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BOND PURCHASE AGREEMENT
Dated ________, 2025
by and among
LUMENT SECURITIES, LLC,
CITY OF SAN JOSÉ
and
KOOSER APARTMENTS, L.P.
Relating to:
$________
City of San José
Multifamily Housing Revenue Bonds
(Fannie Mae MBS Secured)
(Arcade)
Series 2025A-1
$________
City of San José
Multifamily Housing Revenue Bonds
(Arcade)
Series 2025A-2
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
TABLE OF CONTENTS
Page
Section 1. Definitions and Background. .............................................................................................. 1 Section 2. Purchase and Sale. .............................................................................................................. 1 Section 3. Issue Price. .......................................................................................................................... 2 Section 4. Closing. ............................................................................................................................... 2 Section 5. Official Statement: Disclosure Matters. .............................................................................. 2 Section 6. Representations of the Issuer. ............................................................................................. 5 Section 7. Representations and Warranties of the Borrower. .............................................................. 6 Section 8. Covenants of the Issuer. ...................................................................................................... 8 Section 9. Covenants of the Borrower. ................................................................................................ 9 Section 10. Conditions of Closing. ...................................................................................................... 10 Section 11. Actions and Events at the Closing. ................................................................................... 13 Section 12. Termination of Agreement. ............................................................................................... 14 Section 13. Fees and Expenses. ........................................................................................................... 15 Section 14. Indemnification. ................................................................................................................ 16 Section 15. Limitation of Liability. ..................................................................................................... 18 Section 16. Miscellaneous. .................................................................................................................. 18 Section 17. Survival of Certain Representations and Obligations. ...................................................... 19 EXHIBIT A TERMS OF BONDS ...................................................................................................... A-1 EXHIBIT B PROPOSED FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL .......... B-1 EXHIBIT C FORM OF OPINION OF COUNSEL TO THE BORROWER ..................................... C-1 EXHIBIT D FORM OF BORROWER’S RULE 15c2-12 CERTIFICATE ........................................ D-1 EXHIBIT E FORM OF ISSUE PRICE CERTIFICATE .................................................................... E-1 EXHIBIT F FORM OF CERTIFICATE OF FANNIE MAE .............................................................. F-1 EXHIBIT G FORM OF CERTIFICATE OF PERMANENT LENDER ............................................ G-1
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BOND PURCHASE AGREEMENT
Lument Securities, LLC (the “Underwriter”), on its own behalf and not as your fiduciary, hereby offers to enter into this Bond Purchase Agreement dated ________, 2025 (this “Purchase Agreement”) with the City of San José (together with its successors and assigns, the “Issuer”) and Kooser Apartments, L.P., a California limited partnership (the “Borrower”) , for the sale by the Issuer and the purchase by the Underwriter of the Bonds defined below which are being issued by the Issuer for the benefit of the Borrower. The Underwriter is an “underwriter” as defined in Section 2(a)(11) of the Securities Act of 1933, as amended (the “1933 Act”). This offer is made subject to the written acceptance hereof by the Issuer and the Borrower and delivery of such acceptance (in the form of one or more counterparts hereof) at or prior to 5:00 p.m., Pacific Time, on the date hereof, and will expire if not so accepted at or prior to such time (or such later time as the Underwriter may agree in writing). Upon such acceptance, this Purchase Agreement will be binding upon each of the Issuer, the Borrower and the Underwriter.
Section 1. Definitions and Background.
1.1 Capitalized terms used in t his Purchase Agreement but not defined herein have the meanings assigned to them in the Indenture of Trust by and between the Issuer and Computershare Trust Company, National Association, a national banking association (the “Trustee”), dated as of ________ 1, 2025 (the “Indenture”).
1.2 This Purchase Agreement is for the sale and delivery of the Issuer’s Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) ( Arcade) Series 2025A -1 (the “Long -Term Bonds”) and Multifamily Housing Revenue Bonds (Arcade) Series 2025A-2 (the “Short-Term Bonds,” and together with the Long-Term Bonds, the “Bonds” ), which are being issued by the Issuer to provide financing for the Project. The Bonds will be issued pursuant to (i) that certain resolution of the Issuer adopted ________, 2025 (the “Bond Resolution”), (ii) the provisions of Chapter 7 of Part 5 of Division 31 of the California Health and Safety Code, as amended (the “Act”), and (iii) the terms of the Indenture. The Bonds will be payable from sources pledged under the Indenture, including the moneys and securities from time to time held by the Trustee in the funds and accounts established under the terms of the Indenture (collectively, the “Trust Estate”). In connection with the issuance of the Bonds, the Issuer will execute and deliver this Purchase Agreement ; the Indenture ; the Financing Agreement among the Issuer , the Trustee and the Borrower (the “Financing Agreement”) dated as of ________ 1, 2025; the Tax Certificate and Agreement by and between the Issuer and the Borrower (the “Tax Certificate”), dated ________, 2025 ; and the Regulatory Agreement and Declaration of Restrictive Covenants by and between the Issuer and the Borrower (the “ Regulatory Agreement ”), dated as of ________ 1, 2025 (collectively, the “Issuer Documents”), and the Borrower will execute and deliver this Purchase Agreement , the Financing Agreement, the Continuing Disclosure Agreement, the Remarketing Agreement, the Tax Certificate, and the Regulatory Agreement (collectively, the “Borrower Documents ”). The Issuer Documents and the Borrower Documents are referred to herein as the “Financing Documents.” Section 2. Purchase and Sale.
2.1 Subject to the terms and conditions set forth in this Purchase Agreement, the Underwriter hereby agrees to p urchase from the Issuer and the Issuer hereby agrees to sell to the Underwriter, at the Closing (as hereafter defined), $________ aggregate principal amount of its Bonds at a price set forth in Exhibit A attached hereto.
2.2 The Bonds will (i) be issued pursuant to the Indenture and (ii) have the payment related terms (that is, the dated date, maturity date, interest rate and price) set forth in Exhibit A attached hereto,
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and will otherwise correspond to the description thereof contained in the hereinafter-defined Official Statement.
2.3 The Issuer, the Borrower, and the Underwriter each acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to t his Purchase Agreement is an arm’s -length commercial transaction among the Issuer, the Borrower, 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, municipal advisor, financial advis or, or fiduciary of the Issuer or the Borrower, (iii) the Underwriter has not assumed individually or collectively any advisory or fiduciary responsibility in favor of the Issuer or the Borrower with respect to the offering contemplated hereby or the discu ssions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has advised or provided other services or is currently advising or providing other services to the Issuer or the Borrower on other matters) and the Underwriter has no contractual obligation to the Issuer or the Borrower with respect to the offering contemplated hereby except the obligations expressly set forth in this Purchase Agreement, and (iv) the Issuer and the Borrower have consulted their own legal, financial, accounting, tax and other advisors to the extent they deem appropriate in connection with the offering of the Bonds. The primary role of the Underwriter is to purchase the Bonds in an arm’s-length commercial transaction among the Issuer, the Borrower and the Underwriter, for resale to investors. The Underwriter has financial and other interests that differ from those of the Issuer.
Nothing in the foregoing paragraph is intended to limit the Underwriter’s obligations of fair dealing under MSRB Rule G-17.
Section 3. Issue Price.
The Underwriter will provide to the Issuer an executed Issue Price Certificate dated the Closing Date (as defined herein) in the form attached as Exhibit E hereto or other form reasonably required by Bond Counsel in order to establish the issue price of the Bonds.
Subject to compliance with the requirement that the issue price represent a sale to the Public of at least ten percent (10%) of each Maturity of the Bonds (“Public” and “Maturity,” each as defined in the Issue Price Certificate attached as Exhibit F), the Underwriter reserves the right to change such prices as it deems necessary in connection with the offering of the Bonds. Concessions from the public offering price may be allowed to selected dealers and special purchasers. In such event, t he Borrower aut horizes the Underwriter to complete an applicable supplement to the Official Statement to insert the reoffering price for the Bonds selected by the Underwriter in its complete discretion.
Section 4. Closing.
Subject to the terms and conditions hereof, the delivery of the Bonds and the payment of the purchase price of the Bonds as set forth in Exhibit A hereof (the “Closing”) will take place at 10:00 a.m.
Pacific Time on ________, 2025, or at such other time or on such other date mutually agreed upon by the Issuer, the Borrower and the Underwriter, which date shall be referred to herein as the “Closing Date.” Section 5. Official Statement: Disclosure Matters.
5.1 The Issuer and the Borrower each hereby (a) confirms its consent to the use by the Underwriter of the Preliminary Official Statement dated ________, 2025 , relating to the Bonds (the “Preliminary Official Statement”) in the marketing of the Bonds and (b) authorizes the Underwriter to prepare, use and distribute (at the expense of the Borrower) the Official Statement dated ________, 2025, relating to the Bonds (the “Official Statement”) in final form in connection with the offering and sale of the Bonds.
