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FINANCING AUTHORITY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
Tuesday, June 1, 2004 - 3:00 P.M.
Beginning Resolution No. FA 2004-02
CALL TO ORDER
Roll Call:
Board Members: Henderson, Osborne, Perkins, Sniff, and Chairman Adolph
PUBLIC COMMENT
At this time members of the public may address the Financing Authority on items that
appear within the Consent Calendar or matters that are not listed on the agenda. Please
complete a "request to speak" form and limit your comments to three minutes. When you
are called to speak, please come forward and state your name for the record. Please
watch the timing device on the podium.
For all Business Session matters or Public Hearings on the agenda, a completed "request to
speak" form should be filed with the City Clerk prior to beginning consideration of that
item.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF MAY 18, 2004.
Financing Authority Agenda 1 June 1, 2004
CONSENT CALENDAR - NONE
BUSINESS SESSION
1. CONSIDERATION OF ADOPTION OF A RESOLUTION OF THE LA QUINTA
FINANCING AUTHORITY OF THE CITY OF LA QUINTA AUTHORIZING THE
ISSUANCE OF LOCAL AGENCY REVENUE BONDS, 2004 SERIES A. IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $100,000,000, APPROVING
THE EXECUTION OF AN INDENTURE OF TRUST, SUPPLEMENTAL LOAN
AGREEMENT, PURCHASE CONTRACT, ESCROW DEPOSIT AND TRUST
AGREEMENT, OFFICIAL STATEMENT AND PROVIDING OTHER MATTERS
PROPERLY RELATING THERETO.
A. RESOLUTION ACTION
CHAIR AND BOARD MEMBERS' ITEMS — NONE
PUBLIC HEARINGS — NONE
ADJOURNMENT
Adjourn to a regularly scheduled meeting of the Financing Authority to be held on June 15,
2004 at 3:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA
92253.
DECLARATION OF POSTING
I, Phyllis Manley, Deputy City Clerk of the City of La Quinta, do hereby declare that the
foregoing agenda for the La Quinta Financing Authority meeting of Tuesday, June 1, 2004
was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on
the bulletin board at the La Quinta Chamber of Commerce and at Stater Bros., 78-630
Highway 1 1 1, on Friday, May 28, 2004.
DATED: May 28, 2004
PHYLLI MANLEY, Deputy ity Clerk
City of La Quinta, California
Financing Authority Agenda 2 June 1, 2004
COUNCIL/RDA MEETING DATE: June 1, 2004
ITEM TITLE: Consideration of I a Resolution of the La
Quinta Financing Authority of the City of La Quinta
Authorizing the Issuance of Local Agency Revenue
Bonds, 2004 Series A, in an Aggregate Principal
Amount not to Exceed $100,000,000, Approving the
Execution of an Indenture of Trust, Supplemental
Loan Agreement, Purchase Contract, Escrow Deposit
and Trust Agreement, Official Statement and
Providing Other Matters Properly Relating Thereto
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the La Quinta Financing Authority ("Authority") authorizing the
issuance of Local Agency Revenue Bonds, 2004 Series A, in an aggregate principal
amount not to exceed $100,000,000, approving the execution of an Indenture of
Trust, Supplemental Loan Agreement, Purchase Contract, Escrow Deposit and Trust
Agreement, Official Statement and providing other matters properly relating thereto.
Due to the number and length of the documents involved in this bond issue,
documents not provided as attachments hereto are available in the City Clerk's office
for review.
FISCAL IMPLICATIONS:
The Authority will undertake Bond debt service payment obligations pertaining to an
anticipated $100,000,000 2004 Series A Revenue Bonds. These costs will be funded
by the La Quinta Redevelopment Agency per the Loan Agreement with 20% Housing
set aside property tax increment funds.
CITY CHARTER IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
The Redevelopment Agency has been actively implementing an affordable housing
strategy to generate dwellings affordable to very low-, low- and moderate -income
households that feature 45- to 55-year covenants. These efforts have been funded
through a combination of Agency Housing Fund tax increment revenue and proceeds from
the Agency's 1995 Housing Bond. The Agency desires to refund the 1995 Housing Bond
to achieve interest cost savings, and to raise new capital to fund property acquisition and
housing project implementation efforts. To do so, the Agency proposes to enter into a loan
agreement with the La Quinta Financing Authority that pledges La Quinta Redevelopment
Project Area No. 1 and Project Area No. 2 Housing Fund revenue to pay debt service costs
related to the Authority's proposed $100,000,000 2004 Series A Revenue Bonds.
The Authority has sold Agency bonds since 1988. For this transaction, the Authority would
sell Authority sponsored revenue bonds that are indirectly paid for with tax increment
revenue that is allocated to the Agency's Housing Funds. This structure was validated
through a legal action that was approved by the Riverside County Superior Court in April
2004. The 2004 Series A Revenue Bonds will be used to retire the approximately $20.0
million of 1995 Agency Housing Bonds, and fund the loan obligations per the Loan
Agreement. The Agency will use the loan proceeds to purchase property and facilitate the
development of affordable housing.
The Redevelopment Agency Board has on their agenda the Loan Agreement and payment
of 2004 Series A Revenue Bond issuance costs; and the La Quinta City Council has on
their agenda the issuance of the 2004 Series A Revenue Bonds and the Loan Agreement.
Both entities request that the La Quinta Financing Authority consider the attached
resolution that:
• Approves the issuance of the 2004 Series A Revenue Bonds in an aggregate
amount not to exceed $100,000,000;
• Approves the Preliminary Official Statement for the 2004 Series A Revenue Bonds;
• Authorizes the Authority Executive Director to establish the final terms of sale for the
2004 Series A Revenue Bonds;
• Appoints U.S. Bank Trust National Association as trustee and escrow agent;
• Approves the Loan Agreement with the Agency;
• Approves a Disclosure Counsel Agreement with Stradling Yocca Carlson and Rauth
Attachment 2;
• Approves the financing documents; and
• Authorizes the officers of the Financing Authority and members of the Governing
Body to take such actions and execute documents necessary to facilitate the bond
sale.
k�
Since 1988 the Agency has sold nine bond issues through the Financing Authority, who in
turn directly sold the bonds to underwriters. Given the diligent and cost effective service
that Wedbush Morgan securities has provided for past bond issues, the Agency Board
recommends that this firm serve as underwriter for this financing and have provided as
Attachment 1 a bond purchase contract for Authority consideration.
