HomeMy WebLinkAbout16 - Bond Purchase Contract Series B-EFoley & Lardner LLP
Draft No. 2
May 5, 2009
BOND PURCHASE CONTRACT
CITY OF NEWPORT BEACH
REVENUE BONDS
(HOAG MEMORIAL HOSPITAL PRESBYTERIAN)
SERIES 2009B, SERIES 2009C, SERIES 2009D AND SERIES 2009E
CHI2_1948363.2
TABLE OF CONTENTS
Section
Page
1. Purchase, Sale and Delivery of the Bonds ........................................... ...............................
1
2. Representations. Warranties and Agreements of the City ................... ............................... 4
3. Conditions to Obligations of the Underwriters .................................... ............................... 6
4. Conditions to the Obligations of the City .......................................... ...............................
11
5. Expenses / Fees ...................................................................................... .............................12
6. Notices .................................................................................................. .............................12
7. Governing Law ................................................................................... ...............................
12
8. Miscellaneous.. * ........... ....... ......
........................ 12
9. No Fiduciary .................................................................
12
10. Counterparts. ........................................................................................ .............................13
Exhibit A Letter of Representation
Exhibit B Schedule of Redemptions and Initial Long -Term Interest Rate
Exhibit C Form of Agreed -Upon Procedures Letter of Ernst & Young LLP
Exhibit D Form of Opinion of City Attorney
Exhibit E Form of Opinion of Counsel to the Borrower
Exhibit F Form of Opinion of Underwriters Counsel
Exhibit G Officer's Certificate
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CITY OF NEWPORT BEACH
REVENUE BONDS
(HOAG MEMORIAL HOSPITAL PRESBYTERIAN)
SERIES 2009B, SERIES 2009C, SERIES 2009D AND SERIES 2009E
BOND PURCHASE CONTRACT
June ,2009
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92658
Ladies and Gentlemen:
Citigroup Global Markets Inc., on behalf of itself and on behalf of JPMorgan Securities,
Inc. (together, the "Underwriters ") offers to enter into this Bond Purchase Contract, including the
Letter of Representation attached hereto as Exhibit A (the "Letter of Representation "), being
herein called the "Bond Purchase Contract," with the City of Newport Beach (the "City") with
the approval of Hoag Memorial Hospital Presbyterian, as Borrower (the `Borrower "), which,
upon acceptance, will be binding upon the City and the Underwriters. This offer is made subject
to the City's acceptance on or before 11:59 p.m., Newport Beach, California time, on the date
hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon written
notice delivered to the City by the Underwriters at any time prior to acceptance.
Capitalized terms used herein and not otherwise defined shall have the meanings assigned
to such terms in the Bond Indenture (defined below).
1. Purchase, Sale and Delivery of the Bonds.
(a) Subject to the terms and conditions and in reliance upon the
representations, warranties and agreements set forth herein and in the Letter of Representation,
dated the date hereof, executed and delivered contemporaneously herewith by the Borrower and
attached hereto as Exhibit A, the Underwriters hereby agree to purchase from the City, and the
City hereby agrees to sell to the Underwriters, all (but not less than all) of the aggregate principal
amount of the $ City of Newport Beach Revenue Bonds (Hoag Memorial Hospital
Presbyterian) $ Series 2009B, $ Series 2009C, $ Series 2009D and
$ Series 2009E (collectively, the "Series 2009 Bonds" or the "Bonds "), such Bonds to
be dated the date of delivery, to be issued in the aggregate principal amounts and bearing interest
and maturing on the dates set forth in Exhibit B hereto. The aggregate purchase price for the
Bonds shall be $ , consisting of the par amount of the Bonds of $ less an
underwriting discount of $ . The Series 2009 Bonds are being offered simultaneously
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with the City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian) Series
2009A (the "Series 2009A Bonds ").
The Bonds shall be substantially in the form described in, shall be issued and
secured under the provisions of, and shall be payable as provided in, that certain Bond Indenture
dated as of June 1, 2009 (the "Bond Indenture "), by and between the City and Wells Fargo Bank,
National Association, as bond trustee (the "Trustee "). The Bonds shall be limited obligations of
the City payable solely from Loan Repayments (as that term is defined in the Bond Indenture)
made by the Borrower under that certain Loan Agreement dated as of June 1, 2009 (the "Loan
Agreement ") by and between the City and the Borrower, from payments made on Obligation
No. _(as hereinafter defined) by the Obligated Group (as hereinafter defined) and from amounts
held in certain funds established pursuant to the Bond Indenture (including certain proceeds of
the sale of the Bonds). The Bonds will be further secured by an assignment of the right, title and
interest of the City in the Loan Agreement and in Obligation No. to the extent and as more
particularly described in the Bond Indenture.
The proceeds from the sale of the Bonds will be loaned to the Borrower pursuant
to the Loan Agreement and will be used, together with other available funds to (1) refund certain
outstanding City of Newport Beach Insured Revenue Bonds (Hoag Memorial Hospital
Presbyterian), Series 2007D and City of Newport Beach Refunding Revenue Bonds (Hoag
Memorial Hospital Presbyterian), Series 2008A and Series 2008B (collectively, the "Prior
Obligations "), (2) finance the acquisition and construction of certain additions and improvements
to, and equipment for, the acute care hospital and other health care facilities owned by the
members of the Obligated Group, and (3) pay certain costs of issuing the Bonds.
The Borrower, as Credit Group Representative (as defined in the Master
Indenture, defined below) will issue its Obligation No. _ ("Obligation No. _ ") to evidence the
obligation of the Obligated Group Members to make payments sufficient to pay the principal of,
premium, if any, and interest on the Bonds pursuant to the Supplemental Master Indenture for
Obligation No. _, dated as of June 1, 2009 (the "Supplemental Master Indenture "), by and
between the Borrower, as Credit Group Representative, and Wells Fargo Bank, National
Association, as master trustee (the "Master Trustee "), supplementing the Master Indenture dated
as of May 1, 2007 (the "Master Indenture ") between the Borrower, Newport Healthcare Center,
LLC ( "NHC ") and such other Members as may join the obligated group as defined therein (the
"Obligated Group ") and the Master Trustee.
The Borrower will undertake, pursuant to a Continuing Disclosure Certificate,
dated as of the date of issuance and delivery of the Bonds (the "Continuing Disclosure
Certificate "), by and between the Borrower and the Trustee, to provide certain annual financial
information and notices of the occurrence of certain events, if material. A description of this
undertaking is set forth in the Official Statement, as hereinafter described.
(b) The Borrower has delivered to the Underwriters copies of the Preliminary
Official Statement dated , 2009 (the "Preliminary Official Statement') and the Official
Statement dated June _, 2009 (the "Official Statement"), signed on behalf of the City by the
Mayor of the City and approved by the Borrower by its Senior Vice President and Chief
Financial Officer (or such other officer as is acceptable to the Underwriters). The Official
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Statement shall be delivered in sufficient quantity as may reasonably be requested by the
Underwriters in order to comply with Rule 15c2 -12 of the Securities and Exchange Commission
( "Rule 15c2 -12 ") and the rules of the Municipal Securities Rulemaking Board ( "MSRB ") within
seven business days of the date hereof and, in the event the Closing Date is less than seven
business days after the date hereof, upon request of the Underwriters, in sufficient time to
accompany any confirmation requesting payment from any customers of the Underwriters. The
City has deemed the information contained in the Preliminary Official Statement and the Official
Statement regarding the City under the captions "THE CITY" and "LITIGATION — The City" to
be final as of its date. The City hereby ratifies, confirms and approves the use and distribution
by the Underwriters prior to the date hereof of the Preliminary Official Statement and the
Official Statement, and hereby authorizes the Underwriters to use and distribute the Master
Indenture, the Preliminary Official Statement and the Official Statement (on or prior to the date
hereof) and drafts of the Bond Indenture and the Loan Agreement in connection with the offer
and sale of the Bonds.
(c) No later than 1:00 p.m., New York time, on June , 2009, or at such
earlier or later time or date as shall be agreed by the City and the Underwriters (such time and
date being herein referred to as the "Closing Date "), the City will deliver to or upon the order of
The Depository Trust Company ( "DTC ") in New York, New York, for the account of the
Underwriters (or such other location as may be designated by the Underwriters and approved by
the City), the Bonds in the form of a separate, single, fully registered Bond (which may be
typewritten) for each series of Bonds (all of the Bonds bearing CUSIP numbers), duly executed
by the City and authenticated by the Trustee, and will deliver to the Underwriters at the offices of
Orrick, Herrington & Sutcliffe LLP in Sacramento, California, the other documents herein
mentioned. The Underwriters will accept such delivery and pay the purchase price of the Bonds
as set forth in paragraph (a) of this Section by certified or official bank check payable in, or wire
transfer of, immediately available funds (such delivery and payment being herein referred to as
the "Closing "). Notwithstanding the foregoing, neither the failure to print CUSIP numbers on
any Bond nor any error with respect thereto shall constitute cause for a failure or refusal by the
Underwriters to accept delivery of and pay for the Bonds on the Closing Date in accordance with
the terms of this Bond Purchase Contract.
(d) On or prior to the date hereof, the Underwriters shall have received (i)
from Ernst & Young LLP, an executed copy of its letter, substantially in the form of Exhibit C
hereto (the "Procedures Letter "), and (ii) from Ernst & Young LLP, its consent to the inclusion
of its audit report on the financial statements of the Borrower that are included in the Preliminary
Official Statement and the Official Statement and to the references to its name in the Preliminary
Official Statement and the Official Statement.
(e) The obligations and agreements of the Underwriters under this Bond
Purchase Contract are expressly made subject to the issuance of the Series 2009A Bonds and sale
thereof as described in the Official Statement with the proceeds of sale thereof being available to
the Borrower at or prior to the Closing Date.
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2. Renresentations. Warranties and Agreements of the City.
The City represents and warrants to and agrees with the Underwriters and the
Borrower as follows:
(a) The City is and will be at the Closing Date a municipal corporation and
charter city duly organized and existing under a freeholder's charter under the Constitution and
laws of the State of California (the "State ") and pursuant to the Charter of the City with the full
power and authority to issue the Bonds and to execute this Bond Purchase Contract, the Bond
Indenture and the Loan Agreement.
(b) When delivered to and paid for by the Underwriters at the Closing in
accordance with the provisions of this Bond Purchase Contract, the Bonds will have been duly
authorized, executed, issued and delivered, and will constitute valid and binding limited
obligations of the City in conformity with, and entitled to the benefit and security of, the Bond
Indenture (subject as to enforcement to any applicable bankruptcy, reorganization, insolvency,
moratorium or other law or laws affecting the enforcement of creditors' rights generally or
against municipal corporations such as the City from time to time in effect and further subject to
the availability of equitable remedies).
(c) By official action of the City prior to or concurrently with the acceptance
hereof, the City has consented to the distribution of the Preliminary Official Statement and the
Official Statement and authorized and approved the execution and delivery of and the
performance by the City of, the obligations on its part contained in the Bonds, the Loan
Agreement, the Bond Indenture and this Bond Purchase Contract and the consummation by the
City of all other transactions contemplated by the Preliminary Official Statement and the Official
Statement and this Bond Purchase Contract.
