Stradling Yocca Carlson & Rauth
Draft of March 3, 2022
4854-8719-3874/200545-0048
$__________
CATHEDRAL CITY PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, 2022 SERIES A
(FEDERALLY TAXABLE)
BOND PURCHASE CONTRACT
__________, 2022
Cathedral City Public Financing Authority
c/o Cathedral City
68700 Avenida Lalo Guerrero
Cathedral City, California 92234
Ladies and Gentlemen:
Raymond James & Associates, Inc. (the “Underwriter”) offers to enter into this Bond Purchase Contract (this “Purchase Contract”) with the Cathedral City Public Financing Authority (the “Authority”) which will be binding upon the Authority and the Underwriter upon the acceptance hereof by the Authority. This offer is made subject to its acceptance by the Authority by execution of this Purchase Contract and its delivery to the Underwriter on or before 8:00 p.m., California time, on the date hereof. All terms used herein and not otherwise defined shall have the respective meanings given to such terms in the Indenture (as hereinafter defined).
Each of the Authority and the City acknowledge and agree that: (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm’s length commercial transaction among the Authority, the City and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as principal and not as agent or fiduciary of the Authority nor the City; (iii) the Underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the Authority or the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority and the City on other matters); and (iv) the Authority and the City have consulted with their own legal and financial advisors to the extent they have deemed appropriate.
1. Purchase, Sale and Delivery of the Bonds. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $_________ aggregate principal amount of the Authority’s Lease Revenue Bonds, 2022 Series A (Federally Taxable) (the “Bonds”), at a purchase price equal to $__________ (being the aggregate principal amount thereof, plus original issue premium of $________ and less an Underwriter’s discount of $__________). The Bonds are to be purchased by the Underwriter from the Authority. Such payment and delivery and the other actions contemplated hereby to take place at the time of such payment and delivery are herein sometimes called the “Closing.”
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The Bonds shall mature on the dates and in the amounts, and will bear interest at the rates, set forth in Exhibit A hereto and as further described in the Official Statement.
2. The Bonds and Related Documents. The Bonds shall be substantially in the form described in, and shall be issued and secured under the provisions of an Indenture, dated as of April 1, 2022 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and pursuant to the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6584) and Sections 53570 et seq. and 53580 et seq. of the California Government Code and a resolution of the Authority adopted on ________ (the “Resolution”). The Bonds shall be as described in the Indenture and the Official Statement dated the date hereof relating to the Bonds (which, together with all exhibits and appendices included therein or attached thereto and such amendments or supplements thereto which shall be approved by the Underwriter, is hereinafter called the “Official Statement”).
The Bonds are special limited obligations of the Authority secured by and payable from (i) Revenues pledged under the Indenture, consisting primarily of the Base Rental Payments paid by the City to the Authority pursuant to the Lease Agreement, dated as of April 1, 2022 (the “Lease Agreement”), by and between the Authority and the City, (ii) amounts held in the funds and accounts established pursuant to the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture, (iii) investment income with respect to such moneys held by the Trustee and (iv) any insurance proceeds or condemnation awards received by or payable to the Trustee relating to the Base Rental Payments.
The Bonds are further secured by an assignment of all of the right, title and interest of the Authority in and to the Site Lease and the Lease Agreement, including the right to receive Base Rental Payments and the right to exercise any remedies provided in the Lease Agreement in the event of a default by the City thereunder. The Leased Property is initially leased by the City to the Authority pursuant to a Site and Facility Lease dated as of April 1, 2022 (the “Site Lease”), by and between the City and the Authority.
The Bonds are being issued for the purpose of (i) refinancing all or a portion of the Authority’s CalPERS Obligation; (ii) refunding all of the outstanding Authority Lease Revenue Refunding Bonds (Capital Facilities Projects), Series 2015A (Taxable) (the “Refunded Bonds”); (iii) funding a reserve for the Bonds; and (iv) paying costs of issuing the Bonds.
The Authority will undertake pursuant to the provisions of a Continuing Disclosure Agreement, to be dated the date of the Closing (the “Authority Disclosure Agreement”), between the Authority and ________________, as Dissemination Agent thereunder, to provide certain annual information and notices of the occurrence of certain events. A description of the undertaking is set forth in the Preliminary Official Statement (as defined below) and will also be set forth in the Official Statement.
