OH&S DRAFT
10/30/23
4150-6388-6156.6
$[PAR AMOUNT]
RIALTO PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, 2023 SERIES A
(POLICE STATION PROJECT)
BOND PURCHASE AGREEMENT
December __, 2023
Rialto Public Financing Authority
c/o City of Rialto
150 South Palm Avenue
Rialto, California 92376
City of Rialto
150 South Palm Avenue
Rialto, California 92376
Ladies and Gentlemen:
The undersigned, Citigroup Global Markets Inc. (the “ Underwriter”), hereby offers to enter into this Bond Purchase Agreement (this “Purchase Agre ement”) with you, the Rialto Public Financing Authority (the “Authority”), a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “State”) and the City of Rialto , a charter city duly organized and existing under the Constitution and laws of the State of California (the “City”) , for the purchase by the Underwriter of $ [PAR AMOUNT] aggregate principal amount of the Rialto Public Financing Authority Lease Revenue Bonds, 2023 Series A (Police Station Project ) (the “Series 2023 Bonds ”), which will be issued pursu ant to Resolution No. __, adopted by the Authority on November 14, 20 23 (the “Authority Resolution”) , a resolution of the C ity adopted on November 14 , 20 23 (the “ City Resolution”) and under an Indenture, dated as of December 1, 2023 (the “Indenture”), by a nd between the Authority and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) . Capitalized terms used herein not otherwise defined herein shall have the meanings set forth in the Official Statement (hereinafter defined).
This offer is made subject to acceptance by the Authority and the City prior to 11:59 p.m., California time, on the date hereof. If this offer is not so accepted, this offer will be subject to withdrawal by the Underwriter upon notice delivered to the Aut hority and the City at any time prior to acceptance. Upon acceptance, this Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon the Authority, the City and the Underwriter.
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1. Purchase, Sale and Delivery of the Series 2023 Bonds ; Establishment of Issue Price.
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase and the Authority agrees to sell to the Underwriter all (but not less than all) of the Series 2023 Bonds .
The Underwriter shall pay to the Authority as the purchase price for the Series 2023 Bonds $______________, which represents the principal amount of the Series 2023 Bonds of $[PAR AMOUNT], [plus/less] a [premium/discount] of $ _____________, and less an underwriting discount of $__________.
Pursuant to the Site and Facility Lease, dated as of December 1, 2023 (the “Site Lease”), by and between the City and the Authority, the City will lease to the Authority certain real property of the City and the improvements thereon (together, the “Leased Property”). Pursuant to the Lease Agreement, dated as of December 1, 2023 (the “Lease”), by and between the Authority and the City, the Authority will sublease the Leased Property to the City. The Series 2023 Bonds are payable solely from, and secured solely by, revenues pledged under the Indenture, consisting primarily of certain rental payments (the “ Base Rental Payments”) made by the C ity to the Trustee, as assignee of the Authority, pursuant to th e Lease. As security for the payment of the Series 2023 Bonds, the Authority will assign to the Trustee pursuant to the Assignment Agreement, dated as of December 1, 2023 (the “Assignment Agreement”) , by and between the Authority and the Trustee, certain of the Authority’s rights under the Lease and under the Site Lease, including the right to receive Base Rental Payments . Pursuant to the Lease the City will consent to such assignments.
The Series 2023 Bonds shall be substantially in the form described in, and shall be issued and secured under and pursuant to, the Indenture. The Series 2023 Bonds shall be dated the date of their delivery and mature on the dates and in the amounts as set forth in Exhibit A hereto.
Interest on the Series 2023 Bonds shall be payable at the per annum rates set forth in Exhibit A hereto and as otherwise described in the Official Statement. The Series 2023 Bonds will be subject to redemption as set forth in Exhibit A hereto and as otherwise described in the Official Statement.
The Underwriter has reviewed the information in the Preliminary Official Statement (hereinafter defined) and the Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the fa cts and circumstances of this transaction, but the Underwriter has not guaranteed the accuracy or completeness of such information.
The Series 2023 Bonds are being issued by the Authority to provide funds to: (i) finance the acquisition, construction and equipping of a new police station facility in the City, (ii) [fund a debt service reserve for the Series 2023 Bonds,] [(iii)] fund a portion of the interest to accrue on the Series 2023 Bonds, and (iii) pay certain costs of issuance of the Series 2023 Bonds.
The Base Rental Payments to be made by the City pursuant to the Lease are payable by the City to the Authority from lawful money of the United States of America for the right to use and possession by the City of the Leased Property. The C ity will covenant under the Lease that,
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subject to the abatement provisions in the Lease, it will take such action as may be necessary to include the Base Rental Payments and Additional Rental Payments in its annual budgets and to make the necessary annual appropriations therefor.
The C ity will undertake, pursuant to a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”), to be executed and delivered by the C ity on the Closing Date (as defined herein), to provide certain annual financial information and notices of the occurrence of certain events. A form of the Continuing Disclosure Agreement is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.
The Indenture, the Assignment Agreement, the Lease, the Site Lease, the Development Agreement and the Continuing Disclosure Agreement shall be collectively referred to herein as the “Financing Documents.”
The Authority and the City hereby ratify, confirm and approve the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement of th e Authority dated ______ __, 2023, relating to the Series 2023 Bonds (which, together with the cover page and all appendices thereto, is referred to herein as the “Prelim inary Official Statement”) in printed or electronic form . The Preliminary Official Statement has been “deemed final” as of its date for purposes of subsection (b)(1) of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 , as amended (“Rule 15c2 -12”), except for information permitted to be omitted therefrom by Rule 15c2 -12 as set forth in a Certificate of the City as to the Preliminary Official Statement, dated ______ __, 2023 and delivered to the Underwriter on such date.
