Exhibit A Page 2
This Bond is not a debt of the City of Palmdale, California (the “City”), Los Angeles County, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues (as defined in the Indenture hereinafter defined). This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023A (the “Bonds”), in an aggregate principal amount of _______________ dollars ($_________), all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Law”), and pursuant to an Indenture of Trust, dated as of November 1, 2023, by and between the Authority and the Trustee (the “Indenture”), and a resolution of the Authority adopted on October 19, 2023, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds are being issued to (a) finance the cost of the Governmental Freeway Property and the Governmental Property and the refunding of the 2012 Bonds (all a described in the Indenture), and (b) pay costs of issuance of the Bonds. This Bond and the interest and premium, if any, hereon and all other Bonds and the interest and premium, if any, thereon (to the extent set forth in the Indenture) are limited obligations of the Authority, and are payable from, and are secured by a charge and lien on the Revenues as defined in the Indenture, consisting primarily of payments by the City under the Lease Agreement. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. The Bonds maturing on or before June 1, ____, are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on or after June 1, ____, are subject to redemption at the option of the Authority as a whole, or in part in such order of maturity as the City shall designate (and, if no specific order of redemption is designated by the City, in inverse order of maturity, on any date on or after June 1, ____, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Exhibit A Page 3
The Bonds maturing on June 1, ____ (the “Term Bonds”), are also subject to mandatory sinking fund redemption in part by lot on June 1, ___, and on each June 1 thereafter, to and including June 1, ____, from Sinking Account payments made by the Authority at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Term Bonds have been optionally redeemed, the total amount of all future Sinking Account payments will be reduced by the aggregate principal amount of Term Bonds so redeemed, to be allocated among the Sinking Account payments as are thereafter payable on a pro rata basis in integral multiples of $5,000 as determined by the Authority (notice of which determination shall be given by the Authority to the Trustee). Sinking Account Redemption Date (June 1) Principal Amount to be Redeemed †Maturity In lieu of redemption of Term Bonds, amounts on deposit as Sinking Account payments may also be used and withdrawn by the Trustee, at the written direction of the Authority, at any time for the purchase of Term Bonds otherwise required to be redeemed on the following June 1 at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of the Term Bonds so purchased by the Authority and surrendered to the Trustee for cancellation in any twelve-month period ending on June 1 in any year shall be credited towards and shall reduce the par amount of the Term Bonds otherwise required to be redeemed on the following June 1. The Bonds are also be subject to redemption as a whole, or in part on a pro rata basis among maturities, on any date, to the extent the Trustee has received title or hazard insurance proceeds or condemnation proceeds not used to repair or replace any portion of the Leased Property of the City damaged or destroyed and elected by the City, to be used for such purpose, at a redemption price equal to one hundred percent (100%) the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption. If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
Exhibit A Page 4
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Office of the Trustee, or such other place as designated by the Trustee, 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 registration of such transfer, a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. This Bond may be exchanged at the Office of the Trustee, or such other place as designated by the Trustee, for Bonds of the same tenor, aggregate principal amount, interest rate and maturity, of other authorized denominations. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Authority or the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 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 Law and the other 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 prescribed by the Law or any other 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.
Exhibit A Page 5
IN WITNESS WHEREOF, the Palmdale Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director as of the Original Issue Date specified above. PALMDALE FINANCING AUTHORITY By Executive Director CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture. Dated: ________________ U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Officer Exhibit A Page 6
FORM OF ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) 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: Notice: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Notice: The signature on this assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever.
Exhibit A Page 7
Exhibit A Page 8
STATEMENT OF INSURANCE [TO COME]
Exhibit B Page 1
EXHIBIT B FORM OF SERIES B BOND UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF LOS ANGELES PALMDALE FINANCING AUTHORITY Lease Revenue Bonds, Series 2023B (Federally Taxable) INTEREST RATE: MATURITY DATE: ORIGINAL ISSUE DATE: CUSIP: _______% June 1, ____ November 29, 2023 ___ REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: ______________________ DOLLARS The PALMDALE FINANCING AUTHORITY, a duly constituted joint exercise of powers agency under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before May 15, 2024, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate specified above, payable semiannually on June 1 and December 1 in each year, commencing June 1, 2024, (collectively, the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months. Principal hereof and premium, if any, upon early redemption hereof are payable upon presentation and surrender hereof at the corporate trust office (the “Office”) of U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) or such other place as designated by the Trustee. Interest hereon is payable by check on the Interest Payment Date of the Trustee mailed on the applicable Interest Payment Date to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee at least five days prior to such Record Date by a Registered Owner of at least $1,000,000 in aggregate principal amount of Bonds (hereinafter defined), by wire transfer in immediately available funds to an account in the United States designated by such Registered Owner in such written request.