The Indenture, the Authority Disclosure Agreement, the Lease, the Site Lease, the Assignment Agreement and this Purchase Contract are sometimes collectively referred to herein as the “Authority Legal Documents.”
The City will undertake pursuant to the provisions of a Continuing Disclosure Agreement, to be dated the date of the Closing (the “City Disclosure Agreement”), between the City and ________________, as Dissemination Agent thereunder, to provide certain annual information and 3 4854-8719-3874/200545-0048
notices of the occurrence of certain events. A description of the undertaking is set forth in the Preliminary Official Statement (as defined below) and will also be set forth in the Official Statement.
The City Disclosure Agreement, the Lease the Site Lease, and this Purchase Contract are sometimes collectively referred to herein as the “City Legal Documents.”
3. Offering. It shall be a condition to the Authority’s obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter’s obligations to purchase, to accept delivery of and to pay for the Bonds that the entire $_______ aggregate principal amount of the Bonds shall be issued, sold and delivered by the Authority and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public offering of all of the Bonds at the initial public offering prices or yields set forth in Exhibit A hereto and on the inside front cover page of the Official Statement. The Underwriter reserves the right to change, subsequent to the initial public offering, such initial offering prices as it shall deem necessary in connection with the marketing of the Bonds.
4. Use and Preparation of Documents. The Authority has caused to be prepared and delivered to the Underwriter prior to the execution of this Purchase Contract copies of the Preliminary Official Statement dated _________, 2022, relating to the Bonds (the “Preliminary Official Statement”), which was approved by a resolution of the Authority adopted on _______, 2022 (the “Authority OS Resolution”). The Authority ratifies, confirms and approves the use by the Underwriter prior to the date hereof of the Preliminary Official Statement. The Authority has previously deemed the Preliminary Official Statement to be final as of its date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), except for information permitted to be omitted therefrom by Rule 15c2-12. The Authority hereby agrees to deliver or cause to be delivered to the Underwriter, within seven (7) business days of the date hereof, but not less than one (1) business day prior to Closing a sufficient number of copies of the final Official Statement relating to the Bonds, dated the date hereof, which includes all information permitted to be omitted by Rule 15c2-12 and any amendments or supplements to such Official Statement as have been approved by the Authority and the Underwriter to enable the Underwriter to distribute a single copy of each Official Statement to any potential customer of the Underwriter requesting an Official Statement during the time period beginning when the Official Statement becomes available and ending 25 days after the End of the Underwriting Period (defined below). The Authority hereby approves of the use and distribution (including the electronic distribution) by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offer and sale of the Bonds. The Underwriter agrees that it will not confirm the sale of any Bonds unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Official Statement.
5. Representations, Warranties and Agreements of the Authority. The Authority hereby represents, warrants and agrees as follows:
(a) The Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated December 1, 1993 (the “JPA”), by and between the City and the Cathedral City Redevelopment Agency, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the “JPA Law”). 4 4854-8719-3874/200545-0048
(b) The Authority has full legal right, power and authority to enter into the Authority Legal Documents and carry out and consummate the transactions on its part contemplated by the Authority Legal Documents.
(c) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the preparation and use of the Preliminary Official Statement and the Official Statement, the execution and delivery of the Official Statement and the Authority Legal Documents, and the performance by the Authority of all transactions on its part contemplated by the Authority Legal Documents; and when executed by the Authority and the other respective parties thereto the Authority Legal Documents will constitute legal, valid and binding obligations of the Authority, enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally.
(d) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation to which it is subject or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Indenture) or other instrument to which the Authority is a party or to which the Authority or any of its property or assets 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 such a default or event of default under any such instrument, which in any case has or may have a material adverse effect on the Authority’s ability to comply with its obligations under the Authority Legal Documents; and the execution and delivery of the Authority Legal Documents, and compliance with the provisions on the Authority’s part contained therein, will not conflict with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or to which the Authority or any of its property or assets 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 property or assets of the Authority or under the terms of any such constitutional provision, law, regulation or instrument, except as provided by the Indenture.