(d) Other than as described in the Preliminary Official Statement or the
Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, governmental agency, public board or body, known to the City to
be pending or threatened against the City seeking to restrain or enjoin the issuance, sale,
execution or delivery of the Bonds, or in any way contesting or affecting any proceedings of the
City taken concerning the issuance or sale thereof, the pledge or application of any moneys or
security provided for the payment of the Bonds, in any way contesting the validity or
enforceability of the Bonds, the Bond Indenture, the Loan Agreement or this Bond Purchase
Contract or contesting in any way the completeness or accuracy of the Preliminary Official
Statement or the Official Statement, as amended or supplemented, or the existence or powers of
the City relating to the issuance of the Bonds or any of the transactions contemplated by the
Preliminary Official Statement or the Official Statement or this Bond Purchase Contract.
(e) The statements and information contained in the Official Statement
relating to the City and its functions, duties and responsibilities under the captions "THE CITY"
and "LITIGATION — The City" as of its date and the date hereof did not and, as of the Closing
Date 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.
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(f) The City will furnish such information, execute such instruments and take
such other action in cooperation with the Underwriters as the Underwriters may reasonably
request in order for the Underwriters (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 Underwriters may designate and (ii) to determine the eligibility of the Bonds for
investment under the laws of such states and other jurisdictions, and to continue such
qualification in effect so long as required for distribution of the Bonds; provided, however, that
in no event shall the City be required to take any action which would subject it to general or
unlimited service of process in any jurisdiction in which it is not now so subject.
(g) If, between the date of this Bond Purchase Contract and up to and
including the 25th day following the end of the underwriting period (as such term is defined in
Rule 15c2 -12), an event occurs, of which the City has knowledge, which might or would cause
the information relating to the City and its functions, duties and responsibilities contained in the
Official Statement under the captions "THE CITY" and "LITIGATION — The City," as then
supplemented or amended, to contain an untrue statement of a material fact or to omit to state a
material fact required to be stated therein or necessary to make such information therein not
misleading in the light of the circumstances under which it was presented or if the City is
notified by the Borrower pursuant to Section 20 of the Letter of Representation, or otherwise
requested to amend, supplement or otherwise change the Official Statement, the City will notify
the Underwriters and the Borrower. If, in the opinion of the Underwriters, such event requires
the preparation and publication of a supplement or amendment to the Official Statement, the City
will amend or supplement the Official Statement in a form and in a manner approved by the
Underwriters, provided all expenses thereby incurred will be paid by the Borrower or the
Underwriters pursuant to Section 22 of the Letter of Representation.
(h) The execution and delivery of the Bonds, the Loan Agreement, the Bond
Indenture and this Bond Purchase Contract, and compliance with the provisions on the City's
part contained therein, will not conflict with or constitute a breach of or default under any
existing law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note,
resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor
will any such execution, delivery, adoption or compliance result in the creation or imposition of
any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of
the properties or assets of the City under the terms of any such law, administrative regulation,
judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other
instrument, except as provided by the Bond Indenture and the Loan Agreement.
(i) The execution and delivery of this Bond Purchase Contract by the City
shall constitute a representation by the City to the Underwriters that the representations and
agreements contained in this Section 2 are true as of the date hereof, and as to all matters of law
the City is relying on the advice of counsel to the City; and provided further that no member of
the City shall be individually liable for the breach of any representation, warranty or agreement
contained herein.
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3. Conditions to Obligations of the Underwriters.
The obligation of the Underwriters to accept delivery of and pay for the Bonds on
the Closing Date shall be subject, at the option of the Underwriters, to the accuracy in all
material respects of the representations, warranties and agreements on the part of the City
contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material
respects of the statements of the officers and other officials of the City made in any certificates
or other documents furnished pursuant to the provisions hereof, to the performance by the City of
its obligations to be performed hereunder at or prior to the Closing Date and to the following
additional conditions.
(a) At the Closing Date, the Master Indenture shall be in full force and effect,
and the Supplemental Master Indenture, Obligation No. . the Bond Indenture, the Official
Statement, the Loan Agreement, the Remarketing Agreement and the Continuing Disclosure
Certificate shall have been duly authorized, executed and delivered by the respective parties
thereto, in substantially the forms heretofore submitted to the Underwriters, with only such
changes as shall have been agreed to in writing by the Underwriters and the City, and said
agreements shall not have been amended, modified or supplemented, except as may have been
agreed to in writing by the Underwriters, and there shall have been taken in connection
therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by
this Bond Purchase Contract all such actions as, in the opinion of Orrick, Herrington & Sutcliffe
LLP, bond counsel ( "Bond Counsel') and City of Newport Beach City Attorney ( "City
Attorney "), shall be necessary and appropriate.
(b) At the Closing Date, the Official Statement shall not have been amended,
modified or supplemented, except as may have been agreed to by the Underwriters.
(c) At the time of Closing, there shall not have occurred any change or any
development involving a prospective change, in the condition, financial or otherwise, or in the
earnings or operations of the Borrower from that set forth in the Official Statement that in the
judgment of the Underwriters, is material and adverse and that makes it, in the judgment of the
Underwriters, impracticable or inadvisable to proceed with the offer, sale or delivery of the
Bonds on the terms and in the manner contemplated in the Official Statement.
(d) Between the date hereof and the Closing Date, the market price or
marketability of the Bonds, at the initial offering prices set forth in the Official Statement, shall
not have been materially adversely affected, in the judgment of the Underwriters (evidenced by a
written notice to the City and the Borrower terminating the obligation of the Underwriters to
accept delivery of and pay for the Bonds), by reason of any of the following:
(1) an event shall occur which makes untrue or incorrect in any
material respect, as of the time of such event, any statement or information
contained in the Official Statement or which is not reflected in the Official
Statement but should be reflected therein in order to make the statements
contained therein not misleading in any material respect and requires an
amendment of or supplement to the Official Statement and the effect of which, in
the reasonable judgment of the Underwriters, would materially adversely affect
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the market for the Bonds or the sale, at the contemplated offering prices (or
yields), by the Underwriters; or
(2) legislation shall be introduced in, enacted by, reported out of
committee, or recommended for passage by State of California, either House of
the Congress, or recommended to the Congress or otherwise endorsed for passage
(by press release, other form of notice or otherwise) by the President of the United
States, the Treasury Department of the United States, the Internal Revenue
Service or the Chairman or ranking minority member of the Committee on
Finance of the United States Senate or the Committee on Ways and Means of the
United States House of Representatives, or legislation is proposed for
consideration by either such committee by any member thereof or presented as an
option for consideration by either such committee by the staff or such committee
or by the staff of the Joint Committee on Taxation of the Congress of the United
States, or a bill to amend the Code (which, if enacted, would be effective as of a
date prior to the Closing) shall be filed in either House, or a decision by a court of
competent jurisdiction shall be rendered, or a regulation or filing shall be issued
or proposed by or on behalf of the Department of the Treasury or the Internal
Revenue Service of the United States, or other agency of the federal government,
or a release or official statement shall be issued by the President, the Department
of the Treasury or the Internal Revenue Service of the United States, in any such
case with respect to or affecting (directly or indirectly) the taxation of interest
received on obligations of the general character of the Bonds which, in the
reasonable judgment of the Underwriters, materially adversely affects the market
for the Bonds or the sale, at the contemplated offering prices (or yields), by the
Underwriters; or
(3) a stop order, ruling, regulation, proposed regulation or 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, sale or distribution of obligations of
the general character of the Bonds is in violation or would be in violation of any
provisions of the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act ") or the Trust
Indenture Act of 1939, as amended; or
(4) legislation introduced in or enacted (or resolution passed) by the
Congress or an order, decree, or injunction issued by any court of competent
jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press
release or other form of notice issued or made by or on behalf of the Securities
and Exchange Commission, or any other governmental agency having jurisdiction
of the subject matter, to the effect that obligations of the general character of the
Bonds, including any or all underlying arrangements, are not exempt from
registration under or other requirements of Securities Act, or that the Indenture is
not exempt from qualification under or other requirements of the Trust Indenture
Act of 1939, as amended, or that the issuance, offering, or sale of obligations of
the general character of the Bonds, including any or all underlying arrangements,
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as contemplated hereby or by the Official Statement or otherwise, is or would be
in violation of the federal securities law as amended and then in effect;
(5) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national or international emergency or war or
other calamity or crisis the effect of which on financial markets is such as to make
it, in the reasonable judgment of the Underwriters, impractical or inadvisable to
proceed with the offering of the Bonds as contemplated in the Official Statement;
or
(6) there shall have occurred a general suspension of trading,
minimum or maximum prices for trading shall have been fixed and be in force or
maximum ranges or prices for securities shall have been required on the New
York Stock Exchange or other national stock exchange whether by virtue of a
determination by that Exchange or by order of the Securities and Exchange
Commission or any other governmental agency having jurisdiction or any national
securities exchange shall have: (i) imposed additional material restrictions not in
force as of the date hereof with respect to trading in securities generally, or to the
Bonds or similar obligations; or (ii) materially increased restrictions now in force
with respect to the extension of credit by or the charge to the net capital
requirements of underwriters or broker - dealers such as to make it, in the
reasonable judgment of the Underwriters, impractical or inadvisable to proceed
with the offering of the Bonds as contemplated in the Official Statement; or
(7) a general banking moratorium shall have been declared by federal
or New York or Massachusetts state authorities or a major financial crisis or a
material disruption in commercial banking or securities settlement or clearances
services shall have occurred such as to make it, in the judgment of the
Underwriters, impractical or inadvisable to proceed with the offering of the Bonds
as contemplated in the Official Statement; or
(8) a downgrading or suspension of any rating (without regard to
credit enhancement) by Moody's Investors Service, Inc. ( "Moody's "), Standard &
Poor's ( "S &P "), or Fitch Ratings ( "Fitch ") of any debt securities issued by or on
behalf of the Borrower, or (ii) there shall have been any official statement as to a
possible downgrading (such as being placed on "credit watch" or "negative
outlook" or any similar qualification) of any rating by Moody's, S &P or Fitch of
any debt securities issued by or on behalf of the Borrower, including the Bonds.