Exhibit B Page 2
This Bond is not a debt of the City of Palmdale, California (the “City”), Los Angeles County, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues (as defined in the Indenture hereinafter defined). This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023B (Federally Taxable) (the “Bonds”), in an aggregate principal amount of _______________ dollars ($_________), all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Law”), and pursuant to an Indenture of Trust, dated as of November 1, 2023, by and between the Authority and the Trustee (the “Indenture”), and a resolution of the Authority adopted on October 19, 2023, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees. The Bonds are being issued to (a) finance the cost of the Non-Governmental Freeway Property and the Economic Development Projects (all as Described in the Indenture), and (b) pay costs of issuance of the Bonds. This Bond and the interest and premium, if any, hereon and all other Bonds and the interest and premium, if any, thereon (to the extent set forth in the Indenture) are limited obligations of the Authority, and are payable from, and are secured by a charge and lien on the Revenues as defined in the Indenture, consisting primarily of payments by the City under the Lease Agreement. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds. The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected. The Bonds maturing on or before June 1, ____, are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on or after June 1, ____, are subject to redemption at the option of the Authority as a whole, or in part in such order of maturity as the City shall designate (and, if no specific order of redemption is designated by the City, in inverse order of maturity, on any date on or after June 1, ____, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
Exhibit B Page 3
The Bonds maturing on June 1, ____ (the “Term Bonds”), are also subject to mandatory sinking fund redemption in part by lot on June 1, ___, and on each June 1 thereafter, to and including June 1, ____, from Sinking Account payments made by the Authority at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following table; provided, however, that if some but not all of the Term Bonds have been optionally redeemed, the total amount of all future Sinking Account payments will be reduced by the aggregate principal amount of Term Bonds so redeemed, to be allocated among the Sinking Account payments as are thereafter payable on a pro rata basis in integral multiples of $5,000 as determined by the Authority (notice of which determination shall be given by the Authority to the Trustee). Sinking Account Redemption Date (June 1) Principal Amount to be Redeemed †Maturity In lieu of redemption of Term Bonds, amounts on deposit as Sinking Account payments may also be used and withdrawn by the Trustee, at the written direction of the Authority, at any time for the purchase of Term Bonds otherwise required to be redeemed on the following June 1 at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Authority may in its discretion determine. The par amount of any of the Term Bonds so purchased by the Authority and surrendered to the Trustee for cancellation in any twelve-month period ending on June 1 in any year shall be credited towards and shall reduce the par amount of the Term Bonds otherwise required to be redeemed on the following June 1. The Bonds are also be subject to redemption as a whole, or in part on a pro rata basis among maturities, on any date, to the extent the Trustee has received title or hazard insurance proceeds or condemnation proceeds not used to repair or replace any portion of the Leased Property of the City damaged or destroyed and elected by the City, to be used for such purpose, at a redemption price equal to one hundred percent (100%) the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium. As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption. If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
Exhibit B Page 4
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Office of the Trustee, or such other place as designated by the Trustee, 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 registration of such transfer, a new Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor. This Bond may be exchanged at the Office of the Trustee, or such other place as designated by the Trustee, for Bonds of the same tenor, aggregate principal amount, interest rate and maturity, of other authorized denominations. The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Authority or the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 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 Law and the other 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 prescribed by the Law or any other 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.
Exhibit B Page 5
IN WITNESS WHEREOF, the Palmdale Financing Authority has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director as of the Original Issue Date specified above. PALMDALE FINANCING AUTHORITY By Executive Director CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within-mentioned Indenture. Dated: ________________ U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee By Authorized Officer Exhibit B Page 6
FORM OF ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) 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: Notice: Signature guarantee shall be made by a guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. Notice: The signature on this assignment must correspond with the name(s) as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever.
