If an Event of Default has occurred and is continuing, the Trustee may, or if requested in writing by the Owners of the majority in aggregate principal amount of the Bonds then Outstanding, the Trustee shall, by written notice to the Successor Agency, (a) only in the event of a default under Section 8.1(a), declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, and (b) upon any Event of Default (with receipt of indemnity to its satisfaction) exercise any remedies available to the Trustee and the Owners in law or at equity.
Immediately upon becoming aware of the occurrence of an Event of Default, the Trustee shall give notice of such Event of Default to the Successor Agency by telephone confirmed in writing. Such notice shall also state whether the principal of the Bonds shall have been declared to be or have immediately become due and payable. With respect to any Event of Default described in clauses (a) or (c) above the Trustee shall, and with respect to any Event of Default described in clause (b) above the Trustee in its sole discretion may, also give such notice to the Successor Agency, and the Owners, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee shall have declared the Bonds to become due and payable pursuant to the preceding paragraph (but only to the extent that principal and any accrued, but unpaid interest on the Bonds is actually paid on such date.)
This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Successor Agency shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all 61268155.335
matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal and interest (to the extent permitted by law) at the net effective rate then borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee, including but not limited to attorneys’ fees, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, by written notice to the Successor Agency and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.
Upon the occurrence of an event of default, the Trustee may, with the consent of a majority of the Owners, by written notice to the Successor Agency, declare the principal of the Bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in this Indenture in the Bonds to the contrary notwithstanding.
Section 8.2 Application of Funds Upon an Event of Default or Acceleration. All of the Pledged Tax Revenues and all sums in the funds and accounts established and held by the Trustee hereunder upon the date of the declaration of acceleration as provided in Section 8.1, or upon the occurrence and during the continuance of an Event of Default, and all sums thereafter received by the Trustee hereunder, shall be applied by the Trustee in the order following:
First, to the payment of the fees, costs and expenses of the Trustee in declaring such Event of Default and in exercising the rights and remedies set forth in this Article VIII, including reasonable compensation to its agents, attorneys and counsel including all sums owed the Trustee pursuant to Section 6.6 herein; and
Second, upon presentation of the several Bonds, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid, to the payment pro rata of the whole amount then owing and on the Bonds (and any refunding bonds payable from Pledged Tax Revenues on a parity with Outstanding Bonds) for principal and interest, with interest on the overdue principal and installments of interest at the net effective rate then borne by the Outstanding Bonds (to the extent that such interest on overdue installments of principal and interest shall have been collected), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest or any Bond over any other Bond.
Section 8.3 Power of Trustee to Control Proceedings. If the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such 61268155.336
litigation. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 8.4 Limitation on Owner’s Right to Sue. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it being understood and intended that no one or more Owners shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provisions of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.
The right of any Owner of any Bond to receive payment of the principal of and interest on such Bond as herein provided, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
Section 8.5 Non-waiver. Nothing in this Article VIII or in any other provision of this Indenture or in the Bonds, shall affect or impair the obligation of the Successor Agency, which is absolute and unconditional, to pay from the Pledged Housing Tax Revenues and other amounts pledged hereunder, the principal of and interest on the Bonds to the respective Owners on the Interest Payment Dates, as herein provided, or affect or impair the right of action, which is also absolute and unconditional, of the Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds.
A waiver of any default by any Owner shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Health and Safety Code or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners.
If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Owners, the Successor Agency and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
Section 8.6 Actions by Trustee as Attorney-in-Fact. Any suit, action or proceeding which any Owner shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners similarly situated and the Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the respective Owners for the 61268155.337
purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact, provided the Trustee shall have no duty or obligation to enforce any such right or remedy if it has not been indemnified to its satisfaction from loss, liability or any expense including, but not limited to reasonable fees and expenses of its attorneys.
Section 8.7 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Health and Safety Code or any other law.
ARTICLE IX
[RESERVED]
ARTICLE X
[RESERVED]
ARTICLE XI
DEFEASANCE
Section 11.1 Discharge of Indenture. If all Bonds shall be paid and discharged in any one or more of the following ways:
(a) by the payment of the principal of and interest on all Bonds as and when the same become due and payable; or
(b) by providing for the payment of the principal of and interest on all Bonds as provided in Section 11.2; or
(c) by the delivery to the Trustee, for cancellation by it, of all Bonds; and if all other sums payable hereunder by the Successor Agency shall be paid and discharged, then thereupon this Indenture shall be satisfied and discharged and shall cease, terminate and become null and void except the covenants under Covenant 10 of Section 5.1, and thereupon the Trustee shall, upon Written Request of the Successor Agency, and upon receipt by the Trustee and the Successor Agency of an opinion of Bond Counsel to the effect that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with, forthwith execute proper instruments acknowledging satisfaction of and discharging this Indenture. The Trustee shall mail written notice of such payment and discharge to the Successor Agency. The satisfaction and discharge of this Indenture shall be without prejudice to the rights of the Trustee to charge and be reimbursed by the Successor Agency for any expenditures which it may thereafter incur in connection herewith.
The Successor Agency may surrender to the Trustee for cancellation by it any Bonds previously authenticated and delivered which the Successor Agency lawfully may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
61268155.338
Section 11.2 Discharge of Liability on Particular Bonds. (a) Any Bond or a portion thereof shall be deemed to be paid within the meaning of this Indenture when payment of the principal of such Bond or a portion thereof plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption or by declaration as provided herein) shall have been provided for by irrevocably depositing with the Trustee or an escrow agent in trust and irrevocably setting aside exclusively for such payment money and/or Defeasance Securities as provided in Section 11.3.
(b) In the event of the provision of the payment of less than the full principal amount of a Bond in accordance with subsection (a) of this Section, the principal amount of the Bond as to which such payment is not provided for shall be in an Authorized Denomination and, unless that portion of the Bond as to which payment is provided for in accordance with subsection (a) of this Section is to be paid within sixty (60) days of the deposit with the Trustee, such portion will also be in an Authorized Denomination. (c) Upon the deposit with the Trustee, in trust, at or before maturity of money and/or Defeasance Securities as provided in Section 11.3 to pay a Bond or a portion thereof and the satisfaction of the other conditions specified in subsection (a) of this Section, such Bond, or the applicable portion thereof, shall be deemed to be paid hereunder, shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes of any such payment from such money and/or Defeasance Securities deposited with the Trustee for such purpose, and all liability of the Successor Agency in respect of such Bond, or the applicable portion thereof, shall cease, terminate and be completely discharged, except that the Successor Agency shall remain liable for the payment of the principal of and interest on such Bond, or the applicable portion thereof, but only from, and the Owners shall thereafter be entitled only to payment (without interest accrued thereon after such maturity date) out of, the money and/or Defeasance Securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Covenant 10 of Section 5.1 and Section 11.3.
Section 11.3 Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or Defeasance Securities in the necessary amount to pay any Bonds, the money or securities so to be deposited or held may include money or nonprepayable, noncallable Defeasance Securities held by the Trustee in the funds and accounts established pursuant to this Indenture or in an escrow fund held by an escrow agent and shall be:
(a) An amount of money equal to the principal amount of such Bonds and all unpaid interest thereon to maturity; or
(b) nonprepayable, noncallable Defeasance Securities, the principal of and the interest on which when due will provide money at the times and in the amounts sufficient, together with the other moneys held by the Trustee for such purpose (as evidenced by an Independent Certified Public Accountant’s report) to pay the principal of and all unpaid interest to maturity, on the Bonds to be paid, as such principal and interest become due; provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Successor Agency) to apply such money and the payments on such Defeasance Securities to the payment of such principal and interest with respect to such Bonds.
(c) The Trustee shall not be responsible for verifying the sufficiency of money and Defeasance Securities deposited with the Trustee to provide for the payment of the principal of and interest on Bonds pursuant to this Article XI but may conclusively rely for all purposes of this Indenture on an Independent Certified Public Accountant’s report as to such sufficiency. 61268155.339
ARTICLE XII
MISCELLANEOUS
Section 12.1 Benefits Limited to Parties. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Successor Agency, the Trustee, and the registered Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Successor Agency shall be for the sole and exclusive benefit of the Successor Agency, the Trustee, and the registered Owners of the Bonds.
Section 12.2 Successor is Deemed Included in All References to Predecessor. Whenever in this Indenture or any Supplemental Indenture either the Successor Agency or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Successor Agency or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 12.3 [Reserved].
Section 12.4 Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Indenture may require or permit to be executed by any Owner may be in one or more instruments of similar tenor, and shall be executed by such Owner in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
The ownership of Bonds and the amount, maturity, number and date of ownership thereof shall be provided by the Registration Books.
Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Successor Agency or the Trustee in good faith and in accordance therewith.
Section 12.5 Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Successor Agency or the City (but excluding Bonds held in any employees’ retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, provided, however, that for the purpose of determining whether the Trustee shall be protected in relying on any such demand, request, direction, consent or waiver, only Bonds which the Trustee actually knows to be so owned or held shall be disregarded; provided, further, that if all of the Bonds are so owned or held, all such Bonds shall be deemed Outstanding and shall not be disregarded.
61268155.340
Section 12.6 Waiver of Personal Liability. No member, office, agent or employee of the Successor Agency shall be individually or personal liable for the payment of the principal of or interest on the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.
Section 12.7 Destruction of Canceled Bonds. Whenever in this Indenture provision is made for the surrender to the Trustee of any Bonds which have been paid or canceled pursuant to the provisions of this Indenture, the Trustee shall destroy such Bonds and upon written request of the Successor Agency, provide the Successor Agency a certificate of destruction. The Successor Agency shall be entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to.
Section 12.8 Notices. Any notice, request, demand, communication or other paper shall be sufficiently given and shall be deemed given when delivered or mailed by first class mail, postage prepaid, or sent by telegram or facsimile, addressed as follows:
If to the Successor Agency: Successor Agency to the Redevelopment Agency of the City of Cathedral City
c/o Cathedral City
68700 Avenida Lalo Guerrero
Cathedral City, California 92234
Attention: Chief Financial Officer
Telephone: (760) 770-0354
If to the Trustee: The Bank of New York Mellon Trust Company, N.A. [_____]
[_____]
Attention: [_____]
Telephone: [_____]
E-mail: [_____]
If to the Rating Agencies: S&P Global Ratings
State & Local Government
55 Water Street
New York, New York 10041
Section 12.9 Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Indenture shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Indenture. The Successor Agency hereby declares that it would have adopted this Indenture and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid or unenforceable. If, by reason of the judgment of any court, the Trustee is rendered unable to perform its duties hereunder, all such duties and all of the rights and powers of the Trustee hereunder shall, pending appointment of a successor Trustee in accordance with the provisions of Section 6.1 hereof, be assumed by and vest in the Finance Officer of the Successor Agency in trust for the benefit of the Owners that the Finance Officer in such case shall be vested with all of the rights and powers of the Trustee hereunder, and shall assume all of the responsibilities and perform all of the duties of the Trustee hereunder, in trust 61268155.341
for the benefit of the Owners, pending appointment of a successor Trustee in accordance with the provisions of Section 6.1 hereof.
Section 12.10 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest or premium (if any) on or principal of the Bonds which remains unclaimed for two (2) years after the date when the payments of such interest, premium (if any) and principal have become payable, if such money was held by the Trustee at such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be repaid (without liability for interest) by the Trustee to the Successor Agency as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Successor Agency for the payment of the principal of and interest on such Bonds.
Section 12.11 Execution in Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 12.12 Governing Law. This Indenture shall be construed and governed in accordance with the laws of the State.
