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Wedbush Morgan/Underwriting 02AGREEMENT FOR UNDERWRITING SERVICES THIS AGREEMENT, made this '/'"day of May, 2002, by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, organized and existing under the laws of the State of California, (together, hereinafter called the "Issuer"), party of the first part, and WEDBUSH MORGAN SECURITIES (hereinafter called the "Underwriter"), party of the second part: WITNESSETH: WHEREAS, the Issuer requires assistance in developing sound, equitable and practical financing plans by taking into consideration sources Of capital funds and Lash flow requirements, annual costs, the allocation of those costs, statutory requirements and restrictions, and methods if applicable; and WHEREAS, the Issuer requires the services of a municipal investment banker experienced in underwriting debt obligations, to assist in such financial planning related thereto and to purchase at negotiated sale the Issuer's obligations resulting therefrom; and WHEREAS, consistent with the terms and conditions of this Agreement, the Issuer wishes to engage the Underwriter to provide investment banker services for the Issuer. NOW, THEREFORE, it is mutually agreed as follows, to wit: The Issuer hereby employs the Underwriter and the Underwriter hereby, accepts such employment to perform the services, upon the terms, subject to the conditions, and in consideration of payments as hereinafter set forth: Services to be Performed by the Underwriter Upon the reqUest of the Issuer, The underwriter shall work together and in cooperation with the Issuer's financing team (the Issuer's staff, fiscal consultant, bond counsel and disclosure counsel), to diligently perform the following services: 1. Assemble, review and analyze available financial and economic data and information that may have a general bearing on a program for financing any proposed project or projects. 2. Based on the foregoing analysis, prepare a general review and description of the proposed projects and outline the possible methods of financing such projects, the advantages and disadvantages of each method as applied to a given project, the general legal and practical requirements or restrictions applicable to each method and their attendant costs. 3. When the Issuer has approved a specific project or projects for implementation, the estimated costs and method of financing of which have been sufficiently well established to permit the preparation of a final financing plan, the Underwriter shall prepare such plan containing, in addition to other information, the following: A. A description of the financing or financings, benefits, security, estimated costs and other pertinent information. including the purpose, B. Details relating to the proposed method of financing, including tentative bond amortization schedules, call features, sources and amounts of funds to be used in amortizing the costs and other related data. C. Recommendations as to further procedures. The foregoing will be designed to answer substantially all of the important questions that might arise in connection with the particular financing or financings and will contain current information as to estimated costs and economic and fiscal information. 4. Assist Bond Counsel and Disclosure Counsel with the preparation of necessary resolutions and other legal documents and make recommendations as to the exact terms and conditions under which bonds (for the purpose of this Agreement, all references to "bonds" shall mean any "debt obligation") are to be issued and sold, including timing and method of sale, final amortization or repayment schedules, call and redemption features, provisions governing the issuance of additional bonds, covenants and other provisions in order to secure the best possible rating on the bonds. 5. Prepare the text and other material for an official statement or bond prospectus describing the project or projects, the bonds, their security, and the economic and financial background of the Issuer. 6. Assist in obtaining bond insurance and/or a bond rating for each proposed issue to the end that such bonds may be sold for the lowest possible cost. The Underwriter shall provide the bond insurers, Moody's Investors Service and Standard and Poor's Ratings Group with all information required by such. agencies necessary in establishing such bond insurance and/or ratings and make such trips and schedule such conferences with such agencies as may be necessary to obtain the highest possible rating on the bonds. 7. The Underwriter shall be available at reasonable times by telephone or at the offices of the Issuer to discuss on a continuing basis the results of studies and analyses and generate such additional information as desired or requested and consult with the Issuer as to the financial aspects of any specific project then being considered. Sale of Bonds; Compensation; Expenses At such time as the Issuer is satisfied that the financing program meets the goals and objectives of the Issuer and wishes the Underwriter to proceed with the financing program, the Issuer and the Underwriter shall enter into a bond purchase agreement for the sale of the Issuer's obligations to the Underwriter at a discount and bearing interest at rates which are commensurate with the rates prevailing in the market for similar securities at the time the bonds are offered to the public and which will be approved by the Issuer's staff and pricing consultant. For financings of the size and security of that proposed by the Issuer, depending on market conditions, it is anticipated that an underwriter's discount ranging from .080% to 1.000% of the principal amount of Bonds issued (the "Bond Discount") and a net interest rate ranging from 5.200% to 5.400% will be appropriate. Original issue discount, if any, will not exceed 1.50% of the principal amount of Bonds issued. Nothing herein shall require the Issuer to enter into any Bond Purchase Agreement The Bond Discount will represent the total compensation to be paid to the Underwriter and the Issuer shall not be liable for any additional fees whatsoever. The Bond Discount shall conform to those prevailing in the marketplace for similar securities at the time that debt obligations are sold. The Bond Discount applicable to each debt obligation shall be specified in each bond purchase agreement. 