The Authority and the City hereby agree to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof and in sufficient time to accompany any confirmations requesting payments sent to purchasers, provided such delivery is no later than one business day prior to the Closing Date , the final official statement (including all information permitted to be omitted by Rule 15c2 -12 and any amendments or supplements to such official statement as have been approved by the Authority and the City, in accordance with Section 2(i) and 3(j) hereof) and with the prior written consent of the Underwriter, which consent shall not be unreasonably withheld (the “Official Statement”) in the designat ed format to enable the Underwriter to comply with Rule 15c2 -12 and the rules of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board (“MSRB”). The Authority and the City hereby authorize and approve of the use and distribut ion by the Underwriter of the Official Statement in printed or electronic form in connection with the offer and sale of the Series 2023 Bonds.
As used in this Purchase Agreement, the term “End of the Underwriting Period” for the Series 2023 Bonds shall mean the earlier of (i) the Closing Date or (ii) the date on which the End of the Underwriting Period for the Series 2023 Bonds has occurred under Rule 15c2 -12, as specified as such in a written notice from the Underwriter stating the date which is the End of the Underwriting Period.
(b) At 8:00 a.m., Ca lifornia time, on December __, 2023, or at such other time or on such other business day as mutually agreed upon by the Authority, the City and the Underwriter (the “Closing Date”) , the Authority will , subject to the terms and conditions hereof, deliver or
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cause to be delivered to the Underwriter through the book-entry system of The Depository Trust Company (“DTC”), the Series 2023 Bonds, duly executed, and at such place or in such manner as mutually agree d upon by Authority, the City and the Underwriter, the ot her documents required to be delivered by the Authority and the City pursuant to this Purchase Agreement .
Subject to the terms and conditions hereof the Underwriter will accept such delivery through the facilities of DTC and such documents and pay the purchase price of the Series 2023 Bonds as set forth in subparagraph (a) above by wire transfer to an account identified by the Authority at least two business days prior to the Closing Date in immediately available funds (such delivery and payment being herein referred to as the “Closing”). The Series 2023 Bonds shall be promptly credited to the account of the Underwriter at DTC after such payment of the purchase price.
The Series 2023 Bonds shall be registered in the name of Cede & Co., as nominee of DTC, in the form of a separate single fully registered bond for each maturity of such series bearing a particular CUSIP identification number. The Authority acknowledges tha t the services of DTC will be used initially by the Underwriter to permit the issuance of the Series 2023 Bonds in book -entry form and agrees to cooperate fully with the Underwriter in employing such services.
(c) The Underwriter agrees to make a n initial bona fide public offering of the Series 2023 Bonds at the offering prices or yields set forth in Exhibit A hereto. Following the initial public offering of the Series 2023 Bonds and s ubject to the limitations in the immediately following paragraph (d), the offering prices may be changed from time to time by the Underwriter. The Authority and the C ity, as applicable, hereby authorize the Underwriter to use the forms or copies , in each case, in physical or electronic form, of the Official Statement, the Financing Documents and all other documents referred to in the Official Statement and the information contained in each of the foregoing in connection with the public offering and sale of the Series 2023 Bonds.
(d) [Subject to review and revision by Bond Counsel] The Underwriter agrees to assist the Authority in establishing the issue price of the Series 2023 Bonds and shall execute and deliver to the Authority at Closing an “issue price” certificate substantially in the for m attached hereto as Exhibit B, with such m odifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Series 2023 Bonds . Except for th e maturities forth in Schedule I attached hereto, if any, the Authority will treat the first price at which 10% of each maturity of the Series 2023 Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity wi ll be subject to the 10% test).
With respect to the maturities of the Series 2023 Bonds for which the 10% test has not been satisfied set forth on Sc hedule I, the Underwriter, agrees that it will neither offer nor sell unsold Series 2023 Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or
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(2) the date on which the Underwriter has sold at least 10% of that maturity of the Series 2023 Bonds to the public at a price that is no higher than the i nitial offering price to the public (the “hold-the-offering-price rule”).
The Underwriter shall promptly advise the Authority or the Authority’s municipal advisor when it has sold 10% of that maturity of the Series 2023 Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date.
The Underwriter acknowledges that sales of any Series 2023 Bonds to any person that is a related party t o the Underwriter shall not constitute sales to the public for purposes of this paragraph (d).
2. Representations, Warranties and Agreements of the Authority . The Authority hereby represents, warrants and agrees with the Underwriter as follows:
(a) The Authority is and will be on the Closing Date a joint exercise of powers agency duly organized and validly existing pursuant to the laws of the State with the full power and authority to conduct its business, to adopt the Authority Resolution, to issue the Series 2023 Bonds for the purposes described in the Official Statement and to execute and deliver the Official Statement and enter into this Purchase Agreement and the Financing Documents to be executed by it, and to consummate the transactions contemplated hereby and thereby; (b) The Board of Directors of the Authority has duly adopted the Authority Resolution, and the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained herein and in the Financing Documents to be executed by it and the consummation by it of all other transactions of the Authority contemplated by the Official Statement and this Purchase Agreement; (c) The Series 2023 Bonds , this Purchase Agreement and the Fina ncing Documents to be executed by the Authority, when executed and delivered by the Authority and assuming due execution and delivery by all other parties thereto, will constitute the valid and binding obligations of the Authority, enforceable in accordanc e with their respective terms except as the enforceability may be subject to applicable limitations of bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or equitable principles affecting the enforcement of creditors’ ri ghts. The enforcement of this Purchase Agreement , the Financing Documents and the Series 2023 Bonds are subject to the effect of the general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State; (d) The execution and delivery by the Authority of the Series 2023 Bonds , the Financing Documents to be executed by it, this Purchase Agreement and the Official Statement, and compliance with the provisions on the Aut hority’s part contained herein and therein, will not, as of the date hereof or as of the Closing Date, conflict with or constitute a material breach of or material default under any State or federal law, administrative regulation, judgment, decree,
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loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party, nor will, as of the date hereof or as of the Closing Date, any such execution, delivery or compliance result in the creation or imposition of any l ien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such State or federal law, administrative regulation, judgment, decree, loan agreement, indenture, b ond, note, resolution, agreement or other instrument, except as provided in the Financing Documents;