Section 12.13 Payments Due on Other Than a Business Day. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, is not a Business Day, such payment, with no interest accruing for the period from and after such nominal date, may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided therefore in this Indenture. 61268155.3S-1
IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY, has caused this Indenture to be signed in its name by its Chief Financial Officer and attested by its Secretary, and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer hereunto duly authorized, all as of the day and year first above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF
CATHEDRAL CITY
By:
Chief Financial Officer
ATTEST:
By: _______________________________________
Secretary
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Authorized Officer
61268155.3A-1
EXHIBIT A
(FORM OF BOND)
No. R-__ $__________
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
(COUNTY OF LOS ANGELES)
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION HOUSING REVENUE REFUNDING BONDS, SERIES 2024B (MERGED REDEVELOPMENT PROJECT AREA)
Interest Rate Maturity Date Dated Date CUSIP
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: ___________________________________ DOLLARS The SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY, a public body, corporate and politic, duly organized and existing under and by virtue of the laws of the State of California (the “Successor Agency”), for value received hereby promises to pay to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above, the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the interest payment date next preceding the date of authentication of this Bond, unless (i) this Bond is authenticated on an interest payment date, in which event it shall bear interest from such date of authentication, or (ii) this Bond is authenticated prior to an interest payment date and after the close of business on the fifteenth calendar day of the month preceding such interest payment date (a “Record Date”), in which event it shall bear interest from such interest payment date, or (iii) this Bond is authenticated on or before [July 15, 2024], in which event it shall bear interest from the Dated Date stated above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on this Bond, until payment of such Principal Sum in full, at the rate per annum stated above, payable semiannually on February 1 and August 1 in each year (each an “Interest Payment Date”), commencing [August 1, 2024], calculated on the basis of a 360-day year composed of twelve 30-day months. Principal hereof are payable upon presentation and surrender of this Bond at the corporate trust office of The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). Interest hereon (including the final interest payment upon maturity) is payable by check of the Trustee mailed on the interest payment date by first class mail to the Registered Owner hereof at the Registered Owner’s address as it appears on the registration books maintained by the Trustee at the close of business on the Record Date next preceding such interest payment date; provided, however, that upon the written request of any Registered Owner of at least $1,000,000 in principal amount of Bonds received by the Trustee at least fifteen (15) days prior to such Record Date, payment shall be made by wire transfer in immediately available funds to an account in the United States designated by such Owner. 61268155.3A-2
This Bond is one of a duly authorized issue of Bonds of the Successor Agency designated as “Successor Agency to the Redevelopment Agency of the City of Cathedral City Tax Allocation Housing Revenue Refunding Bonds, Series 2024B (Merged Redevelopment Project Area)” (the “Bonds”), in an aggregate principal amount of $[PAR AMOUNT], all of like tenor and date (except for such variation, if any, as may be required to designate varying series, numbers, maturities, interest rates and other provisions) and all issued pursuant to the provisions of the Community Redevelopment Law, beginning with Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code of the State of California (the “Health and Safety Code”), and pursuant to an Indenture, dated as of October 1 , 2014, entered into by and between the Successor Agency and the Trustee (the “Indenture”), authorizing the issuance of the Bonds. No additional bonds, notes or other obligations may be issued on a parity with the Bonds. Reference is hereby made to the Indenture (a copy of which is on file at the office of the Successor Agency) and all indentures supplemental thereto and to the Health and Safety Code for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Pledged Housing Tax Revenues, as that term is defined in the Indenture, and the rights thereunder of the registered owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Successor Agency thereunder, to all of the provisions of which Indenture the Registered Owner of this Bond, by acceptance hereof, assents and agrees.
The Bonds shall be and are special obligations of the Successor Agency and are secured by an irrevocable pledge of, and are payable as to principal, interest and premium, if any, from Pledged Housing Tax Revenues and other funds as hereinafter provided. The Bonds, interest thereon and premium, if any, are not a debt of the City, the County, the State or any of its political subdivisions (except the Successor Agency), and none of the City, the County, the State nor any of its political subdivisions (except the Successor Agency) is liable thereon. The Bonds, interest thereon and premium, if any, are not payable from any funds or properties other than those set forth in this Indenture. None of the members of the Successor Agency Board, or any persons executing the Bonds is liable personally on the Bonds by reason of their issuance.
There has been created and will be maintained by the Successor Agency the Redevelopment Obligation Retirement Fund (as defined in the Indenture) into which Pledged Housing Tax Revenues shall be deposited and transferred to the Trustee for deposit into the Revenue Fund (as defined in the Indenture) from which the Trustee shall pay the principal of and interest on the Bonds when due. As and to the extent set forth in the Indenture, all such Pledged Housing Tax Revenues are exclusively and irrevocably pledged to and constitute a trust fund for, in accordance with the terms hereof and the provisions of the Indenture and the Health and Safety Code, the security and payment, and for the security and payment of interest on, the Bonds. Except for the Pledged Housing Tax Revenues and such moneys, no funds or properties of the Successor Agency shall be pledged to, or otherwise liable for, the payment of principal of or interest on the Bonds.
The Bonds are not subject to redemption prior to their maturity.
If an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.
The Bonds are issuable as fully registered Bonds without coupons in denominations of $5,000 each and any integral multiple thereof. Subject to the limitations and conditions and upon payment of the charges, if any, as provided in the Indenture, Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations and of the same maturity. 61268155.3A-3
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the corporate trust office of the Trustee, but only in the manner and subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon registration of such transfer a new fully registered Bond or Bonds, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange herefor.
The Successor Agency and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the Successor Agency and the Trustee shall not be affected by any notice to the contrary.
The rights and obligations of the Successor Agency and the registered owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Successor Agency to pay the principal, interest at the time and place and at the rate and in the currency provided herein of any Bond without the express written consent of the registered owner of such Bond, reduce the percentage of Bonds required for the written consent to any such amendment or modification or, without its written consent thereto, modify any of the rights or obligations of the Trustee.
It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Bond do exist, have happened or have been performed in due and regular time and manner as required by the Health and Safety Code and the laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Successor Agency, does not exceed any limit prescribed by the Health and Safety Code or any laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture or become valid or obligatory for any purpose until the Trustee’s Certificate of Authentication hereon shall have been manually signed by the Trustee.
61268155.3A-4
IN WITNESS WHEREOF, the Successor Agency to the Redevelopment Agency of the City of Cathedral City has caused this Bond to be executed in its name and on its behalf with the manual or facsimile signatures of its Chief Financial Officer and its Secretary and its seal to be reproduced hereon, all as of the Delivery Date.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF
CATHEDRAL CITY
By:
Chief Financial Officer
By:
Secretary
61268155.3A-5
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-mentioned Indenture.
Authentication Date: ____ __, 20__
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Authorized Officer
61268155.3A-6
(FORM OF ASSIGNMENT)
For value received the undersigned hereby sells, assigns and transfers unto _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ (Name, Address and Tax Identification or Social Security Number of Assignee) the within-registered Bond and hereby irrevocably constitute(s) and appoint(s) ____________________ _______________________________________________________ attorney, to transfer the same on the bond register of the Trustee with full power of substitution in the premises.
Dated: _________________________ ___________________________________________ Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within Bond in every particular without alteration
or enlargement or any change whatsoever.
Signature Guaranteed:
____________________________________
Note: Signature(s) must be guaranteed by
an “eligible guarantor institution.”
61268155.3S-I-1
Schedule I
Existing Non-Housing Debt
Principal Amount
Outstanding
1. Senior Loan Agreement, dated as of April 1, 2000, by and among the Cathedral City Redevelopment Agency,
BNY Western Trust Company, and the Cathedral City
Public Financing Authority, relating to Loan of
$12,311,000.40 to Cathedral City Merged
Redevelopment Project
$ 1,949,907
2. Cathedral City Redevelopment Agency Merged
Redevelopment Project Area 2007 Taxable Tax
Allocation Bonds, Series B
24,150,000
3. Successor Agency Tax Allocation Revenue Refunding
Bonds, Series 2014A (Merged Redevelopment Project
Area)
25,295,000
4. Successor Agency Tax Allocation Revenue Refunding
Bonds, Series 2021A (Merged Redevelopment Project
Area)
24,760,000
5. Successor Agency Tax Allocation Revenue Refunding
Bonds, Series 2021B (Federally Taxable) (Merged
Redevelopment Project Area)
4,385,000
6. Successor Agency Tax Allocation Subordinate Revenue
Refunding Bonds, Series 2021C (Merged Redevelopment
Project Area)
14,125,000
1 CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (this “Disclosure Agreement”) is executed and delivered by the Successor Agency to the Redevelopment Agency of the City of Cathedral City (the “Successor Agency”) and Willdan Financial Services, as dissemination agent (the “Dissemination Agent”), in connection with the issuance of $________ Successor Agency to the Redevelopment Agency of the City of Cathedral City Tax Allocation Revenue Refunding Bonds, Series 2024A (Merged Redevelopment Project Area) (the “2024A Bonds”) and $______ Successor Agency to the Redevelopment Agency of the City of Cathedral City Tax Allocation Housing Revenue Refunding Bonds, Series 2024B (Merged Redevelopment Project Area) (the “2024B Bonds” and, together with the 2024A Bonds, the “Bonds”). The 2024A Bonds are being issued pursuant to an Indenture, dated as of July 1, 2024 (the “2024A Indenture”), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The 2024B Bonds are being issued pursuant to an Indenture, dated as of July 1, 2024 (the “2024B Indenture” and, together with the 2024A Indenture, the “Indenture”), by and between the Successor Agency and the Trustee. The Successor Agency and the Dissemination Agent covenant and agree as follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Successor Agency for the benefit of the Owners and Beneficial Owners of the Bonds.
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the Successor Agency pursuant to, and as described in, Section 3 this Disclosure Agreement. “Beneficial Owner” shall mean any person that (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Business Day” means any day other than (i) a Saturday or Sunday or legal holiday or a day on which banking institutions in the city in which the corporate trust office of the Trustee is located are authorized to close, or (ii) a day on which the New York Stock Exchange is closed. “Dissemination Agent” shall mean initially, Willdan Financial Services, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Successor Agency.
“EMMA” shall mean the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for Municipal Securities disclosures, maintained on the internet at http://emma.msrb.org.
“Fiscal Year” shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the 2 Successor Agency, with notice of such selection or change in fiscal year to be provided as set forth herein.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, as amended, or any other entity designated or authorized by the United States Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the United States Securities and Exchange Commission, filings with the MSRB are to be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” shall mean the Official Statement, dated ______, 2024, relating to the Bonds.
“Owner” shall mean either the registered owners of the Bonds, or, if the Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in such depository system.
“Participating Underwriter” shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“SEC” shall mean the Securities and Exchange Commission. “State” shall mean the State of California.
SECTION 3. Provision and Contents of Annual Report.
(a) So long as any Bonds remain outstanding, the Successor Agency shall, or shall cause the Dissemination Agent to, not later than the March 31 occurring after the end of the Successor Agency’s Fiscal Year, commencing with the Fiscal Year ended June 30, 2024, provide to the MSRB, through EMMA, an audit of the financial transactions and records of the Successor Agency for the Fiscal Year. If the Successor Agency’s audit is not available by the time such audit is required to be filed pursuant to this Section 3(a), an unaudited statement of financial transactions and records of the Successor Agency in a format required by Section 34177(n) of the Health and Safety Code of the State of California shall be provided to the Dissemination Agent, and the audit shall be filed when it becomes available. The audit shall constitute the Annual Report hereunder. The Annual Report may be contained in the City of Cathedral City’s annual comprehensive financial report (“ACFR”) and submission of such ACFR to the MSRB through EMMA shall constitute compliance for submission of the postaudit required hereunder.
Each Annual Report shall also contain the following information for the immediately prior Fiscal Year:
oThe assessed value for the Merged Redevelopment Project Area; 3 oA list of the top ten taxpayers in the Merged Redevelopment Project Area; oInformation on any appeals by top ten taxpayers in the Merged Redevelopment Project Area;
oFor the most recent completed Fiscal Year, (i) the aggregate annual debt service for the 2024A Bonds and any outstanding Parity Debt (as defined in the 2024A Indenture), (ii) the aggregate annual debt service for the 2024B Bonds and any outstanding Parity Debt (as defined in the 2024B Indenture); and oFor the most recent completed Fiscal Year, the actual amount of the Pledged Tax Revenues (as defined in the 2024A Indenture) and the Pledged Housing Tax Revenues (as defined in the 2024B Indenture).
(b) The Annual Report must be submitted in electronic format, accompanied by such identifying information as required by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 3(d) of this Disclosure Agreement. If the Fiscal Year changes for the Successor Agency, the Successor Agency shall give notice of such change in the manner provided under Section 5(e) hereof.
