e. (Form) Contract of PurchaseStradling Yocca Carlson & Rauth
Draft of 5/26/2020
$__________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds
Series 2020A
_____ __, 2020
CONTRACT OF PURCHASE
Orange City Public Facilities Financing Authority
300 E. Chapman Avenue
Orange, CA 92866
Attention: Executive Director
City of Orange
300 E. Chapman Avenue
Orange, CA 92866
Attention: City Manager
Ladies and Gentlemen:
Raymond James & Associates, Inc. (the “Underwriter”) offers to enter into this Contract of
Purchase (this “Purchase Contract”) with the City of Orange (the “City”) and the Orange City
Public Facilities Financing Authority (the “Authority”) with regard to the Bonds described below,
which Purchase Contract, upon the acceptance hereof by the City and the Authority, will be binding
upon the Authority, the City, and the Underwriter. This offer is made subject to the written
acceptance of this Purchase Contract by the Authority and the City and the delivery of such
acceptance to the Underwriter at or prior to 11:59 p.m., Pacific time, on the date hereof, and, if it is
not so accepted, such offer may be withdrawn by the Underwriter upon written notice to the City and
the Authority by the Underwriter at any time before its acceptance.
Each of the Authority and the City acknowledges and agrees that (i) the purchase and sale of
the Bonds (as defined below) pursuant to this Purchase Contract is an arm’s-length commercial
transaction between the Authority and the City, collectively, and the Underwriter, (ii) in connection
therewith and with the discussions, undertakings, and procedures leading up to the consummation of
such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the
agent or fiduciary of the Authority or the City, (iii) the Underwriter has not assumed an advisory or a
fiduciary responsibility in favor of the Authority or the City with respect to the offering contemplated
hereby or the discussions, undertakings, and procedures leading thereto (irrespective of whether the
Underwriter has provided other services or is currently providing other services to the Authority or
the City on other matters) and the Underwriter has no obligation to the Authority or the City with
respect to the offering contemplated hereby except the obligations expressly set forth in this Purchase
Contract, and (iv) the Authority and the City have consulted their own legal, financial, and other
advisors to the extent they have deemed appropriate.
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1. Upon the terms and conditions and upon the basis of the representations, warranties,
and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority
for reoffering to the public, and the Authority hereby agrees to sell to the Underwriter for such
purpose, all (but not less than all) of the $__________ aggregate principal amount of the Orange City
Public Facilities Financing Authority Lease Revenue Bonds, Series 2020A (the “Bonds”). The
purchase price of the Bonds shall be $___________ (representing the par amount of the Bonds, less
an Underwriter’s discount of $___________ and [plus/less] a [net] original issue
[premium/discount]). The Preliminary Official Statement with respect to the Bonds, dated
__________, 2020 (the “Preliminary Official Statement”), as amended to conform to the terms of
this Purchase Contract, and dated the date hereof, and with such changes and amendments as are
mutually agreed to by the Authority, the City, and the Underwriter, including the cover page, the
appendices, and all information incorporated therein by reference, is herein collectively refer red to as
the “Official Statement.” The Authority represents that it has deemed the Preliminary Official
Statement to be final as of its date, except for revision or addition of the offering price(s), yield(s) to
maturity, selling compensation, aggregate denominational amount and maturity value,
denominational amount and maturity value per maturity, delivery date, rating(s), and other terms of
the Bonds that depend upon the foregoing as provided in and pursuant to Rule 15c2-12 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the
“Rule”), by delivering a certificate to the Underwriter substantially in the form of Exhibit B attached
hereto.
2. The Bonds shall mature on the dates and in the amounts, and will bear in terest at the
rates, set forth in Exhibit A hereto and as further described in the Official Statement. The Bonds
shall be issued under and pursuant to the Indenture, dated as of [July] 1, 2020 (the “Indenture”), by
and between the Authority and U.S. Bank National Association (the “Trustee”). Capitalized terms
used herein without definition shall have the meanings given to such terms in the Indenture.
3. (a) The Underwriter shall make a bona fide public offering of all the Bonds at not
in excess of the respective initial public offering prices to be set forth on the inside cover page of the
Official Statement. The Underwriter reserves the right to change such initial offering prices as the
Underwriter deems necessary in connection with the marketing of the Bonds and to offer and sell the
Bonds to certain dealers (including dealers depositing such bonds into investment trusts) and others
at prices lower than the initial offering prices set forth on the cover page of the Official Statement.
The Underwriter also reserves the right to (i ) overallot or effect transactions that stabilize or maintain
the market prices of the Bonds at levels above those which might otherwise prevail in the open
market and (ii) discontinue such stabilizing, if commenced, at any time. “Public offering” shall
include an offering to a representative number of institutional investors or registered investment
companies, regardless of the number of such investors to which the Bonds are sold.
(b) The Underwriter agrees to assist the City and the Authority in establishing the
issue price of the Bonds and shall execute and deliver to the City and the Authority at Closing
(defined below) an “issue price” or similar certificate, together with copies of supporting pricing
wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such
modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the
City, the Authority and Bond Counsel (as such term is hereinafter de fined) to accurately reflect, as
applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds.
All actions to be taken by the City under this section to establish the issue price of the Bonds may be
taken on behalf of the City by the City’s municipal advisor, Urban Futures, Inc. (the “Municipal
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Advisor”) and any notice or report to be provided to the City may be provided to the City’s
Municipal Advisor.
(c) [Except as otherwise set forth in Exhibit A attached hereto,] the City and the
Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”),
identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of
that maturity. At or promptly after the execution of this Purchase Contract, the Underwriter shall
report to the City and the Authority the price or prices at which it has sold to the public each maturity
of Bonds. If at that time the 10% test has not been satisfied as to any maturity of th e Bonds, the
Underwriter agrees to promptly report to the City and the Authority the prices at which it sells the
unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not
the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or
(ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s
reporting obligation after the Closing Date may be at reasonable periodic intervals or o therwise upon
request of the City, the Authority or Bond Counsel. For purposes of this section, if Bonds mature on
the same date but have different interest rates, each separate CUSIP number within that maturity will
be treated as a separate maturity of the Bonds.
(d) [The Underwriter confirms that it has offered the Bonds to the public on or
before the date of this Purchase Contract at the offering price or prices (the “initial offering price”),
or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set
forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule
Used,” as of the date of this Purchase Contract, the maturities, if any, of the Bonds for which the 10%
test has not been satisfied and for which the City, the Authority and the Underwriter agree that the
restrictions set forth in the next sentence shall apply, which will allow the City and the Authority to
treat the initial offering price to the public of each such m aturity as of the sale date as the issue price
of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule
remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold
Bonds of that maturity to any person at a price that is higher than the initial offering price to the
public during the period starting on the sale date and ending on the earlier of the following.
(A) the close of the fifth (5th) business day after the sale date; or
(B) the date on which the Underwriter has sold at least 10% of that
maturity of the Bonds to the public at a price that is no higher than the initial offering price to the
public.
The Underwriter will advise the City and the Authority promptly after the close of the fifth
(5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the
public at a price that is no higher than the initial offering price to the public.]
(e) The Underwriter confirms that:
(A) any selling group agreement and any third-party distribution
agreement relating to the initial sale of the Bonds to the public, together with the related pricing
wires, contains or will contain language obligating each dealer who is a member of the selling group
and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
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(i) to report the prices at which it sells to the public the unsold
Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all
Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10%
test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after
the Closing Date may be at reasonable periodic intervals or otherwise upon request of the
Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long
as directed by the Underwriter,
to promptly notify the Underwriter of any sales of Bonds that,
to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the
initial sale of the Bonds to the public (each such term being used as defined below), and
to acknowledge that, unless otherwise advised by the dealer or
broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker -dealer
is a sale to the public.