(e) The Authority is not in material breach of or in material default under any existing law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the pass age of time or the giving of notice or both, would constitute a material default under any such instrument; (f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any State or federal court, public board or body pending or, to the knowledge of the Authority, threatened against the Authority (i) to restrain or enjoin the issuance, sale or delivery of any of the Series 2023 Bonds , or (ii) in any way contesting or affecting (a) the validity or enforceability of the Series 2023 Bonds , this Purchase Agreement, or the Financing Documents to which the Authority is a party, (b) the existence or powers of the Authority, (c) the transactions contemplated hereby or by the Official Statement or any agreement or instrument to which the Authority is a party or that is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement, or (d) the completeness or accuracy of the Official Statement, or (e) the tax -exempt status of the interest on the Series 2023 Bonds;
(g) No consent, approval, authorization, order, filing, registration, qualification, election or referendum, of or by any State or federal court or State or federal governmental agency or public body is required by the Aut hority in connection with the issuance, delivery or sale of the Series 2023 Bonds or the consummation of the other transactions effected or contemplated herein or hereby, except for such actions as have been taken or obtained and such as may be necessary t o qualify the Series 2023 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions of the United States of America;
(h) As of the date thereof and as of the date hereof , the information and statements contained in the Preliminary Official Statement under the caption “THE AUTHORITY” and under the caption “LITIGATION” with respect to the Authority were and are true and correct, and the Preliminary Official Statement with respect to such information under these captions did not and does 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 the light of the circumstances under which they were made, not misleading, except for info rmation permitted to be omitted therefrom by Rule 15c2 -12; and the Official Statement , as of its date, with respect to such information under these captions does not and will not on the Closing Date contain any untrue statement of a material fact or omit t o state a material fact required to be stated therein or
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necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(i) If between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Series 2023 Bonds, an event occurs which might or would cause the information contained in the Official Statement as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was made, not misleading, the Authority will notify the Underwriter, and, if in the opinion of the Authority or the Underwrit er, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will forthwith prepare and furnish to the Underwriter (at the expense of the City) (i) in the electronic format designated by the MSRB an amendment of or supplement to the Official Statement (in form and substance reasonably satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain any untrue statement of a material fact or omi t to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (ii) if such event takes place subsequent to the Closing, such certificates, instruments and oth er documents as the Underwriter may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official Statement. For the purposes of this subsection, between the date hereof and the date which is 25 days after the End of th e Underwriting Period for the Series 2023 Bonds , the Authority will furnish such information as the Underwriter may from time-to-time reasonably request; (j) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may request in order to qualify the Series 2023 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 a s the Underwriter may designate and will use its best efforts to continue such qualification in effect so long as required for distribution of the Series 2023 Bonds, and consents to and ratifies the use of the Official Statement by the Underwriter in obtai ning such qualifications; provided, however, that in no event shall the Authority be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject or any action to qualify to do business in any jurisdiction; and (k) Any certificate signed by an authorized officer of the Authority delivered to the Underwriter shall be deemed a representation and warranty by the Authority to the Underwriter as to the statements made therein.
3. Representations, Warranties and Agreements of the City. The City hereby represents, warrants and agrees with the Underwriter as follows:
(a) The City is and will be on the Closing Date a charter city duly organized and existing under the Constitution and laws of the State with full power and authority to conduct its business, to adopt the City Resolution, and to execute and deliver the Official Statement and enter into this Purchase Agre ement and the Financing Documents to be executed by it, and to consummate the transactions contemplated hereby and thereby;
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(b) The City Council of the City of Rialto has duly adopted the City Resolution, and the City has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained herein and in the Financing Documents to be executed by it and the consummation by it of all other transactions of the City contemplated by the Official Statement, the Financing Documents and this Purchase Agreement; (c) This Purchase Agreement and the Financing Documents to be executed by the City and the other documents contemplated hereby and by the Official Statement to which the City is a party, when executed and delivered by the City and assuming due execution and delivery by all other parties thereto, will constitute the valid and binding obligations of the City enforceable in accordance with their respective terms except as the enforceability may be subject to applicable limitations of bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium or equitable principles affecting the enforcement of creditors’ rights.
The enforcement of this Purchase Agreement and the Financing Documents are subject to the effect of the general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public entities in the State;
(d) The execution and delivery by the City of the Financing Documents to be executed by it and this Purchase Agreement and the Official Statement, and compliance with the provisions on the City’s part contained herein and therein, will not, as of the date hereof or as of the Closing Date, conflict with or constitut e a material breach of or material default under any State or federal law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party, nor will any such execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulati on, judgment, decree, loan agreement, indenture, bond, note resolution, agreement or other instrument, except as provided in the Financing Documents;
(e) The City is not in material breach of or in material default under any existing law or administrative regu lation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute a material default under any such instrument and which would adversely affect the Financing Documents or the payment of Base Rental Payments;
(f) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any State or federal court, public board or body pending or, to the knowledge of the City, threatened against the City (i) to restrain or enjoin the issuance, sale or del ivery of any of the Series 2023 Bonds or the payment of Base Rental Payments under the Lease, or (ii) in any way contesting or affecting (a) the validity or enforceability of the Series 2023 Bonds , this Purchase Agreement, or the Financing Documents to which the City is a party, (b) the existence or powers of the City, (c) the transactions contem plated hereby or by the Official Statement or
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any agreement or instrument to which the City is a party or that is used or contemplated for use in the consummation of the transactions contemplated hereby or by the Official Statement, (d) the completeness or accuracy of the Official Statement, or (e) the tax -exempt status of the interest on the Series 2023 Bonds;
(g) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may request in order to qualify the Series 2023 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 and will use its bes t efforts to continue such qualification in effect so long as required for distribution of the Series 2023 Bonds, and consents to and ratifies the use of the Official Statement by the Underwriter in obtaining such qualifications; provided, however, that in no event shall the City be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject or any action to qualify to do business in any jurisdiction;
(h) As of the date ther eof and as of the date hereof , the information and statements contained in the Preliminary Official Statement (excluding information provided by the Underwriter or relating to DTC and the book -entry system or CUSIP numbers or under the caption “THE AUTHORI TY” and under the caption “LITIGATION ” with respect to the Authority (collectively, the “Excluded Information”) and as to which no representation is made) did 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 the light of the circumstances under which they were made, not misleading, except for information permitted to be omitted therefrom by Rule 15c2 -12; and the information and statements contai ned in the Official Statement as of its date (other than the Excluded Information as to which no representation is made) does not and will not on the Closing Date 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 the light of the circumstances under which they were made, not misleading; (i) No consent, approval, authorization, order, filing, registration, qualification, election or referendum, of or by a ny State or federal court or State or federal governmental agency or public body is required by the City in connection with the issuance, delivery or sale of the Series 2023 Bonds or the consummation of the other transactions effected or contemplated herein or hereby, except for such as have been take or obtained and such actions as may be necessary to qualify the Series 2023 Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions of the United States of America; (j) If between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Series 2023 Bonds, an event occurs which might or would cause the information contained in the Official Statement as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was made, not misleading, th e City will notify the Authority and the Underwriter, and, if in the opinion of the Authority or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will forthwith prepare and furnish to the Underwriter (at the expense of the City) (i) in the electronic format designated by
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the MSRB an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain any untrue statement of a material fact or omit to state a 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; and (ii) if such event takes place subsequent to the Closing, such certificates, instruments and other documents as the Underwriter may deem necessary to evidence the truth and accuracy of such supplemen t or amendment to the Official Statement. For the purposes of this subsection, between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Series 2023 Bonds , the City will furnish such information with respect to itself as the Underwriter may from time to time reasonably request;
(k) On the Closing Date, each of the representations and certifications of the City in the Financing Documents to be executed by it and in this Purchase Agreement will be true, accurate and complete;
(l) Any certificate signed by an authorized officer of the City delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein;
(m) The financial statements of the C ity set forth in APPENDIX B to the Official Statement fairly present the financial position of the C ity as of the dates indicated and the results of its operations, for the periods therein specified, and, except as may be noted therein or in the Official Statement, are in conformity with generally accepted accounting principles applicable to the City, and, except as disclosed in the Official Statement, there has been no material adverse change in the financial condition of the City since the date thereof; (n) [The exceptions set forth in the preliminary title report with respect to the Leased Property, subject to permitted encumbrances, do not, and the exceptions set forth in the policy or policies of title insurance will not, materially impair the value of the Leased Proper ty, the existing facilities thereon or the sites thereof, nor materially impair the C ity’s enjoyment of the same for any purposes for which they are, or may reasonably be expected to be, used;] (o) The Official Statement does not omit reference to any instance during the last five years in which the C ity failed to comply in all material respects with any of its continuing disclosure undertakings under Rule 15c2-12; and
(p) Between the date of this Purchase Agreement and the Closing Date, the City will not, without the prior written consent of the Underwriter, offer or issue any bonds, notes or other obligations for borrowed money.
4. Conditions to the Obligations of the Underwriter.
The Underwriter hereby enters into this Purchase Agreement in reliance upon the representations and warranties of the Authority and the City contained herein and the representations and warranties of the Authority and the City to be contained in the documents and instruments to be delivered at the Closing and upo n the performance by the Authority and
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the City of their obligations both on and as of the date here of and as of the Closing Date.
Accordingly, the Underwriter’s obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for th e Series 2023 Bonds shall be subject, at the option of the Underwriter, to the accuracy of the representations and warranties of the Authority and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy of the statements of the officers and other officials of the City and the Authority made in any certificate or other document furnished pursuant to the provisions hereof, to the performance by the Authority and the City of their respective obligations to be performed hereu nder and under the Financing Documents at or prior to the Closing Date, and also shall be subject to the following additional conditions:
(a) The Underwriter shall receive, within seven business days of the date hereof, copies of the Official Statement (includ ing all information previously permitted to have been omitted by Rule 15c2 -12 and any amendments or supplements as have been approved by the Underwriter), in the designated format to enable the Underwriter to comply with Rule 15c2 -12 and the rules of the Securities and Exchange Commission and the MSRB; (b) At the Closing, the Financing 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 deli vered by the Authority and the City, all in substantially the forms heretofore submitted to the Underwriter, with only such changes as shall have been agreed to in writing 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 Board of the Authority and the City Council of the City of Rialto as, in the opinion of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby; (c) The Underwriter shall have the right to terminate this Purchase Agreement and their obligation to purchase the Series 2023 Bonds by notification to the Authority and City if, after the execution and delivery hereof and prior to the Closing:
(1) an event sh all occur which makes untrue or incorrect in any material respect, as of the time of such event, any statement or information contained in the Official Statement or which is not reflected in the Official Statement but should be reflected therein in order to make the statements contained therein in the light of the circumstances under which they were made not misleading in any material respect and, in either such event, (a) the Authority refuses to permit the Official Statement to be supplemented to supply s uch statement or information in a manner satisfactory to the Underwriter or (b) the effect of the Official Statement as so supplemented is, in the judgment of the Underwriter, to materially adversely affect the market price or marketability of the Series 2 023 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of the Series 2023 Bonds; or
(2) legislation shall be introduced in, enacted by, reported out of committee, or recommended for passage by State, either House of the Congress of the United States of America, or recommended to the Congress or otherwise endorsed for passage (by press release , other form of notice or otherwise) by the President of the United States of America, the Treasury Department of the United States of America , the Internal Revenue Service or the Chairman or
Error! Unknown document property name.
12 4150-6388-6156.6
ranking minority member of the Committee on Finance of the Unite d States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation is proposed for consideration by either such committee by any member thereof or presented as an option for consideration by either such committ ee by the staff or such committee or by the staff of the Joint Committee on Taxation of the Congress of the United States of America, or a bill to amend the Internal Revenue Code (which, if enacted, would be effective as of a date prior to the Closing) sha ll be filed in either House of Congress, or a decision by a court of competent jurisdiction shall be rendered, or a regulation or filing shall be issued or proposed by or on behalf of the Department of the Treasury or the Internal Revenue Service of the United States of America, or other agency of the federal government, or a release or official statement shall be issued by the President, the Department of the Treasury or the Internal Revenue Service of the United States of America, in any such case with respect to or affecting (directly or indirectly) the federal or state taxation of interest received on obligations of the general character of the Series 2023 Bonds which, in the judgement of the Underwriter, materially adversely affects the market price or marketability of the Series 2023 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), by the Underwriter of the Series 2023 Bonds; or
(3) a stop order, ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering, sale or distribution of obligations of the general character of the Series 2023 Bonds is in violation or would be in violation of any provisions of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 193 4, as amended (the “Exchange Act”) or the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); or (4) legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competen t jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the sub ject matter, to the effect that obligations of the general character of the Series 2023 Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act , or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act , or that the issuance, offering, or sale of obligations of the general character of the Series 2023 Bonds , including any or all underlying arrangements, as contemplated hereby o r by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect;
(5) there shall have occurred (1) any outbreak or escalation of hostilities or the declaration by the United States of America of a national or international emergency or war ; (2) any other calamity or crisis in the financial markets of the United States or elsewhere (or any escalation thereof); which, in the judgment of the Underwriter, materially adversely affect s the market price or marketability of the Series 2023 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields) of the Series 2023 Bonds; or
Error! Unknown document property name.
13 4150-6388-6156.6
(6) there shall have occurred a general suspension of trading, minimum or maximum prices for trading shall have been fixed and be in force or maximum ranges or prices for securities shall have been required on the New York Stock Exchange or other national stoc k exchange whether by virtue of a determination by that Exchange or by order of the Securities and Exchange Commission or any other governmental agency having jurisdiction or any national securities exchange shall have: (i) imposed additional material rest rictions not in force as of the date hereof with respect to trading in securities generally, or to the Series 2023 Bonds or similar obligations; or (ii) materially increased restrictions now in force with respect to the extension of credit by or the charge to the net capital requirements of underwriters or broker-dealers which, in the judgment of the Underwriter, materially adversely affects the market price or marketability of the Series 2023 Bonds or the ability of the Underwriter to enforce contracts fo r the sale, at the contemplated offering prices (or yields), of the Series 2023 Bonds; or (7) a general banking moratorium shall have been declared by federal or New York or State authorities or a major financial crisis or a material disruption in commercial banking or securities settlement or clearances services shall have occurred which, in the judgment of the Underwriter, materially adversely affects the market price or the marketability for the Series 2023 Bonds or the ability of the Underwriter to enforce contracts for the sale, at the offering prices (or yields), of the Series 2023 Bonds; or (8) (i) a downgrading or suspension of any rating (without regard to credit enhancement) by Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”), or Fitch Ratings (“Fitch”) of any debt securities issued by the City, or (ii) there shall have been any official statement as to a possible downgrading (such as being placed on “credit watch” or “negative outlook” or any similar qualification) of any rating by M oody’s, S&P or Fitch of any debt securities issued by the City, including the Series 2023 Bonds which, in the judgment of the Underwriter, materially adversely affects the market price or the marketability for the Series 2023 Bonds or the ability of the Un derwriter to enforce contracts for the sale, at the offering prices (or yields), of the Series 2023 Bonds;
(9) the commencement of any action, suit or proceeding described in Section 2(f) or Section 3(f) of this Purchase Agreement; or
(10) except as disclosed in t he or contemplated by the Official Statement, a material adverse change in the affairs of the Authority or the City. (d) At or prior to the Closing Date, the Underwriter shall have received the following documents, in each case satisfactory in form and substance to the Underwriter:
(1) A copy of each of the Financing Documents, each duly executed and delivered by the respective parties thereto;
(2) The unqualified approving opinion, dated the Closing Date and addressed to the Authority and the City, of Bond Counsel in substantially the form attached to the Official Statement as APPENDIX E, and a letter of such counsel, dated the Closing Date and addressed to the Underwriter to the effect that such opinion may be relied upon by the Underwriter to the same extent as if such opinion were addressed to them;
Error! Unknown document property name.
14 4150-6388-6156.6
(3) The supplemental opinion of Bond Counsel , dated the Closing Date and addressed to the Underwriter, substantially to the effect that (i) this Purchase Agreement has been duly executed and delive red by the Authority and the City and is a valid, binding and enforceable obligation of the Authority and the City, (ii) the Series 2023 Bonds are not subject to the registration requirements of the Securities Act, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act; and (iii) the statements contained in the Preliminary Official Statement and in the Official Statement under the captions “INTRODUCTION – Security for the 2023A Bonds ,” “DESCRIPTION OF THE 2023A BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE 2023A BONDS,” “LEASED PROPERTY,” “TAX MATTERS,” APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS,” excluding any material that may be treated as included under such captions by cross reference or r eference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Series 2023 Bonds, the Indenture, the Assignment Agreement, the Lease, the Site Lease and Bond Counsel’s opinion concerning certain federal tax matters relating to the Series 2023 Bonds, are accurate in all material respects;
(4) [reserved];
(5) The opinion of counsel to the Trustee, dated the Closing Date and addressed to the Underwriter, the Authority and the City to the effect that: (i) the Trustee has been duly organized and is validly existing in good standing as a national banking association under the laws of the United States of America with trust powers and full corporate power to undertake the trust of the Indenture; (ii) the Trustee has duly authorized, executed and delivered the Indenture and the Assignment Agreement and by all proper corporate action has authorized the acceptance of the duties and obligations of the Trustee under the Indenture and the Assignment Agreement; (iii) the Trustee has duly authenticated the Series 2023 Bonds, and (iv) the Indenture and the Assignment Agreement constitute legally valid and binding agreement s of the Trustee, enforceable against the Trustee in accordance with their respective terms; (6) The opinion of counsel to the City, dated the Closing Date and addressed to the Underwriter, to the effect that (i) the City is a charter city , validly existing under the Constitution and laws of the State; (ii) the City Resolution authorizing the execution and delivery of the Financing Documents to which the City is a party and this Purchase Agreement, has been duly adopted at a meeting of the City Council of the City of Rialto which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and has not been amended, modified or rescinded; (iii) the C ity has full legal right, power and authority to enter into and carry out the transactions contemplated of it by the Financing Documents to which the City is a party and this Purchase Contract ; (iv) the Financing Documents to which the City is a party and this Purchase Agreement have been duly authorized, executed and delivered by and City, and assuming due authorizati on, execution and delivery of such documents by the other parties thereto, the Financing Documents to which the City is a party and this Purchase Agreement constitute legally binding agreements of the City enforceable against the City in accordance with their respective terms (except as limited herein); (v) the City has obtained all State governmental, legislative, administrative and judicial authorizations, approvals, consents and orders that are required to be obtained on connection with the City’s performance of its obligations under the Financing Documents to which the City
Error! Unknown document property name.