(c) Any or all of the items listed above may be included by specific reference to other documents, including official statements or other disclosure documents of debt issues of the Successor Agency or related public entities, available to the public on EMMA or filed with the SEC. The Successor Agency shall clearly identify each such other document so included by reference.
(d) The contents, presentation and format of the Annual Report may be modified from time to time as determined in the judgment of the Successor Agency to conform to changes in accounting or disclosure principles or practices and legal requirements followed by or applicable to the Successor Agency or to reflect changes in the business, structure, operations, legal form of the Successor Agency.
(e) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection (a), the Dissemination Agent shall send a notice to the MSRB in substantially the form attached as Exhibit A. (f) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then-current procedures for submitting Annual Reports to, the MSRB prior to the date for providing the Annual Reports; and (ii) to the extent known to the Dissemination Agent file a report with the Successor Agency certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, and stating the date it was provided.
SECTION 4. Reserved.
4 SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Successor Agency shall give, or cause to be given to the MSRB, via EMMA, notice of the occurrence of any of the following Listed Events with respect to the Bonds, which notice shall be given in a timely manner, not in excess of ten business days after the occurrence of such Listed Event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of Bond owners, if material; (8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if material
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the Successor Agency;
(13) The consummation of a merger, consolidation, or acquisition involving the Successor Agency or the sale of all or substantially all of the assets of the Successor Agency, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material;
5 (15) Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties. (For Listed Events listed in Section 5(a)(15) and (16), “financial obligation” has such meaning as set forth in the Rule which, as of the date of this Disclosure Certificate, includes: (i) a debt obligation; (ii) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) a guarantee of (i) or (ii); provided that municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule is not a “financial obligation” for this purpose.) For these purposes, any event described in the immediately preceding paragraph (12) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the Successor Agency in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Successor Agency, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Successor Agency. (b) The Dissemination Agent (if not the Successor Agency) shall, within one business day after obtaining knowledge of the occurrence of any of the events listed in Section 5(a) (1), (3), (4), (5), (6), (9), (11), (12) or (16), or (8) with respect to tender offers, inform the Successor Agency of the occurrence of such event. In any case, as soon as reasonably practicable after obtaining knowledge of the occurrence of such event, the Successor Agency shall, or shall cause the Dissemination Agent to, file in a timely manner, not in excess of ten business days after the occurrence of any such event, a notice of such occurrence with the MSRB, in an electronic format accompanied by identifying information as prescribed by the MSRB. (c) The Dissemination Agent (if not the Successor Agency) shall, within one business day after obtaining knowledge of the occurrence of any of the events listed in Section 5(a) (2), (7), (10), (13), (14), (15) or (8) with respect to bond calls, inform the Successor Agency of the occurrence of such event and request that the Successor Agency promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (d). (d) Whenever the Successor Agency obtains knowledge of the occurrence of any event specified in Section 5(a) (2), (7), (10), (13), (14), (15) or (8) with respect to bond calls, the Successor Agency shall as soon as possible, in order to meet the ten business day deadline to file notices required under the Rule and pursuant to the following sentence, determine if such event would be material under applicable Federal securities law. If the Successor Agency determines 6 that knowledge of the occurrence of such event would be material under applicable Federal securities law, the Successor Agency shall, or shall cause the Dissemination Agent to, file in a timely manner, not in excess of ten business days after the occurrence of any such event, a notice of such occurrence with the MSRB, in an electronic format accompanied by identifying information as prescribed by the MSRB.
(e) If the Dissemination Agent has been instructed by the Successor Agency to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB.
SECTION 6. Filings with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.
SECTION 7. Termination of Reporting Obligation. The Successor Agency’s obligations under this Disclosure Agreement with respect to the Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all Outstanding Bonds. If such termination occurs prior to the final maturity of the Bonds, the Successor Agency shall give notice of such termination in the same manner as for a Listed Event under Section 5.
SECTION 8. Dissemination Agent. The Successor Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing’ a successor Dissemination Agent. The initial Dissemination Agent shall be the Willdan Financial Services.
SECTION 9. Amendment. Notwithstanding any other provision of this Disclosure Agreement, the Successor Agency may amend this Disclosure Agreement, provided no amendment increasing or affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to the Successor Agency to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.
SECTION 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Successor Agency from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Successor Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Successor Agency shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. 7 SECTION 11. Default. In the event of a failure of the Successor Agency or the Dissemination Agent (if the Dissemination Agent is other than the Successor Agency) to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of outstanding Bonds with indemnification satisfactory to it, shall), or any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Successor Agency or the Dissemination Agent (if the Dissemination Agent is other than the Successor Agency), as the case may be, to comply with its obligations under this Disclosure Agreement. The sole remedy under this Disclosure Agreement in the event of any failure of the Successor Agency or the Dissemination Agent (if the Dissemination Agent is other than the Successor Agency) to comply with this Disclosure Agreement shall be an action to compel performance. The Trustee shall not owe any fiduciary duty to the Participating Underwriter nor shall its failure to comply with the request of any Participating Underwriter result in a breach of any of its fiduciary duties owed to the Owners.
SECTION 12. Duties, Immunities and Liabilities of Trustee and Dissemination Agent.
The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Successor Agency agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees and expenses) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Successor Agency under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. If the Trustee performs the duties assigned to it hereunder, the Trustee shall not be responsible to any person for any failure by the Successor Agency or the Dissemination Agent (if other than the Trustee) to perform duties or obligations imposed hereby. The Dissemination Agent shall have the same rights and protections hereunder as accorded to the Trustee under the Indenture. It is understood and agreed that any information that the Dissemination Agent may be instructed to file with the MSRB shall be prepared and provided to it by the Successor Agency.
The Dissemination Agent has undertaken no responsibility with respect to any reports, notices or disclosures provided to it under this Disclosure Agreement, and has no liability to any person, including any owner of Bonds, with respect to any such reports, notices or disclosures. The fact that the Dissemination Agent or any affiliate thereof may have any fiduciary or banking relationship with the Successor Agency shall not be construed to mean that the Dissemination Agent has actual knowledge of any event or condition except as may be provided by written notice from the Successor Agency.
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Successor Agency, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. The Dissemination Agent shall be liable under any circumstances for monetary damages to any person for any breach of this Disclosure Agreement. 8 SECTION 14. Governing Law. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State.
SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
Dated: __________, 2024
SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF CATHEDRAL CITY
By
Chief Financial Officer
WILLDAN FINANCIAL SERVICES,
as Dissemination Agent
By
Authorized Officer
A-1
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Obligated Party: The Successor Agency to the Cathedral City Redevelopment Name of Bond Issue: $______ Successor Agency to the Redevelopment Agency of the City of Cathedral City Tax Allocation Revenue Refunding Bonds, Series 2024A (Merged Redevelopment Project Area)
$______ Successor Agency to the Redevelopment Agency of the City of Cathedral City Tax Allocation Housing Revenue
Refunding Bonds, Series 2024B (Merged Redevelopment Project Area)
Date of Issuance: ________, 2024
NOTICE IS HEREBY GIVEN that the Successor Agency has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of ________, 2024, with respect to the Bonds. [The Successor Agency anticipates that the Annual Report will be filed by _____________.] Dated: _______________
WILLDAN FINANCIAL SERVICES
as Dissemination Agent
on behalf of the Successor Agency
65538.00003\42176754.2
$____________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION REVENUE REFUNDING BONDS, SERIES 2024A
(MERGED REDEVELOPMENT PROJECT AREA)
BOND PURCHASE CONTRACT
_________, 2024
Successor Agency to the Redevelopment Agency
of the City of 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 Successor Agency to the Redevelopment Agency of the City of Cathedral City (the “Agency”) which will be binding upon the Agency and the Underwriter upon the acceptance hereof by the Agency. This offer is made subject to its acceptance by the Agency 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).
The Agency acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm’s length commercial transaction between the Agency and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as principal and not as agent or fiduciary of the Agency; (iii) the Underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the Agency 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 Agency on other matters); and (iv) the Agency has consulted with its own legal and financial advisors to the extent it has 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 Agency for offering to the public, and the Agency hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $___________ aggregate principal amount of the Agency’s Tax Allocation Revenue Refunding Bonds, Series 2024A (Merged Redevelopment Project Area (the “Bonds”), at a purchase price equal to $____________ (being the aggregate principal amount thereof, plus/less original issue premium/discount of $__________ and less an Underwriter’s discount of $___________). The Bonds are to be purchased by the Underwriter from the Agency. 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.”
65538.00003\42176754.2
2 [As an accommodation to the Agency, the Underwriter will pay, from the purchase price, the sum of $____________ to _______________ (the “Insurer”) as the premium for its municipal bond insurance policy (the “Insurance Policy”) issued for the Bonds maturing August 1, 20__ through August 1, 20__ (the “Insured Bonds”). As an accommodation to the Agency, the Underwriter will also pay, from the purchase price, the sum of $__________ to the Insurer as the premium for its reserve fund surety policy (the “Reserve Policy”). Such amounts shall be credited against the Purchase Price to be remitted by the Underwriter to the Trustee pursuant to the foregoing paragraph.]
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 July 1, 2024 (the “Indenture”), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and pursuant Section 34177.5 of the California Health and Safety Code and a resolution of the Agency adopted on _________, 2024 (the “Agency Resolution”). The issuance of the Bonds was approved by the Countywide Oversight Board for the County of Riverside by resolution on ___________, 2024 (the “Oversight Board 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 being issued to refund the outstanding Tax Allocation Revenue Refunding Bonds, Series 2014A (Merged Redevelopment Project Area) (the “Refunded Bonds”).
In connection with such refunding, the Agency will enter into an Escrow Agreement relating to the Refunded Bonds (the “Escrow Agreement”), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the “Escrow Bank”).
The Agency will undertake pursuant to the provisions of a Continuing Disclosure Agreement, to be dated the date of the Closing (the “Disclosure Agreement”), between the Agency and Willdan Financial Services, 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 Disclosure Agreement, the Escrow Agreement and this Purchase Contract are sometimes collectively referred to herein as the “Agency Legal Documents.”
3. Offering.
(a) It shall be a condition to the Agency’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 Agency and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public 65538.00003\42176754.2
3 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. (b) The Underwriter agrees to assist the Agency in establishing the issue price of the Bonds and shall execute and deliver to the Agency at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Agency and Bond Counsel (as such term is hereinafter defined) to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Agency under this section to establish the issue price of the Bonds may be taken on behalf of the Agency by the Agency’s municipal advisor, Fieldman, Rolapp & Associates, Inc. (the “Municipal Advisor”) and any notice or report to be provided to the Agency may be provided to the Municipal Advisor.
(c) The Agency will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Contract, the Underwriter shall report to the Agency the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Agency the prices at which it sells the unsold Bonds of that maturity to the public.
That reporting obligation shall continue, whether or not the Closing Date has occurred, until either
(i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Agency or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided 65538.00003\42176754.2
4 that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering- price rule, if applicable, if and for so long as directed by the Underwriter, (ii) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(iii) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
(e) The Agency acknowledge that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Agency further acknowledge that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold- the-offering-price rule, if applicable to the Bonds. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public 65538.00003\42176754.2
5 (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party;
(2) “underwriter” means (i) any person that agrees pursuant to a written contract with the Agency (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public);
(3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).
4. Use and Preparation of Documents. The Agency 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 ___________, 2024, relating to the Bonds (the “Preliminary Official Statement”). The Agency ratifies, confirms and approves the use by the Underwriter prior to the date hereof of the Preliminary Official Statement. The Agency 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 Agency 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 Agency 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 Agency 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.
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6 5. Representations, Warranties and Agreements of the Agency. The Agency hereby represents, warrants and agrees as follows:
(a) The Agency is a public entity existing under the laws of the State of California, including the Law.
(b) The Agency has full legal right, power and authority to enter into the Agency Legal Documents and carry out and consummate the transactions on its part contemplated by the Agency Legal Documents.
