Upland City Council
May 9, 2022

19 3.14.3.4 All Coverages. Each insurance policy required by this Contract shall be endorsed to state that: (1) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the City; and (2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, its officials, employees, agents and volunteers.

3.14.4 Builders’/All Risk Policy Requirements. The builders’/all risk insurance shall provide that the City be named as loss payee. In addition, the insurer shall waive all rights of subrogation against the City.

3.14.5 Separation of Insureds; No Special Limitations. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its officials, employees, agents and volunteers.

3.14.6 Professional Liability Insurance. All architects, engineers, consultants or design professionals retained by Contractor shall also procure and maintain, for a period of five (5) years following completion of the Contract, errors and omissions liability insurance with a limit of not less than $1,000,000 per occurrence. This insurance shall name the City, its directors, officials, officers, employees, agents and volunteers as additional and insureds with respect to Work performed and shall otherwise comply with all requirements of this Section. Defense costs shall be paid in addition to the limits.

3.14.7 Deductibles and Self-Insurance Retentions. Any deductibles or self- insured retentions must be declared to and approved by the City. Contractor shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self - insured retentions as respects the City, its officials, employees, agents and authorized volunteers; or (2) the Contractor shall procure a bond or other financial guarantee acceptable to the City guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

3.14.8 Acceptability of Insurers. Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A: VII, licensed to do business in California, and satisfactory to the City. Exception may be made for the State Compensation Insurance Fund when not specifically rated.

3.14.9 Verification of Coverage. Contractor shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Contract on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf and shall be on forms supplied or approved by the City. All certificates and endorsements must be received and approved by the City before work commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.

3.14.10 Subcontractors. All subcontractors shall meet the requirements of this Section before commencing Work. Contractor shall furnish separate certificates and endorsements for each subcontractor. Subcontractor policies of General Liability insurance shall name the City, its officials, employees, agents and authorized volunteers as additional insureds using form ISO 20 38 04 13 or endorsements providing the exact same coverage. All coverages

20 for subcontractors shall be subject to all of the requirements stated herein except as otherwise agreed to by the City in writing.

3.14.11 Reporting of Claims. Contractor shall report to the City, in addition to Contractor’s insurer, any and all insurance claims submitted by Contractor in connection with the Work under this Contract.

3.15 Bond Requirements.

3.15.1 Payment Bond. If required by law or otherwise specifically requested by City in Exhibit “C” attached hereto and incorporated herein by reference, Contractor shall execute and provide to City concurrently with this Contract a Payment Bond in an amount required by the City and in a form provided or approved by the City. If such bond is required, no payment will be made to Contractor until the bond has been received and approved by the City.

3.15.2 Performance Bond. If specifically requested by City in Exhibit “C” attached hereto and incorporated herein by reference, Contractor shall execute and provide to City concurrently with this Contract a Performance Bond in an amount required by the City and in a form provided or approved by the City. If such bond is required, no payment will be made to Contractor until the bond has been received and approved by the City.

3.15.3 Bond Provisions. Should, in City’s sole opinion, any bond become insufficient, or any surety be found to be unsatisfactory, Contractor shall renew or replace the effected bond within (ten) 10 days of receiving notice from City. In the event the surety or Contractor intends to reduce or cancel any required bond, at least thirty (30) days prior written notice shall be given to the City, and Contractor shall post acceptable replacement bonds at least ten (10) days prior to expiration of the original bonds. No further payments shall be deemed due or will be made under this Contract until any replacement bonds required by this Section are accepted by the City. To the extent, if any, that the Total Contract Price is increased in accordance with the Contract, Contractor shall, upon request of the City, cause the amount of the bond to be increased accordingly and shall promptly deliver satisfactory evidence of such increase to the City. If Contractor fails to furnish any required bond, the City may terminate the Contract for cause.

3.15.4 Surety Qualifications. Only bonds executed by an admitted surety insurer, as defined in California Code of Civil Procedure Section 995.120, shall be accepted. If a California-admitted surety insurer issuing bonds does not meet these requirements, the insurer will be considered qualified if it is in conformance with Section 995.660 of the California Code of Civil Procedure, and proof of such is provided to the City.

3.16 Warranty. Contractor warrants all Work under the Contract (which for purposes of this Section shall be deemed to include unauthorized work which has not been removed and any non-conforming materials incorporated into the Work) to be of good quality and free from any defective or faulty material and workmanship. Contractor agrees that for a period of one year (or the period of time specified elsewhere in the Contract or in any guarantee or warranty provided by any manufacturer or supplier of equipment or materials incorporated into the Work, whichever is later) after the date of final acceptance, Contractor shall within ten (10) days after being notified in writing by the City of any defect in the Work or non-conformance of the Work to the Contract, commence and prosecute with due diligence all Work necessary to fulfill the terms of the warranty at its sole cost and expense. Contractor shall act sooner as requested by the City in response to an emergency. In addition, Contractor shall, at its sole cost and expense, repair and replace any

21 portions of the Work (or work of other contractors) damaged by its defective Work or which becomes damaged in the course of repairing or replacing defective Work. For any Work so corrected, Contractor’s obligation hereunder to correct defective Work shall be reinstated for an additional one year period, commencing with the date of acceptance of such corrected Work.

Contractor shall perform such tests as the City may require to verify that any corrective actions, including, without limitation, redesign, repairs, and replacements comply with the requirements of the Contract. All costs associated with such corrective actions and testing, including the removal, replacement, and reinstitution of equipment and materials necessary to gain access, shall be the sole responsibility of Contractor. All warranties and guarantees of subcontractors, suppliers and manufacturers with respect to any portion of the Work, whether express or implied, are deemed to be obtained by Contractor for the benefit of the City, regardless of whether or not such warranties and guarantees have been transferred or assigned to the City by separate agreement and Contractor agrees to enforce such warranties and guarantees, if necessary, on behalf of the City. In the event that Contractor fails to perform its obligations under this Section, or under any other warranty or guaranty under this Contract, to the reasonable satisfaction of the City, the City shall have the right to correct and replace any defective or non-conforming Work and any work damaged by such work or the replacement or correction thereof at Contractor’s sole expense.

Contractor shall be obligated to fully reimburse the City for any expenses incurred hereunder upon demand.

3.17 Employee/Labor Certifications.

3.17.1 Contractor’s Labor Certification. By its signature hereunder, Contractor certifies that he is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker’s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Work. A certification form for this purpose, which is attached to this Contract as Exhibit “D” and incorporated herein by reference, shall be executed simultaneously with this Contract.

3.17.2 Equal Opportunity Employment. Contractor represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination.

3.17.3 Verification of Employment Eligibility. By executing this Contract, Contractor verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subcontractors and sub-subcontractors to comply with the same.

3.18 General Provisions.

3.18.1 City’s Representative. The City hereby designates the Assistant City Manger or his or her designee, to act as its representative for the performance of this Contract (“City’s Representative”). City’s Representative shall have the power to act on behalf of the City for all purposes under this Contract. Contractor shall not accept direction or orders from any person other than the City’s Representative or his or her designee.

22 3.18.2 Contractor’s Representative. Before starting the Work, Contractor shall submit in writing the name, qualifications and experience of its proposed representative who shall be subject to the review and approval of the City (“′Contractor’s Representative”). Following approval by the City, Contractor’s Representative shall have full authority to represent and act on behalf of Contractor for all purposes under this Contract. Contractor’s Representative shall supervise and direct the Work, using his best skill and attention, and shall be responsible for all construction means, methods, techniques, sequences and procedures and for the satisfact ory coordination of all portions of the Work under this Contract. Contractor ’s Representative shall devote full time to the Project and either he or his designee, who shall be acceptable to the City, shall be present at the Work site at all times that any Work is in progress and at any time that any employee or subcontractor of Contractor is present at the Work site. Arrangements for responsible supervision, acceptable to the City, shall be made for emergency Work which may be required. Should Contractor desire to change its Contractor’s Representative, Contractor shall provide the information specified above and obtain the City’s written approval.

3.18.3 Termination. This Contract may be terminated by City at any time, either with our without cause, by giving Contractor three (3) days advance written notice. In the event of termination by City for any reason other than the fault of Contractor, City shall pay Contractor for all Work performed up to that time as provided herein. In the event of breach of the Contract by Contractor, City may terminate the Contract immediately without notice, may reduce payment to Contractor in the amount necessary to offset City’s resulting damages, and may pursue any other available recourse against Contractor. Contractor may not terminate this Contract except for cause. In the event this Contract is terminated in whole or in part as provided, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated. Further, if this Contract is terminated as provided, City may require Contractor to provide all finished or unfinished documents, data, diagrams, drawings, materials or other matter prepared or built by Contractor in connection with its performance of this Contract.

Contractor shall be required to provide such document and other information within fifteen (15) days of the request.

3.18.4 Contract Interpretation. Should any question arise regarding the meaning or import of any of the provisions of this Contract or written or oral instructions from City, the matter shall be referred to City’s Representative, whose decision shall be binding upon Contractor.

3.18.5 Anti-Trust Claims. This provision shall be operative if this Contract is applicable to California Public Contract Code Section 7103.5. In entering into this Contract to supply goods, services or materials, Contractor hereby offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Section 15) or under the Cartwright Act (Chapter 2, commencing with Section 16700, of Part 2 of Division 7 of the Business and Professions Code) arising from purchases of goods, services, or materials pursuant to the Contract. This assignment shall be made and become effective at the time the City tender final payment to Contractor, without further acknowledgment by the Parties.

3.18.6 Notices. All notices hereunder and communications regarding interpretation of the terms of the Contract or changes thereto shall be provided by the mailing thereof by registered or certified mail, return receipt requested, postage prepaid and addressed as follows:

23 CONTRACTOR:

Innovative Playgrounds, Inc.
12407 E. Slauson Ave., Unit D, Whittier, CA, 90606
Attn: Alvino Larios

CITY:

City of Upland
460 N. Euclid Avenue
Upland, CA 91786
Attn: City Manager
With Copy To:

City of Upland
460 N. Euclid Avenue
Upland, CA 91786
Attn: City Attorney
Any notice so given shall be considered received by the other Party three (3) days after deposit in the U.S. Mail as stated above and addressed to the Party at the above address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.18.7 Time of Essence. Time is of the essence in the performance of this Contract.

3.18.8 Assignment Forbidden. Contractor shall not, either voluntarily or by action of law, assign or transfer this Contract or any obligation, right, title or interest assumed by Contractor herein without the prior written consent of City. If Contractor attempts an assignment or transfer of this Contract or any obligation, right, title or interest herein, City may, at its option, terminate and revoke the Contract and shall thereupon be relieved from any and all obligations to Contractor or its assignee or transferee.

3.18.9 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.18.10 Laws; Venue. This Contract shall be interpreted in accordance with the laws of the State of California. If any action is brought to interpret or enforce any term of this Contract, the action shall be brought in a state or federal court situated in the County of San Bernardino, State of California.

3.18.11 Counterparts. This Contract may be executed in counterparts, each of which shall constitute an original.

3.18.12 Successors. The Parties do for themselves, their heirs, executors, administrators, successors, and assigns agree to the full performance of all of the provisions contained in this Contract.

24 3.18.13 Solicitation. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Contract. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Contract. For breach or violation of this warranty, City shall have the right to terminate this Contract without liability.

3.18.14 Conflict of Interest. Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Contract. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Contract. For breach or violation of this warranty, City shall have the right to rescind this Contract without liability. For the term of this Contract, no director, official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Contract, or obtain any present or anticipated material benefit arising therefrom. In addition, Contractor agrees to file, or to cause its employees or subcontractors to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Work.

3.18.15 Certification of License.

3.18.15.1 Contractor certifies that as of the date of execution of this Contract, Contractor has a current contractor’s license of the classification indicated below under Contractor’s signature.

3.18.15.2 Contractors are required by law to be licensed and regulated by the Contractors’ State License Board which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or omission is filed within four (4) years of the date of the alleged violation. A complaint regarding a latent act or omission pertaining to structural defects must be filed within ten (10) years of the date of the alleged violation. Any questions concerning a contractor may be referred to the Registrar, Contractors’ State License Board, P.O.

Box 26000, Sacramento, California 95826.

3.18.16 Authority to Enter Contract. Each Party warrants that the individuals who have signed this Contract have the legal power, right and authority to make this Contract and bind each respective Party.

3.18.17 Entire Contract; Modification. This Contract contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Contract may only be modified by a writing signed by both Parties.

3.18.18 Non-Waiver. None of the provisions of this Contract shall be considered waived by either party, unless such waiver is specifically specified in writing.

3.18.19 City’s Right to Employ Other Contractors. City reserves right to employ other contractors in connection with this Project or other projects.

25 SIGNATURE PAGE FOR CONSTRUCTION CONTRACT

BETWEEN THE CITY OF UPLAND
AND INNOVATIVE PLAYGROUNDS, INC.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first written above.

CITY OF UPLAND
APPROVED BY:

MICHAEL BLAY
City Manager

ATTESTED BY:

KERI JOHNSON
City Clerk

APPROVED AS TO FORM:

Best Best & Krieger LLP
City Attorney

INNOVATIVE PLAYGROUNDS, INC

CORPORATION

Signature

Name

Title

Signature

Name

Title

___________________________________
Contractor’s License Number and
Classification

___________________________________
DIR Registration Number

EXHIBIT A

SERVICES/SCHEDULE
1) Supply (1) 24' x 38' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design. Includes Electrical Access at Corner.
2) Installation of (1) 24' x 38' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design.
3) Supply (1) 44' x 44' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design. Includes Electrical Access at Corner.
4) Installation of (1) 44' x 44' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design.
5) Provide Temporary Fencing During Installation of Picnic Shelters in Both Areas.

6) Engineering for Shelters

Shipping Charge to Upland, CA.

EXHIBIT B

CONTRACTORS BID
SHELTER-1 Supply (1) 24' x 38' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design. Includes Electrical Access at Corner.

LIST PRICE: $46,135.48

IN KIND CUSTOMER DISCOUNT APPLIED: ($5,074.90)
$41,060.58T

ENGINEERING - Engineering Fee for Shelter. $1,133.33

INSTALLATION - Installation of (1) 24' x 38' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design.
$25,442.47

SHELTER - 1 Supply (1) 44' x 44' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design. Includes Electrical Access at Corner
LIST PRICE: $99,998.93
IN KIND CUSTOMER DISCOUNT APPLIED: ($10,999.82)
$88,998.56T

ENGINEERING - Engineering Fee for Shelter. $1,133.33

INSTALLATION - Installation of (1) 44' x 44' Steelworx Hip Shelter w/ 12' Eave Height, 4:12 Roof Pitch, w/ Polyester Powder Coated Framework, w/ 24 ga MultiRib Metal Roofing (6) Post Design.
$40,168.49

TEMP. FENCING - Provide Temporary Fencing During Installation of Picnic Shelters in Both Areas. $2,700.00

FREIGHT - Shipping Charge to Upland, CA. Freight Price Valid for 30 Days Only, Due to Fluctuating Fuel Pricing. Please Requote After 4/8/22.
$10,201.75
INCLUDES Pricing includes prevailing wage rates.

BONDS – $8,865.92

EXCLUDES Pricing excludes regular wage rates, permits, any border material and/or concrete curbing, fencing (temporary and/or permanent), special installation due to unforeseen site conditions and any additional site work/preparation/amenities.

Subtotal - $220,434.36
Sales Tax (7.75%) - $10,079.59
Total - $230,513.95

Exhibit C- 1

EXHIBIT C

SPECIAL CONDITIONS
ARTICLE 1. BONDS
Concurrently with this Contract, the Contractor shall deliver to the City four identical counterparts of the Performance Bond and Payment Bond on the forms supplied by the City and included as Exhibit “E” to the Contract. The surety supplying the bond must be an admitted surety insurer, as defined in Code of Civil Procedure Section 995.120, authorized to do business as such in the State of California and satisfactory to the City. The Performance Bond and the Payment Bond shall be for one hundred percent (100%) of the Total Contract Price.

EXHIBIT D

CERTIFICATION
LABOR CODE - SECTION 1861
I, the undersigned Contractor, am aware of the provisions of Section 3700, et seq., of the California Labor Code which require every employer to be insured against liability for Worker’s Compensation or to undertake self-insurance in accordance with the provisions of the Code, and I, the undersigned Contractor, agree to and will comply with such provisions before commencing the performance of the Work on this Contract.

By: _________________________
Signature
_________________________
Name (Print)
_________________________
Title (Print)

S T A F F R E P O R T
I T E M N O . 10.I.

D A T E :M ay 9 , 20 22
T O :M A YO R A N D C I T Y C O U N C I L
F R O M : M I C H A E L B L A Y, C I T Y M A N A G E R P R E P A R E D B Y : R O B E R T D. D A L Q U E S T, D E V E LO P M E N T S E R V I C E S D I R E C TO R

L I Z C H A V E Z , D E V E LO P M E N T S E R V I C E S M A N A G E R

M E L E C I O P I C A Z O, E C O N O M I C D E V E LO P M E N T C O O R D I N A TO R S U B J E C T :D E C L A R I N G R E A L P R O P E R T Y O W N E D B Y T H E C I T Y, C O M M O N LY K N O W N A S A 65 0 S Q U A R E F O OT P O RT I O N O F T H E P R O P E R T Y W I T H A S S E S S O R 'S PA R C E L N U M B E R 1 04 6-5 92 -24 , I S E X E M P T

S U R P L U S L A N D

R E C O M M E N D E D A C T I O N
I t i s recom m en d ed t h at th e C ity C ou n c il ad op t a Resol ut ion d eclarin g p u rs u an t t o G overn m en t C od e sec ti on 54 22 1(f )(1)(B ) t hat real p rop ert y own ed b y th e C ity, com m on ly kn own as a 65 0 sq uare foot p orti on of t h e p rop erty w it h A s ses sor’s Parcel N um b er 1 04 6-5 92 -24 is exem p t su rp lu s land to b e sol d t o th e ow n er of contig uou s land at 1 01 N . 2n d Aven u e i n U p l an d ; an d fin d t h at t h e foreg oin g act ion s are exem p t from en vironm ent al review u nd er th e C aliforn ia E nviron m en tal Q uality A ct.

G O A L S T A T E M E N T
Th e p rop osed act ion su p p ort s th e C i ty’s g oal to en s u re th e econ om ic vit ali ty of D own town , b y su p p ortin g a d iverse m i x of u ses in th e d ow nt ow n, in cl ud in g en t ert ain m en t, res tau ran t, an d neig h b orhood serving u ses . F urth erm ore, it s up p orts t h e C ity’s g oal t o fac il it ate the recru itm en t, reten ti on, or exp ans ion of d esi rab le retail b u si nes ses . I n ad d ition , th e action su p p orts th e C it y’s g oal to com p l y w ith th e S tat e’s S u rp lu s Lan d A ct, G overn m en t C od e S ections 54 22 0 et seq . for the p urp oses of d isp osin g C ity-ow ned su rp lu s land .

B A C K G R O U N D
Th e C it y i s sub ject t o t h e C aliforn ia S u rp lu s L an d A ct (G overn m en t C od e §5 42 20 et s eq .) (the “A ct”), w hich req ui res loc al ag en c ies , to d et erm in e, b y C it y C ou n c il -ap p roved w ri tt en fin d ing s, w hether lan d it int end s to d is p os e of is (a) “su rp lu s” an d , if so, sh ould fi rs t b e m ad e availab le

to afford ab le h ous in g d evel op ers; or, if surp l us, (b ) w h eth er it q u alifies as “exem p t su rp lu s” lan d an d n ot sub ject to the p roced u ral req uirem ents u nd er the A ct.

S p ecifically, sec ti on 5 4 2 2 1 (b )(1 ) of t h e A c t d efi n es “s u rp l u s l an d ” as “land own ed in fee sim p le b y an y local ag en cy for w hich t h e l ocal ag en cy’s g overn in g b od y takes form al action in a reg u lar p u b l ic m eetin g d ec larin g t hat th e l an d is su rp lu s an d is not n eces sary for the ag en cy’s use.” U n d er th e A c t, l an d m u st b e d eclared “eith er su rp lu s lan d or exem p t su rp lu s lan d , as su p p ort ed b y writ ten fi n d in g s , b efore a local ag ency m ay take any act ion to d i sp ose of it con sistent w ith an ag en cy’s p olicies or p roced ures.”

C ity st aff is seeki n g C i ty C oun cil’s ap p roval, via res olu ti on an d t he writ ten fin d ing s contain ed th erein, t hat an ap p roxi m at ely 65 0 s q u are foot, C it y-ow ned site q u ali fies as “exem p t su rp lu s lan d ” u n d er G overn m en t C od e s ect ion 5 42 21 (f )(1 )(B ). S u c h a fi nd in g w ould allow the C ity to p roceed with d is p os it ion of t he si te to t he ow n er of cont ig uou s lan d at 1 01 N . 2 nd Aven ue p u rsuan t to S tate law.

I S S U E S /A N A L Y S I S
Th e C it y-ow n ed si te i n q uesti on is com p rised of an exis ti n g C i ty-own ed land scap ed p lanter w ithin t h e p u b lic p arking lot of A ssessor Parc el N um b er 1 0 4 6 -5 9 2 -2 4 , and is 6 50 sq u are feet (“S ite”) i n size, p rovi d es lit tle op p ort u n it y for th e C it y, an d i s too s m al l for t h e con st ru ct ion of hou sing , as contem p lated b y th e A ct. T he ad jacen t p rop erty ow ner at 1 01 N . 2nd Aven ue is op en in g a g astrop u b res tau ran t with in t he ad jac en t 2,5 00 s q u are foot b u i ld in g an d w is hes to b u ild an out d oor covered seatin g area b eh in d th e b u ild ing to p rovi d e m ore seat in g an d an outd oor d in in g exp erien ce Th e S u rp lu s L an d A ct exem p ts certai n surp lus l an d from its req uirem ents, inclu d ing : “S u rp lu s land th at is (i) less than 5,000 sq uare feet in area, (ii) less th an t he m in im um l eg al resid ent ial b u ild ing l ot s ize for th e juris d i ct ion in wh ic h t he p arcel is located , or 5 ,00 0 s q u are feet in area, w hi ch ever i s l ess , or (iii) h as n o rec ord acc ess an d is less th an 10 ,00 0 sq u are feet in area; and is no t co ntig uo us to land o w ned by a state o r lo cal agency that is used fo r o p en-space o r lo w - and m o derate-inco m e ho using purpo ses. I f t he surp lus land is no t so ld to an o w ner o f co nt ig uo us land, it is no t co nsidered exempt surplus land and is subject to this article” (G overnm ent C od e section 54 22 1(f )(1)(B ), em p hasis ad d ed ).

Th e S it e m eet s t he req u i rem en t s of sect ion 54 22 1(f )(1)(B ), d u e t o its si ze, t he int end ed sale to t h e ow ner of c on t ig u ou s lan d at 1 01 N . 2nd A ven u e con si st ent w ith S t ate l aw, an d b ecau se th e S it e is n ot con ti g u ou s to l an d ow n ed b y a s tat e or l ocal ag en cy u sed for op en-sp ace or low- an d m od erate-incom e h ousin g p urp oses.

A s th e S u rp l u s Lan d A c t req ui res a d eclaration of exem p t su rp lu s lan d , su p p ort ed b y w ritten fin d ing s ap p roved b y th e C it y C ou n ci l at a reg u lar m eeting , b efore C ity m ay t ake any act ion to d isp ose of the land in q u est ion , st aff is seeking C ou ncil’s ap p roval of that exem p t surp lus lan d d esig nation . S tat e st atu te req u ires t hose w ritt en find in g s b e ap p roved b y t he C it y C ou ncil for an exem p t surp lus lan d d esig nation , b u t d oes not req u ire a n otice an d neg otiation p eri od , or H C D ’s revi ew of C ity’s relevan t m aterial s, w h i ch i s req uired for a “s urp l us land ” d esig n ation.

H ow ever, H C D ’s G u id eli n es on th e S u rp l u s L and A ct p u b li sh ed in A p ri l 20 21 seek a c op y of th e resolu tion d eclaring th e p rop erty exem p t su rp lu s land , w hich H C D req u ests 3 0 d ays b efore th e C ity d isp oses of that exem p t surp lus lan d .

Th e res olu ti on d ec larin g th e S it e exem p t s u rp l u s l an d i s exem p t from C E Q A p u rsuan t to S tate C E Q A G u id eli n es S ec ti on 1 50 60 (c)(3 ), b ecau se i t is n ot a p roject as d efi n ed b y t he C E Q A G uid elin es, S ect ion 1 53 78 an d b ecause ad op ti on of t he Resolution , an d t he d eclaration th at th e S ite is exem p t su rp lu s l and , d oes n ot in it sel f h ave t h e p oten ti al for res u l ti n g in eit h er a d irect p h ysical chan g e in t h e en vironm ent or a reasonab ly fores eeab l e i n d irect p h ys ic al chan g e in th e environ m en t.

F I S C A L I M P A C T S
Th is action has n o fiscal im p act on th e G en eral F un d . A ll costs associated with d isp osition of th e su b ject site w ill b e p aid throug h a d ep osit su p p lied b y th e b u yer.

A L T E R N A T I V E S
P rovid e altern ative d irection to staff.

AT TAC HM E NT S :

Description
Resolution
Aerial

RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UPLAND, CALIFORNIA, DECLARING PURSUANT TO
GOVERNMENT CODE SECTION 54221 THAT REAL

PROPERTY OWNED BY THE CITY, COMMONLY KNOWN AS
A 650 SQUARE FOOT PORTION OF THE PROPERTY WITH
ASSESSOR’S PARCEL NUMBER 1046-592-24, IS EXEMPT

SURPLUS LAND, AND FINDING THAT THE FOREGOING

ACTIONS ARE EXEMPT FROM ENVIRONMENTAL REVIEW

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

WHEREAS, the City of Upland (“City”) is the owner in fee simple of the following parcel of real property, measuring approximately 650 square feet in area, adjacent to the address at 101 N. 2nd Avenue, Upland, California, 91786, more specifically described within Attachment A (“Site”); and WHEREAS, the Site is approximately 650 square feet in area and generally bounded by commercial retail buildings to the north and east, City-owned parking lot to the west, and A Street right of way and a Metrolink parking lot to the south; and WHEREAS, the Site is comprised of an existing City-owned landscaped planter within the public parking lot with Assessor Parcel Number 1046-592-24. The adjacent property owner at 101 N. 2nd Avenue is opening a gastropub restaurant within the adjacent 2,500 square foot building and requires the construction of an outdoor covered seating area behind the building to provide more seating and an outdoor dining experience; and
WHEREAS, the Site is no longer necessary for the City’s use, and the City desires to dispose of it (for its appraised fair market value); and WHEREAS, the Surplus Land Act, Government Code sections 54220 et seq. (as amended, the “Act”), applies when a local agency disposes of “surplus land,” as that term is defined in Government Code section 54221; and WHEREAS, the Site is “surplus land” under the Act, because it is land owned in fee simple by the City for which the City Council will take formal action (in the form of adoption of this Resolution) in a regular public meeting declaring that the land is surplus and is not necessary for the City’s use; and WHEREAS, the Act exempts certain surplus land from its requirements, including: “Surplus land that is (i) less than 5,000 square feet in area, (ii) less than the minimum legal residential building lot size for the jurisdiction in which the parcel is located, or 5,000 square feet in area, whichever is less, or (iii) has no record access and is less than 10,000 square feet in area; and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes. If the surplus land is not sold to an owner of contiguous land, it is not considered exempt surplus land and is subject to this article” (Government Code section 54221(f)(1)(B) (the “SLA Exemption”)); and

Resolution No.

WHEREAS, the Site qualifies for the SLA Exemption as it is significantly less than 5,000 square feet in area, the City intends to sell the parcel to the owner of contiguous land, specifically, to Mark Davidson, owner of the property at 101 N. 2nd Avenue, pursuant to one of the disposition processes set out by State law, and because the Site is not contiguous to land owned by a state or local agency used for open-space or low- and moderate-income housing purposes.

NOW THEREFORE, the City Council of the City of Upland does hereby resolve, find, determine, and order as follows:

SECTION 1. RECITALS. The recitals set forth above are true and correct and are hereby incorporated into this Resolution by this reference.

SECTION 2. EXEMPT SURPLUS LAND. The City Council hereby declares that (i) the Site is surplus land and not necessary for the City’s use, and (ii) the Site is exempt from the Act pursuant to the cited SLA Exemption. The basis for this declaration is the finding that the Site is less than 5,000 square feet in area, will be sold to the owner of contiguous land with City Council’s approval, and based on a finding the Site is not contiguous to land owned by a state or local agency used for open space or low- and moderate-income housing purposes, in compliance with section 54221(f)(1)(B).

SECTION 3. CEQA. This Resolution has been reviewed with respect to the applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”). Designation of the Site as exempt surplus land does not have the potential for creating a significant effect on the environment and is therefore exempt from further review under CEQA pursuant to State CEQA Guidelines Section 15060(c)(3), because it is not a project as defined by the CEQA Guidelines, Section 15378. Adoption of the Resolution does not have the potential for resulting in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. If and when the Site is sold to a purchaser, and that purchaser proposes a use for the Property that requires a discretionary permit and CEQA review, that future use and project will be analyzed at the appropriate time in accordance with CEQA.

SECTION 4. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City declares that the City would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

SECTION 5. This Resolution shall become effective immediately upon its adoption.

SECTION 6. Certification. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

Resolution No.

PASSED, APPROVED and ADOPTED this 9th day of May, 2022.

Bill Velto, Mayor

I, Keri Johnson, City Clerk of the City of Upland, do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 9th day of May, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

Resolution No.

ATTACHMENT A

City-owned parking lot at A Street & 2nd Avenue
2nd
Av
e
n
u
e
A Street
Adjacent owner
101 N. 2nd Avenue
APN: 1046-592-23
City-owned
parking lot
APN: 1046-592-24
13 ft. X 50 ft. portion
of APN: 1046-592-24
Total 650 square feet

S T A F F R E P O R T
I T E M N O . 10.J.

D A T E :M ay 9 , 20 22
T O :M A YO R A N D C I T Y C O U N C I L
F R O M : M I C H A E L B L A Y, C I T Y M A N A G E R P R E P A R E D B Y : R O B E R T D. D A L Q U E S T, D E V E LO P M E N T S E R V I C E S D I R E C TO R

M I K E P O L A N D, C O N T R A C T P L A N N E R
S U B J E C T :C O N S I D E R A P P R O V A L O F A P R O F E S S I O N A L S E R V I C E S A G R E E M E N T W I T H B A I R D + D R I S K E L L C O M M U N I T Y P L A N N I N G ,

TO C R E A T E A N A C C E S S O RY DW E L L I N G U N I T (A D U ) W O R K B O O K , W E B S I T E , A N D R E L A T E D P R I N T E D M A T E R I A L S.

R E C O M M E N D E D A C T I O N
I t is recom m end ed t hat C i ty C oun ci l ap p rove th e p rofess ion al s ervi ces ag reem en t w i th B aird + D riskell C om m un ity P lann in g in the am oun t of $99 ,70 0 to d evelop an A ccessory D w ellin g Un it (A D U ) Workb ook, w eb s it e, an d ot h er inform ation al m aterial s to g ui d e Up lan d hom eow ners th rou g h t he p roces s of b u ild ing an A D U ; an d authorize t he C i ty M an ag er to execu te the ag reem ent.

G O A L S T A T E M E N T
Th e p rop osed ac ti on s u p p orts the C it y’s g oal t o im p l em en t action s t hat ad d res s l ocal h ousin g need s, an d t o p rovid e U p lan d resid ents with th e resources and in form ati on n eces sary in un d erstand in g th e d evel op m en t p roces s an d s tat e laws in con st ru ct in g an A ccessory D w ellin g Un it.

B A C K G R O U N D
I n 2 01 7, G overn or B rown sig ned S en at e B ill 2 (S B 2 ), kn ow n as the "B u il d i ng H om es an d J ob s A ct ", as p art of h ou si n g leg islation ai m ed at ad d ressin g t h e S tate's h ou s in g crisis. S B 2 estab lishes a source of fun d ing avail ab l e t o loc al g overnm ent s d ed i cat ed to p rom otin g afford ab le hou sing d evelop m ent.

O n O c tob er 28 , 2 01 9, th e C it y C oun cil ad op ted Resol u t ion N o 65 15 , au th orizing the ap p lication for an d receip t of, S en ate B ill (S B 2) P lann in g G ran ts P rog ram fu nd s in the am ou nt of $3 10 ,00 0.

Th e p u rp ose of the S B 2 P lann in g G rant P rog ram is to p rovid e fin ancial and techn ical assistan ce to local g overn m en ts for u p d ating of p lann in g d ocu m en ts to:

A ccelerate hou sing p rod u ction ,
S tream line th e ap p roval of h ousin g d evelop m ents afford ab le to own er and renter hou seh old s at all in com e levels,
Facilitate hou sing afford ab ility for all in com e g roup s, P rom ote d evel op m en t consisten t w ith t h e S t ate P lann in g P ri ori ti es (G overn m en t S ection 65 04 1.1 ); and ,
E nsure g eog rap hic eq uity in the d istrib ution and usag e of fu nd s.

Up on receip t of the S B 2 P lan ning G rants P rog ram fun d s, the C ity C ou ncil au th orized staff to utilize th e fun d s for the following activities:

C om p lete t he 2 0 2 1 -2 0 2 9 H ousin g E l em en t U p d at e an d related C E Q A C om p lian ce ($1 75 ,00 0)
A D U Workb ook, Web site, and related m aterials ($6 0,0 00 ) C om p lete an d p roces s an A D U O rd in ance th at is com p l ian t wi th S t ate A D U Law ($2 5,0 00 )
D ow ntow n H ou sing Related I nfrastru cture F inan cing A n alysis and S trateg ies ($50 ,00 0)

Th e p rop osed A g reem ent is for th e p rep arati on of th e A D U Workb ook, Web si te, an d related m aterial t o assist U p land res id en t s in terest ed in con st ru ct in g an A D U on th eir p rop erty. I f the C ou ncil ap p roves t h e A g reem en t , an d p rior t o exec u t in g th e A g reem en t w it h B aird + D riskell, staff wi ll file an am en d m ent t o th e C it y’s S B 2 G ran t w ith th e S t ate D ep artm en t of H ousin g and C om m u ni ty D evelop m en t (H C D ) t o rep rog ram fu nd s from th e n ew A D U O rd inan ce t o the A D U Workb ook activit y, as s taff h ad al read y com p l eted th e n ew O rd i n an ce i n ad van c e of receiving n ot ifi cat ion from H C D of th e ap p roval of th e C ity’s S B 2 G rant ap p lication, as well as rep rog ram fu nd s from th e D ow ntow n H ou s in g Related I n frast ru ct u re F inan cing A nal ysi s an d S trateg ies to cover th e cost of the ag reem ent.

I S S U E S /A N A L Y S I S
I n 2 01 9, t h e C ali forn ia Leg islat ure d eclared that allow in g A c ces sory D w ell in g U ni ts (A D U s) in zon es th at al low sin g le-fam ily an d m u lt ifam il y uses p rovid es ad d i ti onal ren tal h ou s in g an d is an ess en t ial com p on en t in ad d res si n g C al iforn i a’s h ou s in g n eed s . I n J an uary 20 20 , ad d ition al ch ang es t o A D U laws b ecam e effective wh ich furth er s u p ers ed ed l ocal zoni ng au th ority to red uce b arriers, an d b et ter st ream line ap p roval p rocesses t o accom m od at e t h e d evelop m en t of A D U s an d J un ior A ccessory D w ellin g U nits (J A D Us).

A D U s are an op p ort u n it y t o ad d res s a variety of h ousin g n eed s an d p rovi d e afford ab l e h ousin g op tion s for fam ily m em b ers, fri en d s, st ud ent s, th e eld erl y, in-h om e h ealt h care p rovid ers, p eop le with d isab ilities, and oth ers. A D U s assist th e C ity in m eeting its afford ab ility g oals an d th e C ity’s R H N A (Reg ion al H ou si ng N eed s A llocation ). I n 20 21 , th e D evel op m ent S ervices D ep artm ent received sixty-seven (67 ) ap p l ic ati ons for A D U s (S om e ap p li cat ion s are st il l b ein g p rocessed ), and thu s far in 2 02 2 th ere h ave b een twen ty-n in e (29 ) ap p lications rec eived , an d ap p roxim ately t w elve (12 ) i nq ui res are received every w eek ab ou t th e C it y’s reg ulations an d p rocessing req u i rem en t s for an A D U. Th e A D U W orkb ook, web site and rel ated m aterials w ill p rovid e t hos e Up lan d res id ent s, wh o are con tem p lating t he construction of an A D U, with al l of th e i n form at ion necessary to m ake th at d ecision. Th is w ill res u l t in savin g st aff tim e in field ing th ose n um erou s inq uiries at th e cou nter an d on th e p h one.

Th e S cop e of Work for th is p roject in clud es:

1. P rod u cing th ree hom eow ner writ ten sp otl ig h t s w it h p h otog rap hs that tel l th e story of hom eow ners, such as w hy they b uilt th eir A D U and how d oin g so has help ed th em .

2. P rep arin g a 1 00 + p ag e m an ual to g uid e h om eown ers from in itial in terest to construction.

I t w ill b e tailored to Up lan d an d will link closely with th e A D U w eb site and oth er A D U p rod u cts. Th rou g h out th e w orkb ook t h ere w il l b e p h ot os, floorp lan s an d st ori es from the hom eow ner sp otlig ht s feat urin g U p l an d s A D U ow ners/resid en ts. Th ere wi ll b e th ree version s of t h e d ocum ent p rod u ced , on e for p rofession al p ri n t in g (hig h res olu ti on ), one for onl in e viewing (l ow resolu tion) an d one for h om e p rintin g (ful l p ag e col or p hotos rem oved , etc.). Th e workb ook is intend ed to b e a resou rc e to h el p U p l and resid ents navig ate the p rocess of b uild in g an A D U. I t will also p rovid e a d etailed , step -b y-step ap p roach to th e entire p roject - from g etting started to b ecom ing a lan d lord .

3. P rod u cing a web site wi th ap p roxim ately 10 sub p ag es t hat : 1 ). g u id es hom eow ners th rou g h th e p rocess of b u i ld in g an A D U ; 2). b u ild s su p p ort for the c on c ep t of A D U s.

I n clud ed on t he web site w il l b e col lat eral m aterial li ke a log o, Fac eb ook p ag e, n ew sletter tem p late; an d 3 ). T h e w eb si te w il l als o c on t ain an A D U C alcu lat or w hich will en ab le a hom eow ner to c alc u l ate b ased on a series of q u es ti on s an d reg i onal con st ru ct ion d ata, th e ap p roxim ate cost of their A D U.

4. P rod u cing a 1 –2 -p ag e h and out th at su m m arizes the C it y’s A D U reg u l ati on s , an d d evelop oth er m aterial to g u id e h om eown ers th rou g h the A D U ap p roval p roces s in clud in g ch ecklists or p roc ess g rap h ic s. Work closely w it h C it y staff t o id ent ify op p ortu n i ti es to m ake it easier for h om eown ers to b uild an A D U.

C ity staff research ed cities th rou g h out C ali forn ia to fin d ou t i f t h i s typ e of inform ation al p roject h as b een d on e w i th in oth er ju ri sd ic ti on s an d how i t h as worked for th em . N o oth er ci ti es w i th in S ou th ern C al iforn i a h ave c om p let ed t hi s t yp e of p roject, h ow ever, a few cities an d coun ties in N orth ern C alifornia have d one this with g reat success.

Th e com p an y th at h as t he m ost su cc ess in w orki n g w it h t h e N orth ern C al iforn i a coun ties and cities i s B aird + D riskell C om m un ity P lann in g , wh o are l ocat ed i n B erkeley, C alifornia. B aird + D riskell is a sole s ou rce com p any an d p rovid es a un iq ue service.

Th ey work with n eig hb orh ood g roup s, non p rofits, local g overnm ents and reg ional an d state ag en ci es on l ong -ran g e p lan ning , h ous in g p olicy an d action , c om m un it y d esig n, lan d u se, an d sustainab ility.

I n ad d it ion , B ai rd + D riskell is a n ati onal lead er in creati ng p ol ic ies an d t ools th at help create A D U s . Th ey h ave d evel op ed inn ovative p rod u ct s th at have b ecom e m od els for b est p ract ice. For exam p l e, th eir onlin e calculator allows h om eown ers to estim ate the costs to b uild an A D U, as well as th e p oten tial reven ue and p ayb ack p eriod s. T heir step - b y-step ap p roach from g ett in g started to b ec om i n g a l an d lord h as h el p ed hom eow ners in red ucin g t h e u n certai n t ies i n w h at c an b e a c om p li cat ed p roces s. S an M ateo C ou nty an d M arin C ou nty A D U Workb ooks can b e seen at:

S an M ateo C ou nty: http s://secon d u nitcentersm c.org /

M arin C ou nty: http s://ad um arin.org /

F I S C A L I M P A C T S
Th e t otal cost of th e p roject w i ll not exceed $99 ,70 0 an d w il l b e fun d ed wi th th e S B 2 G ran t th at was ap p roved b y th e D ep artm en t of H ou si ng an d C om m un ity D evelop m en t (“H C D ”). T he C ity of U p l and w as aw ard ed $3 10 ,00 0 in g ran t fu n d i n g to p rovid e fi nan ci al an d techn ical assistan ce an d to u p d ate p lann in g d ocu m en ts in ord er t o accelerate hou si ng p rod uction for all in com e level s. T h ere will b e n o fiscal im p act to th e C ity’s G en eral F u nd resulting from this ag reem en t.

A L T E R N A T I V E S
P rovid e altern ative d irection to staff.

AT TAC HM E NT S :

Description
Attachment A – Professional S ervices Agreement with Baird + Driskell Community Planning and Scope of Work, Budget, and Project T imeline

1 CITY OF UPLAND

PROFESSIONAL SERVICES AGREEMENT

This Agreement is made and entered into as of May 9, 2022 by and between the City of Upland, a public agency organized and operating under the laws of the State of California with its principal place of business at 460 N. Euclid Avenue, Upland, CA 91786 (“City”), and Baird + Driskell Community Planning, a Sole Proprietorship, with its principal place of business at 2635 Benvenue Avenue, Berkeley, CA 94704 (hereinafter referred to as “Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

RECITALS
A. City is a public agency of the State of California and is in need of professional services for the following project:

Accessory Dwelling Unit (ADU) Workbook, Website and Related Material (hereinafter referred to as “the Project”).

B. Consultant is duly licensed and has the necessary qualifications to provide such services.

C. The Parties desire by this Agreement to establish the terms for City to retain Consultant to provide the services described herein.

AGREEMENT,
THEREFORE, IT IS AGREED AS FOLLOWS:

1. Services.

Consultant shall provide the City with the services described in the Scope of Services attached hereto as Exhibit “A.”

2. Compensation.
a. Subject to paragraph 2(b) below, the City shall pay for such services in accordance with the Schedule of Charges set forth in Exhibit “B.”

b. In no event shall the total amount paid for services rendered by Consultant under this Agreement exceed the sum of ninety nine thousand seven hundred dollars ($99,700.00). This amount is to cover all printing and related costs, and the City will not pay any additional fees for printing expenses. Periodic payments shall be made within 30 days of receipt of an invoice which includes a detailed description of the work performed. Payments to Consultant for work performed will be made on a monthly billing basis.

c. The City Manager may approve Additional Work, as further defined in Section 3, up to ten percent (10%) of the amount of the Agreement or nine thousand seventy dollars ($9,970.00). In no event shall the total sum of the agreement (original compensation amount and Additional Work) exceed one hundred nine thousand six hundred and seventy dollars ($109,670.00). Any additional work in excess of this amount shall be approved by the City Council.

2 3. Additional Work.

If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the Cit y by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement.

4. Maintenance of Records.

Books, documents, papers, accounting records, and other evidence pertaining to costs incurred shall be maintained by Consultant and made available at all reasonable times during the contract period and for four (4) years from the date of final payment under the contract for inspection by City.

5. Term of Performance.

The term of this Agreement shall be from May 9, 2022 through November 23, 2023 unless earlier terminated as provided herein. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Project. Consultant shall perform its services in a prompt and timely manner within the term of this Agreement and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed”). The Notice to Proceed shall set forth the date of commencement of work.

Consultant shall perform its services in a prompt and timely manner and shall commence performance upon receipt of written notice from the City to proceed (“Notice to Proceed”).

Consultant shall complete the services required hereunder within Exhibit C. The Notice to Proceed shall set forth the date of commencement of work.

6. Delays in Performance.
a. Neither City nor Consultant shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the nonperforming party. For purposes of this Agreement, such circumstances include but are not limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; pandemics; war; riots and other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances; sabotage or judicial restraint.

b. Should such circumstances occur, the non-performing party shall, within a reasonable time of being prevented from performing, give written notice to the other party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement.

7. Compliance with Law.
a. Consultant shall comply with all applicable laws, ordinances, codes, and regulations of the federal, state, and local government, including Cal/OSHA requirements.

3 b. If required, Consultant shall assist the City, as requested, in obtaining and maintaining all permits required of Consultant by federal, state, and local regulatory agencies. c. If applicable, Consultant is responsible for all costs of clean up and/ or removal of hazardous and toxic substances spilled as a result of his or her services or operations performed under this Agreement.

8. Standard of Care
Consultant’s services will be performed in accordance with generally accepted professional practices and principles and in a manner consistent with the level of care and skill ordinarily exercised by members of the profession currently practicing under similar conditions.

9. Assignment and Subconsultant
Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be void and without legal effect and shall constitute grounds for termination. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. Nothing contained herein shall prevent Consultant from employing independent associates, and subconsultants as Consultant may deem appropriate to assist in the performance of services hereunder.

10. Independent Contractor
Consultant is retained as an independent contractor and is not an employee of City. No employee or agent of Consultant shall become an employee of City. The work to be performed shall be in accordance with the work described in this Agreement, subject to such directions and amendments from City as herein provided.
a. PERS Eligibility Indemnification
In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (“PERS”) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, inc luding but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits.

11. Insurance. Consultant shall not commence work for the City until it has provided evidence satisfactory to the City it has secured all insurance required under this section. In addition, Consultant shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this section.

4 a. Commercial General Liability
(i) The Consultant shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the City.

(ii) Coverage for Commercial General Liability insurance shall be at least as broad as the following:

(1) Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent.

(iii) Commercial General Liability Insurance must include coverage for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion deleted
(7) Contractual Liability with respect to this Agreement (8) Property Damage
(9) Independent Contractors Coverage
(iv) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement.

(v) The policy shall give City, its officials, officers, employees, agents, and City designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.

(vi) The general liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the City, and provided that such deductibles shall not apply to the City as an additional insured.

b. Automobile Liability
(i) At all times during the performance of the work under this Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the City.
(ii) Coverage for automobile liability insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).

5 (iii) The policy shall give City, its officials, officers, employees, agents, and City designated volunteers additional insured status.

(iv) Subject to written approval by the City, the automobile liability program may utilize deductibles, provided that such deductibles shall not apply to the City as an additional insured, but not a self-insured retention.
c. Workers’ Compensation/Employer’s Liability
(i) Consultant certifies that he/she is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and he/she will comply with such provisions before commencing work under this Agreement.

(ii) To the extent Consultant has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, the Consultant shall maintain full compensation insurance for all persons employed directly by him/her to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the period required by this Agreement, workers’ compensation coverage of the same type and limits as specified in this section.

d. Professional Liability (Errors and Omissions)
At all times during the performance of the work under this Agreement the Consultant shall maintain professional liability or Errors and Omissions insurance appropriate to its profession, in a form and with insurance companies acceptable to the City and in an amount indicated herein.

This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form specifically designed to protect against acts, errors, or omissions of the Consultant. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend. e. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:

Combined Single Limit
Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate for bodily injury, personal injury, and property
damage

Automobile Liability $1,000,000 combined single limit Employer’s Liability $1,000,000 per accident or disease

6 Professional Liability $1,000,000 per claim and aggregate (errors and omissions)

(ii) Defense costs shall be payable in addition to the limits. (iii) Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement.

f. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein.

Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location, and operations to which the insurance applies, and the expiration date of such insurance.
g. Policy Provisions Required
(i) Consultant shall provide the City at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that the Consultant shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non- payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to the effective date of cancellation or expiration.

(ii) The Commercial General Liability Policy and Automobile Policy shall each contain a provision stating that Consultant’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the City or any named insureds shall not be called upon to contribute to any loss.

(iii) The retroactive date (if any) of each policy is to be no later than the effective date of this Agreement. Consultant shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the effective date of this Agreement.
(iv) All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to provide a waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City and

7 shall require similar written express waivers and insurance clauses from each of its subconsultants.
(v) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.

Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit the Consultant’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.

h. Qualifying Insurers
(i) All policies required shall be issued by acceptable insurance companies, as determined by the City, which satisfy the following minimum requirements:

(1) Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

i. Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Consultant, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary, and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement.
(iii) The City may require the Consultant to provide complete copies of all insurance policies in effect for the duration of the Project.

(iv) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
j. Subconsultant Insurance Requirements. Consultant shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the City that they have secured all insurance required under this section.

Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the City as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by Consultant, City may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.

12. Indemnification.

8 a. To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equ ity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’s services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

b. If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance of “design professional” services (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

13. California Labor Code Requirements.
a. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, and agents free and harmless from any claims, liabilities, costs, penalties, or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subconsultants to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1). The requirement to submit certified payroll records directly to the Labor Commissioner under Labor Code section 1771.4 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Section 1771.4. b. If the services are being performed as part of an applicable “public works” or “maintenance” project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subconsultants performing such services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants, as applicable. Notwithstanding the foregoing, the contractor registration requirements mandated by Labor Code Sections 1725.5 and 1771.1 shall not apply to work performed on a public works project that is exempt pursuant to the small project exemption specified in Labor Code Sections 1725.5 and 1771.1.

c. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant’s sole responsibility

9 to comply with all applicable registration and labor compliance requirements. Any stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subcontractor.

14. Verification of Employment Eligibility.

By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time to time, and shall require all subconsultants and sub-subconsultants to comply with the same.

15. City Material Requirements.

Reserved.

16. Laws and Venue.

This Agreement shall be interpreted in accordance with the laws of the State of California.

If any action is brought to interpret or enforce any term of this Agreement, the action shall be brought in a state or federal court situated in the County of San Bernardino, State of California. 17 Termination or Abandonment
a. City has the right to terminate or abandon any portion or all of the work under this Agreement by giving ten (10) calendar days written notice to Consultant. In such event, City shall be immediately given title and possession to all original field notes, drawings and specifications, written reports and other documents produced or developed for that portion of the work completed and/or being abandoned. City shall pay Consultant the reasonable value of services rendered for any portion of the work completed prior to termination. If said termination occurs prior to completion of any task for the Project for which a payment request has not been received, the charge for services performed during such task shall be the reasonable value of such services, based on an amount mutually agreed to by City and Consultant of the portion of such task completed but not paid prior to said termination. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed services and shall not be entitled to damages or compensation for termination of work.

b. Consultant may terminate its obligation to provide further services under this Agreement upon thirty (30) calendar days’ written notice to City only in the event of substantial failure by City to perform in accordance with the terms of this Agreement through no fault of Consultant.

18 Documents.

10 Except as otherwise provided in “Termination or Abandonment,” above, all original field notes, written reports, Drawings and Specifications and other documents, produced or developed for the Project shall, upon payment in full for the services described in this Agreement, be furnished to, and become the property of the City.

19. Organization
Consultant shall assign Joshua Abrams as Project Manager. The Project Manager shall not be removed from the Project or reassigned without the prior written consent of the City.

20. Limitation of Agreement.

This Agreement is limited to and includes only the work included in the Project described above.

21. Notice

Any notice or instrument required to be given or delivered by this Agreement may be given or delivered by depositing the same in any United States Post Office, certified mail, return receipt requested, postage prepaid, addressed to:

CITY: CONSULTANT:

City of Upland
460 N. Euclid Avenue
Upland, CA 91786
Attn: City Clerk

and shall be effective upon receipt thereof.

22. Third Party Rights
Nothing in this Agreement shall be construed to give any rights or benefits to anyone other than the City and the Consultant.

23. Equal Opportunity Employment.

Consultant represents that it is an equal opportunity employer and that it shall not discriminate against any employee or applicant for employment because of race, religion, color, national origin, ancestry, sex, age, or other interests protected by the State or Federal Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff, or termination.

24. Entire Agreement
This Agreement, with its exhibits, represents the entire understanding of City and Consultant as to those matters contained herein, and supersedes and cancels any prior or contemporaneous oral or written understanding, promises or representations with respect to those matters covered hereunder. Each Party acknowledges that no representations, inducements, promises or agreements have been made by any person which are not incorporated Baird + Driskell Community Planning
2635 Benvenue Avenue
Berkeley, CA 94704
Attn. Joshua Abrams

11 herein, and that any other agreements shall be void. This Agreement may not be modified or altered except in writing signed by both Parties hereto. This is an integrated Agreement.

25. Severability
The unenforceability, invalidity, or illegality of any provision(s) of this Agreement shall not render the remaining provisions unenforceable, invalid, or illegal.

26. Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the successors in interest, executors, administrators and assigns of each Party to this Agreement. However, Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights, burdens, duties, or obligations without the prior written consent of City. Any attempted assignment without such consent shall be invalid and void.

27. Non-Waiver
None of the provisions of this Agreement shall be considered waived by either Party unless such waiver is specifically specified in writing.

28. Time of Essence
Time is of the essence for each and every provision of this Agreement.

29. City’s Right to Employ Other Consultants
City reserves its right to employ other consultants, including engineers, in connection with this Project or other projects.

30. Prohibited Interests
Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid, nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift, or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no director, official, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.
[SIGNATURES ON FOLLOWING PAGE]

12 SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT

BETWEEN CITY OF UPLAND AND
BAIRD + DRISKELL

COMMUNITY PLANNING
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

CITY OF UPLAND BAIRD + DROSKELL COMMMUNITY PLANNING

By: By:

Michael Blay
City Manager Its:

Printed Name:

ATTEST:

By:

Keri Johnson, City Clerk

13 EXHIBIT A
Scope of Services

Workbook, Website and Related Material

1. Produce Video and Print Spotlights — Produce three homeowner written spotlights with photographs that tell the story of homeowners, such as why they built their ADU and how doing so has helped them. Uplands to identify, vet and supply information for 10 candidates.

Final selection of homeowners and their ADUs will ensure a diversity of geographic distribution, type of ADU, homeowner goals, etc.

2. Write ADU Workbook — Complete a 100+ page manual to guide homeowners from initial interest to construction. It will be tailored to Uplands and will link closely with the ADU website and other ADU products. Throughout the workbook we will include photos, floorplans and stories from the homeowner spotlights featuring Uplands ADU owners/residents. City Staff and other stakeholders will be asked to review a rough draft before the document is finalized. We will produce three versions of the document, one for professional printing (high resolution), one for online viewing (low resolution) and one for home printing (full page color photos removed, etc.). Includes collecting floorplans/lot plans.

Budget includes printing and delivery of 250 workbooks. Assumes Uplands staff will supply some context photographs.

3. Build Website and Calculator — Produce a website with approximately 10 subpages that 1) guides homeowners through the process of building an ADU, and 2) builds support for the concept of ADUs. We will finalize the target audience with City staff but will likely target people learning about ADUs, people considering building ADUs and people who have decided to build an ADU. City staff will have the opportunity to comment on the website concept and rough draft before it is finalized. If the city is interested, included in the website will be collateral material like a logo, Facebook page and newsletter template. Includes ADU Calculator.

4. Develop handouts and other material — Produce a 1–2-page handout that summarizes ADU regulations. Develop other material to guide homeowners through the ADU approval process including checklists or process graphics. Work closely with jurisdiction staff to identify opportunities to make it easier for homeowners to build an ADU.

14 Outreach

5. Conduct Outreach Events — Conduct a series of outreach events for homeowners (2 events over a year). These could include tours, workshops, open houses, etc. Includes planning and day of facilitation. One of the events could serve as the launch of the ADU material developed as part of this project. Uplands will do outreach for event, logistics, secure venue, print handouts, etc.

15 EXHIBIT B
Schedule of Charges/Payments
Consultant will invoice City on a monthly cycle. Consultant will include with each invoice a detailed progress report that indicates the amount of budget spent on each task. Consultant will inform City regarding any out-of-scope work being performed by Consultant. This is a time-and-materials contract.

Task BD
Hours
Prof
Costs Direct Total Direct Cost Notes
1 Videos and
Print
Spotlights
50 $9,000 $1,000 $10,000 Videographer/photographer/stipends 2 Write ADU
workbook 120 $21,600 $21,600 Purchase photos.
2a
Printing and
Delivering
ADU
workbooks
15 $2,700 $9,000 $11,700 Printing estimated at $36 a book. 3a Website 60 $10,800 $15,000 $25,800
Programmer and website costs.

Assumes similar to
secondunitcentersmc.org
3b Calculator 0 $0 $0 $0 Covered by grant.
4 Handouts 60 $10,800 $0 $10,800
5 Outreach
events 110 $19,800 $0 $19,800
Total 415 $74,700 $25,000 $99,700

16 EXHIBIT C
Activity Schedule
July/August Project launch, begin collecting standards/inputs, begin spotlight recruiting September Stakeholder interviews, confirm standards/inputs, internal draft website October Draft calculator, draft website for review, select spotlight participants November Draft workbook, schedule photos/videos, draft floorplans and spotlights, final website
December Design workbook, final spotlight stories, final calculator Jan/Feb Finalize workbook copy and design, draft handouts, plan for outreach events March Website handoff, final workbook online, final handouts April Final workbook printed

S T A F F R E P O R T
I T E M N O . 11.A .

D A T E :M ay 9 , 20 22
T O :M A YO R A N D C I T Y C O U N C I L
F R O M : M I C H A E L B L A Y, C I T Y M A N A G E R P R E P A R E D B Y : R O B E R T D. D A L Q U E S T, D E V E LO P M E N T S E R V I C E S D I R E C TO R

L I Z C H A V E Z , D E V E LO P M E N T S E R V I C E S M A N A G E R

L I Z Z E T A V A LO S, H O U S I N G C O O R D I N A TO R S U B J E C T :C O N S I D E R A T I O N O F A R E S O L U T I O N A P P R O V I N G T H E

C O M M U N I T Y D E V E LO P M E N T B LO C K G R A N T (C D B G ) O N E -Y E A R A C T I O N P L A N F O R F I S C A L Y E A R 20 22 -23

R E C O M M E N D E D A C T I O N
I t is recom m en d ed th at th e C i ty C ou ncil ad op t a Resol ut ion ap p rovin g t he C ity of Up lan d C om m u nity D evelop m en t B l ock G ran t O n e-Year A ction P lan for F is cal Year 2 02 2-2 3 an d authorize t he C ity M anag er to exec ut e an y and al l n ecessary d ocu m en ts to im p l em en t the F iscal Year 20 22 -23 A ction P lan .

G O A L S T A T E M E N T
Th e p rop os ed act ion s u p p orts t h e C i ty's g oal of p rovid in g ad eq uat e h ousin g , a sustainab le livin g en vironm ent , an d exp an d ed econ om ic op p ortu n i ti es p rin cip ally for low - and m od erate- in com e p erson s.

B A C K G R O U N D
C on sistent with ap p l ic ab l e C om m u n it y D evelop m en t B lock G ran t (C D B G ) reg u lat ion s, the U.S. D ep art m en t of H ous in g an d U rb an D evelop m en t (H U D ) req u ires g rant ees to p rep are a C on solid ated P lan every five years. I t es tab li sh es a s trateg ic vi si on for h ou si n g , com m u nity and ec onom ic d evelop m ent ac ti ons . Th e C it y C ou ncil ad op t ed U p land 's c urren t C onsolid ated P lan on M ay 1 1, 2 02 0, w hi ch covers a fi ve- year p eriod for F Y 2 02 0-2 02 5. H U D furth er req uires t he su b m is si on of a O n e Year A c ti on P l an each fiscal year d u ring t he p l an n in g p eriod to ou tl in e t h e p l an n ed p roject s' on e year g oals an d b u d g et s for C D B G t o b e im p lem ented d u ring th e u p c om i n g p rog ram year. T he ap p roved d ocu m en ts are d u e t o H U D b y M ay 1 6,

20 22 . T he d raft d ocu m en ts w ere avail ab l e for p ub lic revi ew and c om m en t from A p ril 8, 2 02 2 th rou g h M ay 9, 20 22 . C op ies of th e d raft d oc u m en t w ere avail ab l e at th e D evelop m en t S ervices D ep artm en t - H ou sing D ivision O ffice, U p land P u b lic L ib rary, Up lan d C ity C lerk's O ffice and th e city web si te: www.u p lan d c a.g ov. Th e P u b l ic H eari n g sc h ed u l ed for M ay 9 , 2 02 2 p rovid es anot her op p ortun ity for p u b lic i np ut . A n y an d all com m en ts received d urin g the p rocess (at p u b lic m eet in g s and /or i n writ in g ) wi th res p ec t t o a p arti cu lar d raft d ocu m en t w ill b e incorp orated into th e fin al d raft d ocum ent, as ap p licab le, p rior to sub m ission to H U D.

I S S U E S /A N A L Y S I S
D evelop m en t of th e F Y 2 0 2 2 -2 3 O n e Year A ction P lan w as coord in ated an d accom p lished w ith p u b licly not ic ed com m un ity m eeti n g s, d irect s oli ci tat ion of C D B G fu nd in g ap p li cat ion s from local p ub lic servi ce p rovi d ers an d coord ination th rou g h th e U p lan d C D B G C om m it tee. I n th at resp ect, the C D B G C om m ittee is recom m en d ing th at the C ity C ou ncil ap p rove the F Y 2 02 2-2 3 O ne- Year A ct ion P l an . T h e C D B G C om m it tee, wh ose m em b ers are ap p oint ed b y th e C ity C ou ncil, con d u ct ed p u b l ic m eeting s w i th in t h e last th ree m on t h s t o d eterm ine recom m end ed fun d ing am ou nt s for th e p rop osed F Y 20 22 -23 C D B G p rog ram . Th e C D B G C om m ittee's recom m end ations are su m m arized on th e at tached Tab le of F Y 2 02 2-2 3 C D B G E stim ated A llocations. E ac h p rog ram /p roject i s d escrib ed i n n arrative form with in t he O n e Year A ction P lan wh ich h as b een on file w ith the C ity C lerk for a th irty (3 0) d ay p eriod .

F I S C A L I M P A C T S
Th e C it y w ill rec eive $67 5,2 48 from H U D for F Y 2 02 2-2 3. T he O ne Year A ct ion P lan for F Y 20 22 -23 also in cl u d es th e ap p rop ri ati on of $1 3,0 02 .03 of u n all ocat ed C D B G fun d s in the event th ere i s an i n c reas e or d ec reas e for F Y 2 0 2 2 -2 3 fu nd s. Th e C om m i tt ee's fu nd in g recom m end ations are consisten t and com p ly w ith ap p licab le fed eral ru les an d reg ulations - S ee attached Tab le F Y 2 02 2-2 3 O n e Year A ction P lan.

A L T E R N A T I V E S
P rovid e altern ative d irection to staff.

AT TAC HM E NT S :

Description
Resolution F Y 2022-23 Action P lan
Table F Y 2022-23 Action Plan
Draft F Y 2022-23 Action P lan

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UPLAND, CALIFORNIA ADOPTING THE CITY OF UPLAND

COMMUNITY DEVELOPMENT BLOCK GRANT ONE- YEAR
ACTION PLAN FOR FISCAL YEAR 2022-2023

WHEREAS, the City of Upland is an Entitlement community in the U.S.

Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) program; and

WHEREAS, as an entitlement jurisdiction, Upland receives an annual grant of funds under the CDBG Program; and

WHEREAS, for FY 2022-23 the City of Upland will receive $675,248 of CDBG funds; and

WHEREAS, as a prerequisite to receiving CDBG funds, the City of Upland must submit a Consolidated Plan, which serves as a federally required planning document that guides community development efforts in Upland; and

WHEREAS, the City Council adopted Upland’s current Consolidated Plan May 11, 2020, which covers fiscal years 2020-21 through 2024-25; and

WHEREAS, Upland’s Consolidated Plan established goals and objectives that, among other things, addresses HUD’s primary objectives for the CDBG program of providing adequate housing, a suitable living environment and expanded economic opportunities principally for low-moderate-income persons; and

WHEREAS, the CDBG Committee has reviewed project proposals for FY 2022- 23 and made recommendations to the City Council which are specified for the FY 2022-23 One- Year Action Plan and are consistent with the Consolidated Plan; and

WHEREAS, the City Council’s May 9, 2022 public hearing to consider approving the FY 2022-23 One- Year Action Plan was properly notice for a (30) day period prior to the date of the public hearing to allow the public an opportunity to provide comments on the FY 2022-23 One- Year Action Plan; and

WHEREAS, during its May 9, 2022 public hearing, the City Council heard and considered both oral and written comments with respect to the FY 2022-23 One- Year Action Plan; and

WHEREAS, pursuant to Title 14, California Code of Regulations , Chapter 3, Article 18, Section 15262 – Feasibility and Planning Studies, the City Council may determine in its independent judgment that the FY 2022-23 One-Year Action Plan is exempted from the requirements of the California Environmental Quality Act of 1970, as amended.

Resolution No.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines, and resolves as follows:

Section 1. The above recitals are true and correct and are incorporated herein by this reference.

Section 2. The Upland City Council does hereby approve the City of Upland One- Year Action Plan for fiscal year 2022-23.

Section 3. The City Council authorizes the City Manager or his designee to execute any and all necessary and related documents, including subrecipient agreements, in order to effectuate the implementation of the CDBG Program for fiscal year 2022-23.

Section 4. The City Council finds that this Resolution is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a pr oject as defined in Section 15378) of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Further, if the activity is deemed a project this City Council finds that this Resolution is exempt pursuant to Section 15061(b)(3) of the State CEQA Guidelines.

Section 5. Certification. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.

Section 6. Severability. If any section, subsection, subdivision, sentence, or clause or phrase in this Resolution or any part thereof is for any reason held to be unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Resolution or any part thereof. The City Council hereby declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases are declared unconstitutional, invalid, or ineffective.

Section 7. Effective Date. This Resolution shall become effective immediately.

PASSED, APPROVED and ADOPTED this 9th day of May 2022.

Bill Velto, Mayor

Resolution No.

I, Keri Johnson, City Clerk of the City of Upland, do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 9th day of May 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

ACTIVITIES TO BE UNDERTAKEN
Table FY 2022-23 Action Plan summarizes recommendations of the CDBG Committee on public service programs and on capital projects to the City Council of Upland for FY 2022-23.

Table FY 2022-23 Action Plan: City of Upland
CDBG Programs and Projects
Actual
Allocation
FY 22-23
Public Services $101,287
Foothill Family Shelter – Stepping Stone Program 15,000 St. Joseph’s Church – His Hands Food Program 18,000
Pacific Lifeline – Women’s Shelter 8,000
Impact Valley Hope Partners – Food Security Program 10,000 Catholic Charities – Upland Community Resource Center 35,000 Easterseals of Southern California 15,287

Capital Projects $438,912
City of Upland – Landecena Interior Improvement Project FY 22-23 166,000 City of Upland – Downtown Parking Lot Improvement Program FY 22-23 162,059 City of Upland - Emergency Repair Program FY 22-23 110,853

Planning and Administration $135,049
Administrative & Economic Development Costs 89,549
Inland Fair Housing and Mediation Board – Fair Housing 26,000 Inland Fair Housing and Mediation Board – Landlord/Tenant Mediation 19,500 Program Income (none) 0.00
Allocation for FY 2022-23 $675,248
$13,002.03 of unallocated CDBG funds from FY 19-20 will be rolled over to Capital Project: Emergency Repair Program FY 22-23.

Entitlement, Sec. 106(b) for FY 2022-23 CDBG will be awarded before June 30, 2022. In the event FY 2022- 23 funds are increased or decreased, the CDBG Committee approved the following: Public Services appropriation to be directed evenly between Catholic Charities and Easterseals Southern California; and Capital Improvement Projects to be directed to the Emergency Repair Program.

Item No. 12.A

FINANCE COMMITTEE MEETING
APRIL 27, 2022
**********

CONCLUSION/ACTION SUMMARY

1) CALL TO ORDER AND ROLL CALL

In attendance: Committee Chair Elliott, Committee Member Garcia, Treasurer Bradley, Advisory Members Leon, Moore, Teders, and Webb. Assistant City Manager Parker, and Finance Officer Bock-Helms (Finance Officer Bock-Helms was present via Zoom).

2) ORAL COMMUNICATIONS

None

3) INVESTMENT POLICY REVIEW, Assistant City Manager Parker informed the Committee that the City engaged PFM Asset Management LLC to review the City’s investment policy and make recommendations modifying it. Sarah Meacham, Managing Director of PFM reviewed a presentation on Government Code authorized investments, reviewed proposed modifications to the investment policy, and answered questions from the Committee. Committee Member Garcia moved to recommend that City Council approve the proposed revisions to the investment policy and Committee Member Bradley seconded the motion. The motion passed unanimously.

4) MARCH 31, 2022 PORTFOLIO REVIEW, Assistant City Manager Parker presented the March 31, 2022 Portfolio Review, highlighting a new page included in the March Treasurer’s Report that detailed out the changes in investments and satisfies the requirement under California Government Code Section 53607.

5) FISCAL YEAR 2022/23 PROPOSED BUDGET PREVIEW, Assistant City Manager Parker presented the current status of the proposed budget for Fiscal Year 2022/23 to the Committee, highlighted the changes that made up the differences in the expense and revenue budgets as compared to the Fiscal Year 2021/22 Mid-Year report, and stated that additional information would be presented at the Special Budget Workshop on May 9, 2022.

6) SALES TAX UPDATE - FOURTH QUARTER OF 2021, Assistant City Manager Parker highlighted information included in HdL’s quarterly sales tax update, including a significant growth in year-over-year numbers in the Building and Construction, General Consumer Goods, Fuel and Service Stations and Restaurants and Hotels areas.

Finance Committee Meeting
April 27, 2022
4:00 P M
Carnegie Building, 123 East D Street
***************

1.C A L L TO O R D E R A ND R O L L C A L L

2.O R A L C O MMUNI C AT I O NS

3.I NV E S T ME NT P O L I C Y R E V I E W

4.MA R C H 31, 2022 P O RT F O L I O R E V I E W

5.F I S C A L YE A R 2022/23 P R O P O S E D B UD G E T P R E V I E W

6.S A L E S TA X UP D AT E - F O URT H Q UA RT E R O F 2021 NOT E: A ll Agenda items and back-up materials are available for public review at the U pland P ublic Library, downstairs reference desk at 450 N orth E uclid Avenue, the C ity C lerk's O ffice at 460 N orth E uclid Avenue and the C ity website at www.uplandca.gov .

I n compliance with the A mericans with D isabilities Act, if you need special assistance to participate in this meeting, please contact the C ity C lerk's Office at 909.931.4120. N otification 48 hours prior to the meeting will enable the C ity to make reasonable arrangements to ensure accessibility to this meeting. [28 C F R

35.102-35.104 A DA Title I I ]

P O S T I N G S T A T E M E N T : O n A p ri l 21, 2022, a t ru e a n d co rre ct co p y o f t hi s a g e nd a w a s p o s t e d a t 123 E . D S t re e t (C a rne g i e B u i l d i ng ), o n t he b ul l e t i n b o a rd s a t 450 N . E ucl i d A ve nue (U p l a n d P ub l i c L i b ra ry), 4 6 0 N . E u cl i d Ave n u e (U p l a nd C i t y H a l l ), a n d o n t he C i t y's w e b s i t e a t w w w.u p l a nd ca .g o v

The full packet for the Finance Committee
meeting can be viewed on our website at:

https://uplandca.gov/finance-committee

You may also view the video of the meeting at:

https://uplandca.gov/council-meeting-
broadcasts

(choose the tab for “other archived meetings”
to locate the meeting video)

S T A F F R E P O R T
I T E M N O . 13.A .

D A T E :M ay 9 , 20 22
T O :M A YO R A N D C I T Y C O U N C I L
F R O M : M I C H A E L B L A Y, C I T Y M A N A G E R P R E P A R E D B Y : S T E P H E N PA R K E R , C PA , A S S I S TA N T C I T Y M A N A G E R

D O U G A N D E R S O N , C O N S U LTA N T
S U B J E C T :I S S U A N C E O F S P E C I A L TA X R E F U N D I N G B O N D S F O R C O M M U N I T Y F A C I L I T I E S D I S T R I C T N O. 20 03 -2 (T H E C O LO N I E S A T S A N A N TO N I O ), I M P R O V E M E N T A R E A N O. 1

R E C O M M E N D E D A C T I O N
I t is recom m end ed that th e C ity C oun cil, acting as the leg islative b od y of C om m u nity Facilities D is tric t N o. 2 0 0 3 -2 (T he C olon ies at S an A n t on i o) ad op t a Resol u t ion aut horizin g the issu ance of it s S p ecial Tax Refu n d in g B ond s I ssu e of 2 02 2 (I m p rovem en t A rea N o. 1 ) i n a p rin cip al am oun t not t o exceed $1 6,5 00 ,00 0 an d ap p rovin g an I n d en tu re an d an E scrow A g reem ent, and taking certain other action s in conn ection th erewith .

G O A L S T A T E M E N T
Th e p rop osed action sup p orts th e C ity’s g oal of p rovid in g soun d fiscal steward ship an d p rovid in g d ec en t h ou si n g , a su it ab l e li vin g en vironm ent , and exp an d ed econ om ic op p ortun ities for citizens.

B A C K G R O U N D
I n A ug ust of 2 01 2, th e C ity, acting on b ehalf of C om m u nity Facilities D istrict N o. 2 00 3-2 (T he C olonies at S an A nt oni o), issued $2 2,0 60 ,00 0 of S p eci al Tax Refu nd in g B on d s (th e “2 01 2 B on d s”) for I m p rovem en t A rea N o. 1 of t h e D istrict. Th e 2 01 2 B on d s are cu rrently outstand in g in the am oun t of $17 ,23 5,0 00 , and m ay b e called on or after S ep tem b er 1, 2 02 2.

I n ord er t o b e d eem ed a “cu rrent” refun d i ng u si n g t ax-exem p t int erest rat es, th e p rop osed refu nd in g b on d issue c an cl ose w it hin 9 0 d ays of t h e cal l d at e, so any tim e aft er J u ne 3, 20 22 . I n terest rates on th e outstand in g 2 01 2 B ond s rang e from 3.6 25 % to 5 .00 %.

O n M arch 30 , 20 22 , t h e C it y’s F in ance C om m it tee recom m en d ed th at C i ty C oun cil au th orize th e refinan cing of th e 20 12 S p ecial Tax Refun d ing B on d s w ith a p rivate p lacem en t loan an d recom m end ed t h e en g ag em en t of th e refin an c e b on d t eam of U rb an F u tu res, I nc. (M un icip al A d visor), R i ch ard s Watson G ers hon (B on d C ou ns el) an d O p p en h eim er an d C o., I n c. (P lacem ent A g ent).

I S S U E S /A N A L Y S I S
Th e 2 01 2 B on d s m ay b e refu n d ed with a n ew refun d ing b ond i ss u e (the “20 22 B on d s”) an d b ased on a “p rivat e p lacem en t” s tru c tu re w it h one b an k (F irst Fou n d at ion ) ac ti n g as t he b on d p u rchaser, th e es ti m at ed t otal d eb t service s avin g s is ap p roxim atel y $2.8 9 m illion over the rem ain in g term of th e b ond s (w h i ch w ill n ot b e exten d ed b eyon d th e c urren t fin al t erm d ate of S ep tem b er 1 , 2 03 4). F i rs t Fou n d at ion has p rovi d ed a Term S heet wi th an in terest rate of

2.7 4%, wh ich is locked th rou g h th e sched uled closin g d ate of J un e 6, 2 02 2.

I m p rovem en t A rea N o. 1 of th e D is tric t con tains 43 7 hom es, an d th e est im ated averag e ann ual p rop ert y tax savin g s for each of t h os e hom eow ners is $6 01 p er year. Tot al p rop ert y tax saving s over th e life of th e b on d s p er p rop erty own er is estim ated at $6 ,63 4.

Th e next step in the refun d ing p rocess wou ld b e the p rep aration of d raft closin g d ocu m en ts for review b y th e in terested p arti es, i n an ticip at ion of t h e sch ed u led b on d cl osi ng d ate of J un e 6, 20 22 . At b on d cl osi n g , t he n et p roceed s of th e 2 02 2 B on d s w ou l d b e p laced in to an E scrow A ccou nt, t o b e u sed to d efease all ou tstan d ing 20 12 B on d s on th e first availab le call d ate of S ep tem b er 1, 2 02 2.

F I S C A L I M P A C T S
Th e issu ance of th e 20 22 B on d s to refinan ce t he 2 01 2 B on d s w ill resu lt in tot al d eb t service saving s of ap p roxim ately $2 ,89 9,1 56 and t he existin g fin al term d ate (S ep tem b er 1, 2 03 4) w ill not b e ext en d ed . Th e s ou rce of fun d s availab le for th e rep aym en t of t he 20 22 B on d w ill b e lim ited t o s p ec ial t ax reven u es collected from C F D N o. 2 00 3-2 (I m p rovem en t A rea N o. 1), and th e 2 02 2 B on d s w il l not b e a d eb t of t h e C i ty’s G en eral F u n d . T h e costs of i ss u an ce of the 20 22 B ond wi ll b e p ai d from th e refu n d i n g b on d p roceed s, an d th e estim at ed d eb t service saving s am oun t is n et of such costs.

P u rsuan t to th e req ui rem ent s con tai n ed in S B 4 50 , esti m at ed fin an c ial in form ation rel ati ve to th e issu ance of th e 20 22 B on d s is sh ow n in the tab le b elow :

Item E stim ate as o f 4/27/2022
Tru e in terest cos t of th e
b ond s 2 .74 %
F in ance charg e of th e
b ond s $15 0,0 38 (in clud es all costs of issuan ce) B ond p roceed s received b y
the t ru st ee for refun d ing
escrow accoun t
$17 ,60 5,1 28 (in clud es p rior reserve fun d contrib u tion) Total p aym en t am ou nt for
the 2 02 2 B ond s $18 ,81 3,2 71 (Total p rincip al an d interest p aym en ts)

B elow i s a com p arison of t h e int erest rat es on t he 20 12 B on d s t o t h e in terest rat es on the 20 22 B on d s:

Perio d
E nding
Prio r
Interest
R ates
N ew
I nterest
R ates
9/1 /20 22 3 .62 5%2.7 40 %
9/1 /20 23 3 .87 5%2.7 40 %
9/1 /20 24 3 .87 5%2.7 40 %
9/1 /20 25 4 .00 0%2.7 40 %
9/1 /20 26 4 .00 0%2.7 40 %
9/1 /20 27 4 .25 0%2.7 40 %
9/1 /20 28 4 .25 0%2.7 40 %
9/1 /20 29 5 .00 0%2.7 40 %
9/1 /20 30 5 .00 0%2.7 40 %
9/1 /20 31 5 .00 0%2.7 40 %
9/1 /20 32 5 .00 0%2.7 40 %
9/1 /20 33 5 .00 0%2.7 40 %
9/1 /20 34 5 .00 0%2.7 40 %

A L T E R N A T I V E S
P rovid e altern ative d irection to staff.

AT TAC HM E NT S :

Description
Resolution
Indenture
Escrow Agreement
Term S heet
Placement Agent Agreement

RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UPLAND

ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2003-2 OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO) IMPROVEMENT AREA NO. 1 AUTHORIZING

THE ISSUANCE OF ITS SPECIAL TAX REFUNDING BONDS ISSUE
OF 2022 IN A PRINCIPAL AMOUNT NOT TO EXCEED $16,500,000

AND APPROVING AN INDENTURE AND AN ESCROW AGREEMENT,

AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION

THEREWITH

WHEREAS, the City Council of the City of Upland, located in San Bernardino County, California (the “City Council”), has heretofore undertaken proceedings and declared the necessity of the Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) Improvement Area No. 1 (the “District”) to issue bonds pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the “Act”) to finance the acquisition and construction of various public facilities; and WHEREAS, the District has previously issued its $22,060,000 Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2012 (the “2012 Bonds”) pursuant to the Act, of which $17,235,000 is currently outstanding; and
WHEREAS, in order to benefit taxpayers within the District by lowering the annual special taxes to be levied, the District now desires to defease all of the outstanding 2012 Bonds through the issuance of its Special Tax Refunding Bonds, Issue of 2022 (the “Refunding Bonds”) in an aggregate principal amount not to exceed $16,500,000; and WHEREAS, the City Council, acting in its capacity as the legislative body of the District, has determined that it is prudent in the management of its fiscal affairs to issue the Refunding Bonds; and
WHEREAS, the District is authorized pursuant to Section 53362 et seq. of the Act to issue the Refunding Bonds for the purpose of refunding the 2012 Bonds; and WHEREAS, the Refunding Bonds shall be issued in accordance with th e Bond Indenture dated as of June 1, 2022 (the “Indenture”) by and between the District and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”); and WHEREAS, in accordance with Government Code Section 53360.4, the legislative body of the District determines that a negotiated sale of the Refunding Bonds to First Foundation Public Finance (the “Bank”), in accordance with the terms contained in the term sheet provided by the Bank for the Refunding Bonds, will result in a lower overall cost to the District than a public sale; and
WHEREAS, it is in the best interest of the City and th e District that the Refunding Bonds be sold in a private placement directly to Bank, as the sole bondholder; and WHEREAS, in order to effect the issuance of the Refunding Bonds to the Bank, the City Council, as the legislative body of the District, desires to approve the form of a Placement Agent Agreement with Brandis Tallman, a Division of Oppenheimer & Co Inc., as placement agent, the Term Sheet from the Bank, the Indenture and an Escrow Agreement, in substantially the forms on file with the City Clerk and to authorize such changes and additions thereto as the Authorized Officers (defined herein) deem necessary or desirable; and

Resolution No.

WHEREAS, the value of the real property in Improvement Area No. 1 of the District subject to the special tax to pay debt service on the Refunding Bonds is not less than three times the principal amount of the Refunding Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within Improvement Area No. 1 of the District, which fact is required as a precondition to the issuance of the Refunding Bonds; and WHEREAS, on June 26, 2017, the City Council approved a local debt policy (the “Local Debt Policy”) in furtherance of Section 8855(i) of the California Government Code, as amended by SB 1029, enacted as Chapter 307, Statutes of 2016 , and such Refunding Bonds are consistent with the Local Debt Policy; and
WHEREAS, in accordance with Section 5852.1 of the Government Code of the State of California, as amended by SB 450, enacted as Chapter 625, Statutes of 2017, the District has obtained from its Municipal Advisor the required good faith estimates, and such estimates are disclosed and set forth the staff report submitted herewith.

NOW, THEREFORE, the City Council acting as the legislative body of the District hereby finds, determines, and resolves as follow:

Section 1. Each of the above recitals is true and correct and is adopted by the City Council, acting in its capacity as the legislative body of the District.

Section 2. In accordance with the requirements of Section 53345.8 of the Act and the policies of the City, the City Council, acting in its capacity as the legislative body of the District, hereby determines that the value of the real property in the District subject to the special tax to pay debt service on the Refunding Bonds is at least three times the sum of the principal amount of the Refunding Bonds plus the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District. This determination is based exclusively on the full cash value of property within the District as shown on the ad valorem assessment roll for property within the District provided by the County of San Bernardino and having a lien date as of January 1, 2022.

Section 3. The City Council, acting in its capacity as the legislative body of the District, hereby determines that it is prudent in the management of its fiscal affairs to issue the Refunding Bonds. The Refunding Bonds shall be governed by the terms and conditions of the Indenture. The Indenture in substantially the form submitted at this meeting and made a part hereof as though set forth in full , is hereby approved. The Indenture shall be executed by any one of the Mayor (or in his absence, the Mayor Pro Tem) or the City Manager (or in his absence, the Assistant City Manager), or the written designee of one of the foregoing (collectively, the “Authorized Officers”) substantially in the form of the Indenture presented at this meeting, with such additions thereto and changes therein as the officer or officers executing the same deem necessary or desirable. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Indenture by any one of the Authorized Officers. Capitalized terms used in this Resolution which are not defined herein have the meanings ascribed to them in the Indenture.

Section 4. In satisfaction of the requirements contained in Section 53363.2 of the Act, the City Council, acting in its capacity as the legislative body of the District, hereby determines that: (1) it is anticipated that the Refunding Bonds will be issued prior to September 1, 2022, with the 2012 Bonds maturing on and after September 1, 2023 being redeemed on September 1, 2022, (2) the Refunding Bonds shall be dated their date of issuance, be in the denominations, have the maturity dates (which do not exceed the latest

Resolution No.

maturity date of the 2012 Bonds being refunded), and be payable at the place and be in the form specified in the Indenture, (3) the Refunding Bond s will bear interest at the minimum rate of 2.74% per annum, and (4) the designated cost of issuing the Refunding Bonds, as defined by Section 53363.8 of the Act, shall include all of the costs specified in Section 53363.8(a), (b)(2) and (c).

Section 5. In satisfaction of the requirements contained in Section 53364.2 of the Act, the City Council, acting in its capacity as the legislative body of the District, hereby determines that any savings achieved through the issuance of the Refunding Bonds shall be used to reduce the special taxes of the District levied for debt service, and such reductions shall be made in accordance with the Act.

Section 6. The Placement Agent Agreement with Brandis Tallman, a Division of Oppenheimer & Co Inc., as placement agen t (the “Placement Agent Agreement”), in substantially the form submitted at this meeting and made a part hereof as though set forth in full herein is hereby approved, and any one of the Authorized Officers, is hereby authorized to execute the Placement Agent Agreement in substantially the form hereby approved, with such additions thereto and changes therein as may be approved by such Authorized Officer upon consultation with Bond Counsel.

Section 7. The Term Sheet of the Bank presented at this meeting and made a part hereof as though fully set forth herein is hereby approved, and any one of the Authorized Officers is hereby authorized and directed to execute a final Commitment Letter with the Bank with not to exceed interest rates as specified in the Term Sh eet, with such additions thereto and changes therein as may be approved by such officer upon consultation with Bond Counsel, with such approval to be conclusively evidenced by the execution and delivery of the final Commitment Letter.

Section 8. The Escrow Agreement (the “Escrow Agreement”), by and between the District and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”), in substantially the form submitted at this meeting and made a part hereof as though set forth in full herein, is hereby approved, and any one of the Authorized Officers is hereby authorized and directed to execute the Escrow Agreement substantially in th e form hereby approved, with such additions therein and changes thereto as the Authorized Officer or Authorized Officers executing the same deem necessary or desirable, with such approval to be conclusively evidenced by the execution and delivery of the Escrow Agreement.

Section 9. The Refunding Bonds shall be executed on behalf of the District by the manual or facsimile signature of the President of the legislative body of the District and the seal of the District or the City, or a facsimile thereof, may be impressed or imprinted thereon and the signature of the Mayor shall be attested to with the manual or facsimile signature of the City Clerk or Deputy City Clerk.

Section 10. The District hereby appoints the following consultants to assist the District in connection with the issuance of the Refunding Bonds: (i) U.S. Bank Trust Company, National Association, as Trustee; (ii) Urban Futures, Inc., as Municipal Advisor; (iii) Richards, Watson & Gershon, A Professional Corporation, as Bond Counsel .

Section 11. All actions heretofore taken by any Authorized Officers, or by any officers, employees or agents of the City, with respect to: (1) the issuance, delivery or sale of the Refunding Bonds; (2) the refunding, defeasance and redemption of the 2012 Bonds; and (3) the Indenture and the Escrow Agreement, or any of the documents referenced therein, are hereby approved, confirmed and ratified. The Authorized Officers are hereby jointly and severally authorized and directed to do all things and take any and all actions and execute

Resolution No.

and deliver any and all documents as are necessary or desirable to accomplish the issuance, sale and delivery of the Refunding Bonds in accordance with the provisions of this Resolution and as are necessary or appropriate for the fulfillment of the purposes of the Refunding Bonds as described in the Indenture, including obtaining verification agent services.

Section 12. Certification. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED and ADOPTED this 9th day of May, 2022.

Bill Velto, Mayor

I, Keri Johnson, City Clerk of the City of Upland, do hereby certify that the foregoing Resolution was passed and adopted at a regular meeting of the City Council of the City of Upland held on the 9th day of May, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

12979-0036\2647476

BOND INDENTURE
Between
COMMUNITY FACILITIES DISTRICT NO. 2003-2

OF THE CITY OF UPLAND
(THE COLONIES AT SAN ANTONIO)
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
$[16,500,000]
COMMUNITY FACILITIES DISTRICT NO. 2003-2

OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO)
IMPROVEMENT AREA NO. 1
SPECIAL TAX REFUNDING BONDS, ISSUE OF 2022

Dated as of [June 1, 2022]

TABLE OF CONTENTS
Page
i
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ARTICLE I

DEFINITIONS
Section 1.1. Definitions ..................................................................................................................... 2

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds ....................................................... 12 Section 2.2. Type and Nature of Bonds .......................................................................................... 12 Section 2.3. Equality of Bonds and Pledge of Net Taxes ............................................................... 12 Section 2.4. Description of Bonds; Interest Rates .......................................................................... 13 Section 2.5. Place and Form of Payment ........................................................................................ 13 Section 2.6. Form of Bonds ............................................................................................................ 14 Section 2.7. Execution and Authentication ..................................................................................... 14 Section 2.8. Bond Register .............................................................................................................. 15 Section 2.9. Registration of Exchange or Transfer ......................................................................... 15 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds ............................................................... 16 Section 2.11. Validity of Bonds ........................................................................................................ 16

ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. .............................................................. 16 Section 3.2. Deposits to and Disbursements from Special Tax Fund. ............................................ 17 Section 3.3. Administrative Expense Account of the Special Tax Fund ........................................ 18 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 18 Section 3.5. Redemption Account of the Special Tax Fund. .......................................................... 18 Section 3.6. Reserve Account of the Special Tax Fund .................................................................. 19 Section 3.7. Rebate Fund. ............................................................................................................... 20 Section 3.8. Surplus Fund ............................................................................................................... 21 Section 3.9. Costs of Issuance Fund. .............................................................................................. 21 Section 3.10. Investments ................................................................................................................. 21

ARTICLE IV

REDEMPTION OF BONDS
Section 4.1. Optional Redemption. ................................................................................................. 23 Section 4.2. Mandatory Sinking Fund Redemption. ....................................................................... 23 Section 4.3. Extraordinary Redemption of Bonds. ......................................................................... 24 Section 4.4. [Reserved] ................................................................................................................... 24 Section 4.5. Notice of Redemption ................................................................................................. 24 Section 4.6. Partial Redemption of Bonds ...................................................................................... 25 Section 4.7. Effect of Notice and Availability of Redemption Money ........................................... 25

TABLE OF CONTENTS
(continued)
Page

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12979-0036\2647476

ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Warranty ..................................................................................................................... 25 Section 5.2. Covenants .................................................................................................................... 25

ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent ................... 29 Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent .......................... 30 Section 6.3. Notation of Bonds; Delivery of Amended Bonds ....................................................... 31

ARTICLE VII

TRUSTEE
Section 7.1. Trustee ......................................................................................................................... 31 Section 7.2. Removal of Trustee ..................................................................................................... 32 Section 7.3. Resignation of Trustee ................................................................................................ 32 Section 7.4. Liability of Trustee ..................................................................................................... 32 Section 7.5. Merger or Consolidation ............................................................................................. 33

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ........................................................................................................ 33 Section 8.2. Remedies of Owners ................................................................................................... 34 Section 8.3. Application of Revenues and Other Funds After Default ........................................... 34 Section 8.4. Power of Trustee to Control Proceedings ................................................................... 35 Section 8.5. Appointment of Receivers .......................................................................................... 35 Section 8.6. Non-Waiver ................................................................................................................. 35 Section 8.7. Limitations on Rights and Remedies of Owners ........................................................ 36 Section 8.8. Termination of Proceedings ........................................................................................ 36

ARTICLE IX

DEFEASANCE
Section 9.1. Defeasance .................................................................................................................. 37

TABLE OF CONTENTS
(continued)
Page

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ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds ................................................................................................. 38 Section 10.2. Execution of Documents and Proof of Ownership ..................................................... 38 Section 10.3. Unclaimed Moneys ..................................................................................................... 39 Section 10.4. Provisions Constitute Contract.................................................................................... 39 Section 10.5. Future Contracts .......................................................................................................... 39 Section 10.6. Further Assurances ...................................................................................................... 39 Section 10.7. Severability ................................................................................................................. 39 Section 10.8. Notices ........................................................................................................................ 40 Section 10.9. Additional Rights of Original Purchaser ..................................................................... 40

Signature Page ................................................................................................................................... S-1

EXHIBIT A FORM OF SPECIAL TAX REFUNDING BOND, SERIES 2012 .......................... A-1 EXHIBIT B FORM OF PURCHASER LETTER ......................................................................... B-1

12979-0036\2647476v3.doc

BOND INDENTURE
THIS BOND INDENTURE dated as of [June 1, 2022], by and between COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO) (the “District”) and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the “Trustee”), governs the terms of the Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2022 of Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) issued in accordance herewith.

R E C I T A L S :

WHEREAS, the City Council of the City of Upland, located in San Bernardino County, California (hereinafter sometimes referred to as the “legislative body of the District” or the “City”), has heretofore undertaken proceedings and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”); and
WHEREAS, the District has previously issued its Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2012 (the “2012 Bonds”) in the aggregate principal amount of $22,060,000, which are the only bonds of the District outstanding; and WHEREAS, the legislative body of the District intends to accomplish the refunding of the 2012 Bonds through the issuance of bonds in an aggregate principal amount of $[16,500,000] designated as the “Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2022” (the “Bonds”) and to fund a deposit to the Reserve Account and pay certain costs related to the issuance of the Bonds; and
WHEREAS, the District has determined that the issuance of the Bonds wi ll provide significant public benefits by reducing the total amount of Special Taxes to be levied for debt service on indebtedness of the District; and
WHEREAS, the Bonds are to be issued and sold in accordance with a Resolution of the City Council of the City, acting in its capacity as the legislative body of the District, and with this Indenture; and
WHEREAS, the District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied; and
WHEREAS, upon their issuance and the refunding of the 2012 Bonds, the Bonds will be the only outstanding bonds of the District, and the District is covenanting herein not to issue any future obligation or security having a lien, charge, pledge or encumbrance upon the Special Taxes; NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Owners thereof, and for

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other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds which may be issued hereunder from time to time, as follows:

ARTICLE I

DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings:
“Account” means any account created pursuant to this Indenture. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code.
“Administrative Expenses” means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee and any Special Tax Consultant to the District, any fees and related costs for credit enhancement for the Bonds which are not otherwise paid as Costs of Issuance, any costs related to the District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by the City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder. “Administrative Expenses Cap” means $25,000 per Bond Year and escalating 2% each Bond Year thereafter after the initial Bond Year, or such lesser amount as may be designated in written instructions from an Authorized Representative of the District. “Alternative Penalty Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.
“Annual Debt Service” means the principal amount of any Outstanding Bonds payable in a Bond Year at maturity and any interest payable on any Outstanding Bonds in such Bond Year, if the Bonds are retired as scheduled.
“Authorized 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:
(1) (A) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”); (B) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; (C) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America; or (D) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying

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government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United Sta tes of America:
- Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts)
Senior Debt obligations
- Federal Farm Credit Banks
Consolidated system-wide bonds and notes
- Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
- Federal National Mortgage Association (FNMA)
Senior debt obligations
Mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts)
-
(4) Unsecured certificates of deposit, time deposits, bank deposits, demand deposits and bankers’ acceptances (having maturities of not more than 30 days) of any bank (including the Trustee and any affiliate) the short-term obligations of which are rated “A-1” or better by Standard & Poor’s.
(5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks (including the Trustee and any affilia te) which have capital and surplus of at least $5 million.
(6) Commercial paper (having original maturities of not more than 270 days rated “A-1” or “A-1+” by Standard & Poor’s and “Prime-1” by Moody’s. (7) Money market funds rated “AAm” or “AAm-G” by Standard & Poor’s, or better (including those of the Trustee or its affiliates). (8) “State Obligations,” which means:
(A) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A3” by Moody’s and “A-” by Standard & Poor’s, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated.

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(B) Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated “A -1+” by Standard & Poor’s and “Prime-l” by Moody’s.
(C) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated “AA-” or better by Standard & Poor’s and “Aa3” or better by Moody’s. (9) Pre-refunded municipal obligations rated by S & P and by Moody’s not lower than United States Treasury Obligations meeting the following requirements:
(A) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
(B) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(C) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);
(D) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(E) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligatio n and upon delivery of a new Verification; and
(F) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. (10) Repurchase agreements:
(A) With (1) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least “A” by Standard & Poor’s and Moody’s; or (2) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A” by Standard & Poor’s and Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated “A” or bet ter by Standard & Poor’s and Moody’s, provided that:

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(a) The market value of the collateral is maintained at levels equal to 102% of the amount of cash transferred by the Trustee to the provider of the repurchase agreement plus accrued interest with the collateral being valued weekly and marked-to-market at one current market price plus accrued interest; (b) The Trustee or a third party acting solely as agent therefor or for the District (the “Holder of the Collateral”) has possession of the collateral or t he collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);
(c) The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession);
(d) The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or Standard & Poor’s is withdrawn or suspended or falls below “A-“ by Standard & Poor’s or “A3” by Moody’s, as appropriate, the provider must, at the direction of the District or the Trustee, within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the District or Trustee. (11) Investment agreements with a domestic or foreign bank or corporation the long-term debt of which or, in the case of a guaranteed corporation the long -term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA-” by Standard & Poor’s and “Aa3” by Moody’s; provided that, by the terms of the investment agreement:
(A) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the Costs of Issuance Fund, construction draws) on the Bonds; (B) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the District and the Trustee hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;
(C) the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments under the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; (D) the District and the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the District and the Trustee) that such investment agreement is legal, valid, binding and enforceable upon the provider in

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accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the District;
(E) the investment agreement shall provide that if during its term. (1) the provider’s rating by either Standard & Poor’s or Moody’s falls below “AA-” or “Aa3”, respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accord ance with applicable state and federal laws (other than by means of entries on the provider’s books) to the District, the Trustee or a third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Standard & Poor’s and Moody’s to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment; and (2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, respectively, the provider must, at the direction of the District or the Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the District or Trustee; and (F) The investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); and (G) the investment agreement must provide that if during its term (1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the District or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Trustee, as appropriate, and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. (“event of insolvency”), the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the District or Trustee, as appropriate.
(12) The State of California Local Agency Investment Fund; provided that the Trustee may restrict investments in such Fund to the extent necessary to keep monies available for the purposes of this Indenture.
“Authorized Representative of the City” means the Mayor of the City, the City Manager of the City or any other person or persons designated by the Mayor or the City Manager by a written

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certificate signed by the Mayor or the City Manager and containing the specimen signature of each such person.
“Authorized Representative of the District” means Mayor of the City, the City Manager of the City or any other person or persons designated by the Mayor or the City Manager by a written certificate signed by the Mayor or the City Manager and containing the specimen signature of each such person.
“Bond Counsel” means an attorney at law or a firm of attorneys select ed by the District of nationally recognized standing in matters pertaining to the tax -exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. “Bond Register” means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds shall be recorded. “Bondowner” or “Owner” means the person or persons in whose name or names any Bond is registered. Initially, the Original Purchaser is the Bondowner, “Bonds” means the District’s Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2022.
“Bond Year” means the twelve month period commencing on Septem ber 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first September 1 which is not more than 12 months after the Delivery Date.
“Business Day” means a day which is not a Saturday or Sunday or a day of the year on which banks in New York, New York, Los Angeles, California, or the city where the corporate trust office of the Trustee is located, are not required or authorized to remain closed. “Certificate of an Authorized Representative” means a written certificate or warrant request executed by an Authorized Representative of the City.
“Certificate of the Special Tax Administrator” means a certificate of an Authorized Representative of the District, or any successor entity appointed by the City, to administer the calculation and collection of the Special Taxes.
“City” means the City of Upland, California.
“Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Costs of Issuance” means all items of expense directly or indirectl y payable by or reimbursable to the District relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to advertising and printing expenses, costs of preparation and reproduction of documents, filing and recording fees, initial fees, expenses and charges of the Trustee and its counsel (including the Trustee’s first annual administrative fee), fees, charges and disbursements of attorneys, fees of the Original Purchaser’s Counsel, fees of the California Debt Investment Advisory

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Commission, municipal advisors, actuaries, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds, as set forth in a Certificate of an Authorized Representative of the City.
“Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.1 hereof.
“Default Rate” means 5.74% per annum.
“Delivery Date” means, with respect to the Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof. “Developed Property” means real property within the District for which a building permit has been issued.
“District” means Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) established pursuant to the Act and the Resolution of Formation. “Escrow Bank” means U.S. Bank Trust Company, National Association, as escrow bank with respect to the defeasance of the 2012 Bonds under the provisions of the Escrow Agreement. “Escrow Agreement” means that certain Escrow Agreement dated as of [June 1, 2022] by and between the District and the Escrow Bank.
“Escrow Fund” means the fund by that name established under the Escrow Agreement. “Event of Default” means an “event of default” described in Section 8.1 hereof. “Event of Taxability” means a final determination by the Internal Revenue Service or a court of competent jurisdiction that the interest on the Bond is includible for Federal or State income tax purposes in the gross income of the Owner, for any reason unrelated to any act of omission of the Owner.
“Federal Securities” means any of the following: (a) non -callable direct obligations of the United States of America (“Treasuries”), (b) evidence of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and h as the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, and (c) pre - refunded municipal obligations rated “AAA” and “Aaa” by Standard & Poor’s and Moody’s, respectively (or any combination thereof).
“Fiscal Year” means the period beginning on July 1 of each year and ending on the next following June 30.
“Gross Taxes” means the amount of all Special Taxes received by the District, together with the proceeds collected from the sale of property pursuant to the foreclosure provisions of this Indenture for the delinquency of such Special Taxes remaining after the payment of all costs and expenses related to such foreclosure actions.

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“Indenture” means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article VI hereof.
“Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom:
(1) is in fact independent and not under the domination of the District or the City; (2) does not have any substantial interest, direct or indirect, in the District or the City; and
(3) is not connected with the District or the City as a member, officer or employee of the District or the City, but who may be regularly retained to make annual or other reports to the District or the City.
“Interest Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
“Interest Payment Date” means each March 1 and September 1, commencing [September 1, 2022]; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next succeeding such date. “Maximum Annual Debt Service” means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds by adding the following for each Bond Year:
(1) the principal amount of all Outstanding Bonds payable in such Bond Year at maturity; and
(2) the interest payable on the aggregate principal amount of all Bonds Outstanding in such Bond Year if the Bonds are retired as scheduled. “Moody’s” means Moody’s Investors Service, its successors and assigns. “Net Taxes” means Gross Taxes minus amounts set aside to pay Administrative Expenses. “Ordinance” means Ordinance No. 1759 adopted by the legislative body of the District on November 10, 2003 providing for the levying of the Special Tax, as it may be amended from time to time, or any other ordinance adopted by the City Council levying the Special Taxes. “Original Purchaser” means First Foundation Public Finance, a Delaware statutory trust and a wholly-owned subsidiary of First Foundation Bank, and its successors and assigns. “Outstanding” or “Outstanding Bonds” means all Bonds theretofore issued by the District, except:
(1) Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 10.1 hereof;

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(2) Bonds for payment or redemption of which monies shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be re deemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture; and (3) Bonds which have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section

2.10 hereof.
“Person” means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.
“Prepayments” means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in of the District made in accordance with the RMA.
“Principal Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
“Principal Office of the Trustee” means the corporate trust office of the Trustee located in Los Angeles, California, or such other office or offices as the Trustee may designate from time to time, or the office of any successor Trustee where it principall y conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued. “Purchaser Letter” means, as applicable, the letter to be delivered by the Original Purchaser to the District and the Trustee on the Delivery Date, or the letter to be delivered by any person or entity subsequently acquiring the Bonds, substantially in the form attached hereto as Exhibit B, pursuant to Section 2.9.
“Rebate Account” means the account by that name created and esta blished in the Rebate Fund pursuant to Section 3.1 hereof.
“Rebate Fund” means the fund by that name established pursuant to Section 3.1 hereof in which there are established the Accounts described in Section 3.1 hereof. “Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code.
“Record Date” means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.
“Redemption Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
“Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 1 03 of the Code. “Reserve Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.

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“Reserve Requirement” means that amount, as of any date of calculation, equal to 2% of the outstanding principal amount of the Bonds.
“Resolution of Formation” means Resolution No. R-5506 adopted by the City Council of the City on October 29, 2003, pursuant to which the City formed the District. “RMA” means the Rate and Method of Apportionment of Special Taxes appr oved by the qualified electors of the District at the October 29, 2003 election, as amended from time to time. “Special Tax Fund” means the fund by that name created and established pursuant to Section

3.1 hereof.
“Special Taxes” means the taxes levied by the legislative body of the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the October 29, 2003 election in the District, including any scheduled payments and any Prepayments thereof, the net proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien. “Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and division of McGraw-Hill, its successors and assigns. “Supplemental Indenture” means any supplemental indenture amending or supplementing this Indenture.
“Surplus Fund” means the fund by that name created and establish ed pursuant to Section 3.1 hereof.
“Taxable Rate” means, upon the occurrence of an Event of Taxability, the least of: (i) the rate per annum determined by the Owner based on the effect of such Event of Taxability, as notified by the Owner to the District and the Trustee in writing, (ii) 3.80 percent per annum, or (iii) the highest rate permitted by law.
“Tax Certificate” means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under the laws of the United States of America, with a corporate trust office in Los Angeles, California, and its successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3 and any successor thereto.
“2012 Bonds” means the Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) Improvement Area No. 1 Special Tax Refunding Bonds, Issue of 2012.
“Verification” shall have the meaning contained in the definition of Authorized Investments (9)(c) herein.

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ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds. Under and pursuant to the Act, the Bonds in the aggregate principal amount of $[16,500,000 (Sixteen Million Five Hundred Thousand Dollars)] shall be issued for the purposes of refunding the 2012 Bonds, funding the Reserve Account and paying Costs of Issuance. The Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund).

Section 2.2. Type and Nature of Bonds. Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof other than the District is pledged to the payment of the Bonds. Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds. The Bonds are not general or special obligat ions of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expense Account), as more fully described herein. The District’s limited obligation to pay the principal of, premium, if any, and interest on the Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) is absolute and unconditional, free of deductions a nd without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their prope rty. The principal of and interest on the Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the District’s property, or upon any of its income, receipts, revenues or assets, except the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, and interest thereon, and neither the members of the legislative body of the District or the City Council of the City nor any persons executing the Bonds, are liable personally on the Bonds, by reason of their issuance.

Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.

Section 2.3. Equality of Bonds and Pledge of Net Taxes. Pursuant to the Act and this Indenture, the Bonds shall be equally payable from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account), without priority for number, date of the Bonds, date of execution, or date of delivery, and the payment of the interest on and principal of the Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account), which are hereby set aside for the payment of the Bonds. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds

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and so long as any of the Bonds or interest thereon remain Outstanding shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture.

Notwithstanding any provision contained in this Indenture to the contrary, Net Taxes deposited in the Rebate Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds, and none of the Rebate Fund, the Surplus Fund, the Costs of Issuance Fund or the Administrative Expense Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.

Section 2.4. Description of Bonds; Interest Rates. The Bonds shall be initially delivered as a single registered Bond in the name of the Original Purchaser and shall not be delivered as book - entry Bonds. The Bonds shall not be assigned CUSIPS, be issued pursuant to any type of offering document or official statement and shall not receive a rating from any rating agency.

The Bonds shall be designated “COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO) IMPROVEMENT AREA NO. 1 SPECIAL TAX REFUNDING BONDS, ISSUE OF 2022”. The Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1, 2034 in the aggregate principal amount of $16,500,000 and shall be subject to and shall bear interest at the rate of 2.74% per annum.

Interest shall be payable on the Bonds from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of that Bond has been paid; provided, however, that if at the maturity date of any Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds shall then cease to bear interest. Interest due on the Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.

Upon the occurrence of an Event of Taxability, the then outstanding principal amount of the Bond shall bear interest at the Taxable Rate. In addition, upon the occurrence of an Event of Taxability and the Owner is determined to be subject to any fees, fines or penalties as the direct result of such Event Taxability, the Owner may seek reimbursement from the District for such fees, fines or penalties by notifying the District in writing (which notification shall contain reasonable specificity regarding the fees, fines or penalties for which reimbursement is sought). The District shall reimburse the Owner the amount of fees, fines or penalties pursuant to such notification from available Net Taxes.

Upon the occurrence of an Event of Default and so long as Event of Default is continuing and remains uncured, the then outstanding principal amount of the Bond shall bear interest at the Default Rate.

Section 2.5. Place and Form of Payment. The Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The payment of final principal of the Bonds shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. Interest on any Bond shall be payable from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) such d ate of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately

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succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond, in which event interest shall be payable from the dated date of such Bond; provided, however, that if at the time of authentication of such Bond, interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which the intere st has been paid or made available for payment or, if no interest has been paid or made available for payment on that Bond, interest on that Bond shall be payable from its dated date. Interest on any Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, to such Bondowner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated by such Owner.

Notwithstanding anything herein to the contrary, so long as the Bonds are owned by the Original Purchaser: (i) the Trustee shall pay principal of and inte rest and premium, if any, on the Bonds when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on the Bonds shall be made without the requirement for presentation and surrender by the Original Purchaser, provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments described in Section 4.2.

Section 2.6. Form of Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The B onds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication.

Until definitive Bonds shall be prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of thi s Indenture as definitive Bonds. If the District issues temporary Bonds, it shall execute and furnish definitive Bonds without unnecessary delay and thereupon any temporary Bond may be surrendered to the Trustee at its office, without expense to the Owner, in exchange for a definitive Bond of the same maturity, interest rate and principal amount in any authorized denomination. All temporary Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.

Section 2.7. Execution and Authentication. The Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor of the City Council of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed deputy City Clerk, in their capacity as officers of the District. In case any one or more of the officers who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed have been authenticated and delivered by the Trustee (including new B onds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or to lost,

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stolen, destroyed or mutilated Bonds), such Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed such Bonds had not ceased to hold such office.

Only the Bonds as shall bear thereon such certificate of authentication in the form set forth in Exhibit A attached hereto shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been signed by the Trustee.

Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds which shall upon reasonable prior notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register Bonds as herein provided.

The District and the Trustee may treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of that Bond for any and all purposes, and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may rely on the address of the Bondowner as it appears in the Bond R egister for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Trustee of any change in the Bondowner’s address so that the Bond Register may be revised accordingly.

Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.

Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds for other authorized denominations of the same maturity. The Trustee shall not collect from the Owner any charge for any new Bond issued upon any exchange or transfer, b ut shall require the Bondowner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds shall be surrendered for registration of transfer or exchange , the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.

Notwithstanding the foregoing, a Bondowner may only transfer the Bonds to a new Bondowner if the Bonds are transferred in whole and the new Bondowner has delivered a Purchaser Letter (in the form attached as Exhibit B hereto) to the District and the Trustee. For purposes of such a transfer, the Trustee may rely upon all new Bondowner representations as set forth in the letter, which include, but are not limited to, that such Bondowner is a “qualified institutional buyer” as defined in Rule 144A of the Securities Acts of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933.

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Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds. If any Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate and deliver, a new Bond of like tenor, date and maturity 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 cancelled by the Trustee pursuant to Section 10.1 hereof. 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 is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver, a new Bond of like tenor and maturity, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond issued in lieu of any Bond alleged to be mutilated, lost, destroyed or stolen, shall be equally and proportionately entitled to the benefits hereof with all other Bonds issued hereunder. The Trustee shall not treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds.

Section 2.11. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any defect in any proceedings taken by the District with respect to the issuance of the Bonds, and the recital contained in the Bonds that the same are issued pursuant to the Act and other applicable laws of the State shall be conclusive evidence of their validity and of the regularity of their issuance.

ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There is hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The Community Facilities District No. 2003-2 Special Tax Fund (the “Special Tax Fund”) (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account and an Administrative Expense Account.)
(2) The Community Facilities District No. 2003-2 Rebate Fund (the “Rebate Fund”) (in which there shall be established a Rebate Account and an Alternative Penalty Account).
(3) The Community Facilities District No. 2003-2 Costs of Issuance Fund (the “Costs of Issuance Fund”).
(4) The Community Facilities District No. 2003-2 Surplus Fund (the “Surplus Fund”).

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The amounts on deposit in the foregoing funds and accounts shall be held by the Trustee and the Trustee shall invest and disburse the amounts in such funds and accounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof.

The Trustee, at the direction of an Authorized Representative of the City, may create new funds, accounts or subaccounts, or may create additional accounts within any of the foregoing funds and accounts.
(b) The proceeds of the sale of the Bonds shall be received by the Trustee on behalf of the District and deposited and transferred as follows:
(1) $[___________] shall be deposited to the Costs of Issuance Fund to pay the Costs of Issuance of the Bonds;
(2) $[___________] shall be deposited to the Reserve Account of the Special Tax Fund to fund the Reserve Requirement; and
(3) $[___________] shall be transferred to the Escrow Bank for deposit in the Escrow Fund.

The Trustee may, in its discretion, establish a temporary fund or account in its books and records to facilitate such transfers and deposits.

Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for Prepayments which shall be deposited to the Redemption Account as specified in a Certificate of an Authorized Representative, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set for th in the following Sections, in the following order of priority, to:
(1) the Administrative Expense Account of the Special Tax Fund; (2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Reserve Account of the Special Tax Fund;
(6) the Rebate Fund; and
(7) the Surplus Fund.
(b) At maturity of all of the Bonds and, after all principal and interest then due on the Bonds then Outstanding has been paid or provided for and any amounts owed to the Trustee have

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been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.

Section 3.3. Administrative Expense Account of the Special Tax Fund. The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the District; provided, however, that, except as set forth in the following sentence, the total amount transferred in a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds due in such Bond Year and to restore the Reserve Account to the Reserve Requirement. Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expense Account to the extent necessary to collect delinquent Special Taxes. Moneys in the Administrative Expense Account of the Special Tax Fund shall be invested in any Authoriz ed Investments as directed in writing by an Authorized Representative of the District and shall be disbursed as directed in a Certificate of an Authorized Representative.

Section 3.4. Interest Account and Principal Account of the Special Tax Fund . The principal of and interest due on the Bonds until maturity, other than principal due upon redemption, shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively. For the purpose of assuring that the payment of pr incipal of and interest on the Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each March 1 and September 1, the Trustee shall make the following transfers from the Special Tax Fund, first to the Interest Account and then to the Principal Account; provided that, if amounts in the Special Tax Fund (exclusive of the Reserve Account) are inadequate to make the foregoing transfers, then any deficiency shall be made up by transfers from the Reser ve Account:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds on said Interest Payment Date and any installme nt of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same become due.
(b) To the Principal Account, an amount such that the balance in the Pri ncipal Account one Business Day prior to September 1 of each year, commencing September 1, 2013, shall equal the principal payment due on the Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity.

Section 3.5. Redemption Account of the Special Tax Fund. (a) Prepayments deposited to the Redemption Account, along with any amounts that an Authorized Officer of the District directs to be transferred from the Reserve Account to the Redemption Account in connection with any Prepayments, shall be applied on the redemption date established pursuant to Section 4.1 hereof for the use of such Prepayme nts to the payment of the principal of, premium, and interest on the Bonds to be redeemed with such Prepayments; provided that amounts shall be transferred from the Reserve Account only if immediately following such redemption the amount in the Reserve Account will meet the Reserve Requirement.

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(b) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds and in the case of an extraordinary redemption from Prepayments to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds may be made by the District at public or private sale as and when and at such prices as the District 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 extraordinary redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Section 4.1 hereof. Any accrued interest payable upon the purchase of Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Inter est Payment Date.

Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The amounts in the Reserve Account shall be applied as follows:
(a) Moneys in the Reserve Account shall be used solely for the purpose of paying the principal of and interest on the Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor and for the purpose of making any required transfer to the Rebate Fund pursuant to Section 3.7 hereof upon written direction from the District. If the amounts in the Interest Account or the Principal Account of the Special Tax Fund are insufficient to pay the princip al of or interest on any Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall withdraw from the Reserve Account for deposit in the Interest Account or the Principal Account of the Special Tax Fund or the Rebate Fund, as applicable, moneys necessary for such purposes.
(b) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers referred to in Sections 3.3, 3.4 and 3.5 above, the Trustee shall t ransfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the District elects to apply to such purpose, the amount needed to restore the amount of such Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Trustee determines that such amounts will not be needed to make the deposits required to be made to the Administrative Expense Account, the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund on or before the next September 1. If amounts in the Special Tax Fund together with any other amounts transferred to replenish the Reserve Account are inadequate to re store the Reserve Account to the Reserve Requirement, then the District shall include the amount necessary to restore the Reserve Account to the Reserve Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates.
(c) In connection with a redemption of Bonds pursuant to Section 4.1, or a defeasance of Bonds in accordance with Section 9.1 hereof, amounts in the Reserve Account may be applied to such redemption or defeasance so long as the amount on deposit in the Rese rve Account following such redemption or any partial defeasance equals the Reserve Requirement. The District shall set forth in a Certificate of an Authorized Representative the amount in the Reserve Account to be

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transferred to the Redemption Account on a redemption date or to be transferred pursuant to this Indenture to partially defease Bonds, and the Trustee shall make such transfer on the applicable redemption or defeasance date, subject to the limitation in the preceding sentence. (d) To the extent that the Reserve Account is at the Reserve Requirement as of the first day of the final Bond Year for the Bonds, amounts in the Reserve Account may be applied to pay the principal of and interest due on the Bonds in the final Bond Year for such issue. Moneys i n the Reserve Account in excess of the Reserve Requirement not transferred in accordance with the preceding provisions of this section shall be withdrawn from the Reserve Account on the Business Day before each March 1 and September 1 and shall be transferred to the Interest Account of the Special Tax Fund.

Section 3.7. Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternative Penalty Account therein. The District shall cause to be deposited in the Rebate Fund such amounts as required under the Tax Certificate. All money at any time deposited in the Rebate Account or the Alternative Penalty Account of the Rebat e Fund shall be held by the Trustee in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section 3.7 and the Tax Certificate.

Without limiting the generality of the foregoing, the Distric t agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final treasury regulations as may be applicable to the Bonds from time to time, which the District covenants to pay or cause to be paid to the United States at the times and in the amounts determined under the Tax Certificate. The Trustee agrees to comply with all instructions given to it by the District in accordance with this cov enant. The Trustee shall conclusively be deemed to have complied with the provisions of this Section 3.7 if it follows the instructions of the District and shall not be required to take any actions hereunder in the absence of instructions from the District.
(b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund with respect to the Bonds after payment in full of such issue and after making the payments required to comply with this Section 3.7 and the Tax Certificate may be withdrawn by the Trustee at the written direction of the District and utilized in any manner by the District. (c) Survival of Defeasance and Final Payment . Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply wi th the requirements of this Section shall survive the defeasance and final payment of the Bonds.
(d) Amendment Without Consent of Owners. This Section 3.7 may be deleted or amended in any manner without the consent of the Owners, provided that prior to such e vent there is delivered to the District an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds issued on a tax-exempt basis. Notwithstanding any provision of this Section, if the District shall provide to the Trustee an opinion of a nationally recognized bond or tax counsel that any specified action required under this Section 3.7 is no longer required or that some further or different action is required to maintain the tax-exempt status of interest on the Bonds, the Trustee and

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the District may conclusively rely on such opinion in complying with the requirements of this Section, and the covenants hereunder shall be deemed to be modified to that extent.

Section 3.8. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5,

3.6 and 3.7 hereof, as soon as practicable after each September 1, and in any event prior to each October 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative directing that certain amounts be retained in the Special Tax Fund because the District has included such amounts as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b) hereof. Moneys deposited in the Surplus Fund will be transferred by the Trustee at the direction of an Authorized Representative of the District (i) to the Interest Account or the Principal Account of the Special Tax Fund to pay the principal of and interest on the Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account of the Special Tax Fund are insufficient therefor; (ii) to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement; (iii) to the Administrative Expense Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account of the Special Tax Fund are insufficient to pay Administrative Expenses; or (iv) for any other lawful purpose of the District.

The amounts in the Surplus Fund are not pledged to the repayme nt of the Bonds and may be used by the District for any lawful purpose. In the event that the District reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds, the District will notify the Trustee in a Certificate of an Authorized Representative and the Trustee will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested at the written direction of the District in Authori zed Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds.

Section 3.9. Costs of Issuance Fund.
(a) The moneys in the Costs of Issuance Fund shall be disbursed by the Trustee pursuant to a Certificate of an Authorized Representative of the District to pay Costs of Issuance. (b) Upon receipt of a Certificate of an Authorized Representative of the District stating that all or a specified portion of the amount remaining in the Costs of Issuance Fund is no longer needed to pay Costs of Issuance, the Trustee shall transfer all or such specified portion, as appl icable, of the moneys remaining on deposit in the Costs of Issuance Fund to the Interest Account of the Special Tax Fund. On the date which is six months after the date of issuance of the Bonds, all amounts remaining in the Costs of Issuance Fund shall be transferred to the Interest Account of the Special Tax Fund and the Costs of Issuance Fund shall be closed.

Section 3.10. Investments. Moneys held in any of the Funds and Accounts under this Indenture shall be invested at the written direction of the District in accor dance with the limitations set forth below only in Authorized Investments which shall be deemed at all times to be a part of such Funds and Accounts. Any loss resulting from such Authorized Investments shall be credited or

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charged to the Fund or Account from which such investment was made, and any investment earnings on a Fund or Account shall be applied as follows: (i) investment earnings on all amounts deposited in the Costs of Issuance Fund, the Special Tax Fund, the Surplus Fund and the Rebate Fund an d each Account therein (other than the Reserve Account of the Special Tax Fund) shall be deposited in those respective Funds and Accounts, and (ii) investment earnings on all amounts deposited in the Reserve Account shall be deposited therein to be applied as set forth in Section 3.6. Moneys in the Funds and Accounts held under this Indenture shall be invested by the Trustee as directed in writing by the District, from time to time, in Authorized Investments subject to the following restrictions:
(a) Moneys in the Costs of Issuance Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the District estimates the moneys represe nted by the particular investment will be needed for withdrawal from the Costs of Issuance Fund. (b) Moneys in the Interest Account, the Principal Account and the Redemption Account of the Special Tax Fund shall be invested only in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds as the same become due.
(c) Monies in the Reserve Account of the Special Tax Fund may be invested only in Authorized Investments; provided that no such Authorized Investment of amounts in the Reserve Account shall mature later than the final maturity date of the Bonds. (d) Moneys in the Rebate Fund shall be invested only in Authorized Investments of the type described in clause (1) of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.7 hereof or in Authorized Investments of the type described in clause (7) of the definition thereof.
(e) In the absence of written investment directions from the District, the Trustee shall invest solely in Authorized Investments specified in c lause (7) of the definition thereof.

The Trustee shall sell, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such Funds and Accounts or from such Funds and Accounts. For the purpose of determining at any given time the balance in any such Funds and Accounts, any such investments constituting a part of such Funds and Accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the market value thereof at least annually on or before each September 1. In making any valuations hereunder, the Trustee may utilize such computerized securities pricing services as may be available to it, including, without limitation, those available through its regular accounting system, and conclusively rely thereon. Notwithstanding anything herein to the contrary, the Trustee shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of this Indenture.

The Trustee may act as agent in the making or disposing of any investment and shall be entitled to its customary fee for making such investment. The Trustee may sell at the best market price obtainable, or present for redemption, any Authorized Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or

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disbursement from the fund or account to which such Authorized Investment is credited, and, subject to the provisions of Section 7.4, the Trustee shall not be liable or responsible for any loss resulting from such investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately.

The District acknowledges that, to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the District periodic cash transaction statements which shall include detail for all investment transactions made by the Trustee hereunder.

ARTICLE IV

REDEMPTION OF BONDS
Section 4.1. Optional Redemption.

The Bonds may be redeemed, at the option of the District from any source of funds on any date, in whole, or in part from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Dates Redemption Price
On or before August 31, 2024 103%
September 1, 2024 through August 31, 2026 102
September 1, 2026 through August 31, 2027 101
September 1, 2027 and thereafter 100

Section 4.2. Mandatory Sinking Fund Redemption.

The Bonds will be paid from the sinking fund payments that have been deposited into the Redemption Account established by the Indenture, on [September 1, 2022], and on each September 1 thereafter to maturity, in the years and in the amounts forth below. The Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Redemption Date
(September 1)
Amount
2022 $
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032

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2033
2034 (Maturity)

In the event of a partial optional redemption or extraordinary mandatory redemption of the Bonds, each of the remaining Sinking Fund Payments for such Bonds, as applicable, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000.

Section 4.3. Extraordinary Redemption of Bonds.

The Bonds are subject to extraordinary redemption prior to its stated maturity, as a whole, or in part on a pro rata basis among maturities, on or after September 1, [2022] and on each September 1, thereafter, and shall be redeemed by the Trustee, from Prepayments of Special Taxes deposited to the Redemption Account plus amounts transferred from the Reserve Account in connection with such transfers, at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the redemption date, without premium.

Section 4.4. [Reserved]
Section 4.5. Notice of Redemption. When Bonds are due for redemption under Section 4.1 above, the Trustee shall give notice, in the name of the District, of the redemption of such Bonds; provided, however, that such notice for optional redemption shall be conditioned on there being on deposit on the redemption date sufficient money to pay the redemption price of the Bonds to be redeemed and may be further conditioned as stated in the notice of redemption. If any condition stated in the redemption notice shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Such notice of redemption shall (i) state the date fixed for redemption and surrender of the Bonds to be redeemed; (ii) state the redemption price; (iii) state the place or places where the Bonds are to be redeemed; (iv) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (v) state the date of issue of the Bonds as originally issued; (vi) state the rate of interest borne by each Bond being redeemed; and (vii) state any other descriptive information needed to identify accurately the Bonds being redeemed as shall be specified by the Trustee. Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee shall mail a copy of such notice, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the Original Purchaser of the Bonds. The actual receipt by the Owner of any Bond or the Original Purchaser of any Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption.

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In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect or omission in said further notice nor any failure to give al l or any portion of such further notice shall in any manner defeat the legality or effectiveness of a call for redemption if notice thereof is given as above prescribed.

Section 4.6. Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the District shall execute and the Trustee shall authenticate and deliver to the Bondowner, at the expense of the District, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrender ed, with the same interest rate and the same maturity.

Section 4.7. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3 hereof, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption:
(a) the Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture, anything in this Indenture or in the Bonds to the contrary notwithstanding; (b) upon presentation and surrender thereof at the office of the Trustee, the redemption price of such Bonds shall be paid to the Owners thereof; (c) as of the redemption date the Bonds, or portions thereof so designated for redemption, shall be deemed to be no longer Outstanding and such Bonds, or portions thereof, shall cease to bear further interest; and
(d) as of the date fixed for redemption no Owner of any of the Bonds , or portions thereof so designated for redemption, shall be entitled to any of the benefits of this Indenture or any Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Warranty. The District warrants that it shall preserve and protect the security pledged hereunder to the Bonds against all claims and demands of all persons.

Section 5.2. Covenants. So long as any of the Bonds issued hereunder are Outstanding and unpaid, the District makes the following covenants with the Bondowners under the provisions of the Act and this Indenture (to be performed by the District or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the District to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will receive all Special Taxes in trust for the Owners and will instruct the Treasurer to deposit all Special Taxes with the Trustee as soon as reasonably practicable following their apportionment to the District, and

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the District shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the District.

The District covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and in accordance with this Indenture to the extent that Net Taxes and other amounts pledged hereunder are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds and this Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds issued hereunder.

The District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Special Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Special Taxes other than the Bonds. (b) Levy of Special Tax. Beginning in Fiscal Year 2021-2022 and so long as any Bonds are Outstanding, the legislative body of the District cove nants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay (1) the principal of and interest on the Bonds when due, (2) the Administrative Expenses, and (3) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement. The District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds are Outstanding.
(c) Commence Foreclosure Proceedings. The District covenants for the benefit of the Owners of the Bonds that it (i) will commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $10,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due; and (ii) will commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied and the amount on deposit in the Reserve Account is at less than the Reserve Requirement; and (iii) will diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid.

The District covenants that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds, to bring the amount on deposit in the Reserve Account up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds.
(d) Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Net Taxes or other funds in the Special Tax Fund (other than the Administrative Expense Account therein), or which might impair the security of the Bonds then Outstanding; provided, however, that nothing herein contained shall require the District to make any such payments so long as the District in good faith shall contest the validity of any such claims.

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(e) Books and Accounts. The District will keep proper books of records and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the improvements constructed with the proceeds of bonded indebtedness issued by the District, the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Trustee or of the Owners of not less than 10% of the principal amount of the Bonds then Outstanding or their representatives authorized in writing. (f) Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The District will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code.
(2) Arbitrage. The District will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, or take any action or re frain from taking any action which will cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code.
(3) Federal Guaranty. The District will make no use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.
(4) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code.
(5) Hedge Bonds. The District will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds to be considered “hedge bonds” wit hin the meaning of Section 149(g) of the Code unless the District takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds. (6) Miscellaneous. The District will take no action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed on the Delivery Date by the District in connection with the Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein. (7) Other Tax Exempt Issues. The District will not use proceeds of other tax exempt securities to redeem any Bonds without first obtaining the written opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds.

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(g) Reduction of Maximum Special Taxes. The District hereby finds and determines that, historically, delinquencies in the payment of specia l taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the District hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the District below the levels provided i n this Section 5.2(g) would interfere with the timely retirement of the Bonds. The District determines it to be necessary in order to preserve the security for the Bonds to covenant, and, to the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants which, when tak en together, certify that such changes do not reduce the maximum Special Taxes that may be levied in each year on Developed Property within the District to an amount which is less than 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds. For purposes of estimating Administrative Expenses for the foregoing calculation, the Independent Financial Consultants shall compute the Administrative Expenses for the current Fiscal Year and escalate that amount by two percent (2%) in each subsequent Fiscal Year. (h) Covenants to Defend. The District covenants that, in the event that any initiative is adopted by the qualified electors in the District which purports to reduce the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of the District to levy the Special Taxes for the purposes set forth in Section 5.2(b) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (i) Limitation on Right to Tender Bonds. The District hereby covenants that it will not adopt any policy pursuant to Section 53341.1 of the Act permitting the tender of Bonds in full payment or partial payment of any Special Taxes unless the District shall have first received a certificate from an Independent Financial Consultant that the acceptance of such a tender wi ll not result in the District having insufficient Special Tax revenues to pay the principal of and interest on the Bonds when due.
(j) Annual Reports. Not later than March 31 of each year, commencing March 31, 2023, and continuing until the date of the final installment principal of the Bonds, the District shall supply to the Original Purchaser the following information:
(1) a copy of the District’s audited financial statements for the prior Fiscal Year; (2) a table presenting the number of parcels, secured assessed values (land and structure values), and value to-lien ratios within Improvement Area No. 1 for the current Fiscal Year; (3) a table listing the total amount of Special Taxes levied and total delinquencies within Improvement Area No. 1 in the current Fiscal Year and all prior Fiscal Years with delinquencies;
(4) a statement as to any parcel in Improvement Area No. 1 for which the delinquent Special Taxes represents more than 10% of the aggregate Special Tax levy that includes the identity of the parcel, the identity of the owner(s) of the parcel, and the aggregate amount of

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delinquent ad valorem property taxes and Special Taxes within Improvement Area No. 1, including accrued penalties and interest; and
(5) a statement as to the status of any judicial foreclosure proceedings within Improvement Area No. 1, including such proceedings initiated by the District as a result of the delinquency in the payment of Special Taxes.
(k) Significant Events. The District shall give or cause to give notice to the Ori ginal Purchaser of the occurrence of any of the events described in 17 CFR 240.15c2 -12(b)(5)(i)(C) with respect to the Bonds in a timely manner, but not in excess of ten (10) business Days after the occurrence of the event.
(l) Further Assurances. The District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Resolution.

ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent.

The District may from time to time, and at any time, with the consent of the Original Purchaser, which consent shall not be unreasonably withheld, without notice to or consent of any of the Bondowners, adopt Supplemental Indentures for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the District contained in this Indenture, other covenants, agreements, limitations and restrictions to be observed by the District which are not contrary to or inconsistent with this Indenture as theretofore in effect or which further secure Bond payments; (c) 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, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and whi ch shall not materially adversely affect the interests of the Owners of the Bonds then Outstanding; (d) to modify, alter or amend the RMA in any manner, so long as the Trustee receives a certificate of an Independent Financial Consultant stating that such chan ges do not reduce the maximum Special Taxes that may be levied in each year on Developed Property within the District to an amount which is less than 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds Outstanding as of the date of such amendment; or

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(e) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondowners.

Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent .

Exclusive of the Supplemental Indentures described in Section 6.1, the Original Purchaser, or if the Original Purchaser does not own any Bonds, the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding shall have the right to consent to and ap prove the adoption by the District of such Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting, (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond; (b) a reduction in the principal amoun t of, or redemption premium on, any Bond or the rate of interest thereon; (c) a preference or priority of any Bond over any other Bond; or (d) a reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such Supplemental Indenture, without the consent of the Owners of all Bonds then Outstanding.

If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Bondowners, the District shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee shall, at the expense of the District, cause notice of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the office of the Trustee fo r inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding as required by this Section.

Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the District sub stantially in the form of the copy referred to in such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the District, shall thereafter become a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds have consented to the adoption of any Supplemental Indenture, Bonds which are owned by the District or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination.

Upon the adoption of any Supplemental Indenture and the receipt of cons ent to any such Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds in instances where such consent is required pursuant to the provisions of this section, this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the District and all Owners of Outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments.

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Section 6.3. Notation of Bonds; Delivery of Amended Bonds. After the effective date of any action taken as hereinabove provided, the District may determine that the Bonds may bear a notation, by endorsement in form approved by the District, as to such action, and in that case upon demand of the Owner of any Outstanding Bond at such effective date and presentation of his Bond for the purpose at the office of the Trustee or at such additional offices as the T rustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds. If the District shall so determine, new Bonds so modified as, in the opinion of the District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond at such effective date such new Bonds shall be exchanged at the office of the Trustee or at such additional offices as the Trustee may select and designate f or that purpose, without cost to each Owner of Outstanding Bonds, upon surrender of such Outstanding Bonds.

ARTICLE VII

TRUSTEE
Section 7.1. Trustee. U.S. Bank Trust Company, National Association shall be the Trustee for the Bonds unless and until another Trustee is appointed b y the District hereunder. The Trustee represents that it has a combined capital (exclusive of borrowed capital) and surplus of at least $100,000,000. The District may, at any time, and with the prior written consent of the Original Purchaser, so long as the Original Purchaser is the then Owner of any Bonds, appoint a successor Trustee satisfying the requirements of Section 7.2 below for the purpose of receiving all money which the District is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.

The Trustee is hereby authorized to and shall mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5 above, interest payments to the Bondowners, to select Bonds for redemption, and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registra tion of transfer and exchange of Bonds presented to it for such purposes, to provide for the cancellation of Bonds all as provided in this Indenture, and to provide for the authentication of Bonds, and shall perform all other duties assigned to or imposed on it as provided in this Indenture. The Trustee shall keep accurate records of all funds administered by it and all Bonds paid, discharged and cancelled by it.

The Trustee is hereby authorized to redeem the Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds upon payment thereof in accordance with the provisions of Section 10.1 hereof.

The District shall from time to time, subject to any agreement between the District and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee for all its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties hereunder, and indemnify and save the Trustee, its officers, directors, employees and agents, harmless against costs, claims, expenses and liabilities, including, without limitation, fees and expenses of its attorneys, not arising from its own negligence or willful misconduct which it may incur in the exercise and performance of its powers and duties hereunder. The foregoing obligation

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of the District to indemnify the Trustee shall survive the removal or resignat ion of the Trustee or the discharge of the Bonds.

The District shall indemnify and save the Trustee, its officers, directors, employees and agents, harmless against from and against all costs, claims, expenses and liabilities, including, without limitation, fees and expenses of its attorneys, not arising from its own negligence or willful misconduct which it may incur in the exercise and performance of its powers and duties hereunder.

The foregoing obligation of the District to indemnify the Trustee shall survive the removal or resignation of the Trustee or the discharge of the Bonds.

Section 7.2. Removal of Trustee. The District may at any time at its sole discretion, and with the prior written consent of the Original Purchaser, so long as the Original Purchaser is th e then Owner of the Bonds, remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a written notice of its decision to remove the Trustee and may appoint a successor or successors thereto; provided that any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $100,000,000, and subject to supervision or examination by federal or state authority. Any removal shall become effective only upon acceptance of appointment by the successor Trustee. If any bank or trust company appointed as a successor 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 combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice being sent by the successor Trustee to the Bondowners of the successor Trustee’s identity and address.

Section 7.3. Resignation of Trustee. The Trustee may at any time resign by giving written notice to the District and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the registration books in the office of the Trustee. Upon receiving such notice of resignation, the District shall promptly appoint a successor Trustee satisfying the criteria in Section 7.2 above by an instrument in writing. Any resignation or removal of the Trustee and appointment of a successor Trus tee shall become effective only upon acceptance of appointment by the successor Trustee.

Section 7.4. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds shall be taken as statements, promises, covena nts and agreements of the District, and the Trustee assumes no responsibility for the correctness of the same and makes no representations as to the validity or sufficiency of this Indenture or, the Bonds, and shall incur no responsibility in respect there of, other than in connection with its duties or obligations specifically set forth herein, in the Bonds, or in the certificate of authentication assigned to or imposed upon the Trustee. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct.

The Trustee shall be protected in acting upon any notice, resolution, request, cons ent, order, certificate, report, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel to the District, with regard to legal questions, and the opinion of such counsel shall be full

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and complete authorization and protection in respect of any action taken or suffered hereunder in good faith and in accordance therewith.

The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed.

Whenever in the administration of its duties under this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be de emed to be conclusively proved and established by a written certificate of the District, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture 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 to it may seem reasonable.

The Trustee shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. No provision in 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 its rights or powers.

The Trustee shall not be deemed to have knowledge of any default or Event of Default u ntil an officer at the Trustee’s corporate trust office responsible for the administration of its duties hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its corporate trust office.

The Trustee shall have no responsibility for, and makes no representations with respect to, any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.

Section 7.5. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one or more of the following events shall constitute an “Event of Default”:
(a) default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise;

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(b) default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or
(c) except as described in (a) or (b), default shall be made by the Distric t in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture, the Bonds, and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds.

The Trustee agrees to give notice to the Owners as soon as practicable upon the occurrence of an Event of Default under (a) or (b) above and within 30 days of the Trustee’s knowledge of an Event of Default under (c) above.

Section 8.2. Remedies of Owners. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture, including:
(a) by mandamus or other suit or proceeding at law or in equity to enforce his rights against the District and any of the members, officers and employees of the District, and to compel the District or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Indenture; (b) by suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or
(c) by a suit in equity to require the District and its members, officers and employees to account as the trustee of an express trust.

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds.

No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.

Section 8.3. Application of Revenues and Other Funds After Default. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture relating to the Bonds shall be applied by the Trustee in the following order upon presentation of the several Bonds:

First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable

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compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and
Second, to the payment of the whole amount of interest on and principal of the Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order of priority:
(a) first to the payment of all installments of interest on the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; (b) second, to the payment of all installments of principal of the Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; and (c) third, to the payment of interest on overdue installments of principal and interest on the Bonds on a pro rata basis based on the total amount then due and owing.

Section 8.4. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any actio n, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unles s there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majori ty in aggregate principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued hereunder, by taking a nd holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

Section 8.5. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owners of the Bonds under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Net Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

Section 8.6. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds, shall affect or impair the obligation of the District, which is absolute and

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unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Net Taxes and other moneys herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or any Owners 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. No delay or omission of the Trustee or any Owner of any of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or the Owners by the Act or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as the case may be.

Section 8.7. Limitations on Rights and Remedies of Owners. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in complia nce with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.

The right of any Owner of any Bond to receive payment of the principal of and interest and premium (if any) on such Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.

Section 8.8. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the District, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

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ARTICLE IX

DEFEASANCE
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the princip al thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond shall cease to be entitled to the pledge of Net Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the District to the Owner of such Bond under this Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the District’s general fund all money or securities held by it pursuant to this Indentu re which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds.

Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money whic h, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond, as and when the same shall become due and payable; or
(c) by depositing with the Trustee or another escrow bank appointed by the District, in trust, Federal Securities, in which the District may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expense Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond, as and when the same shall become due and payable.

If paid as provided above, then, at the election of the District, and notwithstanding that any Outstanding Bonds shall not have been surrendered for payment, all obligati ons of the District under this Indenture and any Supplemental Indenture with respect to such Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any such Bond not so surrendered and paid, all sums due thereon and except for the covenants of the District contained in Section 5.2(f) or any covenants in a Supplemental Indenture relating to compliance with the Code. Notice of such election shall be filed with the Trustee not less than ten days pr ior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under (c) above, there shall be provided to the District a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, and an opinion of

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Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds being defeased have been legally defeased in accordance with this Indenture and any applicable Supplemental Indenture.

Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the Owners of such Bonds which have been defeased under this Indenture and execute and del iver to the District all such instruments as may be desirable to evidence such release, discharge and satisfaction.

In the case of a defeasance hereunder of all Outstanding Bonds, the Trustee shall pay over or deliver to the District any funds held by the Trustee at the time of a defeasance, which are not required for the purpose of paying and discharging the principal of or interest on the Bonds when due. The Trustee shall, at the written direction of the District, mail, first class, postage prepaid, a n otice to the Bondowners whose Bonds have been defeased, in the form directed by the District, stating that the defeasance has occurred.

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds. All Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond purchased by the District as authorized herein and delivered to the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds, as provided by law, a nd, upon request of the District, furnish to the District a certificate of such destruction.

Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by thi s Indenture to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority.
(b) As to any Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upo n such Bond and the interest thereon to the extent of the sum or sums to be paid. Neither the District nor the Trustee shall be affected by any notice to the contrary.

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Nothing contained in this Indenture shall be construed as limiting the Trustee or the D istrict to such proof, it being intended that the Trustee or the District may accept any other evidence of the matters herein stated which the Trustee or the District may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of such request or consent.

Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds which remain unclaimed for two years after the date when such Outstanding Bonds have become due and payable, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds become due and payable, shall be repaid by the Trustee to the District, as its absolute property and free from trust, and the Trustee shall thereu pon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of such Outstanding Bonds; provided, however, that, before being required to make any such payment to the District, the Trustee, at the expense of the District, shall cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District.

Section 10.4. Provisions Constitute Contract. The provisions of this Indenture shall constitute a contract between the District and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California.

In case any suit, action or proceeding to enforce any right or exercise a ny remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Trustee, then the District, the Trustee and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.

After the issuance and delivery of the Bonds this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Ind enture, but to no greater extent and in no other manner.

Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the District from making contracts or creating bonded or other indebtedness payable from a pledge of the Net Taxes which is subordinate to the pledge hereunder, or which is payable from the general fund of the District or from taxes or any source other than the Net Taxes and other amounts pledged hereunder.

Section 10.6. Further Assurances. The District will adopt, 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 Indenture, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Indenture.

Section 10.7. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application

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of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this I ndenture, the Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California.

Section 10.8. Notices. Any notices required to be given to the District with respect to the Bonds or this Indenture shall be mailed, first class, postage prepaid, or personally delivered to the Director of Finance of the City of Upland, 460 N. Euclid Avenue, Upland, California 91786, and all notices to the Trustee in its capacity as Trustee shall be mailed, first class, postage prepaid, or personally delivered to the Trustee, U.S. Bank Trust Company, National Association, 633 West Fifth Street, 24th Floor, Los Angeles, California 90071, Attention: Global Corporate Trust Services.

Section 10.9. Additional Rights of Original Purchaser. The following provisions shall apply so long as the Original Purchaser owns 100% of the Bonds:
(a) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to the appointment of a successor Trustee appointed by the District after the resignation or removal of the Trustee.
(b) Notwithstanding any other provision of this Indenture, the Original Purchaser shall have the right to consent to any amendment to this Indenture. (c) The District shall inform the Original Purchaser promptly upon the occurrence of an Event of Taxability or an Event of Default. (d) The Original Purchaser is hereby expressly made a third party beneficiary of this Indenture.
(e) The District shall pay or reimburse the Original Purchaser for any and all charges, fees, costs and expenses that the Original Purchaser may reasonably pay or incur, as a result of any action or omission by the District, in connection with the following: (i) the administration, enforcement, defense, or preservation of any rights or security hereunder; (ii) any amendment, waiver, or similar action with respect to or related to this Indenture whether or not executed or completed; or (iii) any litigation or other dispute in connection with this Indenture.

S-1
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IN WITNESS WHEREOF, COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO) has caused this Bond Indenture to be signed by an Authorized Representative of the District and U.S. Bank Trust Company, National Association, in token of its acceptance of the trust created hereunder, has caused this Bond Indenture to be signed in its corporate name by its officers identified below, all as of the day and year first above written.

COMMUNITY FACILITIES DISTRICT NO. 2003-2

OF THE CITY OF UPLAND (THE COLONIES AT

SAN ANTONIO)
By:

City Manager

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Authorized Officer

A-1

EXHIBIT A

FORM OF
SPECIAL TAX REFUNDING BOND, ISSUE OF 2022
[NO TRANSFER OF THIS BOND SHALL BE MADE EXCEPT TO A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A OF THE SECURITES ACT OF 1933 (A “QIB”) OR AN “ACCREDITED INVESTOR” AS THAT TERM IS DEFINED IN RULE 501(A) OF REGULATION D PROMULGATED UNDER THE SECURITES ACT OF 1933 AND SHALL BE SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH IN THE INDENTURE].

R-1 $[16,500,000]

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF SAN BERNARDINO
COMMUNITY FACILITIES DISTRICT NO. 2003-2

OF THE CITY OF UPLAND(THE COLONIES AT SAN ANTONIO)
IMPROVEMENT AREA NO. 1
SPECIAL TAX REFUNDING BONDS, ISSUE OF 2022
INTEREST RATE: MATURITY DATE: DATED DATE:
[2.74]% [September 1, 2034] [June 6, 2022]
REGISTERED OWNER: FIRST FOUNDATION PUBLIC FINANCE AND ITS SUCCESSORS

AND ASSIGNS
PRINCIPAL AMOUNT: [SIXTEEN MILLION FIVE HUNDRED THOUSAND] DOLLARS

COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY OF UPLAND (THE COLONIES AT SAN ANTONIO) (the “District”) which was formed by the City of Upland (the “City”) and is situated in the County of San Bernardino, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as hereinafter defined), to the Registered Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as h ereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless (i) the date of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event int erest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii) the date of

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authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above. Interest will be paid semiannually on March 1 and September 1 (each an “Interest Payment Date”), commencing [September 1, 2022], at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment.

The payment of final principal on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of the Trustee (as such term is defined in the Bond Indenture), initially U.S. Bank Trust Company, National Association (the “Trustee”). Interest on this Bond shall be paid b y check of the Trustee mailed, by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States of America, to the Registered Owner hereof as of the close of business on th e fifteenth day of the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such Registered Owner’s address as it appears on the registration books maintained by the Trustee. Notwithstanding anything herein to the contrary, so long as the Bonds are owned by the Original Purchaser: (i) the Trustee shall pay principal of and interest and premium, if any, on the Bonds when due by wire transfer in immediately available funds to the Original Purchaser in accordance with such wire transfer instructions as shall be filed by the Original Purchaser with the Trustee from time to time; (ii) payments of principal on the Bonds shall be made without the requirement for presentation and surrender by the Original Purchaser, provided that principal which is payable at maturity shall be made only upon presentation and surrender at the Office of the Trustee; and (iii) the Trustee shall not be required to give notice to the Original Purchaser of the mandatory sinking fund payments.

This Bond is the “Community Facilities District No. 2003-2 of the City of Upland, (The Colonies at San Antonio) Improvement Area No. 1 Special T ax Refunding Bonds, Issue of 2022” (the “Bonds”) issued in the aggregate principal amount of $[16,500,000] pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of refunding the District’s Special Tax Refunding Bonds, Issue of 2012, funding a reserve account and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”), on [May 9, 2022] and a Bond Indenture executed in connection therewith (as may be amended and supplemented, the “Indenture”), and this reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and conditions. The Indenture is adopted under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California.

Pursuant to the Act and the Indenture, the principal of, p remium, if any, and interest on this Bond are payable solely from the portion of the annual special taxes authorized under the Act to be levied and collected within the District (the “Special Taxes”) and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any amounts for the payment hereof shall be limited to the Special Taxes pledged and collected or foreclosure proceeds received following a default in payment of the Special Taxes and other amounts deposited to the Special Tax Fund (other than the Administrative Expense Account therein) established under the Indenture, except to the extent that other provision for payment has been made by the Legislative Body, as may be permitted

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by law. The District has covenanted for the benefit of the owners of the Bonds that under certain circumstances described in the Indenture it will commence and diligently pursue to completion appropriate foreclosure proceedings in the event of delinquencies of Special Tax installments levied for payment of principal and interest on the Bonds.

The Bonds may be redeemed, at the option of the District from any source of funds on any date, in whole, or in part from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Dates Redemption Price
On or before August 31, 2024 103%
September 1, 2024 through August 31, 2026 102
September 1, 2026 through August 31, 2027 101
September 1, 2027 and thereafter 100

The Bonds will be paid from the sinking fund payments that have been deposited into the Redemption Account established by the Indenture, on [September 1, 2022], and on each September 1 thereafter to maturity, in the years and in the amounts forth below. The Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Redemption Date
(September 1)
Amount
2022 $
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034 (Maturity)

In the event of a partial optional redemption or extraordinary mandatory redemption of the Bonds, each of the remaining sinking fund payments for such Bonds, as applicable, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000.

The Bonds are subject to extraordinary redemption prior to its stated maturity, as a whole, or in part on a pro rata basis among maturities, on or after September 1, [2022] and on each September 1, thereafter, and shall be redeemed by the Trustee, from Prepayments of Special Taxes deposited to the Redemption Account plus amounts transferred from the Reserve Account in connection with such transfers, at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the redemption date, without premium.

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Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date, provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds.

This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the District and the Trustee may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary.

The Bonds shall be initially delivered as a single registered Bond in the name of the Original Purchaser and shall not be delivered as book-entry Bonds. The Bonds shall not be assigned CUSIPS, be issued pursuant to any type of offering document or official statement and shall not receive a rating from any rating agency.

This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor.

The Trustee shall not be required to register transfers or make exchanges of (i) any B onds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption.

No transfer of this Bond shall be made except to a “Qualified Institutional Buyer” as defined in Rule 144A of the Securites Act of 1933 (a “QIB”) or an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D promulgated under the Securites Act of 1933. Any transfer of this Bond shall be subject to the condition precedent that the proposed transferee deliver a Purchaser Letter (as defined in the Indenture) to the District and the Trustee that meets the requirements set forth in the Indenture.

The rights and obligations of the District and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, though with the prior written consent of the Original Purchaser, to the extent and upon the terms provided in the Indenture.

THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OF UPLAND OR

OF THE DISTRICT FOR WHICH THE CITY OF UPLAND OR THE DISTRICT IS OBLIGATED

TO LEVY OR PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED

OBLIGATIONS OF THE DISTRICT PAYABLE FROM THE PORTION OF THE SPECIAL

TAXES AND OTHER AMOUNTS PLEDGED UNDER THE INDENTURE BUT ARE NOT A

DEBT OF THE CITY OF UPLAND, THE STATE OF CALIFORNIA OR ANY OF ITS

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POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all act s, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.

IN WITNESS WHEREOF, Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) has caused this Bond to be signed on behalf of the District by the Mayor of the City Council by his facsimile signature and attested by the facsimile signature of the City Clerk of the City.

COMMUNITY FACILITIES DISTRICT NO. 2003-2

OF THE CITY OF UPLAND (THE COLONIES AT

SAN ANTONIO)

Mayor
ATTEST:

City Clerk of the City of Upland
===================================================================== [FORM OF TRUSTEE’S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-mentioned Indenture which has been registered on the Bond registration books.

Dated: [June] ____, 2022 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee

By:

Its: Authorized Signatory

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===================================================================== [FORM OF ASSIGNMENT]
For value received the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Name, Address, and Tax Identification or Social Security Number of Assignee) 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 must be guaranteed by a
member of an institution which is a
participant in the Securities Transfer Agent
Medallion Program (STAMP) or other
similar program.

Note: The signature(s) 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.
=====================================================================

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EXHIBIT B

FORM OF PURCHASER LETTER
Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) Upland, California

U.S. Bank Trust Company, National Association
Los Angeles, California
Re: COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY OF

UPLAND (THE COLONIES AT SAN ANTONIO)
IMPROVEMENT AREA NO. 1
SPECIAL TAX REFUNDING BONDS, ISSUE OF 2022

Ladies and Gentlemen:

The undersigned (the “Purchaser”) is hereby delivering this letter pursuant to Section 2.9 of the Bond Indenture, dated as of [June 1, 2022] (the “Indenture”), by and between the Community Facilities District No. 2003-2 of the City of Upland (The Colonies at San Antonio) (the “Issuer”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). Capitalized t erms not defined herein shall have the meanings ascribed to them in the Indenture. In connection with the Purchaser’s [purchase][acceptance of transfer] of the above-referenced bonds (the “Bonds”), the Purchaser hereby represents and agrees as follows:

1. We are a “qualified institutional buyer” as defined in Rule 144A of the Securities Act of 1933, as amended (the “1933 Act”) or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the 1933 Act.

2. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations of a nature similar to the Bonds to be able to evaluate the risks and merits of such a loan represented by t he purchase of the Bonds.

3. We are acquiring the Bonds for our own account, and not with a view to, or for sale in connection with, any distribution of the Bonds or any part thereof. We have not offered to sell, solicited offers to buy, or agreed to sell the Bonds or any part thereof, and we have no present intention of reselling or otherwise disposing of the Bonds.

4. As a qualified institutional buyer, we have made our own credit inquiry and analysis with respect to the Issuer, Improvement Area No. 1 of the District, and the Bonds, and have made an independent credit decision based upon such inquiry and analysis. The Issuer has furnished to us all the information which we as a reasonable lender have requested of the Issuer as a result of our having attached significance thereto in making our credit decision with respect to the Bonds, and we have had the opportunity to ask questions of and receive answers from knowledgeable individuals concerning the Issuer and the Bonds. We are able and willing to bear the economic risk of the purchase and ownership of the Bonds.

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5. We acknowledge that the Bonds are exempt from registration pursuant to the 1933 Act, are transferable only by notation on the registration books maintained by the bond registrar and are freely transferable provided that the Bonds are transferable in whole and not in part and that:
(i) the transferring holder thereof shall first have complied with all applicable state and federal securities laws and regulations;
(ii) the transferring holder thereof can transfer the Bonds only to a transferee who executes and delivers to the Issuer a letter of the transferee substantially to the effect of this letter and who qualifies as a qualified institutional buyer pursuant to Rule 144A of the 1933 Act or an accredited investor under Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the 1933 Act; and
(iii) in the event of transfer, the Issuer will not be required to prepare, review or consent to disclosure concerning the Issuer:

6. We acknowledge that the Bonds shall only be transferred in whole and not in part, provided, however, that the Purchaser may participate its interest in the Bonds.

7. We are not relying upon the Issuer or its employees or consultants for advice as to the merits and risks of loaning the proceeds of the Bonds. We have not relied upon the Issuer’s legal counsel, financial advisor or other consultants to the Issuer for any information, representation or opinions, unless explicitly provided herein, in connection with our lending decision, the Issue r or the Bonds. We have sought such accounting, legal and tax advice as we have considered necessary to make an informed investment decision.

8. We understand and agree that the offering and sale of the Bonds is exempt from Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the “Rule”), pursuant to Section (d) of such Rule, and the Issuer makes, and has made, no representation to us or any other party with respect to matters governing the Rule as it relates to the agreement and the transaction described herein provided, however, that the Issuer has agreed to provide certain ongoing information to us.

9. We understand that no official statement, offering memorandum or circular will be issued in connection with the issuance of the Bonds, and that the Bonds are not rated by any accredited rating agency.

10. The Purchaser states that: (a) it is a bank, (b) it is capable of evaluating credit risks and market value independently, both in general and with regard to transactions and credit strategies in municipal securities, (c) it is exercising independent judgment in evaluating: (i) the recommendation of the Placement Agent, if any, or its associated persons; and (ii) the quality of execution of the Purchaser’s transactions by the Placement Agent; and (d) the Purchaser has timely access to material information that is available publicly through established industry sources as defined in Municipal Securities Rulemaking Board (MSRB) Rule G-47.1

11. We understand that the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. Additionally, the Indenture has not been registered under, and no qualification for sale has been made under, the Blue Sky Laws of any State.

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12. The Purchaser intends to treat the acquisition of the Bonds as a loan and hold the Bonds in its loan portfolio.

13. The Purchaser understands that Bond Counsel will rely upon the accuracy and truthfulness of the representations and warranties contained herein and hereby consents to such reliance.

14. Inasmuch as the Bonds represents a negotiated transaction, the Purchaser is not acting as a fiduciary of the District, but rather is acting solely in its capacity as the Owner (as defined in the Trustee Agreement), for its own loan account. The Issuer acknowledges and agrees that (i) the transaction contemplated herein is an arm’s length commercial transaction between the Issuer and the Purchaser and its affiliates, (ii) in connection with such transaction, the Purch aser and its affiliates are acting solely as a principal and not as an advisor including, without limitation, a “Municipal Advisor” as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the “Municipal Advisor Rules”), (iii) the Purchaser and its affiliates are relying on the purchaser exemption in the Municipal Advisor Rules, (iv) the Purchaser and its affiliates have not provided any advice or assumed any advisory or fiduciary responsibi lity in favor of the Issuer with respect to the transaction contemplated by the Bond and the discussions, undertakings and procedures leading thereto (whether or not the Purchaser, or any affiliate of the Purchaser, has provided other services or advised, or is currently providing other services or advising the Issuer on other matters) and (v) the Purchaser and its affiliates have financial and other interests that differ from those of the Issuer.

FIRST FOUNDATION PUBLIC FINANCE,
a Delaware statutory trust

By: _____________________________
Its: Authorized Representative

1 Pursuant to MSRB Rule G-47 established industry sources shall include the MSRB’s Electronic Municipal Market Access (“EMMA”) system, rating agency reports, and o ther sources of information relating to municipal securities transaction generally used by brokers, dealers and municipal securities dealers that effect transactions in the type of municipal securities at issue.