BOARD OF EDUCATIONKenneth BellReyna DiazDouglas EdwardsTom ReyesCheryl Taylor

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DUARTE UNIFIED SCHOOL DISTRICT1620 HUNTINGTON DRIVE, DUARTE, CA 91010Phone (626) 599-5000 —Fax (626) 599-5079

February 17, 2017

The Honorable Board of SupervisorsCounty of Los Angelesc/o Adela Guzman, Head, Board Specialist383 Hall of Administration500 W. Temple StreetLos Angeles, CA 90012

Re: Duarte Unified School District, Election of 2010 General ObligationBonds, Series D: Request to the Los Angeles County Board ofSupervisors to Levy Taxes and to Direct the Auditor-Controller to PlaceTaxes on Tax Roll.

Dear Supervisors:

At this time, the Duarte Unified School District (the "District") has authorized and intends toissue its Election of 2010 General Obligation Bonds, Series D, in an aggregate principal amountnot-to-exceed $20,000,000 (the "Bonds") for the purpose of voter approved projects. The aboveactions were approved by a resolution (the "District Resolution") adopted by the Board of Educationof the District on February 16, 2017 pursuant to Section 53506 et seq. of the California GovernmentCode and other applicable provisions of law with respect to the Bonds. The District Resolution is infull force and effect and the Board of Education of the District has taken no action to amend or rescindthe District Resolution. A certified copy of the District Resolution is enclosed herein.

The District formally requests, in accordance with California Education Code Section 15250and other applicable provisions of law, that the Board of Supervisors (the "Board of Supervisors") ofthe County of Los Angeles (the "County") adopt the enclosed resolution (the "County Resolution")to levy the appropriate taxes for the payment of the Bonds and to direct the Auditor-Controller of theCounty to place these taxes on the tax roll every year, beginning with fiscal year 2017-18, accordingto a debt service schedule and instructions that will be provided upon the sale of the Bonds, and todirect the County Treasurer and Tax Collector to serve as the Paying Agent for the Bonds.

Dr. Allan Mucerino, Superintendent

d

IT IS TI~REFORE REQUESTED 'THAT:

1. The Board of Supervisors adopt the County Resolution on the next available Board ofSupervisors meeting.

2. After the Board of Supervisors has taken action on this letter, the District requests thatthe Clerk of the Board of Supervisors furnish two (2) certified copies of the Resolution to:

District Bond Counsel:David CasnochaStradling Yocca Carlson and Rauth44 Montgomery Street, Suite 4200San Francisco, CA 94104

and send one (1) copy of the Resolution to each of the following:

Los Angeles County Treasurer and Tax CollectorAttention: John Patterson500 W. Temple Street, Suite 437Los Angeles, CA 90012

Los Angeles County Auditor-ControllerAttention: Jackie Guevarra500 W. Temple Street, Suite 603Los Angeles, CA 90012

Los Angeles County CounselAttention: Shahiedah Palmer500 W. Temple Street, Room 648Los Angeles, CA 90012

Sincerely,

DUARTE UNIFIED SCHOOL DISTRICT

By; /Jim Bauler

ssistant Superintendent, Business Services

Enclosures

Dr. Allan Mucerino, Superintendent

A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF

LOS ANGELES, CALIFORNIA AUTHORIZING THE LEVY OF TAXES FOR

ELECTION OF 2010 GENERAL OBLIGATION BONDS, SERIES D OF THE

DUARTE UNIFIED SCHOOL DISTRICT, DESIGNATING THE PAYING

AGENT THEREFOR AND DIRECTING THE COUNTY AUDITOR-

CONTROLLER TO MAINTAIN TAXES ON THE TAX ROLL

WHEREAS, a duly called municipal election was held in the Duarte Unified School

District (the "District"), Los Angeles County (the "County"), State of California, on November

2, 2010 (the "2010 Election") and thereafter canvassed pursuant to law;

WHEREAS, at the 2010 Election there was submitted to and approved by the requisite

fifty-five percent or more vote of the qualified electors of the District a question as to the

issuance and sale of general obligation bonds of the District for the various purposes set forth in

the ballot submitted to the voters, in the maximum amount not-to-exceed $62,000,000, payable

from the levy of an ad valorem tax against the taxable property in the District (the "2010

Authorization");

WHEREAS, pursuant to the 2010 Authorization, on July 6, 2011, the District issued

the first series of bonds under the 2010 Authorization in an aggregate principal amount of

$15,995,203.65;

WHEREAS, pursuant to the 2010 Authorization, on July 28, 2011, the District issued

the second series of bonds under the 2010 Authorization in an aggregate principal amount of

$5,000,000;

WHEREAS, pursuant to the 2010 Authorization, on June 25, 2014, the District issued

the third series of bonds under the 2010 Authorization in an aggregate principal amount of

$8,000,000;

VV~-IEREAS, the District determined in a resolution adopted by the Board of

Education thereof, on February 16, 2017 (the "District Resolution"), to authorize the issuance

of additional bonds under the 2010 Authorization (the "Bonds"), in an aggregate principal

amount not-to-exceed $20,000,000, pursuant to Section 53506 et seq. of the California

Government Code (the "Bond Law");

WHEREAS, the Board of Supervisors of the County of Los Angeles (the "County

Board") has been formally requested by the District to levy taxes in an amount sufficient to

pay the principal of and interest on the Bonds when due, and to direct the Auditor-Controller

of the County (the "Auditor-Controller") to place on its 2017-18 tax roll, and all subsequent

tax rolls, taxes sufficient to fulfill the requirements of the debt service schedule for the

Bonds, that will be provided to the Auditor-Controller by the District following the sale of

the Bonds; and

WHEREAS, the District has requested that the County Treasurer and Tax Collector

(the "Treasurer") be appointed by the County Board to act as the authenticating agent, bond

registrar, transfer agent and paying agent (collectively, the "Paying Agent") for the Bonds

pursuant to the District Resolution.

DOCSSF/ 136107v3/024022-0010

CERTIFICATE REGARDING RESOLUTION

DUARTE UNIFIED SCHOOL DISTRICT(Los Angeles County, California)

Election of 2010 General Obligation Bonds, Series D

I, Allan Mucerino, Ed. D. hereby certify that I am the duly qualified and actingSuperintendent of the Duarte Unified School District (the "District") and the attached Resolution

No. 21-16-17 is a full, true and correct copy of a resolution adopted by the Board of Education of theDistrict on February 16, 2017 and that such resolution was duly adopted and has not been modified,

amended, rescinded or revoked and is in full force and effect on the date hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 17~' day of February, 2017.

DUARTE UNIFIED SCHOOL DISTRICT

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$y: ~ ~~,l.,l/l/~,~~Allan Mucerino, Ed. D.

Superintendent

DOCSSF/ 136108v 1 /024022-0010

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DUART~ UNIFIED SCHOOL DISTRICT

RESOLUTION NO.21-1G-17

A RESOLUTION OF THE BOARD OF EDUCATION OF THE DUART~UNIFIED SCHOOL DISTRICT, LOS ANGELES COUNTY, CALIFORNIA,AUTHORIZING THE ISSUANCE OF DUARTE UNIFIED SCHOOL DISTRICT(LOS ANGELS COUNTY, CALIFORNIA) ~L~CTION OF 2010 G~N~RALOBLIGATION BONDS, SERIES D, AND ACTIONS It~LAT~D TH~It~TO

WHEREAS, a duly called municipal election was held in the Duarte Unified School District(the "District"), Los Angeles County (the "County"), State of California, on November 2, 2010 (the"Election") and thereafter canvassed pursuant to law;

WH~ItEAS, at the Election there was submitted to and approved by the requisite fifty-fivepercent or more vote of the qualified electors of the District a question as to the issuance and sale ofgeneral obligation bonds of the District for the various purposes set forth in the ballot submitted to thevoters, in the maximum principal amount not-to-exceed $62,000,000 payable from the levy of an advalorem property tax against the taxable property in the District (the "Authorization");

WHEREAS, pursuant to the Authorization, on July 6, 2011, the District issued the first series ofbonds under the Authorization in an aggregate principal amount of $15,995,203.65;

VVI~I2EAS, pursuant to the Authorization, on July 28, 2011, the District issued the secondseries of bonds under the Authorization in an aggregate principal amount of $5,000,000;

WHEREAS, pursuant to the Authorization, on June 25, 2014, the District issued the third seriesof bonds under the Authorization in an aggregate principal amount of $8,000,000;

WHEREAS, at this time this Board of Education (the "Board") has determined that it isnecessary and desirable to issue the fourth series of bonds under the Authorization in an aggregateprincipal amount not-to-exceed $20,000,000, and to be styled as "Duarte Unified School District (LosAngeles, County, California) Election of 2010 General Obligation Bonds, Series D" (the "Bonds");

WHEREAS, pursuant to Article 4.5 of Chapter 3 of Part 1 of Division 2 of Tit[e 5 of theGovernment Code of the State of California (the "Government Code"), the Bonds are authorized to beissued by the District for the purposes set forth in the ballot submitted to the voters at the Election;

WHEREAS, this Board desires to authorize the issuance of the Bonds as any combination ofCurrent Interest Bonds, Capital Appreciation Bonds and Convertible Capital Appreciation Bonds, to beissued in one or more Series of Taxable Bonds orTax-Exempt Bonds (as such terms are defined herein);

WH~It~AS, the District has not filed with nor received from the County Office of Educationhaving jurisdiction over the District a qualified or negative certification in its most recent interim financialreport pursuant to Section 42131 of the California Education Code (the "Education Code");

WHEREAS, this Board desires to appoint certain professionals to provide services related to theissuance of the Bonds; and

DOCSSF/ 134888v2/022000-0001

WHEREAS, all acts, conditions and things required by law to be done oi• performed have beendone and perfoc•med in strict conformity with the laws authorizing the issuance of general obligationbonds of the District, and tl~e indebtedness of the District, including this proposed issue of Bonds, iswithin all limits prescribed by law;

NOW, TH~ItEr012~, BE IT FOUND, D~T~RMIN~D AND RESOLVED BY THEBOARD OF EDUCATION OF THE DUART~ UNIFIED SCHOOL DISTRICT, LOS ANG~L~SCOUNTY, CALIFORNIA, AS FOLLOWS:

SECTION 1. Authorization for Issuance of ttie Bonds. To raise money for the purposesauthorized by the voters of the District at the Election, and to pay all necessary legal, financial,engineering and contingent costs in connection therewith, tEle Board Hereby authorizes the issuance ofthe Bonds pursuant to Article 4.5 of Chapter 3 of Pat-t 1 of Division 2 of Title 5 of the GovernmentCode in one or more Series of Taxable or Tax-Exempt Bonds, with appropriate designation if morethan one Series is issued, and as any combination of Current Interest Bonds, Capital AppreciationBonds and Convertible Capital Appreciation Bonds (as defined Herein), as set forth in the fullyexecuted Purchase Contract (as def ned herein). The Board further orders such Bonds to be sold suchthat the Bonds shall be dated as of a date to be determined by tl~e Superintendent oi• the AssistantSuperintendent, Business Services of the District, or such other off cers or employees of the District asthe Superintendent or the Assistant Superintendent, Business Services may designate (collectively, the"Authorized Officers"), shall be payable upon such terms and provisions as shall be set forth in theBonds, and shall be in an aggregate principal amount not-to-exceed $20,000,000.

SECTION 2. Paying Agent. This Board hereby appoints t}ie Treasurer (as defined herein)as the Paying Agent (as defined herein) to serve as the paying agent, bond registrar, transfer agent andauthentication agent for the Bonds on behalf of the District. The Treasurer is authorized to contractwith any third party to perform the series of Paying Agent hereunder. This Board hereby approves thepayment of the reasonable fees and expenses of the Paying Agent as they s(lall become due andpayable. The fees and expenses of the Paying Agent which are not paid as a cost of issuance of theBonds may be paid in each year from ad valoj-er~z property taxes levied and collected for the paymentthereof, insofar as permitted by law, including specif cally Section 15232 of the Education Code.

SECTION 3. Terms and Conditions of Sale. The Bonds shall be sold upon the directionof an Authorized Off cer. The Board hereby authorizes the sale of the Bonds at a negotiated sale,which is determined to provide more flexibility in the timing of the sale, an ability to implement thesale in a shorter time period, an increased ability to structure the Bonds to fit the needs of particularpurchasers, and a greater opportunity for the Underwriter• (as defined herein) to pre-market the Bondsto potential purchasers prior to the sale, all of w~iich will contt-ibute to the District's goal of achievingthe lowest overall cost of funds. The Bonds shall be sold pcirsuant to tfie terms and conditions set forthin the Purchase Contract, as described below.

SECTION 4. Approval of Purchase Contc-act. The form of contract for• purchase andsale of the Bonds (the "Purchase Contract") by and between the District and the Underwriter (asdefined herein), for the purchase and sale of the Bonds, substantially in the form on file with the Board,is hereby approved and the Authorized Officers, each alone, are hereby authorized and directed toexecute and deliver such Purchase Contract, with such changes therein, deletions therefrom andmodif cations thereto as the Autfzorized Off cec- executing the same shall appc-ove, sucfl approval to beconclusively evidenced by leis or liet• execution and delivery thereof; pt•ovided, However, that theinterest rate on the Bonds shall not exceed the maximum rate permitted by law and the underwc'1tII1~

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DOCSSF/ 13~1888v2/022000-0001

discount thereon, excluding original issue discount, shall not exceed 0.5% of the aggregate principalamount of Bonds issued. The Authorized Off cers, each alone, are fut-tlier authorized to determine theprincipal amount of the Bonds to be specified in tl~e Purchase Contract for sale by the District up to$20,000,000 and to enter into and execute the Purchase Contract with the Underwriter, if the conditionsset forth in this Resolution are satisf ed. The Board estimates that the costs associated with the issuanceof the Bonds, including compensation to the Underwriter•, will equal approximately 1.5% of t11eprincipal amount of the Bonds.

SECTION 5. Certain Definitions. As used in this Resolution, the terms set forth belowshall have t}le meanings ascribed to them (unless otherwise set forth in the Purchase Contract):

(a) "Accreted Interest" means, WIti~l respect to Capital Appreciation Bonds andConvertible Capital Appreciation Bonds prior to the Conversion Date, the Accreted Valuethereof minus the Denominational Amount thereof as of the date of calculation.

(b) "Accreted Value" means, as of the date of calculation, with respect to CapitalAppreciation Bonds and Convertible Capital Appreciation Bonds prior to the Conversion Date,the Denominational Amount thereof plus Accreted Interest thereon to such date of calculation,compounded semiannually on each February 1 and August 1, commencing on August 1, 2017(unless otherwise provided for in the Purchase Contract) at the stated Accretion Rate to maturitythereof, assuming in any such semiannual period that such Accreted Value increases in equaldaily amounts on the basis of a 360-day year of 12, 30-day months.

(c) "Accretion Rate" means, unless othet-wise provided by the Purchase Contract,that rate which, when applied to the Principal Amount of a Capital Appreciation Bond or aConvertible Capital Appreciation Bond prior to the Conversion Date, and compoundedsemiannually on each February 1 and August 1 (commencing on August 1, 2017), produces theMaturity Value on the maturity date (with respect to Capital Appreciation Bonds) and theConversion Value on the Conversion Date (with respect to Convertible Capital AppreciationBonds).

(d) "Beneficial Owner" means, when used with reference to book-entry Bondsregistered pursuant to Section 6 hereof, the person wlio is considered the benef cial owner ofsuch Bonds put•suant to the arrangements for book entry determination of ownec•ship applicableto tale Depository.

(e) "Bond Insurer" means any insurance company which issues a municipal bondinsurance policy insuring the payment of Principal, Conversion Value and Maturity Value of andinterest on the Bonds.

(~ "Bond Payment Date" means, as applicable (and unless otherwise provided bythe Purchase Contract}, (i) with respect to the Current Interest Bonds, February 1 and August 1of each year commencing February 1, 2018 with respect to interest on the Bonds, and tl~e statedmaturity dates thereof with respect to the Principal payments on the Current Interest Bonds, (ii)with respect to interest on the Convertible Capital Appreciation Bonds, February 1 and August 1of each year, commencing on the f rst February 1 or August 1 following the respectiveConversion Dates thereof, and the stated maturity dates thereof with respect to the ConversionVa(ue of the Convertible Capital Appreciation Bonds, and (iii) with respect to the CapitalAppreciation Bonds, the stated maturity dates thereof

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DOCSSF/ 13~888v2/022000-0001

(g) "Bond Register" means the registration books which the Paying Agent shallkeep or cause to be kept on which the registered ownership, transfer and exchange of Bonds shallbe recorded.

(h) "Capital Appreciation Bonds" means the Bonds the interest component ofwhich is compounded semiannually on each February 1 and August 1 (commencing on August 1,2017 (unless otherwise provided in the Purchase Contract)) to maturity as shown in the table ofAccreted Value for such Bonds in the Official Statement or Purchase Contract, as the case maybe.

(i) "Code" means the Internal Revenue Code of 1986, as amended. Reference toany particular section of the Code shall be deemed to be a reference to any successor to any suchsection.

(j) "Continuing Disclosure Certificate" means that certain contractualundertaking in connection with the Bonds, executed by the District pursuant to paragraph (b)(5)of Rule 15c2-12 adopted by the Securities and Exchange Commission under the SecuritiesExchange Act of 1934, and relating to the Bonds, dated as of the date of issuance hereof, asamended from time to time in accordance with the provisions thereof.

(k) "Conversion Date" means, with respect to Convertible Capital AppreciationBonds, the date from which such Bonds bear interest on a current, periodic basis.

(1} "Conversion Value" means, with respect to Convertible Capital AppreciationBonds, the Accreted Value as of the Conversion Date.

(m) "Convertible Capital Appreciation Bonds" means the Bonds the interestcomponent of which is compounded semiannually to the respective Conversion Dates thereof asshown in the table of Accreted Values for the Bonds in the Official Statement or PurchaseContract, as the case may be, and which bear interest from such respective Conversion Dates onthe Conversion Value thereof, payable semiannually thereafter on each Bond Payment Date.

(n) "Current Interest Bonds" means the Bonds the interest on which is payablesemiannually on each Bond Payment Date specified for each such Bond as designated andmaturing in the years and in the amounts set forth in the Purchase Contract.

(o) "Dated Date" means the date of initial issuance and delivery of the Bonds, orsuch other date as shall appear in the Purchase Contract or Official Statement.

(p) "Denominational Amount" means the initial Principal Amount of any CapitalAppreciation Bond or Convertible Capital Appreciation Bond.

(q) "Depository" means the entity acting as securities depository for the Bondspursuant to Section 6(c) hereof.

(r) "DTC" means The Depository Trust Company, 55 Water Street, New York,New York, 10041, a limited purpose trust company organized under the laws ofthe State ofNewYork, in its capacity as the initial Depository for the Bonds.

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DOCSSF/ 134888v2/022000-0001

(s) "Fair Market Value" means the price at which a willing buyer would purchasethe investment from a willing seller in a bona fide, arm's length transaction (determined as of thedate tie contract to purchase or sell the investment becomes binding) if the investment is tradedon an established securities market (within the meaning of section 1273 of the Code) and,otherwise, the term "Fair Market Value" means tl~e acquisition price in a bona ode arm's lengthtransaction (as referenced above) if (i) the investment is a certificate of deposit that is acquiredin accordance with applicable regulations under t11e Code, (ii) the investment is an agreementwith specifically negotiated withdrawal or reinvestment provisions and a specifically negotiatedinterest rate (for example, a guaranteed investment contract, a forward supply contract or otherinvestment agreement) that is acquired in accordance with applicable regulations under the Code,(iii) the investment is a United States Treasury Security—State and Local Govet-nment Seriesthat is acquired in accordance wit}i applicable regulations of the United States Bureau of PublicDebt, or (iv) any commingled investment fund in wliic}i the District and related parties do notown more than a ten percent (10%) beneficial interest therein if the return paid by the fund iswithout regard to the source of the investment.

(t) "Holder" or "Owner" means the registered owner of a Bond as set forth on theBond Register• maintained by the Paying Agent pursuant to Section 6 hereof

(u) "Information Services" means the Municipal Securities Rulemaking Board'sElectronic Municipal Market Access System; or•, such other services providing information withrespect to called municipal obligations as the District may specify in writing to the Paying Agentor as the Paying Agent may select.

(v) "Long Current Interest Bonds" means Current Interest Bonds which maturemore t~ian 30 years from the date of issuance thereof, but not greater than 40 years.

(w) "Maturity Value" means the Accreted Value of any Capital Appreciation Bondon its maturity date.

(x) "Moody's" means Moody's Investors Service, a corporation organized andexisting under the laws of the State of Delaware, its successor and assigns or, if such corpoc•ationshall be dissolved or liquidated or no longer shall perform the functions of a securities ratingagency, such other nationally recognized securities rating agency as may be designated by theDistrict.

(y) "Nominee" means t(le nominee of the Depository, which may be the Depository,as determined from time to time pursuant to Section 6(c) Hereof.

(z) "Non-AMT Bonds" means obligations the interest on wliicll is excludable fromgross income for federal income tax purposes under Section 103(a) of the Code and not treatedas an item of tax preference under Section 57(a)(5)(C) of the Code, tE~at are legal investmentspursuant to Section 53601 of the Government Code of the State of California.

(aa) "Official Statement" means the Official Statement for the Bonds, as describedin Section 17 hereof

(bb) "Outstanding" means, when Lised with reference to tl7e Bonds, as of any date,Bonds theretofore issued or thereupon being issued under this Resolution except:

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DOCSSP/ 13~t 888v2/022000-0001

(i) Bonds canceled at or prior to such date;

(ii) Bonds in lieu of or in substitution for which other Bonds shall have beendelivered pursuant to Section 8 hereof; or

(iii) Bonds for the payment or redemption of which funds or GovernmentObligations in the necessary amount shall have been set aside (whether on or prior to thematurity or redemption date of such Bonds), in accordance with Section 19 of thisResolution.

(cc) "Participants" means those broker-dealers, banks and other financialinstitutions from time to time for which the Depository holds book-entry certificates as securitiesdepository.

(dd) Paying Agent" means, initially, the Treasurer, and afterwards any successorthereto, initially U.S. Bank National Association, or such other Paying Agent as shall be namedin the Purchase Contract or Official Statement, and afterwards any successor financial institution.

(ee) "Permitted Investments" means (i) any lawful investments permitted bySection 16429.1 and Section 53601 of the Government Code, including Non-AMT Bonds andQualified Non-AMT Mutual Funds, (ii) shares in a California common law trust establishedpursuant to Title 1, Division 7, Chapter 5 of the Government Code which invests exclusively ininvestments permitted by Section 53635 of the Government Code, but without regard to anylimitations in such Section concerning the percentage of moneys available for investment beinginvested in a particular type of security, (iii) a guaranteed investment contract with a providerhaving a rating meeting the minimum rating requirements of the County investment poolmaintained by the Treasurer, (iv) the Local Agency Investments Fund of the California StateTreasurer, (v) the County investment pool described above, and (vi) State and Local GovernmentSeries Securities.

(ffl "Preliminary Official Statement" means the Preliminary Official Statementfor the Bonds, as described in Section 17 hereof.

(gg) "Principal" or "Principal Amount" means, with respect to any Current InterestBond, the Principal Amount thereof, with respect to any Capital Appreciation Bond orConvertible Capital Appreciation Bond, the Denominational Amount thereof.

(hh) "Qualified Non-AMT Mutual Fund" means stock in a regulated investmentcompany to the extent that at least 95% of the income of such regulated investment company isinterest that is excludable from gross income under Section 103 of the Code and not an item oftax preference under Section 57(a)(5}(C) of the Code.

(ii) "Qualified Permitted Investments" means (i) Non-AMT Bonds, (ii) QualifiedNon-AMT Mutual Funds, (iii) other Permitted Investments authorized by an opinion of BondCounsel to the effect that such investment would not adversely affect the tax-exempt status ofthe Bonds, and (iv) Permitted Investments of proceeds of the Bonds, and interest earned on suchproceeds, held not more than thirty days pending reinvestment or Bond redemption. Aguaranteed investment contract or similar investment agreement (e.g. a forward supply contract,GIC, repo, etc.) does not constitute a Qualified Permitted Investment.

DOCSSF/I 34888v2/022000-0001

(jj) "Rating Agencies" means (i) Standard & Poor's Global Ratings, (ii) FitchRatings and (iii) Moody's Investors Service.

(Icic) "Record Date" means the close of business on the 15th day of the monthpreceding each Bond Payment Date.

(11) "Securities Depository" means The Depository Trust Company, 55 WaterStreet, New Yorlc, New Yorlc 10041.

(mm) "Series" means any Bonds executed, authenticated and delivered pursuant to theprovisions hereof which are identified as a separate series of Bonds.

(nn) "S&P" means Standard & Poot•'s Ratings Services, a Standard & Pooi•'sFinancial Services LLC business, its successor and assigns, or if such entity shall be dissolved ot•liquidated or sliall no longer• perform tEie functions of a securities rating agency, such othernationally recognized securities rating agency as may be designated by the District.

(oo) "Taxable Bonds" means any Bonds not issued as Tax-Exempt Bonds.

(pp) "Tai:-Exempt Bonds" means any Bonds the interest on which is excludablefrom gross income for federal income tax purposes and is not treated as an item of tax preferencefor purposes of calculating the federal alternative minimum tax, as further described in an opinionof Bond Counsel supplied to the original purchasers of such Bonds.

(qq) "Term Bonds" means those Bonds for which mandatory redemption dates havebeen established in the Purchase Contract.

(rr) "Transfer• Amount" means, (i) with respect to any Outstanding Current InterestBond, the Principal Amount, (ii) with respect to any Outstanding Capital Appreciation Bond, theMaturity Value, and (iii) with respect to any Outstanding Convertible Capital AppreciationBonds, the Conversion Value.

(ss) "Treasurer" means tl~e Treasurer and Tax Collector of the County, or othercomparable officer of the County.

(tt) "Underwriter" Mec•rill Lynch, Pierce, Fenner &Smith Incorporated.

SECTION 6. Terms of the Bonds.

(a) Denomination, Interest, Dated Dates and Terms. The Bonds shall be issued as fullyregistered bonds registered as to both Principal and intec•est, in the following denominations: (i) withrespect to the Current Interest Bonds, $5,000 Principal Amount or any integral multiple thereof, (ii) withrespect to the Capital Appreciation Bonds, $5,000 Maturity Value, or any integral multiple thereof(except for one odd denomination, if necessary}, and (iii) with respect to Convertible CapitalAppreciation Bonds, $5,000 Conversion Value or any integral multiple thereof The Bonds shall bear oraccrete interest at a rate or rates such that the interest rate shall not exceed that authorized at the Election.Tl1e Bonds will initially be registered in the Warne of~"Cede & Co.," the Nominee of DTC.

Each Current Interest Bond shall be dated as of the Dated Date, and shall bear interest from theBond Payment Date next preceding the date of authentication thereof unless it is authenticated during the

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oocssr~13as8s~2ia22oao-ooa 1

period from the 16~f' day of the month next preceding any Bond Payment Date to ttlat Bond PaymentDate, inclusive, in which event it shall bear interest from suc11 Bond Payment Date, or unless it isauthenticated on or before the first Record Date, in wliicli event it shall bear interest from its Dated Date.Interest s~~all be payable on the respective Bond Payment Dates and sE~all be calculated on tfie basis of a360-day year• of 12, 30-day months.

The Capital Appreciation Bonds shall mature in the years, shall be issued in aggregate PrincipalAmounts, shall leave Accretion Rates and shall have denominations per each $5,000 in Maturity Value(except for one odd denomination, if necessary), as shown in the Accreted Value Table attached to theOfficial Statement or Purchase Contract. The Convertible Capital Appreciation Bonds shall mature inthe years, shall be issued in the aggregate Principal Amounts, shall have Accretion Rates and shall lavedenominations per each $5,000 in Conversion Value as shown in such Accreted Value Table; provided,however, that in the event that the amount shown in such Accreted Value Table and flee Accreted Vaiuecaused to be calculated by the District and approved by the Bond Insurer, if any, by application of thedefinition of Accreted Value set forth in Section 5 differ, the latter amount small be the Accreted Valueof such Capital Appreciation Bond or Convertible Capital Appreciation Bond, as applicable. EachCapital Appreciation Bond shall be dated, and shall accrete intet•est from, its date of initial delivery.Capital Appreciation Bonds will not bear interest on a current basis.

Prior to their respective Conversion Dates, each Convec-tible Capital Appreciation Bond shall notbear current interest but will accrete in value tllrougll the Conversion Date thereof, from itsDenominational Amount on the Date of Delivery thereof to its Conversion Value on the applicableConversion Date. No payment will be made to the Owners of Convertible Capital Appreciation Bondson the respective Conversion Dates thereof From and after its Conversion Date, each ConvertibleCapital Appreciation Bond will bear current, periodic interest, and such interest will accrue based uponthe Conversion Value of such Bonds at the Conversion Date. Following their respective ConversionDates, each Convertible Capital Appreciation Bond shall bear interest from flee Bond Payment Date nextpreceding the date of authentication thereof, unless it is authenticated during t11e period from the 16thday of the month next preceding any Bond Payment Date to that Bond Payment Date, inclusive, in whichevent it shall bear interest from such Bond Payment Date, or unless it is authenticated on or before thefirst Record Date after the Conversion Date, in whic~l event it will bear interest from the ConversionDate.

Notwithstanding any other provision herein, the ratio of total debt sec•vice to principal for• eac11Sec•ies of Bonds shall not exceed four-to-one, and Capital Appreciation Bonds and Convertible CapitalAppreciation Bonds may not mature more than 25 years from their respective dates of issuance.

(b) Redemption.

(i) Terms of Redemption. Tlie Bonds shall be subject to optional or mandatorysinking fund redemption prior to maturity as provided in the Pur•cliase Contract oi• tale Off cial Statement;provided, however, that, notwithstanding any other provision herein, any Capital Appreciation Bond orConvertible Capital Appc•eciation Bond maturing moc-e than 10 years after its date of issuance shall besubject to redemption before its f xed maturity date, wit11 or witflout premium, at any time, oi• from timeto time, at the option of the District, beginning no later than the 10th anniversary of the date such Bondis issued.

(ii) Selection of Bonds for Redemption. Whetlever provision is made in thisResolution for the optional redemption of Bonds and less than all Outstanding Qonds are to be redeemed,

~ocssril3~s8s~zio2z000-000 ~

the Paying Agent, upon written instc•uction from the District, s11a11 select Bonds foi• redemption as sodirected and if not directed, in inverse order of maturity. Within a maturity, the Paying Agent shall selectBonds for redemption as directed by the District and, if not so directed, by lot. Redemption by lot shallbe in such manner as the Paying Agent shall determine; provided, However, that (A) with respect toredemption by lot, the portion of any Current Interest Bond to be redeemed in part sf~all be in the principalamount of $5,000 or any integral multiple tllec-eof, (B) t}Ze portion of any Capital Appreciation Bond tobe redeemed in part shall be in integral muItipies of the Accreted Value per $5,000 Maturity Valuethereof, (C) and the portion of any Convertible Capital Appreciation Bond to be redeemed in part shallbe in integral multiples of the Accreted Value per $5,000 Conversion Value thereof

The Purchase Contract may provide that (i) in the event that any portion of Term Bondssubject to mandatory sinking fund redemption is optionally redeemed pt•ior to maturity, the remainingmandatory sinking fund payments with respect to such Bonds shall be reduced propor-tionate(y, or• asotherwise directed by the District, in integral multiples of $5,000 Principal Amount (oi• Maturity Valueor Conversion Value, as applicable), in respect of the portion of such Bonds optionally redeemed, and(ii) within a maturity, Bonds shall be selected for redemption on a "Pro Rata Pass-Tlirougli Distributionof Principal" basis in accordance with DTC procedures, provided further that, suc11 redemption is madein accordance with the operational arrangements of DTC then in effect.

(iii) Redemption Notice. When optional redemption is authorized pursuant toSection 6(b) hereof, the Paying Agent, upon written instruction from the District, shall give notice (a"Redemption Notice") of the redemption of the Bonds. Such Redemption Notice shall specify: t(le Bondsor designated portions thereof (in the case of redemption of the Bonds in part but not in whole) wliicilare to be redeemed, the date of redemption, the place or places where the redemption will be made,including the name and address of the Paying Agent, the redemption price, the CUSIP numbers (if any)assigned to the Bonds to be redeemed, the Bond numbers of the Bonds to be redeemed in whole or• inpart and, in the case of any Bond to be redeemed in part only, t11e Principal Amount, Conversion Valueor Accreted Value, as applicable, of such Bond to be redeemed, and the original issue date, interest rateor Accretion Rate and stated maturity date of each Bond to be t-edeemed in whole or in part. SucllRedemption Notice shall further state that on the specif ed date there shall become due and payable uponeach Bond or portion thereof being redeemed at the redemption price thereof, together with the intet•estaccrued or accreted to the redemption date, and that from and after suc11 date, intec•est thereon shall ceaseto accrue or accrete.

Tlie Paying Agent shall take the following actions with respect to each such Redemption Notice:

(a) At least 20 but not more than 45 days prior to the redemption date, suchRedemption Notice shall be given to the respective Owners of Bonds designated for redemptionby registered or certified mail, postage prepaid, at their addresses appearing on the Bond Register.

(b) At least 20 but not more than 45 days prior to the redemption date, suchRedemption Notice shall be given by (i) registered or cerlifed mail, postage prepaid, (ii)telephonically confi•med facsimile transmission, or (iii) overnight delivery set•vice, to theSecut•ities Depository.

(c) At least 20 but IlOt more than 45 days pc•ioi• to the redemption date, suchRedemption Notice shall be given by (i) i•egisteced or cec-tifed mail, postage prepaid, oi- (ii}overnight delivery service, to one of the Information Services.

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(d} Such Redemption Notice shall be given to such other persons as may be requiredpursuant to the Continuing Disclosure Certificate.

A certificate of the Paying Agent or the District to the effect that a Redemption Notice Ilas beengiven as provided I~erein shall be conclusive as against all pac-ties. Neither failure to receive anyRedemption Notice nor any defect in any such Redemption Notice so given shall affect the suff ciencyof the proceedings for the redemption of the affected Bonds. Each cllecic issued oc• other transfer of fundsmade by the Paying Agent for the purpose of redeeming Bonds shall bear or include the CUSIP numberidentifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or othertransfer. Such Redemption Notice may state that no representation is made as to the accuracy orcorrectness of CUSIP numbers printed thereon, or on the Bonds.

With respect to any notice of optional redemption of Bonds (or portions thereo f pursuant toSection 6(b)(i) Hereof, unless upon the giving of suc~i notice such Bonds or portions thereof s~iall bedeemed to have been defeased pursuant to Section 19 hereof, such notice shall state that such redemptionshall be conditional upon the receipt by an independent escrow agent selected by tl~e District on or priorto the date fixed for such redemption of the moneys necessary and sufficient to pay the Principal,Conversion Value and Accreted Value of, and premium, if any, and interest on, such Bonds (or portionstllereo~ to be redeemed, and that if such moneys shall not have been so received said notice shall be ofno force and effect, no portion of the Bonds shall be subject to redemption on such date and such Bondsshall not be required to be redeemed on such date. In the event that such Redemption Notice containssuch a condition and such moneys are not so received, t11e redemption shall not be made and the PayingAgent shall within a reasonable time tliereaf~er (but in no event later than the date originally set forredemption) give notice to the persons to whom and in the manner in which the Redemption Notice wasgiven that such moneys were not so received. In addition, the District shall leave the right to rescind anyRedemption Notice, by written notice to the Paying Agent, on or prior to the date f xed for suchredemption. The Paying Agent shall distribute a notice of the rescission of suc11 Redemption Notice inthe same manner as such Redemption Notice was originally provided.

(iv) Partial Redemption of Bonds. Upon the surrender of any Bond redeemed in partonly, the Paying Agent shall execute and deliver to the Owner thereof a new Bond oi• Bonds of Like tenorand maturity and of autlloi•ized denominations equal in Transfer Amount to the unredeemed portion ofthe Bond surrendered. Suc(i partial redemption shall be valid upon payment of the amount required tobe paid to such Owner, and the District shall be released and discharged thereupon from all liability tothe extent of such payment.

(v) Effect of Redemption Notice. Notice having been given as aforesaid, and themoneys for the redemption (including the interest accrued or accreted to flee applicable date oft•edemption) having been set aside as provided in Section 19 Hereof, the Bonds to be redeemed shallbecome due and payable on such date of redemption.

If on such redemption date, money for tl~e redemption of all file Bonds to be redeemed asprovided in Section 6(b) hereof, togetl~ec• with intec-est accrued or accreted to such c-edemption date, shallbe held in trust as provided in Section 19 hereof so as to be available therefor on such redemption date,and if a Redemption Notice thereof shall have been given as aforesaid, then fi•ocn and after suchredemption date, interest on the Bonds to be redeemed shall cease to accrue or accrete and becomepayable. All money held for the redemption of Bonds shall be held intrust for the account of the Ownersof file Bonds to be so redeemed.

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(vi) Bonds No Loner Outstanding. When any Bonds (or portions thereof, whichlave been duly called for redemption prior to maturity under t11e provisions of this Resolution, or withrespect to which irrevocable instructions to call for redemption prior to maturity at tiie earliest redemptiondate Have been given to the Paying Agent, in form satisfactory to it, and suff cient moneys shall be fieldirrevocably in trust for the payment of the redemption price of such Bonds or portions thereof, and, inthe case of Current Interest Bonds and Convertible Capital Appreciation Bonds after tl~e ConversionDate, accrued interest thereon to the date fixed for redemption, all as provided in this Resolution, thensuch Bonds shall no longer be deemed Outstanding and shall be surrendered to the Paying Agent forcancellation.

All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions ofthis Section 6 shall be cancelled upon surrender thereof and be delivered to or upon the order of theDistrict. All or any portion of a Bond purchased by the District shall be cancelled by the Paying Agent.

(c) Book-Entr~System.

(i) Election of Boolc-Enti:y System. The Bonds shall initially be delivered in theform of a separate single fully-registered bond (which may be typewritten) foi• each maturity date of suchBonds in an authorized denomination. The ownership of each such Bond shall be registered in the BondRegister (as defined below) in the name of the Nominee, as nominee of the Depository and ownership ofthe Bonds, an all or any portion t}Iereof may not thereafter be transferred except as provided inSection 6(c)(i)(4).

With respect to book-entry Bonds, the District and the Paying Agent shall have no responsibilityor obligation to any Participant or to any person on behalf of which such a Participant holds an interestin such book-entry Bonds. Without limiting the immediately preceding sentence, the District and thePaying Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records ofthe Depository, the Nominee, or any Participant with respect to any ownership interest in book-entryBonds, (ii) the delivery to any Participant or any other person, other• than an Owner as shown in the BondRegister, of any notice with respect to book-entry Bonds, including any Redemption Notice, (iii) theselection by the Depository and its Participants of the benef cial interests in book-entry Bonds to beprepaid in the event the District redeems the Bonds in part, or (iv) the payment by the Depository or anyParticipant or any other person, of any amount with respect to Accreted Value, Conversion Value, andPrincipal of, and premium, if any, or interest on the book-entry Bonds. The District and the Paying Agentmay treat and consider the person in whose Warne eac11 book-entc•y Bond is registered in the Bond Registeras the absolute Owner of such book-entry Bond for• the purpose of payment of Accreted Value,Conversion Value, or Principal of and premium and interest on and to such Bond, for the purpose ofgiving notices of redemption and other mattec•s with respect to such Bond, for the puc•pose of registeringtransfers with respect to such Bond, and for all other purposes wliatsoevei•. The Paying Agent s11a11 payall Accreted Value, Conversion Value, or Principal of and premium, if any, and interest on the Bondsonly to or upon the order of the respective Owner, as shown in the Bond Register, or his respectiveattorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy anddischarge t11e District's obligations with respect to payment of Accreted Value, Conversion Value, orPi•incipai of, and premium, if any, and interest on the Bonds to the extent of t11e sum or sums so paid. Noperson other than an Owner, as shown in the Bond Register, shall receive a certificate evidencing theobligation to make payments ofAccreted Value, Conversion Value, or Principal of, and premium, if any,and interest on the Bonds. Upon delivery by the Depository to the Owner and the Paying Agent, ofwritten notice to the effect that the Depository leas determined to substitute a new nominee in place of

DOCSSF/ 13~1888v2/022000-0001

the Nominee, and subject to the provisions herein with respect to the Record Date, the word Nominee inthis Resolution shall refer to such nominee of the Depository.

1. Delivery of Letter of Representations. In order to qualify the book-entry Bondsfor the Depository's book-entry system, the District and the Paying Agent shall execute anddeliver to the Depository a Letter of Representations. The execution and delivery of a Letter ofRepresentations shall not in any way impose upon the District or the Paying Agent any obligationwhatsoever with respect to persons having interests in such book-entry Bonds other than theOwners, as shown on the Bond Register. By executing a Letter of Representations, the PayingAgent shall agree to take all action necessary at all times so that the District will be incompliancewith all representations of the District in such Letter of Representations. In addition to theexecution and delivery of a Letter of Representations, the District and the Paying Agent shalltake such other actions, not inconsistent with this Resolution, as are reasonably necessary toqualify book-entry Bonds for the Depository's book-entry program.

2. Selection of Depository. In the event (i) the Depository determines not tocontinue to act as securities depository for book-entry Bonds, or (ii) the District determines thatcontinuation of the book-entry system is not in the best interest of the Beneficial Owners of theBonds or the District, then the District will discontinue the book-entry system with theDepository. If the District determines to replace the Depository with another qualified securitiesdepository, the District shall prepare or direct the preparation of a new single, separate, fullyregistered bond for each maturity date of such Outstanding book-entry Bond, registered in thename of such successor or substitute qualified securities depository or its Nominee as providedin subsection (4) hereof. If the District fails to identify another qualified securities depository toreplace the Depository, then the Bonds shall no longer be restricted to being registered in suchBond Register in the name of the Nominee, but shall be registered in whatever name or namesthe Owners transferring or exchanging such Bonds shall designate, in accordance with theprovisions of this Section 6(c).

3. Payments and Notices to Depositorx. Notwithstanding any other provision ofthis Resolution to the contrary, so long as all Outstanding Bonds are held in book-entry form andregistered in the name of the Nominee, all payments by the District or the Paying Agent withrespect to Accreted Value, Conversion Value or Principal of and premium, if any, or interest onthe Bonds and all notices with respect to such Bonds, including Redemption Notices, shall bemade and given, respectively to the Nominee, as provided in the Letter of Representations or asotherwise required or instructed by the Depository and agreed to by the Paying Agentnotwithstanding any inconsistent provisions herein.

4. Transfer of Bonds to Substitute Depository.

(A) The Bonds shall be initially issued as described in the Official Statementdescribed herein. Registered ownership of such Bonds, or any portions thereof, may notthereafter be transferred except:

(1) to any successor of DTC or its nominee, or of any substitutedepository designated pursuant to Section 6(c)(i)(4)(A)(2) ("Substitute Depository");provided that any successor of DTC or Substitute Depository shall be qualified underany applicable laws to provide the service proposed to be provided by it;

12

oocssri i 3~sgs~~a2z000-000 i

(2) to any Substitute Depository, upon (1}the resignation of DTC oi•its successor' (or any Substitute Depository or its successor) from its functions asdepository, or (2) a determination by the District that DTC (or its successor} is no longer•able to carry out its functions as depository; provided that any such Substitute Depositoryshall be qualified under any applicable laws to provide the services proposed to beprovided by it; or

(3) to any person as pt•ovided below, upon (1) the resignation ofDTC or its successor (or any Substitute Depository or its successor) from its functions asdepository, or (2) a determination by the District that DTC or its successor (or• SubstituteDepository or its successor) is no longer able to carry out its functions as depository.

(B) In the case of any transfer puc•suant to Section 6(c)(i)(4)(A)(1) or (2), uponreceipt of all Outstanding Bonds by the Paying Agent, together with a written request of theDistrict to the Paying Agent designating the Substitute Depository, a single new Bond, which theDistrict shall prepare or cause to be prepared, s11all be executed and delivered for each maturityof Bonds then Outstanding, registered in tale name of such successor or such SubstituteDepository or their Nominees, as the case may be, all as specified in such written request of tl~eDistrict. In the case of any transfer pursuant to Section 6(c)(i)(4)(A)(3), upon receipt of allOutstanding Bonds by the Paying Agent, together with a written request of the District to tiePaying Agent, new Bonds, W~11CI1 the D1StI•ict shall prepare or cause to be prepared, shall beexecuted and delivered in such denominations and registered in tale names of such persons as arerequested in such written request of the District, provided that the Paying Agent shall not berequired to deliver such new Bonds within a period of less t11an sixty {~0) days from the date ofreceipt of such wt•itten request from the District.

(C) In the case of a partial redemption or an advance refunding of any Bondsevidencing a portion of the Maturity Value, Conversion Value or Principal maturing in aparticular year, DTC or its successor (or any Substitute Depository or its successor} shall makean appropriate notation on such Bonds indicating the date and amounts of such reduction inConversion Value, Maturity Value or Principal, in form acceptable to the Paying Agent, all inaccordance with the Letter of Representations. The Paying Agent shall not be liable for suchDepository's failure to make suc11 notations or- errors in malting such notations.

(D) The District and the Paying Agent shall be entitled to treat the person in whosename any Bond is registered as the Owner thereof for all purposes of this Resolution and anyapplicable laws, notwithstanding any notice to the contrary received by the Paying Agent or theDistrict; and the District and the Paying Agent shall not leave responsibility for transmittingpayments to, communicating with, notifying, or• otherwise dealing wit11 any Beneficial Ownersof the Bonds. Neither the District nor the Paying Agent shall have any responsibility orobligation, legal or• otherwise, to any surer Beneficial Owners or to any other party, includingDTC or its successor (or Substitute Depository or its successor), except to the Owner of anyBonds, and the Paying Agent may rely conclusively on its records as to the identity of the Ownersof tfle Bonds.

SECTION 7. ~xeeution of the Bonds. The Bonds share be signed by the President of theBoard, oi• ot~ier member of the Boat-d autho~•ized to sign on behalf of tl~e Pc•esidecit, by tlleii• manual orfacsimile signature and countec•signed by the ~nan~ial oi• facsimile signature of the Secretary to or Clericof the Board, or• the designee thereof, all in their official capacities. No Bond shall be valid or

13

~ocssrii 3~~sss~z~oz2000-00o i

obligatory for• any purpose or shall be entitled to any security oi- benefit under• this Resolution unlessand until the certificate of authentication printed on the Bond is signed by the Paying Agent asauthenticating agent. Authentication by the Paying Agent shall be conclusive evidence that the Bondso authenticated has been duly issued, signed and delivered under this Resolution and is entitled to thesecurity and benefit of t~lis Resolution.

SECTION 8. Paying Agent; Transfer and Exchange. So long as any of the Bondsremain Outstanding, the District will cause the Paying Agent to maintain and keep at its designatedoff ce all books and records necessary for the registration, exchange and transfer of the Bonds asprovided in this Section. Subject to the provisions of Section 9 below, the person in whose name aBond is registered on the Bond Register shall be regarded as the absolute Owner of that Bond for allpurposes of this Resolution. Payment of or on account of the Principal, Conversion Value, or AccretedValue of and premium, if any, and interest on any Bond shall be made only to or upon the order ofsuch Owner; neither the District nor the Paying Agent shall be affected by any notice to the contrary,but the registration may be changed as provided in this Section. All such payments shall be valid andeffectual to satisfy and discharge the District's liability upon the Bonds, including interest, to the extentof the amount or amounts so paid.

Any Bond may be exchanged for Bonds of like Series, tenor, maturity and Transfer Amount uponpresentation and surrender at the designated off ce of the Paying Agent, together with a request forexchange signed by the Owner or by a person legally empowered to do so in a form satisfactory to tl~ePaying Agent. A Bond may be transferred on the Bond Register only upon presentation and surrenderof the Bond at the designated office of the Paying Agent together with an assignment executed by theOwner or by a person legally empowered to do so in a form satisfactory to the Paying Agent. Uponexchange or transfer, the Paying Agent shall complete, authenticate and deliver a new bond or• bands oflike tenor• and of any authorized denomination oc• denominations requested by the Owner equal to theTransfer Amount of the Bond surrendered and bearing, accruing or• accreting interest at the same rate andmaturing on the same date. Capital Appreciation Bonds, Convertible Capital Appreciation Bonds andCurrent Interest Bonds may not be exchanged for one another.

If any Bond shall become mutilated, the District, at the expense of the Owner of said Bond, shallexecute, and the Paying Agent shall tliec•eupon authenticate and deliver, a new Bond of like Series, tenor,maturity and Transfer Amount in exchange and substitution for tl~e Bond so mutilated, but only uponsurrender to the Paying Agent of t11e Bond so mutilated. If any Bond issued hereunder• shall be lost,destroyed oi• stolen, evidence of such loss, destruction or theft may be submitted to the Paying Agent and,if suc11 evidence be satisfactory to tl~e Paying Agent and indemnity for the Paying Agent and tl~e Distc•ictsatisfactory to tl~e Paying Agent shall be given by the Owner, the District, at the expense of the Owner,shall execute, and the Paying Agent s1~all thereupon authenticate and deIivei•, a new Bond of Iike series,tenor, maturity and Transfer Amount in lieu of and in substitution for• the Bond so lost, destroyed orstolen (or if any such Bond shall have matured oi• shall leave been called for• redemption, instead of issuinga substitute Bond the Paying Agent may pay the same without surrender thereof upon receipt ofindemnity satisfactory to the Paying Agent and the District). The Paying Agent may require payment ofa reasonable fee for each new Bond issued under• this paragiapll and of the expenses wllic}1 may beincurred by the District and tl~e Paying Agent.

If signatures on behalf of the District are requited in connection with an exchange or transfer, thePaying Agent shall tcndertalce the exchange or- transfer• of Bonds only after• the new Qonds are signed bythe authorized officers of the District. In all cases of exchanged or transferred Bonds, the District shallsign and the Paying Agent shall authenticate and deliver' QOIICIS lIl aCCOI'daI1Ce WIt~l the pI'OV1S10I1S Of t~1lS

14

oocssril3asss~z~ozz000-000l

Resolution. AlI fees and costs of transfer• shall be paid by tl~e requesting party. Those charges may berequired to be paid before the procedure is begun for the exchange or transfer. All Bonds issued uponany exc(iange or transfer shall be valid obligations of the District, evidencing t~1e same debt, and entitledto the same security and benefit under this Resolution as the Bonds surrendered upon that exchange ortransfer.

Any Bond surrendered to the Paying Agent for payment, retirement, exchange, replacement ortransfer shall be cancelled by the Paying Agent. The District may at any time deliver to the Paying Agentfor cancellation any previously authenticated and delivered Bonds that the District may have acquired inany manner whatsoever, and those Bonds shall be promptly cancelled by the Paying Agent. Writtenreports of the surrender and cancellation of Bonds sl1aI1 be made to the District by the Paying Agent asrequested by the District. The cancelled Bonds shall be retained for three years, then returned to theDistrict or destroyed by the Paying Agent as directed by the District.

Neither the District nor the Paying Agent will be required (a) to issue oi• transfer any Bondsduring a period beginning with the opening of business on the 16th day next preceding either any BondPayment Date or any date of selection of Bonds to be redeemed and ending with the close of business onthe Bond Payment Date or any day on which the applicable Redemption Notice is given or (b) to transferany Bonds which have been selected or called for redemption in whole or in part.

SECTION 9. Payment. Payment of interest on any Current Interest Bond or ConvertibleCapital Appreciation Bond after its respective Conversion Date shall be made on any Bond PaymentDate to the person appearing on the Bond Register of the Paying Agent as the Owner thereof as of theRecord Date immediately preceding such Bond Payment Date, such interest to be paid either (i} checkmailed to such Owner on the Bond Payment Date at his or leer address as it appears on such registrationbooks or at such other address as he or she may have filed with the Paying Agent for that purpose onor before the Record Date, or (ii) by wire transfer to the bank and account number on file with thePaying Agent as of the Record Date. The Principal, and redemption premiums, if any, payable on theCurrent Interest Bonds, the Accreted Value and redemption premiums, if any, on the CapitalAppreciation Bonds, and the Accreted Value, Conversion Value and redemption premiums, if any, onConvertible Capital Appreciation Bonds shall be payable upon maturity or redemption upon surrenderat the designated office of the Paying Agent. The Accreted Value, Conversion Value and Principal of,and premiums, if any, and interest on, the Bonds shall be payable in lawful money of t11e United Statesof America. The Paying Agent is hereby authorized to pay the Bonds when duly presented for• paymentat maturity, and to cancel all Bonds upon payment thereof. The Bonds are obligations of t11e Districtpayable solely from the levy of ad valorem property taxes upon all property within the District subjectto taxation, which taxes s~iall be without limit as to t•ate or• amount. The Bonds do not constitute anobligation of the County except as pc•ovided in this Resolution, and no part of any fund of the Countyis pledged oi• obligated to the payment of the Bonds.

SECTION 10. Forms of Bonds. The Bonds shall be in substantially the forms as set forthin Exhibit A hereto, allowing those officials executing the Bonds to make the insertions and deletionsnecessary to conform the Bonds to this Resolution, the Purchase Contract and the Off cial Statementor to correct or cure any defect, inconsistency, ambiguity oc' OI7]1SSlOi1 tl1~i•ein.

SECTION 11. Delivery of Bonds. The proper off cials of the District shall cause the Bondsto be prepared and, following their sale, shall have the Bonds signed and delivered, together with a truetranscript of proceedings with reference to fire issuance of the Bonds, to the Undei•wciter upon paymeeltof t(Ze p~u~cllase price tllec-efoi•.

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SECTION 12. Deposit of Proceeds of Bonds. (a) The purchase price received from theUnderwriter pursuant to the Purchase Contract, to the extent of the principal amount thereof, shall bepaid to the County to t11e credit of tfle fiend hereby authorized to be created to be known as the "DuarteUnified Sc(iool District Election of 2010 General Obligation Bonds, Series D Building Fund" (the"Building Fund") of the District, shall be kept separate and distinct from all other District and Countyfunds, and those proceeds shall be used solely for the purpose for which the Bonds are being issuedand provided further that such proceeds shall be applied solely to the purposes aut~lorized by the votersof the District at the election. The County shall leave no responsibility for assuring the proper use ofthe Bond proceeds by the District. The Building Fund may contain subaccounts if the Bonds are issuedin more than one series. Tlie purchase price received from the Underwriter pursuant to the PurchaseContract, to the extent of any accrued interest and any net original issue premium, shall be kept separateand apart in the fund hereby authorized to be created and designated as the "Duarte Unified SchoolDistrict Election of 2010 General Obligation Bonds, Series D Debt Service Fund" (the "Debt ServiceFund") for the Bonds and used for payment of Accreted Value, Conversion Value, or Principal of andinterest on the Bonds, and for no other purpose. The Debt Service rund may contain subaccounts ifthe Bonds are issued in more than one series. Interest earnings on moneys held in the Building Fundshall be retained in the Building Fund. Interest earnings on moneys held in the Debt Service Fundshall be retained in the Debt Service Fund. Any excess proceeds of the Bonds not needed for theauthorized purposes set forth herein for wllicll the Bonds are being issued upon written notice from tl~eDistrict shall be transferred to the Debt Service Fund and applied to the payment of Accreted Value,Conversion Value or Principal of and interest on the Bonds. If, after payment in full of the Bonds,there remain excess proceeds, any such excess amounts shall be transferred to t~~e general fund of theDistrict.

The costs of issuance of the Bonds are hereby authorized to be paid either from premiumwithheld by the Underwriter upon the sale of the Bonds, or from the Principal Amount of the Bondsreceived from the Underwriter. To the extent costs of issuance are paid from such Principal Amount,the District may direct that a portion thereof, in an amount not-to-exceed 2.0% of such PrincipalAmount, in lieu of being deposited into the Building Fund, be deposited in a costs of issuance accountto be held by a fiscal agent of the District appointed for such purpose. Any excess moneys in the costof issuance account remaining after payment of all costs of issuance shall be transferred to the Countyfor deposit into the Building Fund or- Debt Service Fund, as appropriate.

(b) Moneys in the Debt Service Fund and the Building Fund shall be invested in PermittedInvestments. If at the time of issuance tl~e District determines to issue the Bonds as Tax-Exempt Bondswithout regard to the Code's "temporary period" restrictions, all investment of Bond proceeds shall besubject to paragraph (1) below; and the District, in consultation with the County, may provide for anagent to assist the County in investing funds pursuant to paragraph (1) below. Iftlle District fails to directthe County or its agent, as the case may be, the County or its agent shall invest or cause the funds in theBuilding Fund to be invested in Qualified Permitted Investments, subject to t~~e provisions of paragraph(1) below, until such time as the District provides written direction to invest such funds otherwise.Neither the County nor its off cers and agents, as the case may be, shall have any responsibility orobligation to determine tl~e tax consequences of any investment. Tlie interest eac•ned on the moneysdeposited to the Building Fund shall be applied as set forth in subparagraph (1)(C) below:

(1} Covenant Re~ac-din~ Investment of Proceeds.

(A) Permitted Investments. Beginning on the delivery date, and at all timesuntil expenditure for authorized purposes, not less than 95°/a ofthe proceeds ofthc Bonds

I6

DOCSSF/I 34888v2/02200Q-0001

deposited in t}ie Building Fund, including investment earnings thereon, will be investedin Qualif ed Permitted Investments. Notwithstanding the preceding provisions of thisSection, for purposes of this pai•agrapli, amounts derived from the disposition orredemption of Qualified Permitted Investments and Feld pending reinvestment orredemption for a period of not more than 30 days may be invested in PermittedInvestments. The District ~iereby authorizes investments made pursuant to tflisResolution with maturities exceeding f ve years.

(B) Recordkeepin~ and Monitoring Relating to BuiIdin Pund.

i. Information Re ardin~ Permitted Investments. The Districthereby covenants that it will record or cause to be recoc•ded witE1 respect to each PermittedInvestment in the Building rund the following information: purchase date; purchaseprice; information establishing the Fair Market Value of such Permitted Investment; faceamount; coupon rate; periodicity of interest payments; disposition price; disposition date;and any accrued interest received upon disposition.

ii. Information in Qualified Non-AMT Mutual Punds. Tlie Districthereby covenants tf~at, with respect to each investment of proceeds of the Bonds in aQualified Non-AMT Mutual Fund pursuant to paragraph (1)(A) above, in addition torecording, or causing to be recorded, the information set forth in paragraph (1)(B)(i)above, it will retain a copy of each IRS information reporting form and account statementprovided by such Qualif ed Non-AMT Mutual Fund.

iii. Monthly Investment Fund Statements. The District covenantsthat it will obtain, at the beginning of each month following the delivery date, a statementof the investments in the Building Fund detailing the nature, amount and value of eachinvest[nent as of such statement date.

iv. Retention of Records. The District hereby covenants that it willretain the records refet•red to in paragraph (1)(B)(i) and each IRS information reportingform referred to in paragraph {1)(B)(ii) with its books and records with respect to theBonds until three years following the last date that any obligation compt•ising the Bondsis retired.

(C) Interest Earned on Permitted Investments. Tlie interest earned on themoneys deposited in the Building Fund shall be deposited in the Building Fund and usedfor the purposes of that fund.

Except as required to satisfy the requirements of Section 1480 of the Code, interest earned ontale investment of moneys held in the Debt Service Fund shall be retained in the Debt Service Fund andused by the County to pay the Accreted Value, Conversion Value or Principal of and interest on theBonds when due.

SECTION 13. Rebate I{'und. The following provisions shall apply to any Bonds issued asTax-Exempt Bonds.

(a) The District shall ct•eate and establish a special find designated the Duarte UnifiedSchool District Election of 2010 General Obligatio►1 Bonds, Series D Rebate Fund" (the "Rebate fund").

17

DOCSSI~/13~888v2/022000-0001

All amounts at any time on deposit in the Rebate Fund sliali be Held in trust, to the extent required tosatisfy the requirement to make rebate payments to the United States (the "Rebate Requirement")pursuant to Section 148 of the Code, and the Treasury Regulations promulgated thereunder (tlie"Treasury Regulations"). Suc~l amounts shall be free and cleat• of any lien lierettnder and shall begoverned by this Section and by the Tax Certificate to be executed by the District in connection with theTax-Exempt Bonds (the "Tax Certificate").

(b) Within 45 days of the end of each fifth Bond Year (as such term is def ned in the TaxCertif cate), (1) the District steal l calculate or cause to be calculated with respect to the Bonds the amountthat would be considered the "rebate amount" within the meaning of Section 1.148-3 of the TreasuryRegulations, using as the "computation date" for- this purpose the end of such Bond Year, and (2) theDistrict shall deposit to the Rebate Fund from amounts on deposit in the other funds established hereunderor from other District funds, if and to the extent required, amounts sufficient to cause the balance in theRebate Fund to be equal to the "rebate amount" so calculated. The District shall not be required to depositany amount to the Rebate Fund in accordance with the preceding sentence, if the amount on deposit inthe Rebate Fund prior to the deposit required to be made under this subsection (b) equals or exceeds the"rebate amount" calculated in accordance with the preceding sentence. Such excess may be withdrawnfrom the Rebate Fund to the extent permitted under subsection (g) of this Section. The District shall notbe required to calculate the "rebate amount" and shall not be required to deposit any amount to the RebateFund in accordance with this subsection (b), with respect to all or a portion of the proceeds of the Bonds(including amounts treated as proceeds of the Bonds) (1) to the extent such proceeds satisfy theexpenditure requirements of Section 148(fl(4)(B) or Section 148(~(4)(C) of the Code or Section 1.148-7(d) of the Treasury Regulations, whichever is applicable, and otherwise qualify for the exception to theRebate Requirement pursuant to whichever of said sections is applicable, (2) to the extent such proceedsare subject to an election by the District under Section 148{~(4)(C)(vii) of the Code to pay a one andone-Half percent (1'/z%) penalty in lieu of arbitrage rebate in the event any of the percentage expenditurerequirements of Section 148(~(4)(C) are not satisf ed, or (3) to the extent such proceeds qualify for theexception to arbitrage rebate under Section 148(~(4)(A)(ii) of the Code for amounts in a "bona fide debtservice fund." In such event, and with respect to such amounts, the District shall not be required to depositany amount to the Rebate Fund in accordance with this subsection (b).

(c) Any funds remaining in the Rebate Fund after• redemption of all the Bonds and anyamounts desct•ibed in paragraph {2) of subsection (d) of this Section, oi• provision made tlleteforsatisfactory to the District, including accrued interest, shall be remitted to the District.

(d) Subject to the exceptions contained in subsection (b) of flits Section to the requirementto calculate the "rebate amount" and make deposits to the Rebate Pund, the District shall pay to the UnitedStates, from amounts on deposit in the Rebate Fund,

(1) not later than 60 days after• the end of (i) the f fth Bond Year, and (ii) each f fthBond Year thereafter•, an amount that, together• with ail previous rebate payments, is equal to atleast 90% of the "rebate amount" calculated as of the end of suc~l Bond Year in accordance withSection 1.148-3 of the Treasury Regulations; and

(2) not later than 60 days after the payment of ail Bonds, an amount equal to 100%of the "rebate amount" calculated as of the date of such payment (and any income attc•ibutable tothe "rebate amount" determined to be due and payable) in accordance with Section 1.148-3 ofthe Treasury Regulations.

~ocssri i 3~~sgs~ziozz000-oo01

(e) In the event that, prior to the time any payment is required to be made from tl~e RebateFund, the amount in the Rebate Fund is not suff cient to mace such payment when such payment is due,the District shall calculate (or have calculated) the amount of such def ciency and deposit an amountequal to such deficiency into the Rebate Fund prior to the time suc11 payment is due.

(~ Each payment required to be made pursuant to subsection (d) of this Section shall bemade to tl~e Internal Revenue Service, on or before the date on which such payment is due, and shall beaccompanied by Internal Revenue Service Form 8038-T, such form to be prepared or caused to beprepared by the District.

(g) In the event that immediately following the calculation required by subsection (b) of thisSection, but prior to any deposit made under said subsection, the amount on deposit in the Rebate Fundexceeds the "rebate amount" calculated in accordance with said subsection, the District may withdrawthe excess from the Rebate Fund and credit such excess to the Debt Service Tund.

(11) The District shall retain records of all determinations made hereunder until three yearsafter the complete retirement of the Bonds.

(i) Notwithstanding anything in this Resolution to the contrary, the Rebate Requirementshall survive the payment in full or defeasance of the Bonds.

SECTION 14. Security for the Bonds. There shall be levied on all the taxable property inthe District, in addition to all other taxes, a continuing direct ad valoreffz tax annually during tale periodthe Bonds are Outstanding in an amount sufficient to pay the Principal, Conversion Value and AccretedValue of and interest on the Bonds when due, which moneys when collected will be placed in the DebtService Fund of the District, and which fund is Hereby designated for the payment of the Principal,Conversion Value and Accreted Value of and interest on the Bonds when and as the same fall due, andfor no other purpose. The District covenants to cause the County to take all actions necessary to levysuch ad valoj•e~fz property tax in accordance with this Section 14. Pursuant to Section 53515 of theGovernment Code, t}le Bonds shall be secured by a statutory lien on all revenues received pursuant tothe levy and collection of ad valorej~~ property taxes for the payment thereof

Pursuant to Government Code sections 5450 and 5451, the District hereby pledges all revenuesreceived from the levy and collection of ad valoreffT taxes for the payment of the Bonds and all amountson deposit in the Debt Service Fund to the payment of the Bonds. Such pledge shall constitute a lien onand security interest in such taxes and amounts in the Debt Service Fund. This pledge shall constitute anagreement between the District and tEie Owners of the Bonds to provide security for the payment of theBonds in addition to any statutory lien that may exist.

Tile moneys in the Debt Service Fund, to t11e extent necessary to pay the Principal, Convec•sionValue and Accreted Value of and interest on the Bonds as the same become due and payable, shall betransferred by the Treasurer to the Paying Agent which, in turn, shall pay such moneys to DTC to paysuch Principal, Conversion Value Accreted Value and interest. DTC will tliere~2pon make payments ofPrincipal, Conversion Value and Accreted Value of and interest on t11e Bonds to tl~e DTC Participantswho will thereupon make payments of such Principal, Conversion Value, Accreted Value and interest tothe Beneficial Owners of the Bonds. Any moneys remaining in the Debt Service Fund after the Bondsand the interest thereon have been paid in fill, or provision for such payment has been made, shall betransferred to the general fiend of the District, pursuant to the Education Code Section 15234.

19

DOCSSF/134888v2/022000-0001

SECTION 15. Arbitrage Covenant. The District covenants that it will restrict the use ofthe proceeds of the Bonds in such manner and to such extent, if any, as may be necessary, so that theBonds will not constitute arbitrage bonds under Section 148 of the Code and the applicable regulationsprescribed thereunder or any predecessor section. Calculations for determining arbitrage requirementsare the sole responsibility of the District.

SECTION 16. Conditions Precedent. The Board determines that all acts and conditionsnecessary to be performed by the Board or to have been met precedent to and in the issuing of theBonds in order to make them legal, valid and binding general obligations of the District have beenperformed and have been met, or will at the time of delivery of the Bonds have been performed andhave been met, in regular and due farm as required by law; and that no statutory or constitutionallimitation of indebtedness or taxation will have been exceeded in the issuance of the Bonds.

SECTION 17. Official Statement. The Preliminary Official Statement relating to theBonds, substantially in the form on file with the Clerk of or Secretary to the Board, is hereby approvedand the Authorized Officers, each alone, are hereby authorized and directed, for and in the name andon behalf of the District, to deliver such Preliminary Official Statement to the Underwriter to be usedin connection with the offering and sale of the Bonds. The Authorized Officers, each alone, are herebyauthorized and directed, for and in the name and on behalf of the District, to deem the PreliminaryOfficial Statement "final" pursuant to 15c2-12 of the Securities Exchange Act of 1934, prior to itsdistribution and to execute and deliver to the Underwriter a final Official Statement, substantially inthe form of the Preliminary Official Statement, with such changes therein, deletions therefrom andmodifications thereto as the Authorized Officer executing the same shall approve. The Underwriter ishereby authorized to distribute copies of the Preliminary Official Statement to persons who may beinterested in the purchase of the Bonds and is directed to deliver copies of any final Official Statementto the purchasers of the Bonds. Execution of the Official Statement shall conclusively evidence theDistrict's approval of the Official Statement.

SECTION 18. Insurance. In the event the District purchases bond insurance for the Bonds,and to the extent that the Bond Insurer makes payment of the Principal, Accreted Value and ConversionValue of or interest on the Bonds, it shall become the Owner of such Bonds with the right to paymentof such Principal, Accreted Value, Conversion Value or interest, and shall be fully subrogated to all ofthe Owners' rights, including the Owners' rights to payment thereof. To evidence such subrogation(i) in the case of subrogation as to claims that were past due interest components, the Paying Agentshall note the Bond Insurer's rights as subrogee on the Bond Register for the Bonds maintained by thePaying Agent upon receipt of a copy of the cancelled check issued by the Bond Insurer for the paymentof such interest to the Owners of the Bonds, and (ii) in the case of subrogation as to claims for past duePrincipal, Conversion Value or Accreted Value, the Paying Agent shall note the Bond Insurer assubrogee on the Bond Register for the Bonds maintained by the Paying Agent upon surrender of theBonds by the Owners thereof to the Bond Insurer or the insurance trustee for the Bond Insurer.

SECTION 19. Defeasance. All or any portion of the Outstanding maturities of the Bondsmay be defeased prior to maturity in the following ways:

(a) Cash: by irrevocably depositing with an independent escrow agent selected bythe District an amount of cash which together• with amounts transferred from the Debt ServiceFund, if any, is sufficient to pay all Bonds Outstanding and designated for defeasance (includingall Principal, Accreted Value or Conversion Value thereof, accrued interest thereon andredemption premiums, if any) at or before their maturity date; or

20

DOCSSF/ 134888v2/022000-0001

(b) Government Obli ate ions: by irrevocably depositing wit11 an independent escrowagent selected by the District noncallable Government Obligations together with cash, ifrequired, and amounts transferred from the Debt Service Fund, in such amount as will, togetherwith interest to accrue thereon, in the opinion of an independent certified public accountant, befully sufficient to pay and discharge all Bonds Outstanding and designated for defeasance(including all Principal, Accreted Value or Conversion Value thereof, accrued interest thereonand redemption premiums, if any) at or before their maturity date;

then, notwithstanding tbatany ofsuch Bonds shall not leave been surrendered for payment, alI obligationsof the District with respect to all such designated Outstanding Bonds shall cease and terminate, exceptonly the obligation of the independent escrow agent selected by the District to pay or cause to be paidfrom funds deposited pursuant to paragraphs (a) or (b} of this Section, to the Owners of such designatedBonds not so surrendered and paid all sums due with respect thereto.

ror purposes of tells Section, "Government Obligations" shall mean:

Direct and general obligations of the United States of America, or obligations that areunconditionally guaranteed as to principal and interest by the United States of America (whichmay consist of obligations of the Resolution Funding Corporation that constitute interest strips).In the case of direct and general obligations of the United States of America, GovernmentObligations shall include evidences of direct ownership of proportionate interests in futureinterest or principal payments of such obligations. Investments in such proportionate interestsmust be limited to circumstances where (i) a bank or trust company acts as custodian and holdsthe underlying United States obligations; (ii) the owner of the investment is the real party ininterest and has the right to proceed directly and individual ly against the obligor of the underlyingUnited States obligations; and (iii) tl~e underlying United States obligations are held in a specialaccount, segregated from the custodian's general assets, and are not available to satisfy any claimof the custodian, any person claiming through the custodian, or any person to whom the custodianmay be obligated; provided that such obligations are rated or assessed at Ieast as high as directand general obligations of the United States of America by either S&P or by Moody's.

SECTION 20. Nonliability of Counfy. Notwithstanding anything to the contrary containedherein, in the Bonds or in any other document mentioned herein, neither the County, nor its officials,off cers, employees or agents shall have any liability hereunder or by reason hereof or in connectionwith the transactions contemplated hereby, the Bonds are not a debt of the County or a pledge of thefull faith and credit of the County, and the Bonds and any liability in connection therewith shall bepaid solely from ad valoj~er~z property taxes lawfully levied to pay the Principal, Conversion Value andMaturity Value of or interest on the Bonds, which taxes shall be unlimited as to rate oi• amount.

SECTION 21. Indemnification of County. Tlie District shall defend, indemnify and holdharmless tl~e County, its officials, officers, agents and employees ("Indemnified Parties") against anyand all losses, claims, damages or liabilities, joint or several, to wl~icli such Indemnified Parties maybecome subject based in whole or in part upon any acts or omission related to the Bonds, except witht•egard to the County's responsibilities under Section 23 Hereof TIIc District shall also reimburse theIndemnified Parties for any legal or other costs and expenses incurred in connection with investigatingor defending any such claims or liabilities, except wit(1 regard to tEie County's responsibilities underSection 23 Hereof

21

oocssri~ 3~~sss~2~o22000-000 ~

SECTION 22. Reimbursement of County Costs. The District shall reimburse the Countyfor all costs and expenses incurred by the County, its officials, officers, agents and employees in issuingor otherwise in connection with the issuance of the Bonds.

SECTION 23. Request to County to Lew Tax. The Board of Supervisors and officers ofthe County are obligated by statute to provide for the levy and collection of ad valorem property taxesin each year sufficient to pay all Principal, Maturity Value, Conversion Value of and interest comingdue on the Bonds in such year, and to pay from such taxes all amounts due on the Bonds. The Districthereby requests such Board of Supervisors to annually levy a tax upon all taxable property in theDistrict sufficient to pay all such Principal, Maturity Value, Conversion Value and interest coming dueon the Bonds in such year. The Board hereby finds and determines that such ad valorem taxes shallbe levied specifically to pay the Bonds being issued to finance specific projects authorized by the votersof the District at the Election.

SECTION 24. Other Actions. (a) Officers of the Board and District officials and staff arehereby authorized and directed, jointly and severally, to do any and all things and to execute and deliverany and all documents which they may deem necessary or advisable in order to proceed with theissuance of the Bonds and otherwise carry out, give effect to and comply with the terms and intent ofthis Resolution. Such actions heretofore taken by such officers, officials and staff are hereby ratified,confirmed and approved.

(b) The Board hereby appoints Merrill Lynch, Pierce, Fenner &Smith Incorporated asUnderwriter, Stradling Yocca Carlson & Rauth, a Professional Corporation, as Bond Counsel andDisclosure Counsel and Piper Jaffray & Co. as Financial Advisor, all with respect to the issuance ofthe Bonds.

(c) Notwithstanding any other provisions contained herein, the provisions of this Resolutionas they relate to the Bonds may be amended by the Purchase Contract and the Official Statement.

(d) To the extent the issuance of Bonds includes Long Current Interest Bonds (as definedherein), the useful life of any facility financed with such Long Current Interest Bonds will equal or exceedthe maturity of such Long Current Interest Bonds.

(e) Attached as Exhibit B is disclosure regarding the financing term and time of maturity,repayment ratio and the estimated change in the assessed value of taxable property within the Districtover the term of the Bonds. Such disclosure is appended in satisfaction of Section 15146(b)(1)(E) of theEducation Code, and shall not abrogate or otherwise limit any provision of this Resolution.

(~ Notwithstanding any other provisions contained herein, the provisions of this Resolutionas they relate to the Bonds may be amended by the Purchase Contract and the Official Statement.

SECTION 25. Resolution to County Treasurer and Tax Collector. The Secretary to thisBoard is hereby directed to provide a certified copy of this Resolution to the Treasurer immediatelyfollowing its adoption.

SECTION 26. Continuing Disclosure. The District hereby covenants and agrees that it willcomply with and carry out all of the provisions of that certain Continuing Disclosure Certificateexecuted by the District and dated as of the Dated Date, as originally executed and as it may beamended from time to time in accordance with the terms thereof. The Board hereby approves the form

22

DOCSSF/ 134888v2/022000-0001

of the Continuing Disclosure Certif cafe appended to the form of Preliminary Off cial Statement onfile with the Clerk of or Secretary to the Board as of the date hereof, and the Authorized Officers, eachalone, are Hereby authorized to execute and deliver such Continuing Disclosure Certificate with suchchanges therein and modifications thereto as shall be approved by the Underwriter and the AuthorizedOff cer executing the same, such approval to be conclusively evidenced by such execution anddelivery. Any Bond I-Iolder may take such actions as may be necessary and appropriate, includingseeking mandate or specif c performance by court order, to cause the District to comply with itsobligations under this Section. Noncompliance with this Section shall not result in acceleration of theBonds.

SECTION 27. ~ffeetive Date. This Resolution shall take effect immediately upon itspassage.

SECTION 28. Further Actions Authorized. It is hereby covenanted that the District, andits appropriate off cials, have duly taken all actions necessary to be taken by them, and will take anyadditional actions necessary to be taken by them, for carrying out the provisions of this Resolution.

23

oocssrii 3~~sss~zio2z000-aoo ~

SECTION 29. Recitals. All the recitals in this Resolution above are true and correct andthis Board so f nds, determines and represents.

PASSED, ADOPTED AND APPROVED this 16th day of Tebruary, 2017, by the following vote:

AYES: MEMBERS

NOES: MEMBERS

ABSTAIN: MEMBERS

All 5 Board Members (Diaz, Taylor, Reyes, Edwards & Bell)

0

ABSENT: MEMBERS 0

t

Reyna Dial, President of the Board o~ucation

ATTES .

~ l 1Cheryl Taylor, ~ C 1 e~r k ~to the B and of Education

24

oocssr~l3asss~zio?Zaoo-000 ~

SECRETARY' S CERTIFICATE

I, ,Secretary to the Board of Education of the Duarte Unified School District, Los AngelesCounty, California, hereby certify as follows:

The foregoing is a full, true and correct copy of a Resolution duly adopted at a regular meetingof the Board of Education of said District duly and regularly and legally held at the regular meeting placethereof on February 16, 2017, of which meeting all of the members of the Board of said District had duenotice and at which a quorum was present.

I have carefully compared the same with the original minutes of said meeting on file and of recordin my office and the foregoing is a full, true and correct copy of the original Resolution adopted at saidmeeting and entered in said minutes.

Said Resolution has not been amended, modified or rescinded since the date of its adoption, andthe same is now in full force and effect.

Dated: February 16, 20171

l.~

Dr. Allan Mucerino, Secretary to the Board of EducationDuarte Unified School District

25

EXHIBIT A

FORMS OI' BONDS

(Form of Current Interest Bond)

REGISTERED REGISTEREDNO. $

DUARTE UNIFIED SCHOOL DISTRICT(LOS ANGELS COUNTY, CALIFORNIA)

Election of 2010 General Obligation Bonds, Series D

INTEREST RATE: MATURITY DATE: DATED AS OF: CUSIP%per annum August 1, , 2017

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT:

The Duarte Unified School District (the "District") in Los Angeles County, California (the"County"), for value received, promises to pay to the Registered Owner named above, or registeredassigns, the Principal Amount on the Maturity Date, each as stated above, and interest thereon until thePrincipal Amount is paid or provided for at the Interest Rate stated above, on February 1 and August 1of each year (the "Bond Payment Dates"), commencing February 1, 2018. This bond will bear interestfrom the Bond Payment Date next preceding the date of authentication hereof unless it is authenticatedas of a day during the period from the 16th day of the month next preceding any Bond Payment Date tothe Bond Payment Date, inclusive, in which event it shall bear interest from such Bond Payment Date,or unless it is authenticated on or before January 15, 2018, in which event it shall beat• interest from theDate of Delivery. Interest shall be computed on the basis of a 360-day year of 12, 30-day months.Principal and interest are payable in lawful money of the United States of America, without deductionfor the paying agent services, to the person in whose name this bond (or, if applicable, one or morepredecessor bonds) is registered, such owner being the Registered Ownei•, on the Register maintained bythe Paying Agent, initially U.S. Bank National Association, as agent of the Treasurer and Tax Collectorof the County of Los Angeles. Principal is payable upon presentation and surrender of this bond at thedesignated office of the Paying Agent. Interest is payable by check of- draft mailed by the Paying Agenton each Bond Payment Date to the Registered Owner of this bond (or one or more predecessor bonds}as shown and at the address appearing on the Register at the close of business on the 15tE1 day of tfiecalendar• month next preceding that Bond Payment Date (the "Record Date").

Tllis bond is one of an authorization of bonds approved to raise money for the purposesauthorized by voters of the District at the Election (as def tied herein) arld to pay all necessary legal,financial, engineering and contingent costs in connection therewith under• authority of and pursuant tothe laws of the State of California, and the requisite vote of tfie electors of the Dist~•ict cast at a generalelection held on November• 2, 2010 (tile "Election"), upon t11e question of iss~iing bonds in file amountof $62,000,000 and the resolution of the Qoard of Education of the District adopted on February l6,

A-1

~ocssri 13~~s8s~?~ozzooa-000 1

2017 (the "Bond Resolution"). Tl1is bond is being issued under the provisions of Article 4.5 of Chapter3 of Part 1 of Division 2 of Title 5 of the California Government Code. This bond and tl~e issue of whichthis bond is one are payable as to both principal and interest solely from the proceeds of the levy of advalore»z taxes on all property subject to such taxes in the District, which taxes are unlimited as to rate oramount in accordance with California education Code Sections 15250 and 15252.

The bonds of this issue comprise (i) $ principal amount of Current Interest Bonds, ofWIlIC~I this bond is a part, (ii) Capital Appreciation Bonds OC W~~IC~1 $ represents theDenominational Amount and $ represents the Maturity Value, and (iii) Convertible CapitalAppreciation Bonds, of which $ represents the Denominational Amount and $represents the Conversion Value.

This bond is exchangeable and transferable for Bonds of like series, tenor, maturity and TransferAmount (as def ned in the Bond Resolution) and in authorized denominations at the designated office ofthe Paying Agent in Los Angeles, California, by the Registered Owner or by a person legally empoweredto do so, in a form satisfactory to tl~e Paying Agent, all subject to the terms, limitations and conditionsprovided in the Bond Resolution. All fees and costs of transfer shall be paid by the transferor. TheDistrict and the Paying Agent may deem and treat the Registered Owner as the absolute owner of thisbond for the purpose of receiving payment of or on account of principal or interest and for all otherpurposes, and neither the District nor• the Paying Agent shall be affected by any notice to the contrary.

Neither the District nor the Paying Agent will be required (a) to issue or transfer any Bond duringa period beginning with the opening of business on the 16th day next preceding either any Bond PaymentDate or any date of selection of Bonds to be redeemed and ending with the close of business on the BondPayment Date or day on wllicl~ the applicable notice of redemption is given or (b} to transfer any Bondwhich has been selected or called for redemption in whole or in part.

The Bonds maturing on or before August 1, 20_ are not subject to redemption prior• to theirfixed maturity dates. The Bonds maturing on or after August 1, 20_ are subject to redemption at theoption of the District, as a whole or in part, on any date on or after August 1, 20 at a redemption priceequal to t~~e principal amount of tI~e Bonds to be redeemed, plus interest thereon to the date fixed forredemption, without premium.

T11e Bonds maturing on August 1, 20_, are subject to redemption prior to maturity frommandatory sinking fund payments on August 1 of each year•, on and after August 1, 20_, at a redemptionprice equal to the principal amount thereof, togetl~ei• with accrued interest to the date f xed for redemption,without premium. Tlie principal amount represented by such Bonds to be so redeemed and tl~e datestherefor and the final principal payment date is as indicated in the following table:

Redemption Dates Principal Amounts

TOTAL

If Iess than all of the Bonds of any one maturity shall be called foc• redemption, the particularBonds or portions of Bonds of such r~~aturity to be redeemed shall be selected by lot by the Paying Agentas directed by the Distc•ict in such manner as the Paying agent in its discretion may determine; provided,however, that the portion of any Qond to be redeemed shall be in the principal amount of $5,000 or some

A-2

DOCSSF/13~~888v2/022000-0001

multiple thereof. If less than all of the Bonds stated to mature on different dates shall be called forredemption, the particular Bonds or portions thereof to be redeemed shall be called by the Paying Agentin any order directed by the District and, if not so directed, in the inverse order of maturity.

Reference is made to the Bond Resolution for a more complete description of certain definedterms used herein, as well as the provisions, among others, with respect to the nature and extent of thesecurity for the Bonds of this series, the rights, duties and obligations of the District, the Paying Agentand the Registered Owners, and the terms and conditions upon which the Bonds are issued and secured.The Registered Owner of this bond assents, by acceptance hereof, to all of the provisions of the BondResolution.

It is certified and recited that all acts and conditions required by the Constitution and laws of theState of California to exist, to occur and to be performed or to have been met precedent to and in theissuing of the Bonds in order to make them legal, valid and binding general obligations of the District,have been performed and have been met in regular and due form as required by law; that payment in fullfor the bonds has been received; that no statutory or constitutional limitation on indebtedness or taxationhas been exceeded in issuing the Bonds; and that due provision has been made for levying and collectingad valorem property taxes on all of the taxable property within the District in an amount suff cient to payprincipal and interest when due.

This bond shall not be valid or obligatory for any purpose and shall not be entitled to any securityor benefit under the Bond Resolution until the Certificate of Authentication below has been signed.

[REMAINDER OF PAGE LEFT BLANK]

A-3

DOCSSF/ 134888v2/022000-0001

IN WITNESS WI-IEREOF, the Duarte Unified School District, Los Angeles County, California,I~as caused this bond to be executed on behalf of the District and in their off cial capacities by tl~e manualor facsimile signature of the President of the Board of Education of t11e District, and to be countersignedby the manual or facsimile signature of the Secretary of the Board of Education of the District, alI as ofthe date stated above.

DUARTE UNIFIED SCI-TOOL DISTRICT

By: {Facsimile Signature)President of the Board of Education

COUNTERSIGNED:

(Facsimile Signature)Secretary of the Board of Education

CERTIFICATE OF AUTI-IENTICATION

This bond is one of the bonds described in the Bond Resolution referred to herein which leas beenauthenticated and registered on , 2017.

By: U.S. BANK NATIONAL ASSOCIATION, as agentof the Treasurer and Tax Collector• of the County ofLos Angeles, as Paying Agent

Authorized Officer

A-4

oocssri 13~ 8ss~z~o22o00-000 ~

ASSIGNMENT

For value received, the undersigned sells, assigns and transfers to (print or typewrite name,address and zip code of Transferee):this bond and irrevocably constitutes and appoints attorney to transfer this bond on the books forregistration thereof, with full power of substitution in the premises.

Dated:

Signature Guaranteed:

Notice: The assignor's signature to this assignment must correspond with the name as it appearsupon the within bond in every particular, without alteration or any change whatever, andthe signatures) must be guaranteed by an eligible guarantor institution.

Social Security Number, Taxpayer Identification Number or other identifying number ofAssignee•

Unless this bond is presented by an authorized representative of The Depository Trust Companyto the issuer or its agent for registration of transfer, exchange or payment, and any bond issued isregistered in the name of Cede & Co. or such other name as requested by an authorized representative ofThe Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGEOR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON ISWRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

LEGAL OPINION

The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, aProfessional Corporation in connection with the issuance of, and dated as of the date of the originaldelivery of, the bonds. A signed copy is on file in my office.

(Facsimile Si~naturelSecretary of the Board of Education

DOCSSF/ 134888v2/022000-0001

{Form of Legal Opinion)

A-5

(Form of Capital Appreciation Bond)

REGISTEREDNO.

DUARTE UNIFIED SCI-TOOL DISTRICT(LOS ANGELES COUNTY, CALIFORNIA)

Election of 2010 General Obligation Bonds, Series D

DATED AS OF:

2017

REGISTERED

CUSIPAugust 1,

REGISTERED OWNER: CEDE & CO.

DENOMINATIONAL AMOUNT:

MATURITY VALUE:

The Duarte Unified School District (the "District"} in Los Angeles County, California (the"County"), for value received, promises to pay to the Registered Owner named above, or registeredassigns, the Maturity Value on the Maturity Date, each as stated above, such Maturity Value comprisingthe Denominational Amount and intec•est accreted thereon. This bond will not bear current interest butwill accrete interest, compounded on each February 1 and August 1, commencing August 1, 2017, at theAccretion Rate specified above to the Maturity Date, assuming that in any such semiannual period thesum of such compounded accreted interest and the Denominational Amount (such sum being hereincalled the "Accreted Value") increases in equal daily amounts on the basis of a 360-day year consistingof I2, 30-day months. Accreted Value and redemption premium, if any, are payable in lawful money ofthe United States of America, without deduction for• the paying agent services, to the person in whosename this bond (or, if applicable, one or more predecessor bonds) is registered, such owner being theRegistered Owner, on the Register maintained by the Paying Agent, initially U.S. Banlc NationalAssociation, as agent of the Treasurer and Tax Collector of the County of Los Angeles. Accreted Valueand redemption premium, if any, are payable upon presentation and surrender of this bond at the principaloffice of the Paying Agent.

This bond is one of an authorization of bonds approved to t•aise money for the purposesauthorized by voters of the District at the Election (as defined herein) and to pay all necessary legal,financial, engineering and contingent costs in connection therewith under• authority of and pursuant tothe laws of the State of California, and the requisite vote of the electors of the District cast at a generalelection held on November 2, 2010 (tile "Election"), upon the question of issuing bonds in the amountof $62,000,000 and the resolution of the Board of Education of the District adopted on February 16,2017 (tl~e "Bond Resolution"). This bond is being issued under• the provisions of Article 4.5 of Chapter3 of Part 1 of Division 2 of Title 5 of the California Government Code. This bond and the issue of whichthis bond is one are payable as to both principal and interest solely from the proceeds of the levy of advalorem taxes on all property subject to such taxes in the District, which taxes are unlimited as to rate ocamount in accordance with California Education Code Sections 15250 and 15252.

A-6

Docssrii 3~sss~2ia?z000-000 i

The bonds of this issue comprise (i) $ principal amount of Current Interest Bonds, (ii)Capital Appreciation Bonds, of which this bond is a part, and of which $ represents theDenominational Amount and $ represents the Maturity Value, and (iii) Convertible CapitalAppreciation Bonds, and of wliicli $ represents the Denominational Amount and $represents the Conversion Value.

This bond is exchangeable and transferable for bonds of Iilce series, tenor, maturity and TransferAmount (as defined in the Bond Resolution) and in authorized denominations at t(ie principal office ofthe Paying Agent, located in Los Angeles, California, by tl~e Registered Owner or by a person legallyempowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations andconditions provided in the Bond Resolution. All fees and costs of transfer shall be paid by the transferor.The District and the Paying Agent may deem and treat the Registered Owner as tiie absolute owner ofthis bond for the purpose of receiving payment of or on account of principal or interest and for all otherpurposes, and neither the District nor the Paying Agent sI1a11 be affected by any notice to the contrary.

Neither the District nor the Paying Agent will be required (a) to issue or transfer any bond duringa period beginning with the opening of business on the 16th day next preceding either any Bond PaymentDate or any date of selection of bonds to be redeemed and ending with the close of business on the BondPayment Date or day on wllicli the applicable notice of redemption is given or (b) to transfer any bondwhich has been selected or called for redemption in whole or in part.

The Capital Appreciation Bonds maturing on or before August I, 20_ are not subject toredemption prior to their fixed maturity dates. The Capital Appreciation Bonds maturing on or afterAugust I, 20_ are subject to redemption at t11e option of the District, as a whole or in part, on any dateon or after August 1, 20 at a redemption price equal to the Accreted Value of such CapitalAppreciation Bonds to be redeemed as of the date set for such c•edemption, without premium.

The Capital Appreciation Bonds maturing on August 1, 20_, are subject to redemption prior tomaturity from mandatory sinking fund payments on August 1 of each year, on and after August 1, 20_,at a redemption price equal to the Accreted Value of such Capital Appreciation Bonds as of the dates setfor such redemption, without premium. The Accreted Value represented by such Bonds to be soredeemed and the dates tllerefoi• and the f nal payment date is as indicated in the following table:

Redemption Dates Accreted Value

TOTAL

If less than all of the bonds of any one maturity shall be called for redemption, the particularbonds or• portions of bonds of such maturity to be redeemed shall be selected by lot by the Paying Agentin such manner as the Paying Agent may detec-mine; provided, however•, that the portion of any bond tobe redeemed shall be in the Maturity Value of $5,000 or some multiple thereof If less than all of t(~ebonds stated to mature on different dates shall be called for redemption, the pac•ticulai• bonds or pot-tionsthereof to be redeemed shall be called by the Paying Agent in any order directed by the District and, ifnot so directed, in the inverse order of maturity.

A-7

DOCSSF/134888v2/022000-0001

Reference is made to the Bond Resolution for a more complete description of certain def nedterms used Herein, as well as the provisions, among others, with respect to the nature and extent of thesecurity for tfie bonds of this series, the rights, duties and obligations of the District, the Paying Agentand the Registered Owners, and tfie terms and conditions upon which the bonds are issued and secured.The Registered Owner of this bond assents, by acceptance hereof, to all of the provisions of the BondResolution.

It is certified and recited that all acts and conditions required by tl~e Constitution and laws of theState of California to exist, to occur and to be performed or to have been met precedent to and in theissuing of the bonds in order• to make them legal, valid and binding general obligations of the District,leave been pec•formed and have been met in regular and due form as required by law; that no statutory orconstitutional limitation on indebtedness or taxation has been exceeded in issuing the bonds; and that dueprovision has been made for levying and collecting ad valof~ej~~ property taxes on all of the taxableproperty within the District in an amount sufficient to pay principal and interest when due.

This bond shall not be valid or obligatory for any purpose and shall not be entitled to any securityoc• benefit under the Bond Resolution until the Certificate of Authentication below (ias been signed.

[REMAINDER OF PAGE LEFT BLANK]

s :

DOCSSF/13~~sss~ziaz?000-000 i

IN WITNESS WHEREOF, the Duarte Unified School District, Los Angeles County, California,has caused this bond to be executed on behalf of the District and in their official capacities by the manualor facsimile signature of the President of the Board of Education of the District, and to be countersignedby the manual or facsimile signature of the Secretary of the Board of Education of the District, all as ofthe date stated above.

DUARTE UNIFIED SCHOOL DISTRICT

By: (Facsimile Si nature)President of the Board of Education

COUNTERSIGNED:

(Facsimile Signature)Secretary of the Board of Education

CERTIFICATE OF AUTHENTICATION

This bond is one of the bonds described in the Bond Resolution referred to herein which has beenauthenticated and registered on , 2017.

By: U.S. BANK NATIONAL ASSOCIATION, as agentof the Treasurer and Tax Collector of the County ofLos Angeles, as Paying Agent

Authorized Officer

A-9

DOCSSF/ 134888v2/Q22000-0001

ASSIGNMENT

For value received, the undersigned sells, assigns and transfers to (print or typewrite name,address and zip code of Transferee):this bond and irrevocably constitutes and appoints attorney to transfer this bond on the books forregistration thereof, with full power of substitution in the premises.

Dated:

Signature Guaranteed:

Notice: The assignor's signature to this assignment must correspond with the name as it appearsupon the within bond in every particular, without alteration or any change whatever, andthe signatures) must be guaranteed by an eligible guarantor institution.

Social Security Number, Taxpayer Identification Number or other identifying number ofAssignee:

Unless this bond is presented by an authorized representative of The Depository Trust Companyto the issuer or its agent for registration of transfer, exchange or payment, and any bond issued isregistered in the name of Cede & Co. or such other name as requested by an authorized representative ofThe Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGEOR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON ISWRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

LEGAL OPINION

The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, aProfessional Corporation in connection with the issuance of, and dated as of the date of the originaldelivery of, the bonds. A signed copy is on file in my office.

(Facsimile Signature)Secretary of the Board of Education

(Form of Legal Opinion)

A-10DOCSSF/ 134888v2/022000-0001

(form of Convertible Capital Appreciation Bond)

REGISTERED REGISTEREDNO. $

DUARTE UNIFIED SCHOOL DISTRICT(LOS ANGELES COUNTY, CALIFORNIA)

Election of 20I 0 General Obligation Bonds, Series D

ACCRETION RATE INTEREST RATETO CONVERSION AFTER THE MATURITY

CONVERSION DATE DATE CONVERSION DATE DATE: DATED AS OF: CUSIP

20_ August I, 20_ , 2017

REGISTERED OWNER: CEDE & CO.

f~~~~~~ ̀T:~[~i~/:~l:~~li~~~~A

CONVERSION VALUE

The Duarte Unified School District (the "District"} in Los Angeles County, California (the"County"), for value received, promises to pay to the Registered Owner named above, or registeredassigns, the Conversion Value on the Maturity Date, each as stated above, such Conversion Valuecomprising the Denominational Amount and interest accreted thereon to the Conversion Date. Prior tothe Conversion Date, this bond will not bear current interest but will accrete interest, compounded oneach February 1 and August 1, commencing August 1, 2017, at the Accretion Rate specified above to theConversion Date, assuming that in any such semiannual period the sum of such compounded accretedinterest and the Denominational Amount (such sum being herein called the "Accreted Value") increasesin equal daily amounts on the basis of a 360-day year consisting of 12, 30-day months. After theConversion Date, the District promises to pay to the Registered Owner named above, interest on theConversion Value from the Conversion Date until the Conversion Value is paid or provided for at theInterest Rate stated above, on February 1 and August 1 of each year, commencing 1, 20_ (the"Bond Payment Dates"). This bond will bear such interest from the Bond Payment Date next precedingthe date of authentication hereof unless it is authenticated as of a day during the period from the 15`" dayof the month next preceding any Bond Payment Date to the Bond Payment Date, inclusive, in whichevent it shall bear interest from such Bond Payment Date, or unless it is authenticated on or before15, 20_, in which event it will bear interest from the Conversion Date. Conversion Value and interestare payable in lawful money of the United States of America, without deduction for the paying agentservices, to the person in whose name this bond (or, if applicable, one or more predecessor bonds) isregistered (the "Registered Owner") on the Register maintained by the Paying Agent, initially U.S. BankNational Association, as agent of the Treasurer and Tax Collector of the County of Los Angeles.Accreted Value or Conversion Value and redemption premium, if any, are payable upon presentationand surrender of this bond at the principal office of the Paying Agent. Interest following the ConversionDate is payable by check or draft mailed by the Paying Agent on each Bond Payment Date to theRegistered Owner of this bond (or one or more predecessor bonds} as shown and at the address appearingon the Register at the close of business on the 15th day of the calendar month next preceding that BondPayment Date (the "Record Date").

A-11DOCSSF/ 134888v2/Q22000-0001

This bond is one of an authorization of bonds approved to raise money for the purposesauthorized by voters of the District at the election {as defined herein) and to pay all necessary legal,f nancial, engineering and contingent costs in connection therewith under autlloc•ity of and pursuant tot11e laws of the State of California, and the requisite vote of the electors of the District cast at a generalelection 11e1d on November 2, 2010 (the "Election"), upon the question of issuing bonds in the amountof $62,000,000 and the resolution of the Board of Cducation of the District adopted on February 16,2017 (the "Bond Resolution"). This bond is being issued under the provisions of Article 4.5 of Chapter3 of Part 1 of Division 2 of Title 5 of the California Government Code. This bond and tl~e issue of whichthis bond is one are payable as to both principal and interest solely from the proceeds of the levy of advalorem taxes on all property subject to such taxes in the District, which taxes are unlimited as to rate oramount in accordance with California Education Code Sections 15250 and 15252.

The bonds of this issue comprise (i) $ principal amount of Current Interest Bonds, (ii)Capital Appreciation Bonds of which $ represents the Denominational Amount and $represents the Maturity Value, and (iii) Convertible Capital Appreciation Bonds, of wl1ic11 this bond is apart, and of which $ represents the Denominational Amount and $ represents theConversion Value.

This bond is exchangeable and transferable for bonds of like series, tenor, maturity and TransferAmount (as def ned in the Bond Resolution) and in authorized denominations at the designated office ofthe Paying Agent in Los Angeles, California, by the Registered Owner or by a person legally empoweredto do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations and conditionsprovided in the Bond Resolution. All fees and costs of transfer shall be paid by the transferor. TheDistrict and the Paying Agent may deem and treat the Registered Owner as the absolute owner of tillsbond for the purpose of receiving payment of or on account of principal or interest and for all otherpurposes, and neither the District nor the Paying Agent shall be affected by any notice to the contrary.

Neither the District nor the Paying Agent will be required (a) to issue or transfer any bond duringa period beginning with the opening of business on the 16th day next preceding either any Bond PaymentDate or any date of selection of bonds to be redeemed and ending with the close of business on the BondPayment Date or day on which the applicable notice of redemption is given or (b) to transfer any bondwllicll has been selected or called for redemption in whole or in part.

Tile Convertible Capital Appreciation Bonds maturing on or before August 1, 20_ are notsubject to redemption prior to their f xed maturity dates. The Convertible Capital Appreciation Bondsmaturing on or after August 1, 20_ are subject to redemption at the option of the District, as a whole orin part, on any date on or after , 20 _ at a redemption price equal to either• (i) the Accreted Valuethereof as of the date set for redemption, without premium, if redeemed prior• to the Conversion Date, or(ii) the Conversion Value thereof, together with interest accrued thereon to the date set for redemption,without premium, if redeemed on and after file Conversion Date.

The Convertible Capital Appreciation Bonds matuc•ing on August 1, 20_, are subject toredemption prior to maturity from mandatory sinking fund payments on August 1 of each year, on andafter August 1, 20_, at a redemption price equal to file Conversion Value of such Convertible CapitalAppreciation Bonds together with interest accrued thereon to the date set for redemption withoutpremium. The Conversion Value represented by such Bonds to be so redeemed and the dates thereforand file f nal payment date is as indicated in file following table:

A-12DOCSSF/134888v2/022000-0001

Redemption Dates

TOTAL

A~~r~tc~r~ Valii~

If less than all of the Bonds of any one maturity shall be called for redemption, the particularBonds or portions of Bonds of sucfl maturity to be redeemed shall be selected by Paying Agent as directedby the District, and if not so directed, by lot. Redemption by lot shall be in such manner as shall bedetermined by the Paying Agent, provided, however, that the portion of any Bond to be redeemed shallbe in the principal amount, Maturity Value or Conversion Value of $5,000 or some multiple thereof Ifless than all of the Bonds stated to mature on different dates shall be called foi• redemption, the particularBonds or portions thereof to be redeemed shall be called by t(ie Paying Agent in any order directed bythe District and, if not so directed, in the inverse order of maturity.

Reference is made to the Bond Resolution for a more complete description of certain def nedterms used herein, as well as the provisions, among others, with respect to the nature and extent of thesecurity for the Bonds of this series, the rights, duties and obligations of the District, the Paying Agentand the Registered Owners, and the terms and conditions upon which the Bonds are issued and secured.The Registered Owner of this bond assents, by acceptance hereof, to all of the provisions of the BondResolution.

It is certified and recited that all acts and conditions required by the Constitution and laws of theState of California to exist, to occur and to be performed or to have been met precedent to and in theissuing of the Bonds in order to make them legal, valid and binding general obligations of the District,have been performed and have been met in regular and due form as required by law; t}iat payment in fullfor the Bonds has been received; that no statutory or constitutional limitation on indebtedness or taxationhas been exceeded in issuing the Bonds; and that due provision has been made for levying and collectingad valorem property taxes on all of the taxable property within the District in an amount sufficient to payprincipal and interest when due.

This bond shall not be valid oi- obligatory for any purpose and shall not be entitled to any securityor benefit under the Bond Resolution until the Certificate of Authentication below leas been signed.

[REMAINDER OF PAGE LEFT BLANK]

A-13DOCSSF/ 134888v2/022000-0001

IN WITNESS WHEREOF, the Duarte Unified School District, Los Angeles County, California,has caused this bond to be executed on behalf of the District and in their official capacities by the manualor facsimile signature of the President of the Board of Education of the District, and to be countersignedby the manual or facsimile signature of the Secretary of the Board of Education of the District, all as ofthe date stated above.

COUNTERSIGNED:

(Facsimile Si ature~Secretary of the Board of Education

DUARTE UNIFIED SCHOOL DISTRICT

By: (Facsimile Si ~nature~President of the Board of Education

CERTIFICATE OF AUTHENTICATION

This bond is one ofthe bonds described in the Bond Resolution referred to herein which has beenauthenticated and registered on , 2017.

By: U.S. BANK NATIONAL ASSOCIATION, as agentof the Treasurer and Tax Collector of the County ofLos Angeles, as Paying Agent

Authorized Officer

A-14DOCSS F/ 134888v2/022000-0001

ASSIGNMENT

For value received, the undersigned sells, assigns and transfers to (print or typewrite name,address and zip code of Transferee):this bond and irrevocably constitutes and appoints attorney toregistration thereof, with full power• of substitution in the premises

Dated:

Signature Guaranteed:

transfer this bond on the books for

Notice: The assignor's signature to this assignment must correspond with the name as it appearsupon the within bond in every particular, without alteration or any change whatever, andthe signatures) must be guaranteed by an eligible guarantor institution.

Social Security Number, Taxpayer Identification Number or other identifying number ofAssignee:

Unless this bond is presented by an authorized representative of The Depository Trust Companyto the issuer or its agent for registration of transfer, exchange or payment, and any bond issued isregistered in the name of Cede & Co. or such other name as requested by an authorized representative ofThe Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGEOR OTHER USE HEREOF FOR VALUE OR OTIIERWISE BY OR TO ANY PARSON ISWRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.

LEGAL OPINION

The following is a true copy of the opinion tendered by Stradling Yocca Carlson & Rauth, aProfessional Corporation in connection with the issuance of, and dated as of the date of the originaldelivery of, the bonds. A signed copy is on file in my office.

(Facsimile Signatuc•e)Secretary of the Board of Education

{Form of Legal Opinion)

A-15DOCSSF/134888v2/022000-0001

EXHIBIT B

DISCLOSUIt~ ItEQUIR~D BY EDUCATION CODS SECTION 15146(b)(1)(E)

B-1DOCSSF/134888v2/022000-0001

~7~IiIBIT

DISCLOSUIt~ It~QUII2~D I31' ~DUCA'TION CODS S~CT'ION I~1~G(b) ~nci 151~G(c)

Pinancin~tcnn and time of malurity of the bonds (the cntirc scrics of b~ncls). Illustrativeoption 1 includes only current interest Uonds ("CIBs'~, tvliilc Illustrative Option 2 includesCIBs and convertible a~pital appreciation and clpit~ll appreciation Uoncls ("CABs").

Ittuttrativc O Lion 1-Current Intrrctt 8nndt OnOats Frinclpai Intcrnt Oc6tScnice

a/inata sss~,aro S~,zzn,ass si,eas,osa8/1/2019 SGC:1,O~.0 5959,000 S1,S59,000E/1/2Q20 SD 59~1,0~ 5941,00:1a/inQzt So Sssi,cq Sssi,o~II/1/?022 SO S`311,C0~ 5441,000II/1/IQ23 S~ 5442,DC0 54~i1,00~w~nois S~ s9si.cca ss~s~.o«~a/inau so Sssi,c~ ssst,a~oII/1/?02G $~ 5'Yl1,C~ 5441,0~Ie/~noz~ S~ Ssas,000 Sss~.ocosl~no2s sa ss~t.oa sss~,aba/I/2Q29 S~ 5441,Q^.0 SY11,C00a/innsn sa ssai,000 sss~,o~$~~no31 sa sssi.coo sss~.ox~alinm2 So Sssi,om sss~,000Efl/2033 SS,000 5931,Cd 59%f+,COJII/I/2Q3o S~,d"A 54:D,~50 59'.~,TSD8/1/?O35 $85,000 5939,75 51,023,75DE/1/20]6 5125,000 593s,S~ 51,059~C0a/1J2fl37 S1GS,CQ~ 5928,259 51,093,25)S/1/2~39 52Q5~ SS20~CI 51,125,00II/1/2019 52.145,C0~ SS~9,75~ 53,054,750a~~n~ sz.~~n,~ s~.so~ s~.~~2~a/inai S~.ais,000 Sass,o~ 57,249,00:!s/1/Zb:2 52,~IS,OL~ 5553,25 53.42~,2~0D/l/?OG3 57,155,00 S-~."9~00 53.563 0al~l2a:a ssa~s,coo szsi,~sa sszs~,no

ptuttnt;vc0 Con2-Curttnitnterctt8ondcandG ~t~lA rcttaUonBondcOatc Principal Intcrctt DcbtSenite

a/1/2Dts ss!.~,00a Ss3i,<st SI,alt,asid/1/2D19 SG0~,0~9 SW:7,7C0 51~47,7~t/1/2020 St.9,~0 SG29,7C~ 5709,7008/1/221 559,2)8 SG33,079 5691,357s/1/2~22 SSG,b:U SG39,000 572G~E/1/2023 SS9,G33 SG37,8G7 5696,500II/1/ia24 S~a,~ SG:s,cco SnG~^ael~n~~s sta,iss scs~,~:.~ S~~ts~Q/1/2D2G 5125,431 5671,069 S79G,5~a/in~~~ Si~,tw S~s~ps~ Ss3i,scoa/tn~~a Sici,a~7 S~nsa~ Saee~L/1/2D29 5179,052 1727,uS SY'G~E/1/2~3D 519],215 S7S3~G5 59:G,5~a/tno3i Sza=,~st S~s2,i39 sss~~8/Ir2~32 5213,069 SS13,»32 51,02G~00a/1/233 5223,500, SS~7,944 StA71.5~D/1/2~34 SZSS,IIG 53~~~ 5].111,500II/1/2~35 SZ39,E13 5916,696 SI,ISG~00t/I/2D3G 5]47,716 1953,7Ed 51,201,5E/1/2II37 525~,C63 S98G,a37 51,23G,5~E/1/2Q38 5253,L73 51,~23,~99 S1~7G~00E/1/2039 51,052,721 12,4.^.1,779 53,Gb1,S00E/1/25:~ S1,~SD,G77 12,5<O,E23 53,591,5a/~nasi si~s~,~si si.cucc~ ss,~3c~E/1/25s2 53,255,Od SG2G,5~ S3,E91,Smd/1/2~33 53~75,000 S~G3,750 54,Q33,750a~ln~s ss,7co,oco s2as~o ssasscco

Tnt~l 520.000.000 523.630,011 53161Q,Olt Total 520.000,000 525,080,656 SSS,OSOASI

2, Rep~vmcnt ratio for the bonds (the entire series of bonds.- IIlustrativc Option 1:2.18- Illustrative Option 2: 2.25

3. Estimatcct chan~c in asscssccl value ("A~~"1 of ta~ablc pro~crty within the District over theterm of the i~onds.

- 5.~~% in fiscal year 2015-1G (actual), 5.13°o in fsc.1I year 2016-17 (acluzl) and x.00%from fiscal }'car 2017-15 until f ind maturity of'tlie bonds.

~. Total overall cast of the CE~F3s.- In Illuslrativc Option 2, tlic estimated principal amount of Ct1Bs is X6,210,000 «~iQi an

~St~t„1t~a a~v~ $~n-~~ ~osc ofsi~,G50,000. Tl►is is a repayment ratio for tlic Ct1Bs of2.36.

B-2oocssrii 3~~8ss~?~ozz000-ooa 1

Corn~~rison of #d to overall cost if instead oCCAi3s. the District issued CII3s.- Tlic estimated diiT~crcncc in tlic overall dcUt scivicc cost is estimated at S1,~SSO,~l23.

G. Reason for rccommcncIin~ CABs.

Under current mflrkct conditions, CABs arc recommended in orcicr to provideflc~ibility to Disc the desired project fund amounts todny while shying within them~~imum tnx r~lc of 5G0.00 per S100,000 of Assessed Vnluc.

B-3DOCSSF/ 13~3888v2/022000-0001

BankofAmerica~Merrill Lynch

January il, 2017

Duarte Unffed School District1620 Huntington DriveDuarte, CA 91010

Attn: Jim eaulerRe: Disclosures by the Underwriter Pursuant to MSRBRule G-17

Election of 2010 General Obligation Bonds, Series D

Dear Mr. Bauler:

We are writing to provide you, as Assistant Superintendent, Business Services of Duarte United SchoolDistrict (the "Issuer"), with certain disclosures relating to the captioned bond issue (the "Bonds"}, as required byMunicipal Securities Rulemak~ng Baa~d ("MSRB") Rule G-17 as set forth fn MSRB Notice 2012-25 (May 7, 2012).1

The Issuer has engaged Merrill Lynch, Pierce, Fenner &Smith Incorporated ("BofAML") to serve as anunderwriter and no[ as a financial advisor or municipal advisor to the Issuer ~n connect(on with the issuance of theBonds.

As part of our underwriting services, BofAMI (the "Underwriter"), may provide advice concerning thestructure, timing, terms, and other similar matters concerning the issuance of the Bonds.2

I. Disclosures Concer~in~ tho Undorwriter's Rolo

(i) MSRB Rule G-17 requires an underwriter to deal fairly at all times with both municipal issuers andinvestors.

(ii) The Underwriter's primary role fs to purchase the Bonds with a view to distribution in an arm's-lengthcommercial transaction with the Issuer. The Underwriter has financial and other interests that differ fromthose of the Issuer.

(iii) Unli{:e a municipal advisor, the Underwriter does not have a fiduciary duty to the issuer or any other partyunder the federal securities laws and is, therefore, not required by federal law to act In the best interestsof the Issuer or any other party without regard to its own financial or other interests.

Div) The Underwriter has a duty to purchase the Bonds from the Issuer at a fair and reasonable price, but mustbalance that duty with its duty to sell the Bonds to investors at prices that are fair and reasonable.

(v} The Underwriter w(II review the official statement for the Bonds fn accordance with, and as part of, itsresponsibilities to investors under the federal securities laws, as applied to the facts and circumstances ofthis transaction.'

r interpretive NotJce Concernlnp theApplicot/on ojMSRB Rule G-17 to Undenvrifers ojMunlcipal SecurJtJes (eJjectiveAupustZ. 1012).In the event BoJAML !s actlnp as senJor manapinp urxfertivriter, ►ve are providing this fetter, ocher than t1~e disclosurecontained In Setilon 11I o/this letter, on behol~oJthe undertivriters.

'Sank of Amerio t.leriiU Lynch" it the m~tkcting name (or Uu pJobal b~n4ing and p)obal markets butuuitcs of ISank alM~e~ica Corporation. lending, dcrivativet,and other commercial ban{inQ activities ate performed ~obally GybankingalGliates ofOink of Mierio Corpo~aGon, including Dank of Mierica, Nl~., memGet f01C.Sewrilies, stratt~jc aclviwry, anJ other irtvcttmcnt banking activities arc performed pJobally !ry frntistmcnt binkin{{ o1fiG:ttet o(Qank of Mirric~ Corporation('Irrvestm~nt Oankin~ AffJiates~, Indudt~, in the U~led Stites, Mertil lynch, Ptercr, Femtf &Smith Inwrpotated and Metri4 Lynch Profetslan~l CIt~ tinE Coip.,both of vA~ich arc rcpjstcred 6rokct dcalc~s and members of FtNFtA and StPC, ~nJ, in oUier (uritdlctions, Gy loolfy rcgittercd emitiei. lrmtunent products otfcicdlry lrwctlment E3onkingAlbGatet: Nc Hot FDIC Inwud' ~.laylose Value • Arc Nol Uank Guaranteed.

B-4oocssril3~~sgg~2~oz?000-000 ~

BankofAmerica~Page 2 Merri[I Lynch

II. Disclosures ConcorninQtho Undarwritor's Componsatlon

The Underwriter will be compensated by a fee and/or an underwriting discount that wi11 beset forth inany bond purchase agreement to be negotiated and entered into in connection with the issuance of the Bonds.Payment or receipt of the underwriting fee or discount will be contingent on the closing of the transaction and theamount of the fee or discount maybe based, In whole or in part, on a percentage of the principal amount of theBonds. While this form of compensat(on is customary in the munidpal securities market, it presents a conflict ofinterest since the Underwriter may have an incentive to recommend to the Issuer a transaction that fs unnecessaryor to recommend that the size of the transaction be target than is necessary.

ill. BafAML Conflicts Disclosures

Bank of America Corporation and its affiliates (collectively, the "BAC Group") comprise a full servicesecurities Frm and commerdal bank engaged to securities, commodities and derivatives trading, foreign exchangeand other brokerage activities, and principal investing as well as providing investment, corporate and privatebanking, asset and investment management, financing and strategic advisory services and other commercialserv(ces and products to a wide range of corporations, governments and individuals, domestically and offshore,from whEch conflicting interests or duties, or a perception thereof, may arise. In the ordinary course of theseactivities, parts of the BAC Group at any time may Invest on a prindpat basis or manage funds that Invest, make orhold long or short positions, finance positions or trade or otherwise effect transactions, for their own accounts orthe accounts of customers, in securities or financial Instruments (including derivatives, bank loans or otherobllgatIons} of the Issuer or any other party that maybe involved ~n the transaction. Parts of the BAC Group mayalso communicate independent Investment recommendations, and market advice, or trading ideas and/or publishor express independent research views with respect to such severities or other financial instruments.

IV. Certain Disclosures Ratt~rdinQthe Financing

Since BofAML has recommended to the Issuer a financing structure that may be a "complex municipalsecurities financing" for purposes of MSRB Rule G-17, attached is a description of the material financialcharacteristics of that f~nandng structure as well as the material financPal risks of the financing that are known tous and reasonably foreseeable at this time.

V. Miscollanoous

Nothing in this letter should be viewed as a comm(tment by the Underwriter to purchase or sell the Bondsand any such commitment will only exist upon the execution of any bond purchase agreement or similaragreement and then only in accordance with the terms and conditions thereof.

If you or any other Issuer officials have any questions or concerns about these disclosures, please makethose questions or concerns known immediately to the undersigned. In addition, you should consult tvlth theIssuer's own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent youdeem appropriate.

It is our understanding that you have the authority to bind the Issuer by contract with us, and that you arenot a party to any conflict of interest relating to the subject transaction. If our understanding is Incorrect, pleasenotify the undersigned immediately.

3 Under federal securities la~v, an issuer oJsecurifJes has the primary responsibility jar disclosure to investors. The revrety ojtheofjldol statement by the Undertivriter is soleJyJor purposes oJsatls~ylr~ the Under►vriter's ob!lpotlons under the federalsecurities lotus and such revietivshould not be construed by the lssueras a puorantee oJthe accuracy orcompleteness o~thelnjormatlon In the oJflclol statement.

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BankofAmerica~Merrill Lynch

We are required to seek your acknowledgement that you have received this letter. Accordingly, pin~snsend me nn omail to that offoct, or sign And rotum n copy of this lottor to mo at the address sot forth bolow.Having received the disclosures contained in this letter, we additionally wish to seek your acknowiedgment of ourengagement as underwriter. Depending on the structure of the transaction that the Issuer decides t~ pursue, or ifadditions( potential or actual material conflicts are ~dentifred, we may be required to send you additionaldlsdosures regarding the material financial characteristics and risks of such transaction and/or describing thoseconflicts. At that time, we also will seek your acknowledgement ofreceipt ofany such additional disclosures.

We look forward to working with you and the Issuer in connection with the issuance of the Bonds. Thank you.

Sincerely,

Acknowledgement:

Jfm Bauler

Date:

CC: StradlingYocca Carlson & RauthPiperlaffray & CoKatten Muchin Rosenman LLP

MERRILL LYNCH, PIERCE, FENNER &SMITHINCORPORATED

—~t , J

Frank LauterburManaging Director333 5. Hope Street, Suite 2310Los Angeles, CA 90071frank.lauterbur@baml.com

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D(sdosures Pursuant to MSRBRule G-17CapitAl Approciation Bonds

The following is a general descriptPon of the ~nanciai characteristics of Capital Appreciation Bonds (CABs), as wellas a general description of certain financial risks that are i:nown to us and reasonably foreseeable at this time andthat you should consider before deciding whether to issue CABs. If you have any questions or concerns aboutthese disclosures, please make those questions or concerns known tmmediate(y to us. In addition, you shouldconsult with your ffnandal and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extentyou deem appropriate. If you decide that you would Ilke to pursue this financing attemative, we may provide youwith additional information more specific to your particular CAB issue.

finAncial CharactaristicsMaturity and interestCABs are securities on which the investment return on an initial principal amount is reinvested at a statedaccretion rate until maturity, at which time the investor receives a single payment ("matur(ty value")representingboth the initial prfndpal amount and the total investment returns. CABs typicallyare sold at a deeply discountedprice, have long-term maturities and may be offered to investors in authorized denominations of S5,000 prindpalamount or integral multiples thereof. In return for not receiving periodic interest payments, investors are oftengiven a higher yield.

RedemptionCABs generally will not be subject to optional redemption.

Financial Risk ConsiderationsCertain risks may arise in connection with your issuance of CABs, including some or all of the following:

issuer Default RiskDepending on how the CABs are structured, the maturity value may be a substantial amount. You may be ~ndefault if the funds pledged to secure your CABs are not sufficient to pay debt service on the CABs when due. Theconsequences of a default maybe serious for you and, depending on applicable state law and the terms of theauthorizing documents, the holders of the bonds, the trustee and any credit support provider may be able toexercise a range of available remedies against you. For example, If the CABs are secured by a general obligationpledge, you may be ordered by a court to raise taxes. Ocher budgetary adjustments also may be necessary toenable you to provide sufficient funds to pay debt service on the CABs. If the bonds are revenue bonds, you maybe required to take steps to increase the available revenues that are pledged as security for the bonds. A defaultmay negatively impact your uedit ratings and may effectively limit your ability to publicly offer bonds or othersecurities at market interest rate levels. Further, if you are unable to provide suf~ctent funds to remedy thedefault, subject to applicable state law and the terms of the authorizing documents, you may find it necessary toconsider available alternatives under state law, including (for some issuers) state-mandated receivership orbankruptcy. A default also may occur if you are unable to comply with covenants or other provisions agreed to ~nconnection with the Issuance of the bonds.This desufption is only a brief summary of issues relating to defaults and is not intended as legal advice. Youshould consult with your bond counsel for further information regarding defaults and remedies.

Redemption RiskYour ability to redeem the CABs prior to maturity may be lim(ted, dependingon the optional redemptionprovisions. In the event that interest rates in the market decline, you may be unable to take advantage of thelower Interest rates to reduce debt service if the CABs cannot be redeemed.

Refinancing RiskIf your financing plan contemplates refinancing some or all of the CABs at maturity, market conditions or changesfn law may limit or prevent you from refinancing those CABs when required. Further, I~mftations in the federal taxrules on advance refunding of bonds (an advance refunding of bonds occurs when tax-exempt bonds are refundedmore than 90 days prior to the date on which those bonds maybe retired) may restrict your ability to refund theCABs to take advantage of lower interest rates.

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D(sclosures Pursuant to MSRB Rule G-17CapitalApprociation Bonds

DebtServrce CostsIn re[u~n for not recefving perfod(c interest payments, investors are often given a hfgheryield. The higheryfeld,coupled with the longer repayment period, results in higher total deb[ service costs compared to current interestbonds.

Reinvestment RiskYou may have proceeds of the CABs to invest prior to the time that you are able to spend those proceeds for theauthorized purpose. Oepending on market condit(ons, you may not be able to invest those proceeds at or near theyield on the CABs, which is referred to as "negative arbitrage" resulting in a higher cost of funds.

Tox Compliance RiskThe issuance of tax-exempt bonds Is subject to a number of requirements under the United States InternalRevenue Code, as enforced by the Internal Revenue Service (lR5). You must take certain steps and make certainrepresentations prior to the issuance oftax-exempt bonds. You also must covenant to take certain additionalactions after Issuance of the tax-exempt bonds. A breach of your representations aryour failure to comply withcertain tax-related covenants may cause the interest on the CABs (if issued astax-exempt obligations} to becometaxable retroactively to the date of issuance of the CABs, which may result in an increase to the interest rate thatyou pay on the CABs or the mandatory redemption of the CABs. The IRS also may audit you or your CABs or otherbonds, in some cases on a random bass and (n other cases targeted to specf~c types of bond issues or taxconcerns. If the CABs are declared taxable, or if you are subject to audit, you may be unable to remarket orrefinance the CABs. Further, your ability to Issue other tax-exempt bonds also may be I~mited.This description of tax compliance risks is not intended as legal advice and you should consult with your bondcounsel regarding tax impl(catlons of issuing the CABs.

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