(e) Except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Authority Legal Documents have been duly obtained. (f) Except as otherwise disclosed in the Official Statement, between the date of this Purchase Contract and the date of the Closing, the Authority will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, payable from the Revenues , nor will there be any adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the Authority. 5 4854-8719-3874/200545-0048
(g) To the best knowledge of the officer of the Authority executing this Purchase Contract, after due inquiry, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, government agency, public board or body, pending with respect to which the Authority has been served with process or threatened against the Authority, affecting the existence of the Authority or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution and delivery of the Indenture or the pledge of the Revenues or contesting or affecting, as to the Authority, the validity or enforceability of the Authority Legal Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Authority, or in any way contesting or challenging the consummation of the transactions contemplated hereby, or which might result in a material adverse change in the financial condition of the Authority or which might materially adversely affect the Revenues of the Authority; nor, to the best knowledge of the Authority, is there any known basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the authorization, execution, delivery or performance by the Authority of the Authority Legal Documents.
(h) As of the time of acceptance hereof and as of the date of the Closing, the Authority does not and will not have outstanding any indebtedness which indebtedness is secured by a lien on the Revenues superior to or on a parity with the lien provided for in the Indenture, other than as disclosed in the Official Statement. (i) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (j) As of the date thereof and at all times subsequent thereto to and including the date which is 25 days following the End of the Underwriting Period (as such term is hereinafter defined) for the Bonds, the Official Statement did not and 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 (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (k) If between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds, an event occurs which would cause the information contained in 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 such information herein, in the light of the circumstances under which it was presented, not misleading, the Authority will notify the Underwriter, and, if in the opinion of the Underwriter or the Authority, or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will cooperate in the preparation of an amendment or supplement to the Official Statement in a form and manner approved by the Underwriter, and shall pay all expenses thereby incurred. For the purposes of this subsection, between the date hereof and the date which is 25 days of the End of the Underwriting Period for the Bonds, the Authority will furnish 6 4854-8719-3874/200545-0048
such information with respect to itself as the Underwriter may from time to time reasonably request. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Authority delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as members of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing, unless the Underwriter gives notice to the contrary, the “End of the Underwriting Period” shall be the Closing Date. (l) If the information contained in the Official Statement is amended or supplemented pursuant to paragraph (l) hereof, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date which is 25 days after the End of the Underwriting Period for the Bonds, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact required to be stated therein or necessary to make such information therein in the light of the circumstances under which it was presented, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (m) After the Closing, the Authority will not participate in the issuance of any amendment of or supplement to the Official Statement to which, after being furnished with a copy, the Underwriter shall reasonably object in writing or which shall be disapproved by counsel for the Underwriter.
(n) Any certificate signed by any officer of the Authority and delivered to the Underwriter in connection with the Bonds, or the Authority Legal Documents shall be deemed a representation by the Authority to the Underwriter as to the statements made therein. (o) The Authority will apply the proceeds from the sale of the Bonds for the purposes specified in the Official Statement.
(p) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter, at the expense of the Underwriter, as it may reasonably request in order 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 of America as the Underwriter may designate; provided, however, that the Authority will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction. (q) Except as disclosed in the Preliminary Official Statement, the Authority has not defaulted in any material respect under any prior continuing disclosure undertaking within the previous five years.
6. Representations, Warranties and Agreements of the City. The City hereby represents, warrants and agrees as follows:
(a) The City is a charter city duly organized and validly existing under the Constitution and laws of the State of California.
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(b) The City has full legal right, power and authority to enter into the City Legal Documents and carry out and consummate the transactions on its part contemplated by the City Legal Documents.
(c) By all necessary official action of the City prior to or concurrently with the acceptance hereof, the City has duly authorized and approved the preparation and use of the Preliminary Official Statement and the Official Statement, the execution and delivery of the Official Statement and the City Legal Documents, and the performance by the City of all transactions on its part contemplated by the City Legal Documents; and when executed by the City and the other respective parties thereto the City Legal Documents will constitute legal, valid and binding obligations of the City, enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally. (d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation to which it is subject or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Indenture) or other instrument to which the City is a party or to which the City or any of its property or assets 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 such a default or event of default under any such instrument, which in any case has or may have a material adverse effect on the City’s ability to comply with its obligations under the City Legal Documents; and the execution and delivery of the City Legal Documents, and compliance with the provisions on the City’s part contained therein, will not conflict with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or to which the City or any of its property or assets 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 property or assets of the City or under the terms of any such constitutional provision, law, regulation or instrument. (e) Except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the City of its obligations under the City Legal Documents have been duly obtained. (f) Except as otherwise disclosed in the Official Statement, between the date of this Purchase Contract and the date of the Closing, the City will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, nor will there be any adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the City.