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5.2 The Issuer and the Borrower each agrees to the extent required and permitted by applicable law to cooperate (at the sole cost and expense of the Borrower) with the Underwriter so as to enable the Underwriter to comply with the requirements of Rule 15c2 -12 (“Rule 15c2 -12”) under the Securities Exchange Act of 1934, as amended (the “1934 Act”) , and any other rules of the Securities and Exchange Commission (the “ SEC”) and the Municipal Securities Rulemaking Board (the “MSRB”), in connection with the offer and sale of the Bonds.
5.3 The Issuer and the Borrower hereby make the following representations in subsection (a) and (b), respectively:
(a) The Issuer hereby certifies and agree s that the information in the Preliminary Official Statement under the captions “THE ISSUER” a nd “NO LITIGATION – The Issuer” has been “deemed final” by the Issuer as of the date of the Preliminary Official Statement, except for final information as to the offering prices, interest rates, selling compensation, amount of proceeds, delivery dates, other terms depending on such factors, and other information permitted to be omitted under part (b)(1) of Rule 15c2-12.
(b) The Borrower hereby certifies and agrees that the Preliminary Official Statement has been “deemed final” by the Borrower as of its date , except for final information as to the offering prices, interest rates, selling compensation, amount of proceeds, delivery dates, other terms depending on such factors, and other information permitted to be omitted under part (b)(1) of Rule 15c2-12.
5.4 The Issuer and the Borrower hereby make the following representations in subsection (a) and (b), respectively:
(a) The Issuer hereby represents that the information in the Preliminary Official Statement and the Official Statement under the captions “THE ISSUER” and “NO LITIGATION – The Issuer” is true and correct and does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. (b) The Borrower hereby represents that the information in the Preliminary Official Statement and the Official Statement is true and correct in all material respects and does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
5.5 The Issuer and the Borrower will, at the expense of the Borrower, supply to the Underwriter the Official Statement, in such quantity as may be requested by the Underwriter no later than the earlier of (i) seven (7) business days after the date of t his Purchase Agreement or (ii) one (1) business day prior to the Closing Date, in order to permit the Underwriter to comply with Rule 15c2-12, and the applicable rules of the MSRB, with respect to distribution of the Official Statement. The Borrower shall provide to the Underwriter the Official Statement, including any amendments thereto, in word-searchable PDF format as described in the MSRB’s Rule G-32 no later than one (1) business day prior to the Closing Date to enable the Underwriter to comply with MSRB Rule G-32.
5.6 During the period commencing on the date of this Purchase Agreement and ending on the earlier of (a) 90 days from the End of the Underwriting Period or (b) the time when the Official Statement is available to any person from the MSRB, but in no case less than 25 days following the End of the Underwriting Period (the “Update Period”), if any event shall occur which would cause the Official
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Statement to contain any untrue statement of a material fact or to omit to state any material fact necessary to make the statements contained therein, in light of the circumstance s under which they were made, not misleading, and in the judgment of the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Issuer (to the extent of the provisions referred to in Section 5.4(a) hereof) and the Borrower will, at the expense of the Borrower, prepare or cooperate in the preparation of such supplement or amendment to the Official Statement in a form approved by the Underwriter and furnish or cooperate in the furnishing to the Underwriter (at the sole expense of the Borrower) a reasonable number of copies of an amendment of, or a supplement to, the Official Statement so that, as supplemented or amended, it will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. If the Official Statement is so supplemented or amended prior to the Closing, the approval by the Underwriter of a supplement or amendment to the Official Statement shall not preclude the Underwriter from thereafter terminating this Purchase Agreement in accordance with the provisions of Section 12(c) hereof. The “End of the Underwriting Period ” means the later of the delivery of the Bonds by the Issuer to the Underwriter or when the Underwriter no longer retains (directly or as a syndicate member) an unsold balance of the Bonds for sale to the public; provided, that the “End of the Underwriting Period” shall be deemed to be the Closing Date, unless the Underwriter otherwise notifies the Issuer and the Borrower in writing prior to such date that there is an unsold balance of the Bonds, in which case the End of the Underwriting Period shall be deemed to be extended for 30 days.
The deemed End of the Underwriting Period may be extended for two additional periods of 30 days each upon receipt of an additional written notification from the Underwriter containing the same information as required in the initial written notice.
5.7 If, during the Update Period, the Issuer become s aware of any event relating to the information concerning the Issuer under the captions “THE ISSUER” and “NO LITIGATION – The Issuer” of the Official Statement which would cause such portions of the Official Statement to contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, the Issuer will promptly notify the Underwriter of such event.
5.8 The Issuer shall promptly advise the Underwriter, during the Update Period, of any action, suit, proceeding, inquiry or investigation against the Issuer , of which the Issuer has actual knowledge, seeking to prohibit, restrain or otherwise affect the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Bonds.
5.9 If, during the Update Period, the Borrower becomes aware of any event which would cause the Preliminary Official Statement or the Official Statement to contain any untrue statement of a material fact or to omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, the Borrower will promptly notify the Underwriter and the Issuer of such event.
5.10 The Borrower shall promptly advise the Underwriter, during the Update Period, of any action, suit, proceeding, inquiry or investigation against the Borrower, of which they receive written or actual notice, seeking to prohibit, restrain or otherwise affect the use of the Preliminary Official Statement or the Official Statement in connection with the offering, sale or distribution of the Bonds.
5.11 The Borrower represents and warrants to the Underwriter and the Issuer that neither the Borrower nor any affiliates thereof are in default under any undertakings with respect to continuing disclosure requirements designed to comply with Rule 15c2-12 in connection with any issue of municipal securities.
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Section 6. Representations of the Issuer.
6.1 In addition to the representations contained in Section 5 herein, t he Issuer hereby makes the following representations to the Underwriter:
(a) The Issuer is a chartered city and municipal corporation, duly organized and existing under the laws of the State of California (the “State”), and has full power and authority under the Act to adopt the Bond Resolution and to enter into and to perform its obligations under the Issuer Documents; and when executed and delivered by the respective parties thereto, the Issuer Documents will constitute the legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their respective terms, except as the enforcem ent thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitation on legal remedies against units of government of the State;
(b) By official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has approved and authorized the distribution of the Preliminary Official Statement and the Official Statement and authorized and approved the execution and delivery of the Issuer Documents and the consummation by the Issuer of the transactions contemplated thereby; (c) The Issuer has not received notice of any pending, nor to the Issuer’s actual knowledge is there any threatened, action, suit, proceeding, inquiry or investigation against the Issuer, at law or in equity, by or before any court, public board or body, nor t o the Issuer’s actual knowledge is there any basis therefor, seeking to restrain or enjoin the sale or issuance of the Bonds, or in any way contesting or affecting any proceedings of the Issuer taken concerning the sale thereof, the pledge or application of any moneys or security provided for the payment of the Bonds, in any way contesting the validity or enforceability of the Issuer Documents or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or the existence or powers of the Issuer relating to the sale of the Bonds; (d) To the best knowledge of the Issuer, t he execution and delivery by the Issuer of the Issuer Documents and compliance with the provisions on the Issuer’s part contained therein will neither (i) conflict with or constitute a material breach of or default under any law, administrative regulation, judgment or decree to which the Issuer is subject , (ii) conflict with any loan agreement, financing agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject, nor (iii) 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 Issuer under the terms of any such law, administrative regulation, judgment, decree, loan agreement, financing agreement, indenture, bond, security, note, resolution, agreement or other instrument, except as provided by the Issuer Documents; (e) Except as may be required under Blue Sky or other securities laws of any state and for filings to be made with the Internal Revenue Service on Form 8038, to the Issuer’s knowledge, there is no consent, approval, authorization or other order of, or filing with, or certification by, any state court, or state or federal governmental agency, or public body of any state required for the execution and delivery of the Issuer Docu ments or the consummation by the Issuer of the transactions on its part contemplated herein or therein, which has not been duly obtained or made on or prior to the date hereof;
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(f) Upon delivery of the Bonds, the Issuer will have good right, full power and lawful authority to pledge and assign the Trust Estate described in the Indenture to the Trustee as provided in the Indenture and the Bond Resolution;
(g) The Issuer has complied in all material respects with the Bond Resolution and the Issuer Documents; and
(h) The Bonds, when delivered in accordance with the Indenture and paid for by the Underwriter on the Closing Date as provided herein, will be validly issued and outstanding special, limited obligations of the Issuer entitled to all the benefits and security of the Indenture.