15 4150-6388-6156.6
is a party, this Purchase Agreement and the City Resolution , unless the failure to obtain such authorizations, approvals, consents or orders would not have a material adverse effect o n the due performance by the City of such obligations, provided that no opinion is rendered as to any approvals, consents and orders as may be required under Federal law or the Blue Sky laws or securities laws of any other state in connection with such per formance; and (vi) except as disclosed in the Official Statement, the execution and delivery of the Financing Documents to which the City is a party and this Purchase Agreement do not materially conflict or constitute a material breach or default under any State law, administrative regulation or other agreement to which the City is a party or to which it is bound; (vii) except as described in the Official Statement, no litigation is pending or, to the best of such counsel’s knowledge, threatened in any State or federal court (1) challenging the titles of the officials of the City signatory to any of the Financing Documents to which the City is a party and this Purchase Agreement to their respective offices; (2) contesting or affecting the validity of the Financing Documents to which the City is a party, this Purchase Agreement or the City Resolution; (3) in any way contesting the power of the City to approve, execute and deliver the Financing Documents to which the City is a party or to adopt the City Resolution; (4) to restrain or enjoin the Base Rental Payments under the Lease; o r (5) asserting that the Preliminary Official Statement or the Official Statement contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the cir cumstances under which they were made, not misleading.
(7) The opinion of counsel to the Authority, dated the Closing Date and addressed to the Underwriter, to the effect that (i) the Authority is a joint exercise of powers agency of the State, validly existi ng under the Constitution and laws of the State; (ii) the Authority Resolution authorizing the execution and delivery of the Series 2023 Bonds, the Financing Documents to which the Authority is a party and this Purchase Agreement has been duly adopted at a meeting of the Board of Directors of the Authority which was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and has not been amended, modified or rescinded; (iii) the Authority has full legal right, power and authority to enter into and carry out the transactions contemplated of it by the Financing Documents to which the Authority is a party and this Purchase Agreement; (iv) the Financing Documents to which the Authority is a party and this Purchase Agreement have been duly authorized, executed and delivered by and Authority, and assuming due authorization, execution and delivery of such documents by the other parties thereto, the Financing Documents to which the Authority is a party and this Purchase Agreement constitute legally binding agreements of the Authority enforceable against the Authority in accordance with their respective terms (except as limited herein); (v) the Authority has obtained all State governmental, leg islative, administrative and judicial authorizations, approvals, consents and orders that are required to be obtained on connection with the Authority’s performance of its obligations under the Financing Documents to which the Authority is a party, this Purchase Agreement and the Authority Resolution, unless the failure to obtain such authorizations, approvals, consents or orders would not have a material adverse effect on the due performance by the Authority of such obligations, provided that no opinion is rendered as to any approvals, consents and orders as may be required under Federal law or the Blue Sky laws or securities laws of any other state in connection with such performance; and (vi) except as disc losed in the Official Statement, the execution and delivery of the Financing Documents to which the Authority is a party and this Purchase Agreement do not materially conflict or constitute a
Error! Unknown document property name.
16 4150-6388-6156.6
material breach or default under any State law, administrative r egulation or other agreement to which the Authority is a party or to which it is bound; (vii) except as described in the Official Statement, no litigation is pending or, to the best of such counsel’s knowledge, threatened in any State or federal court (1) challenging the titles of the officials of the Authority signatory to any of the Financing Documents to which the Authority is a party or this Purchase Agreement to their respective offices; (2) contesting or affecting the validity of the Financing Documen ts to which the Authority is a party, this Purchase Agreement or the Authority Resolution; (3) in any way contesting the power of the Authority to approve, execute and deliver the Financing Documents to which the Authority is a party or this Purchase Agree ment or to adopt the Authority Resolution; (4) to restrain or enjoin the Base Rental Payments under the Lease; or (5) asserting that the Preliminary Official Statement or the Official Statement contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(8) The opinion, dated the Closing Date and addressed to the Underwriter, of Orrick, Herringt on & Sutcliffe LLP , Counsel to the Underwriter, in form and substance satisfactory to the Underwriter;
(9) A certificate or certificates, dated the Closing Date, signed by a duly authorized official of the Authority, in form and substance satisfactory to the Underwriter, to the effect that the representations and warranties of the Authority contained in this Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date;
(10) A certificate or certificates, d ated the Closing Date, signed by a duly authorized official of the City, in form and substance satisfactory to the Underwriter, to the effect that the representations and warranties of the Authority contained in this Purchase Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date;
(11) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, satisfactory in form and substance to the Underwriter, to the effect that:
a. the T rustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the full power and being qualified to enter into and perform its duties under the Indenture; b. the Trustee is duly authori zed to enter into the Indenture and the Trustee has duly executed and delivered the Indenture and the Assignment Agreement; c. the execution and delivery of the Indenture and the Assignment Agreement and compliance with the provisions on the Trustee’s part co ntained therein, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or Blue Sky laws or
Error! Unknown document property name.
17 4150-6388-6156.6
regulations), nor will any such execution, delivery, adoption or compliance result in the creation or imposi tion of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loa n agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and
d. it has not been served with any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governm ental agency, public board or body, nor, to the best of the knowledge of the Trustee, is any such action or other proceeding threatened against the Trustee, as such but not in its individual capacity, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the collection of the Payments or other revenues to be applied to pay the principal, premium, if any, and interest on the Series 2023 Bonds , or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Indenture, or contesting the powers of the Trustee or its authority to enter into, adopt or perform its obligations under any of the foregoing, wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of the Indenture;
(12) A copy of the Official Statement, executed on behalf of the Authority and the City by an authorized representative thereof;
(13) A copy of the general resolution of bylaws of the Trustee authorizing the execution and delivery of the Indenture and the Assignment Agreement; (14) A certified copy of the Authority Resolution;
(15) A certified copy of the City Resolution;
(16) A tax certificate and agreement in form satisfactory to Bond Counsel; (17) Evidence of the existence and validity of a policy or policies of title insurance with respect to the Leased Property [required by the Lease Agreement] [discuss plan on title insurance, currently not required by Lease Agreement]; (18) Evidence that any ratings d escribed in the Official Statement are in full force and effect as of the Closing Date;
(19) An opinion from City Counsel, dated the Closing Date and addressed to the Underwriter and Norton Rose Fulbright US LLP to the effect that information under the caption “LITIGATION” in the Preliminary Official Statement , as of its date and as of the date hereof, and the Official Statement , as of the date hereof and as of the Closing Date, is true and correct in all material respects and did not and does not, as applicable , contain any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading;
Error! Unknown document property name.
18 4150-6388-6156.6
(20) An opinion from Norton Rose Fulbrig ht US LLP , dated the Closing Date and addressed to the Underwriter in the form attached hereto as Exhibit C. (21) A certified copy of the Authority’s Amended and Restated Joint Exercise of Powers Agreement; and
(22) Such additional legal opinions, certificates, proc eedings, instruments, title insurance, other insurance policies or evidences thereof and other documents as the Underwriter, Underwriter’s Counsel or Bond Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the representations of the Authority and the City herein and of the statements and information contained in the Preliminary Official Statement and the Official Statement, and the due performance or satisfaction by the Trustee, the Authority and the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by any of them in connection with the transactions contemplated hereby and by the Financing Documents.
If the Authority or the City shall be unable to satisfy the conditions to the Underwriter’s obligations contained in this Purchase Agreement or if the Underwriter’s obligations shall be terminated for any reason permitted herein, all obligations of the Underwriter hereunder may be terminated by the Underwriter at, or at any time prior to, the Closing Date by written notice to the City and the Authority and neither the Underwriter nor the Authority or City shall have any further obligations hereunder.
5. Expenses.
All expenses and costs incident to the authorization, execution, delivery and sale of the Series 2023 Bonds to the Underwriter, including the costs of printing or other reproduction and distribution of the Preliminary Official Statement, the Official Statement, the cost of duplicating the Financing Documents, the fees of accountants, financial advisors, consultants and rating agencies, the initial fee of the Trustee and its counsel in connection with the execution and delivery of the Series 2023 Bonds , the fees and expenses of the Authority, Bond Counsel and Disclosure Counsel, and the costs of recordation, costs of title insurance and all endorsements shall be paid by the City. All fees and expenses to be paid by the City pursuant to this Purchase Agreement may be paid from proceeds of the Series 2023 Bonds to the extent permitted by the Indenture and the related tax certificate. All out of pocket expenses of the Underwriter, including traveling and other expenses of the Underw riter, including those associated with the charges of the CUSIP Service Bureau and DTC, the costs of preparation of any Blue Sky and legal investment surveys prepared by or on behalf of Underwriter’s Counsel, the fees of the California Debt and Investment Advisory Commission, the fees of Digital Assurance Certification, L.L.C. for a continuing disclosure undertaking compliance review and the fees and expenses of Underwriter’s Counsel, shall be paid from the expense compon ent of the Underwriter’s spread by the Underwriter. The City shall pay for expenses incurred on behalf of the C ity’s employees which are incidental to implementing this agreement, including, but not li mited to, meals, transportation and lodging of those employees. The Underwriter is required to pay fees to the California Debt and Investment Advisory Commission in connection with the offering of the Series 2023 Bonds. Notwithstanding that such fees are sole ly the legal obligation of the Underwriter, the City agrees to reimburse the Underwriter for such fees.
Error! Unknown document property name.
19 4150-6388-6156.6
6. Notices.
Any notice or other communication to be given to the parties to this Purchase Agreement may be given by delivering the same in writing to the respective party at the following address:
Underwriter: Citigroup Global Markets Inc.
444 South Flower Street, 27th Floor
Los Angeles, California 90071
Attention: Christopher Mukai [confirm]
City: City of Rialto
150 South Palm Avenue
Rialto, California 92376
Attention: [Interim City Manager]
Authority: Rialto Public Financing Authority
150 South Palm Avenue
Rialto, California 92376
Attention: [Interim Executive Director]
7. No Advisory or Fiduciary Role.
The Authority and the City acknowledge and agree that (i) the purchase and sale of the Series 2023 Bonds pursuant to this Purchase Agreement is an arm’s -length commercial transaction between the Authority and the City, and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent, advisor or fiduciary of the Authority or the City, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Authority or the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority or the City on other matters) and the Underwriter has no contractual obligation to the Authority or the City with respect to the offe ring contemplated hereby except the obligations expressly set forth in this Purchase Agreement and (iv) the Authority and the City have consulted their own legal, financial and other advisors to the extent they have deemed appropriate. The Authority and the City further acknowledge that they have previously provided the Underwriter with an acknowledgement of receipt of the required disclosure under MSRB Rule G-17.
8. Indemnification by the Underwriter.
The Underwriter agrees to indemnify and ho ld harmless the Authority, and the past, present and future members of its Board of Directors, officers, counsel, financial advisors and agents (the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities, or expenses (including attorneys’ fees), causes of action (whether based on negligence or otherwise), including reasonable costs of investigation, to which jointly or severally, any or all of the Indemnified Parties may become subject insofar as any such loss, claim, damag e, liability or expense (or actions with respect thereto) arises out of or is based on any untrue statement or
Error! Unknown document property name.