(e) At or prior to the Closing Date, the Underwriters and the City shall have
received executed or, as noted below, conformed copies of the following documents, in each
case satisfactory in form and substance to the Underwriters and the City (which may be satisfied
pursuant to documents which concurrently address matters related to the Series 2009A Bonds):
(1) The Master Indenture, Obligation No. _ (specimen copy), the
Supplemental Master Indenture, the Bond Indenture, the Loan Agreement, the
Remarketing Agreement and the Continuing Disclosure Certificate, duly executed
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and delivered by the respective parties thereto, with such amendments,
modifications or supplements as may have been agreed to in writing by the
Underwriters;
(2) The unqualified approving opinion of Bond Counsel, dated the
Closing Date and addressed to the City, in substantially the form attached as
Appendix E to the Official Statement, together with a reliance letter addressed to
the Underwriters and a supplemental opinion of Bond Counsel in a form
acceptable to the Underwriters, dated the Closing Date and addressed to the
Underwriters, to the effect that:
(i) the Bonds are not subject to the registration requirements of
the Securities Act of 1933, as amended, and the Bond Indenture is exempt
from qualification pursuant to the Trust Indenture Act of 1939, as
amended;
(ii) this Bond Purchase Contract has been duly executed and
delivered by the City and, assuming due authorization, execution and
delivery by the Underwriters and approval by the Borrower, is a valid and
binding agreement of the City, subject to bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium and
other laws relating to or affecting creditors' rights, to the application of
equitable principles and to the exercise of judicial discretion in appropriate
cases; and
(iii) the statements contained in the Official Statement under the
captions "THE BONDS," "SECURITY FOR THE BONDS," "TAX
MATTERS," "APPENDIX C — Summary of Principal Documents,"
insofar as such statements expressly summarize certain provisions of the
Bonds, the Master Indenture, Obligation No. _, the Bond Indenture, the
Loan Agreement, the Supplemental Master Indenture or the opinion of
Bond Counsel concerning certain tax matters, are accurate in all material
respects;
(3) The opinion of City Attorney, dated the Closing Date, in
substantially the form attached hereto as Exhibit D;
(4) The opinion, dated the Closing Date and addressed to the City and
the Underwriters, of Stradling Yocca Carlson & Rauth, a Professional
Corporation, counsel to the Borrower, in substantially the form attached hereto as
Exhibit E;
(5) The opinion of Foley & Lardner LLP, counsel to the Underwriters,
dated the Closing Date and addressed to the Underwriters, in substantially the
form attached hereto as Exhibit F;
(6) A certificate, dated the Closing Date and signed by an authorized
official of the City, to the effect that (a) to the best of such official's knowledge,
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no litigation is pending or threatened against the City (i) to restrain or enjoin the
issuance or delivery of any of the Bonds or the collection of the Revenues (as
defined in the Bond Indenture) pledged under the Bond Indenture; (ii) in any way
contesting or affecting the authority for the issuance of the Bonds or the validity
of the Bonds, the Bond Indenture, the Loan Agreement or this Bond Purchase
Contract; or (iii) in any way contesting the existence or powers of the City; and
(b) no event affecting the City or its functions, duties and responsibilities has
occurred since the date of the Official Statement that would cause as of the
Closing Date any statement or information concerning the City or its functions,
duties and responsibilities contained in the Official Statement under the captions
"THE CITY" and "LITIGATION — The City" to contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made concerning the City or its functions, duties and responsibilities
contained under such caption not misleading in the light of the circumstances
under which they were made;
(7) A certificate of the Senior Vice President and Chief Financial
Officer of the Borrower, or such other officer as is acceptable to the Underwriters
and the City, dated the Closing Date, substantially in the form attached hereto as
Exhibit G;
(8) Certified copies of the resolution of the City authorizing the
execution and delivery of the Bond Indenture, the Loan Agreement, the Bonds,
this Bond Purchase Contract, the Preliminary Official Statement and the Official
Statement;
(9) Copies of each of the Borrower's and NHC's articles of
incorporation or certificate of formation, certified as of a date not earlier than
fifteen (15) days prior to the Closing Date by the Secretary of State of the State of
California or Delaware, as applicable; a good standing certificate of recent date
certified by the Franchise Tax Board of the State of California; and certified
copies of the Borrower's and NHC's bylaws or operating agreement;
(10) Certified copies of the resolutions of the Board of Directors of the
Borrower authorizing the execution and delivery of the Loan Agreement, the
Supplemental Master Indenture, Obligation No. _, the Continuing Disclosure
Certificate, the Remarketing Agreement and the Letter of Representation, and
approving this Bond Purchase Contract, the Bond Indenture, the Preliminary
Official Statement and the Official Statement (and distribution thereof);
(11) Certificates of the Borrower and the City deeming the Preliminary
Official Statement final for purposes of Rule 15c2 -12.
(12) Evidence that the Borrower has been determined to be an
organization described in Section 501(c)(3) of the Code;
(13) A Tax Agreement in form satisfactory to Bond Counsel;
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(14) Satisfactory evidence that: (i) the Bonds have been assigned the
long -term municipal bond ratings of "AA" by Standard & Poor's Ratings
Services, a division of The McGraw -Hill Companies, Inc. and "Aa3" by Moody's
Investors Service and (ii) the Series 2009B Bonds and Series 2009C Bonds have
been assigned a short-term municipal bond rating of "VMIGI" by Moody's
Investors Service;
(15) Two copies of the Official Statement executed as required by
Section 1(b) hereof;
(16) A properly completed and executed Form 8038 of the Internal
Revenue Service relating to the Bonds; and
(17) Such additional corporate resolutions, legal opinions, certificates,
proceedings, instruments and other documents as the Underwriters, the City or
Bond Counsel may reasonably request to evidence compliance by the City, the
Borrower and NHC with legal requirements, the truth and accuracy, as of the
Closing Date, of the representations of the City contained herein, of the Borrower
contained in the Letter of Representation, and the due performance or satisfaction
by the City, the Borrower and NHC at or prior to such time of all agreements then
to be performed and all conditions then to be satisfied by the City, the Borrower
and NHC.
If the City shall be unable to satisfy the conditions to the Underwriters'
obligations contained in this Bond Purchase Contract or if the Underwriters obligations shall be
terminated for any reason permitted herein, this Bond Purchase Contract shall terminate and
neither the Underwriters nor the City shall have any further obligation hereunder.
4. Conditions to the Obligations of the City.
The obligations of the City to issue and deliver the Bonds on the Closing Date
shall be subject, at the option of the City, to the performance by the Underwriters of their
obligations to be performed hereunder at or prior to the Closing Date and to the following
additional conditions:
(a) The Supplemental Master Indenture, Obligation No. . the Bond
Indenture, the Loan Agreement, the Continuing Disclosure Certificate and this Bond Purchase
Contract shall have been executed by the parties thereto;
(b) No order, decree, injunction, ruling or regulation of any court, regulatory
agency, public board or body shall have been issued, nor shall any legislation have been enacted,
with the purpose or effect, directly or indirectly, of prohibiting the offering, sale or issuance of
the Bonds as contemplated hereby or by the Official Statement; and
(c) The documents contemplated by Section 3(e) (other than those required to
be delivered by or on behalf of the City) shall have been delivered in substantially the forms set
forth herein or in form and substance satisfactory to Bond Counsel
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(d) The Series 2009A Bonds shall have been concurrently issued and
delivered.
5. Exaenses/Fees.
All reasonable expenses and costs of the City incident to the performance of its
obligations in connection with the authorization, issuance and sale of the Bonds to the
Underwriters, including printing costs, fees and expenses of consultants, fees and expenses of
rating agencies, fees and expenses of Bond Counsel, City Attorney, Underwriters Counsel
(including fees in connection with qualification of the Bonds for sale under the Blue Sky or other
securities laws and regulations of various jurisdictions and preparation and printing of a blue sky
survey and legal investment memorandum) and counsel for the Borrower and NHC shall be paid
by the Borrower. The Borrower shall pay for expenses incurred on behalf of the Borrower's
employees which are incidental to implementing this Bond Purchase Contract, including but not
limited to, meals, transportation, lodging and entertainment of those employees (some of which
expenses may have been paid for by the Underwriters and included in the expense component of
the underwriting discount). All fees and expenses to be paid by the Borrower pursuant to this
Bond Purchase Contract may be paid from Bond proceeds to the extent permitted by the Bond
Indenture and Tax Agreement.
6. Notices.
Any notice or other communication to be given to the City under this Bond
Purchase Contract may be given by delivering the same in writing at the City's address as set
forth above, and any such notice or other communication to be given to the Underwriters may be
given by delivering the same in writing to Citigroup Global Markets Inc., 444 South Flower
Street, 27th Floor, Los Angeles, California 90071 and to JPMorgan Securities, Inc., 560 Mission
Street, 3rd Floor, San Francisco, California 94105. The approval of the Underwriters when
required hereunder or the determination of its satisfaction as to any document referred to herein
shall be in writing signed by the Underwriters and delivered to you.
Governing Law.
This Bond Purchase Contract shall be construed in accordance with and governed
by the Constitution and the laws of the State of California.
8. Miscellaneous.
This Bond Purchase Contract is made solely for the benefit of the City, the
Borrower and the Underwriters (including the successors or assigns of each), and not other
person, partnership, association or corporation shall acquire or have any right hereunder or by
virtue hereof.
9. No Fiduciary.
The City acknowledges that in connection with the offering of the Bonds (a) the
Underwriters have acted at arms length, are not an agent of, and owe no fiduciary duties to the
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City or any other person and (b) the Underwriters engagements are as independent contractors
and not in any other capacity.
10. Counteruarts.
This Bond Purchase Contract may be executed in any number of counterparts and
all such counterparts shall together constitute one and the same instrument.
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CITIGROUP GLOBAL MARKETS INC.
LIM
Director
Signature Page to Bond Purchase Contract for the
CITY OF NEWPORT BEACH
REVENUE BONDS
(HOAG MEMORIAL HOSPITAL PRESBYTERIAN)
SERIES 2008
[Series 2008A and Series 2008B]
Error[ Unknown document property name.
Accepted and Agreed to:
CITY OF NEWPORT BEACH
I�
Mayor
Signature Page to Bond Purchase Contract for the
CITY OF NEWPORT BEACH
REVENUE BONDS
(HOAG MEMORIAL HOSPITAL PRESBYTERIAN)
SERIES 2008
[Series 2008A and Series 2008B]
Errorl Unknown document property name.
Approved:
HOAG MEMORIAL HOSPITAL PRESBYTERIAN
Authorized Representative
Signature Page to Bond Purchase Contract for the
CITY OF NEWPORT BEACH
REVENUE BONDS
(HOAG MEMORIAL HOSPITAL PRESBYTERIAN)
SERIES 2008
[Series 2008A and Series 2008B]
Errorl Unknown document property name.
EXHIBIT A TO
BOND PURCHASE CONTRACT
LETTER OF REPRESENTATION
June 2009
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92658
Citigroup Global Markets Inc.
444 South Flower Street
27th Floor
Los Angeles, California 90071
Ladies and Gentlemen:
The City of Newport Beach (the "City") proposes to enter into a Loan Agreement with
Hoag Memorial Hospital Presbyterian (the "Borrower ") dated as of June 1, 2009 (the "Loan
Agreement'). Pursuant to a Bond Purchase Contract, dated the date hereof (the "Bond Purchase
Contract'), between the City and Citigroup Global Markets Inc. on behalf of itself and on behalf
of JPMorgan Securities, Inc. (together, the "Underwriters "), which the Borrower has approved,
the City proposes to sell the aggregate principal amount of the $ City of Newport
Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian) $ Series 2009B,
$ Series 2009C, $ Series 2009D and $ Series 2009E (collectively,
the "Series 2009 Bonds" or the "Bonds ") identified on Exhibit B hereto. The offering of the
Bonds is described in a Preliminary Official Statement dated , 2009 (the "Preliminary
Official Statement') and in an Official Statement dated June _, 2009 (the "Official Statement ").
The Bonds shall be issued and secured under the provisions of that certain Bond
Indenture dated as of June 1, 2009 (the "Bond Indenture "), by and between the City and Wells
Fargo Bank, National Association, as bond trustee (the "Trustee "). The Bonds shall be payable
from payments made by the Borrower under the Loan Agreement from payments made on
Obligation No. _ (as hereinafter defined) by the Obligated Group (as hereinafter defined) and
from amounts held in certain funds established pursuant to the Bond Indenture (including certain
proceeds of the sale of the Bonds). The Bonds will be further secured by an assignment of the
right, title and interest of the City in the Loan Agreement and in Obligation No. _, to the extent
and as more particularly described in the Bond Indenture. All terms not otherwise defined herein
shall have the meanings ascribed thereto in the Bond Purchase Contract.
The proceeds from the sale of the Bonds and the Bonds will be loaned to the
Borrower pursuant to the Loan Agreement and will be used, together with the proceeds of the
Series 2009A Bonds and other available funds to (1) refund certain outstanding City of Newport
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Beach Insured Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series 2007D and City
of Newport Beach Refunding Revenue Bonds (Hoag Memorial Hospital Presbyterian), Series
2008A and Series 2008B (collectively, the "Prior Obligations "), (2) finance the acquisition and
construction of certain additions and improvements to, and equipment for, the acute care hospital
and other facilities owned by the members of the Obligated Group, and (3) pay certain costs of
issuing the Bonds.