6.2 The execution and delivery of this Purchase Agreement by the Issuer shall constitute a representation by the Issuer to the Underwriter that the representations and agreements contained in this Section 6 are true as of the date hereof; provided, however, that as to information furnished by the Borrower pursuant to this Purchase Agreement, the Issuer is relying solely on such information in making the Issuer’s representations and agreements, and as to all matters of law the Issuer is relying on the advice of Bond Counsel; and provided further, that no member, officer, agent or employee of the Issuer shall be individually liable for the breach of any representation, or agreement contained herein.
6.3 It is understood that the representations and covenants of the Issuer contained in this Section 6 and elsewhere in this Purchase Agreement shall not create any general obligation or liability of the Issuer, and that any obligation or liability of the Issuer hereunder or under the Issuer Documents is payable solely out of the Trust Estate established under the Indenture. It is further understood and agreed that the Issuer makes no representations, ex cept as set forth in paragraph 5 .4(a) above, as to the Official Statement, or as to (i) the financial condition, results of operation, business or prospects of the Borrower or the Project, (ii) any statements (financial or otherwise), representations, documents or certification provided or to be provided by the Borrower in connection with the offer or sale of the Bonds, or (iii) the correctness, completeness or accuracy of such statements, representations, documents or certifications.
Section 7. Representations and Warranties of the Borrower.
7.1 In addition to the representations and warranties made in Section 5 herein, t he Borrower hereby makes the following representations and warranties to the Underwriter and the Issuer, all of which will continue in effect subsequent to the purchase of the Bonds:
(a) The Borrower is a limited partnership duly organized and existing under and pursuant to the laws of the State and is qualified to own the Project and conduct its business in the State.
(b) The Borrower has, and as of the Closing Date will have, full legal right, power and authority to (i) execute and deliver the Borrower Documents, (ii) assist in the preparation , distribution and use of the Preliminary Official Statement and the Official Statement, and (iii) otherwise consummate the transactions contemplated by the Borrower Documents. (c) The Borrower has duly authorized the (i) execution and delivery of the Borrower Documents, (ii) performance by the Borrower of the obligations contained in the Borrower Documents, (iii) preparation of the Preliminary Official Statement and the Official Statement, and (iv) consummation by the Borrower of all of the transactions contemplated by the Borrower Documents.
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(d) The Borrower Documents are, and, when executed and delivered by the Borrower and the other parties thereto, will be, the legal, valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency or other similar laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity. (e) All consents, approvals, orders or authorizations of, notices to, or filings, registrations or declarations with any governmental authority, board, agency, commission or body having jurisdiction which are required on behalf of the Borrower for the execution and delivery by the Borrower of the Borrower Documents or the consummation by the Borrower of the transactions contemplated hereby or thereby, have been obtained or will be obtained prior to Closing. (f) The execution and delivery by the Borrower of the Borrower Documents and the consummation by the Borrower of the transactions contemplated hereby and thereby are not prohibited by, do not violate any provision of, and will not result in the breach of or default under (i) the organizational documents of the Borrower, (ii) any applicable law, rule, regulation, judgment, decree, order or other requirement to which the Borrower is subject, or (iii) any contract, indenture, agreement, mortgage, lease, note, commitment or other obligation or instrument to which the Borrower is a party or by which the Borrower or its properties are bound. (g) There is no legal action, suit, proceeding, investigation or inquiry at law or in equity, before or by any court, agency, arbitrator, public board or body or ot her entity or person, pending or, to the best knowledge of the Borrower, threatened against or affecting the Borrower or any partner or member of the Borrower, in their respective capacities as such, nor, to the knowledge of the Borrower, any basis therefor, (i) which would restrain or enjoin the issuance or delivery of the Bonds, the use of the Preliminary Official Statement or the Official Statement in the marketing of the Bonds or the collection of revenues pledged under or pursuant to the Borrower Documents or (ii) which would in any way contest or affect the organization or existence of the Borrower or the entitlement of any officer of the Borrower to its position or (iii) which would contest or have a material and adverse effect upon (A) the due performance by the Borrower of the transactions contemplated by the Preliminary Official Statement , the Official Statement or the Borrower Documents, (B) the validity or enforceability of the Bonds, the Borrower Documents or any other agreement or instrument to which the Borrower is a party and that is used or contemplated for use in the consummation of the transactions contemplated hereby and thereby, (C) the exclusion from gross income for federal income tax purposes of the interest on the Bonds or (D) the financial condition or operations of the Borrower, (iv) which contests in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or (v) which questions the power or authority of the Borrower to carry out the transactions on its part contemplated by the Preliminary Official Statement, the Official Statement and the Borrower Documents, or the power of the Borrower to own or operate the Project. The Borrower is not subject to any judgment, decree or order entered in any lawsuit or proceeding brought against it that would have such an effect. (h) On the Closing Date, the Borrower shall not have granted any interests in or rights or options to sell the Bonds to any other party.
(i) All permits (including building permits), licenses and authorizations necessary for the ownership and operation of its Project in the manner contemplated by the Preliminary Official Statement, the Official Statement and each of the Borrower Documents have been obtained or will be obtained, and said ownership and operation are not in conflict with any zoning or similar ordinance applicable to the Project. The Project conforms to all material environmental regulations.
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(j) None of the Borrower, any guarantor of the Borrower or any “related person” to the Borrower within the meaning of Section 147 of the Code has acquired or shall acquire, pursuant to any arrangement, formal or informal, any Bonds.
(k) The Borrower has not taken or omitted to take on or prior to the date hereof any action that would adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Bonds.
(l) On the Closing Date, each of the representations and warranties of the Borrower contained in the Borrower Documents and all other documents executed by the Borrower in connection with the Bonds shall be true, correct and complete in all material respects. (m) As of the Closing Date, the Borrower will not be in material default under any document, instrument or commitment to which the Borrower is a party or to which any of its property is subject which default would or could reasonably be expected to adversely affect the ability of the Borrower to carry out its obligations under the Borrower Documents. As of the Closing Date, the Borrower will be in compliance with all of its obligations under the Regulatory Agreement.
(n) The Borrower is in compliance with all of its prior continuing disclosure undertakings entered into pursuant to Rule 15c2-12, if any.
7.2 Each of the representations and warranties set forth in this Section 7 will survive the Closing.
7.3 Any certificate signed by any officer of the Borrower and delivered to the Underwriter in connection with the delivery of the Bonds will be deemed to be a representation and warranty by the Borrower to the Underwriter as to the statements made therein.
Section 8. Covenants of the Issuer.
The Issuer hereby makes the following covenants with the Underwriter:
(a) Prior to the Closing, the Issuer will not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without providing reasonable notice of such proposed supplement or amendment to the Underwriter. Neither the receipt by the Underwriter of notice of a proposed supplement or amendment nor the consent by the Underwriter to such supplement or amendment shall abrogate the Underwriter’s rights under Section 1 2(c) hereof.
(b) Prior to the Closing, the Issuer will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of , the Issuer Documents without the prior written consent of the Underwriter.
(c) Prior to the Closing, except as provided in the Issuer Documents, the Issuer will not create, assume or guarantee any indebtedness payable from, or pledge or otherwise encumber, the revenues, assets, properties, funds or interests which will be pledged pursuant to the Indenture, including, without limitation, the Bonds or the Issuer Documents. (d) The Issuer will not knowingly take any action which will in any way cause the proceeds of the Bonds to be applied in a manner other than as provided in the Indenture and
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described in the Official Statement or which would cause the interest on the Bonds to be includable in the gross income of the holders thereof for federal income tax purposes. (e) Prior to the Closing, the Issuer will obtain all governmental consents, approvals, orders or authorizations of any governmental authority or agency that would constitute a condition precedent to the performance by it of its obligations under the Issuer Documents and the Bonds. (f) The Issuer will reasonably cooperate with the Underwriter upon request, without cost to the Issuer, in the qualification of the Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate; provided that the foregoing shall not require the Issuer to expend its own funds, execute a general or special consent to service of process or to qualify as a foreign corporation in connection with such qualification in any foreign jurisdiction.
(g) The Issuer will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished a copy, the Underwriter shall reasonably object in writing and if any event relating to or affecting the Issuer or the Borrower shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement so that it does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, the Issuer shall cause to be forthwith prepared and furnished (at the sole expense of the Borrower) to the Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
Section 9. Covenants of the Borrower.
The Borrower hereby makes the following covenants with the Underwriter and the Issuer:
(a) The Borrower will not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without providing reasonable notice of such proposed supplement or amendment to the Underwriter and the Issuer. It is understood pursuant to Section 12(c) that, in the event there arises an event or condition which, in the reasonable judgment of the Underwriter, requires the Official Statement to be amended or supplemented or has a material and adverse effect upon the marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds, the Underwriter shall have the right, pursuant to Section 12(c) hereof, to terminate t his Purchase Agreement without liability. Neither the receipt by the Underwriter of notice of a proposed supplement or amendment nor the consent by the Underwriter to such supplement or amendment shall abrogate the Underwriter’s rights under Section 12(c) hereof.
