-2024-01, A Resolution of the Gonzales Public Financing Authority Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Assignment Agreement in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal, Amount of Not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions.

AGENDA
ITEM
11 Packet Pg. 72
These resolutions authorize the execution and delivery of a ground lease, lease agreement, indenture, Bond Purchase Agreement and Continuing Disclosure Certificate in connection with the issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, approve the issuance of such Bonds, authorize the distribution of an official statement in connection with the offering and sale of such bonds and authorize the execution of necessary documents, certificates and related actions. Such authorization will allow the city to proceed with interim funding for Phase 1 of the Community Center Complex Project.

BACKGROUND

The City’s Community Center Complex Project is underway, and is being funded from the following sources:
• $5.0M State grant for the Teen Innovation Center
• $705,000 in Community Development Block Grant funds
• $1.8M County contribution to relocate existing library • $1.067M State Building Forward Library Infrastructure Grant Program • $400k Electric Vehicle Charging Station Grant from the California Energy Commission • Capital Campaign with pledges and contributions
• City Measure X Funds
• $9.825M Loan secured from United States Department of Agriculture Rural Development (“USDA”)
The USDA Loan requires interim funding during construction, which will eventually be replaced with the City’s loan with USDA upon completion of the construction of the Community Center.

In front of the City Council tonight is the approval of the 2024 Lease Revenue Bonds, which will provide the required interim funding. The approving resolution also authorizes the execution of legal documents required to facilitate such documents, the distribution of an official statement in connection with the 2024 Bonds and certain fees and related actions in connection with the financing.

REVIEW AND ANALYSIS
To determine the most cost-effective interim financing option for the city, multiple funding options were evaluated. It has been determined that a public bond offering is the most cost-effective option when evaluating the all-in cost to the city (interest cost and related costs to facilitate the financing).

The 2024 Bonds will be structured as lease revenue bonds. The lease revenue bond structure utilizes a lease/leaseback financing structure between City and City’s Financing Authority, with the Community Center site serving as the leased asset. In order to make lease payments (debt service payment), the City must have beneficial use and possession of the leased asset. Therefore, due to the construction nature of the Community Center/leased asset, the financing structure will require the debt service (interest) payments to be pre-funded at closing. This means that the City will make a deposit for such interest payments through May 1, 2026, upon closing of the 2024 Bonds.

A lease structure also requires a fair rental test to be met, which means that the annual fair rental value of the leased asset should be no less than the annual debt service of the bonds. To meet such test, the 2024 Bonds are being structured as a 20-year financing; the longer amortization allows the annual lease payments to coincide with fair rental value. However, the 2024 Bonds are structured with an optional redemption beginning November 1, 2025 and have a mandatory redemption of May 1, 2026. This means that the City has the option to redeem the bonds as soon as November 1, 2025 when construction is anticipated to be complete. The redemption of the 2024 Bonds will occur with the USDA funding and at such time the 2024 Bonds will be replaced with the USDA permanent loan.

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Based on an estimated interest cost of 3.875%, the total interest cost of the 2024 Bonds through the mandatory redemption date of May 1, 2026 is expected to be approximately $731,826. Any unspent funds from the City contribution will be returned to the City upon redemption of the 2024 Bonds.

USDA requires that their funding (committed in the amount of $9,825,000) will only be applied to construction related costs and cannot be applied to soft costs, such as interest or financing related costs.

Therefore, at the closing of the 2024 Bonds, deposits will be made by the City to fund 1) the 2024 Bonds interest cost through May 1, 2026, the date of the mandatory redemption; 2) financing costs of issuance and 3) underwriter’s discount. It is estimated that the deposit at closing will total approximately $950,951 based on current market rates, as shown in the table below. This amount is subject to change based on interest rates at pricing. Due to the prefunded interest deposit, it is not anticipated that the City will need to make any payments on the 2024 Bonds. Upon USDA providing its permanent loan funding of $9,825,000, it will be applied to redeem the principal amount of the 2024 Bonds. At such time, the USDA Loan replaces the 2024 Bonds and payments will commence on the USDA Loan according to a repayment schedule established at such time. It is currently estimated that the future annual payments of the USDA Loan will be approximately $480,275 based on a rate of 3.625% over a 38-year maturity.

The following shows the estimated sources and uses of the 2024 Bonds.

Sources:

Par Amount of Bonds $9,825,000.00
City Contribution $950,951.06
Total Sources $10,775,951.06
Uses:

Total Underwriter's Discount $49,125.00
Costs of Issuance $170,000.00
Deposit to Capitalized (Prefunded) Interest Fund $731,826.06 Deposit to Project Construction Fund $9,825,000.00
Total Uses $10,775,951.06
In addition, the following shows annual debt service on the 2024 Bonds through the 20-year stated maturity. However, as just described, the bonds will be redeemed on or before May 1, 2026 and replaced with the permanent USDA Loan. The debt service payments made prior to the mandatory redemption date will be paid from prefunded interest that the City will deposit upon closing of the 2024 Bonds in June 2024.

Packet Pg. 74
The deposit at closing includes financing and underwriting costs. All costs are contingent upon the successful completion of the financing, except the costs related to securing a rating for the bonds. Such costs are committed upon commencement of the rating process. Upon authorization by the City Council of the financing and related costs, the financing team will proceed with the rating process. The authorizing resolution provides for authorization or reauthorization of related financing costs.

Service Payee
Public
Offering
Bond Counsel Kutak Rock 40,000
Disclosure Counsel Kutak Rock 30,000
Municipal Advisor NHA Advisors 57,500
Rating S&P Global Ratings 19,750
Trustee US Bank 4,250
Official Statement Printer AVIA - estimate 2,500
Title Insurance Title company 8,000
Contingency 8,000
Total 170,000
Underwriting (Hilltop Securities) 49,125
Total (Inclusive of Underwriting) 219,125
Interim Financing Costs of Issuance
The resolutions before the Council set forth certain parameters upon the sale of the 2024 Bonds. The parameters are (i) the principal amount not-to-exceed $9,825,000, (2) a true interest cost attributable to the Lease Payments not exceeding 4.75% (3) the underwriter’s discount not exceeding 0.50% of the par amount of the Bonds.

While we expect the actual terms and rates to be lower as previously described, Council approval should provide some flexibility to adjust the structure if needed due to unexpected market changes.

Financing Documents:

Being presented for approval by the City Council and the Authority, as applicable, are the following documents:

Packet Pg. 75
Authorizing Resolutions:

Authorize the Authority to issue bonds in a principal amount not to exceed $9,825,000 to finance the Project, and authorize City and Authority staff to execute the legal documents for the 2024 Bonds.

Site Lease:

Agreement between the City as lessor and the Authority as lessee, under which the City leases the Leased Property to the Authority in consideration of the payment of an upfront amount which will be used by the City to construct the Community Center Project.

Lease Agreement:

Agreement between the Authority as lessor and the City as lessee, under which the Authority leases the Leased Property back to the City and the City agrees to pay semiannual lease payments to provide revenues with which to pay principal and interest on the 2024 Bonds when due.

Indenture of Trust:

Provides for execution and delivery of the 2024 Bonds and lays out the covenants and specifics of the 2024 Bonds, as well as the prepayment options. Trustee’s duties, repayment mechanisms, default and remedies provisions, and Bondholder’s associated rights and remedies.

Assignment Agreement:

Provides the terms and conditions under which the Authority assigns the City’s lease payments to the Trustee, for ultimate payment to Bondholders.

Bond Purchase Agreement:

Agreement with Hilltop Securities under which Hilltop Securities agrees to purchase the 2024 Bonds; establishes closing requirements and closing document and opinion deliverables Preliminary Official Statement:

Disclosure Counsel prepares a preliminary Official Statement with input from the financing team including tables relating to the City’s finances. Following City Council authorization, the preliminary Official Statement will be distributed by the Underwriter and used as the primary marketing document to prospective bond purchasers. The agenda packet includes a draft of the preliminary Official Statement.

A final Official Statement will be made available shortly after the Bonds are sold; it will be identical to the preliminary Official Statement except that it will reflect the final bond sale pricing information. The preliminary Official Statement and the Official Statement constitute securities disclosures for the benefit of the buyers of the bonds and are governed by federal securities laws.

Continuing Disclosure Certificate:

Certificate of the City to provide annual reporting and ongoing significant events reporting.

Financing Schedule:

If the City Council and Authority Board approve the two resolutions, City staff will work with the financing team to immediately ready the 2024 Bond transaction. Below is a summary of the anticipated financing schedule:

Date Activity
5/06/24 City Council and Authority Board Approve Financing Resolutions 5/07/24 City has rating discussion with S&P
Mid-May 2024 Bonds Official Statement is released to the market; Hilltop Securities begins marketing the 2024 Bonds
Late May 2024 Bonds are priced
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Early to Mid-June 2024 Bonds close and funding delivered to the City The city has sufficient funds in the project account to begin construction prior to the receiving the interim financing.

City services will be delivered in a cost-effective, respectful and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes X No N/A
• Housing Yes X No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A

ALTERNATIVES
The city can choose to pursue other sources of funding, such as a direct placement with a lender; however, such alternative has been considered and was determined to be more costly to the city.

BUDGET IMPACT
Upon closing of the 2024 Bonds in early to mid-June, the city will make a deposit with the Trustee of the 2024 Bonds to pre-fund interest on the 2024 Bonds through May 1, 2026 and to pay costs related to the financing. All such financing costs are contingent upon the successful closing, with the exception of the rating fee as mentioned previously. It is anticipated that the deposit at closing will be approximately $950,951. It is also anticipated that a portion of the deposit will accrue earnings over time, which will be credited back to the city.

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CONCLUSION
It is recommended that the City Council of the City of Gonzales and the Authority Board of Directors receive this staff report, hold a public hearing, and consider adoption of the following Resolutions:
• Resolution 2024-12, A Resolution of the City Council of the City of Gonzales Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Continuing Disclosure Certificate in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal Amount of not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions.
• Resolution FA-2024-01, A Resolution of the Gonzales Public Financing Authority Authorizing the Execution and Delivery of a Ground Lease, Lease Agreement, Indenture, Bond Purchase Agreement and Assignment Agreement in Connection with the Issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, Approving the Issuance of Such Bonds in an Aggregate Principal, Amount of Not to Exceed $9,825,000, Authorizing the Distribution of an Official Statement in Connection with the Offering and Sale of Such Bonds and Authorizing the Execution of Necessary Documents and Certificates and Related Actions.

These resolutions authorize the execution and delivery of a ground lease, lease agreement, indenture, Bond Purchase Agreement and Continuing Disclosure Certificate in connection with the issuance of the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, approve the issuance of such Bonds, authorize the distribution of an official statement in connection with the offering and sale of such bonds and authorize the execution of necessary documents, certificates and related actions. Such authorization will allow the city to proceed with interim funding for Phase 1 of the Community Center Complex Project.

Attachments:

1. Resolution No. 2024-12

2. Resolution No. FA-2024-01

3. Community Center Interim Funding Presentation

4. Site Lease

5. Lease Agreement

6. Indenture of Trust

7. Assignment Agreement

8. Bond Purchase Agreement

9. Preliminary Official Statement

10. Continuing Disclosure Certificate

11. Legal Notice of Public Hearing
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RESOLUTION NO. 2024-12

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, LEASE

AGREEMENT, INDENTURE, BOND PURCHASE AGREEMENT AND CONTINUING

DISCLOSURE CERTIFICATE IN CONNECTION WITH THE ISSUANCE OF THE

GONZALES PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2024A, APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $9,825,000, AUTHORIZING THE

DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE

OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF

NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS WHEREAS, the City of Gonzales (“City”), a municipal corporation and general law city that is located in Monterey County, California, desires to finance certain capital improvements, consisting primarily of a Community Center (“2024 Project”), on an interim basis, pending the closing of a financing on or before May 1, 2026 with the United States Department of Agriculture, Rural Development (“USDA”), for which USDA has made a funding commitment of $9,825,000; and WHEREAS, the Gonzales Public Financing Authority (the “Authority”) and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Bonds”), for the purpose of financing the 2024 Project on an interim basis; and WHEREAS, the 2024 Project constitutes “public capital improvements” within the meaning of the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), all of which are or shall be located within the boundaries of the City; and
WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease pursuant to which the City will lease certain real property of the City (which real property consists of the 2024 Project and the associated land), as described in the Ground Lease (collectively, the “Leased Assets”), to the Authority, and a Lease Agreement, pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as such term is defined in the Lease Agreement), which are pledged to the owners of the Bonds by the Authority pursuant to an Indenture, by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the City and the Authority (the “Indenture”); and WHEREAS, the City and the Authority desire to undertake a negotiated sale of the Bonds to Hilltop Securities Inc., as the underwriter of the Bonds (the “Underwriter”), pursuant to a purchase agreement by and among the City, the Authority and the Underwriter (the “Bond Purchase Agreement”); and
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Bonds, the Underwriter must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis; and
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Attachment: Resolution No. 2024-12 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

Page 2 of 4 ends

WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”) in connection with the issuance of the Bonds; and
WHEREAS, Rule 15c2-12 also requires that, in order to offer the Bonds for sale to the public, the Underwriter must receive a disclosure document with respect to the Bonds and the City; and WHEREAS, in order to cause such requirement to be satisfied, the City and the Authority have prepared a Preliminary Official Statement (“POS”) in connection with the issuance of the Bonds; and
WHEREAS, in compliance with California Government Code Section 5852.1, the City has obtained from the City’s Municipal Advisor required good faith estimates relating to the Bonds, and such estimates are disclosed and set forth in Exhibit A attached hereto; and WHEREAS, the City is a member of the Authority and the 2024 Project is located within the boundaries of the City; and
WHEREAS, USDA requires that its financing fund only hard construction costs; and WHEREAS, accordingly, the City desires to contribute City funds to pay for soft costs of the Bonds, such as interest on the Bonds and costs of issuance (the “City Contribution”); and WHEREAS, the City Council has been presented with the form of each document that is referred to herein relating to the financing that is contemplated hereby, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and
WHEREAS, all acts, conditions and things that are required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing that are authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Gonzales, as follows:

Section 1. Recitals True and Correct. The foregoing recitals are true and correct and are a substantive part of this Resolution.

Section 2. Findings. The City Council hereby approves the financing that is described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the approval of the issuance of the Bonds by the Authority pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the issuance of the Bonds by the Authority and related transactions will result in demonstrable savings in effective interest rate to the City.

Section 3. Approval of Lease Documents. The forms of Ground Lease and Lease Agreement presented at this meeting are hereby approved, and the Mayor of the City, the City Manager of the City Packet Pg. 80
Attachment: Resolution No. 2024-12 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

Page 3 of 4 ends

and the Finance Director of the City, or their respective designees (collectively, the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and the Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that: (a) the term of the Ground Lease and the Lease Agreement shall terminate no later than May 1, 2044 (provided that such term may be extended as provided therein); and (b) the true interest cost applicable to the interest components of the Base Rental Payments under the Lease Agreement shall not exceed 4.75%.

Section 4. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 5. Approval of Bond Purchase Agreement. The form of Bond Purchase Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Underwriter’s discount shall not exceed 0.50% of the principal amount of the Bonds.

Section 6. Approval of Continuing Disclosure Certificate. The form of Continuing Disclosure Certificate presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 7. Approval of POS. The form of POS presented at this meeting, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the POS in connection with the offering and sale of the Bonds is hereby authorized and approved. Each Authorized Officer is hereby authorized to certify on behalf of the City that the POS is deemed final as of its date within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the POS.

Section 8. Authorization of Official Statement. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the POS, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City.

Packet Pg. 81
Attachment: Resolution No. 2024-12 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

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Section 9. Further Action. The Authorized Officers are hereby authorized, empowered and directed, individually, to execute such other documents in addition to those enumerated herein and to take such other actions as each deems necessary or advisable in order to consummate the issuance of the Bonds (including, but not limited to, causing the Indenture, the Lease Agreement and the Ground Lease, or memoranda thereof, to be recorded in the Office of the Monterey County Recorder, causing one or more title insurance policies to be issued relating to the Leased Assets and delivering instructions to the title company with respect thereto, approving changes to the name and/or series designation of the Bonds to reflect the timing of the issuance of the Bonds or otherwise and entering into a commitment for municipal bond insurance or a debt service reserve fund insurance policy if determined to be in the best interest of the City). Such actions heretofore taken by the Authorized Officers or their designees are hereby ratified, confirmed and approved.

Section 10. Special Services. Kutak Rock LLP is hereby appointed to serve as Bond Counsel and Disclosure Counsel with respect to the Bonds and NHA Advisors, LLC, will serve as the City’s Municipal Advisor per its previously approved contract. Each of the Authorized Officers is further authorized to provide for all other services that are necessary to effect the matters that are described in this Resolution. Such services shall include, but not be limited to, legal services, a credit rating from S&P Global Ratings, trustee services, title insurance services and any other services that are deemed appropriate by an Authorized Officer. Any one of the Authorized Officers is authorized to pay for the cost of such services and to enter into agreements as needed to engage such consultants.

Section 11. City Contribution. The Authorized Officers are hereby authorized to contribute available City moneys in an amount not to exceed $1,115,000 as the City Contribution, which shall be applied to pay for soft costs associated with the Bonds, including interest on the Bonds through May 1, 2026, consultant fees and other costs of issuance as described in Section 10. The portion of the City Contribution consisting of interest on the Bonds through May 1, 2026 shall be delivered to the Trustee upon the closing of the Bonds and held in the Interest Fund established under the Indenture.

PASSED AND ADOPTED by the City Council of the City of Gonzales at a regular meeting duly held on the 6th day of May 2024 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_______________________________
Jose L. Rios, The Honorable Mayor
ATTEST:
___________________________
Mary Villegas, Deputy City Clerk
Packet Pg. 82
Attachment: Resolution No. 2024-12 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4888-2523-2818.3

EXHIBIT A

GOOD FAITH ESTIMATES
The following information was obtained from the City’s Municipal Advisor and is provided in compliance with California Government Code Section 5852.1 with respect to the Lease Agreement:
(A) True Interest Cost of the Lease Agreement: 3.928%
(B) Finance Charge of the Lease Agreement (Sum of all fees/charges paid to third parties):
$219,125
(C) Net Proceeds of the Lease Agreement to be Received (net of finance charges, reserves and capitalized interest, if any): $9,825,000
(D) Total Payment Amount through Maturity of Lease Agreement: $14,557,5701 The foregoing constitute good faith estimates only. The principal amount of the Lease Agreement, the true interest cost of the Lease Agreement, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the execution of the Lease Agreement being different than the date assumed for purposes of such estimates; (b) the actual principal amount of the Lease Agreement being different from the estimated amount used for purposes of such estimates; (c) the actual amortization of the Lease Agreement being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of sale of the Lease Agreement being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the City’s financing plan, or a combination of such factors.

The actual date of execution of the Lease Agreement and the actual principal amount of the Lease Agreement will be determined by the City based on a variety of factors. The actual interest rates borne by the Lease Agreement will depend on market interest rates at the time of sale thereof.

The actual amortization of the Lease Agreement will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.
1 Reflects estimated payments through the scheduled 20-year maturity of the Lease Agreement. The Lease Agreement is anticipated to be redeemed on or before May 1, 2026. The Total Payment Amount through May 1, 2026 is estimated to be $731,826.

Packet Pg. 83
Attachment: Resolution No. 2024-12 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

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4888-3499-8450.3
RESOLUTION NO. FA-2024-01

A RESOLUTION OF THE GONZALES PUBLIC FINANCING AUTHORITY

AUTHORIZING THE EXECUTION AND DELIVERY OF A GROUND LEASE, LEASE

AGREEMENT, INDENTURE, BOND PURCHASE AGREEMENT AND ASSIGNMENT

AGREEMENT IN CONNECTION WITH THE ISSUANCE OF THE GONZALES PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2024A, APPROVING THE

ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $9,825,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL

STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS

AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND

CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City of Gonzales (“City”), a municipal corporation and general law city that is located in Monterey County, California, desires to finance certain capital improvements, consisting primarily of a Community Center (“2024 Project”), on an interim basis, pending the closing of a financing on or before May 1, 2026 with the United States Department of Agriculture, Rural Development (“USDA”), for which USDA has made a funding commitment of $9,825,000; and WHEREAS, the City is a member of the Gonzales Public Financing Authority (the “Authority”), a joint exercise of powers authority; and WHEREAS, the Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Bonds”) for the purpose of financing the 2024 Project on an interim basis; and
WHEREAS, the 2024 Project constitutes “public capital improvements” within the meaning of the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), all of which are or shall be located within the boundaries of the City; and
WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease (the “Ground Lease”) pursuant to which the City will lease certain real property of the City (which real property consists of the 2024 Project and the associated land), as described in the Ground Lease (collectively, the “Leased Assets”), to the Authority, and a Lease Agreement (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as such term is defined in the Lease Agreement), which are pledged to the owners of the Bonds by the Authority pursuant to an Indenture, by and among U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), the City and the Authority (the “Indenture”); and
WHEREAS, the Authority and the Trustee desire to enter into an Assignment Agreement (the “Assignment Agreement”) in order to provide, among other things, that all rights to receive the Base Rental Payments payable under the Lease Agreement be assigned without recourse by the Authority to the Trustee; and
WHEREAS, the City and the Authority desire to undertake a negotiated sale of the Bonds to Hilltop Securities Inc., as the underwriter of the Bonds (the “Underwriter”), pursuant to a purchase Packet Pg. 84
Attachment: Resolution No. FA-2024-01 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds

Page 2 of 4 ends

4888-3499-8450.3
agreement by and among the City, the Authority and the Underwriter (the “Bond Purchase Agreement”); and
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to offer the Bonds for sale to the public, the Underwriter must receive a disclosure document with respect to the Bonds and the City; and WHEREAS, in order to cause such requirement to be satisfied, the City and the Authority have prepared a Preliminary Official Statement (the “POS”) in connection with the issuance of the Bonds; and
WHEREAS, in compliance with California Government Code Section 5852.1, the Authority has obtained from the Authority’s Municipal Advisor required good faith estimates relating to the Bonds, and such estimates are disclosed and set forth in Exhibit A attached hereto; and WHEREAS, the 2024 Project is located within the boundaries of the City; and WHEREAS, the Board of Directors of the Authority has been presented with the form of each document that is referred to herein relating to the financing that is contemplated hereby, and the Board of Directors has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and WHEREAS, all acts, conditions and things that are required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing that are authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided.

Section 1. Recitals True and Correct. The foregoing recitals are true and correct and are a substantive part of this Resolution.

Section 2. Findings. The Board of Directors hereby approves the financing that is described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the approval of the issuance of the Bonds by the Authority pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the issuance of the Bonds by the Authority and related transactions will result in demonstrable savings in effective interest rate to the City.

Section 3. Approval of Lease Documents. The forms of Ground Lease and Lease Agreement presented at this meeting are hereby approved, and the President of the Authority, the Vice-President of the Authority and the Executive Director of the Authority, or their respective designees (collectively, the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Ground Lease and the Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that: (a) the term of the Ground Lease and the Lease Agreement shall terminate no later than May 1, 2044 (provided that such term may be extended as provided Packet Pg. 85
Attachment: Resolution No. FA-2024-01 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds

Page 3 of 4 ends

4888-3499-8450.3
therein); and (b) the true interest cost applicable to the interest components of the Base Rental Payments under the Lease Agreement shall not exceed 4.75%.

Section 4. Approval of Indenture. The form of Indenture presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 5. Approval of Assignment Agreement. The form of Assignment Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 6. Approval of Bond Purchase Agreement. The form of Bond Purchase Agreement presented at this meeting is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Bond Purchase Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the Underwriter’s discount shall not exceed 0.50% of the principal amount of the Bonds.

Section 7. Approval of POS. The form of POS presented at this meeting, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the POS in connection with the offering and sale of the Bonds is hereby authorized and approved. Each Authorized Officer is hereby authorized to certify on behalf of the Authority that the POS is deemed final as of its date within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12). The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the POS.