The Borrower, as Credit Group Representative (as defined in the Master
Indenture, defined below) will issue its Obligation No. _ ( "Obligation No. _ ") to evidence the
obligation of the Obligated Group Members to make payments sufficient to pay the principal of,
premium, if any, and interest on the Bonds pursuant to the Supplemental Master Indenture for
Obligation No. _, dated as of June 1, 2009 (the "Supplemental Master Indenture "), by and
between the Borrower, as Credit Group Representative, and Wells Fargo Bank, National
Association, as master trustee (the "Master Trustee "), supplementing the Master Indenture dated
as of May 1, 2007 (the "Master Indenture ") between the Borrower, Newport Healthcare Center,
LLC ( "NHC ") and such other Members as may join the obligated group as defined therein (the
"Obligated Group ") and the Master Trustee. Obligation No. — will also evidence the obligation
of the Obligated Group to make payments sufficient to pay the principal of, premium, if any, and
interest on the Bonds (as defined in the Bond Purchase Contract).
Pursuant to the terms of the Master Indenture and the Supplemental Master Indenture, the
Borrower, NHC and any future Members of the Obligated Group will be jointly and severally
obligated to make payments on Obligation No. — according to the terms thereof when due. The
Borrower and NHC are presently the only Members of the Obligated Group.
The Borrower will undertake, pursuant to a Continuing Disclosure Certificate, dated as of
the date of issuance and delivery of the Bonds (the "Continuing Disclosure Certificate "), by and
between the Borrower and the Trustee, to provide certain annual financial information and
notices of the occurrence of certain events, if material.
In order to induce the City and the Underwriters to enter into the Bond Purchase Contract
and to make the sale and purchase and reoffering of the Bonds therein contemplated, the
Borrower hereby represents, warrants and agrees with each of you as follows:
1. The Borrower is a nonprofit public benefit corporation duly organized and
existing under the laws of the State of California.
2. NHC is a limited liability company duly organized and existing under the laws of
the State of California.
3. The Borrower has, and at the Closing Date will have, full legal right, power and
authority to enter into and perform its obligations under this Letter of Representation, the Loan
Agreement, the Master Indenture, the Supplemental Master Indenture, Obligation No. _, the
Remarketing Agreement and the Continuing Disclosure Certificate, to approve the Bond
Purchase Contract, the Bond Indenture, and the Official Statement and to carry out and
consummate all transactions contemplated by the Bond Purchase Contract, the Bond Indenture,
the Loan Agreement, the Master Indenture, the Supplemental Master Indenture, Obligation No.
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_, this Letter of Representation, the Continuing Disclosure Certificate, the Remarketing
Agreement, and the Official Statement, and by proper corporate action has duly authorized the
execution and delivery of this Letter of Representation, the Loan Agreement, the Master
Indenture, the Supplemental Master Indenture, Obligation No. _, the Remarketing Agreement
and the Continuing Disclosure Certificate, the approval of the Bond Purchase Contract, the Bond
Indenture, and the Official Statement (including the distribution thereof).
4. NHC has, and at the Closing Date will have, full legal right, power and authority
to perform its obligations under the Master Indenture, the Supplemental Master Indentures and
the Obligations.
5. The officers of the Borrower and NHC executing the Master Indenture and the
officers of the Borrower executing this Letter of Representation, the Loan Agreement, the
Supplemental Master Indenture, Obligation No. _, the Remarketing Agreement and the
Continuing Disclosure Certificate, approving the Bond Purchase Contract, the Bond Indenture,
and the Official Statement (including the distribution thereof) are, or were at the time of
execution of such document, fully authorized to execute and approve the same.
6. The Bond Purchase Contract, the Bond Indenture, the Preliminary Official
Statement and the Official Statement have been duly approved by the Borrower; this Letter of
Representation has been duly authorized, executed and delivered by the Borrower; the Loan
Agreement, the Supplemental Master Indenture, Obligation No. _, the Remarketing Agreement
and the Continuing Disclosure Certificate have been duly authorized and, at the Closing, will
have been duly executed and delivered by the Borrower.
7. This Letter of Representation constitutes and the Loan Agreement, the
Remarketing Agreement and the Continuing Disclosure Certificate will constitute the legal, valid
and binding agreements of the Borrower, and the Master Indenture constitutes, and the
Supplemental Master Indenture and the Obligation will constitute, the legal, valid and binding
agreements of the Borrower and NHC, in each case enforceable against the Borrower and NHC,
as applicable, in accordance with their respective terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other
laws affecting the enforcement of creditors' rights generally, including without limitation self -
help remedies and applicable foreclosure procedures, and also limited by the application of
equitable principles, regardless of whether such enforceability is considered in a proceeding in
equity or at law and except as enforcement may be held to be against public policy.
8. Neither the Borrower nor NHC is in any material way (i) in violation of any
applicable law or administrative regulation of the state in which it is incorporated or the United
States of America or any applicable judgment or decree, which violation would materially
adversely affect the financial position or operations of the Borrower and the Obligated Group
taken as a whole, or (ii) in default under any loan agreement, indenture, bond, note, resolution,
agreement or other instrument to which the Borrower or NHC is a party or is otherwise subject,
and no event has occurred and is continuing which, with the passage of time or the giving of
notice or both, would constitute an event of default under any such instrument which default
would materially adversely affect the financial position or operations of the Borrower taken as a
whole.
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9. The execution and delivery of this Letter of Representation, the approval of the
Bond Purchase Contract, the Bond Indenture, and the Official Statement; at the Closing, the
execution and delivery of the Loan Agreement, the Master Indenture, the Supplemental Master
Indenture, Obligation No. ___, the Remarketing Agreement and the Continuing Disclosure
Certificate; the consummation of the transactions contemplated herein and therein; and the
fulfillment of or compliance with the terms and conditions hereof and thereof will not conflict
with or constitute a violation or breach of or default (with due notice or the passage of time or
both) under the articles of incorporation of the Borrower, its bylaws or the articles of
organization of NHC or its operating agreement or any applicable law or administrative rule or
regulation, or any applicable court or administrative decree or order, or any indenture, mortgage,
deed of trust, loan agreement, lease, contract or other agreement or instrument to which the
Borrower or NHC is a party or by which they or their properties are otherwise subject or bound,
or result in the creation or imposition of any prohibited lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of the Borrower or NHC, which conflict,
violation, breach, default, lien, charge or encumbrance might have consequences that would
materially and adversely affect the consummation of the transactions contemplated by the Bond
Purchase Contract, the Bond Indenture, the Loan Agreement, the Master Indenture, the
Supplemental Master Indenture, Obligation No. _, the Remarketing Agreement, the
Remarketing Agreement, the Continuing Disclosure Certificate, this Letter of Representation, or
the Official Statement or the financial condition, assets, properties or operations of the Borrower
or the Obligated Group taken as a whole.
10. No consent or approval of any trustee or holder of any indebtedness of the
Borrower or NHC, and no consent, permission, authorization, order or license of, or filing or
registration with, any governmental authority (except in connection with Blue Sky proceedings)
is necessary in connection with the execution and delivery of this Letter of Representation; at the
Closing, the execution and delivery of the Loan Agreement, the Master Indenture, the
Supplemental Master Indenture, Obligation No. _, the Remarketing Agreement or the
Continuing Disclosure Certificate; the approval of the Bond Purchase Contract, the Bond
Indenture or the Official Statement or the consummation of any transaction therein or herein
contemplated, except as have been obtained or made and as are in full force and effect (or, with
respect to the consummation of any transaction therein or herein contemplated, except as are
expected to be obtained in due course).
11. Except as described in the Preliminary Official Statement and the Official
Statement, there is no action, suit, proceeding, inquiry or investigation before or by any court or
federal, state, municipal or other government authority pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or NHC or the assets, properties or
operations of the Borrower or NHC which, if determined adversely to the Borrower or NHC or
their interests, would have a material and adverse effect upon the consummation of the
transactions contemplated by or the validity of the Bond Purchase Contract, the Loan
Agreement, the Master Indenture, the Supplemental Master Indenture, Obligation No. _, this
Letter of Representation, the Official Statement, the Remarketing Agreement or the Continuing
Disclosure Certificate or upon the financial condition, assets, properties or operations of the
Borrower or the Obligated Group taken as a whole. Neither the Borrower nor NHC is in
violation of any order or decree of any court or any order, regulation or demand of any federal,
state, municipal or other governmental authority, which violation might have consequences that
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would materially and adversely affect the consummation of the transactions contemplated by the
Bond Purchase Contract, the Loan Agreement, the Master Indenture, the Supplemental Master
Indenture, the Remarketing Agreement, Obligation No. the Continuing Disclosure
Certificate, this Letter of Representation, and the Official Statement or the financial conditions,
assets, properties or operations of the Borrower or the Obligated Group taken as a whole.
12. The Borrower is a corporation organized and operated exclusively for charitable
purposes, not for pecuniary profit, and no part of the net earnings of the Borrower inures to the
benefit of any private shareholder or individual. The Borrower is an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, which is exempt from
federal income taxes under Sections 501(a) of the Internal Revenue Code of 1986, as amended,
except for unrelated trade or business income subject to taxation under Section 511 of said Code.
13. The proceeds of the Bonds will not be used by an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, in an "unrelated trade or
business" within the meaning of Section 513(a) of the Internal Revenue Code of 1986, as
amended, or by any other person, in such manner or to such extent as would result in the loss of
exclusion from gross income for federal income tax purposes of interest on any of the Bonds
under Section 103 of said Code.
14. Each of the Borrower and NHC has all necessary power and authority to conduct
the business now being conducted by it and the business contemplated by the Master Indenture,
the Supplemental Master Indenture, Obligation No. _, the Loan Agreement, the Continuing
Disclosure Certificate and the Remarketing Agreement and has all necessary power and authority
to enter into the respective documents mentioned above and to approve the Bond Purchase
Contract and the Official Statement.
15. Each of the Borrower and NHC has good and marketable title to its Property, free
and clear from all encumbrances other than Permitted Liens (as such terms are defined in the
Master Indenture).
16. Each of the Borrower and NHC has all permits, licenses, accreditations and
certifications, including, without limitation, licensing and certification of the Property (as defined
in the Master Indenture), necessary to conduct its business as it is presently being conducted.
17. The Borrower is eligible under applicable statutes, regulations and administrative
practices for payment under Medicare and Medicaid.
18. The Borrower is currently participating in the programs of Medicare and
Medicaid, and there are in full force and effect arrangements providing for payments to the
Borrower with respect to patients enrolled in such programs.
19. The Borrower has not incurred any material liability, direct or contingent, nor has
there been any material adverse change in the financial position, results of operations or
condition, financial or otherwise, of the Borrower since March 31, 2009, which is not described
in the Official Statement, whether or not arising from transactions in the ordinary course of
business.
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20. Between the date hereof and the date of the Closing, the Borrower and NHC will
not, without the prior written consent of the Underwriters, except as described in or contemplated
by the Official Statement, incur any material liabilities, direct or contingent, other than in the
ordinary course of business.
21. As of the date hereof and at the Closing Date, the Official Statement, as amended
or supplemented pursuant to the Bond Purchase Contract or this Letter of Representation, if
applicable, does not (or will not) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided, however, that the
Borrower makes no representation or warranty as to the information contained in or omitted from
the Official Statement in reliance upon and in conformity with information furnished in writing
to the Borrower by or on behalf of the Underwriters or the City specifically for inclusion therein.