2 All costs of the financing program will be payable out of bond proceeds when the bonds are sold and delivered to the Underwriter, unless otherwise specified by the Issuer. In the event that market conditions or actions by regulatory agencies prohibit completion of the financing by the Issuer, the Underwriter will be responsible for all fees and expenses incurred in connection with services to be performed as the Issuer's investment banker including, without limitation, the expenses of its counsel, if any. The Issuer will be responsible for all other fees and expenses incurred in connection with the financing. Named Personnel The Underwriter commits the principal personnel listed below to provide services pursuant to this Agreement for the duration of its term. Underwriter's Principal Personnel: Robin M. Thomas, Senior Vice President Michael K. Cavanaugh, Vice President Daniel P. Massiello, Assistant Vice President It has been determined that the individuals named in this Agreement are necessary for the successful performance of this Agreement. The Underwriter shall not replace these individuals without written consent of the Issuer, which shall not be unreasonably withheld. The consent of the Issuer shall be given or denied in writing within thirty (30) days of the receipt of written notice from the Underwriter of the intent to replace personnel. If the Issuer fails to respond to the Underwriter within thirty (30) days of notification by the Underwriter, said personnel replacement shall be deemed approved. TelTn The term of this Agreement shall remain in full force unless terminated by either party. This Agreement may be terminated without cause by either party by giving the other party sixty (60) days written notice of such cancellation. Independent Contractor The Underwriter shall perform the services as contained herein as an independent contractor and shall not be considered an employee of the Issuer or under the Issuer's supervision or control. This Agreement is by and between the Underwriter and the Issuer, and is not intended, and shall not be construed, to create the relationship of agent, servant, employee, partnership, joint venture, or association, between the Issuer and the Underwriter. Successor and Assignment The services as contained herein are to be rendered by the Underwriter whose name is as appears first above written and said Underwriter shall not assign nor transfer any interest in this Agreement without the prior written consent of the Issuer. Indemnification The Underwriter agrees to indemnify, defend (upon request by the Issuer) and save harmless the Issuer, its elected and appointed officials, officers, agents and employees from and against any liability, expense, including defense costs and legal fees, and claims for damages or other relief of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury or property damage arising from or connected with the Underwriter's operations, or its 3 services, acts and/or omissions hereunder, including any workers' compensation suit, liability or expense, arising from or connected with the services performed by or on behalf of the Underwriter by any person pursuant to this Agreement. Compliance With Laws The parties agree to be bound by applicable federal, state and local laws, regulations and directives as they pertain to the performance of this Agreement. Severability In the event that any provision herein contained is held to be invalid, void or illegal by any court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall in no way affect, impair or invalidate any other provision contained herein. If any such provision shall be deemed invalid due to its scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. Interpretation No provision of this Agreement is to be interpreted for or against either party because that party or that party's legal representative drafted such provision, but this Agreement is to be construed as if both parties drafted it hereto. Disputes - Attorney's Fees If either party to this Agreement is required to initiate or defend litigation in any way connected with this Agreement, the prevailing party in such litigation, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Waiver No breach of any provision hereof can be waived unless in writing. Waiver of any one breach of any provision shall not be deemed to be a waiver of any other breach of the same or any other provision hereof. Notice Notices herein shall be presented in person or by certified or registered U.S. mail, as follows: To the Underwriter: Wedbush Morgan Securities 12526 High Bluff Drive, Suite 300 San Diego, CA 92130 Phone: (800) 659-8200 Fax: (858) 792-3498 Attention: Robin M. Thomas, Senior Vice President To the Issuer: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Phone: (760) 777-7100 Fax: (760) 777-7101 Attention: Thomas P. Genovese, Executive Director Nothing in this paragraph shall be construed to prevent the giving of notice by personal service. IN WITNESS WHEREOF, said Issuer, party of the first part, has caused these presents to be properly executed, and said Underwriter, party of the second part, has caused these presents to be executed by one of its officers, as of the date hereinabove set forth. By: e~ LA QUINTA REDEVELOPMENT AGENCY By..~,~-r-.~..~ J~r~ Executive Director ATTEST: Agency ~ecretary UNDERWRITER: WEDBUSH MORGAN SECURITIES Sen)d'r-~ice President