(c) By all necessary official action of the Agency prior to or concurrently with the acceptance hereof, the Agency 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 Agency Legal Documents, and the performance by the Agency of all transactions on its part contemplated by the Agency Legal Documents; and when executed by the Agency and the other respective parties thereto the Agency Legal Documents will constitute legal, valid and binding obligations of the Agency, 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 Agency 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 Agency is a party or to which the Agency 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 Agency’s ability to comply with its obligations under the Agency Legal Documents; and the execution and delivery of the Agency Legal Documents, and compliance with the provisions on the Agency’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 Agency is a party or to which the Agency 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 Agency 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 Agency of its obligations under the Agency Legal Documents have been duly obtained. 65538.00003\42176754.2
7 (f) Except as otherwise disclosed in the Official Statement, between the date of this Purchase Contract and the date of the Closing, the Agency 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 Pledged Tax 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 Agency. (g) To the best knowledge of the officer of the Agency 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 Agency has been served with process or threatened against the Agency, affecting the existence of the Agency 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 collection of the Pledged Tax Revenues or contesting or affecting, as to the Agency, the validity or enforceability of the Agency Legal Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Agency, 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 Agency or which might materially adversely affect the Pledged Tax Revenues of the Agency; nor, to the best knowledge of the Agency, 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 Agency of the Agency Legal Documents. (h) As of the time of acceptance hereof and as of the date of the Closing, the Agency does not and will not have outstanding any indebtedness which indebtedness is secured by a lien on the Pledged Tax Revenues superior to or on a parity with the lien provided for in the Indenture on the Available Non-Housing Tax Increment Funds, other than as disclosed in the Official Statement.
(i) As of the time of acceptance hereof and as of the date of the Closing, the Agency has complied with the filing requirements of the Law, including, without limitation, the filing of all Recognized Obligation Payment Schedules, as required by the Law.
(j) 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). (k) 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 65538.00003\42176754.2
8 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). (l) 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 Agency will notify the Underwriter, and, if in the opinion of the Underwriter or the Agency, or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency 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 Agency 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 Agency 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.
(m) 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).
(n) After the Closing, the Agency 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.
(o) Any certificate signed by any officer of the Agency and delivered to the Underwriter in connection with the Bonds, or the Agency Legal Documents shall be deemed a representation by the Agency to the Underwriter as to the statements made therein.
(p) The Agency will apply the proceeds from the sale of the Bonds for the purposes specified in the Official Statement.
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9 (q) The Agency 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 Agency 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.
(r) Except as disclosed in the Preliminary Official Statement, the Agency has not defaulted in any material respect under any prior continuing disclosure undertaking within the previous five years.
(s) The Oversight Board has duly adopted the Oversight Board Resolution approving the issuance of the Bonds and no further Oversight Board approval or consent is required for the issuing of the Bonds or the consummation of the transactions on the part of the Agency described in the Official Statement.
(t) The Department of Finance of the State (the “Department of Finance”) has issued a letter, dated ____________, 2024 (the “DOF Letter”), approving the Oversight Board Resolution. No further Department of Finance approval or consent is required for the issuance of the Bonds or the consummation of the transactions on the part of the Agency described in the Preliminary Official Statement. Except as disclosed in the Preliminary Official Statement, the Agency is not aware of the Department of Finance directing or having any basis to direct the County Auditor-Controller to deduct unpaid unencumbered funds from future allocations of property tax to the Agency pursuant to Section 34183 of the Dissolution Act.
6. Closing. At 8:00 A.M., California time, on ________, 2024 (the “Closing” or the “Closing Date”), or on such other date and time as may be mutually agreed upon by the Agency and the Underwriter, the Agency 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 Agency 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 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.
7. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the Agency 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 Agency of its obligations hereunder, 65538.00003\42176754.2
10 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 Agency 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 Agency 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 Agency made in any certificate or other document furnished pursuant to the provisions hereof are accurate;
(c) At the time of the Closing, the Agency 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 Agency, 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 Agency 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 Agency relating to the Official Statement and the Agency 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 Agency, 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 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 Agency and (assuming due 65538.00003\42176754.2
11 authorization, execution and delivery by and validity against the other parties thereto, as applicable) constitute the valid and binding obligations of the Agency, 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,” “THE BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS” and in Appendices A and B 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) Agency Counsel Opinion. An opinion of Counsel to the Agency, dated the date of the Closing and addressed to the Underwriter, to the following effect:
(i) the Agency is a public body, duly existing under the Constitution and laws of the State, with full right, power and authority to execute, deliver and perform its obligations under the Agency Legal Documents; (ii) the Agency Resolution was duly adopted at meeting of the Agency, called and held pursuant to law, with all public notice required by law and at which quorum was present and acting throughout; and the Agency Resolution is in full force and effect and has not been modified amended or rescinded since their respective adoption date; (iii) The Agency Legal Documents have been duly authorized, executed and delivered by the Agency and, assuming due authorization, execution and delivery by the other parties thereto, the Agency Legal Documents constitute the valid, legal and binding obligations of the Agency 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 Agency;
(v) The execution and delivery of the Agency Legal Documents and the Official Statement and compliance with the provisions of the Agency 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 Agency a breach of or default under any agreement or other instrument to which the Agency 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 Agency a violation, breach of or default under any existing law, regulation, court order or consent decree to which the Agency is subject; and
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12 (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 Agency, or threatened, challenging the creation, organization or existence of the Agency, or the validity of the Bonds or the Agency 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 Agency would have a material adverse effect upon the financial condition or the revenues of the Agency, or which, in any manner, questions the right of the Agency to issue, sell and deliver the Bonds, to enter into the Indenture or to use the Pledged Tax Revenues for repayment of the Bonds or affects in any manner the right or ability of the Agency to collect or pledge the Pledged Tax Revenues. (4) 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. (5) Escrow Bank Counsel Opinion. The opinion of counsel to the Escrow Bank, dated the date of the Closing, addressed to the Underwriter, to the effect that:
(i) The Escrow Bank 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 Escrow Agreement; (ii) The Escrow Agreement has been duly authorized, executed and delivered by the Escrow Bank and the Escrow Agreement constitutes the legal, valid and binding obligation of the Escrow Bank, 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 65538.00003\42176754.2
13 or regulatory authority having jurisdiction over the Escrow Bank 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 Escrow Agreement. (6) Agency Certificate. A certificate of the Agency, dated the date of the Closing, signed on behalf of the Agency by a duly authorized officer of the Agency, to the effect that:
(i) the representations and warranties of the Agency 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 Agency 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, 2020 in the Official Statement.
(7) 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 Agency) 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.
(8) Escrow Bank Certificate. A certificate, dated the Closing Date, to the effect that:
(i) The Escrow Bank is a national banking association duly organized and validly existing under the laws of the United States of America; (ii) The Escrow Bank has full power, authority and legal right to comply with the terms of the Escrow Agreement and to perform its obligations stated therein; and
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14 (iii) The Escrow Agreement has been duly authorized, executed and delivered by the Escrow Bank and (assuming due authorization, execution and delivery by the Agency) constitutes legal, valid and binding obligation of the Escrow Bank 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 Agency 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 Agency 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 Agency, counsel to the Agency, 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 or as of the date of this Purchase Contract, 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 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) Fiscal Consultant Certificate. A certificate of HdL Coren & Cone (the “Fiscal Consultant”) to the effect that the report of the Fiscal Consultant (the “Fiscal Consultant Report”) contained in Appendix H to the Official Statement and the information set forth in the Official Statement noted as sourced to the Fiscal Consultant, to the best of the Fiscal Consultant’s knowledge, do 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, consenting to the use of the Fiscal Consultant Report in the Preliminary and Official Statement and stating that to the best of the Fiscal Consultant’s knowledge, nothing has to come the Fiscal Consultant’s attention between the date of such Fiscal Consultant Report and the Closing Date which would materially alter any of the conclusions set forth in the Fiscal Consultant Report.
(12) Oversight Board Resolution and DOF Letter. A copy of the adopted Oversight Board Resolution, together with a copy of the DOF Letter. 65538.00003\42176754.2
15 (13) Underwriter’s Counsel Opinion. An opinion of Best Best & Krieger LLP, dated the Closing Date, addressed to the Underwriter, in form and substance acceptable to the Underwriter.
(14) Municipal Advisor Certificate. A Certificate, dated the date of Closing, signed by an authorized office of Fieldman, Rolapp & Associates, Inc., the Agency’s Municipal Advisor, addressed to the Underwriter and the Agency 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.
(15) Tax Certificate. A tax certificate or certificates with respect to maintaining the tax-exempt status of the Bonds, duly executed by the Agency, in form and substance satisfactory to Bond Counsel.
(16) CDIAC Notices. Copies of the preliminary and final notices to the California Debt and Investment Advisory Commission relating to the Bonds (17) Rating Letter. Evidence that the rating on the Insured Bonds and Uninsured Bonds are as described in the Official Statement. (18) 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.
(19) Insurance Policy. The Insurance Policy, duly executed by the Insurer.
(20) Reserve Policy. The Reserve Policy, duly executed by the Insurer. (21) Insurer Certificate. A certificate or certificates of the Insurer as to the accuracy of the information in the Official Statement relating to the Insurer and the Insurance Policy, and such other matters reasonably requested by the Underwriter and Bond Counsel.
(22) Opinion of Counsel to Insurer. An opinion of counsel to the Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel. (23) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, the Agency or the Underwriter may reasonably deem necessary.
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16 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 Agency 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 Agency 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 Agency 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 by this Purchase Contract, this Purchase Contract shall terminate and neither the Agency nor the Underwriter shall have any further obligation hereunder.
8. Termination. The Underwriter may terminate this Purchase Contract by written notification to the Agency 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 Agency 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 Agency), 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 Agency 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 65538.00003\42176754.2
17 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 Agency that, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the Agency), 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 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 Agency’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 65538.00003\42176754.2
18 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.
9. Expenses. No expenses and costs of the Agency incident to the performance of the Agency’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 Agency, and fees and expenses of Bond Counsel or Disclosure Counsel for the Agency 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.
10. Notices. Any notice or other communication to be given to the Agency under this Purchase Contract may be given by delivering the same in writing at the Agency’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: Jose Vera, Managing Director.
11. Parties in Interest. This Purchase Contract is made solely for the benefit of the Agency 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 Agency 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.
12. Effectiveness and Counterpart Signatures. This Purchase Contract shall become effective upon the execution of the acceptance by an authorized officer of the Agency 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.
13. 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. 65538.00003\42176754.2
S-1
14. 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:
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF
THE CITY OF CATHEDRAL CITY
By:
Authorized Signatory
Time of Execution: p.m. Pacific Time
65538.00003\42176754.2
A-1
EXHIBIT A
MATURITY SCHEDULE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION REVENUE REFUNDING BONDS, SERIES 2024A
(MERGED REDEVELOPMENT PROJECT AREA)
Maturity Date
(August 1)
Principal
Amount Interest Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the
Offering
Price Used
65538.00003\42176754.2
B-1
EXHIBIT B
FORM OF ISSUE PRICE CERTIFICATE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION REVENUE REFUNDING BONDS, SERIES 2024A
(MERGED REDEVELOPMENT PROJECT AREA
The undersigned, on behalf of Raymond James & Associates, Inc. (“Raymond James”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1.Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2.Defined Terms.
(a)General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b)Issuer means the Successor Agency to the Redevelopment Agency of the City of Cathedral City.
(c)Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d)Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
3. The establishment of the Reserve Fund in the amount of the Reserve Requirement was vital to the marketing of the Bond and reasonably required to assure the payment of debt service on the Bonds.
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents Raymond James’ interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Norton Rose Fulbright US LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of 65538.00003\42176754.2
B-2
the Internal Revenue Service Form 8038- G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
RAYMOND JAMES & ASSOCIATES, INC.
By:_______________________________________
Name: ____________________________________
Dated: ___________, 2024
65538.00003\42176754.2
B-3
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES
Maturity Date
(August 1)
Principal
Amount Interest Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the
Offering
Price Used
65538.00003\42181131.1
$____________
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION HOUSING REVENUE REFUNDING BONDS, SERIES 2024B (MERGED REDEVELOPMENT PROJECT AREA)
BOND PURCHASE CONTRACT
_________, 2024
Successor Agency to the Redevelopment Agency
of the City of 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 Successor Agency to the Redevelopment Agency of the City of Cathedral City (the “Agency”) which will be binding upon the Agency and the Underwriter upon the acceptance hereof by the Agency. This offer is made subject to its acceptance by the Agency 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).