Section 8. Authorization of Official Statement. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the POS, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the Authority.

Section 9. Further Action. The Authorized Officers are hereby authorized, empowered and directed, individually, to execute such other documents in addition to those enumerated herein and to take such other actions as each deems necessary or advisable in order to consummate the issuance of the Bonds (including, but not limited to, causing the Indenture, the Assignment Agreement, the Lease Agreement and the Ground Lease, or memoranda thereof, to be recorded in the Office of the Monterey County Recorder, causing one or more title insurance policies to be issued relating to the Leased Assets and delivering instructions to the title company with respect thereto, approving changes to the name Packet Pg. 86
Attachment: Resolution No. FA-2024-01 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds

Page 4 of 4 ends

4888-3499-8450.3
and/or series designation of the Bonds to reflect the timing of the issuance of the Bonds or otherwise and entering into a commitment for municipal bond insurance or a debt service reserve fund insurance policy if determined to be in the best interest of the City). Such actions heretofore taken by the Authorized Officers or their designees are hereby ratified, confirmed and approved.

Section 10. Special Services. Kutak Rock LLP is hereby appointed to serve as Bond Counsel and Disclosure Counsel with respect to the Bonds and NHA Advisors, LLC, will serve as the Authority’s Municipal Advisor per its previously approved contract. Each of the Authorized Officers is further authorized to provide for all other services that are necessary to effect the matters that are described in this Resolution. Such services shall include, but not be limited to, legal services, a credit rating from S&P Global Ratings, trustee services, title insurance services and any other services that are deemed appropriate by an Authorized Officer. Any one of the Authorized Officers is authorized to pay for the cost of such services and to enter into agreements as needed to engage such consultants.

PASSED AND ADOPTED by the Board of Directors of the Gonzales Public Financing Authority at a regular meeting duly held on the 6
th day of May 2024 by the following vote:

AYES: BOARD MEMBERS:

NOES: BOARD MEMBERS:

ABSTAIN: BOARD MEMBERS:

ABSENT: BOARD MEMBERS:
_______________________________
Jose L. Rios, The Honorable Chair
ATTEST:
___________________________
Mary Villegas, Deputy Secretary
Packet Pg. 87
Attachment: Resolution No. FA-2024-01 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 4888-3499-8450.3

EXHIBIT A

GOOD FAITH ESTIMATES
The following information was obtained from the Authority Municipal Advisor and is provided in compliance with California Government Code Section 5852.1 with respect to the Lease Agreement:
(A) True Interest Cost of the Lease Agreement: 3.928%
(B) Finance Charge of the Lease Agreement (Sum of all fees/charges paid to third parties):
$219,125
(C) Net Proceeds of the Lease Agreement to be Received (net of finance charges, reserves and capitalized interest, if any): $9,825,000
(D) Total Payment Amount through Maturity of Lease Agreement: $14,557,5701 The foregoing constitute good faith estimates only. The principal amount of the Lease Agreement, the true interest cost of the Lease Agreement, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the execution of the Lease Agreement being different than the date assumed for purposes of such estimates; (b) the actual principal amount of the Lease Agreement being different from the estimated amount used for purposes of such estimates; (c) the actual amortization of the Lease Agreement being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of sale of the Lease Agreement being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the City’s financing plan, or a combination of such factors.

The actual date of execution of the Lease Agreement and the actual principal amount of the Lease Agreement will be determined by the Authority based on a variety of factors. The actual interest rates borne by the Lease Agreement will depend on market interest rates at the time of sale thereof.

The actual amortization of the Lease Agreement will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Authority.
1 Reflects estimated payments through the scheduled 20-year maturity of the Lease Agreement. The Lease Agreement is anticipated to be redeemed on or before May 1, 2026. The Total Payment Amount through May 1, 2026 is estimated to be $731,826.

Packet Pg. 88
Attachment: Resolution No. FA-2024-01 (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds

CITY OF GONZALES
2024 LEASE REVENUE BONDS
(COMMUNITY CENTER INTERIM FUNDING)
MAY 6, 2024
Packet Pg. 89
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 2 Background
 City’s Community Center Project is underway
 Funding for the Project includes several sources:
 $5.0M State grant for the Teen Innovation Center
 Community Development Block Grant funds
 $1.8M County contribution to relocate existing library  $1.067M State Building Forward Library Infrastructure Grant Program  $400k Electric Vehicle Charging Station Grant from the California Energy Commission and  Capital Campaign with pledges and contributions
 City contribution
 $9.825M Loan secured from United States Department of Agriculture Rural Development  USDA Loan requires interim funding during construction  In front of City Council tonight is the approval of the 2024 Bonds (the USDA required interim financing) and 2024 Bond documents, certificates and related actions Packet Pg. 90
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 3 Interim Funding Plan
 Multiple financing options evaluated
 Public bond offering is the most cost-effective option  Lease Revenue Bond structure, which utilizes a lease/leaseback arrangement between City and City’s Financing Authority
 Leased asset is the Community Center
 Lease structure requires a fair rental value test
 To meet the test the 2024 Bonds are being structured as a 20-year financing, which allows for the annual lease payments to coincide with fair rental value  2024 Bonds can be redeemed as early as November 1, 2025, current estimated construction completion and a mandatory redemption six months post estimated completion on May 1, 2026  2024 Bonds will be replaced with permanent USDA Loan upon redemption Packet Pg. 91
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 4 Estimated Sources & Uses and Payments
Sources:

Par Amount of 2024 Bonds $9,825,000.00
City Contribution $950,951.06
Total Sources $10,775,951.06
Uses:

Total Underwriter's Discount $49,125.00
Costs of Issuance $170,000.00
Deposit to Capitalized/Prefunded Interest Fund $731,826.06 Deposit to Project Construction Fund $9,825,000.00
Total Uses $10,775,951.06
Net Debt service
through
mandatory
redemption on
May 1, 2026
At closing of the 2024 Bonds, the City will
deposit funds for:
• The loan interest cost through May 1, 2026
(the mandatory redemption)
• Financing costs of issuance
• Underwriter’s discount
• Interest deposit will make debt service
(interest) payments through redemption
• USDA loan will provide the funding to
redeem the principal
Period Ending Principal Coupon Interest
Total Debt
Service
Capitalized/
Prefunded
Interest Net Debt Service
5/1/2025 - $351,107 $351,107 ($351,107) -
5/1/2026 - 380,719 380,719 (380,719) -
5/1/2027 $390,000 3.875% 380,719 770,719 - $770,719
5/1/2028 405,000 3.875% 365,606 770,606 - 770,606
5/1/2029 420,000 3.875% 349,913 769,913 - 769,913
5/1/2030 435,000 3.875% 333,638 768,638 - 768,638
5/1/2031 450,000 3.875% 316,781 766,781 - 766,781
5/1/2032 470,000 3.875% 299,344 769,344 - 769,344
5/1/2033 485,000 3.875% 281,131 766,131 - 766,131
5/1/2034 505,000 3.875% 262,338 767,338 - 767,338
5/1/2035 525,000 3.875% 242,769 767,769 - 767,769
5/1/2036 545,000 3.875% 222,425 767,425 - 767,425
5/1/2037 565,000 3.875% 201,306 766,306 - 766,306
5/1/2038 590,000 3.875% 179,413 769,413 - 769,413
5/1/2039 610,000 3.875% 156,550 766,550 - 766,550
5/1/2040 635,000 3.875% 132,913 767,913 - 767,913
5/1/2041 660,000 3.875% 108,306 768,306 - 768,306
5/1/2042 685,000 3.875% 82,731 767,731 - 767,731
5/1/2043 710,000 3.875% 56,188 766,188 - 766,188
5/1/2044 740,000 3.875% 28,675 768,675 - 768,675
Total $9,825,000 - $4,732,570 $14,557,570 ($731,826) $13,825,744 Packet Pg. 92
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 5 Documents Being Approved Tonight
 Authorizing Resolutions
 Authorize the Authority to issue bonds in a principal amount not to exceed $9,825,000 to finance the Project, and authorizes City and Authority staff to execute the legal documents for the 2024 Bonds
 Site Lease
 Agreement between the City as lessor and the Authority as lessee, under which the City leases the Leased Property to the Authority in consideration of the payment of an upfront amount which will be used by City to construct the Community Center Project  Lease Agreement
 Agreement between the Authority as lessor and the City as lessee, under which the Authority leases the Leased Property back to the City and the City agrees to pay semiannual lease payments to provide revenues with which to pay principal and interest on the 2024 Bonds when due  Indenture of Trust
 Provides for execution and delivery of the 2024 Bonds and lays out the covenants and specifics of the 2024 Bonds, as well as the prepayment options.

Trustee’s duties, repayment mechanisms, default and remedies provisions, and Bondholder’s associated rights and remedies  Assignment Agreement
 Provides the terms and conditions under which the Authority assigns the City’s lease payments to the Trustee, for ultimate payment to Bondholders  Bond Purchase Agreement
 Agreement with Hilltop Securities under which Hilltop Securities agrees to purchase the 2024 Bonds; establishes closing requirements and closing document and opinion deliverables
 Preliminary Official Statement
 The document that provides disclosure of the City and the City financings to investors and potential investors of the 2024 Bonds  Continuing Disclosure Certificate
 Certificate of the City to provide annual reporting and ongoing significant events reporting Packet Pg. 93
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 6 Finance Team Professionals  Project Oversight: City of Gonzales  Financial Advisor: NHA Advisors  Bond and Disclosure Counsel: Kutak Rock  Underwriter: Hilltop Securities  Trustee: US Bank Packet Pg. 94
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 7 Timeline
May 6, 2024 • City Council ApprovalMid-May
• City completes rating
process for the Bonds
• Underwriter begins
pre-marketing
Late May • Bonds priced in bond
market
June • 2024 Bonds closed and
funded
Packet Pg. 95
Attachment: Community Center Interim Funding Presentation (2968 : Resolution No. 2024- 4884-1189-8546.3
RECORDING REQUESTED BY:

City of Gonzales
AND WHEN RECORDED RETURN TO:

Kutak Rock LLP
5 Park Plaza, Suite 1500
Irvine, California 92614
Attention: Cyrus Torabi, Esq.
[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.

THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.

GROUND LEASE
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RECORDING REQUESTED BY:

City of Gonzales
AND WHEN RECORDED RETURN TO:

Kutak Rock LLP
5 Park Plaza, Suite 1500
Irvine, California 92614
Attention: Cyrus Torabi, Esq.

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.

THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.

GROUND LEASE
by and between

CITY OF GONZALES
and

GONZALES PUBLIC FINANCING AUTHORITY
Dated as of May 1, 2024
Relating to
$_____

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
Packet Pg. 97
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GROUND LEASE
THIS GROUND LEASE (this “Ground Lease”) is executed and entered into as of May 1, 2024, by and between the CITY OF GONZALES (the “City”), a municipal corporation and general law city that is duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessor, and the GONZALES PUBLIC FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity that is duly organized and existing under the laws of the State of California, as lessee.

RECITALS
A. The Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery by the Authority of the “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Bonds”) for the purpose of financing certain capital improvements of the City, consisting primarily of a community center (the “2024 Project”), which Bonds will be payable from certain base rental payments (the “Base Rental Payments”) to be made by the City under the below-defined Lease Agreement.

B. In connection with the foregoing, the City will lease certain real property of the City and the improvements located thereon, consisting of the 2024 Project and the associated land located at 620-630 Fifth Street, Gonzales, California 93926) (collectively, the “Property”), to the Authority pursuant to this Ground Lease, and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease Agreement”), by and between the City and the Authority.

C. The Property is more particularly described in Exhibit A hereto.

D. The City and the Authority have determined that it would be in the best interests of the City and the Authority to provide for the issuance of the Bonds pursuant to an Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

E. All rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”), by and between the Authority and the Trustee.

F. All acts, conditions and things that are required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Ground 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 Ground Lease.

In consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

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ARTICLE I

DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases that are defined in Article I of the Lease Agreement shall have the same meaning in this Ground Lease.

ARTICLE II
LEASE OF THE PROPERTY; RENTAL
Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Ground Lease.

Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the net proceeds of the Bonds, the receipt of which is hereby acknowledged.

ARTICLE III

QUIET ENJOYMENT
The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then-remaining term of this Ground Lease: (a) to take possession of the Property; (b) if it deems it appropriate, to cause an appraisal of the Property and a study of the then reasonable use thereof to be undertaken; and (c) to relet the Property. Subject to any rights that the City may have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment.

ARTICLE IV

SPECIAL COVENANTS AND PROVISIONS
Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act.

Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby Packet Pg. 99
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leased or intended so to be or for carrying out the expressed intention of this Ground Lease, the Indenture and the Lease Agreement.

Section 4.03 Waiver of Personal Liability. All liabilities under this Ground Lease on the part of the Authority shall be solely liabilities of the Authority as a joint exercise of powers entity, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability under this Ground Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder.

All liabilities under this Ground Lease on the part of the City shall be solely liabilities of the City as a municipal corporation, and the Authority hereby releases each and every member, officer and employee of the City of and from any personal or individual liability under this Ground Lease. No member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder.

Section 4.04 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 Property.

Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same.

Section 4.06 Representations of the City. The City represents and warrants to the Authority and the Trustee as follows:
(a) the City has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Ground Lease;
(b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City;
(c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and
(d) the Property is necessary to the City in order for the City to perform its governmental functions.

Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Ground Lease.

Packet Pg. 100 Attachment: Site Lease (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2024A) 4 4884-1189-8546.3

ARTICLE V

ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 5.01 Assignment and Subleasing. This Ground Lease may be sold or assigned and the Property subleased, as a whole or in part, by the Authority without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.

Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Ground Lease.

ARTICLE VI
TERM; TERMINATION
Section 6.01 Term. The term of this Ground Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including [May 1, 2044] (the “Scheduled Termination Date”), unless such term is extended or sooner terminated as hereinafter provided.

Section 6.02 Extension; Early Termination. If, on the Scheduled Termination Date, the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Ground Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Ground Lease shall in no event be extended more than ten years beyond the Scheduled Termination Date. If, prior to the Scheduled Termination Date, all Bonds shall be fully paid, or provisions therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, the term of this Ground Lease shall end simultaneously therewith.

ARTICLE VII

MISCELLANEOUS
Section 7.01 Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns.

Section 7.02 Severability. In the event that any provision of this Ground Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 7.03 Amendments, Changes and Modifications. This Ground Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement.

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Section 7.04 Assignment to Trustee. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Ground Lease (but none of its obligations and none of its rights to provide consents or approvals hereunder) to the Trustee pursuant to certain provisions of the Assignment Agreement. The City consents to such assignment.

Section 7.05 Execution in Counterparts. This Ground Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 7.06 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California.

Section 7.07 Captions. The captions or headings in this Ground Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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4884-1189-8546.3
IN WITNESS WHEREOF, the Authority and the City have caused this Ground Lease to be executed by their respective officers hereunto duly authorized, all as of the day and year first above written.
_______________________________
Jose L. Rios, The Honorable Mayor
ATTEST:
___________________________
Mary Villegas, Deputy City Clerk

GONZALES PUBLIC FINANCING AUTHORITY
By:

Jose L. Rios, President
ATTEST:

Mary Villegas, Deputy Secretary
Packet Pg. 103 Attachment: Site Lease (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2024A) 4884-1189-8546.3

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property that is conveyed under the foregoing agreement to the Gonzales Public Financing Authority (the “Authority”), a joint exercise of powers authority that is duly organized and existing under and by virtue of the Constitution and the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the Board of Directors of the Authority, pursuant to authority conferred by a resolution of the Board of Directors of Authority adopted on May 6, 2024, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: May __, 2024 GONZALES PUBLIC FINANCING AUTHORITY By:

Jose L. Rios, President
Packet Pg. 104 Attachment: Site Lease (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2024A) 4884-1189-8546.3

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

COUNTY OF MONTEREY
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(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(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
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EXHIBIT A

DESCRIPTION OF THE PROPERTY
The Land referred to herein below is situated in the City of Gonzales, County of Monterey, State of California, and is described as follows:

SITUATE WITHIN THE RANCHO RINCON DE LA PUNTA DEL MONTE, CITY OF GONZALES, MONTEREY COUNTY, STATE OF CALIFORNIA, BEING THE 3.690 ACRE TRACT SHOWN ON THE MAP RECORDED IN VOLUME 4 OF SURVEYS, PAGE 101, BEING DESCRIBED IN THE GRANT DEED FROM THE SUCCESSOR

AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF GONZALES TO THE CITY OF GONZALES RECORDED ON SEPTEMBER 23, 2022 IN DOCUMENT NUMBER 2022039297 TOGETHER WITH THE

PORTION OF THE TRACT THAT WAS QUITCLAIMED TO THE CITY OF GONZALES DESCRIBED IN THE

QUIT CLAIM DEED FROM THE HOUSING AUTHORITY OF MONTEREY COUNTY TO CITY OF GONZALES RECORDED ON SEPTEMBER 23, 2022 IN DOCUMENT NUMBER 2022039298, OFFICIAL RECORDS OF SAID COUNTY, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHERLY CORNER OF THE SAID 3.690 ACRE TRACT, BEING THE

SOUTHEASTERLY LINE OF FIFTH STREET, COMMONLY CALLED JOHNSON CANYON ROAD, AND RUNNING THENCE ALONG THE BOUNDARY OF SAID TRACT:
1) SOUTH 44° 19' 30" EAST, 608.66 FEET; THENCE
2) SOUTH 45° 41' WEST, 260.0 FEET; THENCE
3) NORTH 44° 19' 30" WEST, 627.5 FEET; THENCE
4) NORTH 49° 49' 40" EAST, 260.68 FEET TO THE PLACE OF BEGINNING.

THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE APPROVING A LOT LINE ADJUSTMENT NO. 2024-01, RECORDED MARCH 01, 2024 AS INSTRUMENT NO. 2024007299 OF OFFICIAL RECORDS.

For conveyancing purposes only: APN 020-121-005-000
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-6962-6034.4

LEASE AGREEMENT
by and between

CITY OF GONZALES
and

GONZALES PUBLIC FINANCING AUTHORITY
Dated as of May 1, 2024
Relating to $_____

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
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TABLE OF CONTENTS
Page
i
4891-6962-6034.4

ARTICLE I

DEFINITIONS
Section 1.01 Definitions.............................................................................................................2

ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01 Lease of Property...................................................................................................4 Section 2.02 Term; Occupancy...................................................................................................4

ARTICLE III

RENTAL PAYMENTS
Section 3.01 Base Rental Payments............................................................................................5 Section 3.02 Additional Rental Payments..................................................................................5 Section 3.03 Fair Rental Value...................................................................................................6 Section 3.04 Payment Provisions ...............................................................................................6 Section 3.05 Appropriations Covenant.......................................................................................7 Section 3.06 Rental Abatement ..................................................................................................7

ARTICLE IV

CONSTRUCTION, MAINTENANCE, ALTERATIONS AND

ADDITIONS
Section 4.01 Construction of 2024 Project.................................................................................7 Section 4.02 Maintenance and Utilities......................................................................................9 Section 4.03 Additions to Property.............................................................................................9 Section 4.04 Installation of City’s Equipment............................................................................9

ARTICLE V

INSURANCE
Section 5.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance......................................................................................10 Section 5.02 Title Insurance .....................................................................................................11 Section 5.03 Additional Insurance Provision; Form of Policies...............................................11 Section 5.04 Self-Insurance ......................................................................................................11

ARTICLE VI

DEFAULTS AND REMEDIES
Section 6.01 Defaults and Remedies........................................................................................12 Section 6.02 Waiver..................................................................................................................15

ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
Section 7.01 Eminent Domain..................................................................................................15 Section 7.02 Prepayment ..........................................................................................................15

ARTICLE VIII

COVENANTS
Section 8.01 Right of Entry ......................................................................................................16 Section 8.02 Liens ....................................................................................................................16 Section 8.03 Quiet Enjoyment..................................................................................................16 Packet Pg. 108 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

TABLE OF CONTENTS
(continued)
Page
ii
4891-6962-6034.4
Section 8.04 Authority Not Liable............................................................................................17 Section 8.05 Assignment and Subleasing.................................................................................17 Section 8.06 Title to Property...................................................................................................18 Section 8.07 Authority’s Purpose .............................................................................................18 Section 8.08 Representations of the City..................................................................................18 Section 8.09 Representation of the Authority...........................................................................18 Section 8.10 Environmental Compliance .................................................................................18 Section 8.11 Covenant against Condemnation .........................................................................19

ARTICLE IX
NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY;

SUBSTITUTION OR RELEASE
Section 9.01 No Consequential Damages.................................................................................19 Section 9.02 Use of the Property ..............................................................................................19 Section 9.03 Substitution or Release of the Property ...............................................................20

ARTICLE X

MISCELLANEOUS
Section 10.01 Law Governing ....................................................................................................20 Section 10.02 Notices.................................................................................................................20 Section 10.03 Validity and Severability .....................................................................................21 Section 10.04 Net-Net-Net Lease ...............................................................................................21 Section 10.05 Taxes....................................................................................................................21 Section 10.06 Section Headings.................................................................................................22 Section 10.07 Amendments........................................................................................................22 Section 10.08 Assignment ..........................................................................................................23 Section 10.09 Execution .............................................................................................................23 Signatures ........................................................................................................................... S-1 EXHIBIT A DESCRIPTION OF THE PROPERTY ....................................................................A-1 EXHIBIT B BASE RENTAL PAYMENT SCHEDULE .............................................................B-1 Packet Pg. 109 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 1 4891-6962-6034.4

LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”) is executed and entered into as of May 1, 2024, by and between the CITY OF GONZALES (the “City”), a municipal corporation and general law city that is duly organized and existing under and by virtue of the Constitution and laws of the State of California, as sublessee, and the GONZALES PUBLIC FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity that is duly organized and existing under and by virtue of the laws of the State of California, as sublessor.

B. In connection with the foregoing, the City will lease certain real property of the City and the improvements located thereon, consisting of the 2024 Project and the associated land located at 620-630 Fifth Street, Gonzales, California 93926) (collectively, the “Property”), to the Authority pursuant to a Ground Lease, dated as of the date hereof (the “Ground Lease”), and the City will sublease the Property back from the Authority pursuant to this Lease Agreement, by and between the City and the Authority.

C. The Property is more particularly described in Exhibit A hereto.

F. All acts, conditions and things that are required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease 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 this Lease Agreement.

In consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

Packet Pg. 110 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2 4891-6962-6034.4

ARTICLE I

DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms that are not otherwise defined herein shall have the meanings assigned to such terms in the Indenture.
“Additional Bonds” means bonds other than the Series 2024 Bonds issued under the Indenture in accordance with the provisions thereof.
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02.
“Authority” means the Gonzales Public Financing Authority, a joint exercise of powers authority that is duly organized and existing under the laws of the State of California. “Base Rental Deposit Date” means the fifteenth (15th) day of the month preceding each Interest Payment Date.
“Base Rental Payments” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.01(a).
“Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to the Authority from the City pursuant to Section 3.01(a) and attached hereto as Exhibit B. “Bonds” means the Series 2024 Bonds and any Additional Bonds. “City” means the City of Gonzales, a municipal corporation and general law city that is duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Costs” “means, with respect to the 2024 Project, together with any other proper item of cost not specifically mentioned herein: (a) costs of payment of, or reimbursement for, acquisition, design, construction, rehabilitation, installation, delivery and financing of the 2024 Project, including, but not limited to, the payment of real property rental, administrative costs and capital expenditures relating to acquisition, construction and installation, inspection costs, filing and recording costs, printing costs, reproduction and binding costs, fees and charges of the Trustee pursuant to the Indenture and other financing documents, legal fees and charges, financial, accounting and other professional consultant fees, costs of rating agencies or credit ratings, fees for the printing, execution, transportation and safekeeping of the Series 2024 Bonds; (b) all other costs which the City shall be required to pay under the terms of any contract or contracts for the acquisition, construction, delivery and installation of the 2024 Project, including, but not limited to, the cost of insurance; (c) any sums required to reimburse the City for advances made for any of the above items, or for any other costs incurred and for work done, which is properly chargeable to the 2024 Project; (d) any costs paid from the Net Insurance Proceeds to repair, restore or replace the 2024 Project; and (e) such other expenses not specified herein as may be necessary or incidental to the acquisition, construction, delivery and installation of the 2024 Project, the financing thereof and the placing of the same in use and operation. Costs, as defined Packet Pg. 111 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 3 4891-6962-6034.4
herein, shall be deemed to include the cost and expenses incurred by any agent of the City for any of the above-mentioned items.
“Delivery Date” means May __, 2024.
“Ground Lease” means the Ground Lease relating to the Property, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with to the provisions thereof and hereof. “Hazardous Materials” means flammable explosives, polychlorinated biphenyl compounds, heavy metals, chlorinated solvents, cyanide, radon, petroleum products, asbestos or any asbestos containing materials, methane, radioactive materials, pollutants, hazardous materials, hazardous wastes, hazardous, toxic or regulated substances or related materials, as defined in CERCLA, RCRA, CWA, CAA, TSCA and Title III, and the regulations promulgated pursuant thereto, and in all other federal, state or local environmental laws and regulations. “Indenture” means the Indenture relating to the Series 2024 Bonds, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Joint Powers Agreement” means the Joint Exercise of Powers Agreement, dated as of March 20, 1995, by and between the City and the Successor Agency to the Redevelopment Agency of the City of Gonzales, as successor the Redevelopment Agency of the City of Gonzales, as originally executed and as it may from time to time be amended in accordance with the provisions thereof, which agreement establishes the Authority.
“Lease Agreement” means this Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. “Net Insurance Proceeds” means any insurance proceeds or condemnation award in excess of $50,000, paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof. “Permitted Encumbrances” means, with respect to the Property, as of any particular time:
(a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article V hereof, permit to remain unpaid; (b) the Assignment Agreement; (c) this Lease Agreement; (d) the Ground Lease; (e) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as normally exist with respect to properties similar to the Property for the purposes for which it was acquired or is held by the City; (f) easements, rights of way, mineral rights, drilling rights and other rights (including but not limited to rights in cellular telephone network infrastructure on the Property), reservations, covenants, conditions or restrictions which exist of record as of the Delivery Date which the City certifies in writing will not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing; (g) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions existing on the Delivery Date and set forth in a title insurance policy with respect to the Property; and (h) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Delivery Date which the City certifies in writing Packet Pg. 112 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4 4891-6962-6034.4
do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the Authority and the City consent in writing.
“Property” means the real property that is described in Exhibit A, together with the improvements thereon.
“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the twelve-month period commencing on May 1 of each year during the term of this Lease Agreement; provided that the first Rental Period shall be the period from the Delivery Date through April 30, 2025.
“Scheduled Termination Date” means May 1, 2044, unless extended or sooner terminated as provided in Section 2.02 hereof.
“Series 2024 Bonds” means the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, issued under the Indenture.
“Termination Date” means the Scheduled Termination Date, unless extended or sooner terminated as provided in Section 2.02.
“Trustee” means the trustee appointed under the Indenture and referred to therein as the Trustee.

ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01 Lease of Property.
(a) The Authority hereby subleases to the City and the City hereby subleases from the Authority the Property, on the terms and conditions hereinafter set forth, subject to all Permitted Encumbrances.
(b) The leasing of the Property by the City to the Authority pursuant to the Ground Lease shall not effect or result in a merger of the City’s leasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Ground Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Ground Lease throughout the term thereof and hereof.

The leasehold interest granted by the City to the Authority pursuant to the Ground Lease is and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment or surrender of the leasehold interest granted to the Authority under the Ground Lease.

Section 2.02 Term; Occupancy. The term of this Lease Agreement shall commence on the Delivery Date and shall end on the Scheduled Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If, on the Scheduled Termination Date, the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and payable or shall have been abated at any time and for any reason remain due and owing, then the term of this Lease Packet Pg. 113 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 5 4891-6962-6034.4
Agreement shall be extended until the date upon which: (a) all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture; or (b) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full. Notwithstanding the foregoing, the term of this Lease Agreement shall in no event be extended more than ten years beyond the Scheduled Termination Date, such extended date being the “Maximum Lease Term.” If prior to the Scheduled Termination Date, all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full, and the term of this Lease Agreement shall end simultaneously therewith.

ARTICLE III

RENTAL PAYMENTS
Section 3.01 Base Rental Payments.
(a) Subject to the provisions hereof relating to a revision of the Base Rental Payment Schedule pursuant to subsection (b) of this Section, the City shall pay to the Authority, as Base Rental Payments (subject to the provisions of Section 3.06 and Article VII) the amount at the times specified in the Base Rental Payment Schedule, a portion of which Base Rental Payments shall constitute principal, and a portion of which shall constitute interest. (b) Rental Payments, including Base Rental Payments, shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or of the State of California, or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (c) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so extended pursuant to Section 2.02). Upon such extension, the Base Rental Payments shall be established so that they will be sufficient to pay all extended and unpaid Base Rental Payments; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property.

Section 3.02 Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
(a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein; (b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees Packet Pg. 114 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 6 4891-6962-6034.4
of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or this Lease Agreement or to defend the Authority and its members, officers, agents and employees;
(c) insurance premiums for all insurance required pursuant to Article V hereof; (d) any amounts with respect to this Lease Agreement or the Bonds required to be rebated to the federal government in accordance with Section 148(f) of the Code; and (e) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Section 3.03 Fair Rental Value. The parties hereto have agreed and determined that the annual fair rental value of the Property is not less than the maximum annual Rental Payments due in any year, bearing in mind that the City will be constructing the 2024 Project on the Property from proceeds of the Series 2024 Bonds. In making such determination of fair rental value, consideration has been given to the uses and purposes that may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.

Section 3.04 Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the principal office of the Trustee in Los Angeles, California, or such other place or entity as the Authority or Trustee shall designate. Each Base Rental Payment shall be deposited with the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which such Base Rental Payment is due. Any Base Rental Payment which shall not be paid by the City when due and payable under the terms of this Lease Agreement shall bear interest from the date when the same is due hereunder until the same shall be paid at the rate equal to the highest rate of interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section on any date shall be reduced to the extent of available amounts on deposit in the Base Rental Payment Fund, the Interest Fund or the Principal Fund.

Section 3.05 Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder as a separate line item in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The City will deliver to the Authority and the Trustee each year a Written Certificate of the City stating that its final annual budget includes all Base Rental Payments due in such fiscal year. The covenants on the part of the Packet Pg. 115 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 7 4891-6962-6034.4
City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.

Section 3.06 Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference, and this Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. The City and the Authority shall calculate such abatement and shall provide the Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof, except that the term shall in no event be extended beyond the Maximum Lease Term.

Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds and accounts.

ARTICLE IV

CONSTRUCTION, MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 4.01 Construction of 2024 Project.
(a) Upon the issuance of the Series 2024 Bonds, the Authority agrees that all proceeds of the Series 2024 Bonds shall be paid to the Trustee and that such moneys shall be deposited with the Trustee and be applied as provided in Section 3.02 of the Indenture. (b) The City agrees to acquire, construct, deliver and install any portion of the 2024 Project to be financed with the proceeds of the Series 2024 Bonds, or to cause such portion to be acquired, constructed, delivered and installed, with the proceeds of Series 2024 Bonds paid to the City by the Authority pursuant to this Section 4.01, and the Authority shall have no responsibility with respect thereto.
(c) The City shall comply with all applicable provisions for bids and contracts prescribed by law with respect to the 2024 Project, including, without limitation, any applicable environmental review and approvals, Sections 20110 et seq. of the Public Contracts Code and Article 42 (commencing with Section 20670) of Part 3 of Division 2 of the Public Contracts Code. The City Packet Pg. 116 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 8 4891-6962-6034.4
acknowledges and agrees that specific expenditures for all or any portion of the 2024 Project, as now or hereafter designated, are expressly subject to compliance with such requirements. (d) Payment of Costs shall be made from the moneys deposited with the Trustee in the Project Fund as provided in clause (a) above and Section 3.05 of the Indenture, which shall be disbursed from the Project Fund in accordance and upon compliance with Section 3.05 of the Indenture.
(e) The construction and equipping of the 2024 Project shall be completed on or prior to June 1, 2027, subject to excused delays pursuant to standard City procedures. It is agreed that, if the City does not cause the completion of the acquisition, construction, equipping and installation of the 2024 Project by its completion date specified above by construction contractors or a construction manager, whichever the City deems appropriate, liquidated damages will be assessed against the construction contractor for each day of unexcused delay in completion (in accordance with standard City procedures). The City shall cause to be paid to the Trustee all amounts received as liquidated damages for application toward the Base Rental Payments. Each construction contractor hired by the City shall be required to provide payment and performance bonds in amounts equal to the maximum price under its contract.
(f) The City agrees to oversee the construction, acquisition, delivery and installation of the 2024 Project in accordance with the following terms:
(i) The City agrees to proceed with all due diligence to complete the construction, acquisition, delivery and installation of the 2024 Project, all in accordance with the plans and specifications for the 2024 Project (the “Plans and Specifications”) approved by the City Engineer. The City shall comply with all statutes and laws applicable to the performance of its obligations hereunder, including all public laws applicable thereto and all laws regarding the approval, acquisition and construction of public projects by cities in the State of California. The City shall make certain that each contract relating to the 2024 Project is awarded in accordance with applicable law and contains a scheduled completion date which requires completion on or before the scheduled completion date referred to in clause (e) above;
(ii) Subject to any other restrictions imposed upon the City, the City may approve any changes to the Plans and Specifications so long as any change does not, and all such changes as a whole do not: (i) substantially alter the nature of the 2024 Project; (ii) delay the completion of the 2024 Project beyond the scheduled completion date referred to in clause (e) above; (iii) reduce the fair rental value of the 2024 Project; or (iv) increase the total Costs of the 2024 Project to an amount in excess of the amount in the Project Fund unless there has been deposited with the City an amount equal to such excess or unless there has been deposited with the City a certificate of an Authorized City Representative, together with a revised construction budget demonstrating that the total amount on deposit to pay for the 2024 Project is adequate to allow the completion of the 2024 Project as planned;
(iii) Payment of the portion of the Costs of the 2024 Project being financed by the City shall be made from moneys deposited in the Project Fund, and shall be disbursed for such purpose in accordance and upon compliance with the Indenture. Neither the Authority nor the City shall be liable for the payment of Costs of the 2024 Project other than from amounts on deposit in the Project Fund; and
Packet Pg. 117 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 9 4891-6962-6034.4
(iv) The City agrees that unexpended moneys remaining in the Project Fund shall, upon payment in full of all Costs of the 2024 Project, be applied solely in accordance with the provisions of the Indenture.
(g) Upon the completion of acquisition, construction, delivery and installation of the portion of the 2024 Project to be financed with the Series 2024 Bonds, the City shall deliver to the Trustee a certificate to the effect that the 2024 Project, or the portion thereof to which such certificate relates, has been completed substantially in conformity with the Plans and Specifications for the 2024 Project or such portion thereof (the “Completion Certificate”). On the date of filing a Completion Certificate concerning that portion of the 2024 Project financed with proceeds of Series 2024 Bonds, all excess moneys remaining in the Project Fund for the Series 2024 Bonds for which such Completion Certificate is delivered shall be applied in accordance with the provisions of Section 3.05 of the Indenture.

Section 4.02 Maintenance and Utilities. Throughout the term of this Lease Agreement, as part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Rental Payments, the Authority agrees to provide only the Property.

Section 4.03 Additions to Property. Subject to Section 8.02, the City and any sublessee shall, at its own expense, have the right to make additions, modifications and improvements to the Property. To the extent that the removal of such additions, modifications or improvements would not cause material damage to the Property, such additions, modifications and improvements shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. Such additions, modifications and improvements shall not in any way damage the Property or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the 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 Property immediately prior to the making of such additions, modifications and improvements.

Section 4.04 Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property.

Packet Pg. 118 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 10 4891-6962-6034.4

ARTICLE V

INSURANCE
Section 5.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance.
(a) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees.

Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property resulting from a single accident or event.

Such commercial general liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City, and may be maintained in whole or in part in the form of selfinsurance by the City, provided that such self-insurance complies with the provisions of Section 5.04.

The Net Insurance Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the Net Insurance Proceeds of such insurance shall have been paid.
(b) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the California Labor Code, 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 Property and to cover full liability for compensation under any such act; provided, however, that the City’s obligations under this subsection may be satisfied by self-insurance, provided that such selfinsurance complies with the provisions of Section 5.04. (c) The City shall maintain or cause to be maintained, fire, lightning and special extended coverage insurance (which shall include coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. The City has an insurance policy which provides replacement cost coverage. All insurance required to be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed $500,000. The City’s obligations under this subsection may be satisfied by self-insurance, provided that such self-insurance complies with the provisions of Section 5.04.
(d) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (c) of this Section in an amount sufficient at all times to pay an amount not less than the product of two Packet Pg. 119 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 11 4891-6962-6034.4
times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period.

The City shall not be permitted to self-insure its obligation under this subsection. (e) The insurance required by this Section shall be provided by reputable insurance companies with claims paying abilities determined, in the reasonable opinion of a professionally certified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.

Section 5.02 Title Insurance. The City shall provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the aggregate principal amount of the Bonds. Such policy or policies shall insure: (a) the fee interest of the City in the Property; (b) the Authority’s ground leasehold estate in the Property under the Ground Lease; and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.04 of the Indenture. So long as any of the Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Indenture or this Lease Agreement or required thereby or hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.

Section 5.03 Additional Insurance Provision; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 5.01 hereof, and shall promptly furnish or cause to be furnished evidence of such payments to the Trustee. All such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof or any intended cancellation thereof. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.

The City shall cause to be delivered to the Trustee on or before November 1 each year, commencing November 1, 2024 a Written Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article. The Trustee shall be entitled to rely upon said Written Certificate of the City as to the City’s compliance with this Article. The Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.

Section 5.04 Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any self-insurance maintained by the City pursuant to this Article shall comply with the following terms:
(a) the self-insurance program and any self-insured retentions maintained by the City shall be approved in writing by the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant; (b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant and any deficiencies in any self-insured claims reserve fund shall be remedied in accordance with the recommendation of the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant, as applicable; and
Packet Pg. 120 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 12 4891-6962-6034.4
(c) in the event that the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by a professionally certified risk manager or by an independent insurance consultant, shall be maintained.

ARTICLE VI

DEFAULTS AND REMEDIES
Section 6.01 Defaults and Remedies.
(a) (i) If the City shall fail: (A) to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this Lease Agreement; or (B) to keep, observe or perform any other term, covenant or condition contained herein or in the Indenture to be kept or performed by the City; or (ii) upon the happening of any of the events specified in this subsection or in subsection (b) of this Section, the City shall be deemed to be in default hereunder and it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement. The City shall in no event be in default in the observance or performance of any covenant, condition or agreement in this Lease Agreement on its part to be observed or performed, other than as referred to in clause (i)(A) or (ii) of the preceding sentence, unless the City shall have failed, for a period of 30 days or such additional time as is reasonably required, to correct any such default after notice by the Authority to the City properly specifying wherein the City has failed to perform any such covenant, condition or agreement. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(1) To terminate this Lease Agreement in the manner hereinafter provided on account of default by the City, notwithstanding any re-entry or re-letting of the Property as hereinafter provided for in subparagraph (2) hereof, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice.

Packet Pg. 121 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 13 4891-6962-6034.4
(2) Without terminating this Lease Agreement: (x) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property; or (y) to exercise any and all rights of entry and re-entry upon the Property. In the event that the Authority does not elect to terminate this Lease Agreement in the manner provided for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Property is not re-let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re-enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such reentry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to relet the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subparagraph (1) hereof. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.

The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property. (b) If: (i) the City’s interest in this Lease Agreement or any part thereof is assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority and, as hereinafter provided for; or (ii) the City or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects 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 the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension of time to pay the Packet Pg. 122 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 14 4891-6962-6034.4
City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general assignment for the benefit of the City’s creditors; or (iii) the City shall abandon or vacate the Property; or (iv) the City shall default under the Ground Lease, then the City shall be deemed to be in default hereunder.
(c) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default, the Authority and its assignee shall be entitled to proceed to protect and enforce the rights vested in the Authority and its assignee by this Lease Agreement or by law. The provisions of this Lease Agreement and the duties of the City and of its city council, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its city council, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.

Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Property. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.

In the event that the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.

Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments. (d) Notwithstanding anything to the contrary contained in this Lease Agreement, the termination of this Lease Agreement by the Authority and its assignees on account of a default by the City under this Section shall not effect or result in a termination of the Ground Lease.

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Section 6.02 Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any other default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement.

ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
Section 7.01 Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then this Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in subsection (a) of Section 4.01 of the Indenture, in the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the Authority and to the City as their respective interests may appear.

Section 7.02 Prepayment.
(a) The City may prepay all or a portion of the Base Rental Payments from any source of available funds, on November 1, 2025 or any date thereafter, by paying: (i) all or a portion, as selected by the City, of the principal components of such Base Rental Payments; and (ii) the accrued but unpaid interest component of such Base Rental Payments to be prepaid to the date of such prepayment.
(b) The City may prepay, from any source of available funds, all or any portion of the Base Rental Payments by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Indenture in an amount that is sufficient to make such Base Rental Payments when due or to make such Base Rental Payments through a specified date on which the City has a right to prepay such Base Rental Payments pursuant to subsection (a) of this Section, and to prepay such Base Rental Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section. (c) The City shall prepay all of the Base Rental Payments from the proceeds of any financing entered into between the City and/or the Authority and the United States Department of Agriculture in accordance with terms applicable to the mandatory redemption of Series 2024 Bonds set forth in Section 4.01(b) of the Indenture.

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(d) If less than all of the Base Rental Payments are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the principal and interest components of such Base Rental Payments shall be recalculated by the City and transmitted to the Trustee in order to take such prepayment into account. The City agrees that if, following a partial prepayment of such Base Rental Payments, the Property is damaged or destroyed or taken by eminent domain, or a defect in title to the Property is discovered, the City shall not be entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental Payments and the City shall not be entitled to any reimbursement of such Base Rental Payments.
(e) If all of the Base Rental Payments are prepaid in accordance with the provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection (a) of this Section and, if applicable, the corresponding provisions hereof relating to the prepayment of Base Rental Payments attributable to Additional Bonds, or deposit pursuant to subsection (b) of this Section and, if applicable, such corresponding provisions, and payment of all other amounts owed under this Lease Agreement, the term of this Lease Agreement shall be terminated. (f) Prepayments of Base Rental Payments attributable to the Series 2024 Bonds and made pursuant to this Section shall be applied to the redemption of the Series 2024 Bonds as directed by the City and as provided in Section 4.01 of the Indenture.

ARTICLE VIII

COVENANTS
Section 8.01 Right of Entry. The Authority and its assignees shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.

Section 8.02 Liens. In the event that the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanic’s, materialmen’s or other lien against the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time that the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contestment is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.

Section 8.03 Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements that are contained herein, shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority.

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Section 8.04 Authority Not Liable. The Authority and its directors, officers, agents and employees shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers, agents and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from: (a) any condition of the Property and the adjoining sidewalks and passageways; (b) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement; (c) any act or negligence of licensees in connection with their use, occupancy or operation of the Property; or (d) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director, member, officer or employee thereof by reason of any such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.

Section 8.05 Assignment and Subleasing. Neither this Lease Agreement nor any interest of the City hereunder shall be sold, mortgaged, pledged, assigned or transferred by the City by voluntary act or by operation by law or otherwise. The Property may not be subleased in whole or in part by the City without the prior written consent of the Authority. Any such sublease shall be subject to all of the following conditions:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) no such sublease by the City shall cause the Property to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State of California;
(d) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under this Lease Agreement, including the right to re-enter and re-let the Property or terminate this Lease Agreement upon a default by the City; and Packet Pg. 126 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 18 4891-6962-6034.4
(e) the City shall furnish the Authority and the Trustee with an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes.

Section 8.06 Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Sections 6.01 and 7.01), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.

Section 8.07 Authority’s Purpose. The Authority covenants that, prior to the discharge of this Lease Agreement and the Bonds, it will not engage in any activities that are inconsistent with the purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.

Section 8.08 Representations of the City. The City represents and warrants to the Authority that: (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the Indenture; and (b) the Property will be used in the performance of essential governmental functions.

Section 8.09 Representation of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Assignment Agreement and the Indenture.

Section 8.10 Environmental Compliance.
(a) The City will not use or permit the Property or any part thereof to be used to generate, manufacture, refine, treat, store, handle, transport or dispose of, transfer, produce or process Hazardous Materials, except, and only to the extent, if necessary to maintain the improvements on the Property or conduct lawful activities of the City on the Property and then, only in compliance with all federal, state and local laws and regulations, now or later in effect, with respect to Hazardous Materials, nor will it permit, as a result of any intentional or unintentional act or omission on its part or by any tenant, subtenant, licensee, guest, invitee, contractor, employee and agent, the storage, transportation, disposal or use of Hazardous Materials or the release or threat of release of Hazardous Materials on, from or beneath the Property or onto any other property excluding, however, those Hazardous Materials in those amounts ordinarily found in the inventory of a municipal government, the use, storage, treatment, transportation and disposal of which is in compliance with all environmental regulations.
(b) The City will comply with, and will cause all tenants, subtenants, licensees, guests, invitees, contractors, employees and agents on the Property to comply with, all environmental regulations, and will keep the Property free and clear of any liens imposed pursuant thereto; provided, however, that notwithstanding that a portion of the foregoing covenant is limited to the City’s use of its best efforts, the City will remain solely responsible for ensuring such compliance and such limitation will not diminish or affect in any way the City’s environmental compliance obligations as provided in this Lease Agreement. Upon receipt of any notice from any person with regard to the release of Hazardous Materials on, from or beneath the Property, the City will give prompt written notice thereof Packet Pg. 127 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 19 4891-6962-6034.4
to the Trustee prior to the expiration of any period in which to respond to such notice under any environmental regulation.
(c) The City will, to the extent permitted by law, defend, indemnify and hold harmless the Trustee, the Series 2024 Bond Owners, their partners, depositors and each of their respective employees, agents, officers, directors, trustees, successors and assigns, from and against any claims, demands, penalties, fines, attorneys’ fees (including, without limitation, attorneys’ fees and expenses incurred to enforce the indemnification contained in this Section 8.10), consultants’ fees, investigation and laboratory fees, liabilities, settlements, court costs, damages, losses, costs or expenses of whatever kind or nature, known or unknown, contingent or otherwise, occurring in whole or in part, arising out of, or in any way related to: (i) the disposal, release, threat of release, discharge, storage or transportation of any Hazardous Materials on, from or beneath the Property; (ii) any personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (iii) any lawsuit brought or threatened, settlement reached or governmental order relating to Hazardous Materials on, from or beneath the Property; (iv) any violation of environmental regulations or Sections 8.10(a) or (b) by the City or any of its agents, tenants, employees, contractors, licensees, guests, subtenants or invitees; and (v) the imposition of any governmental lien for the recovery of environmental cleanup or removal costs. To the extent that the City is strictly liable under any environmental regulation, its obligation to the Series 2024 Bond Owners and the other indemnitees under the foregoing indemnification will likewise be without regard to fault on its part with respect to the violation of any environmental regulation which results in liability to any indemnitee. The foregoing obligations and liabilities under will survive the payment and satisfaction of all Bonds, and with regard to the Trustee the resignation and removal of the Trustee.

Section 8.11 Covenant against Condemnation. The City hereby covenants and agrees, to the extent that it may lawfully do so, that so long as any of the Bonds remain Outstanding and unpaid, the City will not exercise the power of condemnation with respect to the Property. The City further covenants and agrees, to the extent that it may lawfully do so, that if for any reason the foregoing covenant is determined to be unenforceable or if the City should fail or refuse to abide by such covenant and condemns the Property, then the appraised value of the Property will not be less than the greater of: (a) if such Bonds are then subject to redemption, the principal and interest components of the Bonds outstanding through the date of their redemption; or (b) if such Bonds are not then subject to redemption, the amount necessary to defease such Bonds to the first available redemption date in accordance with the Indenture.