(b) The Borrower will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished a copy, the Underwriter shall reasonably object in writing and if any event relating to or affecting the Issuer or the Borrower shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to the Underwriter, the Borrower shall cause to be forthwith prepared and furnished (at the sole expense of the Borrower) to the Underwriter a reasonable
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number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Issuer and the Underwriter) that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
(c) Prior to the Closing, the Borrower will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of the Borrower Documents without the prior written consent of the Underwriter.
(d) Prior to the Closing, the Borrower will not create, assume or guarantee any indebtedness payable from, or pledge or otherwise encumber, the revenues, assets, properties, funds or interests which will be pledged pursuant to the Indenture, including, without limitation, the Bonds, the Financing Documents or any indebtedness allowed under the loan from the Permanent Lender.
(e) The Borrower will cooperate with the Issuer to cause the Bonds to be delivered to the address and at the time specified by the Underwriter in conjunction with the Closing. (f) The Borrower will not take or omit to take any action which will in any way cause the proceeds of the Bonds, or other moneys on deposit in any fund or account in connection with the Bonds, to be applied in a manner other than as provided in the Indenture and described in the Preliminary Official Statement or the Official Statement and will not take or omit to take any action which would cause the interest on the Bonds to be includable in the gross income of the holders thereof for federal income tax purposes.
(g) The Borrower will cooperate with the Underwriter in the qualification of the Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate.
(h) The Borrower agrees to cause the necessary amount to be paid to the Trustee and/or the escrow agent on the Closing Date to pay costs of issuance. (i) The Borrower agrees to provide the Underwriter, at the Borrower’s expense, a reasonable number of additional copies of the Financing Documents as the Underwriter shall request.
Section 10. Conditions of Closing.
10.1 The obligations of the Underwriter to consummate at the Closing the transactions contemplated hereby are subject to receipt by the Underwriter of the items described in Section 10.2 hereof and to the satisfaction of the following conditions:
(a) The Underwriter will not have discovered any material error, misstatement or omission in the representations and warranties made in this Purchase Agreement , which representations and warranties will be deemed to have been made again at and as of the time of the Closing and will then be true in all material respects. (b) The Issuer and the Borrower will have performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied with by such respective parties at or prior to Closing.
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(c) The Bonds, the Financing Documents and the Official Statement shall each have been executed and delivered by each of the parties thereto, shall be in full force and effect on and as of the Closing Date and shall not have been amended, modified or supplemented prior to the Closing except as may have been agreed to in writing by the Underwriter and no event of default shall exist under any such documents.
(d) The Underwriter will have received orders for all of the Bonds (or such amount of the Bonds as is acceptable to the Underwriter) and (a) such orders have not been withdrawn at the time of the Closing and (b) the market price or marketability, at the initial offering price set forth in the Official Statement, of the Bonds shall not have been materially and adversely affected, in the reasonable judgment of the Underwriter.
(e) The Borrower shall have entered into the Continuing Disclosure Agreement containing covenants meeting the requirements of Rule 15c2-12 under the 1934 Act. (f) The Issuer shall have received the executed Issue Price Certificate of the Underwriter, substantially in the form attached to this Purchase Agreement as Exhibit E.
10.2 In addition to the co nditions set forth in Section 1 0.1 hereof, the obligations of the Underwriter to consummate at the Closing the transactions contemplated hereby are subject to receipt by the Underwriter of the following items:
(a) An approving opinion of Bond Counsel, dated the Closing Date, relating to the validity of the Bonds and the tax-exempt status of the Bonds, substantially in the form attached to the Official Statement as Appendix I, and a letter of such counsel, addressed to the Federal National Mortgage Association (“ Fannie Mae”), the Underwriter, and the Issuer , to the effect that such opinion may be relied upon, together with a supplemental opinion of Bond Counsel, satisfactory in form and substance to the Underwriter and the Issuer, dated the Closing Date, substantially in the form attached hereto as Exhibit B.
(b) An opinion of counsel to the Borrower, dated the Closing Date, satisfactory in form and substance to the Underwriter, the Trustee, Fannie Mae, Bond Counsel and the Issuer and in substantially the form attached hereto as Exhibit C.
(c) An opinion of Tiber Hudson LLC, counsel to the Underwriter, dated the Closing Date, satisfactory in form and substance to the Underwriter. (d) A certificate of the Issuer, dated the Closing Date and signed by an authorized official or officer of the Issuer, to the effect that (i) each of the Issuer’s representations contained herein and in all other Issuer Documents, which representations will be deemed to have been made again at and as of th e time of Closing, are true and correct in all material respects; (ii) the Issuer has performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied w ith by it at or prior to the Closing; and (iii) the information contained in the Preliminary Official Statement and the Official Statement under the captions “THE ISSUER” and “NO LITIGATION – The Issuer” is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
(e) Evidence that a public hearing has been duly held and the issuance of the Bonds has been duly approved as required by the Code.
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(f) A certificate of the Issuer, dated the Closing Date and signed by an authorized officer of the Issuer, in form and substance satisfactory to the Issuer, the Underwriter and Bond Counsel, respecting certain tax matters as may be reasonably required by Bond Counsel to enable it to give its opinion.
(g) A certificate of the Borrower, dated the Closing Date and signed by its authorized representative, to the effect that:
(i) each of the Borrower’s representations and warranties contained herein and in all Borrower Documents, which representations and warranties will be deemed to have been made again at and as of the time of Closing, are true and correct in all material respects;
(ii) the Borrower has performed and complied with all agreements and conditions required by this Purchase Agreement to be performed or complied with by it at or prior to the Closing;
(iii) since the date of the Official Statement and except as set forth therein, there has not been any material adverse change in the Borrower’s operations, financial or otherwise;
(iv) the information contained in the Preliminary Official Statement and the Official Statement is true and correct in all material respects and does not contain any untrue statement of a material fact and does not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading;
(v) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body pending or, to the best knowledge of the Borrower, threatened against or affecting the Borrower or any of its affiliate s, nor, to the best knowledge of the Borrower, is there any basis therefor, wherein an unfavorable decision, ruling or finding would, in any way, materially and adversely affect the transactions contemplated by the Financing Agreement or the operation and management of the Project, or that might result in any material adverse change in the business, operations, properties, assets, liabilities or condition (financial or other) of the Borrower or that materially affects the information in the Preliminary Official Statement and the Official Statement; and
(vi) such other matters as the Underwriter may reasonably request. (h) A certificate of the Borrower dated the Closing Date and signed by its authorized representative, in form and substance satisfactory to the Underwriter and Bond Counsel, respecting certain tax matters as may be reasonably required by Bond Counsel to enable it to give its opinion. (i) A certificate of the Trustee, dated the Closing Date and signed by an authorized officer of the Trustee, in form and substance satisfactory to the Underwriter. (j) The Borrower’s 15c2-12 Certificate, substantially in the form attached hereto as Exhibit D, duly executed by the Borrower.
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(k) Certified copies of the organizational documents of the Borrower and copies of the resolutions or actions of its partners (if applicable) authorizing the execution and delivery of the Borrower Documents.
(l) The Financing Documents (or certified copies thereof) duly executed and delivered by the respective parties thereto, with such amendments, modifications or supplements as may have been agreed to by the Issuer, Bond Counsel and the Underwriter. (m) A certificate of Fannie Mae dated the Closing Date, delivered to the Issuer, Bond Counsel and the Underwriter, substantially in the form attached hereto as Exhibit F. (n) A certificate of the Permanent Lender dated the Closing Date, delivered to the Issuer, Bond Counsel and the Underwriter, substantially in the form attached hereto as Exhibit G. (o) Written evidence satisfactory to the Underwriter that Moody’s Investors Service, Inc. (the “Rating Agency”) has issued a rating of “[Aaa]” for the Long-Term Bonds and a rating of “[Aaa/VMIG 1]” for the Short-Term Bonds, and such ratings shall be in effect on the Closing Date. (p) A verification report relating to (a) the adequacy of cash and/or U.S. Treasury Securities to be held in separate funds to pay the debt service requirements of the Bonds, (b) the yield on the Series 2025A-1 Bonds to maturity, (c) the yield on the Series 2025A-2 Bonds through the Initial Mandatory Tender Date, (d) the blended yield on the Bonds through the Initial Mandatory Tender Date, (e) the blended yield on the Eligible Investments (as defined in the Indenture) allocable to the Bonds, (f) the yield on the Eligible Investments allocable to the Series 2025A -1 Bonds, and (g) the yield on the Eligible Investments allocable to the Series 2025A-2 Bonds. (q) Such additional legal opinions, certificates, instruments and other documents as the Underwriter, the Issuer or Bond Counsel may reasonably deem necessary to evidence the truth and accuracy as of the Closing Date of the respective representations and warranties of the Issuer and the Borrower herein contained and of the Official Statement, and to evidence compliance by the Issuer and the Borrower with this Purchase Agreement and all applicable legal requirements, and the due performance and satisfaction by the Issuer and the Borrower at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Issuer and the Borrower.