The Agency acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm’s length commercial transaction between the Agency and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as principal and not as agent or fiduciary of the Agency; (iii) the Underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the Agency 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 Agency on other matters); and (iv) the Agency has consulted with its own legal and financial advisors to the extent it has 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 Agency for offering to the public, and the Agency hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the $___________ aggregate principal amount of the Agency’s Tax Allocation Housing Revenue Refunding Bonds, Series 2024B (Merged Redevelopment Project Area (the “Bonds”), at a purchase price equal to $____________ (being the aggregate principal amount thereof, plus/less original issue premium/discount of $__________ and less an Underwriter’s discount of $___________). The Bonds are to be purchased by the Underwriter from the Agency. 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.”
65538.00003\42181131.1
2 [As an accommodation to the Agency, the Underwriter will pay, from the purchase price, the sum of $____________ to _______________ (the “Insurer”) as the premium for its municipal bond insurance policy (the “Insurance Policy”) issued for the Bonds maturing August 1, 20__ through August 1, 20__ (the “Insured Bonds”). As an accommodation to the Agency, the Underwriter will also pay, from the purchase price, the sum of $__________ to the Insurer as the premium for its reserve fund surety policy (the “Reserve Policy”). Such amounts shall be credited against the Purchase Price to be remitted by the Underwriter to the Trustee pursuant to the foregoing paragraph.]
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 July 1, 2024 (the “Indenture”), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and pursuant Section 34177.5 of the California Health and Safety Code and a resolution of the Agency adopted on _________, 2024 (the “Agency Resolution”). The issuance of the Bonds was approved by the Countywide Oversight Board for the County of Riverside by resolution on ___________, 2024 (the “Oversight Board 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 being issued to refund the outstanding Tax Allocation Housing Revenue Refunding Bonds, Series 2014B (Merged Redevelopment Project Area) (the “Refunded Bonds”). In connection with such refunding, the Agency will enter into an Escrow Agreement relating to the Refunded Bonds (the “Escrow Agreement”), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the “Escrow Bank”).
The Agency will undertake pursuant to the provisions of a Continuing Disclosure Agreement, to be dated the date of the Closing (the “Disclosure Agreement”), between the Agency and Willdan Financial Services, 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 Disclosure Agreement, the Escrow Agreement and this Purchase Contract are sometimes collectively referred to herein as the “Agency Legal Documents.”
3. Offering.
(a) It shall be a condition to the Agency’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 Agency and purchased, accepted and paid for by the Underwriter at the Closing. The Underwriter agrees to make a bona fide public 65538.00003\42181131.1
3 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. (b) The Underwriter agrees to assist the Agency in establishing the issue price of the Bonds and shall execute and deliver to the Agency at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Agency and Bond Counsel (as such term is hereinafter defined) to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Agency under this section to establish the issue price of the Bonds may be taken on behalf of the Agency by the Agency’s municipal advisor, Fieldman, Rolapp & Associates, Inc. (the “Municipal Advisor”) and any notice or report to be provided to the Agency may be provided to the Municipal Advisor.
(c) The Agency will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Contract, the Underwriter shall report to the Agency the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Agency the prices at which it sells the unsold Bonds of that maturity to the public.
That reporting obligation shall continue, whether or not the Closing Date has occurred, until either
(i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Agency or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided 65538.00003\42181131.1
4 that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering- price rule, if applicable, if and for so long as directed by the Underwriter, (ii) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(iii) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
(e) The Agency acknowledge that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the- offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Agency further acknowledge that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold- the-offering-price rule, if applicable to the Bonds. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public 65538.00003\42181131.1
5 (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party;
(2) “underwriter” means (i) any person that agrees pursuant to a written contract with the Agency (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public);
(3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).
4. Use and Preparation of Documents. The Agency 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 ___________, 2024, relating to the Bonds (the “Preliminary Official Statement”). The Agency ratifies, confirms and approves the use by the Underwriter prior to the date hereof of the Preliminary Official Statement. The Agency 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 Agency 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 Agency 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 Agency 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.
65538.00003\42181131.1
6 5. Representations, Warranties and Agreements of the Agency. The Agency hereby represents, warrants and agrees as follows:
(a) The Agency is a public entity existing under the laws of the State of California, including the Law.
(b) The Agency has full legal right, power and authority to enter into the Agency Legal Documents and carry out and consummate the transactions on its part contemplated by the Agency Legal Documents.
(c) By all necessary official action of the Agency prior to or concurrently with the acceptance hereof, the Agency 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 Agency Legal Documents, and the performance by the Agency of all transactions on its part contemplated by the Agency Legal Documents; and when executed by the Agency and the other respective parties thereto the Agency Legal Documents will constitute legal, valid and binding obligations of the Agency, 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 Agency 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 Agency is a party or to which the Agency 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 Agency’s ability to comply with its obligations under the Agency Legal Documents; and the execution and delivery of the Agency Legal Documents, and compliance with the provisions on the Agency’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 Agency is a party or to which the Agency 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 Agency 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 Agency of its obligations under the Agency Legal Documents have been duly obtained. 65538.00003\42181131.1
7 (f) Except as otherwise disclosed in the Official Statement, between the date of this Purchase Contract and the date of the Closing, the Agency 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 Pledged Tax 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 Agency. (g) To the best knowledge of the officer of the Agency 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 Agency has been served with process or threatened against the Agency, affecting the existence of the Agency 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 collection of the Pledged Tax Revenues or contesting or affecting, as to the Agency, the validity or enforceability of the Agency Legal Documents, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the Agency, 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 Agency or which might materially adversely affect the Pledged Tax Revenues of the Agency; nor, to the best knowledge of the Agency, 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 Agency of the Agency Legal Documents. (h) As of the time of acceptance hereof and as of the date of the Closing, the Agency does not and will not have outstanding any indebtedness which indebtedness is secured by a lien on the Pledged Tax Revenues superior to or on a parity with the lien provided for in the Indenture on the Available Non-Housing Tax Increment Funds, other than as disclosed in the Official Statement.
(i) As of the time of acceptance hereof and as of the date of the Closing, the Agency has complied with the filing requirements of the Law, including, without limitation, the filing of all Recognized Obligation Payment Schedules, as required by the Law.
(j) 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). (k) 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 65538.00003\42181131.1
8 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). (l) 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 Agency will notify the Underwriter, and, if in the opinion of the Underwriter or the Agency, or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency 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 Agency 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 Agency 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.
(m) 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).
(n) After the Closing, the Agency 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.
(o) Any certificate signed by any officer of the Agency and delivered to the Underwriter in connection with the Bonds, or the Agency Legal Documents shall be deemed a representation by the Agency to the Underwriter as to the statements made therein.
(p) The Agency will apply the proceeds from the sale of the Bonds for the purposes specified in the Official Statement.
65538.00003\42181131.1
9 (q) The Agency 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 Agency 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.
(r) Except as disclosed in the Preliminary Official Statement, the Agency has not defaulted in any material respect under any prior continuing disclosure undertaking within the previous five years.
(s) The Oversight Board has duly adopted the Oversight Board Resolution approving the issuance of the Bonds and no further Oversight Board approval or consent is required for the issuing of the Bonds or the consummation of the transactions on the part of the Agency described in the Official Statement.
(t) The Department of Finance of the State (the “Department of Finance”) has issued a letter, dated ____________, 2024 (the “DOF Letter”), approving the Oversight Board Resolution. No further Department of Finance approval or consent is required for the issuance of the Bonds or the consummation of the transactions on the part of the Agency described in the Preliminary Official Statement. Except as disclosed in the Preliminary Official Statement, the Agency is not aware of the Department of Finance directing or having any basis to direct the County Auditor-Controller to deduct unpaid unencumbered funds from future allocations of property tax to the Agency pursuant to Section 34183 of the Dissolution Act.
6. Closing. At 8:00 A.M., California time, on ________, 2024 (the “Closing” or the “Closing Date”), or on such other date and time as may be mutually agreed upon by the Agency and the Underwriter, the Agency 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 Agency 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 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.
7. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the Agency 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 Agency of its obligations hereunder, 65538.00003\42181131.1
10 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 Agency 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 Agency 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 Agency made in any certificate or other document furnished pursuant to the provisions hereof are accurate;
(c) At the time of the Closing, the Agency 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 Agency, 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 Agency 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 Agency relating to the Official Statement and the Agency 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 Agency, 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 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 Agency and (assuming due 65538.00003\42181131.1
11 authorization, execution and delivery by and validity against the other parties thereto, as applicable) constitute the valid and binding obligations of the Agency, 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,” “THE BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS” and in Appendices A and B 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) Agency Counsel Opinion. An opinion of Counsel to the Agency, dated the date of the Closing and addressed to the Underwriter, to the following effect:
(i) the Agency is a public body, duly existing under the Constitution and laws of the State, with full right, power and authority to execute, deliver and perform its obligations under the Agency Legal Documents; (ii) the Agency Resolution was duly adopted at meeting of the Agency, called and held pursuant to law, with all public notice required by law and at which quorum was present and acting throughout; and the Agency Resolution is in full force and effect and has not been modified amended or rescinded since their respective adoption date; (iii) The Agency Legal Documents have been duly authorized, executed and delivered by the Agency and, assuming due authorization, execution and delivery by the other parties thereto, the Agency Legal Documents constitute the valid, legal and binding obligations of the Agency 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 Agency;
(v) The execution and delivery of the Agency Legal Documents and the Official Statement and compliance with the provisions of the Agency 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 Agency a breach of or default under any agreement or other instrument to which the Agency 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 Agency a violation, breach of or default under any existing law, regulation, court order or consent decree to which the Agency is subject; and
65538.00003\42181131.1
12 (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 Agency, or threatened, challenging the creation, organization or existence of the Agency, or the validity of the Bonds or the Agency 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 Agency would have a material adverse effect upon the financial condition or the revenues of the Agency, or which, in any manner, questions the right of the Agency to issue, sell and deliver the Bonds, to enter into the Indenture or to use the Pledged Tax Revenues for repayment of the Bonds or affects in any manner the right or ability of the Agency to collect or pledge the Pledged Tax Revenues. (4) 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. (5) Escrow Bank Counsel Opinion. The opinion of counsel to the Escrow Bank, dated the date of the Closing, addressed to the Underwriter, to the effect that:
(i) The Escrow Bank 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 Escrow Agreement; (ii) The Escrow Agreement has been duly authorized, executed and delivered by the Escrow Bank and the Escrow Agreement constitutes the legal, valid and binding obligation of the Escrow Bank, 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 65538.00003\42181131.1
13 or regulatory authority having jurisdiction over the Escrow Bank 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 Escrow Agreement. (6) Agency Certificate. A certificate of the Agency, dated the date of the Closing, signed on behalf of the Agency by a duly authorized officer of the Agency, to the effect that:
(i) the representations and warranties of the Agency 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 Agency 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, 2020 in the Official Statement.
(7) 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 Agency) 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.
(8) Escrow Bank Certificate. A certificate, dated the Closing Date, to the effect that:
(i) The Escrow Bank is a national banking association duly organized and validly existing under the laws of the United States of America; (ii) The Escrow Bank has full power, authority and legal right to comply with the terms of the Escrow Agreement and to perform its obligations stated therein; and
65538.00003\42181131.1
14 (iii) The Escrow Agreement has been duly authorized, executed and delivered by the Escrow Bank and (assuming due authorization, execution and delivery by the Agency) constitutes legal, valid and binding obligation of the Escrow Bank 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 Agency 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 Agency 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 Agency, counsel to the Agency, 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 or as of the date of this Purchase Contract, 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 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) Fiscal Consultant Certificate. A certificate of HdL Coren & Cone (the “Fiscal Consultant”) to the effect that the report of the Fiscal Consultant (the “Fiscal Consultant Report”) contained in Appendix H to the Official Statement and the information set forth in the Official Statement noted as sourced to the Fiscal Consultant, to the best of the Fiscal Consultant’s knowledge, do 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, consenting to the use of the Fiscal Consultant Report in the Preliminary and Official Statement and stating that to the best of the Fiscal Consultant’s knowledge, nothing has to come the Fiscal Consultant’s attention between the date of such Fiscal Consultant Report and the Closing Date which would materially alter any of the conclusions set forth in the Fiscal Consultant Report.