(g) To the best knowledge of the officer of the City executing this Purchase Contract, after due inquiry, as of the date hereof, there is no action, suit, proceeding, inquiry or investigation, at law or in equity before or by any court, government agency, public board or 8 4854-8719-3874/200545-0048
body, pending with respect to which the City has been served with process or threatened against the City, affecting the existence of the City or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the pledge of the Revenues or contesting or affecting, as to the City, the validity or enforceability of the City Legal Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the City, or in any way contesting or challenging the consummation of the transactions contemplated hereby, or which might result in a material adverse change in the financial condition of the City or which might materially adversely affect the Revenues of the City; nor, to the best knowledge of the City, is there any known basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the authorization, execution, delivery or performance by the City of the City Legal Documents. (h) As of the time of acceptance hereof and as of the date of the Closing, the City does not and will not have outstanding any indebtedness which indebtedness is secured by a lien on the Revenues superior to or on a parity with the lien provided for in the Indenture, other than as disclosed in the Official Statement.
(i) As of the date thereof, the Preliminary Official Statement did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (j) As of the date thereof and at all times subsequent thereto to and including the date which is 25 days following the End of the Underwriting Period (as such term is hereinafter defined) for the Bonds, the Official Statement did not and 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 (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (k) If between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds, an event occurs which would cause the information contained in 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 such information herein, in the light of the circumstances under which it was presented, not misleading, the City will notify the Underwriter, and, if in the opinion of the Underwriter or the City, or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate in the preparation of an amendment or supplement to the Official Statement in a form and manner approved by the Underwriter, and shall pay all expenses thereby incurred. For the purposes of this subsection, between the date hereof and the date which is 25 days of the End of the Underwriting Period for the Bonds, the City will furnish such information with respect to itself as the Underwriter may from time to time reasonably request. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the City delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as members of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding 9 4854-8719-3874/200545-0048
the foregoing, unless the Underwriter gives notice to the contrary, the “End of the Underwriting Period” shall be the Closing Date.
(l) If the information contained in the Official Statement is amended or supplemented pursuant to paragraph (l) hereof, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date which is 25 days after the End of the Underwriting Period for the Bonds, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact required to be stated therein or necessary to make such information therein in the light of the circumstances under which it was presented, not misleading (except that this representation does not include information relating to The Depository Trust Company or the book-entry only system). (m) After the Closing, the City will not participate in the issuance of any amendment of or supplement to the Official Statement to which, after being furnished with a copy, the Underwriter shall reasonably object in writing or which shall be disapproved by counsel for the Underwriter.
(n) Any certificate signed by any officer of the City and delivered to the Underwriter in connection with the Bonds, or the City Legal Documents shall be deemed a representation by the City to the Underwriter as to the statements made therein. (o) The City will apply the proceeds from the sale of the Bonds for the purposes specified in the Official Statement.
(p) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter, at the expense of the Underwriter, as it may reasonably request in order 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 of America as the Underwriter may designate; provided, however, that the City will not be required to execute a special or general consent to service of process or qualify as a foreign corporation in connection with any such qualification in any jurisdiction. (q) Except as disclosed in the Preliminary Official Statement, the City has not defaulted in any material respect under any prior continuing disclosure undertaking within the previous five years.
7. Closing. At 8:00 A.M., California time, on _______, 2022 (the “Closing” or the “Closing Date”), or on such other date and time as may be mutually agreed upon by the Authority and the Underwriter, the Authority will, subject to the terms and conditions hereof, sell and deliver the Bonds to the Underwriter, duly executed and authenticated, together with the other documents hereinafter mentioned, and, subject to the terms and conditions hereof, the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof in federal funds.
