HomeMy WebLinkAboutPFC-2 - PFC-2 - Bond Purchase AgreementBond Purchase Agreement
HD& W LLP — 10/28/10 Draft
$12010A Principal Amount]
City of Newport Beach Certificates of Participation 2010A
(Tax Exempt) (Civic Center Project/Central Library Refunding)
and
$[Series B Principal Amount]
City of Newport Beach Certificates of Participation 2010B
(Federally Taxable Direct Pay Build America Bonds) (Civic Center Project)
PURCHASE CONTRACT
[Pricing Date]
City of Newport Beach
330 Newport Boulevard
Newport Beach, CA 92658 -8915
Ladies and Gentlemen:
Stone & Youngberg LLC, acting on behalf of itself and as Representative (the
"Representative ") of the underwriter listed in Exhibit A hereto (collectively, the "Underwriters "),
offers to enter into this Purchase Contract (the "Purchase Contract ") with you, the City of
Newport Beach, California (the "City "), for the purchase by the Underwriters of the City of
Newport Beach Certificates of Participation 2010A (Tax Exempt) (Civic Center Project /Central
Library Refunding) in the aggregate principal amount of $[2010A Principal Amount] (the
"2010A Certificates ") and the City of Newport Beach Certificates of Participation 2010B
(Federally Taxable Direct Pay Build America Bonds) (Civic Center Project) in the aggregate
principal amount of $[Series B Principal Amount] (the "2010B Certificates" and, together with
the 2010A Certificates, the "Certificates ").
This offer is made subject to written acceptance by the City at or prior to 5:00 p.m.,
California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the
Underwriters upon notice delivered to the City at any time prior to the acceptance hereof by the
City. Upon such acceptance this Purchase Contract shall be in full force and effect in accordance
with its terms and shall be binding upon the City and the Underwriters.
Section 1. Purchase and Sale. Upon the terms and conditions and in reliance on the
representations, warranties and agreements herein set forth, the Underwriters hereby agree to
purchase, and the City hereby agrees to execute and direct The Bank of New York Mellon Trust
Company, N.A. (the "Trustee "), to authenticate and deliver to the Underwriters, all (but not less
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than all) of the $[2010A Principal Amount] aggregate principal amount of the 2010A Certificates
at the purchase price of $[2010 Purchase Price] (representing the principal amount of the 2010A
Certificates of $[2010A Principal Amount], [plus /minus] a net original issue [premium/discount]
of $[2010A Premium/Discount] and less an underwriting discount of $[2010A Underwriting
Discount]) (the "2010A Purchase Price ") and the $[2010B Principal Amount] aggregate
principal amount of the 2010B Certificates at the purchase price of $[2010 Purchase Price]
(representing the principal amount of the 2010B Certificates of $[2010B Principal Amount], less
an underwriting discount of $[2010B Underwriting Discount]) (the "2010B Purchase Price ").
The Certificates shall be as described in the Official Statement and the Trust Agreement (each as
herein defined) and shall be executed, delivered and secured under and pursuant to a Trust
Agreement, dated as of November 1, 2010 (the "Trust Agreement "), by and among the City, the
Newport Beach Public Facilities Corporation (the "Corporation ") and the Trustee. The principal
amounts, maturities and interest rates with respect to the Certificates are as set forth in Exhibit C
hereto. The proceeds of the 2010A Certificates will be applied to prepay the outstanding City of
Newport Beach Refunding Certificates of Participation, Series 1998 (Central Library Building
Project) (the "1998 Certificates "), and finance a portion of the costs of the acquisition,
improvement and equipping of a new City Hall (the "Civic Center Project "). The proceeds of
the 2010B Certificates will be applied to provide additional financing for the Civic Center
Project. The proceeds of the Certificates will also be applied to fund a reserve fund for the
Certificates and pay certain costs of issuance incurred in connection with the Certificates.
Capitalized terms used and not defined herein have the meanings ascribed to them in the Trust
Agreement or the herein referenced Lease, as applicable. The Certificates will be issued in
book -entry form only and, when delivered, will be registered in the name of Cede & Co., as
nominee of The Depository Trust Company, New York, New York ( "DTC "), which will act as
securities depository for the Certificates. Individual purchases of the Certificates will be made in
book -entry form only.
In connection with the prepayment of the 1998 Certificates and the financing of the Civic
Center Project, the City will lease certain real property and all improvements thereon (the
"Leased Premises "), to the Corporation pursuant to a Site Lease, dated as of November 1, 2010
(the "Site Lease "), by and between the City and the Corporation. The City will sublease the
Leased Premises from the Corporation pursuant to a Lease /Purchase Agreement, dated as of
November 1, 2010 (the "Lease "), by and between the City and the Corporation. The 2010A
Certificates evidence fractional and undivided interests in certain lease payments (the "2010A
Lease Payments ") to be made by the City pursuant to the Lease as rental for the Leased
Premises. The 2010B Certificates evidence fractional and undivided interests in certain other
lease payments (the "2010B Lease Payments" and, together with the 2010A Lease Payments, the
"Lease Payments ") to be made by the City pursuant to Lease as rental for the Leased Premises.
Pursuant to an Assignment Agreement, dated as of November 1, 2010 (the "Assignment
Agreement "), by and between the Trustee and the Corporation, the Corporation will assign to the
Trustee, for the benefit of the Owners of the Certificates all of the Corporation's rights, title, and
interest under the Site Lease and all of the Corporation's rights, title and interest under the Lease
(excepting only the Corporation's rights to indemnity and the payment of its fees and expenses),
including the right to receive Lease Payments, Prepayments and Additional Payments from the
City under the Lease or the Trust Agreement, as applicable. Pursuant to an Agency Agreement,
dated as of November 1, 2010 (the "Agency Agreement "), by and between the City and the
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Corporation, the Corporation will appoint the City as its agent in connection with the acquisition,
construction, delivery and installation of the Civic Center Project.
The City has designated and hereby designates the 2010B Certificates as `Build America
Bonds" for purposes of the American Recovery and Reinvestment Act of 2009 signed into law
on February 17, 2009 (the "Recovery Act') and the 2010B Certificates will be issued as Build
America Bonds.
Upon delivery of the 2010A Certificates, a portion of the proceeds thereof will be
deposited into that certain escrow fund established under an Escrow Agreement, dated as of
October 29, 2010 (the "Escrow Agreement "), by and between the City and U.S. Bank National
Association, as escrow agent thereunder (the "Escrow Agent'). Such amounts will be used by
the Escrow Agent to prepay all of the outstanding 1998 Certificates in accordance with the terms
and conditions of the Escrow Agreement and the trust agreement pursuant to which the 1998
Certificates were executed and delivered.
The execution and delivery of the Trust Agreement, the Certificates and certain matters
relating thereto have been authorized by a resolution of the Corporation adopted on November 9,
2010 (the "Corporation Resolution ") and resolutions of the City adopted on October 27, 2010
and November 9, 2010 (collectively, the "City Resolution "). This Purchase Contract, the Trust
Agreement, the Site Lease, the Lease, the Escrow Agreement, the Agency Agreement and the
Continuing Disclosure Agreement, dated as of November 1, 2010 (the "Continuing Disclosure
Agreement'), by and between the City and Digital Assurance Certification, L.L.C., are referred
to collectively herein as the "City Legal Documents." The Letter of Representations of the
Corporation, set forth in Exhibit B hereto (the "Letter of Representations "), the Trust Agreement,
the Site Lease, the Lease, the Assignment Agreement and the Agency Agreement are referred to
collectively herein as the "Corporation Legal Documents ". The City Legal Documents and the
Corporation Legal Documents are referred to collectively herein as the "Legal Documents ".
Capitalized terms not otherwise defined herein shall have the meanings as defined in the Trust
Agreement.