(B) any selling group agreement relating to the initial sale of the Bonds to
the public, together with the related pricing wires, contains or will contain l anguage obligating each
dealer that is a party to a third-party distribution agreement to be employed in connection with the
initial sale of the Bonds to the public to require each broker -dealer that is a party to such third-party
distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each
maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that
maturity allocated to it have been sold or it is notified by the Underwri ter or the dealer that the 10%
test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after
the Closing Date may be at reasonable periodic intervals or otherwise upon request of the
Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and
for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
(f) The City and the Authority acknowledge that, in making the representations
set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created
in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a
member of the selling group to comply with the requirements for establishing issue price of the
Bonds, including, but not limited to, its agreement to comply with the hold -the-offering-price rule, if
applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and
(ii) in the event that a third-party distribution agreement was employed in connection with the initial
sale of the Bonds to the public, the agreement of each broker -dealer that is a party to such agreement
to comply with the requirements for establishing issue price of the Bonds, including, but not limited
to, its agreement to comply with the hold -the-offering-price rule, if applicable to the Bonds, as set
forth in the third-party distribution agreement and the related pricing wires. The City and the
Authority further acknowledge that the Underwriter shall not be liable for the failure of any dealer
who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution
agreement, to comply with its corresponding agreement to comply with the requirements for
establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the
hold-the-offering-price rule, if applicable to the Bonds.
(g) The Underwriter acknowledges that sales of any Bonds to any perso n that is a
related party to an underwriter participating in the initial sale of the Bonds to the public (each such
term being used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
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(A) “public” means any person other than an underwriter or a related
party;
(B) “underwriter” means (i) any person that agrees pursuant to a written
contract with the City and the Authority (or with the lead underwriter to form an underwriting
syndicate) to participate in the initial sale of the Bonds to the public and (ii) any person that agrees
pursuant to a written contract directly or indirectly with a person described in clause (i) to participate
in the initial sale of the Bonds to the public (including a member of a selling group or a party to a
third-party distribution agreement participating in the initial sale of the Bonds to the public);
(C) a purchaser of any of the Bonds is a “related party” to an
underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than
50% common ownership of the voting power or the total value of their stock, if both entities are
corporations (including direct ownership by one corporation of another), (ii) more than 50% common
ownership of their capital interests or profits interests, if both entities are partnerships (including
direct ownership by one partnership of another), or (iii) more than 50% common ownership of the
value of the outstanding stock of the corporation or the capital int erests or profit interests of the
partnership, as applicable, if one entity is a corporation and the other entity is a partnership
(including direct ownership of the applicable stock or interests by one entity of the other); [and
(D) “sale date” means the date of execution of this Purchase Contract by
the City, the Authority and the Underwriter].
4. The Authority and the City, respectively, hereby authorize the use by the Underwriter
of (i) the Indenture, (ii) the Sublease, dated as of [June] 1, 2020 (the “Sublease”), by and between the
Authority, as lessor, and the City, as lessee, (iii) the Lease Agreement, dated as of [June] 1, 2020 (the
“Lease Agreement”), by and between the City, as lessor, and the Authority, as lessee, (iv) the
Continuing Disclosure Agreement, dated as of the Closing Date (the “Continuing Disclosure
Agreement”), executed by the City and [acknowledged and accepted by] the dissemination agent
named therein, (v) the Assignment Agreement, dated as of [July] 1, 2020 (the “Assignment
Agreement”), by and between the Authority and the Trustee, and (vi) the Official Statement, and any
supplements or amendments thereto, and the information contained in each of such documents, in
connection with the public offering and sale of the Bonds. The Authority an d the City consent to the
use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection
with the public offering of the Bonds.
The Authority will deliver to the Underwriter, within seven (7) business days after the dat e of
this Purchase Contract and in sufficient time to accompany any confirmation requesting payment
from any customers of the Underwriter, copies of the Official Statement in final form (including all
documents incorporated by reference therein) and any amendment or supplement thereto in such
quantities as the Underwriter may reasonably request in order to comply with the obligations of the
Underwriter pursuant to the Rule and the rules of the Municipal Securities Rulemaking Board. As
soon as practicable following receipt thereof from the Authority, the Underwriter shall deliver the
Official Statement to the Municipal Securities Rulemaking Board.
5. At 8:00 a.m., California time, on __________, 2020, or at such other time or on such
other business day as shall have been mutually agreed upon by the Authority and the Underwriter
(the “Closing Date”), the Authority will cause the Trustee to authenticate and deliver to the
Underwriter through the facilities of The Depository Trust Company (“DTC”) in New York, New
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York, or at such other place as the Authority and the Underwriter may mutually agree upon, the
Bonds in fully-registered book-entry form, duly executed and registered in the name of Cede & Co.,
as nominee of DTC, and, subject to the terms and conditions hereof, the Underwriter will accept such
delivery and pay the purchase price of the Bonds by wire transfer payable in immediately available
funds to or upon the order of the Authority. Such delivery of and payment for the Bonds is referred
to herein as the “Closing.” The Bonds shall be made available for inspection by the Underwriter at
least one business day before the Closing.
6. The Authority represents, warrants, and covenants to the Underwriter that:
(a) The Authority is a joint powers authority under Article 1 of Chapter 5 of
Division 7 of Title 1 of the California Government Code duly organized and validly existing under
and by virtue of the Constitution and the laws of the State of California (the “State”).
(b) The Authority has the legal right and power to issue and deliver the Bonds
and to execute and deliver, and to perform its obligations under, the Indenture, the Sublease, the
Lease Agreement, the Assignment Agreement and this Purchase Contract (collectively, the
“Authority Documents”). The Authority has duly authorized the issuance and delivery of the Bonds
and the execution and delivery of, and performance of its obligations under, the Authority
Documents and, as of the date hereof, such authorizations are in full force and effect and have not
been amended, modified, or rescinded. When executed and delivered by the respective parties
thereto, the Authority Documents will constitute legal, valid, and binding obligations of the
Authority in accordance with their respective terms, exc ept as enforcement may be limited by
bankruptcy, insolvency, , debt adjustment, receivership, fraudulent conveyance or transfer,
moratorium, reorganization, arrangements or other laws affecting creditors’ rights, to the application
of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations
on legal remedies against public entities in the State or other laws or equitable principles affecting
the enforcement of creditors’ rights generally. The Authority has complied, and will at the Closing
be in compliance in all material respects, with its obligations under the Authority Documents.
(c) The Bonds will be paid from Revenues consisting primarily of Base Rental
Payments, as defined in and pursuant to the Indenture, which payments have been duly and validly
authorized pursuant to applicable law.
(d) The Bonds will be issued in accordance with the Indenture and will conform
in all material respects to the descriptions thereof contained in the Official Statement. The Indent ure
creates a valid pledge of, first lien upon, and security interest in, the pledged Revenues.
(e) The information in the Official Statement (excluding any information with
respect to DTC and the book-entry only system, [the Reserve Policy or the Reserve Policy Provider]
or prices and yields for the Bonds, or any other information provided by the Underwriter) is true and
correct in all material respects, and the information in the Official Statement does not contain any
misstatement of any material fact and does not omit any statement necessary to make the statements,
in the light of the circumstances in which such statements were made, not misleading.
(f) The Authority covenants with the Underwriter that for twenty-five days after
the Closing Date (the “Delivery Period”), if any event occurs that might or would cause the Official
Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to
omit to state a material fact necessary to make the statements therein, in the light of the
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circumstances under which they were made, not misleading, the Authority shall notify the
Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and
publication of a supplement or amendment to the Official Stat ement, the Authority will cooperate
with the Underwriter and the City in the preparation of an amendment or supplement to the Official
Statement, at the expense of the Authority and the City, in a form and in a manner approved by the
Underwriter (provided, that this requirement for approval shall not bar the City’s and Authority’s
publication of such supplement or amendment if the City and the Authority determines that the
publication is required by applicable laws and regulations ; and provided further that the City,
Authority and Underwriter shall meet and confer regarding any amendment or supplement to the
Official Statement proposed by the Authority or City to which the Underwriter objects).
(g) During the Delivery Period, the Authority will advise the Under writer
promptly of any proposal to amend or supplement the Official Statement and will not effect or
consent to any such amendment or supplement without the consent of the Underwriter (provided, that
this consent requirement shall not bar the City’s and Au thority’s publication of such supplement or
amendment if the City and the Authority determines that the publication is required by applicable
laws and regulations; and provided further that the City, Authority and Underwriter shall meet and
confer regarding any amendment or supplement to the Official Statement proposed by the Authority
or City to which the Underwriter objects). The Authority will advise the Underwriter promptly of the
institution of any proceedings known to it by any governmental agency pr ohibiting or otherwise
affecting the use of the Official Statement in connection with the offering, sale, or distribution of the
Bonds.
(h) If the Official Statement is supplemented or amended, the Official Statement,
as so supplemented or amended, as of the d ate of such supplement or amendment, will not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading
(except no representation is made with respect to any information regarding DTC and the book -entry
only system, or prices and yields for the Bonds, or any other information provided by the
Underwriter).
(i) The Authority is not, in any manner which would materially adversely affect
the transactions contemplated by the Authority Documents, in breach of or in default under any
applicable constitutional provision, law, or administrative rule or regulation of the State or the United
States, or any applicable judgment, decree, consent, or other agreement to which the Authority is a
party, and no event has occurred and is continuing that, with the passage of time or the giving of
notice, or both, would constitute such a default or event of default under any of the foregoing.
(j) The authorization, execution, and delivery by the Authority of the Authority
Documents, and compliance by the Authority with the provisions thereof, do not and will not conflict
with or constitute a breach of or default by the Authority under any applicable constitutional
provision, law, or administrative rule or regulation of the State or the United States, or any applicable
judgment, decree, consent, or other agreement to which it is bound or b y which its properties may be
affected.
(k) No authorization, consent, or approval of, or filing or registration with, any
Governmental Authority (as defined below) or court is, or under existing requirements of law will be,
necessary for the valid execution and delivery of, or performance by the Authority of its obligations
under, the Authority Documents, other than any authorization, consent, approval, filing, or
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registration as may be required under the Blue Sky or securities laws of any state in connection with
the offering, sale, or issuance of the Bonds. All authorizations, consents, or approvals of, or filings
or registrations with, any Governmental Authority or court necessary for the valid issuance of, and
performance by the Authority of its obligation s under, the Bonds will have been duly obtained or
made prior to the issuance of the Bonds (except no representation is made regarding any
authorization, consent, approval, filing, or registration as may be required under the Blue Sky or
securities laws of any state in connection with the offering, sale, or issuance of the Bonds). As used
herein, the term “Governmental Authority” refers to any legislative body or governmental official,
department, commission, board, bureau, agency, instrumentality, body, or public benefit corporation.
(l) The Authority shall furnish such information, execute such instruments, and
take such other action in cooperation with the Underwriter as the Underwriter may reasonably
request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws
and regulations of such states and other jurisdictions of the United States as the Underwriter may
designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such
states and other jurisdictions, and shall use its best efforts to continue such qualifications in effect so
long as required for the distribution of the Bonds; provided, however, that the Authority shall not be
required to execute a general or special consent to ser vice of process or qualify to do business in
connection with any such qualification or determination in any jurisdiction , and the Underwriter shall
be responsible for all costs relating to such qualification or determination under Blue Sky or other
securities laws.
(m) There is no action, suit, proceeding, inquiry, or investigation, at law or in
equity, before or by any court, regulatory agency, or public board or body, pending and notice of
which has been received by the Authority or, to the best knowledge of the Authority, threatened (i) in
any way questioning the existence of the Authority or the titles of the officers of the Authority to
their respective offices; (ii) affecting, contesting, or seeking to prohibit, restrain, or enjoin the
issuance of the Bonds or the Authority’s execution or delivery of any of the Authority Documents, or
the payment or collection of any amounts pledged or to be pledged to pay the principal of and
interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority
Documents or the consummation of the transactions contemplated thereby or any proceeding of the
Authority taken with respect to any of the foregoing, or contesting the exclusion of the interest on the
Bonds from taxation or contesting the powers of the Authority and its authority to pledge the
Revenues pursuant to the Indenture; (iii) that may result in any material adverse change relating to
the Authority that will materially adversely affect the Authority’s ability to apply Revenues pursuant
to the Indenture to pay the Bonds when due; or (iv) contesting the completeness or accuracy of the
Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or
asserting that the Preliminary Official Statemen t or the Official Statement contained any untrue
statement of a material fact or omitted to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(n) Other than in the ordinary course of its business or as contemplated by the
Official Statement, between the date of this Purchase Contract and the Closing Date the Authority
will not, without the prior written consent of the Underwriter, offer or issue any certificates, bonds ,
notes, or other obligations for borrowed money or incur any material liabilities, direct or contingent,
payable from or secured by a pledge of the Revenues.
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(o) The Authority will refrain from taking any action, or permitting any action to
be taken, with regard to which the Authority may exercise control, that results in the loss of the tax
exempt status of the interest on the Bonds.
(p) Any certificate signed by any official or other representative of the Authority
and delivered to the Underwriter pursuant to this Purchase Contract shall be deemed a representation
and warranty by the Authority to the Underwriter as to the truth of the statements therein made.
7. The City represents, warrants, and covenants to the Underwriter that:
(a) The City is a municipal corporation of the State duly organized and validly
existing under and by virtue of the Constitution and laws of the State and has the legal right and
power to execute, deliver, and perform its obligations under the Indenture, the Sublease, the Lease
Agreement, the Continuing Disclosure Agreement and this Purchase Contract (collectively, the “City
Documents”).
(b) The City has the legal right and power to execute and deliver, and to perform
its obligations under, the City Documents. The City has duly authorized the execu tion and delivery
of, and the performance of its obligations under, the City Documents and as of the date hereof such
authorizations are in full force and effect and have not been amended, modified, or rescinded. When
executed and delivered by the respective parties thereto, the City Documents will constitute legal,
valid, and binding obligations of the City in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, debt adjustment, receivership, fraudulent
conveyance or transfer, moratorium, reorganization, arrangements or other laws affecting creditors’
rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate
cases and to the limitations on legal remedies agai nst public entities in the State or other laws or
equitable principles affecting the enforcement of creditors’ rights generally. The City has complied,
and will at the Closing be in compliance in all respects, with its obligations under the City
Documents.
(c) The information in the Official Statement (excluding any information with
respect to DTC and the book-entry only system, [the Reserve Policy or the Reserve Policy Provider]
or prices and yields for the Bonds, or any other information provided by the Unde rwriter) is true and
correct in all material respects, and the information in the Official Statement does not contain any
misstatement of any material fact and does not omit any statement necessary to make the statements,
in the light of the circumstances in which such statements were made, not misleading.
(d) To assist the Underwriter in complying with the Rule, the City will undertake,
pursuant to the Continuing Disclosure Agreement, to provide annual reports and notices of certain
events. A description of this undertaking is set forth in the Preliminary Official Statement and will
also be set forth in the Official Statement. The Official Statement describes the incidences during the
last five years in which the City and its related entities have failed to comply with previous
undertakings to provide annual continuing disclosure reports and notices of material events.
(e) The City covenants with the Underwriter that, during the Delivery Period, if
any event occurs that might or would cause the Official Statement, as then supplemented or
amended, to contain an untrue statement of a material fact or to omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, the City shall notify the Underwriter thereof, and if in the opinion of the Underwriter
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such event requires the preparation and publication of a supplement or amendment to the Official
Statement, the City will cooperate with the Underwriter and the Authority in the prepar ation of an
amendment or supplement to the Official Statement, at the expense of the Authority and the City, in a
form and in a manner approved by the Underwriter (provided, that this requirement for approval shall
not bar the City’s and Authority’s publication of such supplement or amendment if the City and the
Authority determines that the publication is required by applicable laws and regulations ; and
provided further that the City, Authority and Underwriter shall meet and confer regarding any
amendment or supplement to the Official Statement proposed by the Authority or City to which the
Underwriter objects).
(f) During the Delivery Period, the City will advise the Underwriter promptly of
any proposal to amend or supplement the Official Statement and will not effect or consent to any
such amendment or supplement without the consent of the Underwriter (provided, that this consent
requirement shall not bar the City’s and Authority’s publication of such supplement or amendment if
the City and the Authority determines that the publication is required by applicable laws and
regulations; and provided further that the City, Authority and Underwriter shall meet and confer
regarding any amendment or supplement to the Official Statement proposed by the Authority or City
to which the Underwriter objects). The City will advise the Underwriter promptly of the institution
of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the
use of the Official Statement in connection with the offe ring, sale, or distribution of the Bonds.
(g) If the Official Statement is supplemented or amended, the Official Statement
as so supplemented or amended, as of the date of such supplement or amendment, will not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading
(except no representation is made with respect to any information regarding DTC and the book -entry
only system, [the Reserve Policy or the Reserve Policy Provider] or prices and yields for the Bonds,
or any other information provided by the Underwriter).
(h) The City is not, in any manner which would materially adversely affect the
transactions contemplated by the City Documents, in breach of or in default under any applicable
constitutional provision, law, or administrative rule or regulation of the State or the United States, or
any applicable judgment, decree, consent, or other agreement to which the City is a party, and no
event has occurred and is continuing that, with the passage of time or the giving of notice, or both,
would constitute such a default or event of default under any of the foregoing.
(i) The authorization, execution, and delivery by the City of th e City Documents,
and compliance by the City with the provisions thereof, do not and will not conflict with or constitute
a breach of or default by the City under any applicable constitutional provision, law, or
administrative rule or regulation of the State or the United States, or any applicable judgment, decree,
consent, or other agreement to which it is bound or by which its properties may be affected.
(j) No authorization, consent, or approval of, or filing or registration with, any
Governmental Authority or court is, or under existing requirements of law will be, necessary for the
valid execution and delivery of, or performance by the City of its obligations under, the City
Documents, other than any authorization, consent, approval, filing, or registration as may be required
under the Blue Sky or securities laws of any state in connection with the offering, sale, or issuance of
the Bonds (except no representation is made regarding any authorization, consent, approval, filing, or
11
registration as may be required under the Blue Sky or securities laws of any state in connection with
the offering, sale, or issuance of the Bonds).
(k) The City will furnish such information, execute such instruments, and take
such other action in cooperation with the Underwriter as the Underwriter may reasonably request in
order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the United States as the Underwriter may
designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such
states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so
long as required for the distribution of the Bonds; provided, however, that the City shall not be
required to execute a general consent or special consent to service of process or qualify to do
business in connection with any such qualification or determination in any jurisdiction , and the
Underwriter shall be responsible for all costs relating to such qualification or determination under
Blue Sky or other securities laws.
(l) There is no action, suit, proceeding, inquiry, or investigation, at law or in
equity, before or by any court, regulatory agency, or public board or body and no tice of which has
been receive by the City, pending or, to the best knowledge of the City, threatened (i) in any way
questioning the existence of the City or the titles of the officers of the City to their respective offices;
(ii) affecting, contesting, or seeking to prohibit, restrain, or enjoin the Authority’s issuance of the
Bonds or the execution or delivery of any of the City Documents, or the payment or collection by the
Authority of any amounts pledged or to be pledged to pay the principal of and int erest on the Bonds
pursuant to the Indenture, or in any way contesting or affecting the validity of the Bonds or the City
Documents or the consummation of the transactions contemplated thereby or any proceeding of the
City taken with respect to any of the foregoing, or contesting the exclusion of the interest on the
Bonds from taxation; (iii) that may result in any material adverse change relating to the City that will
materially adversely affect the City’s ability to pay Base Rental Payments when due; or
(iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto or asserting that the Preliminary Official
Statement or the Official Statement contained any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(m) Other than in the ordinary course of its business or as contemplated by the
Official Statement, between the date of this Purchase Contract and the Closing Date the City will not,
without the prior written consent of the Underwriter, offer or issue any certificates, bonds, notes, or
other obligations for borrowed money or incur any material liabilities, direct or contingent, payable
from or secured by the City’s General Fund.
(n) The financial statements of, and other financial information regarding, the
City contained in the Official Statement fairly present the financial position and re sults of the
operations of the City as of the dates and for the periods therein set forth, and, to the best of the
City’s knowledge, the audited financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied.
(o) The City will refrain from taking any action, or permitting any action to be
taken, with regard to which the City may exercise control, that results in the loss of the tax exempt
status of the interest on the Bonds.
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(p) Any certificate signed by any official or other representative of the City and
delivered to the Underwriter pursuant to this Purchase Contract shall be deemed a representation and
warranty by the City to the Underwriter as to the truth of the statements therein made.
8. The Underwriter has entered into this Purchase Contract in reliance upon the
representations, warranties, and covenants of the Authority and the City contained herein and in the
Authority Documents and City Documents to which each of the Authority or the City, as applicabl e,
is a party, and the performance by the Authority and the City of their respective obligations
hereunder, both as of the date hereof and as of the Closing Date. The Underwriter’s obligations
under this Purchase Contract are and shall be subject to the following further conditions:
(a) The representations and warranties of the Authority and the City contained
herein shall be true, complete, and correct in all material respects on the date hereof and at and as of
the Closing, as if made at and as of the Closin g, and the statements made in all certificates and other
documents delivered to the Underwriter at the Closing pursuant hereto shall be true, complete, and
correct in all material respects at the Closing; the Authority and the City shall be in compliance i n all
material respects with each of the agreements made by it in this Purchase Contract (unless such
agreements are waived by the Underwriter); there shall not have occurred an adverse change in the
financial position, results of operations, or financial condition of the City that materially adversely
affects the ability of the City to pay Base Rental Payments when due or otherwise perform any of its
obligations under the City Documents; and there shall not have occurred an adverse change in the
financial position of the Authority that materially adversely affects the ability of the Authority to
make payments of principal of and interest on the Bonds when due or otherwise perform any of its
obligations under the Authority Documents.
(b) At the time of the Closing, the Authority Documents and the City Documents
shall be in full force and effect, and shall not have been amended, modified, or supplemented (except
as may be agreed to in writing by the Underwriter); all actions that, in the opinion of Richards,
Watson & Gershon, A Professional Corporation, Los Angeles, California, Bond Counsel (“Bond
Counsel”), shall be necessary in connection with the transactions contemplated hereby shall have
been duly taken and shall be in full force and effect; and the City shall perform or shall have
performed its obligations required under or specified in the City Documents to be performed at or
prior to the Closing and the Authority shall perform or shall have performed its obligations required
under or specified in the Authority Documents to be performed at or prior to the Closing.
(c) At the time of the Closing, the Official Statement (as amended and
supplemented) shall be true and correct in all material respects, and shall not omit any statement or
information necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(d) Except as disclosed in the Official Statement or in a schedule delivered to the
Underwriter at the Closing, no decision, ruling, or finding shall have bee n entered by any court or
Governmental Authority since the date of this Purchase Contract (and not reversed on appeal or
otherwise set aside) that has any of the effects described in Section 8(f) hereof.
(e) (i) No default by the City or the Authority shall have occurred and be
continuing in the payment of the principal of or premium, if any, or interest on any bond, note, or
other evidence of indebtedness issued by the City or the Authority, respectively, and (ii) no
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bankruptcy, insolvency, or other similar proceeding in respect of the City or the Authority shall be
pending or, to the knowledge of the City or the Authority, contemplated.
(f) The Underwriter may terminate this Purchase Contract by written notification
to the Authority and the City if at any time after the date hereof and prior to the Closing:
(i) legislation shall have been enacted by the United States or the State or
shall have been reported out of committee or be pending in committee, or a decision shall have been
rendered by a court of the United States or the Tax Court of the United States, or a ruling shall have
been made or a regulation, proposed regulation, or a temporary regulation shall have been published
in the Federal Register or any other release or announcement shall have been made by the Tr easury
Department of the United States or the Internal Revenue Service, with respect to Federal or State
taxation upon revenues or other income or payments of the general character to be derived by the
City or upon interest received on obligations of the general character of the Bonds, which, in the
reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the City),
materially adversely affects the market for the Bonds; or
(ii) in the reasonable opinion of the Underwriter (after consultation with,
and receipt of advice from, the City or its municipal advisor), any of the following events materially
adversely affects the market for the Bonds: (a) the United States shall have become engaged in
hostilities that have resulted in a declaration of war or a national emergency or the President of the
United States of America shall have committed the armed forces of the United States of America to
combat so as to adversely affect the financial markets in the United States of America, (b) any other
calamity or crisis in the financial markets of the United States or elsewhere which did not exist on, or
has escalated since, the dated date of this Purchase Contract, (c) the sovereign debt rating of the
United States is downgraded by any major credit rating agency or a payment default occurs on
United States Treasury obligations, or (d) a default with respect to the debt obligations of, or the
institution of proceedings under any federal bankruptcy laws by or against, any state of the United
States or any city, county, or other political subdivision located in the United States having a
population of over 500,000; or
(iii) there shall have occurred a general suspension of trading on the New
York Stock Exchange or other major exchange, or minimum or ma ximum prices for trading shall
have been fixed and be in force, or maximum ranges for prices for securities shall have been required
and be in force on any such exchange, whether by virtue of determination by that exchange or by
order of the Securities and Exchange Commission or any other Governmental Authority having
jurisdiction, or a general banking moratorium shall have been declared by Federal, California, or
New York authorities having jurisdiction and being in force; or
(iv) there shall have occurred an adverse change in the financial position,
results of operations, or financial condition of the City that, in the reasonable opinion of the
Underwriter (after consultation with, and receipt of advice from, the City), materially adversely
affects the market for the Bonds; or
(v) any legislation, ordinance, rule, or regulation shall be introduced in,
or be enacted by, any governmental body, department, or agency of the State, or a decision by any
court of competent jurisdiction within the State or any court of the United States shall be rendered
that, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the
Bonds; or
14
(vi) legislation shall be enacted by the Congress of the United States, or a
decision by a court of the United States shall be rendered, or a stop order, ruling, regulation, or
official statement by, or on behalf of, the Securities and Exchange Commission or any other
governmental agency having jurisdiction of the subject matter shall be issued or made to the effect
that the issuance, offering, or sale of obligations of the general character of the Bonds, or the
issuance, offering, or sale of the Bonds, including all underlying obligations, as contemplated hereby
or by the Official Statement, is in violation or would be in violation of, or that obligations of the
general character of the Bonds, or the Bonds, are not exempt from registration under, any provision
of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect,
or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as
then in effect; or
(vii) additional material restrictions not in force as of the date hereof shall
have been imposed upon trading in securities generally by any govern mental authority or by any
national securities exchange, which restrictions materially adversely affect the ability of underwriters
to trade obligations of the general character of the Bonds; or
(viii) there shall have occurred or any notice shall have been given of any
intended review, downgrading, suspension, withdrawal, or negative change in credit watch status by
any national rating service to any of the Authority’s or the City’s obligations secured in a like
manner, which, in the Underwriter’s reasonable opinion, materially adversely affects the
marketability or market price of the Bonds; or
(ix) the commencement of any action, suit, or proceeding described in
Section 6(n) or 7(m) that, in the judgment of the Underwriter, materially adversely affects the market
price of the Bonds; or
(x) any event occurring, or information becoming known that, in the
reasonable judgment of the Underwriter, makes any statement or information contained in the
Official Statement, as of its date, untrue in any material adverse respect, or h as the effect that the
Official Statement, as of its date, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(g) At or prior to the Closing, the Underwriter shall receive the following
documents:
the opinion of Bond Counsel, dated the Closing Date, in substantially
the form included in the Official Statement as Appendix B, addressed to the Authority (and
accompanied by reliance letters to the Underwriter, the City, and the Trustee);
a supplemental opinion of Bond Counsel, in form and substance
satisfactory to the Underwriter, dated the Closing Date, addressed to the Underwriter, to the effect
that:
(i) the City has full legal power and lawful authority to enter into
the City Documents and to perform its obligations thereunder;
15
(ii) the City Documents have been duly authorized, executed, and
delivered by the City and, assuming due authorization, execution, and delivery by the other parties
thereto, such documents constitute the legal, valid, and binding agreements of the City enforceable in
accordance with their terms, subject to laws relating to bankruptcy, insolvency, debt adjustment,
receivership, fraudulent conveyance or transfer, moratorium, reorganization, arrangements or other
laws affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial
discretion in appropriate cases and to the limitations on legal remedies against public entities in the
State or other laws or equitable principles affecting the enforcement of creditors’ rights generally.
(iii) the Authority has full legal power and lawful authority to
enter into the Authority Documents and to perform its obligations thereunder;
(iv) the Authority Documents have been duly authorized,
executed, and delivered by the Authority and, assuming due authorization, execution, and delivery by
the other parties thereto, such documents constitute the legal, valid, and binding agreements of the
Authority enforceable in accordance with their terms, subject to laws relating to bankruptcy,
insolvency, debt adjustment, receivership, fraudulent conveyance or transfer, moratorium,
reorganization, arrangements or other laws affecting creditors’ rights, to t he application of equitable
principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal
remedies against public entities in the State or other laws or equitable principles affecting the
enforcement of creditors’ rights generally;
(v) the Bonds are not subject to registration requirements of the
Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the
Trust Indenture Act of 1939, as amended;
(vi) the statements contained in the Official Statement under the captions
“INTRODUCTION,” “THE BONDS,” “PLAN OF FINANCE,” “SECURITY FOR THE BONDS,”
“TAX MATTERS,” “APPENDIX B—FORM OF BOND COUNSEL OPINION,” and “APPENDIX
C—SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS,”
insofar as such statements expressly summarize certain provisions of the Indenture, the Sublease, the
Lease Agreement, the Bonds, and the opinion of Bond Counsel concerning certain federal tax matters
relating to the Bonds, are accurate in all material respects ; provided that no opinion needs to be
expressed with respect to any financial, statistical or numerical information, or any information
regarding the book-entry system[, the Reserve Policy or the Reserve Policy Provider] contained
therein; and
an opinion of the City Attorney of the City, in form and substance
satisfactory to the Underwriter, dated the Closing Date, addressed to the Authority and the
Underwriter, to the effect that:
(i) the City is a municipal corporation and general law city duly
organized and validly existing under and by virtue of the laws of the State;
(ii) the resolution of the City approving and authorizing the
execution and delivery of the City Documents (the “City Resolution”) was duly adopted at a
meeting of the City Council of the City that was called and held pursuant to law and with all public
notice required by law and at which a quorum was present and acting throughout, and the City
16
Resolution is in full force and effect and has not been modified, amended, or rescinded as of the
Closing Date;
(iii) to the best knowledge of such counsel, the execution and
delivery by the City of the City Documents, and compliance by the City with the provisions thereof,
under the circumstances contemplated thereby, do not and will not in any material respect conflic t
with or constitute a breach of or default under any law, administrative regulation, court decree,
resolution, or agreement to which the City is subject to or by which it is bound;
(iv) to the best knowledge of such counsel, the Official Statement
(excluding therefrom financial statements and other statistical data included in the Official Statement,
and any information with respect to DTC and the book -entry only system, [the Reserve Policy or the
Reserve Policy Provider] or prices and yields for the Bonds, or any other information provided by the
Underwriter, as to which no view need be expressed) does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(v) except as otherwise disclosed in the Official Statement, to the
best knowledge of such counsel after reasonable investigation, there is no action, suit, proceeding,
inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public
board or body, pending and notice of which has been received by the City, or, to the best knowledge
of such counsel, threatened (a) in any way questioning the existence of the City or the titles of the
officers of the City to their respective offices; (b) affecting, contesting, or seeking to prohibit,
restrain, or enjoin the Authority’s issuance of the Bonds or the execution or delivery of any of the
City Documents, or the payment or collection by the Authority of any amounts pledged or to be
pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the
validity of the Bonds or the City Documents or the consummation of the transactions contemplated
thereby or any proceeding of the City taken with respect to any of the foregoing, or contesting the
exclusion of the interest on the Bonds from taxation; (c) that may result in any material adverse
change relating to the City that will materially adversely affect t he City’s ability to perform its
obligations under the City Documents; or (d) contesting the completeness or accuracy of the
Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or
asserting that the Preliminary O fficial Statement or the Official Statement contained any untrue
statement of a material fact or omitted to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; and
(vi) no authorization, approval, consent, or other order of the State
or any other governmental authority or agency within the State having jurisdiction over the City is
required for the valid authorization, execution, and delivery by the City of the City Docum ents;
(4) an opinion of the City Attorney of the City, serving as General
Counsel to the Authority, in form and substance satisfactory to the Underwriter, dated the Closing
Date, addressed to the City and the Underwriter, to the effect that:
(i) the Authority is a joint powers authority under Article 1 of
Chapter 5 of Division 7 of Title 1 of the California Government Code duly organized and validly
existing under and by virtue of the Constitution and the laws of the State;
17
(ii) the resolution of the Authority approving and authorizing the
execution and delivery of the Authority Documents and approving the Official Statement (the
“Authority Resolution”) was duly adopted at a meeting of the governing board of the Authority that
was called and held pursuant to law and with all public notice required by law and at which a quorum
was present and acting throughout, and the Authority Resolution is in full force and effect and has
not been modified, amended, or rescinded as of the Closing Date;
(iii) to the best knowledge of such counsel, the execution and
delivery by the Authority of the Authority Documents, and compliance by the Authority with the
provisions thereof, under the circumstances contemplated thereby, do not and will not in any material
respect conflict with or constitute a breach of or default under any law, administrative regulation,
court decree, resolution, or agreement to which the Authority is subject to or by which it is bound;
(iv) except as otherwise disclosed in the Official Statement, to the
best knowledge of such counsel after reasonable investigation, there is no action, suit, proceeding,
inquiry, or investigation at law or in equity, before or by any court, regulatory agency, or public
board or body, pending and notice of which has been received by the Authority or, to the best
knowledge of such counsel, threatened (a) in any way questioning the existence of the Authority or
the titles of the officers of the Authority to their respective offices, (b) affecting, contesting, or
seeking to prohibit, restrain, or enjoin the issuance of the Bonds or the execution or delivery of any
of the Authority Documents, or the payment or collection of any amounts pledged or to be pledged to
pay the principal of and interest on the Bonds, or in any way contesting or affecting the vali dity of
the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby
or any proceeding of the Authority taken with respect to any of the foregoing, or contesting the
exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority and its
authority to make the pledges set forth in the Indenture, (c) that may result in any material adverse
change relating to the Authority that will materially adversely affect the Authority’s ability to
perform its obligations under the Authority Documents, or (d) contesting the completeness or
accuracy of the Preliminary Official Statement or the Official Statement or any supplement or
amendment thereto or asserting that the Preliminary Official Statement or t he Official Statement
contained any untrue statement of a material fact or omitted to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; and
(v) no authorization, approval, consent, or other order of the State
or any other governmental authority or agency within the State having jurisdiction over the Authority
is required for the valid authorization, execution, and delivery by the Authority of the Authority
Documents;
(5) a letter from Richards, Watson & Gershon, A Professional
Corporation, Los Angeles, California, disclosure counsel to the Authority (“Disclosure Counsel”),
dated the Closing Date, addressed to the Underwriter, to the effect that, based upon its participation
in the preparation of the Official Statement as counsel to the Authority and without having
undertaken to determine independently the fairness, accuracy, or completeness of the statements
contained in the Official Statement, such counsel has no reason to believe that the Official Statement
as of its date and as of the Closing Date (excluding therefrom the reports, CUSIP numbers, financial,
accounting, statistical, economic, engineering or demographic data or forecasts, numbers, charts,
tables, graphs, estimates, projections, assumptions or expressions of opinion, any determinations
regarding valuation, real estate, and environmental matters, or any basis therefor; information about
18
the Underwriter or underwriting; any information about the DTC, the book-entry system, [the
Reserve Policy or the Reserve Policy Provider]; and the information included in the Appendices
thereto, as to which no view need be expressed) contained or contains any untrue statement of a
material fact or omits to state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(6) a certificate of the City, in form and substance satisfactory to the
Underwriter, dated the Closing Date, to the effect that;
(i) the representations and warranties of the City contained in this
Purchase Contract are true and correct in all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date; and
(ii) there has been no material adverse change in the financial
condition or results of operations of the City from the date of the Official Statement to the Closing
Date;
(7) a certificate of the Authority, in form and substance satisfactory to the
Underwriter, dated the Closing Date, to the effect that;
(i) the representations and warranties of the Authority contained
in this Purchase Contract are true and correct in all material respects on and as of the Closing Date
with the same effect as if made on the Closing Date; and
(ii) there has been no material adverse change in the financial
condition or results of operations of the Authority from the date of the Official Statement to the
Closing Date;
(8) a certificate, dated the date of the Preliminary Official Statement,
from the Authority and the City, in the form attached hereto as Exhibit B;
an opinion of counsel to the Trustee, dated the Closing Date,
addressed to the Underwriter, the Authority, and the City, to the effect that:
(i) the Trustee is a national banking association and is validly
existing, duly qualified to do business and in good standing under the laws of each jurisdiction in
which the performance of its duties under the Indenture and the Assignment Agreement (collectively,
the “Trustee Documents”) would require such qualification and has the requisite power and
authority to execute, deliver and perform its obligations under the Trustee Documents;
(ii) the Trustee is duly eligible and qualified to act as Trustee
under the Indenture;
(iii) the Trustee has all requisite power, authority and legal right to
execute and deliver the Trustee Documents and to perform its obligations under the Trustee
Documents, and has taken all necessary corporate action to authorize the execution and delivery of
and the performance of its obligations under the Trustee Documents;
(iv) the Trustee has duly executed and delivered the Trustee
Documents. Assuming the due authorization, execution and delivery thereof by the other parties
19
thereto, the Trustee Documents are the legal, valid, and binding agreements of the Trustee
enforceable against the Trustee in accordance with their terms, except to the extent enforceability
thereof may be subject to (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws affecting creditors’ rights and remedies heretofore or hereaft er
enacted, and (B) the application of equitable principles and the exercise of judicial discretion in
appropriate cases;
(v) the Bonds have been duly authenticated by the Trustee;
(vi) the execution, delivery and performance of the Trustee
Documents by the Trustee and the consummation of the transactions contemplated thereby do not
and will not (a) to the knowledge of such counsel, conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture, mo rtgage, deed of
trust, loan agreement, or other agreement or instrument to which the Trustee is a party or by which
the Trustee is bound or to which any of the property or assets of the Trustee or any of its subsidiaries
is subject, (b) result in any violation of the provisions of the charter, articles of association, by-laws,
or applicable resolutions of the Trustee, or (c) to the knowledge of such counsel, result in any
violation of any statute or any order, rule, or regulation of any court or government agency or body
having jurisdiction over the Trustee or any of its properties or assets; and
(vii) to the knowledge of such counsel, there are no actions,
proceedings or investigations pending or threatened against the Trustee before any court,
administrative agency or tribunal (a) asserting the invalidity of the Trustee Documents, (b) seeking to
prevent the consummation of any of the transactions contemplated thereby, or (c) that might
materially and adversely affect the performance by the Trustee of its obligati ons under, or the
validity or enforceability of the Trustee Documents;
(10) a certificate, dated the Closing Date, signed by a duly authorized
officer of the Trustee, to the effect that;
(i) the Trustee is a national banking association organized and
existing under and by virtue of the laws of the United States of America, having the necessary power
to enter into, accept, and administer the trusts created under the Indenture and to authenticate the
Bonds;
(ii) the Trustee Documents have been duly authorized, executed,
and delivered by a duly authorized officer of the Trustee, and the execution, delivery, and
performance of the Trustee Documents has been duly authorized by all necessary action of the
Trustee;
(iii) the Trustee Documents constitute the legal, valid, and binding
obligations of the Trustee enforceable in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors’
rights generally and by the application of equitable principles, if equitable remedies are sought;
(iv) the Bonds have been duly authenticated by a duly authorized
officer of the Trustee;
20
(v) no consent, approval, authorization, or other action by any
governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained
is or will be required for the execution and delivery of the Trustee Documents or the performance by
the Trustee of its duties and obligations under the Trustee Documents;
(vi) the execution and delivery by the Trustee of the Trustee
Documents and compliance with the terms thereof will not conflict with, or result in a violation or
breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution, or any
other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or
any rule, regulation, order, or decree of any court or governmental agency or body having
jurisdiction over the Trustee or any of its activities or properties (except that no representation,
warranty, or agreement need be made with respect to any federal or State securities or blue sky laws
or regulations);
(vii) the Trustee’s action in executing and delivering the Trustee
Documents will not contravene the articles or bylaws of the Trustee and is in full complianc e with,
and does not conflict with, any applicable law or governmental regulation currently in effect, and
such action does not conflict with or violate any contract to which the Trustee is a party or any
administrative or judicial decision by which the Trustee is bound; and
(viii) there is no action, suit, proceeding, or investigation, at law or
in equity, before or by any court or governmental agency, public board, or body that has been served
on the Trustee, or to the best knowledge of the Trustee, threatened a gainst the Trustee which in the
reasonable judgment of the Trustee would affect the existence of the Trustee or in any way
contesting or affecting the validity or enforceability of the Trustee Documents or contesting the
powers of the Trustee or its authority to enter into and perform its obligations thereunder;
(11) a letter from Stradling Yocca Carlson & Rauth, a Professional
Corporation, Newport Beach, California, counsel to the Underwriter (“Underwriter’s Counsel”),
dated the Closing Date, addressed to the Underwriter, in form and substance acceptable to the
Underwriter;
(12) certified copies of the City Resolution, the Authority Resolution, and
an incumbency resolution of the Trustee;
(13) copies each of the Authority Documents, the City Documents, and the
Official Statement, duly executed and delivered by the respective parties thereto;
(14) evidence that the rating on the Bonds of “__”from S&P Global
Ratings, a Standard & Poor’s Financial Services LLC business, is in full force and effect on the
Closing Date;
(15) copies of the statements with respect to the sale of the Bonds required
to be delivered to the California Debt and Investment Advisory Commission;
(16) evidence that a debt management policy which complies
Sections 8855 of the California Government Code has been adopted by both the City and the
Authority;
21
(17) a copy of the Blanket Letter of Representations to DTC relating to the
Bonds signed by the Authority;
(18) a copy of an ALTA or CLTA title insurance policy in an amount
equal to the principal amount of the Bonds, insuring the City’s leasehold interest in the Property,
subject only to permitted encumbrances or such other encumbrances approved in writing by the
Underwriter;
(19) A Certificate Regarding Compliance With Certain Tax Matters with
respect to the maintenance of the tax-exempt status of the Bonds, duly executed by the City, together
with Form 8038-G, duly executed by the City.
(20) Specimen Bonds, duly executed by the Trustee.
(21) such additional legal opinions, certificates, proceedings, instruments,
and other documents as the Underwriter, Underwriter’s Counsel, or Bond Counsel may reasonably
request to evidence compliance by the City and the Authority with legal requirements, the accuracy,
as of the time of Closing, of the Authority and the City’s representations herein contained, and the
due performance or satisfaction by the City and the Authority at or prior to such time of all
agreements then to be performed and all conditions then to be satisfied by the City and the Authority.
If the City or the Authority shall be unable to satisfy the conditions to the Underwriter’s
obligations contained in this Purchase Contract or if the Underwriter’s obligations shall be terminated
for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and none
of the City, the Authority, or the Underwriter shall have any further obligation hereunder.
9. The performance by each of the Authority and the City of its obligations is
conditioned upon (i) the performance by the Underwriter of its obligations hereunder and (ii) receipt
by the Authority, the City, and the Underwriter of opinions and certificates being delivered at the
Closing by persons and entities other than Authority and the City.
10. No expenses and costs of the City or the Authority incident to the performance of t he
Authority’s or the City’s obligations in connection with the authorization, issuance, and sale of the
Bonds to the Underwriter, such as the costs of preparation (including word processing, printing, and
reproduction), distribution and delivery of the Preliminary Official Statement, the Official Statement,
and this Purchase Contract, in reasonable quantities, fees of rating agencies, fees and expenses of any
municipal advisor to the City, and fees and expenses of Bond Counsel or Disclosure Counsel for the
City shall be paid by the Underwriter. Except as indicated above, all out -of-pocket expenses of the
Underwriter, including the California Debt and Investment Advisory Commission fee, traveling,
advertising expenses, any costs and expenses incurred in connection with the preparation and
distribution of any blue sky surveys or any legal investment memoranda, fees and expenses of
Underwriter’s Counsel and other expenses and the fees and expenses of the Underwriter, shall be
paid by the Underwriter.
11. Any notice or other communication to be given to the City under this Purchase
Contract may be given by delivering the same in writing to the City of Orange, 300 E. Chapman
Ave., Orange, California 92866, Attention: City Manager, or to such other person as the City
Manager may designate in writing. Any notice or other communication to be given to the Authority
under this Purchase Contract may be given by delivering the same in writing to the Orange City
22
Public Facilities Financing Authority, 300 E. Chapman Ave., Orange, California 92866, Attention:
Executive Director, or to such other person as the Executive Director may designate in writing. Any
notice or other communication to be given to the Underwriter under this Purchase Contract may be
given by delivering the same in writing to Raymond James & Associates, Inc., 39 E. Union Street,
Pasadena, California 91103, Attention: Josè Vera, Managing Director. The approval of the
Underwriter when required hereunder or the determination of its satisfaction as to any document
referred to herein shall be in writing signed by the Underwriter and delivered to the Authority.
12. For all purposes of this Purchase Contract, a default shall not be deemed to be
continuing if it has been cured, waived, or otherwise remedied. This Purchase Contract shall be
governed by and construed in accordance with the laws of the State applicable to contracts made and
performed within the State.
13. This Purchase Contract may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
14. This Purchase Contract when accepted by the Authority and the City in writing shall
constitute the entire agreement among the City, the Authority, and the Underwriter and is made
solely for the benefit of the City, the Authority, and the Underwriter (including the successors or
assigns of the Underwriter approved by the City and the Authority). No other person shall acquire or
have any right hereunder or by virtue hereof. All of the representations, warranties, and agreements
of the City and the Authority contained in this Purchase Contract shall remain operative and in full
force and effect regardless of (a) any investigation made by or on behalf of the Underwriter (but, if
the Underwriter does discover by its investigation that the Official Statement contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, the Underwriter shall so
notify the City and the Authority); (b) the delivery of and payment for the Bonds; and (c) any
termination of this Purchase Contract.
S-1
15. This Purchase Contract shall not be modified or amended without the prior written
consent of the Underwriter, the City, and the Authority.
Very truly yours,
RAYMOND JAMES & ASSOCIATES, INC.
By:
Managing Director
Accepted at ______ [AM/PM] as of the date hereof:
ORANGE CITY PUBLIC FACILITIES FINANCING
AUTHORITY
By:
Authorized Officer
CITY OF ORANGE
By:
Authorized Officer
A-1
EXHIBIT A
$__________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds, Series 2020A
Maturity
Date
(November 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold the
Offering
Price
Used
$ % %
[C Priced to the first optional redemption date of November 1, 20__ at par.]
[T Term Bond.]
Redemption
Optional Redemption. The Bonds maturing on or before November 1, 20__ are not subject to
optional redemption. The Bonds maturing on or after November 1, 20__ are subject to redemption
prior to their respective maturity dates, as a whole or in part, from prepayments of Base Rental made
at the option of the City pursuant to the Sublease on any date with respect to which such prepayments
have been made (which will be on or after November 1, 20__), at a redemption price equal to 100
percent of the principal amount of the Bonds to be redeemed, without premium, plus accrued interest
thereon to the date of redemption.
A-2
Mandatory Sinking Fund Redemption. The Bonds maturing on November 1, 20__ are
subject to redemption in part by lot from sinking account payments made by the Authority, at a
redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon
to the redemption date, without premium, in the aggregate respective principal amounts and on the
respective dates as set forth in the following table:
Term Bonds Maturing on November 1, 20
Redemption Date
(November 1)
Principal Amount
to be Redeemed
$
(Maturity)
B-1
EXHIBIT B
$__________*
Orange City Public Facilities Financing Authority
Lease Revenue Bonds, Series 2020A
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents that the undersigned is the duly appointed
and acting representative of the Orange City Public Facilities Financing Authority (the “Authority”),
and the City of Orange (the “City”) and as such is duly authorized to execute and deliver this
Certificate on behalf of the Authority and the City, and further hereby certifies and reconfirms on
behalf of the Authority and the City as follows:
(1) This Certificate is delivered in connection with the offering and sale of the above
captioned bonds (the “Bonds”) in order to enable the underwriter of the Bonds to comply with
Securities and Exchange Commission Rule 15c2-12 promulgated under the Securities Exchange Act
of 1934 (the “Rule”).