In addition, a bond pricing consultant has been and will used to insure that the interest
rates, discount rates and issuance costs are equal to those incurred for like sized and
structured bond issues sold on a competitive basis.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Financing Authority include:
1. Adopt a Resolution of the La Quinta Financing Authority authorizing the issuance
of Local Agency Revenue Bonds, 2004 Series A, in an aggregate principal amount
not to exceed $100,000,000, approving the execution of an Indenture of Trust,
Supplemental Loan Agreement, Purchase Contract, Escrow Deposit and Trust
Agreement, Official Statement and providing other matters properly relating
thereto; or
2. Do not adopt a Resolution of the La Quinta Financing Authority authorizing the
issuance of Local Agency Revenue Bonds, 2004 Series A, in an aggregate
principal amount not to exceed $100,000,000, approving the execution of an
Indenture of Trust, Supplemental Loan Agreement, Purchase Contract, Escrow
Deposit and Trust Agreement, Official Statement and providing other matters
properly relating thereto; or
3. Provide staff with alternative direction.
Respectfully submitted,
YJ-o�htnFalcon'er, Finance Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachment: 1. Purchase Contract
2. Disclosure Counsel Agreement
3
RESOLUTION NO. FA 2004-
A RESOLUTION OF THE LA QUINTA FINANCING
AUTHORITY AUTHORIZING THE ISSUANCE OF LOCAL
AGENCY REVENUE BONDS, 2004 SERIES A, IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$100,000,000, APPROVING THE EXECUTION OF AN
INDENTURE OF TRUST, SUPPLEMENTAL LOAN
AGREEMENT, PURCHASE CONTRACT, ESCROW DEPOSIT
AND TRUST AGREEMENT, OFFICIAL STATEMENT AND
PROVIDING OTHER MATTERS PROPERLY RELATING
THERETO
WHEREAS, the City of La Quinta (the "City") and the La Quinta Redevelopment
Agency (the "Agency") have heretofore entered into a Joint Exercise of Powers
Agreement establishing the La Quinta Public Financing Authority (the Authority) for
the purpose of issuing its bonds to be used to provide financing for capital
improvements of the City and the Agency, and any other member entities which may
be approved by the City and the Agency as members of the Authority; and
WHEREAS, the Authority proposes for such purpose to authorize issuance of
bonds pursuant to an Indenture of Trust (the "Indenture"), dated as of May 1, 2004,
by and between the Authority and U.S. Bank National Association (the Trustee) in
the maximum principal amount not to exceed $100,000,000 Local Agency Revenue
Bonds, 2004 Series A Bonds (the "Series A Bonds.); and
WHEREAS, the Bonds, including the Series A Bonds, are to be issued pursuant
to the Marks -Roos Local Bond Pooling Act of 1985 (the "Act"), constituting Article 4
(commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the
Government Code of the State of California; and
WHEREAS, the Authority proposes to sell the Series A Bonds at a negotiated
sale to Wedbush Morgan Securities (the "Underwriter") pursuant to a Bond Purchase
Agreement, (the "Purchase Contract"); and
WHEREAS, the Underwriter has caused to be prepared an Official Statement
describing the Series A Bonds (the forms of which are on file with the Secretary); and
WHEREAS, the Authority intends to use proceeds from the Series A Bonds to
make a loan to the Agency (the "Loan") pursuant to a Loan Agreement .(the Loan
Agreement") to finance certain low- and moderate -income housing projects (the
"Project"); and a First Supplemental Loan Agreement (the Supplemental Loan
Agreement"); and
WHEREAS, the Board of Directors of the Authority, with the aid of its Staff,
has reviewed the form of the Indenture, dated as of June 1, 2004, the Loan
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Resolution No. 2004-
2004 Series A Bonds
Adopted: June 1, 2004
Page 2
Agreement, dated as of February. 3, 2004, the First Supplemental Loan Agreement,
dated as of June 1, 2004, the Escrow Deposit And Trust Agreement, dated as of
June 1, 2004 and the Continuing Disclosure Agreement, dated as of June 1, 2004
(collectively, the "Financing Documents");
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the La
Quinta Public Financing Authority of the City of La Quinta, California as follows:
SECTION 1. Recitals True and Correct. Each of the recitals stated above is
true and correct.
. SECTION 2. Findings and Determinations. Pursuant to the Act, the Board
hereby finds and determines that the issuance of the Series A Bonds will result in
savings in effective interest rates, bond underwriting and bond issuance costs, will
result in significant employment benefits from timely completion of the Project, and
will cause the more efficient delivery of local agency services to residential and
commercial development and thereby will result in significant public benefits to the
City and the Agency within the contemplation of Sections 6586(a), (c), and (d) of the
Act.
SECTION 3. Issuance of Series A Bonds. The Board hereby authorizes the
issuance of the Series A Bonds in the aggregate principal amounts not to exceed
$100,000,000 under the authority of the Act and the Indenture, in substantially the
form on file with the Secretary, together with any changes therein or additions
thereto deemed advisable by the Executive Director or Assistant Executive Director or
Treasurer, whose execution thereof shall be conclusive evidence of his consent to
such changes or additions.
SECTION 4. Execution of Series A Bonds. The Series A Bonds shall be
executed on behalf of the Authority by the manual or facsimile signature of the
Chairman or Executive Director or Assistant Executive Director or Treasurer of the
Authority.
SECTION 5. Official Statement. The Authority approves distribution of the
Preliminary Official Statement by the Underwriter in connection with the sale of the
Series A Bonds, and the Executive Director or Assistant Executive Director or
Treasurer of the Authority is authorized to deem each of the Preliminary Official
Statement "final," pursuant to Rule 15c2-12 under the Securities Exchange Act of
1934 (the "Rule"). The form of the final Official Statement shall include such
information permitted to be excluded from the Preliminary Official Statement pursuant
to the Rule. The Board hereby approves and authorizes the distribution of the final
Official Statement by the Underwriter. The Executive Director or Assistant Executive
Director or Treasurer is hereby authorized and directed to approve any changes in or
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Resolution No. 2004-
2004 Series A Bonds
Adopted: June 1, 2004
Page 3
additions to the final forms of said Official Statement, whose execution thereof shall
be conclusive evidence of approval of any ' such changes and additions. The final
Official Statement shall be executed in the name and on behalf of the Authority by
the Executive Director or Assistant Executive Director or Treasurer, who are hereby
authorized and directed to execute the final Official Statement on behalf of the
Authority.
SECTION 6. Executive Director Authorized to Establish Final Terms of the Sale
of the Series A Bonds. The Executive Director, based on such advice of Staff as he
may deem necessary, is hereby authorized and directed to act on behalf of the
Authority to establish and determine (i) the final principal amount of the Series A
Bonds, which shall not exceed $100,000,000, (ii) the final amounts of the various
maturities and sinking fund payments of the Series A bonds, (iii) the final interest
rates on the Series A Bonds, which rates shall not exceed eight percent (8%) per
annum for any maturity of the Series A Bonds, and (iv) the Underwriter's discount for
the purchase of the Series A Bonds, which shall not exceed three quarters of one
percent (.75%) of the principal amount of the Series A Bonds.
SECTION 7. Appointment of Trustee and Escrow Agent. U.S. Bank National
Association, Los Angeles, California, is hereby appointed as trustee for the Series A
Bonds under the Indenture and Fiscal Agent pursuant to the Documents, as defined
below.
SECTION 8. Purchase Contract. The proposed form of Purchase Contract by
and between the Authority and the Underwriter, on file with the Secretary of the
Governing Board and incorporated into this Resolution by reference is hereby
approved, provided however, (i) the principal amount of the Bonds does not exceed
$100,000,000, preliminary, subject to market conditions; and (ii) the Underwriter's
discount, exclusive of original issue discount, does not exceed .75% preliminary,
subject to market conditions, of the principal amount of the Bonds. The Chairman or
Executive Director or Assistant Executive Director or Treasurer is hereby authorized
and directed, for and in the name and on behalf of the Authority, to purchase the
Bonds from the Authority -and to accept the offer of the Underwriter to purchase
Bonds from the Authority, subject to the terms and conditions of the Purchase
Contract, and to execute and deliver the Purchase Contract in substantially said form,
with such changes or additions thereto that may hereafter become necessary in the
interests of the Authority and which are reviewed and approved by counsel to the
Authority, any such additions or changes to be conclusively evidenced by the
execution and delivery of said agreements.
SECTION 9. Filing of CDAC Notice. The Authority hereby approves the filing
by Rutan & Tucker, LLP ("Bond Counsel") of a notice of the Authority's intent to sell
6
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Resolution No. 2004-
2004 Series A Bonds
Adopted: June 1, 2004
Page 4
the Bonds with the California Debt Advisory Commission pursuant to Section 8855 of
the California Government Code.
SECTION 10. Approval of Loans. The Authority hereby authorizes and
approves the Loan to be made to the Authority by the Agency from the proceeds of
the Bonds. The Loans shall be made pursuant to and in accordance with the terms of
the Loan Agreement and the First Supplemental Loan Agreement (collectively, the
"Loan Documents"). The Authority hereby approves the Loan Documents in
substantially the forms on file with the Secretary together with any additions thereto
or changes therein (including but not limited to the principal amounts of the Loans)
deemed necessary or advisable by the Executive Director or Assistant Executive
Director or Treasurer whose execution thereof shall be conclusive evidence of
approval of any such additions and changes. The Chairperson or Executive Director
or Assistant Executive Director or Treasurer is hereby authorized and directed to
execute, and the Secretary is hereby authorized and directed to attest and affix the
seal of the Agency to the final form of the Loan Documents in the name and on
behalf of the Authority. The proceeds of the Loans shall be applied by the Agency for
the purposes and in the amounts set forth in the Loan Documents. The Authority
hereby authorizes the delivery and performance of the Loan Documents.
SECTION 11. Approval of Financing Documents. The Financing
Documents substantially in the form on file with the Secretary, with such additions
thereto and changes therein as are recommended or approved by Bond Counsel and
the officers executing the same, with such approval to be conclusively evidenced by
their execution and delivery are hereby approved. The Chairperson, the Executive
Director, the Assistant Executive Director, the Treasurer, the Secretary, or their
designees are hereby authorized and directed to execute and deliver the Financing
Documents.
SECTION 12. Delivery of the Bonds. The Bonds shall be delivered to the
Underwriter upon compliance with the terms and conditions set forth in the Purchase
Contract. The Chairperson, the Executive Director, the Assistant Executive Director,
the Treasurer, the Secretary and other proper officers of the Authority are hereby
authorized and directed to deliver any and all documents and instruments, to authorize
the payment of Costs of Issuance and to do and cause to be done any and all acts
and things necessary or convenient for delivery of the Bonds to the Purchaser.
SECTION 13. Official Action. The Chairman, the Vice Chairman, the
Executive Director, the Assistant Executive Director, the Treasurer, the General
Counsel and any and all other officers of the Authority are hereby authorized and
directed, for and in the name and on behalf of the Authority, to do any and all things
and take any and all actions, including execution and delivery of any and all
assignments, certificates, requisitions, including, without limitation, requisitions for
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Resolution No. 2004-
2004 Series A Bonds
Adopted: June 1, 2004
Page 5
the payment of costs of issuance of the Series A Bonds, agreements, notices,
consents, bond insurance premiums or rating agency fees, instruments of
conveyance, warrants and other documents which they, or any of them, may deem
necessary by the Bond Counsel or advisable in order to consummate lawful issuance,
sale and delivery of the Series A Bonds. Any action authorized by this resolution to
be taken by a specific officer of the Authority may be taken on such officer's behalf
by the written designee of such officer.
SECTION 14. Bond Counsel. Rutan & Tucker, LLP is hereby appointed
Bond Counsel for the Series A Bonds.
SECTION 15. Effective Date. This resolution shall take effect from and
after its passage and adoption.
PASSED, ADOPTED and APPROVED at a regular meeting of the La Quinta
Financing Authority held on this 1 st day of June, 2004, by the following vote to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
DON ADOLPH, Chairperson,
La Quinta Financing Authority
ATTEST:
JUNE S. GREEK, CMC, CITY CLERK
City of La Quinta, California
(City Seal)
APPROVED AS TO FORM:
M. KATHERINE JENSON, City Attorney
City of La Quinta, California
8
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ATTACHMENT 1
$9090009000*
LA QUINTA FINANCING AUTHORITY
LOCAL AGENCY REVENUE BONDS, 2004 SERIES A
PURCHASE CONTRACT
June , 2004
La Quinta Financing Authority
78495 Calle Tam ico
La Quinta CA 92353
La Quinta Redevelopment Agency
78495 Calle Tampico
La Quinta CA 92-253
Ladies and Gentlemen:
The undersigned, Wedbush Morgan Securities (the "Underwriter") offers to enter into
this Purchase Contract (this "Purchase Contract") with the La Quinta Financing Authority (the
"Authority") and the La Quinta Redevelopment Agency (the "Agency") which will be binding
upon the Authority, the Agency and the Underwriter upon the acceptance hereof by the
Authority and the Agency. This offer is made subject to its acceptance by the Authority and the
Aggency by execution of this Purchase Contract and its delivery to the Underwriter on or before
5:00 .m., California time, on the date hereof. All terms used herein and not otherwise defined
shall have the respective meanings given to such terms in the Indenture (as hereinafter
defined).
Section 1. Purchase and Sale. Upon the terms and conditions and upon the
basis of the representations, warranties and agreements hereinafter set forth, the Underwriter
hereby agrees to purchase from the Authority for offering to the public, and the Authority
hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of the
$90,000,000* aggregate principal amount of the Authority's Local Agency Revenue Bonds, 2004
Series A (the "Bonds"), at a purchase price not to exceed $90,000,000 (being the aggregate
rinci al amount thereof less an Underwriter' discount of not to exceed .75% and less an
originprincipal
ikl issue discount of not to exceed 1.1 %. The Bonds shall be dated the Closing Date and
shall have the maturities and bear interest at the rates per annum shown on Exhibit A hereto.
Section 2. Description of the Bonds. The Bonds will be issued under the
provisions of an Indenture of Trust (the "Indenture"), dated as of June 1, 2004, by and between
the Authority and U.S. Bank National Association, as trustee (the "Trustee"), a First
Supplemental Loan Agreement, dated June 1, 2004, by and among the Agency and the Authority
and pursuant to the California Community Redevelopment Law, constituting Part 1, Division 24
commencing with Section 33000) of the California Health and Safety Code (the "Law"). The
Bonds shall be as described in the Indenture and the Official Statement dated the date hereof
relating to the Bonds (which, together with all exhibits and appendices included therein or
attached thereto and such amendments or supplements thereto which shall be approved by the
Underwriter, is hereinafter called the "Official Statement").
* Preliminary, subject to change.
E
The net proceeds of the Bonds will be used to finance low and moderate income housing
redevelopment activities of the Agency with respect to the Agency's Redevelopment Project
Areas (the "Project Areas") described in the Redevelopment Plans and to refund the Agency's
1995 Bonds pursuant to an Escrow Deposit and Trust Agreement (the "Escrow Agreement")
(within the meaning of such terms in the Indenture).
The Bonds shall be secured by a first pledge of and lien on all of the Pledged Tax
Revenues (as defined in the Indenture). The scheduled payment of principal of and interest on
the Bonds shall be insured by (the
"Insurer") by the issuance of a municipal bond insurance policy (the "Policy").
Section 3. Public Offering. The Underwriter agrees to make a bona fide public
offering of all the Bonds initially at the public offering prices (or yields) set forth on Appendix A
attached hereto and incorporated herein by reference. Subsequent to the initial public offering,
the Underwriter reserves the right to change the public offering prices (or yields) as it deems
necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not
change the interest rates set forth on Appendix A. The Bonds may be offered and sold to certain
dealers at prices lower than such initial public offering prices.
Section 4. Delivery of. Official Statement. The Authority has delivered or caused to
be delivered to the Underwriter prior to the execution of this Purchase Contract, copies of the
Preliminary Official Statement relating to the Bonds (the "Preliminary Official Statement"). Such
Preliminary Official Statement is the official statement deemed final by the Authority for
purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") and approved
for distribution by Indenture of the Authority. The Authority shall have executed and delivered
to the Underwriter a certification to such effect in the form attached hereto as Appendix B.
Within seven (7) business days from the date hereof (and, thereafter, for such period of
time ending on the earlier of: (1) 90 days after the End of the Underwriting Period (as hereinafter
defined); or (2) the time when the Official Statement becomes available from a "national
recognized municipal securities information repository" ("NRMSIR"), but in no event less than
25 days after the End of the Underwriting Period), the Authority shall deliver to the Underwriter
a final Official Statement, executed on behalf of the Authority by an authorized representative of
the Authority and dated the date hereof, which shall include information permitted to be omitted
by paragraph (b)(1) of the Rule and with such other amendments or supplements as shall have
been approved by the Authority and the Underwriter. The Authority also agrees to delivery to the
Underwriter, at the Authority's' sole cost and at such address as the Underwriter shall specify, as
many copies of the Official Statement as the Underwriter shall reasonably request as necessary to
comply with paragraph (b)(4) of the Rule and with Rule G-32 and all other applicable rules of the
Municipal Securities Rulemaking Board.
As used herein, the term "End of the Underwriting Period" means the later of such time as
(i) the Bonds are delivered to the Underwriter, or (ii) the Underwriter does not retain, directly or
as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public.
Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be
deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written
10
notice delivered to the Authority at or prior to the Closing, and shall specify a date (other than the
Closing Date) to be deemed the "End of the Underwriting Period."
For a period of 25 days after the Closing Date, the Underwriter agrees to deliver a copy of
the Official Statement to each of their customers purchasing Bonds no later than the settlement
date of such purchase transaction. The Underwriter agrees to deliver the Official Statement,
promptly upon receipt thereof, to at least one NRMSIR.
The Authority will undertake, pursuant to the Indenture and a continuing disclosure
agreement (the "Continuing Disclosure Agreement"), to provide certain annual financial
information and notices of the occurrence of certain events, if material.
Section 5. The Closing. At 8:00 a.m., California time, on June _, 2004, or at such
other time or on such earlier or later business day as shall have been mutually agreed upon by the
Authority, the Agency and the Underwriter, the Authority and the Agency will deliver (i) the
Bonds in definitive form (one bond for each annual maturity) to the Underwriter at The
Depository Trust Company ("DTC") in New York, New York, or such other location as may be
specified by the Underwriter, with CUSIP identification numbers printed thereon, in fully
registered form and registered in the name of Cede & Co., and (ii) the closing documents
hereinafter mentioned at the offices of Rutan & Tucker, LLP, Costa Mesa, California, or another
place to be mutually agreed upon by the Authority, the Agency and the Underwriter. The
Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in
Section 1 hereof by federal funds wire payable to the order of the Trustee on behalf of the
Agency. This payment and delivery, together with the delivery of the aforementioned
documents, is herein called the "Closing." Unless the DTC Fast Automated Securities Transfer
("FAST") is utilized, the Bonds will be made available for inspection by DTC at least one
business day prior to the Closing.
Section 6. ' Agency Representations, Warranties and Covenants. The Agency
represents, warrants and covenants to the Underwriter that:
(a) Due Organization and Existence of Agency. The Agency is a public body
corporate and politic, organized and existing under the laws of the State, including the
Community Redevelopment Law of the State, constituting Part 1 of Division 24 of the
Health and Safety Code (the "Redevelopment Law"), with full right, power and authority
to adopt or to execute and deliver, as applicable, and to perform its obligations under the
Indenture, the Loan Agreement, the Escrow Agreement, this Purchase Contract and the
Continuing Disclosure Agreement (collectively, the "Agency Documents") and to carry
out and consummate the transactions contemplated by the Agency Documents and the
Official Statement.
(b) Due Authorization and Approval. By all necessary official action of the
Agency, the Agency has duly authorized and approved the execution and delivery of, and
the performance by the Agency of the obligations contained in, the Agency Documents
and as of the date hereof, such authorizations and approvals are in full force and effect
and have not been amended, modified or rescinded. The Indenture when adopted and the
other Agency Documents when executed and delivered, constitute the legally valid and
11
binding obligations of the Agency enforceable in accordance with their respective terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or affecting creditors' rights
generally. The Agency has complied, and will at the Closing be in compliance in all
respects, with the terms of the Agency Documents, provided that no representation is
made with respect to compliance with the securities or "Blue Sky" laws of the various
states of the United States.
(c) Official Statement Accurate and Complete. The Preliminary Official
Statement was as of its date, and the final Official Statement is, and at all times
subsequent to the date of the final Official Statement up to and including the Closing will
be, true and correct in all material respects, and the Preliminary Official Statement and
the final Official Statement contain, and up to and including the Closing will contain, no
misstatement of any material fact and do not, and up to and including the Closing will
not, omit any statement necessary to make the statements contained therein, in the light of
the circumstances in which such statements were made, not misleading.