10.3 If any of the co nditions set forth in Section 1 0.1 or 10.2 hereof have not been met on the Closing Date, the Underwriter may, at its sole option, terminate this Purchase Agreement or proceed to Closing upon waiving any rights under this Purchase Agreement with respect to any such condition. If this Purchase Agreement is terminated pursuant to this Section 10, no party will have any rights or obligations to any other, except as provided in Section 13 hereof.
Section 11. Actions and Events at the Closing.
The following events will take place at the Closing:
(a) The Issuer will cause the Trustee to deliver the Bonds to the Underwriter. The Bonds so delivered will be in the form required by the Indenture, duly authenticated by the Trustee, and will be fully registered in the name of C ede & Co., as nominee of The Depository Trust Company, New York, New York.
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(b) The Issuer and the Borrower, as applicable, will deliver or cause to be delivered to the Underwriter at the offices of Bond Counsel, or at such other place or places as the Issuer, the Borrower and the Underwriter may mutually agree upon, the materials described in Sectio n 10.1 and Section 10.2 hereof.
(c) The Underwriter will deliver to the Trustee, for the account of the Issuer, a wire, payable in immediately available funds, in an amount equal to the purchase price of the Bonds as set forth in Exhibit A hereto.
Section 12. Termination of Agreement.
The Underwriter may terminate this Purchase Agreement, without liability therefor, by notifying the Issuer and the Borrower at any time prior to the Closing, if:
(a) Legislation is enacted or introduced in the Congress or recommended to the Congress for passage by the President of the United States, or favorably reported for passage to either house of the Congress of the United States by a committee of such house to wh ich such legislation has been referred for consideration, or a decision is rendered by a court established under Article III of the Constitution of the United States or by the Tax Court of the United States, or an order, ruling, regulation (final, temporar y or proposed), press release, statement or other form of notice or official statement is issued or made: (i) by or on behalf of the President, the Treasury Department of the United States or the Internal Revenue Service with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by the owners of the Bonds, or (ii) by or on behalf of the SEC, or any other governmental entity having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds or any arrangements underlying the Bonds, are not exempt from registration under the 1933 Act, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended;
(b) The declaration of a general banking moratorium by federal, New York or State authorities, or general suspension of trading in securities on the New York Stock Exchange any other national securities exchange, or the establishment by the New York Stock Exchange, by the SEC, by any federal or state agency or by the decision of any court, of any limitation on prices for such trading, or any outbreak or escalation of hostilities or occurrence of any other national or international calamity or crisis or escalation of such calamity or crisis , the effect of which on the financial markets of the United States shall be such as to make it impracticable for the Underwriter to proceed with the purchase and offering of the Bonds; (c) Any event or condition which, in the reasonable judgment of the Underwriter, (i) renders untrue any statement of a material fact in the Official Statement, and the Issuer and the Borrower do not agree to supplement or amend the Official Statement to correct the deficiency, or (ii) causes the Official Statement to omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer and the Borrower do not agree to supplement or amend the Official Statement to correct the deficiency, or (iii) has a material adverse effect upon the marketability of the Bonds, or (iv) would materially and adversely affect the ability of the Underwriter to enforce contracts for the sale of the Bonds;
(d) The imposition by the New York Stock Exchange or other national securities exchange, or any governmental entity, of any restrictions not now in forc e with respect to any of the Bonds or obligations of the general character of the Bonds or securities generally, or the increase
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of any such restrictions now in force, including those relating to the extension of credit by, or the change to the net capital requirements of the Underwriter; (e) An order, decree or injunction of any court of competent jurisdiction, or order, filing, regulation or official statement by the SEC, or any other governmental entity having jurisdiction of the subject matter, 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 or any arrangements underlying the Bonds, as contemplated hereby or by the Preliminary Official Statement or the Official Statement, is or would be in violation of the federal securities laws as then in effect;
(f) The rating on the Bonds shall have been downgraded or withdrawn by the Rating Agency; or
(g) A material disruption in commercial banking, securities settlement, payment, or clearance services shall have occurred.
Section 13. Fees and Expenses.
13.1 The Borrower shall pay to the Underwriter a fee in the amount of $_________ for certain fees and expenses (the “Underwriter’s Fee”), payable in immediately available funds on the Closing Date from which the Underwriter will pay certain expenses. The Underwriter’s Fee shall not include the fee of the Underwriter’s counsel. The Borrower acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred in connection with the issuance of the Bonds. The Borrower has agreed to pay the Underwriter’s Fee set forth in this Section 13.1 , and inclusive in the expense component of the Underwriter’s Fee are actual expenses incurred or paid for by the Underwriter on behalf of the Borrower in connection with the marketing, issuance, and delivery of the Bonds, including, but not limited to, advertising expenses, the costs of any preliminary and final blue sky memoranda, CUSIP fees, and transportation, lodging, and meals for the Borrower’s employees and representatives, if any.
13.2 The Borrower shall pay the costs of issuance of the Bonds, including all expenses incident to the performance of the Underwriter’s and the Issuer’s obligations hereunder, including, but not limited to, (i) the cost of the preparation, printing or other reproduction of this Purchase Agreement, the Preliminary Official Statement and the Official Statement, as either may be supplemented or amended, the Indenture and the other Financing Documents in reasonable quantities for distribution; (ii) the cost of engraving, reproducing and signing the definitive Bonds; (iii) the reasonable fees and disbursements of all applicable legal counsel, including Bond Counsel, counsel to the Issuer, counsel to the Trustee (if any), and counsel to the Underwriter, and of the Issuer’s municipal advisor; (iv) the initial fees and costs of paying the Trustee and all paying agents, transfer agents and registrars; (v) the fees and expenses of the Issuer; (vi) CUSIP fees; (vii) the cost of qualifying the Bonds for sale in various states chosen by the Underwriter and the cost of preparing or printing any Preliminary Blue Sky Survey to be used in connection with such sale; (viii) the fees and expenses of the experts retained by the Borrower with respect to the acquisition, rehabilitation and financing of the Project; (ix) the fees of the Rating Agency in connection with the rating of the Bonds; (x) normal travel costs, including reasonable transportation and lodging; (xi) ordinary and reasonable meals hosted by the Underwriter that are directly related to the offering contemplated by this Purchase Agreement; and (xii) all other applicable fees of professionals hired in conjunction with the issuance of the Bonds .
Notwithstanding anything to the contrary, in the event the transaction contemplated hereby does not close, the Borrower shall pay all fees and expenses incurred in connection with the transaction.
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13.3 In the event that the Issuer, the Borrower or the Underwriter shall have paid obligations of the other as set forth in this Section, appropriate adjustments will promptly be made.
13.4 In addition to the provisions set forth in Section 14 hereto, the Borrower shall indemnify the Issuer and the Underwriter with respect to the foregoing costs and expenses in the event that the purchase provided for herein is not consummated.
Section 14. Indemnification.
14.1 The Borrower will indemnify and hold harmless the Issuer and the Underwriter, and each of their officers, directors, employees, agents, officials, members, commissioners, board members and each person who “controls” (as such term is used in Section 15 of the 1933 Act and Section 20 of the 1934 Act) the Issuer and the Underwriter (each referred to individually as an “Indemnified Party” and collectively as the “Indemnified Parties”) against any losses, claims, expenses (including, without limitation, to the extent permitted by law, reasonable attorneys’ fees and expenses actually incurred), damages or liabilities, causes of action (whether in contract, tort or otherwise), suits, claims, demands and judgments of any kind, character and nature (collectively refe rred to herein as the “Liabilities”), joint or several, to which the Indemnified Parties may be threatened or become subject, caused by or directly or indirectly arising from or in any way relatin g to (i) the Bonds, the Project, the loan of the proceeds of the Bonds, this Purchase Agreement or any document related to the Bonds, the Project or the loan of the proceeds of the Bonds or any transaction or agreement, written or oral, pertaining to the foregoing, (ii) any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Official Statement or the Official Statement, or any supplement or amendment thereto, or (iii) any omission or alleged omission to state in the Preliminary Official Statement or the Official Statement a material fact necessary to be stated therein in order to make the statements contained therein, in light of the circumstances under which t hey were made, not misleading. This indemnification provision shall not be construed as a limitation on any other liability which the Borrower may otherwise have to any indemnified person, provided that in no event shall the Borrower be obligated for double indemnification , in that the Borrower shall not be required to indemnify an Indemnified Party more than once with respect to a specific indemnification obligation arising as the result of a specific event. Notwithstanding the foregoing, (i) with respect to the Issuer and its related Indemnified Parties (the “Issuer Indemnified Parties”), the Borrower shall not be required to indemnify the Issuer Indemnified Parties for the willful misconduct of the Issuer Indemnified Parties and (ii) with respect to the Underwriter and its related Indemnified Parties (the “Underwriter Indemnified Parties”), the Borrower shall not be required to indemnify the Underwriter Indemnified Parties for the gross negligence or willful misconduct of the Underwriter Indemnified Parties.