Section 8.12 Covenant to Obtain Take-Out Financing. The City covenants to take all actions required to obtain financing from the United States Department of Agriculture and/or the State, or any other available financing source (“Take-Out Financings”), to provide funds to prepay or pay all of the principal balance of the Base Rental Payments, plus accrued interest, due and payable, on or before the two year anniversary of the Closing Date, to the extent not otherwise paid by the City.

Immediately upon receipt of the proceeds of a Take-Out Financing, the City covenants to apply all proceeds thereof to prepay or pay all of the principal balance of the Base Rental Payments prior to maturity and such proceeds of any such financing may not be used for any other purpose.

ARTICLE IX
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NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY; SUBSTITUTION OR RELEASE
Section 9.01 No Consequential Damages. 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 of this Lease Agreement or the City’s use of the Property.

Section 9.02 Use of the Property. The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.

Section 9.03 Substitution or Release of the Property. The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property pursuant to this subsection, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
(a) The City shall have delivered a Written Certificate to the Trustee setting forth its findings that the Property, as constituted after such substitution or release: (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period; and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds; (b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in Section 5.02 hereof;
(c) the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes; (d) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the Monterey County Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease; and (e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds.

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ARTICLE X

MISCELLANEOUS
Section 10.01 Law Governing. THIS LEASE AGREEMENT SHALL BE GOVERNED

EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 10.02 Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given 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:

If to the City: City of Gonzales
P.O. Box 647
147 Fourth Street
Gonzales, California 93926
Attention: City Manager
If to the Authority: Gonzales Public Financing Authority P.O. Box 647
147 Fourth Street
Gonzales, California 93926
Attention: Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed: (a) if personally served or delivered, upon delivery; (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment; (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail; (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier; or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 10.03 Validity and Severability. If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term hereof; then and in such event this Lease Agreement is and shall be deemed to be a Lease Agreement under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

Section 10.04 Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority.

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Section 10.05 Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.

The City or any sublessee may, at the City’s or such sublessee’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority or the Trustee shall notify the City or such sublessee that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any part thereof, will be subject to loss or forfeiture, in which event the City or such sublessee shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority and the Trustee.

Section 10.06 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 Lease Agreement.

Section 10.07 Amendments.
(a) This Lease Agreement and the Ground Lease may be amended and the rights and obligations of the Authority and the City hereunder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Authority and the City, but only with the prior written consent of the Owners of a majority of the principal amount of the Bonds then Outstanding pursuant to the Indenture, provided that no such amendment shall: (i) extend the payment date of any Base Rental Payments, reduce the interest component or principal component of any Base Rental Payments or change the prepayment terms and provisions, without the prior written consent of the Owner of each Bond so affected; or (ii) reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease. (b) This Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become binding upon execution by the Authority and the City, without the written consents of any Owners, but only: (1) to the extent permitted by law; and (2) for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein or therein 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 or therein to or conferred herein or therein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel;
(ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to Packet Pg. 131 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 23 4891-6962-6034.4
questions arising hereunder or thereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest on the Bonds;
(iv) to provide for the substitution or release of all or a portion of the Property in accordance with the provisions of Section 9.03; (v) to provide for the issuance of Additional Bonds in accordance with Article III of the Indenture; or
(vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and which shall not materially adversely affect the rights and interests of the Owners, as evidenced by an Opinion of Bond Counsel.

Section 10.08 Assignment. The City and the Authority hereby acknowledge the assignment of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals hereunder), and the Base Rental Payments payable hereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 10.09 Execution. This Lease Agreement 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 Agreement.
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4891-6962-6034.4
IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF GONZALES
By:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk

GONZALES PUBLIC FINANCING AUTHORITY
By:

Jose L. Rios, President
ATTEST:

Mary Villegas, Deputy Secretary
Packet Pg. 133 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-1
4891-6962-6034.4

EXHIBIT A

DESCRIPTION OF THE PROPERTY
The Land referred to herein below is situated in the City of Gonzales, County of Monterey, State of California, and is described as follows:

AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF GONZALES TO THE CITY OF GONZALES RECORDED ON SEPTEMBER 23, 2022 IN DOCUMENT NUMBER 2022039297 TOGETHER WITH THE

PORTION OF THE TRACT THAT WAS QUITCLAIMED TO THE CITY OF GONZALES DESCRIBED IN THE

BEGINNING AT THE MOST NORTHERLY CORNER OF THE SAID 3.690 ACRE TRACT, BEING THE

THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE APPROVING A LOT LINE ADJUSTMENT NO. 2024-01, RECORDED MARCH 01, 2024 AS INSTRUMENT NO. 2024007299 OF OFFICIAL RECORDS.

For conveyancing purposes only: APN 020-121-005-000
Packet Pg. 134 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series B-1
4891-6962-6034.4

EXHIBIT B

BASE RENTAL PAYMENT SCHEDULE
Base Rental Payments
Date
(Fifteenth Day of Calendar
Month Prior to)
Principal
Component
Interest
Component
Total
Base Rental
5/1/2024 $ $ $
11/1/2024
5/1/2025
11/1/2025
5/1/2026
11/1/2026
5/1/2027
11/1/2027
5/1/2028
11/1/2028
5/1/2029
11/1/2029
5/1/2030
11/1/2030
5/1/2031
11/1/2031
5/1/2032
11/1/2032
5/1/2033
11/1/2033
5/1/2034
11/1/2034
5/1/2035
11/1/2035
5/1/2036
11/1/2036
5/1/2037
11/1/2037
5/1/2038
11/1/2038
5/1/2039
11/1/2039
5/1/2040
11/1/2040
5/1/2041
11/1/2041
5/1/2042
11/1/2042
5/1/2043
11/1/2043
5/1/2044
TOTAL $_____ $ $
Packet Pg. 135 Attachment: Lease Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

INDENTURE
by and among

GONZALES PUBLIC FINANCING AUTHORITY
and

CITY OF GONZALES
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of May 1, 2024
Relating to
$_____

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
Packet Pg. 136 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

TABLE OF CONTENTS
Page
i

ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions.............................................................................................................2 Section 1.02 Equal Security........................................................................................................9

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds........................................................................................10 Section 2.02 Terms of Series 2024 Bonds................................................................................10 Section 2.03 Form of Series 2024 Bonds .................................................................................11 Section 2.04 Transfer and Exchange of Bonds.........................................................................12 Section 2.05 Registration Books...............................................................................................12 Section 2.06 Execution of Bonds..............................................................................................12 Section 2.07 Authentication of Bonds......................................................................................12 Section 2.08 Temporary Bonds ................................................................................................13 Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen .......................................................13 Section 2.10 Book-Entry Bonds...............................................................................................13

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2024 Bonds............................................................................15 Section 3.02 Application of Proceeds of the Series 2024 Bonds..............................................15 Section 3.03 [RESERVED]......................................................................................................15 Section 3.04 Costs of Issuance Fund ........................................................................................15 Section 3.05 Project Fund.........................................................................................................16 Section 3.06 Conditions for the Issuance of Additional Bonds................................................16 Section 3.07 Procedure for the Issuance of Additional Bonds.................................................17 Section 3.08 Additional Bonds.................................................................................................18

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2024 Bonds ......................................................................18 Section 4.02 Notice of Redemption..........................................................................................19 Section 4.03 Selection of Bonds for Redemption.....................................................................19 Section 4.04 Partial Redemption of Bonds...............................................................................19 Section 4.05 Effect of Notice of Redemption...........................................................................20

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations.................................................................................20 Section 5.02 Flow of Funds......................................................................................................20 Section 5.03 Application of Net Insurance Proceeds ...............................................................22 Section 5.04 Title Insurance .....................................................................................................23 Packet Pg. 137 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

TABLE OF CONTENTS
(continued)
Page
ii
Section 5.05 Rebate Fund.........................................................................................................23 Section 5.06 Investment of Moneys .........................................................................................25

ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements..............................................................................26 Section 6.02 Compliance with Ground Lease and Lease Agreement.......................................26 Section 6.03 Observance of Laws and Regulations..................................................................26 Section 6.04 Other Liens..........................................................................................................26 Section 6.05 Prosecution and Defense of Suits........................................................................26 Section 6.06 Accounting Records and Statements ...................................................................27 Section 6.07 Recordation and Filing ........................................................................................27 Section 6.08 Tax Covenants.....................................................................................................27 Section 6.09 Continuing Disclosure .........................................................................................28 Section 6.10 Further Assurances ..............................................................................................28 Section 6.11 Continued Existence of Authority .......................................................................28

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default ................................................................................................28 Section 7.02 Other Remedies of the Trustee ............................................................................29 Section 7.03 Non-Waiver .........................................................................................................29 Section 7.04 Remedies Not Exclusive......................................................................................29 Section 7.05 No Liability by the Authority to the Owners.......................................................29 Section 7.06 No Liability by the City to the Owners ...............................................................30 Section 7.07 No Liability of the Trustee to the Owners...........................................................30 Section 7.08 Application of Amounts After Default................................................................30 Section 7.09 Trustee May Enforce Claims Without Possession of Bonds...............................30 Section 7.10 Limitation on Suits ..............................................................................................31

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee .................................................................................31 Section 8.02 Duties, Removal and Resignation of the Trustee ................................................31 Section 8.03 Compensation of the Trustee ...............................................................................32 Section 8.04 Protection of the Trustee......................................................................................33

ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted .........................................................36 Section 9.02 Effect of Supplemental Indenture........................................................................37 Section 9.03 Endorsement of Bonds; Preparation of New Bonds............................................37 Section 9.04 Amendment of Particular Bonds .........................................................................37 Packet Pg. 138 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series

TABLE OF CONTENTS
(continued)
Page
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ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture ........................................................................................38 Section 10.02 Bonds Deemed To Have Been Paid.....................................................................38 Section 10.03 Payment of Bonds After Discharge of Indenture.................................................39

ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties..............................................................39 Section 11.02 Successor Deemed Included in all References to Predecessor............................39 Section 11.03 Execution of Documents by Owners...................................................................39 Section 11.04 Waiver of Personal Liability................................................................................40 Section 11.05 Destruction of Bonds...........................................................................................40 Section 11.06 Funds and Accounts.............................................................................................40 Section 11.07 Article and Section Headings Gender and References........................................40 Section 11.08 Partial Invalidity ..................................................................................................40 Section 11.09 Disqualified Bonds ..............................................................................................41 Section 11.10 Money Held for Particular Bonds........................................................................41 Section 11.11 Payment on Non-Business Days..........................................................................41 Section 11.12 California Law.....................................................................................................41 Section 11.13 Notices.................................................................................................................42 Section 11.14 Notice to Rating Agencies...................................................................................42 Section 11.15 Execution in Counterparts ...................................................................................42 Signatures ................................................................................................................................... S-1 EXHIBIT A FORM OF SERIES 2024 BOND .............................................................................A-1 EXHIBIT B DESCRIPTION OF THE 2024 PROJECT...............................................................B-1 EXHIBIT C FORM OF PROJECT FUND REQUISITION.........................................................C-1 Packet Pg. 139 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 1 INDENTURE
THIS INDENTURE (this “Indenture”), executed and entered into and dated as of May 1, 2024, is by and among the GONZALES PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity that is duly organized and existing under the laws of the State of California (the “Authority”), the CITY OF GONZALES, a municipal corporation and general law city that is duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association that is duly organized and existing under and by virtue of the laws of the United States, as Trustee (the “Trustee”).

RECITALS
A. The Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery by the Authority of the “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024 Bonds”) for the purpose of financing certain capital improvements of the City, consisting primarily of a community center (the “2024 Project”), which Series 2024 Bonds will be payable from certain base rental payments (the “Base Rental Payments”) to be made by the City under the below-defined Lease Agreement.

B. In connection with the foregoing, the City will lease certain real property of the City and the improvements located thereon, consisting of the 2024 Project and the associated land located at 620-630 Fifth Street in Gonzales, California 93926) (collectively, the “Property”), to the Authority pursuant to a Ground Lease, dated as of the date hereof (the “Ground Lease”) and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease Agreement”), by and between the City and the Authority.

C. The Property is more particularly described in Exhibit A to the Lease Agreement.

D. All rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”), by and between the Authority and the Trustee.

E. The Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2024 Bonds (the Series 2024 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”).

F. In order to provide for the authentication and delivery of 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 of the principal thereof, premium, if any, and interest thereon, the Authority and the City have authorized the execution and delivery of this Indenture.

G. The Authority and the City have determined that all acts and proceedings that are required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the 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, and the execution and delivery of the Indenture has been in all respects duly authorized.

Packet Pg. 140 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2 In consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties do hereby agree as follows:

ARTICLE I
DEFINITIONS; EQUAL SECURITY
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 or supplement hereto and of the Bonds and of any certificate, opinion, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. Capitalized terms that are not otherwise defined herein shall have the meanings assigned to such terms in the Lease Agreement. “Additional Bonds” means Bonds (other than the Series 2024 Bonds) issued hereunder in accordance with the provisions of Sections 3.06 and 3.07. “Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 of the Lease Agreement. “Assignment Agreement” means the Assignment Agreement relating to the Series 2024 Bonds, dated as of the date hereof, by and between the Authority and the Trustee. “Authority” means the Gonzales Public Financing Authority, a joint exercise of powers entity that is duly organized and existing under and by virtue of the laws of the State of California. “Authorized Authority Representative” means the President, Vice-President, Executive Director, Treasurer/Auditor and Secretary of the Authority, or any other person authorized by the Board of Directors of the Authority to act on behalf of the Authority under or with respect to this Indenture.
“Authorized City Representative” means the Mayor of the City, the Mayor Pro Tem of the City, the City Manager of the City, the Finance Director of the City or the City Clerk, or any other person authorized by the City Council of the City to act on behalf of the City under or with respect to this Indenture.
“Authorized Denominations” means $5,000 or any integral multiple thereof. “Base Rental Payment Fund” means the fund by that name established in accordance with Section 5.02.
“Base Rental Payments” means all amounts payable to the Authority by the City as Base Rental Payments pursuant to Section 3.01(a) of the Lease Agreement and any payments under Section

3.01 of the Lease Agreement which are attributable to Additional Bonds. “Beneficial Owner” means, whenever used with respect to a Book-Entry Bond, the person whose name is recorded as the beneficial owner of such Book-Entry Bond or a portion of such Book-Entry Bond by a Participant on the records of such Participant or such person’s subrogee. “Bonds” means the Series 2024 Bonds and any Additional Bonds issued hereunder.

Packet Pg. 141 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 3 “Book-Entry Bonds” means the Bonds of a Series registered in the name of the nominee of DTC, or any successor securities depository for such Series of Bonds, as the registered owner thereof pursuant to the terms and provisions of Section 2.10.
“Business Day” means a day which is not: (a) a Saturday, Sunday or legal holiday; (b) a day on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close; or (c) a day on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
“City” means the City of Gonzales, a municipal corporation and general law city that is duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means May __, 2024.
“Code” means the Internal Revenue Code of 1986, as amended. “Continuing Disclosure Certificate” means the Continuing Disclosure Certificate relating to the Series 2024 Bonds, dated the Closing Date, executed by the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Costs of Issuance” means all of the costs of issuing and delivering the Bonds, including, but not limited to, all printing and document preparation expenses in connection with this Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement, the Bonds and any preliminary official statement and final official statement pertaining to the Bonds, rating agency fees, CUSIP Service Bureau charges, market study fees, legal fees, municipal advisor and other consultant fees, printing fees and expenses of counsel with the issuance and delivery of the Bonds, the initial fees and expenses of the Trustee and its counsel and other fees and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent such fees and expenses are approved by the City. “Costs of Issuance Fund” means the fund by that name established in accordance with Section 3.04.
“DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.10. “Federal Securities” means: (a) non-callable direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), fully and unconditionally guaranteed as to timely payment; and (b) obligations of any agency, department or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America, provided that such securities are eligible for defeasance under the then-existing criteria of S&P.
“Ground Lease” means the Ground Lease relating to the Property, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof and of the Lease Agreement.

Packet Pg. 142 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4 “Indenture” means this Indenture, as originally executed and as it may be amended or supplemented from time to time by any Supplemental Indenture. “Information Services” means the Municipal Securities Rulemaking Board through the Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other 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 Fund” means the fund by that name established in accordance with Section 5.02. “Interest Payment Date” means November 1, 2024 and each May 1 and November 1 thereafter.
“Lease Agreement” means the Lease Agreement relating to the Property, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may be from time to time amended in accordance with the provisions thereof. “Moody’s” means Moody’s Investors Service, a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, except that if such corporation shall no longer perform the function of a securities rating agency for any reason, the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Net Insurance Proceeds Fund” means the fund by that name established in accordance with Section 5.02.
“Office of the Trustee” means the corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.
“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 Authority or the City and which written opinion, if to be delivered to the Trustee, is satisfactory to the Trustee. “Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.01; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.
“Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“Participant” means any entity which is recognized as a participant by DTC in the book-entry system of maintaining records with respect to Book-Entry Bonds.

Packet Pg. 143 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 5 “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Certificate.
“Permitted Investments” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein (the Trustee is entitled to rely upon the investment direction of the City as a determination that such investment is a legal investment):
(a) Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the timely payment of principal of and interest on which are fully and unconditionally guaranteed by the United States of America.
(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided that such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself):
(i) U.S. Export-Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership (ii) Farmers Home Administration (FmHA)
Certificates of beneficial ownership
(iii) Federal Financing Bank
(iv) Federal Housing Administration Debentures (FHA)
(v) General Services Administration
Participation certificates
(vi) Government National Mortgage Association (GNMA or “Ginnie Mae”) GNMA – guaranteed mortgage-backed bonds
GNMA – guaranteed pass-through obligations
(vii) U.S. Maritime Administration
Guaranteed Title XI financing
(viii) U.S. Department of Housing and Urban Development (HUD) Project Notes
Local Authority Bonds
New Communities Debentures – U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds – U.S. government guaranteed public housing notes and bonds.
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself):
(i) Federal Home Loan Bank System
Packet Pg. 144 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 6 Senior debt obligations
(ii) Federal Home Loan Mortgage Corporation (FHLMC or “Freddie Mac”) Participation Certificates
Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or “Fannie Mae”) Mortgage-backed securities and senior debt obligations
(iv) Student Loan Marketing Association (SLMA or “Sallie Mae”) Senior debt obligations
(v) Resolution Funding Corp. (REFCORP) obligations
(vi) Farm Credit System
Consolidated systemwide bonds and notes.
(d) Money market mutual funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by S&P of AAAm-G, AAA-m or AA-m and if rated by Moody’s rated Aaa, Aa1 or Aa2, including funds for which the Trustee and its affiliates provide investment advisory, custodial transfer agency and other management services, and receive and retain a fee for such services provided to the fund. (e) Certificates of deposit (including those placed by a third party pursuant to a separate agreement between the Authority and the Trustee) secured at all times by collateral described in (a) and/or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks or mutual savings banks whose short term obligations are rated “A-1+” or better by S&P and “Prime-1” by Moody’s. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. (f) Bank deposit products, certificates of deposit (including those placed by a third party pursuant to a separate agreement between the Authority and the Trustee), savings accounts, deposit accounts, including time deposits, trust funds, trust accounts, overnight bank deposits, interest bearing accounts, interest bearing money market accounts, banker’s acceptances, money market deposits, including those of the Trustee and its affiliates.
(g) Investment agreements, including guaranteed investment contracts. (h) Commercial paper rated, at the time of purchase, “Prime-1” by Moody’s and/or “A-1” or better by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by Moody’s and/or S&P in one of the two highest long-term rating categories assigned by such agencies. (j) Federal funds or bankers’ acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of “Prime-1” or “A3” or better by Moody’s and/or “A-1+” or better by S&P.
(k) Repurchase agreements or reverse repurchase agreements (“Repos”) that provide for the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee Packet Pg. 145 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 7 (buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in exchange for the securities at a specified date.

Repos must satisfy the following criteria:
(a) Repos must be among the City, the Trustee and a dealer bank or securities firm (i) Primary dealers on the Federal Reserve reporting dealer list which are rated “A” or better by S&P and Moody’s, or
(ii) Banks rated “A” or above by S&P and Moody’s.
(b) The written repo contract must include the following:
(i) Securities which are acceptable for transfer are:
(I) Direct U.S. Governments
(II) Federal agencies backed by the full faith and credit of the U.S. government (and FNMA & FHLMC)
(ii) The term of the repo may be up to 30 days
(iii) The collateral must be delivered to the City or the Trustee (if Trustee is not supplying the collateral) or third party acting as agent for the Trustee (if the trustee is supplying the collateral) before/simultaneous with payment (perfection by possession of certificated securities). (iv) Valuation of Collateral
(I) The securities must be valued weekly, marked-to-market at current market price plus accrued interest.
(II) The value of collateral must be equal to 104% of the amount of cash transferred by the City or the Trustee, on behalf of the City, to the dealer bank or security firm under the repo plus accrued interest. If the value of securities held as collateral slips below 104% of the value of the cash transferred by District or the Trustee, on behalf of the City, then additional cash and/or acceptable securities must be transferred. If, however, the securities used as collateral are FNMA or
FHLMC, then the value of collateral must equal 105%.
(III) Legal opinion which must be delivered to the City and the Trustee.

Repos must also meet guidelines under state law for legal investment of public funds.

Packet Pg. 146 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 8 (l) The Local Agency Investment Fund of the State, created pursuant to Section 16429.1 of the California Governmental Code, to the extent that the Trustee is authorized to register such investment in its own name.
“Person” means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Principal Fund” means the fund by that name established in accordance with Section 5.02. “Project Fund” means the fund by that name established in accordance with Section 3.05. “Property” has the meaning set forth in the Recitals hereof. “Rebate Fund” means the fund by that name established in accordance with Section 5.05. “Rebate Requirement” has the meaning ascribed thereto in the Tax Certificate. “Record Date” means the fifteenth day of the month next preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the fund by that name established in accordance with Section 5.02.
“Redemption Price” means the aggregate amount of principal of, accrued interest to the date of redemption on and premium, if any, on the Bonds upon the redemption thereof pursuant hereto. “Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the period from the Closing Date through April 30, 2025, and, thereafter, the twelve-month period commencing on May 1 of each year during the term of the Lease Agreement.
“Representation Letter” means the Letter of Representations from the Authority to DTC, or any successor securities depository for any Series of Book-Entry Bonds, in which the Authority makes certain representations with respect to issues of its securities for deposit by DTC or such successor depository.
“S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, its successors and assigns, except that if such entity shall no longer perform the functions of a securities rating agency for any reason, the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Authority. “Securities Depositories” means The Depository Trust Company; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the Authority may designate in a Written Certificate of the Authority delivered to the Trustee.

Packet Pg. 147 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 9 “Series” means the Series 2024 Bonds executed, authenticated and delivered on the Closing Date and identified pursuant to this Indenture and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds. “Series 2024 Bonds” means the Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A, issued hereunder.
“Supplemental Indenture” means any supplemental indenture amendatory of or supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Authority and the City at the time of issuance of the Series 2024 Bonds relating to the requirements of Section 148 of the Code, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association that is duly organized and existing under and by virtue of the laws of the United States, or any successor thereto as Trustee hereunder, appointed as provided herein. “2024 Costs of Issuance Account” means the account by that name within the Costs of Issuance Fund established pursuant to Section 3.04.
“2024 Project” has the meaning set forth in the Recitals hereof, as more particularly described in Exhibit B.
“Written Certificate of the Authority” and “Written Request of the Authority” mean, respectively, a written certificate or written request signed in the name of the Authority by an Authorized Authority Representative. Any such certificate or request 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. “Written Certificate of the City” and “Written Request of the City” mean, respectively, a written certificate or written request signed in the name of the City by an Authorized City Representative. Any such certificate or request 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 Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of Packet Pg. 148 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 10 authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds. The Authority hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture and applicable laws of the State of California.