22. If, between the date hereof and up to and including the 25th day following the end
of the underwriting period (as defined in Rule 15c2 -12 of the Securities and Exchange
Commission), any event relating to or affecting the Borrower, NHC or any future Members of
the Obligated Group or their respective present or proposed facilities shall occur which 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 required to be stated therein or
necessary to make the statements therein not misleading, in the light of the circumstances under
which they were made, the Borrower shall notify the City and the Underwriters and if, in the
opinion of the Borrower, the City or the Underwriters such event requires the preparation and
publication of a supplement or amendment to the Official Statement, the Borrower will request
the City to cause the Official Statement to be amended or supplemented in a form and in a
manner approved by the Underwriters.
23. For twenty -five days from the date of the end of the underwriting period (as
defined in Rule 15c2 -12 of the Securities and Exchange Commission), the Borrower will (a) not
participate in the issuance of any amendment of or supplement to the Official Statement to
which, after being furnished with a copy, any of you shall reasonably object in writing or which
shall be disapproved by your respective counsel and (b) if any event relating to or affecting the
City, the Borrower or NHC or any future Members of the Obligated Group or their respective
present or proposed facilities shall occur as a result of which it is necessary, in the opinion of
counsel for the Underwriters or the City, to amend or supplement the Official Statement in order
to make the Official Statement not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, forthwith prepare and famish to the Underwriters and the City
(at the expense of the Borrower for 90 days from the date of Closing, and thereafter at the
expense of the Underwriters) a reasonable number of copies of an amendment of or supplement
to the Official Statement (in form and substance satisfactory to counsel for the Underwriters and
counsel to the City) which will amend or supplement the Official Statement so that it will not
contain an untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein not misleading, in the light of the circumstances existing at the time
the Official Statement is delivered to the purchaser. For the purposes of this section, the
Borrower will furnish such information with respect to itself, NHC, any future Members of the
Obligated Group and their respective present and proposed facilities as any of you may from
time to time reasonably request.
W.
Error! Unknown document property name.
24. (a) The Borrower agrees to indemnify and hold harmless the Underwriters, the
directors, officers, employees and agents of the Underwriters and each person who controls the
Underwriters within the meaning of either the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject under the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Official Statement (or in
any supplement or amendment thereto), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified parry, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the Borrower will not be
liable in any such case to the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or omission or alleged
omission made in the Official Statement, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the Borrower by or on
behalf of the Underwriters specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Borrower may otherwise have.
(b) The Borrower agrees to indemnify and hold harmless the City, the directors,
officers, employees and agents of the City and each person who controls the City within the
meaning of either the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Official Statement (or in any supplement or
amendment thereto), or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Borrower will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission made in the
Official Statement, or in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Borrower by or on behalf of the City
specifically for inclusion therein. This indemnity agreement will be in addition to any liability
which the Borrower may otherwise have.
(c) The Underwriters agree to indemnify and hold harmless the Borrower, each of
its officials, directors, trustees, officers and employees, and each person who controls the
Borrower within the meaning of either the Securities Act of 1933, as amended, or the Securities
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Exchange Act of 1934, as amended, to the same extent as the foregoing indemnity from the
Borrower to the Underwriters, but only with reference to written information relating to the
Underwriters furnished to the Borrower by or on behalf of the Underwriters specifically for
inclusion in the Official Statement (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which the Underwriters may otherwise have. The
Borrower acknowledges that the statements set forth in the section entitled, "UNDERWRITING"
and the paragraph related to stabilization on the inside cover page of the Official Statement,
constitute the only information furnished in writing by or on behalf of the Underwriters for
inclusion in the Official Statement (or in any amendment or supplement thereto).
(d) Promptly after receipt by an indemnified party under this Section 24 of notice
of the commencement of any action, such indemnified party will, if a claim in respect thereof is
to be made against the indemnifying party under this Section 24 notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will
not relieve it from liability under paragraph (a), (b) or (c) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided
in paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided, however, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party's election
to appoint counsel to represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or compromise or consent
to the entry of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph (a) or (c) of this
Section 24 is unavailable to or insufficient to hold harmless an indemnified party for any reason,
the Borrower and the Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in connection with
A -8
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investigating or defending same) (collectively "Losses ") to which the Borrower and the
Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits
received by the Borrower on the one hand and by the Underwriters on the other from the offering
of the Bonds. If the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Borrower and the Underwriters shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative fault of the Borrower on
the one hand and of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses, as well as any other relevant equitable considerations. In no case
shall the Underwriters be responsible for any amount in excess of the purchase discount or
commission applicable to the Bonds purchased by the Underwriters hereunder. Benefits received
by the Borrower shall be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to
be equal to the total purchase discounts and commissions in each case set forth in the Official
Statement under the section entitled "UNDERWRITING." Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information
provided by the Borrower on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. The Borrower and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (e), no person guilty of fraudulent
misrepresentation (within the meaning of Section Il(f) of the Securities Act of 1933, as
amended) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 24, each person who controls the Underwriters
within the meaning of either the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, and each director, officer, employee and agent of the Underwriters
shall have the same rights to contribution as the Underwriters, and each person who controls the
Borrower within the meaning of either the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, and each official, director, officer and employee of the
Borrower shall have the same rights to contribution as the Borrower, subject in each case to the
applicable terms and conditions of this paragraph (e).
25. The Borrower has filed all annual reports when and where they are required to be
filed pursuant to any Continuing Disclosure Certificate executed and delivered by the Borrower
pursuant to Rule 15c2 -12 of the Securities and Exchange Commission that has been binding
upon the Borrower, and has filed all required notices of "listed events," as described in Rule
15c2 -12, when and where such notices are required to be filed pursuant to such Continuing
Disclosure Certificates.
26. The representations, warranties, agreements and indemnities herein shall survive
the Closing under the Bond Purchase Contract, and any investigation made by or on behalf of
any of you or any person who controls any of you of any matters described in or related to the
transactions contemplated hereby and by the Bond Purchase Contract, the Official Statement, the
Loan Agreement, the Bond Indenture, the Master Indenture, the Supplemental Master Indenture,
the Remarketing Agreement, Obligation No. _ and the Continuing Disclosure Certificate.
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27. The Borrower shall be under no obligation to deliver the Loan Agreement or enter
into any of the agreements referenced herein on the Closing Date except upon the concurrent
issuance and delivery of the Series 2009A Bonds (as defined in the Bond Purchase Contract).
28. The Borrower hereby agrees to pay the expenses described in Section 5 of the
Bond Purchase Contract (which are the responsibility of the Borrower), and to pay any expenses
incurred in amending or supplementing the Official Statement pursuant to the Bond Purchase
Contract or this Letter of Representation.
29. This Letter of Representation shall be binding upon the Borrower and inure solely
to the benefit of each of you and, to the extent set forth herein, persons controlling any of you,
and their respective members, officers, employees, agents, successors and assigns, and no other
person or firm shall acquire or have any right under or by virtue of this Letter of Representation.
No recourse under or upon any obligation, covenant or agreement contained in this Letter of
Representation shall be had against any officer or director of the Borrower as individuals, except
as caused by their bad faith.
30. The Borrower acknowledges that in connection with the offering of the Bonds (a)
the Underwriters have acted at anus length, are not agents of, and owe no fiduciary duties to the
Borrower or any other person and (b) the Underwriters engagements are as independent
contractors and not in any other capacity. The Borrower further acknowledges that it is solely
responsible for making its own judgments in connection with the offering of the Bonds
regardless of any past or present relationships with the Underwriters on related or other matters.
31. This Letter of Representation may be executed in any number of counterparts and
all such counterparts shall together constitute one and the same instrument.
Mill
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Very truly yours,
HOAG MEMORIAL HOSPITAL PRESBYTERIAN
in
Authorized Representative
Signature Page to Letter of Representation for the
City of Newport Beach
Revenue Bonds (Hoag Memorial Hospital Presbyterian)
Series 2008
[Series 2008A and Series 2008B]
Errorl Unknown document property name.
Accepted and Agreed to:
CITIGROUP GLOBAL MARKETS INC.
IC
Director
Signature Page to Letter of Representation for the
City of Newport Beach
Revenue Bonds (Hoag Memorial Hospital Presbyterian)
Series 2008
[Series 2008A and Series 2008B]
Errorl Unknown document property name.
Accepted and Agreed to:
CITY OF NEWPORT BEACH
0
Mayor
Signature Page to Letter of Representation for the
City of Newport Beach
Revenue Bonds (Hoag Memorial Hospital Presbyterian)
Series 2008
[Series 2008A and Series 2008B]
Errorl Unknown document property name.
EXHIBIT B TO
BOND PURCHASE CONTRACT
SCHEDULE OF REDEMPTIONS AND INITIAL LONG -TERM INTEREST RATE
Initial Lone -Term Interest Rate:
Redemption Provisions:
The Series 2009B Bonds. The 2009B Bonds are subject to redemption prior to their stated
maturity in part, by lot, from sinking fund installments, on any December 1, on or after December 1,
20_, at the principal amount thereof and interest accrued thereon to the date fixed for redemption,
without premium, as follows:
Redemption Date
(December 1)
f Final Maturity
Sinking Fund
Installment
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Redemption Date Sinking Fund
(December 1) Installment
The Series 2009C Bonds. The 2008A Bonds are subject to redemption prior to their stated
maturity in part, by lot, from sinking fund installments, on any December 1, on or after December 1,
20 , at the principal amount thereof and interest accrued thereon to the date fixed for redemption,
without premium, as follows:
Redemption Date
(December 1)
t Final Maturity
Sinking Fund
Installment
Redemption Date
(December 1)
Sinking Fund
Installment
The Series 2009D Bonds. The 2009C Bonds are subject to redemption prior to their stated
maturity in part, by lot, from sinking fund installments, on any December 1, on or after December 1,
20_, at the principal amount thereof and interest accrued thereon to the date fixed for redemption,
without premium, as follows:
Redemption Date Sinking Fund Redemption Date
(December 1) Installment (December 1)
t Final Maturity
Sinking Fund
Installment
The Series 2009E Bonds. The 2009D Bonds are subject to redemption prior to their stated
maturity in part, by lot, from sinking fund installments, on any December 1, on or after December 1,
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20_, at the principal amount thereof and interest accrued thereon to the date fixed for redemption,
without premium, as follows:
Redemption Date Sinking Fund Redemption Date Sinking Fund
(December 1) Installment (December 1) Installment
f Final Maturity
Optional/Extraordinary Optional Redemption
The Bonds shall be subject to optional and extraordinary optional redemption under the
circumstances as described in the Bond Indenture.
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EXHIBIT C TO
BOND PURCHASE CONTRACT
FORM OF AGREED -UPON PROCEDURES LETTER OF ERNST & YOUNG LLP
[See attached]
C -1
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EXHIBIT D TO
BOND PURCHASE CONTRACT
FORM OF OPINION OF CITY ATTORNEY
May 22, 2008
City of Newport Beach, California
Newport Beach, California
Citigroup Global Markets Inc.
Los Angeles, California
Hoag Memorial Hospital Presbyterian
Newport Beach, California
Re: $ City of Newport Beach Revenue Bonds (Hoag Memorial Hospital -
Presbyterian) Series 2008A and Series 2008B (the "Bonds ")
Ladies and Gentlemen:
This opinion is delivered to you pursuant to the Bond Purchase Contract dated June _
2009 (the "Purchase Contract'), between the City of Newport Beach, California (the "City ") and
Citigroup Global Markets Inc. on behalf of itself and on behalf of JPMorgan Securities, Inc.