14.2 The indemnity agreements in paragraph 14.1 of this Section 14 shall be in addition to any liability which the Borrower may otherwise have hereunder or under the other Borrower Documents, and shall extend on the same terms and conditions to each member, principal, official, officer, commissioner, board member, attorney or employee of the Borrower and to each person, if any, who “controls” (as such term is used in Section 15 of the 1933 Act and Section 20 of the 1934 Act) the Borrower.
14.3 Promptly after receipt by an Inde mnified Party under paragraph 1 4.1 of this Section of notice of the commencement of any action against such Indemnified Party in respect of which indemnity or reimbursement may be sought against the Borrower under any such paragraph, such Indemnified Party will notify the Borrower in writing of the commencement thereof; provided that any delay or failure to give such notification shall be of no effect except to the extent that the Borrower is prejudiced thereby.
14.4 In case any action, claim or proceeding, as to which the Borrower is to provide indemnification hereunder, shall be brought against the Indemnified Party and the Indemnified Party notifies the Borrower of the commencement thereof, the Borrower may, or if so requested by the
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Indemnified Party shall, participate therein or assume the defense thereof, with counsel reasonably satisfactory to the Indemnified Party; provided that, except as provided below, the Borrower shall not be liable for the expenses of more than one separate counsel representing the Indemnified Party in the action, claim or proceeding.
14.5 If the Borrower shall not have employed counsel to have charge of the defense of the action, claim or proceeding, or if any Indemnified Party shall have concluded reasonably that there may be a defense available to it or to any other Indemnified Party which is different from or in addition to those available to the Borrower or to any other Indemnified Party (hereinafter referred to as a “separate defense”), (i) the Borrower shall not have the right to direct the defense of the action, claim or proceeding on behalf of the Indemnified Party, and (ii) reasonable legal and other expenses incurred by the Indemnified Party (including without limitation, to the extent permitted by law, reasonable attorney’s fees and expenses actually incurred) shall be borne by the Borrower; provided, that the Borrower shall not be liable for the expenses of more than one additional separate counsel for each Indemnified Party with respect to such separate defenses. For the purpose of this paragraph, an Indemnified Party shall be de emed to have concluded reasonably that a separate defense is available to it or any other Indemnified Party if (a) such Indemnified Party shall have requested an unqualified written opinion from Independent Counsel to the effect that a separate defense exists, and such Independent Counsel shall have delivered such opinion to the Indemnified Party within ten (10) days after such request or (b) the Borrower agrees that a separate defense is so available. For purposes of this paragraph, “Independent Counsel” shall mean any attorney, or firm or association of attorneys, duly admitted to practice law before the supreme court of any state and not a full- time employee of any Indemnified Party. Nothing contained in this paragraph 14.5 will preclude any Indemnified Party, at its own expense, from retaining additional counsel to represent such party in any action with respect to which indemnity may be sought from the Borrower hereunder.
14.6 The Borrower agrees to reimburse any Indemnified Party for any reasonable expense (including reasonable fees and expenses of counsel) incurred as a result of producing documents, presenting testimony or evidence, or preparing to present testimony or evidence (based upon time expended by an Indemnified Party at its then current t ime charges), in connection with any court or administrative proceeding (including any investigation which may be preliminary thereto) arising out of or relating to any public distribution of the Bonds. The Borrower will not be required to reimburse any (i) Issuer Indemnified Party if such court or administrative hearing arises out of the willful misconduct or breach of this Purchase Agreement by an Issuer Indemnified Party and (ii) Underwriter Indemnified Party if such court or administrative hearing arises out of the gross negligence of, willful misconduct or breach of, this Purchase Agreement by an Underwriter Indemnified Party.
14.7 In order to provide for just and equitable contribution in circumstances in which the indemnity provided for in paragraph 14.1 or 14.2 of this Section 14 is for any reason held to be unavailable, the Borrower and the Indemnified Party shall contribute proportionately to the aggregate Liabilities to which the Borrower and the Indemnified Party may be subject, so that the Indemnified Party is responsible for that portion represented by the percentage that the fees paid by the Borrower to the Indemnified Party in connection with the issuance and administration of the Bonds bears to the aggregate offering price of the Bonds, with the Borrower responsible for the balance; provided, however, that in no case shall the Indemnified Party be responsible for any amount in excess of the fees paid by the Borrower to the Indemnified Party in connection with the issuance and administration of the Bonds; and provided, further, that the foregoing limitation on an Indemnified Party’s liability or responsibility shall not be applicable if the indemnity provided for in paragraph 14.1 or 14.2 is unavailable or inapplicable due to the gross negligence or willful misconduct of any Indemnified Party. No person guilt y of fraudulent misrepresentation (within Section 10(b) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such misrepresentation.
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14.8 The Indemnified Parties, other than the Underwriter and the Issuer, shall be considered to be third-party beneficiaries of this Purchase Agreement for purposes of this Section 14. The provisions of this Section 14 will be in addition to all liability which the Borrower may otherwise have and shall survive any termination and cancellation of this Purchase Agreement, the offering and sale of the Bonds and the payment or provisions for payment of the Bonds.
14.9 Notwithstanding anything to the contrary in t his Purchase Agreement , the Issuer may employ its own counsel (whether one or more separate counsel) in any manner it deems appropriate , and the Borrower shall indemnify the Issuer for fees and expenses of such counsel.
Section 15. Limitation of Liability.
Notwithstanding any provision herein to the contrary, no member, officer, director, partner, agent, commissioner, board members or employee of the Issuer, the Underwriter or the Borrower, including any person executing this Purchase Agreement, shall bear any liability as a result of any failure of the Issuer , the Underwriter or the Borrower to perform the obligations of each, respectively, set forth in this Purchase Agreement.
Section 16. Miscellaneous.
16.1 All notices, demands and formal actions hereunder will be in writing and mailed, telecopied or delivered to the following address or such other address as either of the parties shall specify:
If to the Underwriter: Lument Securities, LLC
3111 Camino Del Rio N, Suite 100
San Diego, CA 92108
Attention: Nicholas A. Hamilton
If to the Issuer: City of San José
Finance Department
200 East Santa Clara Avenue, 13th Floor
San José, CA 95113
Attention: Debt Management
Email: [email protected]
If to the Borrower: Kooser Apartments, L.P.
c/o Affirmed Housing Group, Inc.
13520 Evening Creek Drive North, Suite 160
San Diego, CA 92128
Attention: President
16.2 This Purchase Agreement will inure to the benefit of and be binding upon the parties hereto and their successors and assigns and, except as provided in Section 1 4 hereof will not confer any rights upon any other person. The terms “successor” and “assigns” will not include any purchaser of any of the Bonds from the Underwriter merely because of such purchase.
16.3 This Purchase Agreement may not be assigned by any of the parties hereto prior to the Closing.
16.4 If any provision of this Purchase Agreement is held or deemed to be or is, in fact, inoperative, invalid or unenforceable as applied in any particular case in any jurisdiction or jurisdictions,
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or in all jurisdictions because it conflicts with any provision of any constitution, statute, rule of public policy, or any other reason, such circumstances will not have the effect of rendering the provision in question inoperable or unenforceable in any other case or circumstance or of rendering any other provision or provisions of this Purchase Agreement invalid, inoperative or unenforceable to any extent whatever.
16.5 This Purchase Agreement will be construed in accordance with and governed by the internal laws of the State, without regard to conflict of law principles of the State. This Purchase Agreement shall be enforceable in the State, and any action arising hereunder shall (unless waived by the Issuer in writing) be filed and maintained in the County of Santa Clara, California.
16.6 This Purchase Agreement may be executed in several counterparts (including counterparts exchanged by email in PDF format) , each of which will be regarded as an original and all of which will constitute one and the same document.
Section 17. Survival of Certain Representations and Obligations.
The respective agreements, covenants, representations, warranties and other statements of the Issuer and the Borrower and each of their respective officers set forth in or made pursuant to this Purchase Agreement shall survive delivery of and payment for the Bonds and shall remain in full force and effect, regardless of any investigation, or statements as to the results thereof, made by or on behalf of the Underwriter.
[Signature pages to follow]
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If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof and, upon the acceptance hereof by the Issuer and the Borrower, t his Purchase Agreement and such acceptance shall constitute the binding agreement among us as to the matters set forth above.