Sale, delivery and payment as aforesaid shall be made at the offices of Norton Rose Fulbright US LLP, Los Angeles, California (“Bond Counsel”), or such other place as shall have been mutually agreed upon by the Authority and the Underwriter, except that the Bonds (with one certificate for each maturity and otherwise in a form suitable for the book-entry system) shall be delivered to the Underwriter in New York, New York, through the book-entry system of The Depository Trust 10 4854-8719-3874/200545-0048
Company (“DTC”). Unless the DTC Fast Automated Securities Transfer (“FAST”) is utilized, the Bonds will be made available for inspection by DTC at least one business day prior to the Closing.
8. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the Authority contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Authority of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter’s obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Authority of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions:
(a) The Underwriter shall receive, within seven (7) business days of the date hereof, but in no event less than 1 business day prior to Closing, copies of the Official Statement (including all information previously permitted to have been omitted from the Preliminary Official Statement by Rule 15c2-12 and any amendments or supplements as have been approved by the Underwriter), in such reasonable quantity as the Underwriter shall have requested;
(b) The representations and warranties of the Authority contained herein shall be true and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing and the statements of the officers and other officials of the Authority made in any certificate or other document furnished pursuant to the provisions hereof are accurate;
(c) At the time of the Closing, the Authority Legal Documents shall have been duly authorized, executed and delivered by the respective parties thereto, and the Official Statement shall have been duly authorized, executed and delivered by the Authority, all in substantially the forms heretofore submitted to the Underwriter, with only such changes as shall have been agreed to by the Underwriter, and shall be in full force and effect; and there shall be in full force and effect such resolution or resolutions of the governing body of the Authority as, in the opinion of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby;
(d) At the time of the Closing, all necessary official action of the Authority relating to the Official Statement and the Authority Legal Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; and
(e) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents:
(1) Bond Counsel Opinion. The approving opinion of Bond Counsel to the Authority, dated the date of the Closing and substantially in the form included as Appendix B to the Official Statement;
(2) Supplemental Opinion of Bond Counsel. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter and dated the date of the 11 4854-8719-3874/200545-0048
Closing, stating that the Underwriter may rely on the opinions of Bond Counsel described in paragraph (1) above as if such opinion was addressed to the Underwriter and to the following effect:
(i) the Purchase Contract and the Continuing Disclosure Agreement have been duly executed and delivered by the Authority and (assuming due authorization, execution and delivery by and validity against the other parties thereto, as applicable) constitute the valid and binding obligations of the Authority, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights and by the application of equitable principles; (ii) the statements contained in the Official Statement under the captions “INTRODUCTION,” “DESCRIPTION OF THE 2022A BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2022A BONDS,” “TAX MATTERS” and in Appendices C and E thereto, insofar as such statements expressly summarize certain provisions of the Indenture or the opinion of Bond Counsel, are accurate in all material respects; and
(iii) the Bonds are not subject to the registration
requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended. (3) Authority Counsel Opinion. An opinion of Counsel to the Authority, dated the date of the Closing and addressed to the Underwriter, to the following effect:
(i) the Authority is a joint powers authority duly organized and existing under and pursuant to the JPA, and under the provisions of the JPA Law, with full right, power and authority to execute, deliver and perform its obligations under the Authority Legal Documents;
(ii) the Authority Resolution and the Authority OS
Resolution were duly adopted at meetings of the Authority, called and held pursuant to law, with all public notice required by law and at which quorums were present and acting throughout; and the Authority Resolution and the Authority OS Resolution are in full force and effect and have not been modified amended or rescinded since their respective adoption date; (iii) The Authority Legal Documents have been duly
authorized, executed and delivered by the Authority and, assuming due authorization, execution and delivery by the other parties thereto, the Authority Legal Documents constitute the valid, legal and binding obligations of the Authority enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors rights and by the application of equitable principles if equitable remedies are sought;
(iv) The preparation, delivery and execution of the Official Statement has been duly authorized by the Authority;
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(v) The execution and delivery of the Authority Legal
Documents and the Official Statement and compliance with the provisions of the Authority Legal Documents, under the circumstances contemplated thereby, (A) do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound, and (B) do not and will not in any material respect constitute on the part of the Authority a violation, breach of or default under any existing law, regulation, court order or consent decree to which the Authority is subject; and
(vi) to the best of such counsel’s knowledge, except as otherwise disclosed in the Official Statement, there is no litigation or proceeding, pending and served upon the Authority, or threatened, challenging the creation, organization or existence of the Authority, or the validity of the Bonds or the Authority Legal Documents or seeking to restrain or enjoin any of the transactions referred to therein or contemplated thereby, or under which a determination adverse to the Authority would have a material adverse effect upon the financial condition or the revenues of the Authority, or which, in any manner, questions the right of the Authority to issue, sell and deliver the Bonds, to enter into the Indenture or to use the Revenues for repayment of the Bonds or affects in any manner the right or ability of the Authority to pledge the Revenues.