(2) In connection with the offering and sale of the Bonds, there has been prepared a
Preliminary Official Statement, setting forth information concerning the Bonds, the Authority and the
City (the “Preliminary Official Statement”).
(3) As used herein, “Permitted Omissions” means the offering price(s), interest rate(s),
selling compensation, aggregate principal amount, principal amount per maturity, delivery dat es,
ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed
final within the meaning of the Rule, and the information therein is accurate and complete except for
the Permitted Omissions.
Dated: __________, 2020
ORANGE CITY PUBLIC FACILITIES FINANCING
AUTHORITY
By:
Authorized Officer
CITY OF ORANGE
By:
Authorized Officer
* Preliminary; subject to change.
C-1
EXHIBIT C
(Certificate Regarding Compliance with Certain Tax Matters)
CERTIFICATE OF THE UNDERWRITER
with reference to
$__________
Orange City Public Facilities Financing Authority
Lease Revenue Bonds
Series 2020A
Dated: _________, 2020
This certificate is being delivered by Raymond James & Associates, Inc. (“Raymond James”)
in connection with the issuance by the Orange City Public Facilities Financing Authority (the
“Authority”) of the above-referenced bonds (the “Bonds”). The Underwriter hereby makes the
representations, and provides the certifications, contained in this certificate based on the information
available to it concerning the Bonds to the Authority, the City of Orange (the “City”) and Richards,
Watson & Gershon, A Professional Corporation, as Bond Counsel (“Bond Counsel”), as follows:
1. Certain Defined Terms.
(a) Capitalized terms used in this certificate, unless otherwise defined herein, shall have
the meanings given to such terms in the Certificate Regarding Compliance with Certain Tax Matters
(the “Tax Certificate”) executed by the Authority and the City in connection with the execution and
delivery of the Bonds.
(b) “General Rule Maturities” means those Ma turities of the Bonds not indicated as a
“Hold-the-Offering-Price Maturity” on Schedule I.
(c) “Maturity” means Bonds with the same credit and payment terms. Bonds with
different maturity dates, or Bonds with the same maturity date but different stated i nterest rates, are
treated as separate Maturities.
(d) “Public” means any person (including an individual, trust, estate, partnership,
association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons
who have greater than 50 percent common ownership, directly or indirectly.
(e) “Underwriter” means (i) any person that agrees pursuant to a written contract with the
City and the Authority (or with the lead underwriter to form an underwriting syndicate) to participate
in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written
contract directly or indirectly with a person described in clause (i) of this paragraph to participate in
the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail
distribution agreement participating in the initial sale of the Bonds to the Public). Raymond James is
the sole Underwriter with respect to the Bonds.
C-2
2. Contract of Purchase. On ______________, 2020 (the “Sale Date”), the
Underwriter, the City and the Authority executed a Contract of Purchase (the “Purchase Contract”) in
connection with the sale of the Bonds. The Underwriter has not modified the Purchase Contract
since its execution on the Sale Date.
3. Sale Prices. As of the date of this Certificate, for each Maturity of the Bonds, the
first price or prices at which at least 10% of each such Maturity of the Bonds was sold to the Public
(the “10% Test”) is the respective price listed in Schedule I attached hereto (the “Sale Price,” as
applicable to the respective Maturities). [Revise if hold-the-offering-price applies.]
4. Issue Price. The aggregate of the sale prices of the Bonds is $________ (the “Issue
Price”).
5. Reserve Requirement. Based upon Raymond James’s experience in marketing and
maintaining a market for obligations having terms and credit arrangements similar to those
underlying the Bonds, the Reserve Requirement contemplated under the Indenture was a vital factor
in the marketing of the Bonds, facilitated the marketing of the Bonds at an interest rate comparable to
that of bonds and other obligations of a similar type and is not in excess of the amount necessary for
such purpose.
6. [Credit Enhancement.
(i) Raymond James has calculated that the aggregate present value of the amounts paid
to obtain the Bond Insurance and the Reserve Policy is less than the present value of the interest
reasonably expected to be saved on the Bonds as a result of having the Bond Insurance and the
Reserve Policy, using the Yield on the Bonds (calculated by taking into account the cost of the Bond
Insurance and the Reserve Policy) as the discount factor for this p urpose.
(ii) To the best of Raymond James’s knowledge, the amount paid to
____________________________ (the “Bond Insurer”) from the proceeds of the Bonds for the Bond
Insurance and the Reserve Policy, is within a reasonable range of premiums charged for c omparable
credit enhancement for obligations comparable to the obligations evidenced and represented by the
Bonds.
(iii) The fees paid and to be paid to obtain the Bond Insurance and the Reserve Policy
were determined in arm’s-length negotiations and were required as a condition to the issuance by the
Bond Insurer of the Bond Insurance and the Reserve Policy.
(iv) To the best of Raymond James’s knowledge, the fees paid and to be paid for the
Bond Insurance and the Reserve Policy represent a commercially rea sonable charge for the transfer
of credit risk.]
7. Yield.
(i) Using a methodology acceptable to Bond Counsel, Raymond James has calculated
the Yield on the Bonds to be ________ percent, being the discount rate that, when used in computing
the present worth of all payments of principal and interest to be paid on the Bonds, computed on the
basis of a 360-day year and semi-annual compounding, produces an amount equal to the Sale Price as
C-3
stated above[, less the premium for the Bond Insurance and the Reserve Policy, which are Qualified
Guarantees].
(ii) The Bonds maturing in the years 20__ through 20___ are the only Bonds that are
subject to optional redemption prior to maturity and have an Initial Offering Price that exceeds their
stated redemption price at maturity by more than one fourth of one percent multiplied by the product
of their stated redemption price at maturity and the number of complete years to their first optional
redemption date. Accordingly, in computing the Yield on the Bonds stated above, each of such
Bonds maturing 20__ through 20__ are treated as retired on the optional redemption date or at
maturity to result in the lowest Yield on that Bond.
(iii) [No maturity of Bonds that are subject to mandatory early redemption has a stated
redemption price that exceeds its Initial Offering Price by more than one-fourth of one percent
multiplied by the product of its stated redemption price at maturity and the number of years to its
weighted average maturity date]
8. Weighted Average Maturity. The “Weighted Average Maturity” of the Bonds is
calculated pursuant to the instructions of Bond Counsel as the sum of the products of the Sale Price
or the Initial Offering Price, as applicable, of each Maturity of the Bonds and the number of years to
maturity (determined separately for each Maturity and by taking into account mandatory
redemptions), divided by the Sale Price of the Bonds. Calculated in this manner, the Weighted
Average Maturity of the Bonds is ____ years.
9. Use of Certificate. The representations set forth in this Certificate are limited to
factual matters only. Nothing in this Certificate represents Raymond James’s interpretation of any
laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations thereunder. Raymond James understands and acknowledges that this
Certificate will be attached as an Exhibit to the Tax Certificate, executed by the City and the
Authority. Raymond James understands that this Certificate will be r elied upon by the City and the
Authority with respect to certain of the representations set forth in the Tax Certificate and with
respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in
connection with rendering its opinion that the interest on the Bonds is excluded from gross income
for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038 -G, and
other federal income tax advice that Bond Counsel may give to the City and the Autho rity from time
to time relating to the Bonds. Except as expressly set forth above, the certifications set forth herein
may not be relied upon or used by any third party or for any other purpose.
IN WITNESS WHEREOF, the undersigned has caused this Certific ate to be executed on the
date first written above.
RAYMOND JAMES & ASSOCIATES, INC.
By:
(Print) Name:
Title:
C-4
SCHEDULE 1
MATURITY SCHEDULE, PRICES AND YIELDS
C-5
SCHEDULE 2
PRICING WIRE