Very truly yours,
LUMENT SECURITIES, LLC
By:
Nicholas A. Hamilton
Senior Managing Director
[Signatures continue on following page]
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[Issuer’s signature page to Purchase Agreement]
CITY OF SAN JOSE, as Issuer
By:
Maria Öberg
Director of Finance
Approved as to Form:
Jessica Holden
Deputy City Attorney
[Signatures continue on following page]
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[Borrower’s signature page to Purchase Agreement]
KOOSER APARTMENTS, L.P.,
a California limited partnership
By: AHG Kooser, LLC,
a California limited liability company,
its Administrative General Partner
By: Affirmed Housing Group, Inc.,
a Delaware corporation,
its Manager
By:
James P. Silverwood
President
By: CFAH Housing LLC,
a California limited liability company,
its Managing General Partner
By: Compass for Affordable Housing,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Robin Martinez
Executive Director
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EXHIBIT A
TERMS OF BONDS
Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade)
Series 2025A-1
Dated Date Maturity Date Principal Amount Interest Rate Price ________, 2025 August 1, 20___ $________ ___% 100%
Multifamily Housing Revenue Bonds
(Arcade)
Series 2025A-2
Dated Date
Initial
Mandatory
Tender Date Maturity Date
Principal
Amount
Interest
Rate Price
________, 2025 August 1, 20___ August 1, 20__ $________ ___% 100%
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EXHIBIT B
PROPOSED FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
________, 2025
Lument Securities, LLC,
as Underwriter
San Diego, California
SUPPLEMENTAL OPINION:
$________ City of San José Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade) Series 2025A-1
$________ City of San José Multifamily Housing Revenue Bonds (Arcade) Series 2025A-2 Ladies and Gentlemen:
This letter is addressed to you, as Underwriter, pursuant to Section 10.2(a) of the Bond Purchase Agreement, dated [Pricing Date] (the “Purchase Agreement”), among you, California Municipal Finance Authority (the “Issuer”) and Kooser Apartments, L.P. (the “Borrower”), providing for the above-referenced bonds (collectively, the “Bonds”). The Bonds are being issued pursuant to the Indenture of Trust, dated as of ________ 1, 2025 (the “Indenture”), between the Issuer and Computershare Trust Company, National Association, as trustee (the “Trustee”) for the stated purpose of making a loan of the proceeds thereof to the Borrower. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Purchase Agreement.
We have delivered our final legal opinion (the “Bond Opinion”) as bond counsel to the Issuer concerning the validity of the Bonds and certain other matters, dated the date hereof and addressed to the Issuer. You may rely on such opinion as though the same were addressed to you.
In connection with our role as bond counsel to the Issuer, we have reviewed the Purchase Agreement, the Indenture, the Financing Agreement, the Regulatory Agreement, the Tax Certificate and Agreement, dated the date hereof (the “Tax Certificate”), between the Issuer and the Borrower, certain portions of the Official Statement, dated [Pricing Date], wit h respect to the Bonds (the “Official Statement”), certificates of the Issuer, the Borrower, the Trustee and others, opinions of counsel to the Issuer, the Borrower, the Trustee and others, and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.
The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the original delivery of the Bonds on the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the origina l delivery of the Bonds on the date hereof. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery thereof by, and validity against, any parties other than the Issuer. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to
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in the third and fourth paragraphs hereof. We have further assumed compliance with all covenants and agreements contained in such documents. In addition, we call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Financing Agreement, the Regulatory Agreement, the Tax Certificate and the Purchase Agreement and their enforceability may be subject to bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities such as the Issuer in the State of California. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute or to have the effect of a penalty), right of set -off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non - exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinions with respect to the state or quality of title to or interest in any assets described in or as subject to the lien of the Indenture or the Financing Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such assets. Finally, we undertake no responsibility for the accuracy, except as expressly set forth in numbered paragraph 3 below, completeness or fairness of the Official Statement or other offering material rel ating to the Bonds and express no opinion or view with respect thereto.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:
1. 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. No opinion is expressed with respect to the MBS.
2. The Purchase Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of, the Issuer.
3. The statements contained in the Official Statement (except as to any statistical and financial data included in the Official Statement and except for the information relating to The Depository Trust Company, its Participants and its book-entry only system, as to which we do not express an opinion) under the captions “DESCRIPTION OF THE BONDS,” “TAX MATTERS,” “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” “APPENDIX D – SUMMARY OF CERTAIN PROVISIONS OF THE FINANCING AGREEMENT” and “APPENDIX E – SUMMARY OF CERTAIN PROVISIONS OF THE REGULATORY AGREEMENT,” excluding any material that may be treated as included under such captions by cross reference or reference to other documents or sources, insofar as such statements expressly summarize certai n provisions of the Indenture, the Financing Agreement and the Regulatory Agreement, or set out content of the Bond Opinion, are accurate in all material respects.
This letter is furnished by us as bond counsel to the Issuer. No attorney -client relationship has existed or exists between our firm and you in connection with the Bonds or by virtue of this letter. We disclaim any obligation to update this letter. This letter is delivered to you as Underwriter of the Bonds, is solely for your benefit as such Underwriter in connection with the original delivery of the Bonds on the date hereof, and is not to be used, circulated, quoted or otherwise referred to or relied u pon for any other purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of the Bonds or by any other party to whom it is not specifically addressed.
Respectfully submitted,
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EXHIBIT C
FORM OF OPINION OF COUNSEL TO THE BORROWER
________, 2025
Lument Securities, LLC
Columbus, Ohio
City of San José
San José, California
Anzel Galvan LLP
San Francisco, California
Computershare Trust Company, National Association
St. Paul, Minnesota
Fannie Mae
Washington, D.C.
$________
City of San José
Multifamily Housing Revenue Bonds
(Fannie Mae MBS Secured)
(Arcade)
Series 2025A-1
$________
City of San José
Multifamily Housing Revenue Bonds
(Arcade)
Series 2025A-2
Ladies and Gentlemen:
We have acted as counsel to Kooser Apartments, L.P . (the “Borrower”), in connection with the issuance of the above-captioned bonds (the “Bonds”) by the City of San José (the “Issuer”).
Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture of Trust dated as of ________ 1, 2025, between the Issuer and Computershare Trust Company, National Association, a national banking association , as trustee (the “Trustee”), or the hereinafter -defined Bond Purchase Agreement.
In our capacity as such counsel, in rendering the opinions set forth below, we have examined, among other things, originals or copies, certified or otherwise identified to our satisfaction, of the following documents: (i) the Preliminary Official Statemen t, dated ________, 2025, of the Issuer relating to the Bonds (the “Preliminary Official Statement”); (ii) the Official Statement, dated ________, 2025, of the Issuer relating to the Bonds (the “Official Statement”); (iii) the Regulatory Agreement and Declaration of Restrictive Covenants, by and between the Issuer and the Borrower, dated as of ________ 1, 2025; (iv) the Financing Agreement, dated as of ________ 1, 2025 , by and among the Issuer, the Trustee and the Borrower; (v) the Bond Purchase Agreement, dated ________, 2025, among the Issuer, the Underwriter named therein and the Borrower (the “Bond Purchase Agreement”); (vi) the Continuing Disclosure Agreement, dated as of ________ 1, 2025 , between the Borrower and the Dissemination Agent named therein; (vii) the Remarketing Agreement, dated as of ________ 1, 2025, between the Borrower and the Remarketing Agent named therein; (viii) the promissory note, dated the Closing Date, executed by the Borrower; (ix) the Tax Certificate and Agreement, dated the Closing Date, executed by the Borrower and
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the Issuer; and (x) such other documents, certificates and instruments as we have deemed necessary for the purposes of reaching the opinion expressed herein. We have also relied as to matters of fact upon a certificate of the Borrower and examined certain other certificates and documents.
In such examination, we have assumed the genuineness of all signatures (other than those relating to the Borrower), the authenticity of all documents submitted to us as originals, and the conformity to the original document of all documents submitted to us as photostatic or certified copies. We have assumed due authorization, execution and delivery of all documents referenced herein by the parties thereto other than the Borrower and that each of such parties has full power, authority and legal right to exe cute and deliver each such instrument.
Based upon and subject to the foregoing, we are of the opinion that, as of the date hereof:
(i) The Borrower (a) is a limited partnership validly existing under the laws of the State of California (the “State”), (b) is in good standing and duly qualified to transact business in the State, and (c) has full power and authority to execute and deliver the documents listed above numbered (iii) through (ix) (the “Financing Documents”) and the O fficial Statement and to perform its obligations under each respective agreement.