(4) City Attorney Opinion. An opinion of the City Attorney to the City, dated the date of the Closing and addressed to the Underwriter, to the following effect:
(i) the City is a charter city duly organized and validly existing under the Constitution and laws of the State of California, with full right, power and authority to execute, deliver and perform its obligations under the City Legal Documents; (ii) the resolutions of the City authorizing the execution and delivery of the City Documents and the Official Statement were duly adopted at meetings of the City, called and held pursuant to law, with all public notice required by law and at which quorums were present and acting throughout; and such resolutions are in full force and effect and have not been modified amended or rescinded since their respective adoption date; (iii) The City Legal Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, the City Legal Documents constitute the valid, legal and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors rights and by the application of equitable principles if equitable remedies are sought;
(iv) The preparation, delivery and execution of the Official Statement has been duly authorized by the City;
(v) The execution and delivery of the City Legal
Documents and the Official Statement and compliance with the provisions of the City Legal Documents, under the circumstances contemplated thereby, (A) do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound, and 13 4854-8719-3874/200545-0048
(B) do not and will not in any material respect constitute on the part of the City a violation, breach of or default under any existing law, regulation, court order or consent decree to which the City is subject; and
(vi) to the best of such counsel’s knowledge, except as otherwise disclosed in the Official Statement, there is no litigation or proceeding, pending and served upon the City, or threatened, challenging the creation, organization or existence of the City, or the validity of the Bonds or the City Legal Documents or seeking to restrain or enjoin any of the transactions referred to therein or contemplated thereby, or under which a determination adverse to the City would have a material adverse effect upon the financial condition or the revenues of the City.
(5) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the date of the Closing, addressed to the Underwriter, to the effect that:
(i) The Trustee is a national banking association, duly organized and validly existing under the laws of the United States of America, having full power to enter into, accept and administer the trusts created under the Indenture; (ii) The Indenture has been duly authorized, executed and delivered by the Trustee and the Indenture constitutes the legal, valid and binding obligation of the Trustee, enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles, if equitable remedies are sought; and (iii) Except as may be required under Blue Sky or other securities laws of any state, no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the execution and delivery by it of the Indenture, or the consummation of the transactions on its part contemplated by the Indenture. (6) Authority Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by a duly authorized officer of the Authority, to the effect that:
(i) the representations and warranties of the Authority contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing;
(ii) to his or her knowledge, no event affecting the
Authority has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
(iii) no further consent is required to be obtained for the inclusion of the City of Cathedral City’s audited financial statements, including the accompanying independent auditor’s report, for the Fiscal Year ended June 30, 2021 in the Official Statement.
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(7) City Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by a duly authorized officer of the Authority, to the effect that:
(i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing;
(ii) to his or her knowledge, no event affecting the City has occurred since the date of the Official Statement which has not been disclosed therein or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
(iii) no further consent is required to be obtained for the inclusion of the City of Cathedral City’s audited financial statements, including the accompanying independent auditor’s report, for the Fiscal Year ended June 30, 2021 in the Official Statement.
(8) Trustee Certificate. A certificate, dated the Closing Date, to the effect that:
(i) The Trustee is a national banking association duly
organized and validly existing under the laws of the United States of America; (ii) The Trustee has full power, authority and legal right to comply with the terms of the Indenture and to perform its obligations stated therein; and (iii) The Indenture has been duly authorized, executed and delivered by the Trustee and (assuming due authorization, execution and delivery by the Authority) constitutes legal, valid and binding obligation of the Trustee in accordance with its respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally.
(9) Legal Documents. Executed copies of this Purchase Contract and the other Authority Legal Documents.
(10) Disclosure Letter. A letter of Norton Rose Fulbright US LLP, Los Angeles, California (“Disclosure Counsel”), dated the date of the Closing, addressed to the Authority, the City and the Underwriter, to the effect that, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, but on the basis of their participation in conferences with representatives of the Authority, counsel to the Authority, representatives of the City, the City Attorney of the City of Cathedral City, the Municipal Advisor, the Underwriter and others, and their examination of certain documents, no facts have come to their attention which would lead them to believe that the Preliminary Official Statement, as of its date, and the Official Statement, as of its date or as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any 15 4854-8719-3874/200545-0048
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 (except that no opinion or belief need be expressed as to any financial, statistical, economic, engineering, or demographic data or forecasts, numbers, charts, tables, graphs, maps, estimates, projections, assumptions or expressions of opinion, or any information about valuation, real estate, or environmental matters, the Appendices to the Preliminary Official Statement and the Official Statement or any information about debt service requirements, book-entry, or the Depository Trust Company contained in the Preliminary Official Statement and the Official Statement). (11) Underwriter’s Counsel Opinion. An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, dated the Closing Date, addressed to the Underwriter, in form and substance acceptable to the Underwriter. (12) Municipal Advisor Certificate. A Certificate, dated the date of Closing, signed by an authorized office of Fieldman, Rolapp & Associates, Inc., the Authority’s Municipal Advisor, addressed to the Underwriter and the Authority and without having undertaken any investigation, to the effect that, in connection with its role in the preparation of the Official Statement, nothing has come to the attention of the Municipal Advisor that would lead it to believe that the statements and information contained in the Preliminary Official Statement and the Official Statement as of the date thereof and the date of the Closing, contains an 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 in which they were made, not misleading.
(13) CDIAC Notices. Copies of the preliminary and final notices to the California Debt and Investment Advisory Commission relating to the Bonds (14) Rating Letter. Evidence that the rating on the Insured Bonds and Uninsured Bonds are as described in the Official Statement. (15) Defeasance Opinions. An opinion or opinions of Bond Counsel, addressed to the Underwriter, dated the Closing Date, to the effect that the Refunded Bonds are no longer outstanding.
(16) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, the Authority or the Underwriter may reasonably deem necessary.
All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter.
If the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract, if the Authority shall determine in good faith (and provide written notice to the Underwriter) that legislation has been introduced or proposals made by the Governor of the State which if enacted and effective would impose additional limitations or burdens on the Authority by reason of the issuance of the Bonds or which purport to prohibit the issuance of the Bonds, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted 16 4854-8719-3874/200545-0048
by this Purchase Contract, this Purchase Contract shall terminate and neither the Authority nor the Underwriter shall have any further obligation hereunder.