(together, the "Purchasers "), which Hoag Memorial Hospital Presbyterian (the "Borrower ") has
approved, in connection with the issuance by the City of the $ City of Newport Beach
Revenue Bonds (Hoag Memorial Hospital Presbyterian) $66,800,000 Series 2009B, $
Series 2009C, $ Series 2009D, and $ Series 2009E (collectively, the "Series
2009 Bonds" or the "Bonds ") pursuant to a Bond Indenture dated as of June 1, 2009 (the "Bond
Indenture "), between the City and Wells Fargo Bank, National Association, as bond trustee (the
"Bond Trustee "). The Bonds are being issued for the purpose of making a loan of the proceeds
thereof to the Borrower pursuant to a Loan Agreement dated as of June 1, 2009 (the "Loan
Agreement) between the City and the Borrower.
The opinions or conclusions expressed herein are based on an analysis of existing laws,
regulations, rulings ands court decisions and cover certain matters not directly addressed by such
authorities. Such opinions may be affected by actions taken or omitted or events occurring after
the date hereof. We have not undertaken to determine, or to inform any person, whether any
such actions or events are taken or do occur. We have assumed the genuineness of all documents
and signatures presented to us (whether as originals or as copies) and the due and legal execution
and delivery thereof by, and validity against, any parties other than the City. We have not
undertaken to verify independently, and have assumed, the accuracy of the factual matters
represented, warranted or certified in the documents, and of the legal conclusions contained in
the opinions, referred to in the second paragraph hereof. We have further assumed compliance
with all covenants and agreements contained in such documents. In addition, we call attention to
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the fact that the rights and obligations under the Bonds, the Bond Indenture, the Loan Agreement
and the Purchase Contract may be subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws affecting creditors' rights, to the application of
equitable principles and to the exercise of judicial discretion in appropriate cases. We express no
opinion with respect to any indemnification, contribution, choice of law, choice of forum or
waiver provisions contained in the foregoing documents.
As counsel for the City in connection with the issuance of the Bonds, I have examined
certain documents, records and proceedings as I have deemed necessary and appropriate for the
purpose of this opinion and, on the basis of the foregoing and upon consideration of applicable
law, I am of the opinion that:
1. The City is a municipal corporation and charter city duly organized and validly
existing under a freeholder's charter under the Constitution and laws of the State of California
and has corporate power and authority to consummate and carry out all transactions
contemplated by the Purchase Contract.
2. The Preliminary Official Statement dated , 2009 (the "Preliminary
Official Statement") has been duly authorized and delivered and the Official Statement dated
June , 2009 (the "Official Statement ") has been duly authorized, executed and delivered, in
each case by the City.
3. Without assuming any responsibility for the accuracy, completeness or fairness of
the information or the statements contain in the Official Statement, to my knowledge, the
information relating to the City in its limited role as the conduit issuer of the Bonds contained in
the Official Statement under the headings "THE CITY" and "LITIGATION — The City" does not
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
4. The Resolution of the City Council of the City approving and authorizing the
execution and delivery of the Bond Indenture, the Purchase Contract, the Bonds, the Loan
Agreement and the Official Statement was duly adopted at a meeting of the City Council which
was called and held pursuant to law and all public notices required by law and the procedural
rules of the City Council and at which a quorum was present and acting throughout.
5. There is no action, suit, proceeding or investigation at law or in equity before or
by any court, public board or body known to be pending or threatened against or affecting the
City to restrain or enjoin the issuance of delivery of the Bonds or the collection of revenues
pledged under the Bond Indenture or the assignment of the Loan Agreement under the Bond
Indenture, in any way contesting or affecting any authority for the issuance of the Bonds or the
validity of the Bonds, the Loan Agreement, the Bond Indenture or the Purchase Contract or in
any way contesting the existence or powers of the City with respect to the issuance of the Bonds
or the security therefore wherein an unfavorable decision, ruling or finding would materially
adversely affect the transactions contemplated by the Preliminary Official Statement, the Official
Statement, the Bond Indenture, the Loan Agreement or the Purchase Contract or the validity of
the Bonds.
far]
Error! Unknown document property name.
6. The execution and delivery of the Bonds, the Bond Indenture, the Loan
Agreement and the Purchase Contract and compliance with the provisions thereof under the
circumstances contemplated thereby do not and will not conflict with or constitute on the part of
the City a breach 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, the result of which breach or default would be to materially adversely affect
the City's ability to perform its obligations under the Loan Agreement, the Bond Indenture, the
Bonds or the Purchase Contract.
7. The Loan Agreement, the Bond Indenture, the Bonds and the Purchase Contract
have been duly executed and delivered by the City and, assuming due authorization, execution
and delivery by the other parties thereto, are valid and binding obligations of the City
enforceable in accordance with their terms subject to laws relating to bankruptcy, insolvency,
reorganization or creditors' rights generally and to the application of equitable principles if
equitable remedies are sought.
8. All right and title to the payments due under the Loan Agreement have been duly
and legally assigned and pledged to the Bond Trustee for the payment of the principal of,
premium, if any, and interest on the Bonds.
Respectfully Submitted,
CITY ATTORNEY
D -3
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EXHIBIT E TO
BOND PURCHASE CONTRACT
FORM OF OPINION OF COUNSEL TO
THE BORROWER
,2009
City of Newport Beach
Newport Beach, California
Citigroup Global Markets Inc.
Los Angeles, California
JPMorgan Securities, Inc.
San Francisco, California
Wells Fargo Bank, National Association
as bond trustee and as master trustee
Los Angeles, California
Re: $ City of Newport Beach Revenue Bonds (Hoag Memorial Hospital
Presbyterian) Series 2009B, Series 20090, Series 2009D and Series 2009E
Ladies and Gentlemen:
We have acted as special counsel to Hoag Memorial Hospital Presbyterian, a California
nonprofit public benefit corporation (the "Corporation ") and Newport Healthcare Center, LLC, a
Delaware limited liability company ( "NHC "), in connection with the sale and delivery of
$ City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian)
Series 2009B, Series 2009C, Series 2009D and Series 2009E (collectively, the "Bonds ");
however, we are not general counsel to the Corporation or NHC.
Our opinion is based on the following general transaction structure:
The Bonds are being executed and delivered pursuant to an indenture, dated as of
, 2009 (the "Indenture ") between the City of Newport Beach (the "City ") and Wells
Fargo Bank, National Association, as trustee (the "Bond Trustee "). The proceeds of the Bonds
are being loaned to the Corporation under the terms of a loan agreement, dated as of ,
2009 (the "Loan Agreement') between the City and the Corporation. Capitalized terms used but
not defined in this opinion have the respective meanings ascribed thereto in the Indenture.
The Corporation is issuing its obligation number ( "Obligation No. _ ") to
evidence its obligation to make payments sufficient to pay the principal of, premium, if any,
interest on and purchase price of the Bonds, pursuant to a master trust indenture dated as of May
1, 2007 (as amended, supplemented and otherwise modified, the "Master Indenture "), by and
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among the Corporation, NHC and Wells Fargo Bank, National Association, as master trustee (the
"Master Trustee ").
In connection with the Bonds, the Corporation and the Master Trustee are also entering
into a Supplemental Master Indenture For Obligation No. _, dated as of 2009.
The Bonds are being sold pursuant to a bond purchase contract dated , 2009
between the Corporation, the City, Citigroup Global Markets Inc., and JPMorgan Securities, Inc.
and approved by the Corporation (the "Purchase Contract'). An official statement dated
, 2009 has been prepared to furnish information with respect to the sale and delivery of
the Bonds (the "Official Statement'). A preliminary official statement dated , 2009 has
been prepared to furnish information with respect to the sale and delivery of the Bonds, (the
"Preliminary Official Statement")
This Opinion is provided pursuant to paragraph 3(e)(4) of the Purchase Contract.
We have made such investigations of facts and law, examined such documents, obtained
such certificates from public officials and officers of the Corporation, and done such other things
as we have determined to be necessary or appropriate to render this opinion. We have assumed
that there are no other documents or agreements between the Corporation or NHC and the
Master Trustee which would expand or otherwise modify the respective rights and obligations of
the Corporation or NHC and the Master Trustee as set forth in Supplemental Master Indenture
No. , and Obligation No. _, and the documents required or contemplated thereby. As to
questions of fact relevant to this opinion, we have been furnished with and relied solely upon
certificates of public officials, certificates of and questionnaires completed by certain officers of
the Corporation, and documents submitted to us in response to our information request to the
Corporation and NHC and follow -up with officers of the Corporation where indicated based on
the information received from such sources. We have assumed and have not verified the
accuracy of the facts stated in any certificate, questionnaire or the documents provided to us in
response to our requests as described above.
Whenever a statement herein is qualified by "known to us," "to our current actual
knowledge," or similar phrase, it is intended to indicate that, during the course of our
representation of the Corporation and NHC, no information that would give us current actual
knowledge of the inaccuracy of such statement has come to the attention of those attorneys in
this firm who have rendered legal services in connection with the transaction described in the
introductory paragraph hereof. However, except as otherwise expressly indicated, we have not
undertaken any independent investigation to determine the accuracy of such statement, and any
limited inquiry undertaken by us during the preparation of this opinion letter should not be
regarded as such an investigation; no inference as to our knowledge of any matters bearing on
the accuracy of any such statement should be drawn from the fact of our representation of the
Corporation or NHC.
We have assumed the legal capacity of all natural persons and that, with respect to all
parties to agreements or instruments relevant hereto (other than the Corporation and NHC), such
parties had the requisite power and authority to execute, deliver and perform such agreement or
instruments, that such agreements or instruments have been duly authorized by all requisite
E -2
Error! Unknown document property name.
action, executed and delivered by such parties, and that such agreement or instruments are the
valid binding and enforceable obligations of such parties. We have further assumed the
authenticity of all items submitted to us as originals, the conformity to originals of all items
submitted to us as certified or photostatic copies, and except for signatures on behalf of the
Corporation and NHC, the genuineness of such signatures. We have further assumed that the
City is a duly organized and validly existing local government entity and that the Bonds have
been duly issued by the City.
With respect to our opinions in paragraphs 18 and 19 below, we have made the following
assumptions: (i) the description of the Gross Receivables contained in Supplemental Master
Indenture For Obligation No. 1, dated as of May 1, 2008, between the Corporation and the
Master Trustee ( "Supplemental Master Indenture No. 1 ") and the UCC -1 Financing Statements
described in paragraphs 18 and 19 below "reasonably identifies" the Gross Receivables within
the meaning of California Uniform Commercial Code Section 9108; (ii) the Corporation and
NHC have sufficient "rights" or "power to transfer rights" in the Gross Receivables within the
meaning of California Uniform Commercial Code Section 9203 and (iii) the Corporation and
NHC have each received legally sufficient consideration and "value" (as such term is defined in
California Uniform Commercial Code Section 1201) as required by California Uniform
Commercial Code Section 9203 for its obligations under Supplemental Master Indenture No. 1,
Supplemental Master Indenture No. , Obligation No. 1, and Obligation No. , and for the
granting of security interests in its property as security for such obligations.
Based on the foregoing, and subject to the additional assumptions, exceptions, the
qualifications and limitations set forth below, as of the date of this letter, it is our opinion that:
1. The Corporation is a nonprofit public benefit corporation duly organized and in
good standing under the laws of the State of California.
2. NHC is a limited liability company duly organized and in good standing under the
laws of the State of Delaware.
3. The Corporation has the power and authority to enter into the Loan Agreement,
the Tax Certificate and Agreement, the Purchase Contract (including the Letter of Representation
appended thereto), Supplemental Master Indenture No. , Obligation No. _ and the
Continuing Disclosure Certificate (collectively, the "Borrower Documents "), to perform all of its
duties contained therein, and to approve the Preliminary Official Statement and the Official
Statement.
4. The execution of Supplemental Master Indenture No. is authorized or
permitted by the Master Indenture.
5. All conditions precedent to the execution of Supplemental Master Indenture No.
have been satisfied or waived. The Borrower Documents have been duly authorized by all
necessary corporate action on the part of the Corporation and have been duly executed and
delivered by the Corporation.
E -3
Errorl Unknown document property name.
6. The obligations under the Loan Agreement and Obligation No. constitute the
legal, valid and binding agreements of the Corporation enforceable against the Corporation in
accordance with their respective terms.
7. (i) The Borrower Documents constitute the legal, valid and binding obligations of
the Corporation and NHC enforceable against the Corporation and NHC in accordance with their
respective terms.
8. The Corporation has the corporate power to approve and has duly approved the
Indentures, the Preliminary Official Statement and the Official Statement and duly authorized the
distribution of the Official Statement.
9. The distribution of the Preliminary Official Statement and the Official Statement
and the approval thereof by the Corporation, the approval by the Corporation of the Indentures,
the execution and delivery by the Corporation of the Borrower Documents and the execution and
delivery by the Corporation and NHC of the Master Indenture, the performance by the
Corporation and NHC, as applicable, of the duties and covenants of the Corporation and NHC
contained therein and the fulfillment of or compliance by the Corporation and NHC with the
terms and conditions thereof (a) do not and will not constitute on the part of the Corporation or
NHC a breach of or default (with due notice or the passage of time or both), and do not result in
the creation or imposition of any prohibited lien, charge or encumbrance upon the property or
assets of the Corporation or NHC, under the articles of incorporation or bylaws of the
Corporation or the Limited Liability Company Agreement of NHC, or the resolution of the
Board of Directors of the Corporation duly adopted on authorizing the
transactions contemplated by the documents referred to in this paragraph, (b) do not and will not,
to our knowledge, constitute a material breach of the terms, conditions or provisions of, or
constitute a default under, any material contract, undertaking, indenture or other agreement or
instrument; and (c) neither is prohibited by, nor subjects the Corporation or NHC to, a fine,
penalty, or other similar sanction under, any statute or regulation of the State of California, or
any federal statute or regulation, of a type which are typically applicable to transactions similar
to those transactions contemplated by the documents referred to in this paragraph, and which
breach, default, lien, charge or encumbrance would materially and adversely affect the
consummation of the transactions contemplated by the documents referred to in this paragraph,
or the financial condition or operations of the Corporation or NHC.
10. With respect to requirements imposed on the Corporation or NHC, no consent,
approval, authorization of or designation, declaration, or filing with any California or United
States federal authority (except as may be required under any state or federal blue sky or
securities laws) is required in connection with the execution and delivery by the Corporation and
NHC of the Borrower Documents and the Official Statement or the distribution of the
Preliminary Official Statement and the Official Statement, or, in the case of and the Borrower
Documents, is required in connection with the performance of the obligations and duties of the
Corporation and NHC contained therein, except as has been obtained or made on or before the
date hereof and as is in full force and effect or which are not required to be made or obtained
until after the date hereof. All requirements and conditions to be fulfilled by the Corporation and
NHC prior to the issuance of Obligation No. _, set forth in the Master Indenture and
Supplemental Master Indenture No. have been complied with and satisfied.
E -4
Errorl Unknown document property name.
11. (a) To our current actual knowledge, there is no action, suit or proceeding
pending against the Corporation or NHC or their respective properties in any court or before any
governmental authority or agency, or arbitration board or tribunal, which challenges the
consummation of the financing transactions contemplated by or the validity of the Bonds or the
Borrower Documents, which, if determined adversely to the Corporation or NHC, would have a
material and adverse effect on such consummation or validity.
(b) To our current actual knowledge, there is no action, suit or proceeding,
pending against the Corporation or NHC or their respective assets, properties or operations in
any court or before any governmental authority or agency, or arbitration board or tribunal,
which, if determined adversely to the Corporation or NHC, would have a material and adverse
effect on the Corporation or NHC or their financial condition, assets or operations (taken as a
whole).
(c) To our current actual knowledge, neither the Corporation nor NHC is in
violation or breach with respect to any specific judicial or administrative adjudicative order or
decree directed to or affecting the Corporation or NHC by any federal, state, or municipal court
or other governmental authority which violation or breach might have consequences that would
materially and adversely affect the consummation of the transactions contemplated by the
documents referred to in this paragraph 11 or the financial condition or operations of the
Corporation or NHC (taken as a whole).
12. The Corporation is an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended (the "Code "), and is exempt from federal income taxation
under Section 501(a) of the Code except for unrelated business income subject to taxation under
Section 511 of the Code.
13. The Corporation is an organization described in Section 3(a)(4) of the Securities
Act of 1933, as amended, and Section 12(g)(2)(D) of the Securities Exchange Act of 1934, as
amended.
14. Each of the Corporation and NHC has the power and authority to own its
properties and assets and to carry on its business as now being conducted by it.
15. The Corporation is duly licensed by the State of California Department of Health
Services as a general acute care hospital and is qualified to participate in the federal Medicare
and state Medi -Cal programs.
16. Obligation No. _ is exempt from registration under the Securities Act of 1933,
as amended.
17. The provisions of Supplemental Master Indenture No. 1 are sufficient to create a
security interest which has attached to the right, title and interest of the Corporation and NHC in
those items and types of Gross Receivables in which a security interest may attach under
Division 9 of the California Uniform Commercial Code. "Gross Receivables," as used in this
opinion, has the same meaning ascribed thereto in Supplemental Master Indenture No. 1.
E -5
Error! Unknown document property name.
18. The UCC -1 Financing Statement filed with the California Secretary of State on
May 30, 2007 as Filing No. 07- 7115717127 (the "Corporation Financing Statement') is in
adequate and legally sufficient form to perfect a security interest in favor of the Master Trustee
in the right, title and interest of the Corporation to the Gross Receivables which are described in
the Corporation Financing Statement and Supplemental Master Indenture No. 1, and for which
perfection may occur by the filing of a UCC -1 Financing Statement with the Secretary of State
for the State of California (the "Corporation Gross Receivables "). Assuming that the
Corporation Financing Statement was duly filed with the Secretary of State for the State of
California in accordance with the provisions of Section 9516(a) of the California Uniform
Commercial Code, the Master Trustee has a perfected security interest in the Corporation Gross
Receivables.
19. The UCC -1 Financing Statement filed with the Delaware Secretary of State on
May 30, 2007 as Filing No. 72027026 (the "NHC Financing Statement') is in adequate and
legally sufficient form to perfect a security interest in favor of the Master Trustee in the right,
title and interest of NHC to the Gross Receivables which are described in the NHC Financing
Statement and Supplemental Master Indenture No. 1, and for which perfection may occur by the
filing of a UCC -1 Financing Statement with the Secretary of State for the State of Delaware (the
"NHC Gross Receivables "). Assuming that the NHC Financing Statement was duly filed with
the Secretary of State for the State of Delaware in accordance with the provisions of Section
9516(a) of the California Uniform Commercial Code, the Master Trustee has a perfected security
interest in the NHC Gross Receivables.
20. As holders of Master Indenture Obligations (as defined in the Master Indenture),
the holders of Obligation No. _ are entitled to the benefit of the security interest in favor of
the Master Trustee in the Corporation Gross Receivables and the NHC Gross Receivables, on the
terms and subject to the conditions set forth in Supplemental Master Indenture No. 1.
In connection with our participation in the preparation of the Official Statements, we
have not independently verified the accuracy, completeness or fairness of the statements
contained therein, and the limitations inherent in the examination made by us and the knowledge
available to us are such that we are unable to assume, and we do not assume, any responsibility
for the accuracy, completeness or fairness of the statements contained in the Official Statements.
However, on the basis of our examination and our participation in conferences with certain
officers of the Corporation and NHC, its independent auditors and representatives of the
Underwriter, its counsel and Bond Counsel in connection with the preparation of the Official
Statements, we can advise you supplementally as a matter of fact that we have no current actual
knowledge that the Official Statements as of their date or the date hereof contained or contains
any untrue statement of a material fact or omitted or omits to state any material fact required to
be stated therein or necessary in order to make the statements therein not misleading. However,
we are not expressing any belief as to the financial statements and the notes thereto or any
financial statistical or economic data or forecast, or the demographic and statistical data, or any
information regarding the City, the Book -Entry Only System and The Depository Trust
Company, all as contained in the Official Statements.
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Our opinion is subject to the following qualifications:
(a) We have not examined the question of what law would govern the
interpretation or enforcement of the Master Indenture, the Indentures, Obligation No. , the
Loan Agreement or the Purchase Contract and, except as set forth in (b), (c) and (d) below,
we express no opinion with respect to the laws of any state or jurisdiction other than
California.
(b) We express our opinion with respect to federal law only as set out in
paragraphs 9, 10, 11, 12, 13, 14, 15 and 16 hereof and as it may apply to exception
paragraphs (c), (d), (e) and (g).
(c) Except as specifically provided in paragraphs 13 and 16 and in exception
paragraph (d), we express no opinion with respect to the registration or qualification
provisions of federal or state securities laws or their application to any of the documents
referred to herein or any transaction contemplated thereunder.
(d) The enforceability of the documents listed in paragraphs 7 and 8 may be
limited:
(i) by bankruptcy, insolvency, fraudulent conveyance, or other similar
laws or proceedings affecting the enforcement of creditors' rights generally as such
proceedings or laws affect the Corporation, including, without limitation, self -help
remedies, applicable foreclosure procedures and by application of equitable principles
regardless of whether such enforceability is considered in a proceeding in equity or at
law,
(ii) to the extent that enforcement may be held to be against public policy,
(iii) to the extent that the indemnification provisions in such documents
may be limited by applicable securities law or public policy,
(iv) by the implied covenant of good faith and fair dealing, and
(v) to the extent that enforcement may be limited by donor restrictions on
certain funds.
(e) Our opinion as expressed in paragraph 12 is based solely upon an interview
with the Senior Vice President and Chief Financial Officer of the Corporation, a review of
the minutes of the Board of Directors of the Corporation, and a review of responses to
inquiries by us of litigation counsel identified by the Corporation regarding litigation matters
pertaining to the Corporation and a certificate regarding litigation matters dated the date
hereof of the Senior Vice President and Chief Financial Officer of the Corporation.
(1) We express no opinion as to:
(i) The enforceability of provisions in any of the documents mentioned
herein with respect to the payment of attorneys' fees.
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(ii) The enforceability under certain circumstances of provisions waiving
stated rights or unknown future rights, or providing that rights or remedies are not
exclusive, but every right or remedy is cumulative and may be exercised in addition
or with any other right or remedy or that the election of some particular remedy or
remedies does not preclude or waive recourse to one or more others. Provisions
purporting to limit or restrict the right of the Corporation or NHC to sell, encumber or
otherwise transfer or dispose of any of their respective property may be
unenforceable to the extent that they impose restrictions upon the Corporation or
NEC and it cannot be demonstrated that such restrictions are reasonably necessary
for Master Trustee's protection. Limitations on strict enforcement of certain
covenants in debt instruments absent a showing of damage to the lender, impairment
of value of collateral or impairment of the debtor's ability to pay or otherwise under
circumstances which would violate the lender's covenant of good faith and fair
dealing.
(iii) The enforceability under certain circumstances of provisions which
waive statutory rights to receive notice or to be allowed to cure, or which waive
statutes of limitations.
(iv) The enforceability under certain circumstances of provisions to the
effect that failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of that right or remedy or that waivers must be in writing in order to be
effective. Limitations on the exercise of certain contractual rights and remedies if the
defaults are not material or the penalties bear no reasonable relation to the damages
suffered by the aggrieved party as a result of the delinquencies or defaults.
(v) The enforceability under certain circumstances of provisions to the
effect that the invalidity or unenforceability of certain provisions shall not impair the
validity or enforceability of remaining provisions.
(vi) The enforceability of provisions in any of the documents relating to
the disposition of insurance proceeds or condemnation proceeds.
(vii) The enforceability of provisions in any of the documents relating to
the execution of claims by third parties to such documents.
(viii) The enforceability of provisions increasing the interest rate payable
after a default or imposing a prepayment premium (except upon voluntary
prepayment) or late charges.
(ix) The enforceability of provisions which waive rights of set -off.
(x) The enforceability of provisions that time is of the essence.
(xi) The enforceability of any provisions that indemnify any party against
its own negligence or willful misconduct. The effect of provisions releasing or
indemnifying a party against liability for its own wrongful or negligent acts, or where
indemnification is contrary to public policy.
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(xii) The effect of California Civil Code Section 1670.5 which provides
that a court may refuse to enforce, or may limit the application of, a contract or any
clause thereof which the court finds as a matter of law to have been unconscionable at
the time it was made. The effect of California Civil Code Section 1671 which
provides in part that a contractual provision liquidating the damages for breach of
contract in a commercial transaction will be invalid if it is established that the
provision was "unreasonable" under the circumstances existing at the time the
contract was made. The effect of Sections 2787 through 2855 of the California Civil
Code which provide protections for and limitations on the obligations of a guarantor
such as, but not limited to, limitations that provide (i) in certain circumstances that a
notice be given to the guarantor of any default by the debtor or obligor which may
result in liability to the guarantor; (ii) that the obligations of a guarantor cannot be
greater in amount or more burdensome than that of the obligor; (iii) that the guarantor
will have the same defenses to liability as the obligor, other than defenses arising
from the personal disability of the obligor; (iv) that a guarantor will be exonerated
from liability, by any act of the creditor taken without the guarantor's consent, which
alters the original obligations of the obligor or impairs or suspends any remedies or
rights of the creditor against the obligor or security for the guaranteed obligation;
(v) that the creditor's acceptance of anything in partial satisfaction of the guaranteed
obligation also reduces the obligation of the guarantor to the same extent; and
(vi) that a guarantor may require the creditor to proceed against the obligor or
security held by the creditor or to pursue other remedies within the power of the
creditor which cannot be pursued by the guarantor before proceeding against the
guarantor. The effect of Sections 3439.01 through 3439.12 of the California Civil
Code relative to fraudulent transfers or conveyances.
(xiii) The effect of Section 1698 of the California Civil Code which
provides in part that provisions of any instrument or agreement may only be waived
in writing will not be enforced to the extent that an oral agreement has been executed
modifying provisions of such instrument or agreement.
(xiv) The enforceability of provisions governing choice of law, waiving the
right to trial by jury, consenting to jurisdiction or venue, altering the statutory method
of service of process, or appointing any parry as the attomey -in -fact for the other
party.
(g) Certain provisions of the Borrower Documents may be unenforceable under
applicable California laws governing such provisions, but neither such laws nor the possible
unenforceability of the provisions referred to in section (t) above, subject to the other
exceptions, qualifications and limitations in this Opinion, render the Borrower Documents
invalid as a whole or substantially interfere with realization of the principal benefits provided
by the Borrower Documents. In addition, we advise you that California court decisions
invoking statutes or principles of equity have held that certain covenants and provisions of
agreements are unenforceable where (i) the breach of such covenants or provisions imposes
restrictions or burdens upon the debtor, including the acceleration of indebtedness due under
debt instruments, and it cannot be demonstrated that the enforcement of such restrictions or
burdens is reasonably necessary for the protection of the creditor, or (ii) the creditor's
enforcement of such covenants or provisions under the circumstances would be unreasonable,
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violate the creditor's implied covenant of good faith and fair dealing or would be
commercially unreasonable.
(h) Our opinions as expressed in paragraphs 12 and 13 are based solely upon:
(i) The current articles of incorporation as certified by the Secretary of
State of the State of California and bylaws of the Corporation as provided to us by the
Corporation;
(ii) A copy of a letter dated March 10, 1954 by the Internal Revenue
Service addressed to the Corporation confirming that the Corporation is exempt from
federal income taxes under Section 501(a) of the Code as an organization described
in Section 501(c)(3) and that the Corporation is not a "private foundation" within the
meaning of Section 509(a) of the Code;
(iii) A certificate from the President and Senior Vice President and Chief
Financial Officer of the Corporation stating that the Corporation has not been notified
by the Internal Revenue Service of any investigation of, or proposed or actual
revocation of its status as an organization described in section 501(c)(3) of the Code
which is not a private foundation; and
(iv) Factual information set forth in certificates from officers of the
Corporation, the Corporation's responses to our questionnaire dated
and the documents and other information submitted to us in response to our
information request to the Corporation dated , and follow -up with
officers of the Corporation where indicated based on the information received from
such sources.
(i) We understand that you will rely upon the opinion of Bond Counsel as to
matters concerning the effect of the execution and delivery of the Indentures on the validity
and tax- exempt status of the Bonds, and we express no opinion herein on such matters.
0) The opinions expressed herein are based on facts, laws, regulations and case
law in effect as of the date hereof, and we assume no obligation to revise or supplement this
letter should such facts, laws, regulations and case law be changed in any respect, including
any changes in organization or affairs of the Corporation and NHC.
(k) We have not rendered insurance advice to the Corporation or NHC as to any
types or classifications of coverage, including general and medical malpractice liability
coverage, and we do not represent by this opinion or otherwise that we have reviewed or
made any assessment about, nor do we express any opinion about the types or amounts of
coverage, of the ability of any insurer or any self insurance program or organization to meet
its obligations pursuant to any policy or agreement with the Corporation or NHC, or of the
adequacy of the funding or reserves thereof.
(1) As special counsel to the Corporation and NEC in this matter, we have not
rendered financial advice to the Corporation or NEC and do not represent by this opinion, or
otherwise, that we have reviewed or made any assessment about, nor do we offer any opinion
about, the financial condition of the Corporation or NHC, past, present or future (except only
as financial condition is related to a standard of materiality as used in paragraphs 9, 11(b) and
II(c) hereof), and with respect to the latter we have relied entirely on the assessment of
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materiality made by the Senior Vice President and Chief Financial Officer of the
Corporation.
(m) We express no opinion with respect to any numerical or mathematical
calculation or computation regarding the Bonds, any of the documents referred to herein or
any certificate given or issued with respect to the matters referred to herein. Without limiting
the generality of the above, we specifically express no opinion with respect to any such
calculation or computation contained in or related to the subject matter of the Tax Certificate
and Agreement or Internal Revenue Service Form 8038.
(n) We express no opinion as to the ownership or the condition of title of any real
or personal property of the Corporation or NHC.
(o) Our opinion is limited to the matters expressly set forth herein, and no
opinion or other statement may be inferred or implied beyond the matters expressly stated.
(p) We expressly do not comment upon or render any opinion with respect to the
Corporation's or NHC's rights in or title to any item of Gross Receivables, the priority of any
security interest in any item of Gross Receivables over any other interest in Gross
Receivables, and the ability of the Master Trustee to realize upon any item of Gross
Receivables in which any other person has an interest.
(q) Our opinions rendered above do not include any opinion as to the perfection
of any security interest or lien which is not perfected by the filing of a financing statement
with the Secretary of State for the State of California or the Secretary of State for the State of
Delaware.
We are members of the Bar of the State of California and, accordingly, do not purport to
be experts on or to be qualified to express any opinion herein concerning, nor do we express any
opinion herein concerning, any laws other than the laws of the State of California and federal
law.
Our engagement by the Corporation and NHC with respect to the matters stated herein
terminates as of the date hereof. No attorney - client relationship exists between us and you.
This opinion is furnished by us as special counsel to the Corporation and it may be relied
upon only by the addressees, their counsel and Orrick, Herrington & Sutcliffe LLP, as Bond
Counsel. This letter shall not be used, quoted, disseminated, circulated or relied upon by any
other person or entity, for any purpose, without our prior written consent, except as copies may
be included in transcripts of the proceedings relating to the issuance of the Bonds.
Respectfully submitted,
/s/
STRADLING YOCCA CARLSON & RAUTH
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EXHIBIT F TO
BOND PURCHASE CONTRACT
FORM OF OPINION OF UNDERWRITERS COUNSEL
[To Come]
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EXHIBIT G TO
BOND PURCHASE CONTRACT
FORM OF OFFICER'S CERTIFICATE
Re: City of Newport Beach Revenue Bonds (Hoag Memorial Hospital Presbyterian)
Series 2009 (the "Bonds ")
I, Jennifer Mitzner, hereby certify that I am the Senior Vice President and Chief Financial
Officer of Hoag Memorial Hospital Presbyterian (the "Corporation "), a nonprofit public benefit
corporation duly organized and existing under the laws of the State of California and that, as
such, I am authorized to execute this certificate on behalf of the Corporation under the Master
Indenture dated as of May 1, 2007, as supplemented and amended, by and among the
Corporation, Newport Healthcare Center, LLC and such other members as may join the
obligated group as defined therein and Wells Fargo Bank, National Association, as master
trustee.
I hereby further state and certify, to the best of my knowledge, that:
1. Since March 31, 2009, no material and adverse change has occurred in the
financial position or results of operation of the Corporation which is not described in the Official
Statement prepared in connection with the issuance of the Bonds or which has not been
described in writing delivered by the Corporation to the City and the Underwriter.
2. The Corporation has not, since March 31, 2009, incurred any material liabilities
other than in the ordinary course of business which are not described in or contemplated by the
Official Statement or in writing delivered by the Corporation to the City and the Underwriter.
3. No proceedings are pending or threatened in any way contesting or affecting the
Corporation's status as an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986 (the "Code "), as amended, or which would subject any income of any Member of
the Obligated Group to federal income taxation.
4. No event affecting the Corporation has occurred since the date of the Official
Statement which (i) makes untrue or incorrect in any material respect as of the date hereof, or at
such earlier or later time or date as shall be agreed by the City and the Underwriter, any
statement or information contained in the Official Statement or (ii) is not reflected in the Official
Statement but should be reflected therein in order to make the statements and information therein
not misleading in any material respect.
5. The representations and warranties made by the Corporation in the Letter of
Representation delivered by the Corporation in connection with the execution of the Bond
Purchase Contract related to the Bonds, are true and correct as of the date hereof as if made on
the date hereof.
Capitalized terms used and not defined herein have the meanings assigned to them in the
Bond Purchase Contracts dated June _, 2009 and June _, 2009, respectively, each between
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Citigroup Global Markets Inc., on behalf of itself and on behalf of JPMorgan Securities, Inc., and
the City of Newport Beach and approved by the Corporation.
Dated: June , 2009
HOAG MEMORIAL HOSPITAL PRESBYTERIAN
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Senior Vice President and Chief Financial Officer
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