(12) Oversight Board Resolution and DOF Letter. A copy of the adopted Oversight Board Resolution, together with a copy of the DOF Letter. 65538.00003\42181131.1
15 (13) Underwriter’s Counsel Opinion. An opinion of Best Best & Krieger LLP, dated the Closing Date, addressed to the Underwriter, in form and substance acceptable to the Underwriter.
(14) Municipal Advisor Certificate. A Certificate, dated the date of Closing, signed by an authorized office of Fieldman, Rolapp & Associates, Inc., the Agency’s Municipal Advisor, addressed to the Underwriter and the Agency 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.
(15) Tax Certificate. A tax certificate or certificates with respect to maintaining the tax-exempt status of the Bonds, duly executed by the Agency, in form and substance satisfactory to Bond Counsel.
(16) CDIAC Notices. Copies of the preliminary and final notices to the California Debt and Investment Advisory Commission relating to the Bonds (17) Rating Letter. Evidence that the rating on the Insured Bonds and Uninsured Bonds are as described in the Official Statement. (18) 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.
(19) Insurance Policy. The Insurance Policy, duly executed by the Insurer.
(20) Reserve Policy. The Reserve Policy, duly executed by the Insurer. (21) Insurer Certificate. A certificate or certificates of the Insurer as to the accuracy of the information in the Official Statement relating to the Insurer and the Insurance Policy, and such other matters reasonably requested by the Underwriter and Bond Counsel.
(22) Opinion of Counsel to Insurer. An opinion of counsel to the Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel. (23) Additional Documents. Such additional certificates, instruments and other documents as Bond Counsel, the Agency or the Underwriter may reasonably deem necessary.
65538.00003\42181131.1
16 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 Agency 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 Agency 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 Agency 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 by this Purchase Contract, this Purchase Contract shall terminate and neither the Agency nor the Underwriter shall have any further obligation hereunder.
8. Termination. The Underwriter may terminate this Purchase Contract by written notification to the Agency 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 Agency 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 Agency), 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 Agency 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 65538.00003\42181131.1
17 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 Agency that, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the Agency), 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 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 Agency’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 65538.00003\42181131.1
18 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.
9. Expenses. No expenses and costs of the Agency incident to the performance of the Agency’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 Agency, and fees and expenses of Bond Counsel or Disclosure Counsel for the Agency 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.
10. Notices. Any notice or other communication to be given to the Agency under this Purchase Contract may be given by delivering the same in writing at the Agency’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: Jose Vera, Managing Director.
11. Parties in Interest. This Purchase Contract is made solely for the benefit of the Agency 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 Agency 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.
12. Effectiveness and Counterpart Signatures. This Purchase Contract shall become effective upon the execution of the acceptance by an authorized officer of the Agency 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.
13. 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. 65538.00003\42181131.1
S-1
14. 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:
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF
THE CITY OF CATHEDRAL CITY
By:
Authorized Signatory
Time of Execution: p.m. Pacific Time
65538.00003\42181131.1
A-1
EXHIBIT A
MATURITY SCHEDULE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION HOUSING REVENUE REFUNDING BONDS, SERIES 2024B (MERGED REDEVELOPMENT PROJECT AREA)
Maturity Date
(August 1)
Principal
Amount Interest Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the
Offering
Price Used
65538.00003\42181131.1
B-1
EXHIBIT B
FORM OF ISSUE PRICE CERTIFICATE
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY
TAX ALLOCATION HOUSING REVENUE REFUNDING BONDS, SERIES 2024B (MERGED REDEVELOPMENT PROJECT AREA
The undersigned, on behalf of Raymond James & Associates, Inc. (“Raymond James”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1.Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2.Defined Terms.
(a)General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b)Issuer means the Successor Agency to the Redevelopment Agency of the City of Cathedral City.
(c)Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(d)Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
3. The establishment of the Reserve Fund in the amount of the Reserve Requirement was vital to the marketing of the Bond and reasonably required to assure the payment of debt service on the Bonds.
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents Raymond James’ interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Norton Rose Fulbright US LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of 65538.00003\42181131.1
B-2
the Internal Revenue Service Form 8038- G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
RAYMOND JAMES & ASSOCIATES, INC.
By:_______________________________________
Name: ____________________________________
Dated: ___________, 2024
65538.00003\42181131.1
B-3
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES
Maturity Date
(August 1)
Principal
Amount Interest Rate Yield
Initial
Offering
Price
10% Test
Used
Hold the
Offering
Price Used
ESCROW AGREEMENT
by and between
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE
CITY OF CATHEDRAL CITY
and
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee and Escrow Agent
Dated as of [_______] 1, 2024
Successor Agency to the
Redevelopment Agency of the City of Cathedral City
Tax Allocation Revenue Refunding Bonds
Series 2014A
(Merged Redevelopment Project Area)
200454555.2
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of July 1, 2024, by and between
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY, a public body corporate and politic, duly organized and existing under the laws of the State of California (the “Successor Agency”) and COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under and by virtue of the laws of the United States of America, as escrow agent and as successor trustee (the “Trustee”) under the Indenture, dated as of October 1, 2014 (the “Indenture”), by and between the Successor Agency and the Trustee;
W I T N E S S E T H:
WHEREAS, the Successor Agency has previously issued its Tax Allocation Revenue Refunding Bonds Series 2014A (Merged Redevelopment Project Area), currently outstanding in the aggregate principal amount of $25,295,000 (the “Series 2014A Bonds”), pursuant to the Indenture; and
WHEREAS, the Successor Agency desires to refund the Series 2014A Bonds maturing on August 1, 2025 through August 1, 2034, inclusive (the “Refunded Bonds”), outstanding in the aggregate principal amount of $23,310,000; and WHEREAS, the Successor Agency has approved the issuance of its Tax Allocation Revenue Refunding Bonds, Series 2024A (Merged Redevelopment Project Area) (the “Series 2024A Bonds”) under the Indenture of Trust, dated as of July 1, 2024, by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., the proceeds of which are to be used in part to effect the full refunding and defeasance of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual premises contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. As used herein, the following terms shall have the following meanings:
“Code” means the Internal Revenue Code of 1986.
“Escrow Agent” means Computershare Trust Company, N.A., as escrow agent hereunder and as trustee under the Indenture, and its successors and assigns, and any other corporation or institution that may at any time be substituted in its place as provided herein. “Escrow Fund” means the fund established and held by the Escrow Agent pursuant to Section 3 hereof.
“Escrow Requirements” has the meaning given in Section 5. “Redemption Date” means [_____], 2024.
200454555.2 2
“Successor Agency” means the Successor Agency to the Redevelopment Agency of the City of Cathedral City, a public body corporate and politic, duly organized and existing under the laws of the State of California, and its successors and assigns.
SECTION 2. The Successor Agency hereby appoints Computershare Trust Company, N.A. as Escrow Agent under this Escrow Agreement for the benefit of the holders of the Refunded Bonds. The Escrow Agent hereby accepts the duties and obligations of Escrow Agent under this Escrow Agreement and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. The applicable and necessary provisions of the Indenture, including particularly the redemption provisions thereof, are incorporated herein by reference. Reference herein to, or citation herein of, any provisions of the Indenture shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein.
SECTION 3. There is created and established with the Escrow Agent a special and irrevocable trust fund designated the “Series 2014A Bonds Escrow Fund” (the “Escrow Fund”), to be held by the Escrow Agent separate and apart from all other funds and accounts, and used only for the purposes and in the manner provided in this Escrow Agreement.
SECTION 4. The Successor Agency herewith deposits, or causes to be deposited, with the Escrow Agent into the Escrow Fund, to be held in irrevocable trust by the Escrow Agent and to be applied solely as provided in this Escrow Agreement, the amount of $[_____] from proceeds of the Series 2024A Bonds. The Escrow Agent acknowledges receipt of the moneys described in this Section.
SECTION 5. The Escrow Agent shall invest such moneys, on the date of receipt thereof, in [non-callable direct obligations of the United States of America] described in Schedule I hereto (the “Initial Defeasance Securities”), and to hold any moneys in the Escrow Fund not invested pursuant to this Section as cash. The moneys set forth in the Escrow Fund when invested in the Initial Defeasance Securities, and giving account to the maturing principal of such Initial Defeasance Securities and investment earnings thereon (excluding reinvestment earnings), are at least equal to an amount sufficient to defease the Refunded Bonds by paying when due the amounts shown in Schedule II hereto (the “Escrow Requirements”). The sufficiency of the moneys to pay the Escrow Requirements has been verified in a report prepared by [______] dated [____], 2024.
Such amounts shall be applied by the Escrow Agent solely to the payment of the Escrow Requirements in respect of the Refunded Bonds described on Schedule II hereto and, pending such payment, shall be held for the equal and ratable benefit of the holders of such Refunded Bonds.
SECTION 6. The Trustee acknowledges investment in and receipt of the Initial Defeasance Securities described in Schedule I hereto.
SECTION 7. The Successor Agency hereby directs and the Escrow Agent hereby agrees that the Escrow Agent will take all the actions required to be taken by it hereunder, in order to effectuate this Escrow Agreement. The liability of the Escrow Agent for the payment of the Escrow Requirements shall be limited to the application, in accordance with this Escrow Agreement, of the moneys available for such purposes in the Escrow Fund. 200454555.2 3
SECTION 8. The Escrow Agent is hereby instructed to mail, by first-class mail, postage prepaid, notice of defeasance to the owners of the Refunded Bonds substantially in the form of Exhibit A attached hereto on or prior to [______], 2024.
The Escrow Agent is hereby instructed to mail, by first-class mail, postage prepaid, at least twenty (20) but not more than sixty (60) days prior to the Redemption Date, notice of redemption to the owners of the Refunded Bonds containing the information prescribed in Section
2.3(i) of the Indenture, substantially in the form of Exhibit B attached hereto.
The Escrow Agent is hereby further instructed to post a copy of such notices, when mailed, to (A) the Insurer (as defined in the Indenture), (B) the Securities Depositories (as hereinafter defined) and (C) the Information Services (as hereinafter defined). “Securities Depositories” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041-0099, Attn. Call Notification Department, Fax (212) 855- 7232, or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Successor Agency may designate in a Certificate of the Successor Agency delivered to the Escrow Agent. “Information Services” means the Electronic Municipal Market Access system (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org; or, in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other services providing information with respect to called bonds as the Successor Agency may designate in a certificate of the Successor Agency delivered to the Escrow Agent.
SECTION 9. The Successor Agency irrevocably instructs the Escrow Agent and the Trustee to pay, solely out of amounts on deposit in the Escrow Fund, the Escrow Requirements.
Any amounts remaining in the Escrow Fund following the payment of all Refunded Bonds shall be transferred by the Escrow Agent to or at the direction of the Successor Agency.
SECTION 10. The trust hereby created shall be irrevocable and the holders of the Refunded Bonds shall have an express lien limited to all moneys and securities in the Escrow Fund until paid out, used and applied in accordance with this Escrow Agreement.