(d) Underwriter' Consent to Amendments and Supplements to Official
Statement. Up to and including 25 days after the End of the Underwriting Period, the
Agency will advise the Underwriter promptly of any proposal to amend or supplement the
Official Statement, and will not effect or consent to any such amendment or supplement
without the consent of the Underwriter, which consent will not be unreasonably withheld.
The Agency will advise the Underwriter promptly of the institution of any proceedings
known to it by any governmental agency prohibiting or otherwise affecting the use of the
Official Statement in connection with the offering, sale or distribution of the Bonds.
(e) No Breach or Default. As of the time of acceptance hereof and as of the
time of the Closing, except as otherwise disclosed in the Official Statement, the Agency
is not and will not be in breach of or in default under any applicable constitutional
provision, law or administrative rule or regulation of the State or the United States, or any
applicable judgment or decree or any trust agreement, loan agreement, bond, note,
Indenture, ordinance, agreement or other instrument to which the Agency is a party or is
otherwise subject, and no event has occurred and is continuing which, with the passage of
time or the giving of notice, or both, would constitute a default or event of default under
any such instrument; and, as of such times, except as disclosed in the Official Statement,
the authorization, execution and delivery of the Agency Documents and compliance with
the provisions of each of such agreements or instruments do not and will not conflict with
or constitute a breach of or default under any applicable constitutional provision, law or
administrative rule or regulation of the State or the United States, or any applicable
judgment, decree, license, permit, trust agreement, loan agreement, bond, note, Indenture,
ordinance, agreement or other instrument to which the Agency (or any of its officers in
their respective capacities as such) is subject, or by which it or any of its properties is
bound, nor will any such authorization, execution, delivery or compliance result in the
creation or imposition of any lien, charge or other security interest or encumbrance of any
nature whatsoever upon any of its assets or properties or under the terms of any such law,
regulation or instrument, except as may be provided by the Agency Documents.
12
(f) No Litigation. As of the time of acceptance hereof and the Closing, except
as disclosed in the Official Statement, no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, government agency, public
board or body, pending or threatened (i) in any way questioning the corporate existence of
the Agency or the titles of the officers of the Agency to their respective offices; (ii)
affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of
any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to
pay the principal of and interest on the Bonds, or in any way contesting or affecting the
validity of the Bonds or the Agency Documents or the consummation of the transactions
contemplated thereby, or contesting the exclusion of the interest on the Bonds from
taxation or contesting the powers of the Agency and its authority to pledge the Pledged
Tax Revenues; (iii) which may result in any material adverse change relating to the
Agency; or (iv) contesting the completeness or accuracy of the Preliminary Official
Statement or the final Official Statement or any supplement or amendment thereto or
asserting that the Preliminary Official Statement or the final Official Statement contained
any untrue statement of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and there is no basis for any
action, suit, proceeding, inquiry or investigation of the nature described in clauses (i)
through (iv) of this sentence.
(g) Preliminary Official Statement. For purposes of the Rule, the Agency has
heretofore deemed final the Preliminary. Official Statement prior to its use and
distribution by the Underwriter, except for the information specifically permitted to be
omitted by paragraph (bx 1) of the Rule. The Agency has never failed to comply timely
with any filing requirements under the Rule.
(h) Excess Surplus. The Agency's Low and Moderate Income Housing Fund
established pursuant to Section 33334.3 of the Law does not on the date hereof, and will
not on the Closing Date, contain an "excess surplus" (within the meaning of Section
33334.12 of the Law) that would cause the Agency to be subject to the sanctions
contained in Section 33334.12(e)(1) of the Law.
(i) Order Prohibiting. The Agency does not on the date hereof, and will not
as of the Closing, have "major violations" (within the meaning of Section 33080.8(i) of
the Redevelopment Law) so as to be subject to a court order prohibiting the activities set
forth in Section 33080.8(e)(3) of the Redevelopment Law.
(j) Arbitrage Certificate. The Agency has not been notified of any listing or
proposed listing by the Internal Revenue Service to the effect that it is a bond issuer
whose arbitrage certificates may not be relied upon.
Section 7. Authority Representations, Warranties and Covenants. The Authority
represents, warrants and covenants to the Underwriter that:
(a) Due Organization and Existence of Authority. The Authority is a joint
powers authority, duly organized and existing, and authorized to transact business and
13
exercise powers under and pursuant to the provisions of the laws of the State of
California and has, and as of Closing will have, full legal right, power and authority to
enter into this Purchase Contract, and to carry out and to consummate the transactions
contemplated by this Purchase Contract.
(b) Of f�`icial Statement Accurate and Complete. The information relating to the
Authority contained in the Preliminary Official Statement and the final Official Statement
is correct in all material respects and does not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements contained therein, in the light of the circumstances under which they
were made, not misleading.
(c) Purchase and Sale of Bonds. The Bonds will be purchased and sold by the
Authority pursuant to the Mark -Roos Local Bond Pooling Act of 1985, constituting
Article 4 of Chapter 5, Division 7 of Title 1 (commencing with Section 6584) of the
California Government Code (the "JPA Act").
(d) Compliance with JPA Act. The Authority has complied, and will on the
Closing Date be in compliance, in all respects, with the JPA Act and all other applicable
laws of the State of California (and it is understood that the Authority is not responsible
for compliance with or the consequences of failure to comply with applicable "Blue Sky"
laws).
Section 8. Closing Conditions. The Underwriter has entered into this Purchase
Contract in reliance upon the representations, warranties and covenants herein and the
performance by the Agency and the Authority of their respective obligations hereunder, both as
of the date hereof and as of the Closing Date. The Underwriter' obligations under this. Purchase
Contract to purchase and pay for the Bonds shall be subject to the following additional
conditions:
(a) Bring Down Representation. The representations, warranties and
covenants of the Authority and the Agency contained herein shall be true, complete and
correct at the date hereof and at the time of the Closing, as if made on the Closing Date.
(b) Executed Agreements and Performance Thereunder. At the time of the
Closing (i) the Agency Documents shall .be in full force and effect, and shall not have
been amended, modified or supplemented except with the written consent of the
Underwriter and (ii) there shall be in full force and effect the Indenture and such other
such Indentures of the Agency and the Authority as, in the opinion of Bond Counsel, shall
be necessary in connection with the transactions contemplated by this Purchase Contract,
the Official Statement and the Agency Documents.
(c) Closing Documents. At or prior to the Closing, the Underwriter shall
receive each of the documents identified in Section 9.
Section 9. Closing Documents. In addition to the other conditions to the Underwriter'
obligations under this Purchase Contract to purchase and pay for the Bonds, at or before the
14
Closing the Underwriter shall receive each of the following documents, provided that the actual
payment for the Bonds by the Underwriter and the acceptance of delivery thereof shall be
conclusive evidence that the requirements of this Section 9 shall have been satisfied or waived by
the Underwriter.
(a) Bond Counsel Opinion. An approving opinion of Rutan & Tucker, LLP
("Bond Counsel"), dated the Closing Date and substantially in the form appended to the
Official Statement, together with a letter from such counsel, dated the Closing Date and
addressed to the Underwriter, to the erect that the foregoing opinion may be relied upon
by the Underwriter to the same extent as if such opinion were addressed to it.
(b) Supplemental Opinion. A supplemental opinion or opinions of Bond
Counsel addressed to the Underwriter, in form and substance acceptable to the
Underwriter, and dated the Closing Date substantially to the following effect:
(i) This Purchase Contract has been duly authorized, executed and
delivered by the Agency and the Authority, as applicable, and constitute the valid,
legal and binding agreements of the Agency and the Authority, as applicable,
enforceable in accordance with its terms.
(ii) The statements contained in the Official Statement (including the
cover page and the Appendices thereto), insofar as such statements purport to
summarize certain provisions of the Bonds, the Indenture, the LoanAgreement,
the Escrow Agreement or federal tax law, accurately summarize the information
presented therein; provided that Bond Counsel need not express any opinion - with
respect to any financial or statistical information contained therein.
(iii) The Agency's obligations under the Indenture are exempt from
a
registration under the Securities Act of 1933, as mended, and the Indenture is
exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended.
(c) Disclosure Letter. A letter of Stradling Yocca Carlson & Rauth, A
Professional Corporation ("Disclosure Counsel"), dated the Closing Date, addressed to
the Underwriter, to the erect that based upon its participation in the preparation of the
Official Statement and without having undertaken to determine independently the
fairness, accuracy or completeness of the statements contained in the Official Statement,
such counsel has no reason to believe that, as of the Closing Date, the Official Statement
(excluding therefrom the reports, financial and statistical data and forecasts therein and
the information included in the Appendices thereto, excluding information relating to the
Insurer and the Policy and excluding information relating to DTC, as to which no advice
need be expressed) contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
15
(d) Agency Counsel Opinion. An opinion of Counsel to the Agency, dated the
Closing Date and addressed to the Underwriter, in form and substance acceptable to the
Underwriter substantially to the following effect:
(i) The Agency is a public body corporate and politic duly organized
and validly existing under the laws of the State of California;
(ii) The Indenture was duly adopted at a meeting of the Agency which
was called and held pursuant to law and with all public notice required by law and
at which a quorum was present and acting throughout, and the Indenture is in full
force and effect and has not been modified, amended or rescinded; and
(iii) Except as otherwise disclosed in the Official Statement and to the
best knowledge of such counsel after due inquiry, there is no litigation,
proceeding, action, suit, or investigation at law or in equity before or by any court,
governmental agency or body, pending or threatened against the Agency,
challenging the creation, organization or existence of the Agency, or the validity
of the Agency Documents or seeking to restrain or enjoin the repayment of the
Bonds or in any way contesting or affecting the validity of the Agency Documents
or contesting the authority of the Agency to enter into or perform its obligations
under any of the Agency Documents, or under which a determination adverse to
the Agency would have a material adverse effect upon the financial condition or
the revenues of the Agency, or which, in any manner, questions the right of the
Agency to use the Pledged Tax Revenues for repayment of the Bonds or affects in
any manner the right or ability of -the Agency to collect or pledge the Pledged Tax
Revenues.
(e) Authority Counsel Opinion. An opinion of Counsel to the Authority, dated
the Closing Date and addressed to the Underwriter, to the effect that:
(i) The Authority is a public body, corporate and politic, organized
and existing under the laws of the State, including the JPA Act.
(ii) The Resolution of the Authority approving and authorizing the
execution and delivery of this Purchase Contract (the Authority Resolution) was
duly adopted at a meeting of the Authority which was called and held pursuant to
law and with all public notice required by law and at which a quorum was present
and acting throughout and the Authority Indenture is in full force and effect and
has not been modified, amended or rescinded
(iii) To the best of such counsel's knowledge after due investigation,
there is no action, suit, proceeding or investigation at law or in equity before or by
any court, public board or body pending or threatened against or affecting the
Authority to restrain or enjoin the Authority's participation in, or in any way
contesting the existence of the Authority or the powers of the Authority with
respect to the transactions contemplated by this Purchase Contract.
16
(f) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the
Closing Date, addressed to the Underwriter, to the effect that:
(i) The Trustee is a national banking association, duly organized and
validly existing under the laws of the United States of America, having full power
to enter into, accept and administer the trust created under the Indenture.
(ii) The Indenture has been duly authorized, executed and delivered by
the Trustee and the Indenture constitutes the legal, valid and binding obligation of
the Trustee enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally and by the application of equitable
principles, if equitable remedies are sought.
(iii) Except as may be required under Blue Sky or other securities laws
of any state, no consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction over the Trustee that has
not been obtained is or will be required for the execution and delivery of the
Indenture or the consummation of the transactions contemplated by the Indenture.
(g) Agency Certificate. A certificate of the Agency, dated the Closing Date,
signed on behalf of the Agency by the Executive Director or other duly authorized officer
of the Agency to the effect that:
(i) The. representations, warranties • and covenants of the Agency
contained herein are true and correct in all material respects on and as of the
Closing Date as if made on the Closing Date and the Agency has complied with
all of the terms and conditions of this Purchase Contract required to be complied
with by the Agency at or prior to the Closing Date.
fii) No event affecting the Agency has occurred since the date of the
Official Statement which has not been disclosed therein or in any supplement or
amendment thereto which event should be disclosed in the Official Statement in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iii) Except as otherwise disclosed in the Official Statement and to the
best knowledge of such signing officer after due inquiry, there is no litigation,
proceeding, action, suit, or investigation at law or in equity before or by any court,
governmental agency or body, pending or threatened against the Agency,
challenging the creation, organization or existence of the Agency, or the validity
of the Agency Documents or seeking to restrain or enjoin the repayment of the
Bonds or in any way contesting or affecting the validity of the Agency Documents
or contesting the authority of the Agency to enter into or perform its obligations
under any of the Agency Documents, or under which a determination adverse to
the Agency would have a material adverse effect upon the financial condition or
the revenues of the Agency, or which, in any manner, questions the right of the
17
Agency to use the Pledged Tax Revenues for repayment of the Bonds or affects in
any manner the right or ability of the Agency to collect or pledge the Pledged Tax
Revenues.
(h) Authority Certificate. A certificate of the Authority, dated the Closing
Date, signed on behalf of the Authority by the Executive Director or other duly authorized
officer of the Authority to the effect that:
(i) The representations, warranties and covenants of the Authority
contained herein are true and correct in all material respects on and as of the
Closing Date as if made on the Closing Date and the Authority has complied with
all of the terms and conditions of this Purchase Contract required to be complied
with by the Authority at or prior to the Closing Date.
(ii) No event affecting the Authority has occurred since the date of the
Official Statement which has not been disclosed therein or in any supplement or
amendment thereto which event should be disclosed in the Official Statement in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iii) Except as otherwise disclosed in the Official Statement and to the
best knowledge of such signing officer after due inquiry, there is no litigation,
proceeding, action, suit, or investigation at law or in equity before or by any court,
governmental Authority or body, pending or threatened against the Authority,
challenging the creation, organization or existence of the Authority, or the validity
of this Purchase Contract or contesting the authority of the Authority to enter into
or perform its obligations under this Purchase Contract.
(i) Trustee's Certificate. A certificate of the Trustee, dated the Closing Date,
in form and substance acceptable to counsel for the Underwriter, to the following effect:
(i) The Trustee is duly organized and existing as a national banking
association in good standing under the laws of the United States of America,
having the full power and authority to enter into and perform its duties under the
Indenture.
(ii) The Trustee is duly authorized to enter into the Indenture.
(iii) To its best knowledge after due inquiry, there is no action, suit,
proceeding or investigation, at law or in equity, before or by any court or
governmental agency, public board or body pending against the Trustee or
threatened against the Trustee which in the reasonable judgment of the Trustee
would affect the existence of the Trustee or in any way contesting or affecting the
validity or enforceability of the Indenture or contesting the powers of the Trustee
or its authority to enter into and perform its obligation under the Indenture.
18
0) Documents. Certified copies of the Indenture and the Loan Agreement and
an original executed copy of each of the other Agency Documents.
(k) Municipal Bond Insurance Policy. A copy of the Policy, as duly executed
and delivered by the Insurer.
(1) Ratings. Evidence that the Bonds have been rated "AAA" by Standard &
Poor's Credit Market Services and "Aaa" by Moody's Investors Service.
(m) a Certificate of an officer of the Fiscal Consultant, Rosenow Spevacek
Group, Inc., Santa Ana, California, fiscal consultant to the Agency (the "Fiscal
Consultant"), dated the Closing Date, addressed to the Agency and the Underwriter, to the
effect that the assessed valuations and other financial information contained in the
Official Statement, and for which the Fiscal Consultant is shown as the source, to the best
of his knowledge are presented fairly and accurately; and
(n) Additional Documents. Such additional certificates, instruments and other
documents as Bond Counsel, the Authority, the Agency or the Underwriter may
reasonably deem necessary.
If the Agency or the Authority shall be unable to satisfy the conditions contained in this
Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason
permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the
Underwriter nor the Agency or the Authority shall be under further obligation hereunder, except
as further set forth in Section 11 hereof.
Section .10. Termination Events.. The Underwriter shall have the right to terminate
this Purchase Contract, without liability therefor, by notification to the Agency and the Authority
if at any time between the date hereof and prior to the Closing:
(a) any event shall occur which causes any statement contained in the Official
Statement to be materially misleading or results in a failure of the Official Statement to
state a material fact necessary to make the statements in the Official Statement, in the
light of the circumstances under which they were made, not misleading; or
(b) the marketability of the Bonds or the market price thereof, in the opinion
of the Underwriter, has been materially adversely affected by an amendment to the
Constitution of the United States or by any legislation in or by the Congress of the United
States or by the State, or the amendment of legislation pending as of the date of this
Purchase Contract in the Congress of the United States, or the recommendation to
Congress or endorsement for passage (by press release, other form of notice or otherwise)
of legislation by the President of the United States, the Treasury Department of the
United States, the Internal Revenue Service or the Chairman or ranking minority member
of the Committee on Finance of the United States Senate or the Committee on Ways and
Means of the United States House of Representatives, or the proposal for consideration of
legislation by either such Committee or by any member thereof, or the presentment of
legislation for consideration as an option by either such Committee, or by the staff of the
19
Joint Committee on Taxation of the Congress of the United States, or the favorable
reporting for passage of legislation to either House of the Congress of the United States
by a. Committee of such House to which such legislation has been referred for
consideration, or any decision of any Federal or State court or any ruling or regulation
(final, temporary or proposed) or official statement on behalf of the United States
Treasury Department, the Internal Revenue Service or other federal or State authority
materially adversely affecting the federal or State tax status of the Agency, or the interest
on bonds or notes or obligations of the general character of the Bonds; or
(c) any legislation, ordinance, rule or regulation shall be introduced in, or be
enacted by any governmental body, department or agency of the State, or a decision by
any court of competent jurisdiction within the State or any court of the United States shall
be rendered which, in the reasonable opinion of the Underwriter, materially adversely
affects the market price of the Bonds; or
(d) legislation shall be enacted by the Congress of the United States, or a
decision by a court of the United States shall be rendered, or a stop order, ruling,
regulation or official statement by, or on behalf of, the Securities and Exchange
Commission or any other governmental agency having jurisdiction of the subject matter
shall be issued or made to the effect that the issuance, offering or sale of obligations of
the general character of the Bonds, or the issuance, offering or sale of the Bonds,
including all underlying obligations, as contemplated hereby or by the Official Statement,
is in violation or would be in violation of, or that obligations of the general character of
the Bonds, or the Bonds, are not exempt from registration under, any provision of the
federal securities laws, including the Securities Act of 1933, as amended and as then in
effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939,
as amended and as then in effect; or
(e) additional material restrictions not in force as of the date hereof shall have
been imposed upon trading in securities generally by any governmental authority or by
any national securities exchange which restrictions materially adversely affect the
Underwriter' ability to trade the Bonds; or
(f) a general banking moratorium shall have been established by federal or
State authorities; or
(g) the United States has become engaged in hostilities which have resulted in
a declaration of war or a national emergency or there has occurred any other outbreak of
hostilities or a national or international calamity or crisis, or there has occurred any
escalation of existing hostilities, calamity or crisis, financial or otherwise, the effect of
which on the financial markets of the United States being such as, in the reasonable
opinion of the Underwriter, would affect materially and adversely the ability of the
Underwriter to market the Bonds; or
(h) any rating of the Bonds shall have been downgraded, suspended or
withdrawn by a national rating service, which, in the Underwriter' reasonable opinion,
materially adversely affects the marketability or market price of the Bonds; or
20
(i) the commencement of any action, suit or proceeding described in Section
6(f) hereof which, in the judgment of the Underwriter, materially adversely affects the
market price of the Bonds; or
0) there shall be in force a general suspension of trading on the New York
Stock Exchange.
Section 11. Expenses. The Underwriter shall be under no obligation to pay and the
Agency shall pay or cause to be paid the expenses incident to the performance of the obligations
of the Agency and the Authority hereunder including but not limited to (a) the costs of the
preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of
the Agency Documents and the cost of preparing, printing, issuing and delivering the definitive
Bonds, (b) the fees and disbursements of any counsel, financial advisors, accountants or other
experts or consultants retained by the Agency; (c) the fees and disbursements of Bond Counsel
and Disclosure Counsel; (d) the cost of printing the Preliminary Official Statement and any
supplements and amendments thereto and the cost of printing the Official Statement, including
the requisite number of copies thereof for distribution by the Underwriter; (e) charges of rating
agencies for the rating of the Bonds; and (f) the premium payable to the Insurer in consideration
of the issuance by the Insurer of the Policy.
The Underwriter shall pay and the Agency shall be under no obligation to pay all
expenses incurred by it in connection with the public offering and distribution of the Bonds, the
fees of the California Debt and Investment Advisory Commission and the CUSIP Service Bureau
charge for the assignment of CUSIR numbers to the Bonds.
Section 12. Notice. Any notice or other communication to be given to the Agency and
the Authority under this Purchase Contract may be given by delivering the same in writing to
such entity at the address set forth above. Any notice or other communication to be given to the
Underwriter under this Purchase Contract may be given by delivering the same in writing to:
Wedbush Morgan Securities
201 Lomas Santa Fe Drive, Suite 500
Solana Beach, CA 92075
Attn: Robin Thomas, Senior Vice President
Section 13. Entire Agreement. This Purchase Contract, when accepted by the
Agency and the Authority, shall constitute the entire agreement between the Agency, the
Authority and the Underwriter and is made solely for the benefit of the Agency, the Authority
and the Underwriter (including the successors or assigns of any Underwriter). No other person
shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the
Agency's and the Authority's representations, warranties and covenants in this Purchase Contract
shall remain operative and in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter.
21
I Section 14. Counterparts. This Purchase Contract may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same instrument.
Section 15. Severability. In case any one or more of the provisions contained herein
shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof.
Section 16. State of California Law Governs. The validity, interpretation and
performance of this Purchase Contract shall be governed by the laws of the State.
Section 17. No Assignment. The rights and obligations created by this Purchase
Contract shall not be subject to assignment by the Underwriter, the Authority or the Agency
without the prior written consent of the other parties hereto.
Accepted as of the date first stated above:
LA QUINTA FINANCING AUTHORITY
M
Executive Director
LA QUINTA REDEVELOPMENT AGENCY
IM
Executive Director
WEDBUSH MORGAN SECURITIES
0
Senior Vice President — Public Finance
22
APPENDIX A
LOCAL AGENCY REVENUE BONDS
2004 SERIES A
Maturity Date Principal
September 1 Amount
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2024
2029
2034
Total
Interest Reoffering
Rate Yield
Price
23
APPENDIX B
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents to Wedbush Morgan Securities (the
"Underwriter"), that he is a duly appointed and acting officer of the La Quinta Financing
Authority (the "Authority"), and as such is authorized to execute and deliver this Certificate and
further hereby certifies and reconfirms on behalf of the Authority to the Underwriter as follows:
(1) 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 offering and sale of the Authority's Local
Agency Revenue Bonds, 2004 Series A (the "Bonds").
(2) In connection with the offering and sale of the Bonds, there has been
prepared a Preliminary Official Statement, setting forth information concerning the Bonds
and the issuer of the Bonds (the Preliminary Official Statement ).
2004.
(3) As used herein, "Permitted Omissions" shall mean the offering prices,
interest rate(s), selling compensation, aggregate principal amount, principal amount per
maturity, delivery dates, ratings and other terms of the Bonds depending on such matters
and the identity of the Underwriter, all with respect to the Bonds.
(4) The Preliminary Official Statement is, except for the Permitted Omissions,
deemed final within the meaning of the Rule and has been, and the information therein is
accurate and complete in all material respects except for the Permitted Omissions.
(5) If, at any time prior to the execution of the final contract of purchase, any
event occurs as a result of which the Preliminary Official Statement might include an
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not
misleading, the Authority shall promptly notify the Underwriter thereof.
IN WITNESS WHEREOF, I have hereunto set my hand as of the th day of June,
LA QUINTA FINANCING AUTHORITY
Executive Director
24
ATTACHMENT 2
DISCLOSURE COUNSEL AGREEMENT
LA QUINTA FINANCING AUTHORITY
THIS AGREEMENT, made as of this day of , 2004, by and
between the LA QUINTA FINANCING AUTHORITY, a joint powers agency (herein "Authority")
and STRADLING YOCCA CARLSON & RAUTH, a Professional Corporation (herein "Disclosure
Counsel"):
RECITALS:
A. Authority desires to retain Disclosure Counsel to do the necessary legal work
hereinafter outlined, upon the terms and conditions hereinafter set forth, for the issuance of tax
allocation bonds; and
B. Disclosure Counsel represents that it is ready, willing and able to perform said legal
work;
NOW, THEREFORE, in consideration of the premises, and of the mutual covenants, terms
and conditions herein contained, the parties agree as follows:
1. Authority retains Disclosure Counsel to provide, and Disclosure Counsel will
provide, legal services in connection with the issuance by the La Quinta Financing Authority of its
Local Agency Revenue Bonds, 2004 Series A (the "Bonds"). Disclosure Counsel agrees to consult
with and advise Authority officials and Authority's financial consultants as to the preparation of
disclosure documents. Disclosure Counsel's services will include:
i. Attending conferences and consulting with Authority staff and
counsel regarding the proceedings;
ii. participating with any financial advisors, underwriters or other
experts retained by Authority in preparation of disclosure documents;
Assisting in the preparation of the official statements or placement
memorandums and supporting documentation relating to the offering
for sale of the Bonds;
iv. Reviewing the Bond purchase contracts;
V. Consulting with the underwriters, their legal counsel and rating
agencies;
vi. Consulting with counsel to Authority concerning ' any legislation or
litigation during the course of the financing; and
vii. Rendering an opinion.
DOCSOC/1046439v 1 /29999-M
25
2. This contract shall be administered by the Executive Director or his designee.
3. Authority agrees to accept, and Disclosure Counsel agrees to provide, the
aforementioned services primarily through David R. McEwen.
If the above attorney is unable to provide such services due to death, disability or
similar event, Disclosure Counsel reserves the right to substitute another of its attorneys, upon
approval by the Authority, to provide such services; and such substitution shall not alter or affect in
any way Disclosure Counsel's or Authority's other obligations under this Agreement.
4. Disclosure Counsel has professional liability insurance in the amount of $25,000,000
and is self -insured for the first $250,000 on each claim.
5. For the services to be rendered under this Agreement our fee would be $60,000.00,
including out-of-pocket expenses incurred in connection with the engagement, including without
limitation, document reproduction, travel as approved by the Authority and messenger services.
Said fee will be billed upon the issuance of the Bonds and payable from Bond
proceeds. In the event that a financing is not completed for any reason, the Authority will have no
liability for any fees or expenses incurred by Disclosure Counsel with respect to the financing.
IN WITNESS WHEREOF, as of the date first hereinabove written, Authority has caused this
instrument to be executed by the Chairman of the Authority and attested by the Secretary of the
Authority; and Disclosure Counsel has caused this instrument to be executed on its behalf and in its
name by an authorized officer of Disclosure Counsel.
LA QUINTA FINANCING AUTHORITY
M
ATTEST:
Secretary
Chairman
STRADLING YOCCA CARLSON & RAUTH
A Professional Corporation
c
By:
DOCSOC/ 104643 9v 1 /29999-0000
26