Exhibit B Page 7
STATEMENT OF INSURANCE [TO COME]
Exhibit C
Agreement for Legal Services (A-8556) Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023A Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023B (Federally Taxable) THIS AGREEMENT FOR LEGAL SERVICES is made and entered into this ______ day of _________, 2023, by and between the CITY OF PALMDALE (the “City”), and QUINT & THIMMIG LLP, Larkspur, California (“Attorneys”). W I T N E S S E T H : WHEREAS, the City proposes to: (a) finance the cost of the acquisition of approximately 56 acres of real property, of which 50% (the “Governmental Freeway Property”), will be used for governmental purposes of the City and of which 50% (the “Non-Governmental Freeway Property”) is expected to be sold for development, (b) finance the cost of the acquisition of approximately 649 acres of real property which will be used for governmental purposes of the City (the “Ritter Property” and, with the Governmental Freeway Property and the Non- Governmental Freeway Property, the “Acquired Property”), (c) finance the cost of renovations to the Antelope Valley Mall in the City (the “Mall Renovations”), and (d) refund the outstanding Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Refunding Bonds, Series 2012 (the “2012 Bonds”); WHEREAS, it is proposed that the cost of the Governmental Freeway Property, the Ritter Property and the refunding of the 2012 Bonds will be financed from the proceeds of
Agreement for Legal Service (A-8556) Quint & Thimmig LLP -2-
Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023A (the “2023A Bonds”), to be issued by the Palmdale Financing Authority (the “Authority”) pursuant to the provisions of Article 4 (commencing with section 6584) of the JPA Act (the “Bond Law”), and pursuant to the terms of an indenture of trust, by and between the Authority and U.S. Bank Trust Company, National Association, as trustee (A-8549) (the “Indenture”), and that the cost of the Non-Governmental Freeway and the Mall Renovations will be financed from the proceeds of Palmdale Financing Authority (Los Angeles County, California) Lease Revenue Bonds, Series 2023B (Federally Taxable) (the “2023B Bonds” and, with the 2023A Bonds, the “Bonds”), to be issued by the Authority pursuant to the provisions of the Bond Law and the Indenture; WHEREAS, the City requires the services of bond counsel and disclosure counsel in connection with the authorization, issuance and sale of the Bonds; WHEREAS, the City has determined that Attorneys are qualified by training and experience to perform the services of bond counsel and disclosure counsel, and Attorneys are willing to provide such services; and WHEREAS, the public interest, economy and general welfare will be served by this Agreement for Legal Services; NOW, THEREFORE, IT IS HEREBY AGREED, as follows: Section 1. Duties of Attorneys. A. Attorneys shall provide legal services, as bond counsel, in connection with the authorization, issuance and consummation of the financing proceedings relating to the Bonds. Such services shall include the following: (a) Consult and cooperate with officials of the City, City legal counsel, financing consultants, underwriters and other consultants, staff and employees of the City, and assisting such consultants, staff and employees in the formulation of coordinated financial and legal proceedings; (b) Attend all meetings of the City at which the financing is to be discussed, as deemed necessary by for the proper planning of the financing proceedings or when specifically requested to attend; (c) Prepare any required indentures, ordinances and all resolutions, notices and legal documents necessary for the proper conduct of the financing proceedings; (d) Review all financial documents for legal sufficiency; (e) Review, without undertaking an independent investigation, any official statement or other disclosure document prepared in connection with the financing proceedings to assure correctness of disclosure relating to the legal documents; (f) Prepare and provide a signature and no-litigation certificate, an arbitrage certificate and any and all other closing documents required to accompany delivery of the securities; Agreement for Legal Service (A-8556) Quint & Thimmig LLP -3-
(g) Prepare and provide a complete transcript of the proceedings necessary to accompany delivery of the securities; (h) Subject to the completion of proceedings provide a legal opinion that (if tax-exempt) the interest due with respect to the securities is excluded from gross income for purposes of federal income taxation and that such interest is exempt from California personal income taxation; (i) Subject to the completion of proceedings, provide a legal opinion approving in all regards the legality of all proceedings relating to the securities; (j) Confer and consult with the City officials and agents with regard to problems which may arise during the servicing and payment of principal of and interest on the securities; and (k) Such other and further services as are normally performed by bond counsel in connection with the issuance of securities. B. Attorneys shall provide legal services, as disclosure counsel, in connection with the preparation of the official statement to be used in connection with the offering and sale of the Bonds (the “Official Statement”), the continuing disclosure certificate and the bond purchase agreement between the City and the underwriter of the Bonds. Such services shall include the following: (a) Review the Official Statement (both preliminary and