SECTION 11. (a) Except as otherwise provided in Section 5 hereof, amounts held in the Escrow Fund under this Escrow Agreement may be invested only in [non-callable direct obligations of the United States of America]. Those obligations described in the preceding sentence are herein referred to as “Defeasance Securities.” (b) Only if and to the extent the Successor Agency so directs, the Escrow Agent shall redeem, transfer or exchange the Initial Defeasance Securities or any Defeasance Securities which are then held as an investment of the Escrow Fund and reinvest the proceeds thereof, together with the other moneys held in such Escrow Fund in Defeasance Securities, and may release to the Successor Agency the excess amount then resulting in the Escrow Fund provided that the Successor Agency delivers to the Escrow Agent the following:
200454555.2 4
(i) an opinion of an independent certified public accountant to the effect that, after such reinvestment the principal amount of Defeasance Securities, together with the interest thereon and other available moneys held in the Escrow Fund, will be sufficient without reinvestment to pay interest on, and the redemption price of, the Refunded Bonds as provided in Section 5 hereof; and
(ii) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause either the Refunded Bonds, or other Bonds issued under the Indenture to be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder in effect on the date of such investment, or otherwise cause the interest on any of such bonds (not designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes, and (b) such reinvestment complies with the Constitution and laws of the State of California and with all relevant documents relating to the issuance of the Refunded Bonds. (c) Subject to Section 5, if, at any time, the Initial Defeasance Securities or other Defeasance Securities then held as an investment of the Escrow Fund mature or payments are made thereon to the Escrow Agent or the Escrow Agent otherwise holds or receives cash in advance of the time same cash is needed to make payment on the Refunded Bonds, such amounts shall be held uninvested unless the Escrow Agent has received written instructions from the Successor Agency directing the investment of such amounts and all of the following requirements have been met:
(i) such moneys shall be invested only in Defeasance Securities that mature not later than the date on which the funds invested therein will be needed to make payments on the Refunded Bonds;
(ii) such moneys shall be invested only in Defeasance Securities that mature in an amount, together with interest thereon, not less than the full amount paid by Escrow Agent to acquire such investments;
(iii) prior to any such reinvestment, the Escrow Agent shall receive from the Successor Agency or the Successor Agency’s financial advisor a certificate to the effect that the investments to be acquired by the Escrow Agent meet the requirements of Subsections 11(c)(i) and 11(c)(ii) above; and
(iv) if the yield on such reinvestment is greater than 0.00% or the reinvestment is being made pursuant to an agreement providing for the purchase of Defeasance Securities at a future time or times, then prior to any such reinvestment, the Successor Agency shall deliver to the Escrow Agent an unqualified opinion of nationally recognized municipal bond counsel to the effect that such reinvestment will not cause either the Refunded Bonds or other Bonds issued under the Indenture to be “arbitrage bonds” within the meaning of Section 148 of the Code, and the regulations thereunder in effect on the date of such investment, or otherwise cause the interest on any of such bonds (not designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes; provided that, if such investment is made pursuant to the terms of an agreement between the Escrow Agent and a supplier of securities which agreement is entered into by the Escrow Agent at the written direction of the Successor Agency 200454555.2 5
and provides for investments to be provided at a future time or times, then the requirement set forth in this Subsection 11(c)(iv) shall be met if the opinion described herein is provided prior to the time the agreement is entered into and relates to all investments made in accordance with the terms of such agreement.
(d) In addition to the requirements and restrictions set forth above in Subsection 11(c), if the Refunded Bonds then carry a rating assigned by a rating agency or agencies on the basis of the security provided by the Escrow Fund, then the Successor Agency shall not direct the Escrow Agent to enter into an agreement providing for the purchase of securities at a future time or times as an investment of the Escrow Fund unless prior to the time the Escrow Agent enters into such agreement, the Successor Agency has been notified by the rating agency or agencies then maintaining such rating or ratings that entering into the agreement will not cause the rating or ratings then assigned to the Refunded Bonds to be reduced or withdrawn.
SECTION 12. This Escrow Agreement is made pursuant to and in furtherance of the Indenture and for the benefit of the Owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered, amended or supplemented without the written consent of all such Owners and the written consent of the Escrow Agent and the Successor Agency; provided, however, that the Successor Agency and the Escrow Agent may, without the consent of, or notice to, such Owners enter into such amendments or supplements as shall not be inconsistent with the terms and provisions of this Escrow Agreement, for any one or more of the following purposes:
(a) to cure an ambiguity or formal defect or omission in this Escrow Agreement;
(b) to grant to, or confer upon, the Escrow Agent for the benefit of the holders of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and
(c) to transfer to the Escrow Agent and make subject to this Escrow Agreement additional funds, securities or properties.
The Escrow Agent shall be entitled to conclusively rely upon an opinion of nationally recognized bond counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification or addition affects the rights of the holders of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section.
If this Escrow Agreement or any provision thereof is severed, amended or revoked the Escrow Agent shall provide written notice of such severance, amendment or revocation to the rating agencies then rating the Refunded Bonds.
SECTION 13. The Escrow Agent shall receive its reasonable fees and expenses as previously agreed to by the Escrow Agent and the Successor Agency and any other reasonable fees and expenses approved by the Successor Agency; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys described 200454555.2 6
in Section 5 for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Agreement.
SECTION 14. All of the terms of the Indenture relating to the making of payments of principal and interest with respect to the applicable Refunded Bonds (including, without limitation, Section 11.10 of the Indenture) and relating to the notices of defeasance are incorporated in this Escrow Agreement as if set forth in full herein. The procedures set forth in the Indenture relating to the resignation and removal of the Trustee thereunder are also incorporated in this Escrow Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.
SECTION 15. Except as provided in Section 5 and Section 11 of this Escrow Agreement, the Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement or to sell, transfer or otherwise dispose of the moneys held hereunder.
SECTION 16. To the extent permitted by law, the Successor Agency hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the Successor Agency or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the acceptance of the funds deposited hereunder and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the Successor Agency shall not be required to indemnify the Escrow Agent against the negligence or, willful misconduct on the part of the Escrow Agent or its employees. In no event shall the Successor Agency or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement and any resignation or removal of the Escrow Agent.
SECTION 17. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the acceptance of the moneys deposited hereunder, the sufficiency of amounts described herein to pay the Refunded Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non- negligent error of the Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Successor Agency, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of amounts described herein to accomplish the refunding of the Refunded Bonds or to the validity of this Escrow Agreement as to the Successor Agency and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the 200454555.2 7
performance of its duties under this Escrow Agreement except for its own negligence, misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may no such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a certificate signed by an officer of the Successor Agency.
The Escrow Agent shall furnish the Successor Agency periodic cash transaction statements which include detail for all investment transactions, if any, effected by the Escrow Agent or brokers selected by the Successor Agency. Upon the Successor Agency’s election, such statements will be delivered via the Escrow Agent’s online service and upon electing such service, paper statements will be provided only upon request. The Successor Agency waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The Successor Agency further understands that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.
None of the provisions of this Escrow Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder. The Escrow Agent shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Escrow Agent and could not have been avoided by exercising due care.
Force majeure shall include acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics, pandemics or other similar occurrences. The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by secured e-mail, facsimile transmission or other similar secured electronic methods, provided, however, that the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Successor Agency elects to give the Escrow Agent e-mail instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent’s understanding of such instructions shall be deemed controlling. The Escrow Agent shall not be liable for any losses, liabilities, damages, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Successor Agency agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties. The Escrow Agent may conclusively rely as to the truth and accuracy of the statements and correctness of any opinions or calculations provided to it in connection with this Escrow Agreement and shall be protected in acting, or refraining from acting, upon any notice, instruction, request, certificate, document, opinion or other writing furnished to the Escrow Agent in connection with this Escrow Agreement and reasonably believed 200454555.2 8
by the Escrow Agent to be signed by the proper party, and it need not investigate any fact or matter stated therein.
SECTION 18. This Escrow Agreement shall terminate upon payment of all Refunded Bonds on the Redemption Date, or upon such later date on which all amounts held in the Escrow Fund have been disbursed as provided herein.
SECTION 19. THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 20. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Successor Agency or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. All the covenants, promises and agreements in this Escrow Agreement contained by or on behalf of the Successor Agency or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.
SECTION 21. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. Each of the parties hereto agrees that the transaction consisting of this Escrow Agreement may be conducted by electronic means. Each party agrees and acknowledges that it is such party’s intent that if such party signs this Escrow Agreement using an electronic signature it is signing, adopting, and accepting this Escrow Agreement and that signing this Escrow Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Escrow Agreement in usable format. 200454555.2
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed by their duly authorized officers as of the date first-above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF CATHEDRAL CITY
By
Chief Financial Officer
COMPUTERSHARE TRUST COMPANY,
N.A., as Escrow Agent and as Trustee
By
Authorized Officer
200454555.2 S-I
SCHEDULE I
INITIAL DEFEASANCE SECURITIES
200454555.2 S-II
SCHEDULE II
ESCROW REQUIREMENTS
200454555.2 A-1
Exhibit A
NOTICE OF DEFEASANCE
200454555.2 B-1
Exhibit B
NOTICE OF REDEMPTION
ESCROW AGREEMENT
by and between
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE
CITY OF CATHEDRAL CITY
and
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee and Escrow Agent
Dated as of [_______] 1, 2024
Successor Agency to the
Redevelopment Agency of the City of Cathedral City
Tax Allocation Housing Revenue Refunding Bonds
Series 2014B
(Merged Redevelopment Project Area)
200454561.2
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of July 1, 2024, by and between
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF CATHEDRAL CITY, a public body corporate and politic, duly organized and existing under the laws of the State of California (the “Successor Agency”) and COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under and by virtue of the laws of the United States of America, as escrow agent and as successor trustee (the “Trustee”) under the Indenture, dated as of October 1, 2014 (the “Indenture”), by and between the Successor Agency and the Trustee;
W I T N E S S E T H:
WHEREAS, the Successor Agency has previously issued its Tax Allocation Housing Revenue Refunding Bonds Series 2014B (Merged Redevelopment Project Area), currently outstanding in the aggregate principal amount of $9,865,000 (the “Series 2014B Bonds”), pursuant to the Indenture; and
WHEREAS, the Successor Agency desires to refund the Series 2014B Bonds maturing on August 1, 2025 through August 1, 2033, inclusive (the “Refunded Bonds”), outstanding in the aggregate principal amount of $9,080,000; and WHEREAS, the Successor Agency has approved the issuance of its Tax Allocation Housing Revenue Refunding Bonds, Series 2024A (Merged Redevelopment Project Area) (the “Series 2024A Bonds”) under the Indenture of Trust, dated as of July 1, 2024, by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., the proceeds of which are to be used in part to effect the full refunding and defeasance of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual premises contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. As used herein, the following terms shall have the following meanings:
“Code” means the Internal Revenue Code of 1986.
“Escrow Agent” means Computershare Trust Company, N.A., as escrow agent hereunder and as trustee under the Indenture, and its successors and assigns, and any other corporation or institution that may at any time be substituted in its place as provided herein. “Escrow Fund” means the fund established and held by the Escrow Agent pursuant to Section 3 hereof.
“Escrow Requirements” has the meaning given in Section 5. “Redemption Date” means [_____], 2024.
200454561.2 2
“Successor Agency” means the Successor Agency to the Redevelopment Agency of the City of Cathedral City, a public body corporate and politic, duly organized and existing under the laws of the State of California, and its successors and assigns.
SECTION 2. The Successor Agency hereby appoints Computershare Trust Company, N.A. as Escrow Agent under this Escrow Agreement for the benefit of the holders of the Refunded Bonds. The Escrow Agent hereby accepts the duties and obligations of Escrow Agent under this Escrow Agreement and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. The applicable and necessary provisions of the Indenture, including particularly the redemption provisions thereof, are incorporated herein by reference. Reference herein to, or citation herein of, any provisions of the Indenture shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein.
SECTION 3. There is created and established with the Escrow Agent a special and irrevocable trust fund designated the “Series 2014B Bonds Escrow Fund” (the “Escrow Fund”), to be held by the Escrow Agent separate and apart from all other funds and accounts, and used only for the purposes and in the manner provided in this Escrow Agreement.
SECTION 4. The Successor Agency herewith deposits, or causes to be deposited, with the Escrow Agent into the Escrow Fund, to be held in irrevocable trust by the Escrow Agent and to be applied solely as provided in this Escrow Agreement, the amount of $[_____] from proceeds of the Series 2024A Bonds. The Escrow Agent acknowledges receipt of the moneys described in this Section.
SECTION 5. The Escrow Agent shall invest such moneys, on the date of receipt thereof, in [non-callable direct obligations of the United States of America] described in Schedule I hereto (the “Initial Defeasance Securities”), and to hold any moneys in the Escrow Fund not invested pursuant to this Section as cash. The moneys set forth in the Escrow Fund when invested in the Initial Defeasance Securities, and giving account to the maturing principal of such Initial Defeasance Securities and investment earnings thereon (excluding reinvestment earnings), are at least equal to an amount sufficient to defease the Refunded Bonds by paying when due the amounts shown in Schedule II hereto (the “Escrow Requirements”). The sufficiency of the moneys to pay the Escrow Requirements has been verified in a report prepared by [______] dated [____], 2024.