Section 2. Delivery of the Official Statement and Other Documents.
(a) The City, on behalf of itself and as agent for the Corporation, agrees to
cause to be delivered to the Underwriters as many copies of the Official Statement (as hereinafter
defined), signed on behalf of the City by the City Manager or any other duly authorized officer
of the City, as the Underwriters shall reasonably request in order to comply with paragraph (b)(4)
of Rule 15c2 -12 (the "Rule ") promulgated by the U.S. Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, and the rules of the Municipal
Securities Rulemaking Board (the "MSRB "). The City agrees to deliver such Official
Statements within seven (7) business days after the execution hereof, and no later than three (3)
business days prior to the date of Closing (as hereinafter defined).
(b) The City has previously authorized the approval of the Official Statement
by execution thereof by a duly authorized officer of the City. The City executed and delivered to
the Representative a certificate in the form of Exhibit D in connection with distribution of the
Preliminary Official Statement dated [POS Date] with respect to the Certificates (together with
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the appendices thereto, any documents incorporated therein by reference and any supplements or
amendments thereto, the "Preliminary Official Statement'). By execution of this Purchase
Contract, the City confirms that the Preliminary Official Statement was deemed final for
purposes of the Rule and represents that the information (excluding the statements and
information under the caption "Book -Entry System," and in Appendix D — "Book -Entry System"
and any information relating to the Underwriters provided by the Underwriters in writing for
inclusion in the Preliminary Official Statement) contained in the Preliminary Official Statement
was as of its date, and is as of the date hereof, true and correct in all material respects and such
information did not and does not contain any untrue or misleading statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Preliminary Official
Statement, with such changes and amendments as are mutually agreed to by the City, the
Corporation and the Underwriters, including the cover page, inside cover page, the appendices
and all information incorporated therein by reference, is herein referred to as the "Official
Statement'.
(c) Prior to the 25 days after the Closing, but not thereafter, the City shall
provide the Underwriters with such information regarding the City, its current financial condition
and ongoing operations, as the Underwriters may reasonably request, if there are any unsold
Certificates at Closing.
Section 3. The Closing. At 8:00 a.m., California Time, on November 30, 2010, or at
such other time or on such earlier or later date as the City and the Representative mutually agree
upon, the City and the Trustee will deliver or cause to be delivered to the Representative the
Certificates in book -entry form through or otherwise in care of the facilities of DTC, duly
executed and authenticated, and the other documents hereinafter mentioned shall be delivered at
the offices of Stradling Yocca Carlson & Rauth, a Professional Corporation in Newport Beach,
California, or at such other location as shall have been mutually agreed upon by the City and the
Representative. Subject to the terms and conditions hereof, the Representative will accept
delivery of the Certificates and pay the Purchase Price thereof by federal funds to the order of the
Trustee in an amount equal to the Purchase Price as set forth in Section I hereof (such delivery
of and payment for the Certificates is herein called the "Closing ").
Section 4. Public Offering. The Underwriters agree to make a bona fide public
offering of all of the Certificates at their principal amount. The Underwriters reserve the right to
change such initial public offering prices or yields as the Underwriters deem necessary following
the initial public offering period in connection with the marketing of the Certificates. The City
hereby authorizes the Underwriter to use the forms or copies of the Legal Documents and the
Official Statement and the information contained therein in connection with the public offering
and sale of the Certificates.
Section 5. Liquidated Damages. [In the event that the Underwriters fail (other than
for a reason permitted by this Purchase Contract) to accept and pay for the Certificates at the
Closing, the amount of 1% of the principal amount of the Certificates shall be full liquidated
damages for such failure and for any and all defaults hereunder on the part of the Underwriters,
and the acceptance of such amount shall constitute a full release and discharge of all claims and
rights of the Trustee, the City and the Corporation, against the Underwriters. Full payment for
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liquidated damages shall be made in Clearinghouse funds within two business days of the day on
which the Underwriters failed (other than for a reason permitted by this Purchase Contract) to
accept and pay for the Certificates.]
Section 6. City Representations, Warranties and Agreements. The City represents
and warrants to the Underwriters as follows:
(a) Due Organization and Operation, Legal, Valid and Binding Obligations.
The City is a chartered city duly organized and operating pursuant to the Constitution and laws
of the State of California and has all necessary power and authority to adopt the City Resolution,
execute, deliver and perform its obligations under the Certificates, and to enter into and perform
its duties under the City Legal Documents. The City Resolution has been adopted at a meeting
of the City Council 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 is in full force and effect and has
not been modified, amended or rescinded, and the City Legal Documents, when executed and
delivered by the respective parties thereto, will constitute legal, valid and binding obligations of
the City enforceable against the City in accordance with their respective terms, except as the
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.
(b) No Conflict. The adoption of the City Resolution and the execution and
delivery of the City Legal Documents, and compliance with the provisions thereof, will not in
any material respect conflict with, or constitute a breach of or default under, the City's duties
under the City Legal Documents, the City Resolution or any law, administrative regulation, court
decree, resolution, by -laws or other agreement to which the City is subject or by which it or any
of its property is bound.
(c) No Consents Required. After due inquiry, except as may be required
under blue sky or other securities laws of any state, or with respect to any permits, consents or
approvals heretofore received which are in full force and effect or the requirement for which is
otherwise disclosed in the Official Statement, there is no consent, approval, authorization or
other order of, or filing with, or certification by, any governmental authority, board, agency or
commission or other regulatory authority having jurisdiction over the City, other than the
approval and authorization of the City Council of the City (the "City Council "), required for the
adoption of the City Resolution and execution and delivery of the City Legal Documents or the
consummation by the City of the other transactions contemplated by the Certificates, the Official
Statement, the City Resolution or the City Legal Documents.
(d) No Liti ation. There is no action, suit, proceeding or investigation at law
or in equity before or by any court or governmental agency or body pending or, to the knowledge
of the City, threatened against the City to restrain or enjoin the delivery of the Certificates or the
payments to be made pursuant to the Lease, or in any way contesting or affecting the validity of
the City Legal Documents, the City Resolution or the Certificates, or contesting the powers of
the City to enter into or perform its obligations under any of the foregoing.
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(e) Official Statement Correct and Complete. The information (excluding the
statements and information under the caption "Book -Entry System," and in Appendix D —
"Book -Entry System" and any information relating to the Underwriters provided by the
Underwriters in writing for inclusion in the Official Statement) contained in the Official
Statement is as of the date hereof, and will be as of the Closing Date, true and correct in all
material respects and such information does not and will not contain any untrue or misleading
statement of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(I) Blue Sky Cooperation. The City agrees to cooperate with the
Underwriters in endeavoring to qualify the Certificates for offering and sale under the securities
or Blue Sky laws of such jurisdictions of the United States as the Underwriters may request;
provided, however, that the City shall not be required to execute a special or general consent to
service of process in any jurisdiction in which it is not now so subject or to qualify to do business
in any jurisdiction where it is not now so qualified.
(g) Due Approval of Official Statement Distribution. By official action of the
City prior to or concurrently with the execution hereof, the City has duly approved the
distribution of the Preliminary Official Statement and the Official Statement, has duly adopted
the City Resolution and has duly authorized and approved the execution and delivery of, and the
performance by the City of the obligations on its part contained in, the City Legal Documents
and the consummation by it of all other transactions contemplated by the Official Statement and
the City Legal Documents.
(h) No Breach or Default. Except as described in the Official Statement, the
City is not in breach of or in default under any applicable law or administrative regulation of the
State of California or the United States or any applicable judgment or decree or any loan
agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is
a party or is otherwise subject which breach or default would have a material and adverse impact
on the City's ability to perform its obligations under the Certificates or the City Legal
Documents, and no event has occurred and is continuing which, with the passage of time or the
giving of notice, or both, would constitute a default or an event of default under any such
instrument.
(i) Agreement to Notify Representative Regarding Official Statement.
Subject to Section 2(c) hereof, the City will advise the Representative promptly of any proposal
to amend or supplement the Official Statement and will not effect any such amendment or
supplement without the consent of the Representative. The City will advise the Representative
promptly of the institution of any proceedings known to it seeking to prohibit or otherwise affect
the use of the Official Statement in connection with the offering, sale or distribution of the
Certificates.
(j) Agreement to Amend Official Statement. If at any time from the date
hereof to and including twenty -five (25) days after the end of the underwriting period in the
reasonable opinion of the Representative, the Official Statement as then amended or
supplemented includes an untrue statement of a material fact, or omits to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which
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they were made, not misleading, the City will prepare an amendment or supplement to the
Official Statement; provided that all expenses thereby incurred (including printing expenses) will
be paid for by the City.
Unless otherwise notified in writing by the Representative on or prior to the date
of Closing, the City may assume that the "end of the underwriting period" for the
Certificates for all purposes of the Rule, is the date of Closing. In the event such notice is
given in writing by the Representative, the Representative agrees to notify the City in
writing following the occurrence of the "end of the underwriting period" as defined in the
Rule for the Certificates. The "end of the underwriting period" as used in this Purchase
Contract shall mean the date of Closing or such later date as to which notice is given by
the Representative in accordance with the preceding sentence.
(k) Amendments to Official Statement Correct and Complete. If the
information contained in the Official Statement is amended or supplemented pursuant to the
immediately preceding subparagraph, at the time of each supplement or amendment thereto and
(unless subsequently again supplemented or amended pursuant to such subparagraph) at all times
subsequent thereto up to and including the date twenty -five (25) days after the end of the
underwriting period, the portions of the Official Statement so supplemented or amended
(including any financial and statistical data contained therein) will be true and correct in all
material respects and such information will not contain any untrue or misleading statement of a
material fact or omit to state any material fact necessary to make the information therein, in the
light of the circumstances under which it was made, not misleading. If at any time prior to the
earlier of (i) receipt of notice from the Representative pursuant to Section 2(c) hereof that
Official Statements are no longer required to be delivered; and (ii) twenty -five (25) days after the
end of the underwriting period, any event occurs with respect to the City as a result of which the
Official Statement as then amended or supplemented might include an untrue statement of a
material fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, the City shall promptly
notify the Representative in writing of such event. Any information supplied by the City for
inclusion in any amendment or supplement to the Official Statement will not contain any untrue
or misleading statement of a material fact relating to the City or omit to state any material fact
relating to the City necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that no representation and warranty is made
concerning statements and information under Appendix D — "Book -Entry System" and any
information relating to the Underwriters provided by the Underwriters in writing for inclusion in
the Official Statement.
(1) No Default. The City represents that it is not, and has not been at any
time, in default as to principal or interest with respect to any indebtedness for borrowed money
issued or guaranteed by it.
(m) Agreement to Preserve Tax Exemption with respect to the 2010A
Certificates. The City covenants that it will not take any action which would cause interest with
respect to the 2010A Certificates to be subject to federal income taxation or California personal
income taxes (other than to the extent the 2010A Certificates will be subject to federal income
taxation as described under the caption "Tax Matters" in the Official Statement).
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(n) Agreement to Preserve State Tax Exemption and Federal Subsidy with
respect to the 2010B Certificates. The City covenants that it will not take any action which
would cause interest with respect to the 2010B Certificates to be subject to California personal
income taxes or result in the loss of the Refundable Credits with respect to the 2010B
Certificates.
(o) City Financial Statements. The financial statements of, and other financial
information regarding, the City in the Official Statement fairly present the financial condition
and results of the operations of the City as of the dates and for the periods therein set forth and
the audited financial statements have been prepared in accordance with generally accepted
accounting principles as consistently applied. [No consent is required from Mayer Hoffman
McCann P.C. for the City to include its June 30, 2009 Basic Financial Statements and
Supplemental Data as Appendix B to the Official Statement.]
(p) Continuing Disclosure. The City has not failed in the past five years to
comply in all material respects with any continuing disclosure undertakings with regard to the
Rule to provide annual reports or notices of material events specified in such rule.
Section 7. Letter of Representations. The Underwriters' obligations under this
Purchase Contract are and shall be subject to the receipt of the Letter of Representations from the
Corporation in substantially the form attached hereto as Exhibit B.
Section 8. Underwriters' Representations, Warranties and Agreements. The
Underwriters represent, warrant to and agree with the City that, as of the date of hereof and as of
the Closing Date:
(a) The execution and delivery hereof and the consummation of the
transactions contemplated hereby do not and will not violate any of the prohibitions set forth in
Rule G -37 promulgated by the MSRB;
(b) All reports required to be submitted to the MSRB pursuant to Rule G -37
have been and will be submitted to the MSRB;
(c) The Underwriters have not paid or agreed to pay, nor will they pay or
agree to pay, any entity, company, firm, or person, other than a bona fide officer, agent or
employee working for the Underwriters, any compensation, fee, gift or other consideration
contingent upon or resulting from the award of or entering into this Purchase Contract; and
Section 9. Conditions to the Obligations of the Underwriters. The Underwriters have
entered into this Purchase Contract in reliance upon the representations, warranties and
agreements of the City contained herein and of the Corporation contained in its Letter of
Representations, the representations, warranties and agreements to be contained in the
documents and instruments to be delivered at the Closing, the performance by the City of its
obligations hereunder, and the performance by the Corporation of its obligations contained in its
Letter of Representations, and the opinions of Stradling Yocca Carlson & Rauth, a Professional
Corporation, Newport Beach, California ( "Special Counsel "), the City Attorney, counsel to the
Trustee, counsel to the City, counsel to the Corporation, Disclosure Counsel and counsel to the
Underwriters described hereafter. Accordingly, the Underwriters' obligations under this
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Purchase Contract to purchase, to accept delivery of and to pay for the Certificates shall be
conditioned upon and subject to (i) the performance by the City and the Trustee of their
respective obligations to be performed hereunder and under such documents and instruments as
shall reasonably be requested by the Underwriters or counsel to the Underwriters at or prior to
the Closing, (ii) the execution and delivery by the Corporation of the Corporation Letter of
Representations and the performance by the Corporation of its obligations thereunder at and
prior to the Closing and (iii) the accuracy in all material respects, in the reasonable judgment of
the Representative, of the representations and warranties of the City herein and shall also be
subject to the following additional conditions:
(a) Bring -down of Representations. The representations, warranties and
agreements of the City and the Corporation contained herein shall be true, complete and correct
on the date hereof and on and as of the date of the Closing.
(b) Authorization, Execution and Delivery of Documents. At the Closing, the
Legal Documents, the Certificates and the Official Statement shall have been duly authorized,
executed and delivered by the respective parties thereto and the City Resolution and the
Corporation Resolution shall have been duly adopted, in substantially the forms heretofore
submitted to the Representative, with only such changes as shall have been agreed to in writing
by the Representative, and said agreements and resolutions shall not have been amended,
modified or supplemented, except as may have been agreed to in writing by the Representative,
and each shall be in full force and effect.
(c) No Amendment of Official Statement. At the Closing, the Official
Statement shall not have been amended, modified or supplemented, except as may have been
agreed to in writing by the Representative.
(d) No Material Adverse Chanee. At the time of the Closing, there shall not
have occurred any change or any development involving a prospective change in the condition,
financial or otherwise, or in the operations of the City, from that set forth in the Official
Statement that makes it, in the reasonable judgment of the Representative, impracticable to
market the Certificates on the terms and in the manner contemplated by the Official Statement;
(e) Marketability Adversely Affected. In the judgment of the Representative,
between the date hereof and the Closing, the marketability of the Certificates at the initial
offering prices set forth in the Official Statement shall not have been materially adversely
affected by reason of any of the following:
(1) Legislation, Judicial Decisions or Rulings. An amendment to the
Constitution of the United States or the constitution of the State of California shall have been
passed or legislation enacted, introduced in the Congress or in the legislature of the State of
California or recommended for passage by the President of the United States, or a decision
rendered by a court established under Article III of the Constitution of the United States or by the
Tax Court of the United States, or an order, ruling, regulation (final, temporary or proposed) or
official statement issued or made:
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(i) Regarding Federal Tax Exemption — by or on behalf of the
Treasury Department of the United States or the Internal Revenue Service, with the purpose or
effect, directly or indirectly, of imposing federal income taxation upon payments of the general
character of the Lease Payments as would be received by the Trustee or upon such interest as
would be received by the Owners of the 2010A Certificates; or
(ii) Regarding State Tax Exemption — by or on behalf of the
State of California or the California Franchise Tax Board, with the purpose or effect, directly or
indirectly, of imposing California personal income taxation upon payments of the general
character of the Lease Payments as would be received by the Trustee or upon such interest as
would be received by the Owners of the Certificates; or
(iii) Regarding Federal or State Tax Rates — by or on behalf of
the Treasury Department of the United States or the Internal Revenue Service or by or on behalf
of the State of California or the California Franchise Tax Board, with the purpose or effect,
directly or indirectly, of changing the federal or State of California income tax rates,
respectively; or
(iv) [Regarding Federal Subsidy - by or on behalf of the
Treasury Department of the United States or the Internal Revenue Service, with the purpose or
effect, directly or indirectly, of adversely impacting the availability of the Refundable Credits
with respect to the 2010B Certificates; or]
(v) Regarding Securities Registration Exemption — by or on
behalf of the U.S. Securities and Exchange Commission, or any other governmental agency
having jurisdiction over the subject matter, to the effect that obligations of the general character
of the Certificates, including any or all underlying arrangements, are not exempt from
registration under the Securities Act of 1933, as amended (the "Act "), or that the Trust
Agreement is not exempt from qualification under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act ");
(2) War. The United States' engagement, alone or as a participant, in
an outbreak or escalation of hostilities or any change in financial markets or any calamity or
crisis the effect of which in the Representative's reasonable judgment makes it impracticable or
impossible to proceed with the solicitation of offers to purchase the Certificates on the terms and
in the manner contemplated by the Official Statement;
(3) Banking Moratorium. The declaration of a general banking
moratorium by federal, New York or California authorities, or the general suspension of trading
on any national securities exchange;
(4) Securities Exchange Restrictions. Trading generally shall have
been suspended or materially limited on or by the New York Stock Exchange or other national
securities exchange, or the imposition by the New York Stock Exchange or other national
securities exchange, or any governmental authority, of any material restrictions not now in force
with respect to the Certificates or obligations of the general character of the Certificates, or the
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material increase of any such restrictions now in force, including those relating to the extension
of credit by, or the charge to the net capital requirements of, underwriters;
(5) Regarding Federal Securities Laws. An order, decree or injunction
of any court of competent jurisdiction, or order, ruling, regulation or official statement by the
Securities and Exchange Commission, or any other governmental agency having jurisdiction of
the subject matter, issued or made to the effect that the execution, delivery, offering or sale of
obligations of the general character of the Certificates, or the execution, delivery, offering or sale
of the Certificates, including any or all underlying obligations, as contemplated hereby or by the
Official Statement, is or would be in violation of any federal securities law as amended and then
in effect;
(6) Official Statement Untrue or Incomplete. Any event occurring, or
information becoming known which, in the reasonable judgment of the Representative, makes
untrue in any material respect, any statement or information contained in the Official Statement,
or has the effect 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 the light of the
circumstances under which they were made, not misleading;
(7) Certain Amendments to the Official Statement. An event
described in Paragraph 60) hereof occurs prior to the Closing which, in the reasonable judgment
of the Representative, requires or has required a supplement or amendment to the Official
Statement; or
(8) Action by Rating Agencies. Any downgrading, suspension or
withdrawal, or any official statement as to a possible downgrading, suspension or withdrawal, of
any rating by Moody's Investors Service ( "Moody's "), Standard & Poor's, a division of The
McGraw -Hill Companies, Inc. ( "S &P "), or Fitch Ratings ( "Fitch ") of any obligations of the City
(excluding obligations for which the City acts merely as a conduit issuer) including the
Certificates.
(f) At or prior to the Closing, the Representative shall have received the
following documents, in each case satisfactory in form and substance to them and its counsel:
(1) Opinion of Special Counsel. The approving opinion of Special
Counsel in substantially the form included as Appendix E to the Official Statement, dated the
date of Closing, addressed to the City and the Underwriters (or a reliance letter to the
Underwriters);
(2) Supplementary Opinion of Special Counsel. A supplementary
opinion of Special Counsel in form and substance satisfactory to the Representative, dated the
date of Closing, addressed to the Representative to the effect that:
(i) Specified Sections of the Official Statement Correct and
Complete — the statements contained in the Official Statement under the captions "the
Certificates," "Security for the Certificates and Sources of Payment" (except for any information
relating to DTC and its book -entry system), and "Tax Matters" and in Appendix E - "Form of
Special Counsel Opinion" and Appendix C — "Summary of Principal Legal Documents"
11
excluding any material that may be treated as included under such captions by cross - reference
insofar as such statements expressly summarize certain provisions of the Certificates, the Trust
Agreement, the Site Lease, the Lease, the Assignment Agreement and the opinion of Special
Counsel concerning certain federal tax matters relating to the Certificates, are accurate in all
material respects;
(ii) Due Execution and Delivery; Valid and Binding
Agreements — the Purchase Contract has been duly executed and delivered by the City and
(assuming due authorization, execution and delivery against the other parties thereto) is a valid
and binding agreement of the City, except as limited by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium and other laws relating to or 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 counties in the State of
California, and except for any indemnification, contribution, penalty, choice of law, choice of
forum or waiver provisions contained therein; and
(iii) Securities Registration Exemption — the Certificates are not
subject to the registration requirements of the Act and the Trust Agreement is exempt from
qualification under the Trust Indenture Act;
(3) Opinion of City Attorney. An opinion of the City Attorney, dated
the date of Closing, in form and substance satisfactory to the Representative, addressed to the
City, the Trustee and the Underwriters, to the effect that:
(i) Due Organization and Existence — the City is a chartered
city duly organized and validly existing under the Constitution and the laws of the State of
California;
(ii) Due Adoption — the City Resolution approving and
authorizing the execution and delivery of the City Legal Documents and approving the Official
Statement was duly adopted at a meeting of the City Council of the City which 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 Resolution is in full force and effect and has not been
amended or rescinded;
(iii) No Lifi ag tion — except as disclosed in the Official
Statement, there is no action, suit or proceeding pending or, to the best knowledge of such
Counsel, threatened against the City to (i) restrain or enjoin the execution or delivery of any of
the Certificates or the City Legal Documents, (ii) in any way contesting or affecting the validity
of the Certificates, the City Legal Documents, the City Resolution or the authority the City to
enter into the City Legal Documents, or (iii) in any way contesting or affecting the powers of the
City in connection with any action contemplated by the Official Statement, the City Resolution
or the City Legal Documents;
(iv) No Conflict — the execution and delivery of the City Legal
Documents, the adoption of the City Resolution, the approval of the Official Statement, and
compliance with the provisions thereof and hereof, under the circumstances contemplated
12
thereby, do not and will not in any material respect conflict with or constitute on the part of the
City a breach of or default under any agreement or other instrument to which the City is a party
or by which it is bound or any existing law, regulation, court order or consent decree to which
the City is subject;
(v) Due Authorization. Execution and Delivery; Legal, Valid
and Binding Agreements — the City Legal Documents have been duly authorized, executed and
delivered by the City, and, assuming due authorization, execution and delivery by the other
parties thereto constitute legal, valid and binding agreements of the City enforceable in
accordance with their respective terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles
relating to or limiting creditors' rights generally and by the application of equitable principles if
equitable remedies are sought and by the limitations on legal remedies imposed on actions
against counties in the State of California;
(vi) No Consents Required — Official Statement, City Legal
Documents — no authorization, approval, consent, or other order of the State of California or any
other governmental authority or agency within the State of California, other than the City
Council pursuant to the City Resolution, is required for the valid authorization, execution and
delivery of the City Legal Documents and the approval of the Official Statement; and
(vii) Official Statement — based upon examinations which he has
made and his discussions in conferences with certain officials of the City and others with respect
to the Official Statement and without having undertaken to determine independently the
accuracy, completeness or fairness of the statements contained in the Official Statement
(including the Appendices attached thereto), nothing has come to his attention which would lead
him to believe that the Official Statement (other than financial and statistical data therein and
incorporated therein by reference, and other than information relating to the DTC Book -Entry
System, as to which no opinion need be expressed) as of its date and as of the date of Closing,
contained or contains an untrue statement of a material fact or omitted 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, except that no opinion is expressed concerning statements and
information relating to DTC and its book -entry system;
(4) Opinion of Counsel to the Corporation. An opinion of counsel to
the Corporation (which may be counsel to the City), dated the date of Closing, in form and
substance satisfactory to the Representative, addressed to the City, the Trustee and the
Underwriters, to the effect that:
(i) Due Organization and Existence — the Corporation is a
nonprofit public benefit corporation duly organized and validly existing under and by virtue of
the laws of the State of California;
(ii) Full Power and Authority of the Corporation — the
Corporation has full legal power and adequate authority to adopt the Corporation Resolution, to
enter into the Corporation Legal Documents, and to own or lease its properties and to carry on its
13
business as now conducted and as contemplated by the Legal Documents and the Official
Statement;
(iii) Due Authorization, Execution and Delivery; Legal, Valid
and Binding Agreements — the Corporation Resolution has been duly adopted by the Corporation
at a meeting of the Board of Directors of the Corporation at which a quorum was present and
acting throughout and is in full force and effect and the Corporation Legal Documents have been
duly authorized by all necessary official action on the part of the Corporation, have been duly
authorized, executed and delivered by the Corporation and, assuming due authorization,
execution and delivery by the other parties thereto, constitute legal, valid and binding agreements
of the Corporation, enforceable in accordance with their respective terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally and by the application of
equitable principles if equitable remedies are sought and by the limitations on legal remedies
imposed on actions against counties in the State of California;
(iv) Description of Corporation in the Official Statement
Correct and Complete — the description of the Corporation in the Official Statement is correct
and does not omit any statement necessary to make such description not misleading in any
material respect;
(v) No Litigation — except as disclosed in the Official
Statement, there is no action, suit or proceeding pending or, to the best knowledge of such
Counsel, threatened against the Corporation to (i) restrain or enjoin the execution or delivery of
any of the Certificates or the Corporation Legal Documents, (ii) in any way contesting or
affecting the validity of the Certificates, the Corporation Legal Documents, the Corporation
Resolution or the authority the Corporation to enter into the Corporation Legal Documents, or
(iii) in any way contesting or affecting the powers of the Corporation in connection with any
action contemplated by the Official Statement, the Corporation Resolution or the Corporation
Legal Documents;
(vi) No Conflict — the execution and delivery of the Corporation
Legal Documents, and the adoption of the Corporation Resolution, by the Corporation and
performance by the Corporation of its obligations thereunder will not conflict with or result in a
breach of any of the terms, conditions or provisions of any agreement or instrument to which the
Corporation is a party or constitute a default thereunder; and
(vii) No Consents Required — Official Statement, the Certificates
— all consents, approvals, authorizations and orders of a governmental or regulatory authority, if
any, which are required to be obtained by the Corporation for the consummation of the
transactions contemplated by the Official Statement or as conditions precedent to the execution
and delivery of the Certificates have been obtained (provided no opinion need be expressed as to
any action required under state securities or blue sky laws in connection with the purchase or
distribution of the Certificates by the Underwriters);
14
(5) Opinion of Trustee's Counsel. An opinion of counsel to the
Trustee, dated the date of Closing, in form and substance satisfactory to the Representative,
addressed to the City, the Trustee and the Underwriters, to the effect that:
(i) Due Organization and Existence — the Trustee is a national
banking association duly incorporated and validly existing under the laws of the United States of
America, having full power and being qualified to enter into and to perform its duties as Trustee
under the Trust Agreement and the Assignment Agreement; and
(ii) Due Authorization. Execution and Delivery — the Trust
Agreement and the Assignment Agreement have been duly authorized, executed and delivered
by the Trustee and assuming due authorization, execution and delivery by the other parties
thereto, constitute the legal, valid and binding obligations of the Trustee enforceable in
accordance with their respective terms.
(6) Defeasance Opinion. A defeasance opinion of Special Counsel,
dated the date of Closing, addressed to the Underwriters, with respect to the 1998 Certificate in
form and substance satisfactory to Escrow Agent;
(7) Opinion of Disclosure Counsel. The opinion of Hawkins Delafield
& Wood LLP, Los Angeles, California, Disclosure Counsel, dated the date of Closing and
addressed to the City, the Corporation and the Underwriters, to the effect that, on the basis of the
information developed in the course of the performance of disclosure counsel services by such
firm, considered in light of such firm's understanding of the applicable law and experience such
firm has gained through its practice thereunder, such firm is of the opinion, subject to certain
limitations, that as of the date of Closing such firm has no reason to believe that the Official
Statement (excluding therefrom financial, engineering and statistical data, forecasts, projections,
estimates, assumptions and expressions of opinions, and information relating to The Depository
Trust Company and the book -entry only system, as to all of which such firm expresses no
opinion) as of its date and as of the date of Closing contained or contains any untrue statement of
a material fact or omitted 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;
(8) Opinion of Underwriter's Counsel. The opinion of Jones Hall, a
Professional Law Corporation, San Francisco, counsel for the Underwriters, dated the date of
Closing and addressed to the Underwriters, satisfactory in form and substance to the
Representative;
(9) Legal Documents. A copy of the certified transcript of the record
of proceedings relating to the Certificates;
(10) Official Statement. Two (2) copies of the Official Statement;
(11) Trustee Resolution. A copy of the general resolution of the
Trustee authorizing the execution and delivery of certain documents by certain officers of the
Trustee, which resolution authorizes the execution and delivery of the Certificates and the Legal
Documents to which the Trustee is a party;
15
(12) Trustee's Representations. Warranties and Agreements. A
certificate of the Trustee, dated the date of Closing, that as of the date of Closing:
(i) Due Organization and Existence - the Trustee is duly
organized and existing as a national banking association under the laws of the United States of
America, in good standing under the laws of the State, and has the full power and authority to
enter into and perform its duties under the Legal Documents to which the Trustee is a party and
to execute and deliver the Certificates to the Underwriters pursuant to the terms of the Trust
Agreement;
(ii) Due Authorization; Valid and Binding Obligations - the
Trustee is duly authorized to enter into the Legal Documents to which it is a party;
(iii) No Conflict - the execution and delivery by the Trustee of
the Legal Documents to which the Trustee is a party, and compliance with the terms thereof, will
not, in any material respect, 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, which conflict breach or default would
materially adversely affect the ability of the Trustee to perform its obligations under the Legal
Documents to which the Trustee is a party or (except with respect to the lien of the Trust
Agreement) result in the creation or imposition of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the property or assets of the Trustee;
(iv) Consents — exclusive of federal or state securities laws and
regulations, other than routine filings required to be made with governmental agencies in order to
preserve the Trustee's authority to perform a trust business (all of which routine filing, to the
best of the Trustee's knowledge, have been made), no consent, approval, authorization or other
action by any governmental or regulatory authority having jurisdiction over the Trustee is or will
be required for the execution and delivery by the Trustee of the Legal Documents to which the
Trustee is a party or the execution and delivery of the Certificates; and
(v) No Litigation — to the best of the Trustee's knowledge,
there is no litigation pending or threatened against or affecting the Trustee to restrain or enjoin
the Trustee's participation in, or in any way contesting the powers of the Trustee with respect to
the transactions contemplated by the Certificates, the Trust Agreement, the Assignment
Agreement and the Continuing Disclosure Agreement;
(13) Escrow Agent's Representations, Warranties and Agreements. A
certificate of the Escrow Agent, dated the date of Closing, that as of the date of Closing:
(i) Due Organization and Existence - the Escrow Agent is duly
organized and existing as a national banking association under the laws of the United States of
America, in good standing under the laws of the State, and has the full power and authority to
enter into and perform its duties under the Escrow Agreement;
16
(ii) Due Authorization; Valid and Binding Obligations - the
Escrow Agent is duly authorized to enter into the Escrow Agreement;
(iii) No Conflict - the execution and delivery by the Escrow
Agent of the Escrow Agreement, and compliance with the terms thereof, will not, in any material
respect, 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
Escrow Agent 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 Escrow Agent
or any of its activities or properties, which conflict breach or default would materially adversely
affect the ability of the Escrow Agent to perform its obligations under the Escrow Agreement or
result in the creation or imposition of any lien, charge or other security interest or encumbrance
of any nature whatsoever upon any of the property or assets of the Escrow Agent;
(iv) Consents — exclusive of federal or state securities laws and
regulations, other than routine filings required to be made with governmental agencies in order to
preserve the Escrow Agent's authority to perform a trust business (all of which routine filing, to
the best of the Escrow Agent's knowledge, have been made), no consent, approval, authorization
or other action by any governmental or regulatory authority having jurisdiction over the Escrow
Agent is or will be required for the execution and delivery by the Escrow Agent of the Escrow
Agreement; and
(v) No Lifi ag tion — to the best of the Escrow Agent's
knowledge, there is no litigation pending or threatened against or affecting the Escrow Agent to
restrain or enjoin the Escrow Agent's participation in, or in any way contesting the powers of the
Escrow Agent with respect to, the transactions contemplated by the Escrow Agreement;
(14) Resolutions. A certified copy of the City Resolution and a
certified copy of the Corporation Resolution;
(15) City Bring -Down Certificate. A certificate of an authorized officer
of the City, dated the date of Closing, confirming as of such date the representations and
warranties of the City contained in this Purchase Contract;
(16) CoEporation Bring -Down Certificate. A certificate of an
authorized officer of the Corporation, dated the date of Closing, confirming as of such date the
representations and warranties of the Corporation contained in its Letter of Representations;
(17) Tax Certificates. Tax certification with respect to the 2010A
Certificates and tax certification with respect to the 2010B Certificates, each by the City in form
and substance acceptable to Special Counsel;
(18) Ratings. Evidence from Moody's, Fitch and S &P that the
Certificates have been rated "_ ", "AA +" and "AA + ", respectively, by such agencies;
(19) Articles and Bylaws of the Corporation. Certified copies of each
of the Articles of Incorporation and Bylaws of the Corporation;
17
(20) Good Standing Certificates of the Corporation. Good standing
certificates issued by the Secretary of State of the State of California and the California
Franchise Tax Board, with respect to the Corporation;
(21) Blue Sky Survey. A copy of the Preliminary and Final Blue Sky
Survey with respect to the Certificates;
(22) Risk Management. A certificate of an authorized officer of the
City, dated the date of Closing, certifying that the insurance with respect to the Leased Premises
as set forth in the Lease has been secured, together with certificates evidencing that the requisite
level of "all risk" coverage and rental interruption insurance with respect to the Leased Premises
has been secured and will be maintained pursuant to the Lease;
(23) Title Insurance. Evidence of the maintenance of title insurance on
the Leased Premises issued by a company of recognized standing, duly authorized to issue the
same, in form and amount set forth in the Lease;
(24) CDIAC Notices. Evidence of required filings with the California
Debt and Investment Advisory Commission;
(25) Form 8038 -G. Evidence that the federal tax information 8038
forms have been prepared for filing; and
(26) Miscellaneous. Such additional legal opinions, certificates,
proceedings, instruments and other documents as Special Counsel and counsel for the
Underwriters may reasonably request to evidence compliance with legal requirements, the truth
and accuracy, as of the time of Closing, of the representations and warranties contained herein, in
the Official Statement and in the Letter of Representations and the due performance or
satisfaction by the Trustee, the Corporation and the City at or prior to such time of all agreements
then to be performed and all conditions then to be satisfied.
(g) All matters relating to this Purchase Contract, the Certificates and the sale
thereof, the Official Statement, the Legal Documents and the consummation of the transactions
contemplated by this Purchase Contract shall have been approved by the Representative and
counsel for the Underwriters, such approval not to be unreasonably withheld.
If the conditions to the Underwriters' obligations contained in this Purchase Contract are
not satisfied or if the Underwriters' obligations shall be terminated for any reason permitted by
this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor
the City shall have any further obligations hereunder except that the respective obligations of the
City and the Underwriters set forth in Paragraph 11 hereof (relating to expenses) and
Paragraph 12 hereof shall continue in full force and effect.
Section 10. Conditions to the Obligations of the City. The performance by the City of
its obligations hereunder is conditioned upon the performance by the Underwriters of their
obligations hereunder and upon receipt by the City of opinions and certificates to be delivered at
the date of Closing by persons and entities other than the City.
IN
Section 11. Expenses.
(a) The City shall pay or cause to be paid from the proceeds of the Certificates
or other funds available to it the expenses incident to the performance of its obligations
hereunder, including but not limited to: (i) the cost of printing and distribution of the Official
Statement in reasonable quantities and all other documents (other than as set forth in the next
succeeding paragraph) prepared in connection with the transactions contemplated hereby,
including distribution costs and all mailing, including overnight and express delivery, costs;
(ii) the fees and disbursements of the Trustee and Escrow Agent in connection with the execution
and delivery of the Certificates; (iii) the fees and disbursements of Special Counsel, and any
other experts or consultants retained by the City or the Corporation in connection with the
transactions contemplated hereby; (iv) the costs related to obtaining ratings; (v) the cost of
mailing or delivering the definitive Certificates; (vi) the fees and disbursements of disclosure
counsel to the City; (vii) the fees and disbursements of the financial advisor to the City; and (viii)
the fees and disbursements of any other experts, consultants or advisers retained by the City.
(b) The Underwriters shall pay: (i) all advertising expenses in connection with
the public offering of the Certificates; (ii) the fees and expenses of counsel to the Underwriters,
including their fees in connection with the qualification of the Certificates for sale under the Blue
Sky or other securities laws and regulations of various jurisdictions; (iii) California Debt and
Investment Advisory Commission fees; and (iv) all other expenses incurred by it in connection
with its public offering and distribution of the Certificates.
Section 12. Notices.
(a) Trustee. Any notice or other communication to be given to the Trustee
under this Purchase Contract may be given by delivering the same in writing to The Bank of
New York Mellon Trust Company, N.A., 700 South Flower Street, Suite 500, Los Angeles,
California 90017, Attention: Corporate Trust Department.
(b) Underwriters. Any such notice or other communication to be given to the
Underwriters may be given by delivering the same to Stone & Youngberg LLC, 4350 La Jolla
Village Drive, Suite 140, San Diego, CA 92122, Attention: Bill Huck, Managing Director.
(c) Cam. Any notice or communication to be given the City under this
Purchase Contract may be given by delivering the same to the City of Newport Beach, 330
Newport Boulevard, Newport Beach, CA 92658 -8915, Attention: Dave Kiff, City Manager.
All notices or communications hereunder by any party shall be given and served upon
each other party.
Section 13. City Acknowled eg rn The City acknowledges and agrees that (i) the
purchase and sale of the Certificates pursuant to this Purchase Contract is an arm's - length
commercial transaction between the City and the Underwriters, (ii) in connection therewith and
with the discussions, undertakings and procedures leading up to the consummation of such
transaction, the Underwriters are and have been acting solely as principals and are not acting as
the agent or fiduciary of the City, (iii) the Underwriters have not assumed an advisory or
fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or
19
the discussions, undertakings and procedures leading thereto (irrespective of whether the
Underwriters have provided other services or is currently providing other services to the City on
other matters) and the Underwriters have no obligation to the City with respect to the offering
contemplated hereby except the obligations expressly set forth in this Purchase Contract and (iv)
the City has consulted its own legal, financial and other advisors to the extent it has deemed
appropriate.
Section 14. Counterparts. This Purchase Contract may be executed by anyone or more
of the parties hereto in any number of counterparts, each of which shall be deemed to be an
original, but all of such counterparts shall together constitute one and the same instrument.
Section 15. Successors and Assigns. This Purchase Contract will inure to the benefit
of and be binding upon the parties and their successors (including any successors or assigns of
the Underwriters), and will not confer any rights upon any other person.
Section 16. Survival. The provisions of Section 9(g) shall survive termination or
cancellation of this Purchase Contract. All representations, warranties, covenants and agreements
by the City, the Corporation and the Underwriters in this Purchase Contract shall remain
operative and in full force and effect regardless of any investigation made by or on behalf of the
Underwriters and shall survive the delivery of and payment for the Certificates.
Section 17. Governing Law. This Purchase Contract shall be governed by, and
construed in accordance with, the laws of the State of California.
Section 18. No Personal Liabilitv. No officer of the City, the Corporation or designee
thereof shall incur any personal liability for approving or executing this Purchase Contract,
taking any action or omitting to take any action required or permitted hereunder or otherwise by
reason of or in connection with the Certificates, the Legal Documents or any of the transactions
or other matters contemplated by any of the foregoing.
Section 19. Headings. The headings of the sections of this Purchase Contract are
inserted for convenience only and shall not be deemed to be a part hereof.
Section 20. Parties in Interest; Force and Effect. This Purchase Contract is made solely
for the benefit of the City and the Underwriters (including the successors or assigns thereof) and
no other person shall acquire or have any right hereunder or by virtue hereof. All representations,
warranties and agreements of the City or the Underwriters pursuant to this Purchase Contract
shall remain operative and in full force and effect regardless of (i) any investigation made by or
on behalf of the Underwriters; (ii) delivery of and payment for the Certificates pursuant to this
Purchase Contract; or (iii) termination of this Purchase Contract but only to the extent provided
by the last paragraph of Section 9 hereof, regarding preconditions of Closing.
Section 21. Entire Agreement. This Purchase Contract when accepted by you in
writing as heretofore specified shall constitute the entire agreement between us and is made
solely for the benefit of the City and the Underwriters (including the successors or assigns
thereof). No other person shall acquire or have any right hereunder or by virtue hereof.
20
Section 22. Unenforceable Provisions. If any provision of this Purchase Contract shall
be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in
any particular case in any jurisdiction or jurisdictions, or in all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question invalid, inoperable
or unenforceable in any other case or circumstance, or of rendering any other provision or
provisions of this Purchase Contract invalid, inoperative or unenforceable to any extent
whatsoever.
Acceptance of the terms of this Purchase Contract shall be signified by execution below
by an authorized officer of the City and an authorized officer of the Representative.
Accepted this _th day of , 2010
at _ a.m. /p.m. Pacific Time:
CITY OF NEWPORT BEACH
:
Dave Kiff
City Manager
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
By:
David R. Hunt, City Attorney
APPROVED AS TO FORM:
SPECIAL COUNSEL:
By:
Hawkins Delafield & Wood LLP
Very truly yours,
STONE & YOUNGBERG LLC
M
21
Bill Huck
Managing Director
EXHIBIT A
THE UNDERWRITERS
Stone & Youngberg LLC
E.J. De La Rosa & Co., Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Raymond James
A -1
EXHIBIT B
LETTER OF REPRESENTATIONS OF THE
NEWPORT BEACH PUBLIC FACILITIES FINANCING CORPORATION
[Pricing Date]
Stone & Youngberg LLC
San Diego, California
E.J. De La Rosa & Co., Inc.
San Francisco, California
Merrill Lynch, Pierce, Fenner & Smith Incorporated
San Francisco, California
Raymond James
San Francisco, California
Ladies and Gentlemen:
The City of Newport Beach (the "City ") proposes to cause the execution and delivery of
the City of Newport Beach Certificates of Participation 2010A (Tax Exempt) (Civic Center
Project /Central Library Refunding) in the aggregate principal amount of $[2010A Principal
Amount] (the "2010A Certificates ") and the City of Newport Beach Certificates of Participation
2010B (Federally Taxable Direct Pay Build America Bonds) (Civic Center Project) in the
aggregate principal amount of $[Series B Principal Amount] (the "2010B Certificates" and,
together with the 2010A Certificates, the "Certificates ").
The Certificates are being executed and delivered pursuant to a Trust Agreement, dated
as of November 1, 2010, by and among The Bank of New York Mellon Trust Company, N.A., as
trustee (the "Trustee "), the City and the Newport Beach Public Facilities Corporation (the
"Corporation "). In connection with the prepayment of the 1998 Certificates and the financing of
the Civic Center Project, the City will lease certain real property and all improvements thereon,
as more particularly described herein (the "Leased Premises "), to the Corporation pursuant to a
Site Lease, dated as of November 1, 2010 (the "Site Lease "), by and between the City and the
Corporation. The City will sublease the Leased Premises from the Corporation pursuant to a
Lease /Purchase Agreement, dated as of November 1, 2010 (the "Lease "), by and between the
City and the Corporation. The 2010A Certificates evidence fractional and undivided interests in
certain lease payments (the "2010A Lease Payments ") to be made by the City pursuant to the
Lease as rental for the Leased Premises. The 2010B Certificates evidence fractional and
undivided interests in certain other lease payments (the "201013 Lease Payments" and, together
with the 2010A Lease Payments, the "Lease Payments ") to be made by the City pursuant to
Lease as rental for the Leased Premises. Pursuant to an Assignment Agreement, dated as of
November 1, 2010 (the "Assignment Agreement "), by and between the Trustee and the
Corporation, the Corporation will assign to the Trustee, for the benefit of the Owners of the
Certificates all of the Corporation's rights, title, and interest under the Site Lease and all of the
H. 31
Corporation's rights, title and interest under the Lease (excepting only the Corporation's rights to
indemnity and the payment of its fees and expenses), including the right to receive Lease
Payments, Prepayments and Additional Payments from the City under the Lease or the Trust
Agreement, as applicable. Pursuant to an Agency Agreement, dated as of November 1, 2010
(the "Agency Agreement "), by and between the City and the Corporation, the Corporation will
appoint the City as its agent in connection with the acquisition, construction, delivery and
installation of the Civic Center Project.
The execution and delivery of the Trust Agreement, the Site Lease, the Lease, the
Assignment Agreement, the Agency Agreement and the Certificates have been authorized by a
resolution of the City (the "City Resolution ") and a resolution of the Corporation (the
"Corporation Resolution ") and the Certificates shall be as described in, and shall be secured
under and pursuant to the Trust Agreement. The Certificates shall be payable and shall be
subject to prepayment as provided in the Trust Agreement.
The Trust Agreement, the Site Lease, the Lease, the Assignment Agreement, the Agency
Agreement and this Letter of Representations of the Corporation (the "Letter of
Representations ") are referred to collectively herein as the "Corporation Legal Documents."
Capitalized terms not otherwise defined herein shall have the meanings as defined in the Trust
Agreement or the Lease, as appropriate.
The Certificates are to be sold by the City pursuant to the Purchase Contract, dated
[Pricing Date] (the "Purchase Contract "), by and between the City and Stone & Youngberg LLC,
acting on behalf of itself and as Representative (the "Representative ") of the underwriter
(collectively, the "Underwriters ").
This Letter of Representations 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.
To facilitate your entering into the Purchase Contract and to induce you to purchase the
Certificates as contemplated therein, the Corporation hereby represents, warrants and agrees with
you as follows:
(a) Due Organization and Existence; Legal, Valid and Binding Obligations. The
Corporation is a nonprofit public benefit corporation duly organized and validly
existing pursuant to the laws of the State of California and has all necessary
power and authority to adopt the Corporation Resolution and enter into and
perform its duties under the Corporation Legal Documents, the Corporation
Resolution has been adopted and has not been rescinded, and the Corporation
Legal Documents, when executed and delivered by the respective parties thereto,
will constitute legal, valid and binding obligations of the Corporation in
accordance with their respective terms except as enforcement against the
Corporation 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.
IC X
(b) No Conflict. The adoption of the Corporation Resolution and the execution and
delivery of the Corporation Legal Documents and compliance with the provisions
thereof, will not in any material respect conflict with, or constitute a breach of or
default under, the Corporation's duties under the Corporation Legal Documents,
the Corporation Resolution or any law, administrative regulation, court decree,
resolution, charter, by -laws or other agreement to which the Corporation is
subject or by which it or any of its property is bound.
(c) No Consents Required. Except as may be required under blue sky or other
securities laws of any state, or except with respect to any permits or approvals
heretofore received which are in full force and effect or the requirement for which
is otherwise disclosed in the Official Statement, there is no consent, approval,
authorization or other order of, or filing with, or certification by, any
governmental authority, board, agency or commission or other regulatory
authority having jurisdiction over the Corporation, required for the adoption of the
Corporation Resolution and the execution, delivery and sale of the Certificates or
the consummation by the Corporation of the other transactions contemplated by
the Official Statement, the Corporation Resolution or the Corporation Legal
Documents.
(d) No Liti ag tion. There is no action, suit, proceeding or investigation at law or in
equity before or by any court or governmental agency or body pending or to the
knowledge of the Corporation, threatened against the Corporation to restrain or
enjoin the delivery of the Certificates, or the assignment of the payments to be
made pursuant to the Lease or in any way contesting or affecting the validity of
the Corporation Legal Documents, the Corporation Resolution or the Certificates
or contesting the powers of the Corporation to enter into or perform its obligations
under any of the foregoing.
(e) Official Statement Correct and Complete. The information relating to the
Corporation, its functions, duties and responsibilities contained in the Official
Statement is, true and correct in all material respects and such information does
not contain any untrue or misleading statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) Blue Sky Cooperation. The Corporation agrees to cooperate with the
Underwriters in endeavoring to qualify the Certificates for offering and sale under
the securities or blue sky laws of such jurisdictions of the United States as the
Underwriters may request; provided, however, that the Corporation shall not be
required to execute a special or general consent to service of process in any
jurisdiction in which it is not now so subject or to qualify to do business in any
jurisdiction where it is not now so qualified.
(h) No Breach or Default. The Corporation is not in breach of or in default under any
applicable law or administrative regulation of the State of California or the United
States or any applicable judgment or decree or any loan agreement, indenture,
M- 3
bond, note, resolution, agreement or other instrument to which the Corporation is
a party or is otherwise subject which breach or default would have a material and
adverse impact on the Corporation's ability to perform its obligations under the
Legal Documents to which the Corporation is a party, and no event has occurred
and is continuing which, with the passage of time or the giving of notice, or both,
would constitute a default or an event of default under any such instrument.
(1) Agreement to Preserve Tax Exemption. The Corporation covenants that it will
not take any action which would cause interest with respect to the 2010A
Certificates to be subject to federal income taxation or California personal income
taxes (other than to the extent the 2010A Certificates will be subject to federal
income taxation as described under the caption "Tax Matters" in the Official
Statement).
(m) Agreement to Preserve Federal Subsidy. The Corporation covenants that it will
not take any action which would cause interest with respect to the 2010B
Certificates to be subject to California personal income taxes or result in the loss
of the Refundable Credits with respect to the 2010B Certificates.
Very truly yours,
NEWPORT BEACH PUBLIC FACILITIES
FINANCING CORPORATION
W1
[Keith D. Curry]
[Chairman]
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
By:
David R. Hunt, City Attorney
APPROVED AS TO FORM:
SPECIAL COUNSEL:
E
Hawkins Delafield & Wood LLP
Accepted and confirmed as of the date above written
STONE & YOUNGBERG LLC
1�
Authorized Representative
EXHIBIT C
MATURITY SCHEDULE
$[2010A Principal Amount]
CITY OF NEWPORT BEACH
CERTIFICATES OF PARTICIPATION 2010A (TAX EXEMPT)
(CIVIC CENTER PROJECT /CENTRAL LIBRARY REFUNDING)
Maturity Date Principal Interest Price or
(July 1) Amount Rate Yield
2010A Term Certificates due July 1, 20_ — Priced to Yield: %
2010A Term Certificates due July 1, 20_ — Priced to Yield: %
$[2010B Principal Amount]
CITY OF NEWPORT BEACH
CERTIFICATES OF PARTICIPATION 2010B
(FEDERALLY TAXABLE DIRECT PAY BUILD AMERICA BONDS)
(CIVIC CENTER PROJECT)
Maturity Date Principal Interest Price or
(July 1) Amount Rate Yield
201013 Term Certificates due July 1, 20 — Priced to Yield: %
201013 Term Certificates due July 1, 20_ — Priced to Yield: %
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i
EXHIBIT D
City of Newport Beach Certificates of Participation 2010A
(Tax Exempt) (Civic Center Project/Central Library Refunding)
and
City of Newport Beach Certificates of Participation 2010B
(Federally Taxable Direct Pay Build America Bonds) (Civic Center Project)
Rule 15c2 -12 Certificate
The undersigned hereby certifies and represents that she is a duly appointed and acting
authorized officer of the City of Newport Beach, California (the "City "), and as such is duly
authorized to execute and deliver this certificate and further hereby certifies and reconfirms on
behalf of the City as follows:
(1) This certificate is delivered in connection with the offering and execution
and delivery of the above - referenced certificates of participation (the "Certificates ") in
order to enable the Underwriters of the Certificates to comply with Securities and
Exchange Commission Rule 15c2 -12 under the Securities Exchange Act of 1934 ( as
amended, the "Rule ").
(2) In connection with the offering and sale of the Certificates, there has been
prepared a Preliminary Official Statement dated 2010 setting forth
information concerning the Certificates and the City (the "Preliminary Official
Statement ").
(3) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule.
(4) As used herein, "Permitted Omissions" shall mean the offering price(s),
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Certificates depending on such
matters, all with respect to the Certificates.
D -1
IN WITNESS WHEREOF, the undersigned has executed this certificate as of this
12010.
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY:
David R. Hunt, City Attorney
APPROVED AS TO FORM:
SPECIAL COUNSEL:
By:
Stradling Yocca Carlson & Rauth
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