The Bonds may consist of one or more Series of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Series 2024 Bonds are authorized hereunder for the purpose of financing the 2024 Project.

Section 2.02 Terms of Series 2024 Bonds.
(a) The Series 2024 Bonds shall be designated the “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A.” Each Series of Additional Bonds shall bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds.
(b) The Series 2024 Bonds shall be issued in fully registered form without coupons in Authorized Denominations, so long as no Series 2024 Bond shall have more than one maturity date.

The Series 2024 Bonds shall be dated as of the Closing Date, shall be issued in the aggregate principal amount of $_____, shall mature on May 1 of each year and shall bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the rates per annum as follows:

Packet Pg. 149 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 11 Maturity Date
(May 1)
Principal
Amount Interest Rate
2025 $_____ ___%
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
(c) Interest on the Series 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless: (i) a Series 2024 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date; (ii) a Series 2024 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the dated date thereof; or (iii) interest on any Series 2024 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest shall be paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership of the Series 2024 Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Except as provided in Section 2.10(a), interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2024 Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. (d) The principal and premium, if any, of the Series 2024 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2024 Bonds shall be subject to redemption as provided in Article IV.

Section 2.03 Form of Series 2024 Bonds. The Series 2024 Bonds shall be in substantially the form set forth in Exhibit A, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.

Packet Pg. 150 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 12 Section 2.04 Transfer and Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such person’s duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other Authorized Denominations. The Trustee shall require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor will provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee will conclusively rely on the information provided to it and has no responsibility to verify or ensure the accuracy of such information.

Section 2.05 Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds as hereinbefore provided.

Section 2.06 Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Authority with the facsimile signature of an Authorized Officer of the Authority attested by the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers of the Authority who shall have signed or attested any of the Bonds shall cease to be such officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.

Section 2.07 Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit A, manually or electronically executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the Packet Pg. 151 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 13 benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.08 Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such authorized denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be 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. If the Authority issues temporary Bonds of a Series, it will execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in Authorized Denominations.

Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder.

Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or in accordance with the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture.

Section 2.10 Book-Entry Bonds.
(a) Prior to the issuance of a Series of Bonds, the Authority may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds and, in such event, the Bonds of such Series for each maturity shall be in the form of a separate single fully registered Bond (which may be typewritten). The Series 2024 Bonds shall initially be issued as Book-Entry Bonds.

Except as provided in subsection (c) of this Section, the registered Owner of all of the BookEntry Bonds shall be Cede & Co., as nominee of DTC. Notwithstanding anything to the contrary contained in this Indenture, payment of interest with respect to any Book-Entry Bond registered as of each Record Date in the name of Cede & Co. shall be made by wire transfer of same-day funds to the Packet Pg. 152 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 14 account of Cede & Co. on the Interest Payment Date at the address indicated on the Record Date for Cede & Co. in the Registration Books or as otherwise provided in the Representation Letter. (b) The Trustee, the City and the Authority may treat DTC (or its nominee) as the sole and exclusive Owner of Book-Entry Bonds registered in its name for the purposes of payment of the principal, premium, if any, or interest with respect to Book-Entry Bonds, selecting Book-Entry Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Owners of Book-Entry Bonds under this Indenture, registering the transfer of Book-Entry Bonds, obtaining any consent or other action to be taken by Owners of Book-Entry Bonds and for all other purposes whatsoever, and neither the Trustee nor the Authority shall be affected by any notice to the contrary. None of the Trustee, the City nor the Authority shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in Book-Entry Bonds under or through DTC or any Participant, or any other person which is not shown on the Registration Books as being an Owner, with respect to the accuracy of any records maintained by DTC or any Participant, the payment by DTC or any Participant of any amount in respect of the principal, premium, if any, or interest with respect to Book-Entry Bonds, any notice which is permitted or required to be given to Owners of Book-Entry Bonds under this Indenture, the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of Book-Entry Bonds, or any consent given or other action taken by DTC as Owner of Book-Entry Bonds. The Trustee shall pay all principal, premium, if any and interest with respect to Book-Entry Bonds, only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to the principal, premium, if any, and interest with respect to the Book-Entry Bonds to the extent of the sum or sums so paid. Except under the conditions of subsection (c) of this Section, no person other than DTC shall receive an executed Book-Entry Bond for each separate stated maturity.

Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to record dates, the term “Cede & Co.” in this Indenture shall refer to such new nominee of DTC. (c) In the event that: (i) DTC, including any successor as securities depository for a Series of Bonds, determines not to continue to act as securities depository for such Series of Bonds; or (ii) the Authority determines that the incumbent securities depository shall no longer so act, and delivers a written certificate to the Trustee to that effect, then the Authority will discontinue the bookentry system with the incumbent securities depository for such Series of Bonds. If the Authority determines to replace the incumbent securities depository for such Series of Bonds with another qualified securities depository, the Authority shall prepare or direct the preparation of a new single, separate fully registered Bond of such Series for the aggregate outstanding principal amount of Bonds of such Series of each maturity, registered in the name of such successor or substitute qualified securities depository, or its nominee, or make such other arrangement acceptable to the Authority, the Trustee and the successor securities depository for the Bonds of such Series as are not inconsistent with the terms of this Indenture. If the Authority fails to identify another qualified successor securities depository for such Series of Bonds to replace the incumbent securities depository, then the Bonds of such Series shall no longer be restricted to being registered in the Registration Books in the name of the incumbent securities depository or its nominee, but shall be registered in whatever name or names the incumbent securities depository for such Series of Bonds, or its nominee, shall designate. In such event the Authority shall execute, and deliver to the Trustee, a sufficient quantity of Bonds of such Series to carry out the transfers and exchanges provided in Sections 2.04, 2.08 and 2.09. All such Bonds of such Series shall be in fully registered form in Authorized Denominations.

Packet Pg. 153 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 15 (d) Notwithstanding any other provision of this Indenture to the contrary, so long as any Book-Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to the principal, premium, if any, and interest with respect to such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Representation Letter.
(e) In connection with any notice or other communication to be provided to Owners of Book-Entry Bonds pursuant to this Indenture by the Authority, the City or the Trustee with respect to any consent or other action to be taken by Owners, the Authority, the City or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2024 Bonds. The Authority may, at any time, execute the Series 2024 Bonds for issuance hereunder and deliver the same to the Trustee. The Trustee shall authenticate the Series 2024 Bonds and deliver the Series 2024 Bonds to the original purchaser thereof upon receipt of a Written Request of the Authority and upon receipt of the purchase price therefor.

Section 3.02 Application of Proceeds of the Series 2024 Bonds. (a) On the Closing Date, the proceeds of the sale of the Series 2024 Bonds received by the Trustee, $_____, shall be deposited by the Trustee, together with $____ received from the City on or before the Closing Date, as follows:
(i) The Trustee shall deposit the amount of $_____ in the 2024 Costs of Issuance Account.
(ii) The Trustee shall deposit the amount of $___ in the Project Fund to be applied as set forth in Section 3.05.
(iii) The Trustee shall deposit the amount of $____ in the Interest Fund to pay capitalized interest on the Series 2024 Bonds through May 1, 2026. (b) The Trustee may establish temporary funds and accounts in its records connection with the receipt of the proceeds of the Series 2024 Bonds.

Section 3.03 [RESERVED].

Section 3.04 Costs of Issuance Fund. The Trustee shall establish and maintain a separate fund designated the “Costs of Issuance Fund,” and within such fund the “2024 Costs of Issuance Account.” On the Closing Date, there shall be deposited in the 2024 Costs of Issuance Account the amount specified in Section 3.02(a)(i). There shall additionally be deposited in the Costs of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued.

The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Authority stating:

Packet Pg. 154 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 16 (a) the Person to whom payment is to be made; (b) the amount to be paid, together with payment instructions; (c) the purpose for which the obligation was incurred; (d) that such payment is a proper charge against the Costs of Issuance Fund; and (e) that such amounts have not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested thereunder. Each such Written Request of the Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the six month anniversary of the Closing Date, all amounts, if any, remaining in the 2024 Costs of Issuance Account shall be withdrawn therefrom by the Trustee and transferred to the Interest Fund, and the 2024 Costs of Issuance Account shall be closed.

Section 3.05 Project Fund. The Trustee shall establish, maintain and hold in trust a separate fund designated as the “Project Fund.” The moneys in the Project Fund or the accounts therein shall be disbursed by the Trustee on behalf of the City as specified in a Written Request of the City in the form attached hereto as Exhibit C. Each Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. On the date on which the City determines that amounts in the Project Fund are no longer necessary for payment of the cost of the 2024 Project, the City shall submit a Written Request to the Trustee to transfer any remaining balance in the Project Fund not needed for Project Fund purposes, at the City’s sole discretion, to the City for use on eligible capital facilities, and the Project Fund shall be closed. Investment earnings on amounts on deposit in the Project Fund shall remain on deposit in the Project Fund for application in accordance with this Section.

Section 3.06 Conditions for the Issuance of Additional Bonds. The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2024 Bonds) payable from Base Rental Payments as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of such Additional Bonds shall have been authorized under and pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify the following:
(1) The application of the proceeds of the sale of such Additional Bonds; (2) The principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds; (3) The date, the maturity date or dates, the interest payment dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that: (i) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on May 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on May 1; (ii) the Additional Bonds shall be payable as to interest semiannually on May 1 and November 1 of each year, except that the first installment of interest may be payable on either May 1 or November 1 and shall be for a period of not longer than twelve months and the interest shall be payable thereafter semiannually on May 1 and November 1; (iii) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination; and (iv) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be Packet Pg. 155 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 17 established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(4) The redemption premiums and terms, if any, for such Additional Bonds;
(5) The form of such Additional Bonds; and
(6) Such other provisions that are appropriate or deemed necessary by the Authority and are not inconsistent with the provisions hereof; (b) The Authority shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it;
(c) The City shall be in compliance with all agreements, conditions, covenants and terms contained herein, in the Lease Agreement and in the Ground Lease required to be observed or performed by it; and
(d) The Ground Lease shall have been amended, to the extent necessary, and the Lease Agreement shall have been amended so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period shall be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City).

Nothing contained herein shall limit the issuance of any bonds or other obligations payable from Base Rental Payments if, after the issuance and delivery of such bonds or other obligations, none of the Bonds theretofore issued hereunder will be Outstanding.

Section 3.07 Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds, such Additional Bonds shall be executed by the Authority for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) Certified copies of the Supplemental Indenture authorizing the issuance of such Additional Bonds, the amendment to the Lease Agreement required by Section 3.06 and the amendment to the Ground Lease, if any, required by Section 3.06, together with satisfactory evidence that such amendment to the Lease Agreement and such amendment to the Ground Lease, if any, have been duly recorded;
(b) A Written Request of the Authority as to the delivery of such Additional Bonds; (c) An Opinion of Counsel substantially to the effect that: (i) the Indenture (including all Supplemental Indentures), the Lease Agreement (including the amendment thereto required by Section 3.06) and the Ground Lease (including any amendment thereto required by Packet Pg. 156 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 18 Section 3.06) have been duly authorized, executed and delivered by, and constitute the valid and binding obligations of, the Authority and the City, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California); (ii) such Additional Bonds constitute valid and binding special obligations of the Authority payable solely from Base Rental Payments as provided herein and are enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights and by the application of equitable principles and by the exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies against political subdivisions in the State of California); and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest on the Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for federal income tax purposes;
(d) a Written Certificate of the Authority that the requirements of Section 3.06 have been met;
(e) a Written Certificate of the City that the requirements of Sections 5.01 and 5.02 of the Lease Agreement have been met, and a Written Certificate of the City as to the fair rental value of the Property, after giving effect to the execution and delivery of the Additional Bonds, and to the use of proceeds received therefrom; and
(f) Such further documents as are required by the provisions hereof or by the provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.

Section 3.08 Additional Bonds. So long as any of the Bonds remain Outstanding, the Authority shall not issue any Additional Bonds or obligations payable from the Base Rental Payments, except pursuant to Sections 3.06 and 3.07.

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2024 Bonds.
(a) Extraordinary Redemption. The Series 2024 Bonds shall be subject to redemption, in whole or in part, on any date as directed by the City in a Written Request of the City provided to the Trustee not less than 30 days (or such lesser number of days acceptable to the Trustee, in the sole discretion of the Trustee) prior to such date, in Authorized Denominations, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund pursuant to Sections 5.03 and 5.04, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
(b) Redemption. The Series 2024 Bonds shall be subject to mandatory redemption in whole on May 1, 2026, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. The Series 2024 Bonds shall also be subject to optional redemption, in whole, on any Business Day on or Packet Pg. 157 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 19 after November 1, 2025, as directed by the City in a Written Request of the City provided to the Trustee not less than 30 days (or such lesser number of days acceptable to the Trustee, in the sole discretion of the Trustee) prior to such date, in Authorized Denominations, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Section 4.02 Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers and the maturity or portion of the maturity of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption.

Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

With respect to any notice of optional redemption of Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds to be redeemed and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Section 4.03 Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption: (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority; (b) with respect to any redemption pursuant to Section 4.01(a) and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable; and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 denominations and such separate denominations shall be treated as separate Bonds which may be separately redeemed.

Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in Authorized Denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

Packet Pg. 158 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 20 Section 4.05 Effect of Notice of Redemption. Notice having been mailed as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said 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 without liability to such Owners for interest thereon.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed.

Moneys in the Interest Fund shall not be applied to pay the Redemption Price of the Series 2024 Bonds. Upon redemption of the Series 2024 Bonds in full, moneys in the Interest Fund shall be delivered to an account designated by the City in a Written Request of the City.

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are hereby pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of this Indenture. Subject to Section 7.08(a), said pledge shall constitute a first lien on such assets.

All obligations of the Authority under this Indenture shall be special obligations of the Authority, payable solely from Rental Payments and the other assets pledged therefor hereunder.

Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Section 5.02 Flow of Funds.
(a) The Trustee shall establish and maintain separate funds designated the “Base Rental Payment Fund,” the “Interest Fund,” the “Principal Fund,” the “Redemption Fund” and the “Net Insurance Proceeds Fund.”
All Base Rental Payments shall be paid directly by the City to the Trustee, and if received by the Authority at any time shall be transferred by the Authority to the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee shall be deposited by the Trustee in the Base Rental Payment Fund.

Packet Pg. 159 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 21 (b) The Trustee shall transfer the amounts on deposit in the Base Rental Payment Fund, at the times and in the manner hereinafter provided, to the following respective funds:
(i) Interest Fund. On the Business Day immediately preceding each Interest Payment Date, the Trustee shall transfer from the Base Rental Payment Fund to the Interest Fund the amount, if any, necessary to cause the amount on deposit in the Interest Fund to be equal to the interest due on the Bonds on such Interest Payment Date. (ii) Principal Fund. On the Business Day immediately preceding each May 1, commencing May 1, 20__, the Trustee shall transfer from the Base Rental Payment Fund to the Principal Fund the amount, if any, necessary to cause the amount on deposit in the Principal Fund to be equal to the principal amount of the Bonds due on such May 1 either as a result of the maturity thereof or mandatory sinking fund redemption payments required to be made with respect thereto.

Moneys in the Principal Fund shall be used by the Trustee for the purpose of paying the principal of the Bonds when due and payable at their maturity dates or upon earlier mandatory sinking fund redemption.
(iii) Redemption Fund. The Trustee, on the redemption date specified in the Written Request of the City filed with the Trustee at the time that any prepaid Base Rental Payment is paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption Fund that amount of moneys representing the portion of the Base Rental Payments designated as prepaid Base Rental Payments; provided that moneys held in the Interest Fund shall not be deposited in the Redemption Fund, but shall be delivered to the City upon redemption of the Series 2024 Bonds in full in accordance with the last paragraph of Section 4.05. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to be deposited therein pursuant to Sections 5.03 or 5.04.

Moneys in the Redemption Fund shall be used by the Trustee for the purpose of paying the principal of and interest and premium, if any, on Series 2024 Bonds redeemed pursuant to the provisions of subsection (a) of Section 4.01 and Additional Bonds redeemed pursuant to the corresponding provisions of the Supplemental Indenture pursuant to which such Additional Bonds are issued; provided, however, that moneys deposited in the Redemption Fund may also be used to purchase Outstanding Series 2024 Bonds or Additional Bonds in the manner hereinafter provided. Purchases of Outstanding Series 2024 Bonds or Additional Bonds may be made by the Authority at public or private sale as and when and at such prices as the Authority may in its discretion determine, but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or an extraordinary redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Sections 4.01(a) or (b), as applicable, or in the case of Additional Bonds the premium established in any Supplemental Indenture. Accrued interest payable upon the purchase of Series 2024 Bonds shall not be paid from amounts held in the Interest Fund.
(iv) Surplus. With respect to each Rental Period, moneys on deposit in the Base Rental Payment Fund which are in excess of the payments required above for such Rental Period may be expended by the Authority at any time for any purpose permitted by law as directed by the Authority.
(c) Upon receipt of a Written Certificate of the City pursuant to Section 3.06 of the Lease Agreement that the City has commenced repairs of the Property, the Trustee will transfer moneys from the Redemption Fund at the times and in the manner required by subsection (b)(iii) above if and to the extent there are insufficient funds in the Base Rental Payment Fund to make such transfers.

Packet Pg. 160 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 22 Upon receipt of a Written Certificate of the City pursuant to Section 3.06 of the Lease Agreement that the City has completed repairs of the Property and will recommence to make Base Rental Payments or that the City has determined not to make such repairs and made the certifications required pursuant to the Lease Agreement, the Trustee will transfer any funds remaining on deposit in the Redemption Fund to the City for any lawful use.

Section 5.03 Application of Net Insurance Proceeds. If the Property or any portion thereof shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as expeditiously as possible, continuously and diligently prosecute or cause to be prosecuted the repair or replacement thereof, unless the City elects not to repair or replace the Property or the affected portion thereof in accordance with the provisions hereof.

The Net Insurance Proceeds (other than Net Insurance Proceeds of rental interruption insurance), including the proceeds of any self-insurance, received on account of any damage or destruction of the Property or a portion thereof shall as soon as possible be deposited with the Trustee and be held by the Trustee in the Net Insurance Proceeds Fund and made available for and, to the extent necessary, shall be applied to the cost of repair or replacement of the Property or the affected portion thereof upon receipt of a Written Request of the City, together with invoices therefor. Each such Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. Pending such application, such proceeds may be invested by the Trustee as directed by the City in Permitted Investments that mature not later than such times moneys are expected to be needed to pay such costs of repair or replacement.

Notwithstanding the foregoing, the City shall, within 60 days of the occurrence of the event of damage or destruction, notify the Trustee in writing as to whether the City intends to replace or repair the Property or the portions of the Property which were damaged or destroyed. If the City does intend to replace or repair the Property or portions thereof, the City shall deposit with the Trustee the full amount of any insurance deductible to be credited to the Net Insurance Proceeds Fund.

In the event of any damage to or destruction of the Property caused by one of the perils covered by the insurance required by Section 5.01(c) of the Lease Agreement which would result in an abatement of rental payments or any portion thereof pursuant to Section 3.06 thereof, then the City shall apply the Net Insurance Proceeds, together with other legally available funds that the City elects to contribute, to the repair, reconstruction or replacement of the damaged or destroyed portions of the Property; provided, however, that the City shall not be required to repair or replace any portion of the Property pursuant to this Section 5.03 if such Net Insurance Proceeds, together with any other amounts held under this Indenture and any other legally available funds made available by the City at its election, are sufficient to prepay: (i) all of the Outstanding Bonds; or (ii) a portion of the Outstanding Bonds such that the resulting Base Rental Payments under Section 4.01(a) in any Rental Period following such partial prepayment are sufficient to pay in such Rental Period the principal of and interest on all Bonds to remain Outstanding immediately after such partial redemption. If the City is not required to replace or repair the Property, or the affected portion thereof, or to use such amounts to redeem Bonds, in each case as set forth in this Section 5.03, then such proceeds shall, if there is first delivered to the Trustee a Written Certificate of the City to the effect that the annual fair rental value of the Property after such damage or destruction, and after any repairs or replacements made as a result of such damage or destruction, is at least equal to 100% of the maximum amount of Base Rental Payments becoming due under the Lease Agreement in the then current Rental Period or any subsequent Rental Period and the fair replacement value of the Property after such damage or Packet Pg. 161 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 23 destruction is at least equal to the principal amount of the Outstanding Bonds, be paid to the City to be used for any lawful purpose.

The proceeds of any award in eminent domain received in respect to the Property shall be deposited by the Trustee in the Redemption Fund and applied to the redemption of Bonds pursuant to subsection (a) of Section 4.01 and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.04 Title Insurance. Proceeds of any policy of title insurance received by the Trustee in respect of the Property shall be applied and disbursed by the Trustee as follows:
(a) if the City determines that the title defect giving rise to such proceeds has not substantially interfered with its use and occupancy of the Property and will not result in an abatement of Rental Payments payable by the City under the Lease Agreement, such proceeds shall be remitted to the City upon written direction from the City and used for any lawful purpose thereof; or (b) if the City determines that the title defect giving rise to such proceeds has substantially interfered with its use and occupancy of the Property and will result in an abatement of Rental Payments payable by the City under the Lease Agreement, then, upon written direction of the City, the Trustee shall immediately deposit such proceeds in the Redemption Fund and such proceeds shall be applied to the redemption of Bonds in the manner provided in subsection (a) of Section 4.01 and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.

Section 5.05 Rebate Fund.
(a) Establishment. The Trustee shall establish a fund for the Bonds designated the “Rebate Fund” when required in accordance herewith. Absent an Opinion of Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected, the Authority shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the Bonds shall be governed by this Section and the Tax Certificate, unless and to the extent that the Authority delivers to the Trustee an Opinion of Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied. Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee: (1) shall be deemed conclusively to have complied with the provisions thereof if it follows all Written Requests of the Authority or Written Requests of the City; (2) shall have no liability or responsibility to enforce compliance by the Authority or the City with the terms of the Tax Certificate and shall not be deemed to have knowledge of the terms thereof; (3) may rely conclusively on the Authority’s or the City’s calculations and determinations and certifications relating to rebate matters; and (4) shall have no responsibility to independently make any calculations or determinations or to review the Authority’s or the City’s calculations or determinations thereunder.
(i) Computation. Within 55 days of the end of each fifth Bond Year (as such term is defined in the Tax Certificate), the Authority shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the Packet Pg. 162 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 24 computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “Rebatable Arbitrage”). The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Transfer. Within 55 days of the end of each fifth Bond Year, upon the Written Request of the Authority or Written Request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any Rental Payments legally available for such purpose (as specified by the Authority or the City in the aforesaid Written Request), if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon Written Request of the Authority or Written Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Base Rental Payment Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed by Written Request of the Authority, to the United States Treasury, out of amounts in the Rebate Fund:
(1) Not later than 60 days after the end of: (X) the fifth Bond Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (2) Not later than 60 days after the payment of all of the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.

In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T (prepared by the Authority), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in subsection (a) above being made may be withdrawn by the Authority and utilized in any manner by the Authority. (c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the Bonds.

Packet Pg. 163 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 25 Section 5.06 Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture and held by the Trustee shall be invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority filed with the Trustee at least two (2) Business Days in advance of the making of such investments. Moneys in all funds and accounts held by the Trustee shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture; provided, however, that such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date. Absent timely written direction from the Authority, the Trustee shall hold any funds held by it uninvested.

Subject to the provisions hereof, all interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be retained in such fund or account.

For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. In determining fair market value, the Trustee may use and rely conclusively on any generally recognized securities pricing service available to it (including brokers and dealers in securities and the service available through the Trustee’s accounting system).

The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the funds and accounts established hereunder.

The Trustee may make any investments hereunder through the bond or investment department or trust investment department of the entity acting as Trustee hereunder, or those of such entity’s parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder and such entity, or its affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for such services.

The City and the Authority acknowledge that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City or the Authority the right to receive brokerage confirmations of security transactions as they occur, the City and the Authority specifically waive receipt of such confirmations to the extent permitted by law. The City and the Authority further understand that trade confirmations for securities transactions effected by the Trustee will be available upon request at no additional cost and other trade confirmations may be obtained from the applicable broker. The Trustee will furnish the City with periodic cash transaction statements which shall include detail for all investment transactions effected by the Trustee hereunder. Upon the City’s election, such statements will be delivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request.

Packet Pg. 164 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 26 ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements. The Trustee will not authenticate or deliver any Bonds in any manner other than in accordance with the provisions hereof, and the Authority and the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply with, keep, observe and perform all of the agreements, conditions, covenants and terms hereof required to be complied with, kept, observed and performed by them.

Section 6.02 Compliance with Ground Lease and Lease Agreement. The Authority and the City will faithfully comply with, keep, observe and perform all of the agreements, conditions, covenants and terms contained in the Ground Lease and the Lease Agreement required to be complied with, kept, observed and performed by them and, together with the Trustee, will enforce the Ground Lease and the Lease Agreement against the other party thereto in accordance with their respective terms.

Section 6.03 Observance of Laws and Regulations. The Authority, the City and the Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on them by contract, or prescribed by any law of the United States of America or of the State of California, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by them, including their right to exist and carry on their respective businesses, to the end that such franchises, rights and privileges shall be maintained and preserved and shall not become abandoned, forfeited or in any manner impaired.

Section 6.04 Other Liens. The City will keep the Property and all parts thereof free from judgments and materialmen’s and mechanics’ liens and free from all claims, demands, encumbrances and other liens of whatever nature or character, and free from any claim or liability which materially impairs the City in conducting its business or utilizing the Property, and the Trustee at its option (after first giving the City ten days’ written notice to comply therewith and failure of the City to so comply within such ten-day period) may, but is in no event obligated to, defend against any and all actions or proceedings, or may pay or compromise any claim or demand asserted in any such actions or proceedings; provided, however, that, in defending against any such actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall not in any event be deemed to have waived or released the City from liability for or on account of any of its agreements and covenants contained herein, or from its liability hereunder and to perform such agreements and covenants.

So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or accounts created hereunder, other than the pledge and lien hereof.

The Authority, the City and the Trustee shall not encumber the Property other than in accordance with the Ground Lease, the Lease Agreement, the Indenture and the Assignment Agreement.

Section 6.05 Prosecution and Defense of Suits. The City will promptly, upon request of the Trustee (which request the Trustee is not required to make), take such action from time to time as may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Property or Packet Pg. 165 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 27 any part thereof, whether now existing or hereafter developing, will prosecute all actions, suits or other proceedings as may be appropriate for such purpose and will indemnify and save the Trustee harmless from all cost, damage, expense or loss, including attorneys’ fees and expenses, which it or the Owners may incur by reason of any such cloud, defect, action, suit or other proceeding.

Section 6.06 Accounting Records and Statements. The Trustee will keep proper accounting records in which complete and correct entries shall be made of all transactions of the Trustee relating to the receipt, deposit and disbursement of the Base Rental Payments, and such accounting records shall be available for inspection by the Authority and the City at reasonable hours and under reasonable conditions upon reasonable notice.

Section 6.07 Recordation and Filing. The City will record, or cause to be recorded, with the appropriate county recorder, the Lease Agreement, the Ground Lease and the Assignment Agreement, or memoranda thereof.

Section 6.08 Tax Covenants. Notwithstanding any other provision of the Indenture, absent an Opinion of Counsel that the exclusion from gross income of the interest on the Series 2024 Bonds will not be adversely affected for federal income tax purposes, the City and the Authority covenant to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income with respect to the Series 2024 Bonds, and specifically covenant, without limiting the generality of the foregoing, as follows:
(a) Private Activity. The City and the Authority will not take any action or refrain from taking any action or make any use of the proceeds of the Series 2024 Bonds or of any other moneys or property which would cause the Series 2024 Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(b) Arbitrage. The City and the Authority will make no use of the proceeds of the Series 2024 Bonds or of any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action which would cause the Series 2024 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(c) Federal Guarantee. The City and the Authority will make no use of the proceeds of the Series 2024 Bonds and will not take or omit to take any action that would cause the Series 2024 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (d) Information Reporting. The City and the Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code necessary to preserve the exclusion of interest on the Series 2024 Bonds pursuant to Section 103(a) of the Code;
(e) Hedge Bonds. The City and the Authority will make no use of the proceeds of the Series 2024 Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the Series 2024 Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City and the Authority take all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the Series 2024 Bonds for federal income tax purposes; and
Packet Pg. 166 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 28 (f) Miscellaneous. The City and the Authority will not take any action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein.

This Section and the covenants set forth herein shall not be applicable to, and nothing contained herein shall be deemed to prevent the City and the Authority from causing the issuance of Additional Bonds, the interest with respect to which has been determined by an Opinion of Counsel to be subject to federal income taxation.

Section 6.09 Continuing Disclosure. The City will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Series 2024 Bonds, and upon being indemnified to its reasonable satisfaction therefor, shall) or any holder or Beneficial Owner of the Series 2024 Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

Section 6.10 Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Ground Lease or the Lease Agreement, and to preserve the priority of the pledge of the Rental Payments under applicable law.

Section 6.11 Continued Existence of Authority. The City and the Authority will take or cause to be taken all actions reasonably necessary to continue the Authority’s existence until such time as the Bonds are no longer Outstanding hereunder, including but not limited to the addition of one or more new members to the Authority and execution of the JPA Agreement pursuant to which the Authority was created by such new members.

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default. If an event of default (within the meaning of Article VI of the Lease Agreement) shall happen, then such event of default shall constitute an event of default hereunder. The Trustee shall give notice, as assignee of the Authority, of an event of default under the Lease Agreement to the City to the extent that it has actual knowledge thereof. In each and every case during the continuance of an event of default, the Trustee may and, at the direction of the Owners of not less than a majority of the aggregate principal amount of Bonds then Outstanding, and upon being indemnified to its reasonable satisfaction therefor, shall, upon notice in writing to the City and the Authority, exercise any of the remedies granted to the Authority under the Lease Agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the Bonds, either at law or in equity or in Packet Pg. 167 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 29 bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right, including any one or more of the remedies set forth in Section 7.02 hereof.

Section 7.02 Other Remedies of the Trustee. Subject to the provisions of Section 7.01 hereof, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or the City or any member, director, officer or employee thereof, and to compel the Authority or the City or any such member, director, officer or employee to perform or carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or
(c) by suit in equity upon the happening of any event of default hereunder to require the Authority and the City to account as the trustee of an express trust.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.

Section 7.03 Non-Waiver. A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often as the Trustee shall deem expedient.

If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or any Owner, then subject to any adverse determination, the Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.

Section 7.04 Remedies Not Exclusive. Subject to the provisions of Section 7.01, no remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by any law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 7.05 No Liability by the Authority to the Owners. Except as expressly provided herein, the Authority shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Packet Pg. 168 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 30 City of the other agreements and covenants required to be performed by it contained in the Lease Agreement or herein, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

Section 7.06 No Liability by the City to the Owners. Except for the payment when due of the Base Rental Payments and the performance of the other agreements and covenants required to be performed by it contained in the Lease Agreement, the Ground Lease or herein, the City shall not have any obligation or liability to the Owners with respect to the Indenture or the preparation, execution, delivery or transfer of the Bonds or the disbursement of the Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained herein.

Section 7.07 No Liability of the Trustee to the Owners. Except as expressly provided herein, the Trustee shall not have any obligation or liability to the Owners with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the Authority or the City of the other agreements and covenants required to be performed by them contained in the Lease Agreement, the Ground Lease or herein.

Section 7.08 Application of Amounts After Default. All payments received by the Trustee with respect to the rental of the Property after a default by the City pursuant to Article VI of the Lease Agreement (including, without limitation, any proceeds received in connection with the sale, assignment or sublease of the Authority’s right, title and interest in the Ground Lease), and all damages or other payments received by the Trustee for the enforcement of any rights and powers of the Trustee under Article VI of the Lease Agreement, shall be deposited into the Base Rental Payment Fund and as soon as practicable thereafter applied, together with all other funds held hereunder (except funds in the Rebate Fund):
(a) to the payment of all amounts due to the Trustee under Article VIII hereof; (b) to the payment of all amounts then due for interest on the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of interest on such Bonds due and payable; and
(c) to the payment of all amounts then due for principal of the Bonds, in respect of which, or for the benefit of which, money has been collected (other than Bonds which have become payable prior to such event of default and money for the payment of which is held by the Trustee), ratably without preference or priority of any kind, according to the amounts of principal of such Bonds due and payable.

Section 7.09 Trustee May Enforce Claims Without Possession of Bonds. All rights of action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Owners in respect of which such judgment has been recovered.

Packet Pg. 169 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 31 Section 7.10 Limitation on Suits. No Owner of any Bond shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or Trustee, or for any other remedy hereunder, unless: (a) such Owner shall have previously given written notice to the Trustee of a continuing event of default; (b) the Owners of not less than 25% of the aggregate principal amount of the applicable Series of Bonds then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such event of default in its own name as Trustee hereunder; (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceedings; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60 day period by the Owners of a majority of the aggregate principal amount of the applicable Series of Bonds then Outstanding; it being understood and intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Owners.

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs the Trustee to receive, deposit and disburse the Base Rental Payments, to authenticate, deliver and transfer the Bonds and to perform the other functions contained herein, all in the manner provided herein and subject to the conditions and terms hereof. By executing and delivering this Indenture, the Trustee accepts the appointment and employment hereinabove referred to and accepts the rights and obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than when an event of default has occurred and is continuing, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an event of default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

Section 8.02 Duties, Removal and Resignation of the Trustee. The Authority may, by an instrument in writing, with at least 30 days’ prior notice, remove the Trustee initially a party hereto and any successor thereto unless an event of default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if at any time: (a) requested to do so by an instrument or concurrent instruments in writing signed by the Owners of a majority of the aggregate principal amount of Bonds at the time Outstanding (or their attorneys duly authorized in writing); or (b) the Trustee shall cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee. The Trustee and any successor Trustee shall be a banking corporation or association or trust company having (or if such banking corporation or association or trust company is a member of a bank holding company, its bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authorities. If such banking corporation or association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the Packet Pg. 170 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 32 combined capital and surplus of such bank, association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

The Trustee may at any time resign by giving written notice of such resignation to the Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event that the Authority does not appoint a successor Trustee within 30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of a Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee.

Any corporation, association or agency into which the Trustee may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and become successor trustee under this Indenture and vested with all the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 8.03 Compensation of the Trustee. The City shall from time to time, subject to any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for all its services rendered hereunder and reimburse the Trustee for all of its reasonable advances and expenditures (which shall not include “overhead expenses” except as such expenses are included as a component of the Trustee’s stated annual fees) hereunder, including but not limited to advances to and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other experts, and counsel, employed by it in the exercise and performance of its rights and obligations hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against the Authority or the City.

The City shall, to the extent permitted by law, indemnify and save the Trustee and its officers, directors, agents and employees harmless against any liabilities, costs, suits, judgments, damages, claims or expenses, including those of its attorneys, which it may incur in the exercise and performance of its powers and duties hereunder, under the Lease Agreement or in connection with any document or transaction contemplated hereunder or thereunder, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its misconduct. The duty of the City to indemnify the Trustee shall survive the termination and discharge of this Indenture and the earlier removal or resignation of the Trustee.

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers hereunder.

Upon an event of default, and only upon an event of default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it. When the Packet Pg. 171 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 33 Trustee incurs expenses or renders services after the occurrence of an event of default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law.

Section 8.04 Protection of the Trustee. The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners of the Bonds pursuant to this Indenture, unless such Owners shall have offered to the Trustee security or indemnity, reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee may consult with counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect to any action taken or suffered by it hereunder in good faith in accordance therewith.

The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement, or of the assignment made to it by the Assignment Agreement, or for statements made in any preliminary or final official statement relating to the Bonds, or of the title to the Property.

Whenever in the administration of its rights and obligations hereunder 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 in respect thereof is specifically prescribed herein) may be deemed to be conclusively proved and established by a Written Certificate of the City or a Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it deems reasonable.

The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Authority or the City, and may act as agent, depository or trustee for any committee or body of Owners or of owners of obligations of the Authority or the City as freely as if it were not the Trustee hereunder.

The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers hereof and perform any rights and obligations required of it hereunder by or through agents, attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided, however, that in the event of any negligence or misconduct of any such attorney, agent or receiver, the Trustee shall in a commercially reasonable manner pursue all remedies of the Trustee against such agent, attorney or Packet Pg. 172 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 34 receiver. The Trustee shall not be liable for any error of judgment made by it in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.

The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for anything whatsoever in connection with the funds established hereunder, except only for its own willful misconduct or negligence.

The Trustee shall not be deemed to have knowledge of an event of default unless it has actual knowledge thereof.

The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of the aggregate principal amount of the applicable Series of Bonds then Outstanding, provided that the Trustee shall have no duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or liability arising from such action.

The Trustee’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 of the Bonds.

All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.

The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful default. The Trustee shall have no responsibility or liability with respect to any information, statements or recitals in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. The Trustee shall not be accountable for the use or application by the Borrower of any of the Bonds or the proceeds thereof or for the use or application of any money paid over by the Trustee in accordance with the provisions of this Indenture or for the use and application of money received by any paying agent.

The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means. (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder). The Authority and the City shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Authority whenever a person is to be added or deleted from the listing. If the Authority or the City elect to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Authority and the City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer.

The Authority and the City shall be responsible for ensuring that only Authorized Officers transmit Packet Pg. 173 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 35 such Instructions to the Trustee and that the Authority, the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Authority. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The Authority and the City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that they are fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Authority or the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences.

In acting or omitting to act pursuant to the Assignment Agreement, the Lease Agreement, Ground Lease or any other document executed in connection herewith or therewith, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Indenture and the Lease Agreement, including, but not limited to, this Article VIII.

Ratings of Permitted Investments referred to herein shall be determined at the time of purchase of such Permitted Investments and without regard to rating subcategories. The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of such Permitted Investments, or the responsibility to validate Permitted Investments the ratings of Permitted Investments prior to the initial purchase.

The Trustee may conclusively rely upon the City or the Authority’s Written Request as to both the suitability and legality of the directed investments and such written direction shall be deemed to be a certification that such directed investments constitute Permitted Investments.

The Trustee shall have no duty to review, verify or analyze any financial statements furnished to it by the City, and shall hold such financial statements solely as a repository for the Owners. The Trustee shall not be deemed to have notice of any information contained therein or any default or event of default that may be disclosed therein in any manner.

Packet Pg. 174 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 36 ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority, the City, the Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the prior written consent of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall:
(i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the Owner of each Bond so affected; or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment; or (iii) permit the creation of any lien on the Base Rental Payments and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Base Rental Payments and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. (b) This Indenture and the rights and obligations of the Authority, the City, the Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into without the consent of any Bond Owners, but only for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority or the City in this Indenture contained other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Authority or the City; (ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture;
(iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Article III hereof; (iv) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute;
(v) to modify, amend or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America, if applicable to such Series of Bonds; and Packet Pg. 175 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 37 (vi) in any other respect whatsoever as the Authority and the City may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the rights and interests of the Bond Owners hereunder, in the Opinion of Counsel filed with the Authority, the City and the Trustee.
(c) Promptly after the execution by the Authority, the City and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (d) No Supplemental Indenture shall modify any of the rights or obligations of the Trustee without its prior written consent.
(e) In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall receive, and shall be fully protected in relying upon, an Opinion of Counsel addressed and delivered to the Trustee stating that the execution of such Supplemental Indenture is permitted by and in compliance with this Indenture and, if applicable, that the execution and delivery thereof will not in and of itself adversely affect the exclusion from federal gross income tax of interest on the Series of Bonds.

Section 9.02 Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Authority, the City, the Trustee and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all of the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.03 Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and presentation of such Owner’s Bonds for such purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal amount of the same interest rate and maturity.

Section 9.04 Amendment of Particular Bonds. The provisions of this Article shall not prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such Owner.

Packet Pg. 176 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 38 ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture. If the Authority shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Base Rental Payments and the other assets as provided herein, and all agreements, covenants and other obligations of the Authority and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority and the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal of and interest and premium, if any, on such Bonds, including with respect to the Series 2024 Bonds, moneys held in the Interest Fund.

Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority and the City shall have kept, performed and observed all of the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by them on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the lien of this Indenture and such lien and all covenants, agreements and other obligations of the Authority and the City hereunder shall cease, terminate become void and be completely discharged as to such Bonds.

Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the compensation and indemnity of the Trustee shall remain in effect and shall be binding upon the Trustee, the City and the Authority.

Section 10.02 Bonds Deemed To Have Been Paid. If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bonds and the interest thereon at the maturity or redemption date thereof, such Bonds shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01. Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 if: (a) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02, notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 4.02; (b) there shall have been deposited with the Trustee either: (i) money in an amount which shall be Packet Pg. 177 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 39 sufficient; or (ii) Federal Securities that are not subject to redemption other than at the option of the holder thereof, the interest on and principal of which when paid will provide money which, together with the money, if any deposited with the Trustee at the same time, shall, as verified in writing by an independent certified public accountant, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bonds; and (c) in the event that such Bonds are not by their terms subject to redemption within the next succeeding 60 days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the owners of such Bonds that the deposit required by clause (b) above has been made with the Trustee and that such Bonds, are deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bonds.

Section 10.03 Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, to the extent permitted by law, any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bonds and remaining unclaimed for two years after the date of deposit of such moneys, shall be repaid to the Authority (without liability for interest) free from the trusts created by this Indenture, and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee may (at the cost of the Authority) first mail, by first class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof.

ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition, covenant or term required herein to be observed or performed by or on behalf of the Authority or the City shall be for the sole and exclusive benefit of the Trustee and the Owners.

Section 11.02 Successor Deemed Included in all References to Predecessor. Whenever the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Authority, the City or the Trustee, or such officer, and all agreements, conditions, covenants and terms required hereby to be observed or performed by or on behalf of the Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

Section 11.03 Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state Packet Pg. 178 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 40 or territory in which he purports to act that the person signing such declaration, request or other instrument or writing 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, or by such other proof as the Trustee may accept which it may deem sufficient.

The ownership of any Bonds and the amount, payment date, number and date of owning the same may be proved by the Registration Books.

Any declaration, request or other instrument in writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority, the City or the Trustee in good faith and in accordance therewith.

Section 11.04 Waiver of Personal Liability. Notwithstanding anything contained herein to the contrary, no member, officer or employee of the Authority or the City shall be individually or personally liable for the payment of any moneys, including without limitation, the principal of or interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of the City or the Authority from the performance of any official duty provided by any applicable provisions of law, by the Lease Agreement or hereby.

Section 11.05 Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds.

Section 11.06 Funds and Accounts. Any fund or account required to be established and maintained herein by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund, but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Bonds and the rights of the Owners.

The Trustee may commingle any of the moneys held by it hereunder for investment purposes only; provided, however, that the Trustee shall account separately for the moneys in each fund or account established pursuant to this Indenture. The Trustee may establish such funds and accounts as it deems necessary or appropriate to perform its obligations hereunder.

Section 11.07 Article and Section Headings Gender and References. The singular form of any word used herein, including the terms defined in Section 1.01, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections,” subsections or clauses are to the corresponding Articles, Sections, subsections or clauses hereof, and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, subsection or clause thereof.

Section 11.08 Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms required herein to be observed or performed by or on the part of the Authority, the Packet Pg. 179 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 41 City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or conditions, such covenant or covenants or such term or terms shall be null and void to the extent contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them under any applicable provisions of law.

The Authority, the City and the Trustee hereby declare that they would have executed this Indenture, and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

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 under this Indenture, Bonds which are actually known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; except that, in determining whether the Trustee shall be protected in relying upon any such demand, request, direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned or held by or for the account of the Authority or the City, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Authority and the City shall specify in a Written Certificate of the City and Authority those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such Certificate.

Section 11.10 Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.03 but without any liability for interest thereon.

Section 11.11 Payment on Non-Business Days. In the event that any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such non-Business Day.

Section 11.12 California Law. This Indenture shall be construed and governed in accordance with the laws of the State of California.

Packet Pg. 180 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 42 Section 11.13 Notices. All written notices to be given hereunder shall be given by 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:

If to the City: City of Gonzales
P.O. Box 647
147 Fourth Street
Gonzales, California 93926
Attention: City Manager
If to the Authority: Gonzales Public Financing Authority P.O. Box 647
147 Fourth Street
Gonzales, California 93926
Attention: Executive Director
If to the Trustee: U.S. Bank Trust Company, National Association 633 W. 5th Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust Services
Ref: City of Gonzales 2024 Lease Revenue Bonds
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed: (a) if personally served or delivered, upon delivery; (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answer back or other written acknowledgment; (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail; (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier; or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 11.14 Notice to Rating Agencies. The Trustee shall provide S&P, if the Bonds are then rated by S&P, and Moody’s, if the Bonds are then rated by Moody’s, with prompt notice of any substitution or release of property pursuant to Section 9.03 of the Lease Agreement.

Section 11.15 Execution in Counterparts. This Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Packet Pg. 181 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series S-1
IN WITNESS WHEREOF, the Authority and the City have caused this Indenture to be signed in their respective names by their representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF GONZALES
By:

Jose L. Rios, The Honorable Mayor
ATTEST:

Mary Villegas, Deputy City Clerk

GONZALES PUBLIC FINANCING AUTHORITY
By:

Jose L. Rios, President
ATTEST:

Mary Villegas, Deputy Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
Packet Pg. 182 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series S-2
[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer
Packet Pg. 183 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-1

EXHIBIT A
FORM OF SERIES 2024 BOND
No. ____ $___________

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY TRUST COMPANY TO THE TRUSTEE FOR REGISTRATION OF TRANSFER,

EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE

OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BOND, SERIES 2024A

INTEREST RATE MATURITY DATE DATED DATE CUSIP
______% May 1, 20__ May __, 2024 _____ ___
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _________________________ DOLLARS
The Gonzales Public Financing Authority (the “Authority”), for value received, hereby promises to pay, solely from the Base Rental Payments (as hereinafter defined) or amounts in certain funds and accounts held under the Indenture (as hereinafter defined), to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on November 1, 2024 and each May 1 and November 1 thereafter (the “Interest Payment Dates”), until payment of such Principal Amount in full. This Bond shall bear interest from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date, whether or not such day is a Business Day, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to October 15, 2024, in which event it shall bear interest from the Dated Date identified above; provided, however, that if, at the time of authentication of this Bond, interest is in default on this Bond, interest on this Bond shall be payable from the date to which interest hereon has been paid in full, payable on each Interest Payment Date). The Principal Amount hereof is payable upon surrender hereof upon maturity or earlier redemption at the Office of the Trustee (as hereinafter defined). Interest hereon is payable by wire or check of U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), mailed by first class mail, postage prepaid, on each Interest Payment Date to the Registered Owner hereof at the address of the Registered Owner Packet Pg. 184 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-2
shown on the Registration Books at the close of business on the fifteenth calendar day of the month next preceding such Interest Payment Date. “Office of the Trustee” means the corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Authority and the City of Gonzales (the “City”) by the Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Authority and the City by the Trustee in writing.

This Bond is one of a series of a duly authorized issue of bonds issued for the purpose of financing the acquisition, construction and installation of certain capital improvements of the City, and is one of the series of bonds designated “Gonzales Public Financing Authority Lease Revenue Bonds, Series 2024A” (the “Series 2024 Bonds”) in the aggregate principal amount of $_____. The Series 2024 Bonds are issued pursuant to the Indenture, dated as of May 1, 2024 (the “Indenture”), by and among the Authority, the City and the Trustee, and this reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional bonds (“Additional Bonds”) may be issued by the Authority secured by a lien on a parity with the lien securing the Series 2024 Bonds. The Series 2024 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is entered into, and this Bond is issued under, the laws of the State of California.

Pursuant to the Indenture, the principal of and interest on the Bonds are payable solely from certain base rental payments (the “Base Rental Payments”) under and pursuant to that certain Lease Agreement, dated as of May 1, 2024 (the “Lease Agreement”), by and between the City, as sublessee, and the Authority, as sublessor, all of which rights to receive such Base Rental Payments have been assigned without recourse by the Authority to the Trustee. Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund established under the Indenture are pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms and the provisions of the Indenture. Said pledge constitutes a first lien on such assets.

The Series 2024 Bonds are authorized to be issued in the form of fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof (“Authorized Denominations”).

The Series 2024 Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any net insurance proceeds received with respect to all or a portion of the property leased under the Lease Agreement, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof, which are deposited by the Trustee in the Redemption Fund established under the Indenture, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

The Series 2024 Bonds shall be subject to mandatory redemption in whole on May 1, 2026, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. The Series 2024 Bonds shall also be subject to optional redemption, in whole, on any Business Day on or after November 1, 2025, as directed by the City in a Written Request of the City provided to the Trustee not less than 30 days (or such lesser number of days acceptable to the Trustee, in the sole discretion of the Trustee) prior to such Packet Pg. 185 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-3
date, in Authorized Denominations, at a Redemption Price equal to the principal amount of the Series 2024 Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective owners of any Series 2024 Bonds designated for redemption, at their respective addresses appearing on the Registration Books, at least 20 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed, nor any defect therein, shall affect the validity of the proceedings for the redemption of such Series 2024 Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. The Redemption Price of the Series 2024 Bonds to be redeemed shall be paid only upon presentation and surrender thereof at the Office of the Trustee. From and after the date fixed for redemption of any Series 2024 Bonds, interest on such Series 2024 Bonds will cease to accrue and become payable.

Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, fully registered Series 2024 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount and maturity of fully registered Series 2024 Bonds of other authorized denominations.

This Bond is transferable by the Registered Owner hereof, in person or by his or her duly authorized attorney, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully registered Series 2024 Bond or Series 2024 Bonds, in Authorized Denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Authority, the City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority, the City and the Trustee shall not be affected by any notice to the contrary.

The Indenture and the rights and obligations of the Authority, the City, the owners of the Bonds and the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall: (a) extend the fixed maturity of any Bonds, or reduce the principal thereof or the rate of interest thereon, or extend the time of payment, without the consent of the owner of each Bond so affected; or (b) reduce the percentage of Bonds the consent of the owners of which is required to effect any such amendment or modification; or (c) permit the creation of any lien on the Base Rental Payments and other assets pledged under the Indenture prior to or on a parity with the lien created by the Indenture or deprive the owners of the Bonds of the lien created by the Indenture on such the Base Rental Payments and such other assets (except as expressly provided in the Indenture), without the consent of the owners of all Bonds then outstanding.

The Indenture contains provisions permitting the Authority to make provision for the payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds shall no longer be deemed to be outstanding under the terms of the Indenture.

All obligations of the Authority under the Indenture shall be special obligations of the Authority, payable solely from Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Packet Pg. 186 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-4
It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time, form and manner as required by the Joint Exercise of Powers Agreement, and the laws of the State of California and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit under any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.

Packet Pg. 187 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-5
IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and on its behalf by the facsimile signatures of its President and Secretary, all as of the Dated Date identified above.

GONZALES PUBLIC FINANCING AUTHORITY
By:

Jose L. Rios, President
ATTEST:

Mary Villegas, Deputy Secretary
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2024 Bonds described in the within-mentioned Indenture and registered on the Registration Books.

Date: May __, 2024 U.S. Bank Trust Company, National Association, as Trustee
By:

Authorized Signatory
Packet Pg. 188 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-6
[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Kutak Rock LLP, Irvine, California, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

Secretary of the Gonzales Public Financing Authority
[FORM OF ASSIGNMENT]
For value, received the undersigned hereby sells, assigns and transfers unto ____________________________________________ whose address and social security or other tax identifying number is ______________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ____________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated: ____________________
Signature Guaranteed:

Note: Signature(s) must be guaranteed by an eligible
guarantor.

Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within pond in every particular without alteration or
enlargement or any change whatsoever.

Packet Pg. 189 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series B-1

EXHIBIT B
DESCRIPTION OF THE 2024 PROJECT
Construction of a community center at 620-630 Fifth Street, Gonzales, California 93926.

The 10,209 square foot community center will be named the Dennis & Janice Caprara Community Center Complex. It will include community meeting rooms, a relocated branch of the County library, performing arts space/community hall, offices, a commercial kitchen, parking, electric vehicle charging stations and outdoor amenities.

Packet Pg. 190 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series C-1

EXHIBIT C

FORM OF PROJECT FUND REQUISITION
REQUISITION NO. _____ FOR

DISBURSEMENT FROM PROJECT FUND
The undersigned hereby states and certifies:
(i) that he/she is the duly appointed, qualified and acting _________ of the City of Gonzales, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that, pursuant to Section 3.05 of the Indenture, dated as of May 1, 2024 (the “Indenture”), by and among the Gonzales Public Financing Authority (the “Authority”), the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), related to the Authority’s Lease Revenue Bonds, Series 2024A, the undersigned hereby requests the Trustee to disburse this date the following amounts from the Project Fund established under the Indenture, to the payees designated on the attached Exhibit 1;
(iii) that each obligation mentioned herein has been incurred by the City and is a proper charge against the Project Fund; and
(iv) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys payable to any of the payees named on the attached Exhibit 1, which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by mere operation of law.

All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Indenture.

Dated: ______________ CITY OF GONZALES
By:

Its:

Packet Pg. 191 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series C
-2
EXHIBIT 1

PROJECT FUND DISBURSEMENTS
Item
Number Payee Name and Address
Purpose of
Obligation Amount
Packet Pg. 192 Attachment: Indenture of Trust (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4862-1900-0242.3
RECORDING REQUESTED BY:

Gonzales Public Financing Authority
AND WHEN RECORDED RETURN TO:

Kutak Rock LLP
5 Park Plaza, Suite 1500
Irvine, California 92614
Attention: Cyrus Torabi, Esq.
[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF

THE CALIFORNIA GOVERNMENT CODE BECAUSE THE ASSIGNOR IS A GOVERNMENTAL AGENCY.

LEASE TERM LESS THAN 35 YEARS.

ASSIGNMENT AGREEMENT
Packet Pg. 193 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4862-1900-0242.3
RECORDING REQUESTED BY:

Gonzales Public Financing Authority
AND WHEN RECORDED RETURN TO:

Kutak Rock LLP
5 Park Plaza, Suite 1500
Irvine, California 92614
Attention: Cyrus Torabi, Esq.

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF

THE CALIFORNIA GOVERNMENT CODE BECAUSE THE ASSIGNOR IS A GOVERNMENTAL AGENCY.

LEASE TERM LESS THAN 35 YEARS.

ASSIGNMENT AGREEMENT
by and between

GONZALES PUBLIC FINANCING AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of May 1, 2024
Relating to
$_____

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
Packet Pg. 194 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 1 4862-1900-0242.3

ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is executed and entered into as of May 1, 2024, by and between the GONZALES PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity that is organized and existing under and by virtue of the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association that is organized and existing under the laws of the United States, as Trustee (the “Trustee”).

B. In connection with the foregoing, the City will lease certain real property of the City and the improvements located thereon, consisting of the 2024 Project and the associated land located at 620-630 Fifth Street, Gonzales, California 93926) (collectively, the “Property”), to the Authority pursuant to a Ground Lease, dated as of the date hereof (the “Ground Lease”) and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease Agreement”), by and between the City and the Authority.

C. The Property is more particularly described in Exhibit A hereto.

E. The Authority desires to assign to the Trustee without recourse all rights to receive the Base Rental Payments pursuant to this Assignment Agreement.

F. 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 of this 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 this Assignment Agreement;
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:

Section 1. Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the owners of the Bonds, all of its right, title and interest in and to the Ground Lease and the Lease Agreement including, without limitation, its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Authority shall retain its obligations under the Lease Agreement and Ground Lease, Packet Pg. 195 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 2 4862-1900-0242.3
its rights to indemnification, its rights to give approvals and consents under the Lease Agreement and the Ground Lease and its rights to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement.

Section 2. Acceptance. The Trustee hereby accepts the foregoing assignment, subject to the terms and provisions of the Indenture, and all such Base Rental Payments shall be applied and the rights so assigned shall be exercised by the Trustee as provided in the Lease Agreement and the Indenture.

Section 3. Conditions. This Assignment Agreement shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture. The Trustee shall have the same rights, protections, immunities and indemnities hereunder as afforded to it under the Indenture.

Section 4. Further Assurances. The Authority shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Assignment Agreement, and for the better assuring and confirming to the Trustee, for the benefit of the owners of the Bonds, the rights intended to be conveyed pursuant hereto.

Section 5. Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE

GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 6. Execution. This Assignment Agreement 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 Assignment Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Packet Pg. 196 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series S-1
4862-1900-0242.3
IN WITNESS WHEREOF, the Authority and the Trustee have caused this Assignment Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above-written.

GONZALES PUBLIC FINANCING AUTHORITY
By:

Jose L. Rios, President
ATTEST:

Mary Villegas, Deputy Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
Packet Pg. 197 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series S-2
4862-1900-0242.3
[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer
Packet Pg. 198 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4862-1900-0242.3

STATE OF CALIFORNIA

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
Packet Pg. 199 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 4862-1900-0242.3

STATE OF CALIFORNIA
COUNTY OF ______
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(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(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
Packet Pg. 200 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series A-1
4862-1900-0242.3

EXHIBIT A

DESCRIPTION OF THE PROPERTY
The Land referred to herein below is situated in the City of Gonzales, County of Monterey, State of California, and is described as follows:

AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF GONZALES TO THE CITY OF GONZALES RECORDED ON SEPTEMBER 23, 2022 IN DOCUMENT NUMBER 2022039297 TOGETHER WITH THE

PORTION OF THE TRACT THAT WAS QUITCLAIMED TO THE CITY OF GONZALES DESCRIBED IN THE

BEGINNING AT THE MOST NORTHERLY CORNER OF THE SAID 3.690 ACRE TRACT, BEING THE

THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE APPROVING A LOT LINE ADJUSTMENT NO. 2024-01, RECORDED MARCH 01, 2024 AS INSTRUMENT NO. 2024007299 OF OFFICIAL RECORDS.

For conveyancing purposes only: APN 020-121-005-000
Packet Pg. 201 Attachment: Assignment Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds Series 30539.00015\42160527.2
1 $_________

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

BOND PURCHASE AGREEMENT
_________, 2024
Gonzales Public Financing Authority
147 Fourth Street
Gonzales, California 93926
City of Gonzales
147 Fourth Street
Gonzales, California 93926
Ladies and Gentlemen:

Hilltop Securities Inc. (the “Underwriter”) hereby offers to enter into this Bond Purchase Agreement (the “Bond Purchase Agreement”) with the Gonzales Public Financing Authority (the “Authority”), a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “State”), and the City of Gonzales (the “City”), a municipal corporation duly organized and existing under the laws of the State, which upon written acceptance of this offer will be binding upon the Authority, the City, and the Underwriter. This offer is made subject to the written acceptance of the Authority and the City on or before 11:59 p.m., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority and the City at any time prior to the acceptance hereof by the Authority and the City.

Capitalized terms used and not defined herein shall have the same meanings as set forth in the Indenture, dated as of May 1, 2024 (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

Section 1. Purchase and Sale of the Bonds
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the $___________ aggregate principal amount of the Authority’s Lease Revenue Bonds, Series 2024A (the “Bonds”). The Bonds will bear interest at the rates and will mature on the dates as set forth on Schedule I attached hereto, and will be subject to redemption as provided in the Indenture. The purchase price for the Bonds shall be $__________, being the principal amount of the Bonds, plus/less original issue premium/discount of $_________, and less an Underwriter’s discount of $___________.

Packet Pg. 202 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
2 (b) The Authority and the City each acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the Authority and the City, on one hand, and the Underwriter, on the other; (ii) in connection with such transaction, including the process leading thereto, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Authority or the City; (iii) the Underwriter has neither assumed an advisory or fiduciary responsibility in favor of the Authority or the City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the Authority or the City on other matters) nor has it assumed any other contractual obligation to the Authority or the City except the obligations expressly set forth in this Bond Purchase Agreement; (iv) the Underwriter has financial and other interests that differ from those of the Authority and the City; and (v) the Authority and the City have each consulted with its own legal and financial advisors to the extent it deemed appropriate in connection with the offering of the Bonds.

Section 2. Description and Purpose of the Bonds
(a) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in the Indenture. (b) The Bonds are authorized to be issued pursuant to the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the California Government Code, as amended) and all laws amendatory thereof or supplemental thereto (the “Act”). The Bonds are limited obligations of the Authority and, as and to the extent set forth in the Indenture, are payable solely from and secured by a pledge, charge and lien upon the Base Rental Payments other payments made by the City and received by the Authority, and all interest or other investment income thereon, and certain other moneys and securities held by the Trustee as provided in the Indenture.
(c) The proceeds of the Bonds will be used to: (i) finance the construction of a community center; (ii) [pay capitalized interest on the Bonds through May 1, 2026]; and (iii) [pay the costs of issuing the Bonds].

Section 3. Public Offering
The Underwriter agrees to make a bona fide public offering of all the Bonds initially at the public offering prices (or yields) set forth on Schedule I attached hereto and incorporated herein by reference.

Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth on Schedule I. The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

Section 4. Delivery of Official Statement; Continuing Disclosure (a) The Authority and the City have delivered or caused to be delivered to the Underwriter prior to the execution of this Bond Purchase Agreement, copies of the preliminary official statement with respect to the Bonds, dated [May 6], 2024 (the “Preliminary Official Statement”). Such Preliminary Official Statement is the official statement deemed final by the Authority and the City for purposes of Rule 15c2- 12 under the Securities Exchange Act of 1934 (the “Rule”) and approved by the Authority and the City for distribution by the Underwriter by the Authority Resolution and the City Resolution (each as defined herein). As authorized by the Authority Resolution and the City Resolution, the Authority and the City hereby ratify and confirm their authorization of the use by the Underwriter before the date hereof of the Preliminary Official Statement.

Packet Pg. 203 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
3 (b) Within seven (7) business days from the date hereof, and in any event not later than two business days prior to the Closing Date, the Authority and the City shall deliver to the Underwriter a final Official Statement, executed on behalf of the City by authorized representatives of the City and on behalf of the Authority by authorized representatives of the Authority, which shall include information permitted to be omitted from the Preliminary Official Statement by paragraph (b)(1) of the Rule and with such other amendments or supplements as shall have been approved by the Authority, the City and the Underwriter (the “Final Official Statement”) and such additional conformed copies thereof as the Underwriter may reasonably request to meet potential customer requests for copies of the Final Official Statement to comply with the Rule and rules of the Municipal Securities Rulemaking Board (the “MSRB”). It is acknowledged by the Authority and the City that the Underwriter may deliver the Preliminary Official Statement and a Final Official Statement electronically over the internet and in printed paper form. For purposes of this Bond Purchase Agreement, the printed paper form of the Preliminary Official Statement and the Final Official Statement are deemed controlling. The Underwriter agrees to file a copy of the Final Official Statement, including any supplements prepared by the City, with the MSRB on its Electronic Municipal Markets Access (“EMMA”) system. The Final Official Statement shall be in substantially the same form as the Preliminary Official Statement and, other than information previously permitted to have been omitted by the Rule, the Authority and the City shall only make such other additions, deletions, revisions and recent developments in the Final Official Statement as shall be approved by the Underwriter. The Underwriter hereby agrees to cooperate and assist in the preparation of the Final Official Statement. The Authority and the City hereby agree to deliver to the Underwriter an electronic copy of the Final Official Statement in a form that permits the Underwriter to satisfy its obligations under the rules and regulations of the MSRB and the U.S. Securities and Exchange Commission (“SEC”). The Authority and the City hereby authorize the Underwriter to use the Final Official Statement and the information contained therein in connection with the offering and sale of the Bonds. The Final Official Statement, including the cover pages, the appendices thereto and all information incorporated therein by reference are hereinafter referred collectively to as the “Official Statement.”
(c) To enable the Underwriter to comply with the Rule, the City will execute a Continuing Disclosure Certificate concurrently with issuance of the Bonds substantially in the form attached as Appendix E to the Official Statement (the “Continuing Disclosure Certificate”).

Section 5. Closing
At 8:30 a.m. California time on May ____, 2024, or such other time as shall be agreed upon by the Underwriter, the Authority and the City (the “Closing Date”), the City will deliver or cause to be delivered to the Underwriter at the offices of Kutak Rock LLP, bond counsel to the Authority (“Bond Counsel”) in Irvine, California (or such other location as may be designated by the Underwriter and approved by the Authority and the City) the closing documents hereinafter mentioned and, through the facilities of The Depository Trust Company, the Bonds in the form of registered book-entry bonds evidenced by one certificate for each maturity, interest rate and series of Bonds (which may be typewritten) in denominations of $5,000 or any multiple thereof, duly executed by the Authority and authenticated by the Trustee, and subject to the terms and conditions hereof the Underwriter will accept delivery of the Bonds in book-entry form, and the Underwriter will pay the purchase price of the Bonds set forth in Section 1 by Federal Funds wire (such delivery and payment being herein referred to as “Closing”).

Section 6. Representations, Warranties and Agreements of the Authority The Authority represents, warrants and covenants with the Underwriter that:
(a) the Authority is a joint exercise of powers entity duly organized and existing under the laws of the State with full legal right, power and authority to issue, sell and deliver the Bonds to the Packet Pg. 204 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
4 Underwriter pursuant to the Indenture, and execute, deliver and perform its obligations, as the case may be, under this Bond Purchase Agreement, the Indenture, the Ground Lease, dated as of May 1, 2024 (the “Ground Lease”), the Lease Agreement, dated as of May 1, 2024 (the “Lease”), by and between the City and the Authority, the Assignment Agreement, dated as of May 1, 2024, by and between the Authority and the Trustee, and the Bonds (collectively, the “Authority Legal Documents”), and to carry out and consummate all transactions contemplated by each of the aforesaid documents and the Official Statement, and compliance with the provisions of the Authority Legal Documents will not materially conflict with or constitute a breach of or default under any applicable constitutional provision, law, administrative regulation, court order or consent decree or any applicable judgment or decree or any loan agreement, note, resolution, indenture, agreement or other instrument to which the Authority is a party or it or any of its assets may be otherwise subject;
(b) the Resolution adopted by the Authority on ___________, 2024 approving and authorizing the issuance of the Bonds and the execution and delivery by the Authority of the Authority Legal Documents and the preparation and distribution of the Preliminary Official Statement and the Official Statement (the “Authority Resolution”) was duly adopted at a regular meeting of the governing board of the Authority called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed; (c) when delivered by the Authority and paid for by the Underwriter in accordance with the provisions of this Bond Purchase Agreement, the Bonds will have been duly authorized, executed and delivered and will constitute the valid and binding limited obligations of the Authority in conformity with, and entitled to the benefit and security of, the Indenture; (d) the Authority has duly authorized and approved the issuance of the Bonds and the execution and delivery of the Authority Legal Documents and when executed and delivered, the Authority Legal Documents, assuming due authorization, execution and delivery by the other respective parties thereto, as applicable, will constitute the legally valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally;
(e) at the date hereof and as of the Closing Date, except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, the Authority will be in compliance with the covenants and agreements contained in the Authority Legal Documents, and no event of default has occurred and no event has occurred and is continuing which, with the passage of time or giving of notice, or both, would constitute an event of default thereunder; (f) the Authority will comply with the requirements of the Tax Certificate executed by the Authority in connection with the delivery of the Bonds; (g) any certificate signed by any officer of the Authority and delivered to the Underwriter pursuant to the Authority Legal Documents or any document contemplated hereby or thereby shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein and that such officer shall have been duly authorized to execute the same; (h) the Indenture creates a valid pledge of and grant of a first, direct and exclusive charge and lien on the Base Rental Payments (as defined in the Indenture) purported to be pledged thereby, subject to no prior pledges, liens or security interests;
(i) the information under the headings “THE AUTHORITY” and “LITIGATION” in the Packet Pg. 205 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
5 Preliminary Official Statement as of its date and as of the date hereof, and in the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Official Statement contains and up to and including the Closing will contain no misstatement of any material fact and does not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading;
(j) the Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not affect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds;
(k) as of the time of acceptance hereof and as of the time of the Closing, to the best of its knowledge, the Authority is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is a party or it or any of its assets is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach or default would materially adversely affect the security of the Bonds or the Authority’s performance under the Authority Legal Documents; and, as of such times, except as disclosed in the Preliminary Official Statement and the Official Statement, the authorization, execution and delivery of the Authority Legal Documents and the Bonds and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance agreement or other instrument to which the Authority (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery 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 its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Bonds and the Authority Legal Documents; and (l) as of the time of acceptance hereof and the Closing, except as disclosed in the Preliminary Official Statement and the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending (notice of which has been properly served on and received by the Authority) or, to the best of the Authority’s knowledge after reasonable investigation, threatened (i) in any way questioning the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, the Authority Legal Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest on the Bonds from gross income for Federal income tax purposes or contesting the powers of the Authority or its authority to issue the Bonds; (iii) which may result in any material adverse change relating to the Authority; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or Packet Pg. 206 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
6 investigation of the nature described in clauses (i) through (iv) of this sentence.

All representations, warranties and agreements of the Authority shall remain operative and in full force and effect, regardless of any investigations made by or on the Underwriter’s behalf, and shall survive the delivery of the Bonds.

Section 7. Representations, Warranties and Agreements of the City The City represents, warrants and covenants with the Underwriter that:
(a) the City is a municipal corporation duly organized and existing under the laws of the State; (b) the City has full legal right, power and authority to execute, deliver and perform its obligations, as the case may be, under this Bond Purchase Agreement, the Indenture, the Ground Lease, the Lease and the Continuing Disclosure Certificate (collectively, the “City Legal Documents”) and to carry out and consummate all transactions contemplated by each of the aforesaid documents and the Official Statement, and compliance with the provisions of the City Legal Documents will not materially conflict with or constitute a breach of or default under any applicable constitutional provision, law, administrative regulation, court order or consent decree or any applicable judgment or decree or any loan agreement, note, resolution, indenture, agreement or other instrument to which the City is a party or it or any of its assets may be otherwise subject;
(c) the Resolution adopted by the City Council of the City on [May 6], 2024 approving and authorizing the execution and delivery by the City of the City Legal Documents and the preparation and distribution of the Preliminary Official Statement and the Official Statement (the “City Resolution”) was duly adopted at a meeting of the City Council of the City called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and is in full force and effect and has not been amended or repealed;
(d) prior to adoption of the City Resolution, the City Council held a duly noticed public hearing as required by Section 6586.5 of the Act;
(e) by adoption of the City Resolution, the City has duly authorized and approved the execution and delivery by the City of the City Legal Documents and when executed and delivered, the City Legal Documents, assuming due authorization, execution and delivery by the other respective parties thereto, as applicable, will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally;
(f) at the date hereof and as of the Closing Date, except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, the City will be in compliance with the covenants and agreements contained in the City Legal Documents, and no event of default has occurred and no event has occurred and is continuing which, with the passage of time or giving of notice, or both, would constitute an event of default thereunder;
(g) the City will comply with the requirements of the Tax Certificate executed by the City in connection with the delivery of the Bonds;
(h) any certificate signed by any officer of the City and delivered to the Underwriter pursuant to the City Legal Documents or any document contemplated hereby or thereby shall be deemed a Packet Pg. 207 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
7 representation and warranty by the City to the Underwriter as to the statements made therein and that such officer shall have been duly authorized to execute the same; (i) to the best knowledge of the City there is no public vote or referendum pending or proposed, the results of which could materially adversely affect the transactions contemplated by the City Legal Documents or the Official Statement or the validity or enforceability of the Bonds; (j) the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Official Statement contains and up to and including the Closing will contain no misstatement of any material fact and does not, and up to and including the Closing will not, omit any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading (excluding therefrom the information relating to DTC and its book-entry only system and under the caption “UNDERWRITING,” as to which no representations or warranties are made); (k) the City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not affect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds;
(l) as of the time of acceptance hereof and as of the time of the Closing, to the best of its knowledge, the City is not and will not be in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument relating to the City to which the City is a party or any of its assets is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach or default would materially adversely affect the security of the Bonds or the City’s performance under the City Legal Documents; and, as of such times, except as disclosed in the Preliminary Official Statement and the Official Statement, the authorization, execution and delivery of the City Legal Documents and the Bonds and compliance with the provisions of each of such agreements or instruments do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance agreement or other instrument relating to the City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery 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 its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Bonds and the City Legal Documents;
(m) as of the time of acceptance hereof and the Closing, except as disclosed in the Preliminary Official Statement and the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, is pending (notice of which has been properly served on and received by the City) or, to the best of the City’s knowledge after reasonable investigation, threatened (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged by the Authority to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds, the City Legal Documents or the consummation Packet Pg. 208 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
8 of the transactions contemplated thereby or hereby; (iii) which may result in any material adverse change relating to the City; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence; (n) for purposes of the Rule, the City has heretofore deemed final the Preliminary Official Statement prior to its use and distribution by the Underwriter, except for the information specifically permitted to be omitted by paragraph (b)(1) of the Rule; (o) except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, the City has not previously failed to comply in any material respect with any continuing disclosure obligation undertaken pursuant to the Rule; and (p) except for information which is permitted to be omitted pursuant to the Rule, the Preliminary Official Statement is, as of its date and as of the date hereof (excluding therefrom the information relating to DTC and its book-entry only system, and under the caption “UNDERWRITING,” as to which no representations or warranties are made) was and is true and correct in all material respects and did not and does not contain any untrue or misleading statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

All representations, warranties and agreements of the City shall remain operative and in full force and effect, regardless of any investigations made by or on the Underwriter’s behalf, and shall survive the delivery of the Bonds.

Section 8. Conditions to the Obligations of the Underwriter The Underwriter hereby enters into this Bond Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein and the representations and warranties to be contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the Authority, the City and the Trustee of their respective obligations both on and as of the date hereof. Accordingly, the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy of the representations and warranties of the Authority and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy of the statements of the officers and other officials of the Authority, the City and the Trustee made in any certificate or document furnished pursuant to the provisions hereof, to the performance by the Authority, the City and the Trustee of their respective obligations to be performed hereunder and under the Authority Legal Documents and the City Legal Documents to which it is a party at or prior to the date hereof and at or prior to the Closing Date, and also shall be subject to the following additional conditions:
(a) On the Closing Date, the Authority Legal Documents shall have been duly authorized, executed and delivered by the Authority and the City Legal Documents shall have been duly authorized, executed and delivered by the City, all in substantially the forms heretofore submitted to the Underwriter, with only such changes as shall have been agreed to in writing by the Underwriter, and shall be in full force and effect; and there shall be in full force and effect such resolutions of the governing board of the Authority and the City Council of the City as, in the opinion of the Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby; Packet Pg. 209 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
9 (b) On the Closing Date, all necessary action of the Authority and the City relating to the issuance and sale of the Bonds will have been taken and will be in full force and effect and will not have been amended, modified or supplemented;
(c) On or prior to the Closing Date, the Underwriter shall have received the following documents, in each case satisfactory in form and substance to the Underwriter:
(i) Authority Legal Documents, Authority Resolution, and Joint Powers Agreement.

The Authority Legal Documents, each duly executed and delivered by the respective parties thereto, and certified copies of the Authority Resolution and the Joint Exercise of Powers Agreement, as amended, between the Successor Agency to the Redevelopment Agency of the City Gonzales (the “Joint Powers Agreement”);
(ii) City Legal Documents and City Resolution. The City Legal Documents, each duly executed by the respective parties thereto, and a certified copy of the City Resolution (defined herein);
(iii) Official Statement. A copy of the Official Statement, executed by an authorized officer of the Authority and of the City;
(iv) Opinion of Bond Counsel. The approving opinion, dated the date hereof and addressed to the Authority, of Bond Counsel in substantially the form of Appendix D to the Official Statement;
(v) Supplemental Opinion of Bond Counsel. A supplemental opinion of Bond Counsel addressed to the Underwriter in form and substance acceptable to the Underwriter, and dated the date of the Closing substantially in the form attached as Exhibit B; (vi) Letter of Disclosure Counsel. A letter of Kutak Rock LLP, as Disclosure Counsel, dated the Closing Date, and addressed to the Underwriter, the Authority and the City substantially in the form attached hereto as Exhibit C;
(vii) Opinion of Authority Counsel. An opinion of the City Attorney, as Counsel to the Authority, dated the Closing Date and addressed to the Underwriter, in form and substance similar to the opinion of City Attorney set forth in (viii) below; (viii) Opinion of the City Attorney. An opinion of the City Attorney to the City dated the Closing Date and addressed to the Underwriter, substantially in the form attached as Exhibit D; (ix) Opinion of Underwriter’s Counsel. The opinion of Best Best & Krieger LLP (“Underwriter’s Counsel”), dated the Closing Date and addressed to the Underwriter, in form and substance satisfactory to the Underwriter;
(x) Certificate of the Authority. A certificate of the Authority, dated the Closing Date, to the effect that:
(a) by all necessary official action of the Authority, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations contained in the Authority Legal Documents, and as of the date of Closing, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded;
Packet Pg. 210 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
10 (b) when executed and delivered, the Authority Legal Documents will constitute the legally valid and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally;
(c) the Authority has complied, and will at the Closing be in compliance in all respects, with the terms of the Authority Legal Documents; (d) the representations, warranties and covenants of the Authority contained herein are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing and the Authority has complied with all of the terms and conditions of this Bond Purchase Agreement required to be complied with by the Authority at or prior to the Closing Date;
(e) no event affecting the Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (f) except as otherwise disclosed in the Official Statement and to the best knowledge of such signing officer after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending (notice of which has been properly served on and received by the Authority) or threatened against the Authority, challenging the creation, organization or existence of the Authority, or the validity of the Authority Legal Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the Authority Legal Documents or contesting the authority of the Authority to enter into or perform its obligations under any of the Authority Legal Documents, or under which a determination adverse to the Authority would have a material adverse effect upon the financial condition or the revenues of the Authority; (xi) Certificate of the City. A certificate of the City, dated the Closing Date, to the effect that:
(a) by all necessary official action of the City, the City has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations contained in the City Legal Documents, and as of the date of Closing, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded;
(b) when executed and delivered, the City Legal Documents will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally;
(c) the City has complied, and will at the Closing be in compliance in all respects, with the terms of the City Legal Documents;
(d) the representations, warranties and covenants of the City contained herein Packet Pg. 211 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
11 are true and correct in all material respects on and as of the date of Closing as if made on the date of Closing and the City has complied with all of the terms and conditions of this Bond Purchase Agreement required to be complied with by the City at or prior to the Closing Date;
(e) no event affecting the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (f) except as otherwise disclosed in the Official Statement and to the best knowledge of such signing officer after due inquiry, there is no litigation, proceeding, action, suit, or investigation at law or in equity before or by any court, governmental authority or body, pending (notice of which has been properly served on and received by the City) or threatened against the City, challenging the creation, organization or existence of the City, or the validity of the City Legal Documents or seeking to restrain or enjoin the repayment of the Bonds or in any way contesting or affecting the validity of the City Legal Documents or contesting the authority of the City to enter into or perform its obligations under any of the City Legal Documents, or under which a determination adverse to the City would have a material adverse effect upon the financial condition or the revenues of the City;
(xii) Certificate of the Trustee. A certificate of a duly authorized official of the Trustee, dated the Closing Date, to the effect that: (A) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States, having the full power and being qualified to enter into and perform its duties under the Indenture and to authenticate and deliver the Bonds to the Underwriter; (B) the Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Underwriter pursuant to the Indenture; (C) when delivered to and paid for by the Underwriter at the Closing, the Bonds will have been duly authenticated and delivered by the Trustee; (D) the execution and delivery of the Indenture, and compliance with the provisions on the Trustee’s part contained therein, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or blue sky laws or regulations), which conflict, breach or default would materially impair the ability of the Trustee to perform its obligations under the Indenture, 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 properties or assets held by the Trustee pursuant to the lien created by the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and (E) to the best of the knowledge of the Trustee, it has not been served with any action, suit, proceeding, inquiry or investigation in law or in equity, before or by any court, governmental agency, public board or body, nor is any such action or other proceeding threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain, or enjoining the execution and delivery of the Bonds or the collection of revenues to be applied to pay the principal, premium, if any, and interest with respect to the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Indenture, or contesting the powers of the Trustee or its authority to enter into, adopt or perform its obligations under any of the foregoing to which it is a party, wherein an unfavorable decision, ruling or funding would materially adversely affect the validity or Packet Pg. 212 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
12 enforceability of the Indenture or the power and authority of the Trustee to enter into and perform its duties under the Indenture and to authenticate and deliver the Bonds to or upon the order of the Underwriter;
(xiii) General Resolution of the Trustee. A certified copy of the general resolution of the Trustee authorizing the execution and delivery of the Indenture; (xiv) Opinion of Counsel to the Trustee. The opinion, dated the Closing Date and addressed to the Underwriter and the City, of Counsel to the Trustee, to the effect that: (A) the Trustee has been duly organized as a national banking association under the laws of the United States with trust powers, having full power and authority to enter into and to perform its duties as Trustee under the Indenture; (B) the Trustee has duly authorized, executed and delivered the Indenture, and by all proper corporate action has authorized the acceptance of the trusts of the Indenture; (C) the Indenture constitutes the legally valid and binding agreement of the Trustee, enforceable against the Trustee in accordance with its terms; and (D) the Bonds have been validly authenticated and delivered by the Trustee to the Underwriter; (xv) Tax Certificate. A Tax Certificate of the Authority and the City in form and substance acceptable to Bond Counsel;
(xvi) Evidence of Insurance. Evidence of insurance on the leased Property as required by the Lease;
(xvii) Title Insurance. A copy of the pro forma title insurance policy committed to be issued by the title insurance company;
(xviii) IRS Form 8038-G. Evidence that the federal tax information form 8038-G has been prepared for filing;
(xix) CDIAC Notices of Sale. A copy of the Notice of Proposed Sale and Report of Final Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 8855(g) of the California Government Code;
(xx) DTC Blanket Letter of Representations. A copy of the Authority’s executed Blanket Letter of Representation to The Depository Trust Company; (xxi) Rating Letter. Evidence of a rating of “_____” by S&P Global Ratings, being in full force and effect as of the Closing Date; and
(xxii) Additional Documents. Such additional legal opinions, certificates, instruments or evidences thereof and other documents as the Counsel to the Underwriter or Bond Counsel may request to evidence the due authorization, execution and delivery of the Bonds and the conformity of the Bonds, the Authority Legal Documents and the City Legal Documents with the terms of the Bonds and the descriptions thereof in the Official Statement; (d) the Underwriter shall have the right to terminate this Bond Purchase Agreement, without liability therefor, by notification to the Authority and the City if at any time at or prior to the Closing:
(i) any event shall occur or facts are discovered which causes any statement contained in the Official Statement to be materially misleading or results in a failure of the Official Statement to state a material fact necessary to make the statements in the Official Statement, in the light of Packet Pg. 213 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
13 the circumstances under which they were made, not misleading; or (ii) The market price or marketability or the ability of the Underwriter to enforce contracts for the sale of the Bonds, at the initial offering prices set forth in the Official Statement, shall not, in the reasonable judgment of the Underwriter, have been materially adversely affected by reason of any of the following:
(1) legislation enacted or introduced in the Congress or recommended for passage by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the United States Tax Court, with the purpose or effect, directly or indirectly, of causing inclusion in gross income for purposes of federal income taxation of the interest received by owners of the Bonds, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made:
(a) by or on behalf of the United States Treasury Department or by or on behalf of the Internal Revenue Service, with the purpose or effect, directly or indirectly, of causing inclusion in gross income for purposes of federal income taxation of the interest received by the owners of the Bonds; or (b) by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction over the subject matter thereof, to the effect that the Bonds, or obligations of the general character of the Bonds, including any and all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended;
(2) any outbreak or escalation of hostilities affecting the United States, the declaration of a national or international emergency, war or engagement in, or escalation of, major military hostilities by the United States or the occurrence of any other national emergency or calamity, or escalation thereof, relating to the effective operation of the government or the financial community in the United States; (3) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange or any governmental authority securities exchange; (4) the imposition by the New York Stock Exchange, other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds, or obligations of the general character of the Bonds, or securities generally, or the material increase of any such restrictions now in force; (5) an order, decree or injunction of any court of competent jurisdiction, or order, filing, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws, as amended and then in effect; (6) there shall have occurred or any notice shall have been given of any intended downgrading, suspension, withdrawal, or negative change in credit watch status by any national rating service to the outstanding indebtedness of the Authority or the City; Packet Pg. 214 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
14 (7) any event occurring, or information becoming known which in the reasonable judgment of the Underwriter makes untrue in any material adverse respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of a material fact or omits 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, and, in either such event, the Authority or the City refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price of marketability or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (8) the occurrence, since the date hereof, of any materially adverse change in the affairs or financial condition of the City;
(9) the suspension by the SEC of the trading in the outstanding bonds of the Authority or the City;
(10) any amendment shall have been made to the federal or State Constitution or action by any federal or State court, legislative regulatory body or authority materially adversely affecting the tax status of the Authority or the City its property, income securities (interest thereon);
(11) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(12) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; or
(13) legislation enacted by the legislature of the State, or a decision rendered by a court of the State, or a ruling, order, or regulation (final or temporary) made by State authority, which would have the effect of changing, directly or indirectly, the State tax consequences of interest on obligations of the general character of the Bonds.

If the Authority or the City shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the Authority or the City shall be under further obligation hereunder, except as further set forth in Section 9 and Section 10.

Section 9. Expenses
(a) The Underwriter shall be under no obligation to pay, and the Authority shall pay or cause to be paid the expenses incident to the performance of the obligations of the City hereunder including but not limited to (i) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the Authority Legal Documents and the City Legal Documents and the cost of preparing, printing, issuing and delivering the definitive Bonds, (ii) the fees and disbursements of the accountants, or other experts or consultants retained by the Authority or the City, (iii) the fees and disbursements of counsel to the Authority and to the City, and Bond Counsel, (iv) the fees and disbursements of Disclosure Counsel, (v) the fees and disbursements of the Trustee, and (vi) the cost of Packet Pg. 215 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
15 preparation and printing of the Preliminary Official Statement and any supplements and amendments thereto and the cost of preparation and printing of the Official Statement and any supplements and amendments thereto, including the requisite number of copies thereof for distribution by the Underwriter.

The Authority and the Underwriter intend that the Authority will pay all expenses of City’s employees that are incidental to implementing this Bond Purchase Agreement, including, but not limited to, meals, transportation, and lodging, of those employees, and the Authority shall reimburse the Underwriter if the Underwriter pays for any of such expenses on behalf of the City. (b) The Underwriter shall pay all expenses incurred by them in connection with the public offering and distribution of the Bonds including, but not limited to: (i) the fees and disbursements of Underwriter’s Counsel; (ii) all advertising expenses in connection with the offering of the Bonds; and (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds (including travel and other expenses, CDIAC and blue sky filing fees, CUSIP Service Bureau fees, and any other fees and expenses), except as provided in Section 9(a) or as otherwise agreed to by the Underwriter and the City from the Underwriter’s discount set forth in Section 1.

The Authority and the City acknowledge that they have had an opportunity, in consultation with such advisors as they may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds. The Authority and the City acknowledge that the Underwriter will pay from the underwriter’s expense allocation of the underwriting discount certain fees, including the applicable per bond assessment charged by the California Debt and Investment Advisory Commission.

Section 10. Covenants of the City
The City covenants with the Underwriter that:
(a) If between the date hereof and the date which is not less than 25 days after the End of the Underwriting Period for the Bonds (as defined below), an event occurs, or facts or conditions become known of which the City has knowledge which in the opinion of counsel to the Underwriter or counsel to the City, might or would cause the information contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was made, not misleading, the City will notify the Underwriter, 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 City will forthwith prepare and furnish to the Underwriter (at the expense of the City) a reasonable number of copies of an amendment of or supplement to the Official Statement (in the form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to prospective purchasers, not misleading. If such notification shall be after the Closing, the City shall forthwith provide to the Underwriter such certificates as the Underwriter may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement.

For the purposes of this subsection, between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds, the City will furnish such information with respect to itself as the Underwriter may from time to time reasonably request;
(b) If the information contained in the Official Statement is amended or supplemented pursuant to subparagraph (a) of this Section 10, at the time of such supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date which is 25 days after the “End of the Underwriting Period” for the Packet Pg. 216 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
16 Bonds, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein), excluding therefrom the information relating to DTC and its book-entry only system and under the caption “UNDERWRITING”), will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was made, not misleading; (c) As used herein and for the purposes of the foregoing, the term “End of Underwriting Period” for the Bonds shall mean the earlier of (i) the Closing Date unless the City shall have been notified in writing to the contrary by the Underwriter on or prior to the Closing Date or (ii) the date on which the End of the Underwriting Period for the Bonds has occurred under the Rule, provided, however, that the City may treat as the End of the Underwriting Period for the Bonds the date specified as such in a notice from the Underwriter stating the date which is the End of the Underwriting Period; (d) The City will advise the Underwriter immediately of receipt by the City of any notification with respect to the suspension of the qualification of the Bonds for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose;
(e) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may request 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; provided, however, that the City shall not be required to register as a dealer or broker or foreign corporation in any such state or jurisdiction or consent to service of process therein;
(f) The City will perform all actions as may be requested by the Underwriter (including delivery of an appropriate certificate with respect to the Preliminary Official Statement) in order for the Underwriter to comply with the applicable provisions of the Rule; and (g) Between the date hereof and the Closing Date, without the prior written consent of the Underwriter, the City will not have issued any bonds, notes, or other obligations for borrowed money, in each case payable from Revenues.

Section 11. Establishment of Issue Price
(a) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) The Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test” is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds.

Packet Pg. 217 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
17 (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Schedule A to Exhibit A attached hereto, except as otherwise set forth therein. Schedule A to Exhibit A also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter shall promptly advise the Authority when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (e) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter. The Authority acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party, (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution Packet Pg. 218 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
18 agreement participating in the initial sale of the Bonds to the public), (iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and (iv) “sale date” means the date of execution of this Bond Purchase Agreement by all parties.

Section 12. Notices
Any notice or other communication to be given to the Authority and the City under this Bond Purchase Agreement may be given by delivering the same in writing at the Authority’s and the City’s addresses set forth above and any such notice or other communication to be given to the Underwriter shall be delivered to the following address:

Hilltop Securities Inc.
777 S. Hwy 101, Suite 104
Solana Beach, CA 92075
Attention: Todd Smith
Telephone: (760) 632-1347
Section 13. Parties in Interest
This Bond Purchase Agreement is made solely for the benefit of the Authority, the City and the Underwriter and no other person shall acquire or have any right hereunder or by virtue hereof. All the representations and warranties of the parties hereto contained in this Bond Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter, the Authority or the City until the earlier of (a) delivery of and payment for the Bonds hereunder and (b) any termination of this Bond Purchase Agreement.

Section 14. Execution in Counterparts; Electronic Transmission This Bond Purchase Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute the Purchase Agreement by signing any such counterpart.

Section 15. Headings
The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be part hereof.

Section 16. Effectiveness
This Bond Purchase Agreement shall become effective and binding upon the respective parties Packet Pg. 219 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
19 hereto upon the execution by the Underwriter and the acceptance hereof by the duly authorized representatives of the Authority and the City and shall be valid and enforceable as of the time of such acceptance.

Section 17. Choice of Law
The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State, without regard to conflicts of law.

Section 18. Severability
In the event any provision of this Bond Purchase Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 19. Entire Agreement
The Bond Purchase Agreement, when accepted by the Authority and the City in writing as heretofore specified, shall constitute the entire agreement among the Authority, the City and the Underwriter.

Section 20. Headings
The headings of the sections of this Bond Purchase Agreement are inserted for convenience only and shall not be deemed to be part hereof.

Section 21. No Assignment
The rights and obligations created by this Bond Purchase Agreement shall not be subject to assignment by the Underwriter, the Authority or the City without the prior written consent of the other parties hereto.
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Packet Pg. 220 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
20 IN WITNESS WHEREOF, the parties hereto, by their representatives thereunto duly authorized, have executed and delivered this Agreement, effective as of the day and year first above written.

HILLTOP SECURITIES INC.

Authorized Signatory
Accepted at ______________ .M. as of the date hereof:

GONZALES PUBLIC FINANCING AUTHORITY
By:

Authorized Signatory

CITY OF GONZALES
By:

Authorized Signatory
Packet Pg. 221 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2

SCHEDULE I

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
Maturity Date
(May 1) Principal Amount Interest Rate Yield Price
______________
Packet Pg. 222 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2

EXHIBIT A

ISSUE PRICE CERTIFICATE
$____________

GONZALES PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Hilltop Securities Inc. (the “Underwriter”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A.

2. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Issuer means the Gonzales Public Financing Authority. (c) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. (e) Related Party means any entity if an Underwriter and such entity are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profit interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). (f) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is May ___, 2024. (g) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

Packet Pg. 223 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Kutak Rock LLP, Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to the Bonds. Except as expressly set forth above, the certifications set forth herein may not be relied upon or used by any third party or for any other purpose.

Dated: ___________, 2024
HILLTOP SECURITIES INC.

By:

Name:

Packet Pg. 224 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES
Packet Pg. 225 Attachment: Bond Purchase Agreement (2968 : Resolution No. 2024-12 & Resolution No. FA-2024-01 Public Fin. Auth Lease Revenue Bonds 30539.00015\42160527.2

EXHIBIT B

FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
May ____, 2024
Hilltop Securities Inc.

Solana Beach, California
$_____________
Gonzales Public Financing Authority
Lease Revenue Bonds, Series 2024A
(Supplemental Opinion)
Ladies and Gentlemen:

We have this day released to the Gonzales Public Financing Authority (the “Authority”) our final approving legal opinion with respect to the above-captioned bonds (the “Bonds”). You are authorized to rely on such opinions 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 Bond Purchase Agreement, dated ___________, 2024 (the “Bond Purchase Agreement”), by and among the Authority, the City of Gonzales (the “City”) and you relating to the Bonds.

The opinions expressed herein are based on an analysis of existing law and cover certain matters not directly addressed thereby. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof, and we have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. We have assumed the genuineness of all documents and signatures presented to us. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. Furthermore, we have assumed compliance with all agreements and covenants contained in such documents.

Based upon the foregoing, in our opinion:

1. The statements on the cover of the Official Statement and in the Official Statement under the captions “THE 2024 BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS,” “TAX MATTERS,” APPENDIX B - “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS,” and in APPENDIX D - “FORM OF BOND COUNSEL OPINION” (excluding any material that may be treated as included under such captions and appendices by any cross-reference; any financial, statistical or numerical data contained therein; or the statements under each such caption relating to The Depository Trust Company, Cede & Co., the book-entry system, as to all of which we express no view herein), insofar as such statements expressly summarize provisions of the Indenture, the Lease Agreement, the Ground Lease, the Assignment Agreement, and our final opinion concerning certain federal tax matters relating to the Bonds, are accurate in all material respects as of the date hereof.

Gonzales City CouncilMay 6, 2024

Gonzales City Council
May 6, 2024