Such amounts shall be applied by the Escrow Agent solely to the payment of the Escrow Requirements in respect of the Refunded Bonds described on Schedule II hereto and, pending such payment, shall be held for the equal and ratable benefit of the holders of such Refunded Bonds.
SECTION 6. The Trustee acknowledges investment in and receipt of the Initial Defeasance Securities described in Schedule I hereto.
SECTION 7. The Successor Agency hereby directs and the Escrow Agent hereby agrees that the Escrow Agent will take all the actions required to be taken by it hereunder, in order to effectuate this Escrow Agreement. The liability of the Escrow Agent for the payment of the Escrow Requirements shall be limited to the application, in accordance with this Escrow Agreement, of the moneys available for such purposes in the Escrow Fund. 200454561.2 3
SECTION 8. The Escrow Agent is hereby instructed to mail, by first-class mail, postage prepaid, notice of defeasance to the owners of the Refunded Bonds substantially in the form of Exhibit A attached hereto on or prior to [______], 2024.
The Escrow Agent is hereby instructed to mail, by first-class mail, postage prepaid, at least twenty (20) but not more than sixty (60) days prior to the Redemption Date, notice of redemption to the owners of the Refunded Bonds containing the information prescribed in Section
2.3(i) of the Indenture, substantially in the form of Exhibit B attached hereto.
The Escrow Agent is hereby further instructed to post a copy of such notices, when mailed, to (A) the Insurer (as defined in the Indenture), (B) the Securities Depositories (as hereinafter defined) and (C) the Information Services (as hereinafter defined). “Securities Depositories” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041-0099, Attn. Call Notification Department, Fax (212) 855- 7232, or, in accordance with then-current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Successor Agency may designate in a Certificate of the Successor Agency delivered to the Escrow Agent. “Information Services” means the Electronic Municipal Market Access system (referred to as “EMMA”), a facility of the Municipal Securities Rulemaking Board, at www.emma.msrb.org; or, in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other services providing information with respect to called bonds as the Successor Agency may designate in a certificate of the Successor Agency delivered to the Escrow Agent.
SECTION 9. The Successor Agency irrevocably instructs the Escrow Agent and the Trustee to pay, solely out of amounts on deposit in the Escrow Fund, the Escrow Requirements.
Any amounts remaining in the Escrow Fund following the payment of all Refunded Bonds shall be transferred by the Escrow Agent to or at the direction of the Successor Agency.
SECTION 10. The trust hereby created shall be irrevocable and the holders of the Refunded Bonds shall have an express lien limited to all moneys and securities in the Escrow Fund until paid out, used and applied in accordance with this Escrow Agreement.
SECTION 11. (a) Except as otherwise provided in Section 5 hereof, amounts held in the Escrow Fund under this Escrow Agreement may be invested only in [non-callable direct obligations of the United States of America]. Those obligations described in the preceding sentence are herein referred to as “Defeasance Securities.” (b) Only if and to the extent the Successor Agency so directs, the Escrow Agent shall redeem, transfer or exchange the Initial Defeasance Securities or any Defeasance Securities which are then held as an investment of the Escrow Fund and reinvest the proceeds thereof, together with the other moneys held in such Escrow Fund in Defeasance Securities, and may release to the Successor Agency the excess amount then resulting in the Escrow Fund provided that the Successor Agency delivers to the Escrow Agent the following:
200454561.2 4
(i) an opinion of an independent certified public accountant to the effect that, after such reinvestment the principal amount of Defeasance Securities, together with the interest thereon and other available moneys held in the Escrow Fund, will be sufficient without reinvestment to pay interest on, and the redemption price of, the Refunded Bonds as provided in Section 5 hereof; and
(ii) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such investment will not cause either the Refunded Bonds, or other Bonds issued under the Indenture to be “arbitrage bonds” within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder in effect on the date of such investment, or otherwise cause the interest on any of such bonds (not designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes, and (b) such reinvestment complies with the Constitution and laws of the State of California and with all relevant documents relating to the issuance of the Refunded Bonds. (c) Subject to Section 5, if, at any time, the Initial Defeasance Securities or other Defeasance Securities then held as an investment of the Escrow Fund mature or payments are made thereon to the Escrow Agent or the Escrow Agent otherwise holds or receives cash in advance of the time same cash is needed to make payment on the Refunded Bonds, such amounts shall be held uninvested unless the Escrow Agent has received written instructions from the Successor Agency directing the investment of such amounts and all of the following requirements have been met:
(i) such moneys shall be invested only in Defeasance Securities that mature not later than the date on which the funds invested therein will be needed to make payments on the Refunded Bonds;
(ii) such moneys shall be invested only in Defeasance Securities that mature in an amount, together with interest thereon, not less than the full amount paid by Escrow Agent to acquire such investments;
(iii) prior to any such reinvestment, the Escrow Agent shall receive from the Successor Agency or the Successor Agency’s financial advisor a certificate to the effect that the investments to be acquired by the Escrow Agent meet the requirements of Subsections 11(c)(i) and 11(c)(ii) above; and
(iv) if the yield on such reinvestment is greater than 0.00% or the reinvestment is being made pursuant to an agreement providing for the purchase of Defeasance Securities at a future time or times, then prior to any such reinvestment, the Successor Agency shall deliver to the Escrow Agent an unqualified opinion of nationally recognized municipal bond counsel to the effect that such reinvestment will not cause either the Refunded Bonds or other Bonds issued under the Indenture to be “arbitrage bonds” within the meaning of Section 148 of the Code, and the regulations thereunder in effect on the date of such investment, or otherwise cause the interest on any of such bonds (not designated as taxable bonds) to be included in the gross income of the recipients thereof for federal income tax purposes; provided that, if such investment is made pursuant to the terms of an agreement between the Escrow Agent and a supplier of securities which agreement is entered into by the Escrow Agent at the written direction of the Successor Agency 200454561.2 5
and provides for investments to be provided at a future time or times, then the requirement set forth in this Subsection 11(c)(iv) shall be met if the opinion described herein is provided prior to the time the agreement is entered into and relates to all investments made in accordance with the terms of such agreement.
(d) In addition to the requirements and restrictions set forth above in Subsection 11(c), if the Refunded Bonds then carry a rating assigned by a rating agency or agencies on the basis of the security provided by the Escrow Fund, then the Successor Agency shall not direct the Escrow Agent to enter into an agreement providing for the purchase of securities at a future time or times as an investment of the Escrow Fund unless prior to the time the Escrow Agent enters into such agreement, the Successor Agency has been notified by the rating agency or agencies then maintaining such rating or ratings that entering into the agreement will not cause the rating or ratings then assigned to the Refunded Bonds to be reduced or withdrawn.
SECTION 12. This Escrow Agreement is made pursuant to and in furtherance of the Indenture and for the benefit of the Owners from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered, amended or supplemented without the written consent of all such Owners and the written consent of the Escrow Agent and the Successor Agency; provided, however, that the Successor Agency and the Escrow Agent may, without the consent of, or notice to, such Owners enter into such amendments or supplements as shall not be inconsistent with the terms and provisions of this Escrow Agreement, for any one or more of the following purposes:
(a) to cure an ambiguity or formal defect or omission in this Escrow Agreement;
(b) to grant to, or confer upon, the Escrow Agent for the benefit of the holders of the Refunded Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and
(c) to transfer to the Escrow Agent and make subject to this Escrow Agreement additional funds, securities or properties.
The Escrow Agent shall be entitled to conclusively rely upon an opinion of nationally recognized bond counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification or addition affects the rights of the holders of the Refunded Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section.
If this Escrow Agreement or any provision thereof is severed, amended or revoked the Escrow Agent shall provide written notice of such severance, amendment or revocation to the rating agencies then rating the Refunded Bonds.
SECTION 13. The Escrow Agent shall receive its reasonable fees and expenses as previously agreed to by the Escrow Agent and the Successor Agency and any other reasonable fees and expenses approved by the Successor Agency; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys described 200454561.2 6
in Section 5 for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Agreement.
SECTION 14. All of the terms of the Indenture relating to the making of payments of principal and interest with respect to the applicable Refunded Bonds (including, without limitation, Section 11.10 of the Indenture) and relating to the notices of defeasance are incorporated in this Escrow Agreement as if set forth in full herein. The procedures set forth in the Indenture relating to the resignation and removal of the Trustee thereunder are also incorporated in this Escrow Agreement as if set forth in full herein and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.
SECTION 15. Except as provided in Section 5 and Section 11 of this Escrow Agreement, the Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement or to sell, transfer or otherwise dispose of the moneys held hereunder.
SECTION 16. To the extent permitted by law, the Successor Agency hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the Successor Agency or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the acceptance of the funds deposited hereunder and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, that the Successor Agency shall not be required to indemnify the Escrow Agent against the negligence or, willful misconduct on the part of the Escrow Agent or its employees. In no event shall the Successor Agency or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement and any resignation or removal of the Escrow Agent.
SECTION 17. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the acceptance of the moneys deposited hereunder, the sufficiency of amounts described herein to pay the Refunded Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non-negligent act, non-negligent omission or non- negligent error of the Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the Successor Agency, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of amounts described herein to accomplish the refunding of the Refunded Bonds or to the validity of this Escrow Agreement as to the Successor Agency and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the 200454561.2 7
performance of its duties under this Escrow Agreement except for its own negligence, misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may no such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter may be deemed to be conclusively established by a certificate signed by an officer of the Successor Agency.
The Escrow Agent shall furnish the Successor Agency periodic cash transaction statements which include detail for all investment transactions, if any, effected by the Escrow Agent or brokers selected by the Successor Agency. Upon the Successor Agency’s election, such statements will be delivered via the Escrow Agent’s online service and upon electing such service, paper statements will be provided only upon request. The Successor Agency waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The Successor Agency further understands that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.
None of the provisions of this Escrow Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise, in the performance of any of its duties hereunder. The Escrow Agent shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Escrow Agent and could not have been avoided by exercising due care.
Force majeure shall include acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics, pandemics or other similar occurrences. The Escrow Agent agrees to accept and act upon instructions or directions pursuant to this Escrow Agreement sent by secured e-mail, facsimile transmission or other similar secured electronic methods, provided, however, that the Escrow Agent shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Successor Agency elects to give the Escrow Agent e-mail instructions (or instructions by a similar electronic method) and the Escrow Agent in its discretion elects to act upon such instructions, the Escrow Agent’s understanding of such instructions shall be deemed controlling. The Escrow Agent shall not be liable for any losses, liabilities, damages, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Successor Agency agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized instructions, and the risk of interception and misuse by third parties. The Escrow Agent may conclusively rely as to the truth and accuracy of the statements and correctness of any opinions or calculations provided to it in connection with this Escrow Agreement and shall be protected in acting, or refraining from acting, upon any notice, instruction, request, certificate, document, opinion or other writing furnished to the Escrow Agent in connection with this Escrow Agreement and reasonably believed 200454561.2 8
by the Escrow Agent to be signed by the proper party, and it need not investigate any fact or matter stated therein.
SECTION 18. This Escrow Agreement shall terminate upon payment of all Refunded Bonds on the Redemption Date, or upon such later date on which all amounts held in the Escrow Fund have been disbursed as provided herein.
SECTION 19. THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 20. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Successor Agency or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. All the covenants, promises and agreements in this Escrow Agreement contained by or on behalf of the Successor Agency or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.
SECTION 21. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument. Each of the parties hereto agrees that the transaction consisting of this Escrow Agreement may be conducted by electronic means. Each party agrees and acknowledges that it is such party’s intent that if such party signs this Escrow Agreement using an electronic signature it is signing, adopting, and accepting this Escrow Agreement and that signing this Escrow Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Escrow Agreement in usable format. 200454561.2
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed by their duly authorized officers as of the date first-above written.
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY
OF CATHEDRAL CITY
By
Chief Financial Officer
COMPUTERSHARE TRUST COMPANY,
N.A., as Escrow Agent and as Trustee
By
Authorized Officer
200454561.2 S-I
SCHEDULE I
INITIAL DEFEASANCE SECURITIES
200454561.2 S-II
SCHEDULE II
ESCROW REQUIREMENTS
200454561.2 A-1
Exhibit A
NOTICE OF DEFEASANCE
200454561.2 B-1
Exhibit B
NOTICE OF REDEMPTION