20 4150-6388-6156.6
alleged untrue statement of a material fact contained in the Preliminary Official Statement or Official Statement, or any supplement thereto, or arising out of or is based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, so made or omitted negligently, intentionally, or in any other manner, which untrue statement or omission or the alleged untrue statement or omission was made in reliance upon the information furnished therein by the Underwriter expressly for use in the sections of the Preliminary Official Statement or Official Statement designated “MATURITY SCHEDULE,” “DEBT SERVICE REQUIREMENTS” and “UNDERWRITING” (the “Underwriter Information”).
Any Indemnified Party shall notify the Underwriter of the existence of any claim, demand, or other matter to which the Underwriter’s indemnification obligations would apply, and shall give to the Underwriter a reasonable opportunity to defend the same at their own expense and with counsel satisfactory to the Indemnified Party; provided that the Indemnified Party shall at all times also have the right to fully participate in the de fense. If the Indemnified Party is advised in an opinion of counsel that there may be legal defenses available to it which are different from or in addition to those available to the Underwriter or if the Underwriter shall, after this notice and within a period of time necessary to preserve any and all defenses to any claim asserted, fail to assume the defense or to employ counsel for that purpose satisfactory to the Indemnified Party, the Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle the claim, demand or other matter on behalf of, for the account of, and at the risk of, t he Underwriter. The Underwriter shall be responsible for the reasonable fees, costs, and expenses of the Indemnif ied Party in conducting its defense.
The Indemnified Parties, other than the Authority, shall be considered to be third party beneficiaries of this Purchase Agreement for purposes of this Section.
Notwithstanding the foregoing, in no case shall the Underwr iter be responsible for any indemnification amount in excess of the total underwriters’ discount set forth in the Official Statement under the section titled “UNDERWRITING.”
9. Survival of Representations and Warranties.
The representations and warranties of the Authority and the City dated as of their date set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or t ermination of this Purchase Agreement and regardless of any investigations or statements as to the results thereof made by or on behalf of the Underwriter and regardless of delivery of and payment for the Series 2023 Bonds.
10. Effectiveness.
This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by a duly authorized officer of the Authority and the City and shall be valid and enforceable as of the time of such acceptance.
Error! Unknown document property name.
21 4150-6388-6156.6
11. Execution in Counterparts.
This Purchase Agreement may be executed in counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original.
12. Headings.
The headings of the sections of this Purchase Agreement are inserted for convenience only and shall not be deemed to be a part hereof.
13. Governing Law.
This Purchase Agreement shall be governed by and construed in accordance with the laws of the State.
14. Entire Agreement.
This Purchase Agreement embodies the entire agreement and understanding between the parties relating to the subject matter hereof and supersedes all prior agreements and understandings related to such subject matter, and it is agreed that there are no terms, understandings, representations or warranties, express or implied, other than those set forth herein.
4150-6388-6156.6
If the above terms are acceptable, please cause a duly authorized officer of the Authority and the City to execute the acceptance below.
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.,
as Underwriter
By:
Christopher Mukai
Managing Director
ACCEPTED:
RIALTO PUBLIC FINANCING
AUTHORITY
By: ________________________________
[Henry Garcia]
[Interim Executive Director]
CITY OF RIALTO
By: ________________________________
[Henry Garcia]
[Interim City Manager]
Time: ___:___
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A-1
4150-6388-6156.6
EXHIBIT A
MATURITY SCHEDULE
Maturity
(October 1)
Principal
Amount $
Interest
Rate %
Yield % Price
$_________ _.___% Term Bonds due October 1, 20__ Yield: _.___%; Price: ___.___
C = [Priced to the first optional call date of ___ 1, 20__].
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A-1
4150-6388-6156.6
CERTAIN REDEMPTION PROVISIONS
Optional Redemption of Bonds. The Series 2023 Bonds maturing on or after October 1, 20__ shall be subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after October 1, 20__, in any order deemed reasonable by the Authority, and by lot within a maturity, from prepayments of Base Rental Payments made at the option of the City pursuant to the Lease, at a redemption price equal to the principal amount of the 2023A Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium.
Mandatory Sinking Account Redemption of Series 2023 Bonds. The Series 2023 Bonds maturing on October 1, 20__ are subject to mandatory redemption, in part by lot, from sinking account payments set forth in the following schedu le commencing on October 1 in each year to and including October 1, 20__ at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption.
Redemption Date
(October 1)
Principal Amount
To be Redeemed
$
*
_________________
* Maturity.
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C-1
4150-6388-6156.6
EXHIBIT B
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Citigroup Global Markets Inc. (“ Citigroup”), hereby certifies as set forth below with respect to the sale and issuance of the Rialto Public Financing Authority Lease Revenue Bonds, 2023 Series A (Police Station Project) (the “Bonds”) of Rialto Public Financing Authority (the “Issuer”).
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. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Citigroup offered the Hold -the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedu le A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (b) As set forth in the Bond Purchase Agreement , Citigroup agreed in writ ing on or prior to the Sale Date that for each Maturity of the Hold -the-Offering-Price Maturities, it would neither offer nor sell any of the unsold Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Mat urity during the Holding Period for such Maturity (the “hold-the-offering-price rule”). No Underwriter (as defined below) offered or sold any unsold Bonds of any Maturity of the Hold -the-Offering-Price Maturities at a price that is higher than the respecti ve Initial Offering Price for that Maturity of the Bonds during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold -the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Citigroup sold at least 10% of such Hold -the- Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) 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.
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(e) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a rel ated 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. (f) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is December __, 2023. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (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 w ritten contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents Citigroup’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Tre asury 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 with respect to the Bonds 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 i ncome for federal income tax purposes, the preparation of 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. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.
CITIGROUP GLOBAL MARKETS INC.
By: ________________________________
Name: ________________________________
Title: ________________________________
Dated: December __, 2023
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SCHEDULE A TO ISSUE PRICE CERTIFICATE
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SCHEDULE B TO ISSUE PRICE CERTIFICATE
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SCHEDULE I
[No maturities for which the 10% test has not been satisfied.]
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EXHIBIT C
FORM OF OPINION OF NORTON ROSE FULBRIGHT US LLP
AS DISCLOSURE COUNSEL