final) prepared by the City’s municipal advisor in connection with the offering of the Bonds; (b) Confer and consult with the officers and administrative staff of the City as to matters relating to the Official Statement; (c) Attend all meetings of the City and any administrative meetings at which the Official Statement is to be discussed, deemed necessary by Attorneys for the proper exercise of their due diligence with respect to the Official Statement, or when specifically requested by the City to attend; (d) On behalf of the City, prepare the continuing disclosure certificate in a form which is acceptable to the City and the underwriter of the Bonds; (e) On behalf of the City, prepare the bond purchase agreement, if required, between the City and the underwriter of the Bonds in a form which are acceptable to the City and the underwriter of the Bonds; (f) Subject to the completion of proceedings to the satisfaction of Attorneys, provide letters of Attorneys addressed to the City and the underwriter of the Bonds to the effect that, although Attorneys have not undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, in the course of Attorneys participation in the preparation of the Official Statement Attorneys have been in contact with representatives of the City and others concerning the contents of the Official Statement and related matters, and, based upon the foregoing, nothing has come to Attorneys attention to lead Attorneys to believe that the Official Statement (except for any financial or statistical data or forecasts, numbers, charts, estimates, projections, assumptions or Agreement for Legal Service (A-8556) Quint & Thimmig LLP -4-
expressions of opinion included therein, and information relating to The Depository Trust Company and its book-entry system, as to which Attorneys need express no view) as of the date of the Official Statement or the date of the closing for the Bonds contain any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Section 2. Compensation. (a) For the services set forth under Section 1A. above, Attorneys shall be paid a legal fee, inclusive of all out-of-pocket expenses, based on the following scale: 1% of the first $1,000,000 of principal amount of the Bonds, plus ½% of the next $5,000,000 of principal amount of the Bonds, plus ¼% of the next $15,000,000 of principal amount of the Bonds, plus ⅛% of the remaining principal amount of the Bonds. (b) For the services set forth under Section 1B, Attorneys shall be paid a fee for each issue of $25,000, inclusive of all out-of-pocket expenses. Payment of said fees shall be entirely contingent, shall be due and payable upon the delivery of the Bonds and shall be payable solely from the proceeds of the Bonds and from no other funds of the City. Section 3. Responsibilities of City. The City shall cooperate with Attorneys and shall furnish Attorneys with certified copies of all proceedings taken by the City and deemed necessary by Attorneys to render an opinion on the validity of the Bonds. All costs and expenses incurred incidental to the financing, including the cost and expense of preparing certified copies of proceedings required by Attorneys in connection with the financing, the cost of all printing and publication costs, fees and expenses of parties other than Attorneys, costs and expenses of legal advertising and all other expenses incurred in connection with the financing, shall be paid by the City from the proceeds of the financing and shall not be the responsibility of Attorneys. Section 4. Non-Legal Services. In performing their services as bond counsel and as disclosure counsel pursuant to this Agreement for Legal Services, it is understood and acknowledged by the City that Attorneys will not be providing financial advisory, placement agent, investment banking or other similar services. It is expected that the City will engage other consultants to provide any such services with respect to the financing. Section 5. Termination of Agreement. This Agreement for Legal Services may be terminated at any time by the City, with or without cause, upon written notice to Attorneys. In the event of such termination, all finished and unfinished documents shall, at the option of the City, become its property and shall be delivered by Attorneys to the City. Section 6. Amendment or Modification. No amendment, modification, or other alteration of this Agreement shall be valid unless in writing and signed by both of the parties hereto. Section 7. Entire Agreement. This Agreement contains the entire agreement of the parties hereto. No other agreement, statement, or promise made on or before the effective date of this Agreement will be binding on the parties hereto.
Agreement for Legal Service (A-8556) Quint & Thimmig LLP -5-
IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed by their respective officers thereunto duly authorized as of the day and year first above written. CITY OF PALMDALE By City Manager QUINT & THIMMIG LLP By Brian D. Quint, Partner 1 AGREEMENT NO. A-8557 CONTRACT FOR MUNICIPAL ADVISOR SERVICES BETWEEN THE CITY OF PALMDALE AND HARRELL & COMPANY ADVISORS, LLC THIS AGREEMENT is made and entered into this 18th day of October 2023 by and between the City of Palmdale, a body corporate and politic in the State of California (hereinafter called “City”) and Harrell & Company Advisors, LLC, a California limited liability company (hereinafter called “Harrell & Co.”). RECITALS WHEREAS the City, through the Palmdale Financing Authority (“Authority”), proposes to issue series of tax-exempt and taxable lease revenue bonds (the “Transaction”) for the purpose of refinancing an outstanding lease revenue bond by the Authority and to raise funds for land acquisition and other economic development projects; and WHEREAS the City requires assistance from a municipal advisor in the development of a sound and practical financing plan to implement the Transaction; and WHEREAS Harrell & Co. represents it is qualified to perform the services under this contract; and WHEREAS the City Manager is authorized to enter into this Agreement on behalf of the City, NOW, THEREFORE, AND IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, it is mutually agreed between the parties as follows: APPOINTMENT OF HARRELL & COMPANY The City hereby appoints and designates Harrell & Co. as its municipal advisor for the purpose of assisting the City in the preparation and execution of the Transaction. Harrell & Co. represents and warrants that it is duly qualified to perform the services under this contract. MUNICIPAL ADVISOR DISCLOSURES In connection with the services described herein, certain disclosures are required by the Securities and Exchange Commission and the Municipal Securities Rulemaking Board regarding municipal advisors. These disclosures are attached hereto as Exhibit A. 2 SCOPE OF SERVICES Harrell & Co. will be responsible for performing the following: 1. Financial Assessment. Calculate financing schedules for each project component, taking into account existing debt and potential Measure A V as a source of funding. 2. Financing Schedule. Develop and monitor the schedule of activities during the Transaction to assist the City in meeting agenda deadlines and public notice requirements. 3. Document Review. Review and comment on all legal documents prepared by the City’s bond counsel to ensure conformance with the financing structure. 4. Fee Proposals. Request fee proposal from the City’s underwriter. 5. Disclosure Issues. Provide technical support in defining disclosure issues necessary to meet SEC guidelines. 6. Official Statement. Prepare the preliminary and final official statements in connection with the Transaction. Work closely with the disclosure counsel to make sure all relevant financial information on the City and the Leased Property is included in the official statement. Revise the Preliminary Official Statement for final interest rates and tables related thereto. Arrange for printing and distribution of Final Official Statement within seven business days from the sale date 7. Rating and Insurance Agencies. Submit documentation, conduct negotiations and attend meetings with rating agencies and bond insurance companies as may be required. 8. Timing of Sale. Advise the City of market movements, trends and developments and make recommendations as to the timing of the sale of the financing. 9. Pricing. Advise the City on the propriety of the underwriter’s proposed pricing and compensation relative to the current market conditions. Negotiate with the underwriter to provide the lowest available rates and costs to the City. Provide a pricing analysis and comparison of the transaction with other recent sales of comparable credit quality, or review and comment on similar data provided by the underwriter. Revise cash flows for final pricing information and arrange for the SLGS order for bond defeasance escrow, if required. 10. Bond Closing. Review the proposed arrangements for closing of Bonds and delivery of the Bonds, including certificates and representations of other parties. 11. Bond Administration. Advise the City in administration of the financings after closing. 3 12. Attendance at Meetings. Attend all meetings of the working group and the City Council as required. COMPENSATION For services relating to serving as municipal advisor for the Transaction with an estimated par amount of $42 million, Harrell & Co. shall be compensated at closing of the Transaction: • A fixed fee of $15,000 for preparation of the official statement. • A fixed fee of $80,000 for all other financial advisory services as described herein • Out of pocket expenses, if any, not to exceed $1,500. COST THE RESPONSIBILITY OF THE CITY The City understands that there are several program costs that are required for completion of the Transaction that shall be the responsibility of the City. These may include the cost of bond counsel, trustees, and of any other experts required for completion of the Transaction. COOPERATION BY CITY The City agrees to make available to Harrell & Co. without cost, sufficient copies of the resolutions, and other relevant material pertaining to the Transaction or the City as reasonably may be required from time to time for the prompt and efficient performance by Harrell & Co. of its obligations hereunder. NOTICES Notice to Harrell & Co. shall be deemed delivered if sent by certified mail, return receipt requested, to Harrell & Company Advisors, LLC, 13891 Newport Avenue, Suite 145, Tustin, CA 92780. Notices by Harrell & Co to City shall be deemed delivered if sent by certified mail, return receipt requested, to the City Manager, City of Palmdale, 38300 Sierra Highway, Palmdale, CA 93550. TERM OF THE AGREEMENT The term of this agreement is a two year period commencing from the date first written above. This agreement may be terminated by either party due to either party’s failure to comply to the terms of this agreement, provided that notice must be given not less than 7 days prior to such unilateral termination. In addition, this agreement may be terminated by either party without cause upon 30 days prior notice. In the event of such termination, Harrell & Co. shall be compensated for all reasonable out-of-pocket expenses and for actual time expended (based upon Harrell & Co.’s hourly rate of $300) on behalf of City pursuant to this agreement. 4 INSURANCE Harrell & Co. will maintain errors and omissions insurance during the term of the agreement with a combined single limit of at least $1,000,000. INDEMNIFICATION Neither party hereto shall be liable for any damages approximately resulting from the negligent or wrongful actions or omissions of the other party, or the other party’s employees, agents or contractors performing under this agreement, and each party shall indemnify, defend and save harmless the other party from such damage or liability. It is expressly understood and agreed by City that in performing the duties and activities under this agreement Harrell & Co. is to be acting solely on Harrell & Co.’s own behalf. ENTIRE AGREEMENT This Agreement shall constitute the entire agreement between the parties. Any amendments to or clarification necessary to this agreement shall be in writing and acknowledged by both parties to the agreement. In witness whereof that the parties hereto have caused this agreement to be executed by their duly authorized officials and representatives as of the day and year above written: City of Palmdale By: City Manager Harrell & Company Advisors, LLC By: ____________________________ Suzanne Q. Harrell Managing Director A-1
Exhibit A Municipal Advisor Disclosures Harrell & Company Advisors, LLC (Harrell & Co.) is registered as a “municipal advisor” pursuant to Section 15B of the Securities Exchange Act and rules and regulations adopted by the United States Securities and Exchange Commission (“SEC”) and the Municipal Securities Rulemaking Board (“MSRB”). The SEC has approved MSRB Rule G-42 which, among other matters, requires Harrell & Co. to provide the City with information regarding any conflicts of interest that Harrell & Co. may have and with information about where to find Harrell & Co.’s SEC filings on the SEC website. As a municipal advisor in connection with the execution of the Transaction, Harrell & Co. will owe a fiduciary duty to the City and will carry out its duties in accordance with such duty. Simply put, this means that Harrell & Co. owes the City both a duty of loyalty and a duty of care and that in performing services that Harrell & Co. may undertake in connection with any bond issue, Harrell & Co. will put the needs of the City ahead of its own. This standard of care is higher than that required of other financial services providers such as underwriters. The fees to be paid by the City to Harrell & Co. are contingent on the successful closing of the Transaction. Although this form of compensation may be customary, it presents a conflict because Harrell & Co. may have an incentive to recommend unnecessary financings or financings that are disadvantageous to the City. In addition, if facts or circumstances arise that could cause the financing to be delayed or fail to close, Harrell & Co. may have an incentive to discourage a full consideration of such facts and circumstances, or to discourage consideration of alternatives that may result in the cancellation of the financing. Harrell & Co. manages and mitigates this conflict primarily by adherence to the fiduciary duty which Harrell & Co. owes to municipal entities such as the City which require Harrell & Co. to put the interests of the City ahead of its own. Harrell & Co. has determined, after exercising reasonable diligence, that other than described above, it has no known material conflicts of interest that would impair its ability to provide advice to the City in accordance with its fiduciary duty to municipal entity clients such as the City. To the extent any such material conflicts of interest arise after the date of our engagement Harrell & Co. will inform the City of such conflicts as described below. The City may terminate Harrell & Co.’s services at any time upon written notice as described in this Agreement. Harrell & Co. may withdraw from its representation as Municipal Advisor upon written notice to the City subject to the fiduciary duty described above which may require it to continue to represent the City until an appropriate replacement is identified which will depend on the status of the transaction.
A-2
As part of its registration Harrell & Co. is required to disclose to the SEC information regarding criminal actions, regulatory actions, investigations, terminations, judgments, liens, civil judicial actions, customer complaints, arbitrations and civil litigation involving us. Pursuant to MSRB Rule G-42, Harrell & Co. is required to disclose any legal or disciplinary event that is material to the City’s evaluation of Harrell & Co. or the integrity of its management or advisory personnel. As reflected in Harrell & Co.’s filings with the SEC, Harrell & Co. has determined that no such event exists. Copies of our registration filings with the SEC can currently be found by accessing the SEC’s EDGAR system Company Search Page which is currently available at https://www.sec.gov/edgar/searchedgar/companysearch.html and searching for either “Harrell & Co Advisors” or for our CIK number which is 0001610917. The MSRB has made available on its website (www.msrb.org) a municipal advisory client brochure that describes the protections that may be provided by MSRB rules and how to file a complaint with the appropriate regulatory authority.
O F F I C E O F T H E C I T Y M A N A G E RLease Revenue BondsSeries 2023City Council MeetingWednesday, November 1, 2023 Project Funding OptionsPay-as-you-goIntergovernmental revenue (grants)Borrowing (municipal bonds)EIFDCity has 4 Options to fund Infrastructure and Other Projects Important to Sustained Economic Growth or Quality of Life Prioritizing Project Funding and SourcesProjects Needing Immediate Funding (1-6 months) • Pay-Go• Long-term FinancingProjects With Longer Funding Horizon (12-24 Months) • Pay-Go• Grants• Long-term FinancingDeveloped Project List based on Council GoalsAmounts NeededType of Project (Capital or Economic Development)Timing Immediate Needs (1-6 Months)• $18 Million Freeway Site Land Acquisition• $10.8 Million Land Purchase Agreement with Preston Hollow• $5 Million for Economic Development Projects Freeway Site Land Acquisition• Long-Term Financing• 50% Taxable Bonds to Provide For Future Property Resale• 50% Tax-Exempt Bonds• 30 Year Bonds• If a Portion of the Property is Sold, the Proceeds Will beRecycled Into Additional Economic Development ProjectsInstead of Prepaying Bonds• Eliminates Need to Borrow/Repay for Other Projects Land Purchase Agreement • Long-Term Financing• 100% Tax-Exempt Bonds• 30 Year Bonds• Land Purchase Price Will Provide Preston Hollow With Pump Station Funding for the Ritter Ranch Development Economic Development• $5 Million Financed• 100% Taxable Bonds• 10 Year Bonds• Will Provide Start-Up Capital for Projects• Shorter Repayment to Match Return on Investment Longer Horizon Needs (12-24 Months)To be Separately Considered and Approved 2024-2025Marie Kerr Pool Cover • Bond Funding – 20 YearsDry Town Improvements
• Bond Funding – 20 YearsCivic Center
• Pay-Go (Insurance)• Grants• Bond Funding– 30 YearsEconomic Development • Pay-Go• Land Sale Proceeds
2023 Lease Revenue BondsTOTALTAXABLETAX-EXEMPT$33,800,000$14,000,000$19,800,000Project Costs3,800,000-3,800,000Refunding Escrow3,483,000490,0002,993,000Capitalized Interest585,000225,000360,000Costs of Issuance617,000240,000377,000Bond Insurance/Surety33,00010,00023,000Contingency42,318,00014,965,00027,353,000(1,058,000)-(1,058,000)Original Issue Premium$41,260,000$14,965,000$26,295,000 Total Bond Amount 2023 Bond Structure• Wrap Debt Service Payments for 2023 Bonds Around Existing Debt Service to Minimize Impact in Early Years• Maintain General Fund Contribution to Debt Service at a Level $2 Million• Balance of Debt Service Allocated to Measure AV• City Lease Revenue Bonds Rating Affirmed at A+ with Positive Outlook• Purchase Bond Insurance • Upgrades City’s A+ Rating to AA Bond Insurer Rating Interest RatesCurrent Effective Interest Rate Estimate 5.14% for Tax-Exempt Series A 6.87% for Taxable Series B(Including Cost of Bond Insurance) (Including Cost of Bond Insurance)3.01%2.83%2.81%4.06%3.88%3.81%3.93%4.92%1.50%2.00%2.50%3.00%3.50%4.00%4.50%5.00%1 Yr 5 yr 10 Yr 30 YrJune 2023August 2023October 20234.85%4.61%4.76%5.02%5.70%6.05%6.25%6.80%3.00%3.50%4.00%4.50%5.00%5.50%6.00%6.50%7.00%7.50%1 Yr 5 yr 10 Yr 30 YrJune 2023August 2023October 2023 Debt Service Allocation
12 $0$500,000$1,000,000$1,500,000$2,000,000$2,500,000$3,000,000$3,500,000$4,000,000$4,500,000$5,000,000$5,500,000$6,000,000 Existing General Fund2023 BondsExisting Other FundsMeasure AV AllocationGeneral Fund AllocationProp C and Park Fund Allocation Recommended Actions• City Council Opens Public Hearing and Receives Testimony• City Council Adopts Resolution • Approves Form of Legal Documents• Approves Form of Preliminary Official Statement (Offering Document)• Authorizes Contracts with Bond Consultants• Financing Authority Adopts Resolution • Approves Form of Legal Documents• Approves Form of Preliminary Official Statement • Authorizes Executive Director to Issue the Bonds Within Parameters
CITY OF PALMDALE
OFFICE OF THE CITY COUNCIL
M E M O R A N D U M
TO: City Clerk
FROM: Laura Bettencourt, Mayor
SUBJECT: Monthly Informational Report – Events and Meetings DATE: November 1, 2023
During the period October 1, through October 31, 2023, I attended the following meetings and events:
Oct. 3: Meeting with PWD
Oct. 4: Regular Council Meeting
Oct. 18: Regular Council Meeting
Oct. 18: Meeting with Palmdale Regional Medical
Oct. 21: Breast Cancer Awareness Walk
Oct. 21: Children’s Bureau Family Resource Center Grand Opening Oct. 23: Red Ribbon Week Fight Fentanyl AV Kick-Off
Oct. 26: Palmdale’s Dream Village (ACT) Groundbreaking
Oct. 28: Walk A Mile In Her Shoes
Oct. 29: Palmdale Sheriff’s Booster Trunk or Treat
CITY OF PALMDALE
OFFICE OF THE CITY COUNCIL
M E M O R A N D U M
TO: City Clerk
FROM: Austin Bishop, Councilmember
SUBJECT: Monthly Informational Report – Events and Meetings DATE: November 1, 2023
During the period October 1, through October 31, 2023, I attended the following meetings and events:
Oct. 1: AV Fair & Alfalfa Festival
Oct. 4: Regular Council Meeting
Oct. 6: Kaleidoscope After Dark at Palmdale Amphitheater Oct. 11: AV Chamber Legislative Update with Tom Lackey
Oct. 13: Fall Family Movie Nights-Palmdale Amphitheater Oct. 14: .308 Industries Ribbon Cutting
Oct.16: Habitat For Humanity Builders Kick-Off Celebration Oct. 16: North County Transportation Corridor JPA Board Meeting Oct. 16: PRWA Board Meeting
Oct. 18: Regular Council Meeting
Oct. 17: AVAQMD Board Meeting
Oct. 17: Visit Palmdale Board Meeting
Oct. 19: Meeting with AV Chambers
Oct. 20: AV Chambers Ribbon Cutting
Oct. 20: Family Movie Nights at Palmdale Amphitheater
Oct. 21: Breast Cancer Awareness Walk
Oct. 21: Children’s Bureau Family Resource Center Grand Opening Oct. 23: Red Ribbon Week Fight Fentanyl AV Kick-Off
Oct. 26: Palmdale’s Dream Village (ACT) Groundbreaking
Oct. 27: Marie Kerr Haunted House
Oct. 29: Palmdale Sheriff’s Booster Trunk or Treat
CITY OF PALMDALE
OFFICE OF THE CITY COUNCIL
M E M O R A N D U M
TO: City Clerk
FROM: Richard Loa, Councilmember
SUBJECT: Monthly Informational Report – Events and Meetings DATE: November 1, 2023
During the period October 1, through October 31, 2023, I attended the following meetings and events:
Oct. 1: AV Fair & Alfalfa Festival
Oct. 3: Meeting with PWD
Oct. 4: Regular Council Meeting
Oct. 5: Deputy Clinkunbroomer Memorial Service
Oct. 11: Plant 42/Edwards Breakfast Meeting
Oct. 11: NAHREP Educational Event for Homeownership
Oct. 11: AV Chamber Luncheon Legislative Update with Tom Lackey Oct.16: North County Transportation Coalition JPA Board of Directors Meeting
Oct. 18: Regular Council Meeting
Oct. 19: High Desert Corridor JPA Board of Directors Meeting Oct. 23: Red Ribbon Week Fight Fentanyl AV Kick-Off
Oct. 24: AVTA Board of Directors Meeting
Oct. 26: Blue Ribbon Committee on Homelessness North County Sector Elections
Oct. 26: Edwards Air Force Base Civilian-Military Support Group Banquet Oct 28: Walk A Mile In Her Shoes
Oct. 28: Jacob Taylor Plaque Dedication Ceremony at Marie Kerr Oct. 29: Palmdale Sheriff’s Booster Trunk or Treat
Oct. 29: Victory Outreach Palmdale 20 Years of Service Pastor Mike and Ribbon Cutting
CITY OF PALMDALE
OFFICE OF THE CITY COUNCIL
M E M O R A N D U M
TO: City Clerk
FROM: Eric Ohlsen, Councilmember
SUBJECT: Monthly Informational Report – Events and Meetings DATE: November 1, 2023
During the period October 1, through October 31, 2023, I attended the following meetings and events:
Oct. 1: AV Fair & Alfalfa Festival
Oct. 4: Regular Council Meeting
Oct. 6: Kaleidoscope After Dark at Palmdale Amphitheater Oct. 11: Plant 42/Edwards Breakfast Meeting
Oct. 11: NAHREP Educational Event for Homeownership
Oct. 13: Howl-O-Ween at Yellen Dog Park
Oct.16: Habitat For Humanity Builders Kick-Off Celebration Oct. 18: Regular Council Meeting
Oct. 19: High Desert Corridor JPA Board of Directors Meeting Oct. 20: AV Chambers Ribbon Cutting
Oct. 20: AV BOGA Retirement Party
Oct. 21: Children’s Bureau Family Resource Center Grand Opening Oct. 23: Red Ribbon Week Fight Fentanyl AV Kick-Off
Oct. 24: AVTA Board Meeting
Oct. 26: Palmdale’s Dream Village (ACT) Groundbreaking
Oct. 26: Edwards Air Force Base Civilian-Military Support Group Banquet Oct 28: Halloween Bike Parade-Yellen Park to Dominic Massari Oct. 28: Habitat For Humanity Home Dedication Celebration Oct. 29: Palmdale Sheriff’s Booster Trunk or Treat