(ii) The Financing Documents and the Official Statement have each been duly authorized, executed and delivered by the Borrower and the Financing Documents constitute legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforcement thereof may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization and similar laws (including fraudulent conveyance laws) affecting the enforcement of creditors’ rights and remedies generally in effect from time to time, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). (iii) The execution and delivery of the Financing Documents and the performance by the Borrower of the terms of the respective agreements do not conflict with or violate any other document, instrument, decree, indenture or agreement by which the Borrower is bound. (iv) No approval, authorization or other action by, or filing with, the State or any agency thereof, is required in connection with the execution and delivery by the Borrower of the Bond Purchase Agreement.
(v) There is no action, suit, proceeding, inquiry or investigation at law or in equity or before any court or public body pending or, to the best of our knowledge, threatened, to challenge the right, power or authority of the Borrower to acquire, own and operate the Project or to perform its obligations under the Bond Purchase Agreement or the other Financing Documents. (vi) The information in the Preliminary Official Statement and the Official Statement does not contain an untrue statement of fact or omit 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 as of the date hereof.
We express no opinion as to any matter whatsoever, relating to the accuracy or completeness of any financial accounting or projection information furnished to any party, the accuracy or completeness of any representation made by our clients, the financial status of our clients, the ability of our clients to meet their obligations under any of the above-referenced agreements or any other related document.
Very truly yours,
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EXHIBIT D
FORM OF BORROWER’S RULE 15c2-12 CERTIFICATE
$________
City of San José
Multifamily Housing Revenue Bonds
(Fannie Mae MBS Secured)
(Arcade)
Series 2025A-1
$________
City of San José
Multifamily Housing Revenue Bonds
(Arcade)
Series 2025A-2
The undersigned hereby certifies and represents to Lument Securities, LLC (the “Underwriter”) that the undersigned is authorized to execute and deliver this certificate on behalf of Kooser Apartments, L.P., a California limited partnership (the “Borrower”), and hereby further certifies to the Underwriter as follows:
(a) This certificate is delivered to enable the Underwriter to comply with Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”) in connection with the issuance and sale of the above captioned securities (the “Bonds”). (b) In connection with the issuance and sale of the Bonds, there has been prepared a Preliminary Official Statement, dated ________, 2025, relating to the Bonds (the “Preliminary Official Statement”), setting forth information concerning the Bonds and the Borrower. (c) As used herein, “Permitted Omissions” shall mean the offering price(s), interest rate(s), accreted values, yield to maturity, selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of th e Bonds depending on such matters and the identity of the Underwriter(s), all with respect to the issuance and sale of the Bonds. (d) The Preliminary Official Statement is, as of the date thereof, deemed final within the meaning of the Rule, except for Permitted Omissions.
(e) The section of the Preliminary Official Statement entitled “CONTINUING DISCLOSURE” describes the agreement the Borrower expects to make for the benefit of the Bondholders in the Continuing Disclosure Agreement dated as of ________ 1, 2025 , executed by the Borrower and Computershare Trust Company, National Association , a national banking association , as dissemination agent, by which the Borrower will undertake to provide continuing disclosure in accordance with the Rule.
Dated: ________, 2025
[Signature page to follow]
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[Signature page to Rule 15c2-12 Certificate]
IN WITNESS WHEREOF, I have hereunto set my hand as of the date set forth above.
KOOSER APARTMENTS, L.P.,
a California limited partnership
By: AHG Kooser, LLC,
a California limited liability company,
its Administrative General Partner
By: Affirmed Housing Group, Inc.,
a Delaware corporation,
its Manager
By:
James P. Silverwood
President
By: CFAH Housing LLC,
a California limited liability company,
its Managing General Partner
By: Compass for Affordable Housing,
a California nonprofit public benefit corporation,
its sole member and manager
By:
Robin Martinez
Executive Director
E-1
DRAFT--Contact the Office of the City Clerk at (408) 535-1260 or [email protected] for final document.
EXHIBIT E
FORM OF ISSUE PRICE CERTIFICATE
$________
City of San José
Multifamily Housing Revenue Bonds
(Fannie Mae MBS Secured)
(Arcade)
Series 2025A-1
$________
City of San José
Multifamily Housing Revenue Bonds
(Arcade)
Series 2025A-2
The undersigned, on behalf of Lument Securities, LLC (the “Underwriter”), on behalf of itself, hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).
1. Sale of the Bonds . As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Exhibit A attached to the Bond Purchase Agreement dated ________, 2025 , among the Underwriter, Kooser Apartments, L.P., a California limited partnership (the “Borrower”), and City of San José (the “Issuer”). The aggregate issue price of the Bonds is $________________.
2. Defined Terms.
(a) 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.
(b) 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.
(c) 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 written 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 the Underwriter’s 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 Agreement dated as of the date hereof, with respect to the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Anzel Galvan 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 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.
Dated: ________, 2025
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[Underwriter’s signature page to Issue Price Certificate] Dated as of the date hereof.
LUMENT SECURITIES, LLC
By:
Nicholas A. Hamilton
Senior Managing Director
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EXHIBIT F
FORM OF CERTIFICATE OF FANNIE MAE
$________
City of San José
Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade)
Series 2025A-1
This Certificate, dated as of ________, 2025 , is being furnished to the City of San José (the “Issuer”) and Lument Securities, LLC , as underwriter (the “Underwriter”), pursuant to the terms of the Bond Purchase Agreement dated ________, 2025 (the “ Bond Purchase Agreement ”) among the Underwriter, the Issuer and Kooser Apartments, L.P., a California limited partnership , regarding the purchase by the Underwriter of the Issuer’s Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade) Series 2025A-1 (the “Bonds”), issued by the Issuer. All terms not otherwise defined herein shall have the meanings ascribed to such terms in the Bond Purchase Agreement.
The undersigned hereby certifies to the Issuer and the Underwriter that (A) Fannie Mae has provided the link which includes a template of the Fannie Mae MBS Prospectus (Multifamily Fixed Rate Yield Maintenance) set forth in the first paragraph under the caption “APPENDIX A – FANNIE MAE MORTGAGE-BACKED SECURITIES PROGRAM ” in the Preliminary Official Statement and the Official Statement, (B) if the MBS had been issued by Fannie Mae on the date of this Certificate, the disclosure in the Additional Disclosure A ddendum provided in connection with the MBS would be substantially the same in all material respects as the Additional Disclosure Addendum provided in Schedule I to Appendix A of the Official Statement, and (C) Fannie Mae consents to the inclusion, but makes no representation as to the suitability of such information under the caption “APPENDIX A – FANNIE MAE MORTGAGE-BACKED SECURITIES PROGRAM ” in the Preliminary Official Statement and the Official Statement, for use in connection with the marketing of the Bonds.
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FANNIE MAE
By:
Name:
Title:
FANNIE MAE CERTIFICATE (Arcade)
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EXHIBIT G
FORM OF CERTIFICATE OF PERMANENT LENDER
$________
City of San José
Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade)
Series 2025A-1
________, 2025
The undersigned, Lument Real Estate Capital, LLC, a Delaware limited liability company (the “Permanent Lender”), in connection with the issuance, sale and delivery by the City of San José (the “Issuer”) of its Multifamily Housing Revenue Bonds (Fannie Mae MBS Secured) (Arcade) Series 2025A- 1 in the aggregate principal amount of $________ (the “Bonds”), does hereby certify as of the date hereof as follows:
1. If issued by Fannie Mae, each MBS delivered to Computershare Trust Company, National Association, a national banking association (the “Trustee”) pursuant to the Indenture shall be issued by Fannie Mae and guaranteed by its terms, as to timely payment of interest at the applicable Pass -Through Rate on the unpaid principal balance of the Permanent Loan pertaining to such MBS, and guaranteed by its terms as to timely payment of principal in accordance with the terms of the principal amortization schedule of the Permanent Loan.
2. If the MBS is issued by Fannie Mae, the Trustee shall be furnished with (i) an MBS, registered in the name of the Trustee (or its nominee), as Trustee under the Indenture and (ii) any prospectus for the MBS.
3. The Permanent Lender has provided the information under the captions “THE PERMANENT LOAN,” “FANNIE MAE,” “APPENDIX A — FANNIE MAE MORTGAGE -BACKED SECURITIES PROGRAM,” and “APPENDIX H — TERM SHEET” in the Official Statement, and, to the knowledge of the Lender, the information under such captions in the Official Statement is accurate as of the date of the Official Statement and as of the Closing Date, and that the Permanent Lender has authorized the inclusion of such information in the Official Statement for use in connection with the marketing of the Bonds.
All terms not otherwise defined herein shall have the meanings ascribed to such terms in the Bond Purchase Agreement dated ________, 2025, among Lument Securities, LLC, Kooser Apartments, L.P., a California limited partnership, and the Issuer.
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[Signature page to Certificate of Permanent Lender]
IN WITNESS WHEREOF, I have hereunto set my hand as of the date set forth above.
LUMENT REAL ESTATE CAPITAL, LLC
By:
Name:
Title: