DRAFT

AGREEMENT FOR BOND COUNSEL AND DISCLOSURE COUNSEL SERVICES

This Agreement, made and entered into this _____ day of, ___________ 2002, by and between the City of Sunnyvale (hereinafter called "City") and Jones Hall, A Professional Law Corporation, 650 California Street, 18th Floor, San Francisco, California 94108 (hereinafter called "Attorneys");

W I T N E S S E T H:

WHEREAS, the Sunnyvale Financing Authority (the "Authority") issued Utilities Revenue Bonds, 1992 Series B (Solid Waste Materials Recovery and Transfer Station) in an aggregate principal amount of $24,160,000 (the "1992 Bonds"), the proceeds of which were used to finance the acquisition and construction of a solid waste materials recovery and transfer station owned by the City; and

WHEREAS, the 1992 Bonds were secured by Addendum No. 1 to Installment Purchase Agreement, dated as of December 1, 1992, between the Authority and the City (the "1992 Installment Purchase Agreement"); and

WHEREAS, interest rates have declined since the 1992 Bonds were issued, and the City will receive economic benefit by refunding the 1992 Installment Purchase Agreement, which will have the effect of refunding the 1992 Bonds;

WHEREAS, the 1992 Installment Purchase Agreement and the 1992 Bonds are referred to herein collectively as the "Prior Obligations"; and

WHEREAS, Sections 53570 et seq. and 53580 et seq. of the California Government Code (the "Revenue Refunding Bond Law") authorizes the City to issue its revenue bonds for the purpose of refunding revenue obligations of the City such as the 1992 Installment Purchase Agreement;

WHEREAS, City is in need of special bond counsel and disclosure counsel services in order to accomplish a refunding revenue bond issue (the "Bonds"), and Attorneys are specially trained and experienced in providing such services and advice to the City;

NOW, THEREFORE, it is AGREED as follows:

Section 1. Retention as Counsel.

(a)  Bond Counsel Services. Attorneys are hereby retained by City to perform and render all legal services as bond counsel in connection with said Bond issue, including, but not limited to, the following:

(i) Confer and consult with the administrative staff of City and with City financial consultants and underwriters as to any matters relating to the refunding of the Prior Obligations or servicing or administering the Bonds issued in connection with such refunding;

(ii) Attend all meetings of the City Council and any administrative meetings or committee meetings at which any financing and refunding proceedings are to be discussed, deemed necessary for the proper planning of the proceedings, or when requested to attend by the Director of Finance or the City Attorney or other administrative staff;

(iii) Prepare all ordinances, resolutions, indentures, notices, legal documents and amendments to existing financing documents necessary for the proper conduct of proceedings for the purpose of refunding the Prior Obligations;

(iv) Prepare and provide a receipt for the sale of the Bonds, a receipt for the proceeds of the Bonds, a signature and no-litigation certificate, and any and all other closing documents required to accompany the delivery of the Bonds;

(v) Prepare and provide a complete transcript of the conduct of the financing proceedings necessary to accompany the delivery of the Bonds;

(vi) Provide Attorneys' legal opinions approving in all regards the legality of all proceedings for the authorization, issuance, sale, and delivery of the Bonds or other transactions relating to the financing. Said opinions shall inure to the benefit of the purchasers of the Bonds, the underwriters, and other persons dealing with City and their respective officers;

(vii) Prosecute any actions deemed necessary for determining the validity of any Bonds issued, contracts executed, or of the laws pursuant to which such proceedings were conducted;

(viii) Confer and consult with City officials with regard to problems which may arise during the period of servicing and payment of the Bonds;

(ix) Assist City financial consultants in obtaining a rating on the Bonds from established rating agencies;

(x) Apply for and obtain any rulings necessary from the Internal Revenue Service regarding the tax-exempt status of the interest with respect to the Bonds, if necessary; and

(xi) Provide other necessary services generally expected of bond counsel not listed above.

(b)  Disclosure Counsel Services. Attorneys shall provide legal services in connection with the preparation of the Official Statement to be used in connection with the offering and sale of the Bonds. Such services shall include the following:

(i) Prepare the Official Statement (both preliminary and final) or other disclosure documents in connection with the offering of the Bonds;

(ii) Confer and consult with the officers and administrative staff of the City as to matters relating to the Official Statement;

(iii) Attend all meetings of the City and any administrative meetings at which the Official Statement is to be discussed, deemed necessary by Attorneys for the proper exercise of their due diligence with respect to the Official Statement, or when specifically requested by the City to attend;

(iv) On behalf of the City, prepare a bond purchase agreement between the City and the underwriter, memorializing the terms on which the underwriter has agreed to purchase the Bonds from the City;

(v) On behalf of the City, prepare a continuing disclosure certificate of the City to assist the purchaser of the Bonds with compliance with the provisions of SEC Rule 15c2-12; and

(vi) Subject to the completion of proceedings to the satisfaction of Attorneys, provide a letter of Attorneys addressed to the underwriter and the City that, although Attorneys have not undertaken to determine independently or assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, in the course of Attorneys' participation in the preparation of the Official Statement, Attorneys have been in contact with representatives of the City and others, concerning the contents of the Official Statement and related matters and, based upon the foregoing, nothing has come to Attorneys' attention to lead Attorneys to believe that the Official Statement (except for any financial or statistical data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion included therein, and information relating to The Depository Trust Company and its book-entry system, as to which Attorneys need express no view) as of the date of the Official Statement or the date of the closing contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 2. Personnel. William H. Madison, a principal in the firm, shall be directly responsible for providing documents, advice, consultations, and other Bond Counsel services specified above or requested by City in connection with the Bond issue. Scott Ferguson shall be directly responsible for providing the preliminary and final forms of the Official Statement, Continuing Disclosure Certificate, Bond Purchase Agreement, advice, consultations, and other Disclosure Counsel services specified above or requested by City in connection with the issue. In addition, Dave Walton shall be responsible for responding and advising with respect to federal tax laws. Other identified personnel will be made available as required.

Section 3. Compensation. Compensation for the foregoing services shall be as follows:

(a) Bond Counsel. If Bonds are issued, for services rendered to the City as Bond Counsel, Attorneys shall be paid compensation in the amount of $45,000.

(b) Disclosure Counsel. For the services set forth under Section 1(b), Attorneys shall be paid compensation in the amount of $25,000.

Payment of said compensation shall be entirely contingent, shall be due and payable upon the delivery of the Bonds and shall be payable solely from the proceeds of the Bonds and from no other funds of the City.

Section 4. Costs. Attorneys shall be reimbursed for any direct cash outlays made by them on behalf of the City, the cost of special messenger and delivery services and out-of-state travel. Closing costs will be Seventy-five Dollars ($75) per binder. There will be no reimbursement for intra-state travel, telephone, meals, and the like. Out-of-pocket expenses shall not exceed $2,500, plus all direct out-of-pocket expenses incurred in connection with travel outside the State of California, if requested.

Section 5. Termination. City may terminate this agreement at any time.

Section 6. Amendment. This agreement may be altered or amended in writing by mutual agreement of the parties at any time.

IN WITNESS WHEREOF, City and Attorneys have executed this agreement the day and year first above written.

ATTEST:
CITY OF SUNNYVALE ("City")
City Clerk City Attorney
APPROVED AS TO FORM:
JONES HALL, A PROFESSIONAL LAW CORPORATION ("Attorneys")
William H. Madison

Return to RTC# 02-388