9. Termination. The Underwriter may terminate this Purchase Contract by written notification to the Authority if at any time after the date hereof and prior to the Closing:
(a) legislation shall have been enacted by the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the Tax Court of the United States, or a ruling shall have been made or a regulation, proposed regulation, or a temporary regulation shall have been published in the Federal Register or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, with respect to Federal or State taxation upon revenues or other income or payments of the general character to be derived by the Authority or upon interest received on obligations of the general character of the Bonds, which, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the Authority), materially adversely affects the market for the Bonds; or
(b) in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the Authority or its Municipal Advisor), any of the following events materially adversely affects the market for the Bonds: (a) the United States shall have become engaged in hostilities that have resulted in a declaration of war or a national emergency or the President of the United States of America shall have committed the armed forces of the United States of America to combat so as to adversely affect the financial markets in the United States of America, (b) any other calamity or crisis in the financial markets of the United States or elsewhere which did not exist on, or has escalated since, the dated date of this Purchase Contract, (c) the sovereign debt rating of the United States is downgraded by any major credit rating agency or a payment default occurs on United States Treasury obligations, or (d) a default with respect to the debt obligations of, or the institution of proceedings under any federal bankruptcy laws by or against, any state of the United States or any city, county, or other political subdivision located in the United States having a population of over 500,000; or (c) there shall have occurred a general suspension of trading on the New York Stock Exchange or other major exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission or any other Governmental Authority having jurisdiction, or a general banking moratorium shall have been declared by Federal, California, or New York authorities having jurisdiction and being in force; or
(d) there shall have occurred an adverse change in the financial position, results of operations, or financial condition of the Authority that, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the Authority), materially adversely affects the market for the Bonds; or
(e) any legislation, ordinance, rule, or regulation shall be introduced in, or be enacted by, any governmental body, department, or agency of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States shall be 17 4854-8719-3874/200545-0048
rendered that, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or
(f) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation, or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering, or sale of obligations of the general character of the Bonds, or the issuance, offering, or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (g) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which restrictions materially adversely affect the ability of underwriters to trade obligations of the general character of the Bonds; or (h) there shall have occurred or any notice shall have been given of any intended review, downgrading, suspension, withdrawal, or negative change in credit watch status by any national rating service to any of the Authority’s obligations secured in a like manner, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or
(i) the commencement of any action, suit, or proceeding described in Section 6(g) that, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or
(j) any event occurring, or information becoming known that, in the reasonable judgment of the Underwriter, makes any statement or information contained in the Official Statement, as of its date, untrue in any material adverse respect, or has the effect that the Official Statement, as of its date, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
10. Expenses. No expenses and costs of the Authority incident to the performance of the Authority’s obligations in connection with the authorization, issuance, and sale of the Bonds to the Underwriter, such as the costs of preparation (including word processing, printing, and reproduction), distribution and delivery of the Preliminary Official Statement, the Official Statement, and this Purchase Contract, in reasonable quantities, fees of rating agencies, fees and expenses of any municipal advisor to the Authority, and fees and expenses of Bond Counsel or Disclosure Counsel for the Authority shall be paid by the Underwriter. Except as indicated above, all out-of-pocket expenses of the Underwriter, including the California Debt and Investment Advisory Commission fee, traveling, advertising expenses, any costs and expenses incurred in connection with the preparation and distribution of any blue sky surveys or any legal investment memoranda, fees and expenses of Underwriter’s Counsel and other expenses and the fees and expenses of the Underwriter, shall be paid by the Underwriter.
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11. Notices. Any notice or other communication to be given to the Authority under this Purchase Contract may be given by delivering the same in writing at the Authority’s address set forth above; Attention: Executive Director, and to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Raymond James & Associates, Inc., 39 E. Union Street, Pasadena, California 91103, Attention: Josè Vera, Managing Director.
12. Parties in Interest. This Purchase Contract is made solely for the benefit of the Authority and the Underwriter and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the Authority contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds pursuant to this Purchase Contract; and (iii) any termination of this Purchase Contract.
13. Effectiveness and Counterpart Signatures. This Purchase Contract shall become effective upon the execution of the acceptance by an authorized officer of the Authority and shall be valid and enforceable at the time of such acceptance and approval. This Purchase Contract may be executed by the parties hereto by facsimile transmission and in separate counterparts, each of which when so executed and delivered (including delivery by facsimile transmission) shall be an original, but all such counterparts shall together constitute but one and the same instrument.
14. Headings. The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
S-1
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15. Governing Law. This Purchase Contract shall be construed in accordance with the laws of the State of California.
Very truly yours,
RAYMOND JAMES & ASSOCIATES, INC., as
Underwriter
By:
Its: Authorized Officer
Accepted:
CITY OF CATHEDRAL CITY
PUBLIC FINANCING AUTHORITY
By:
Tami E. Scott, Chief Financial Officer
CITY OF CATHEDRAL CITY, CALIFORNIA
By:
Tami E. Scott, Administrative Services Director
Time of Execution: _____ p.m. Pacific Time
A-1
4854-8719-3874/200545-0048
EXHIBIT A
MATURITY SCHEDULE
CATHEDRAL CITY PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, 2022 SERIES A
(FEDERALLY TAXABLE)
Maturity Date
(August 1)
Principal
Amount Interest Rate Yield Price CUSIP
B-1
4854-8719-3874/200545-0048