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1998 04 07 FAp� � OZ V - � La Quinta Financing Authority Agenda CITY COUNCIL CHAMBER 78-495 Calle Tampico La Quinta, California 92253 Regular Meeting April 7, 1998 - 3:00 PM CALL TO ORDER a. Roll Call PUBLIC COMMENT CONFIRMATION OF AGENDA APPROVAL OF MINUTES a. Approval of Minutes of February 17, 1998 BUSINESS SESSION Beginning Res. No. FA 98-01 CONSIDERATION OF: 1) ADOPTION OF RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT WITH MILLER AND SCHROEDER FINANCIAL, INC. FOR THE SALE OF LA QUINTA REDEVELOPMENT AGENCY TAX ALLOCATION PARITY REFUNDING BONDS FOR THE LA QUINTA PROJECT (PROJECT NO. 1 ); AND 2) ADOPTION OF RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT WITH MILLER AND SCHROEDER FINANCIAL, INC. FOR THE SALE OF LA QUINTA REDEVELOPMENT AGENCY TAX ALLOCATION REFUNDING BONDS FOR LA QUINTA REDEVELOPMENT PROJECT NO. 2. A) RESOLUTION ACTION (2). CONSENT CALENDAR - None DEPARTMENT REPORTS - None CHAIR AND BOARD MEMBERS' ITEMS PUBLIC HEARINGS - None ADJOURNMENT DECLARATION OF POSTING I, SAUNDRA L. JUHOLA, Secretary of the La Quinta Financing Authority, do hereby declare that the foregoing agenda for the La Quinta Financing Authority meeting of April 7, 1998 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 on Friday, April 3, 1998. D t d: April 3, 1998. SAUNDRA L. JUHOLA, Secretary La Quinta Financing Authority G %j V Page 2 Titit 4 4a Q" COUNCIL/RDA MEETING DATE: April 7, 1998 ITEM TITLE: Consideration of (1) Adoption of Resolution authorizing the execution and delivery of a bond purchase contract with Miller and Schroeder Financial, Inc. for the sale of La Quinta Redevelopment Agency tax allocation parity refunding bonds for the La Quinta Redevelopment Project (Project No. 1), and (2) Adoption of a Resolution authorizing the execution and delivery of a bond purchase contract with Miller and Schroeder Financial, Inc. for the sale of La Quinta Redevelopment Agency tax allocation refunding bonds for La Quinta Redevelopment Project No. 2. RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: -L CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the attached resolutions and authorize the officers of the Financing Authority and members of the Governing Board to execute the documents and certificates necessary to sell these bonds. FISCAL IMPACT: None. The bond sale will not result in the expenditure of Finance Authority funds. The proceeds will be used in conjunction with the City and Agency's Economic Development Plan and Capital Improvement Program. BACKGROUND AND OVERVIEW: The La Quinta Redevelopment Agency has historically used the La Quinta Financing Authority to sell Agency bonds. This is done in order to reduce the overall cost of issuance by placing the bonds with the most cost effective bond underwriter. A pricing consultant is employed to insure that the final interest rate and discount is at or below market rates. The Agency desires to refund the 1991 Project No. 1 and the 1992 Project No. 2 tax allocation bonds. The Agency Board has previously authorized staff to use Miller and Schroeder Financial to underwrite these bonds. Miller and Schroeder was selected because they have been responsive, efficient and previously MOO demonstrated their cost effectiveness related to structuring Agency bonds (the 1995 Housing Bonds wherein Miller and Schroeder served as pricing consultant and their efforts realized substantial cost savings). Their final purchase bid will be reviewed by the Authority's current pricing consultant, Piper Jaffray, in order to insure that the final bids are at or below market rates. The attached resolutions (Attachment No. 1) and bond purchase contract (Attachment No. 2) approves the sale, by the Financing Authority, of up to $16,000,000 of La Quinta Redevelopment Agency Project Area No. 1, and up to $8,000,000 in La Quinta Redevelopment Agency Project Area No. 2, refunding bonds. For both the Project No. 1 and Project No. 2 financing, original issue discount shall not exceed 1 %, and the net interest cost shall not exceed 5.5%. Further, it authorizes the execution of necessary documents. FINDINGS AND ALTERNATIVES: Alternatives to the recommended action are: 1 . Approve the two resolutions and bond purchase contracts; 2. Do not ap ro the two resolutions and bond purchase contracts. )hn Falconer irector of Finance ATTACHMENT NO. 1 LA QUINTA FINANCING AUTHORITY RESOLUTION NO. FA RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A PURCHASE CONTRACT BY AND AMONG THE LA QUINTA REDEVELOPMENT AGENCY, THE LA QUINTA FINANCING AUTHORITY, AND MILLER AND SCHROEDER FINANCIAL, INC. WHEREAS, the City of La Quinta (the "City") and the La Quinta Redevelopment Agency (the "Agency") have entered into a Joint Exercise of Powers Agreement, dated as of November 3, 1988 (the "Agreement"), creating the La Quinta Financing Authority (the "Authority"); WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of the Government Code of the State of California (the "Act") and the Agreement, the Authority is authorized to purchase bonds issued by the Agency for financing public capital improvements, working capital, liability and other insurance needs, or projects whenever there are significant public benefits as determined by the Agency; and WHEREAS, pursuant to the Act and the Agreement the Authority is further authorized to sell bonds so purchased to public or private purchasers by public or negotiated sale; and WHEREAS, the Authority desires to purchase not to exceed $16,000,000 aggregate principal amount of bonds of the Agency designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 1 Tax Allocation Refunding Bonds, Series 1998" (the "Bonds") solely from the proceeds received from the Authority's concurrent sale of such Bonds to Miller & Schroeder Financial, Inc. (the "Underwriter"); and WHEREAS, in accordance therewith, the Authority now desires to authorize the execution of a bond purchase contract by and among the Authority, the Agency and the Underwriter (the "Purchase Contract"); and WHEREAS, the Agency has determined that "significant public benefits" as defined in Section 6586 of the Act will be derived by the Agency in undertaking the issuance of the Bonds and their sale to the Authority and resale to the Underwriter, in furtherance of the corporate purposes of the Agency; NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the La Quinta Financing Authority as follows: Section 1. The foregoing recitals are true and correct and this Authority so finds and determines. 124/015610-0012/3150611.1 a03/30/98 Section 2. The proposed form of Purchase Contract by and among the Agency, 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 $16,000,000; (ii) the underwriter's discount exclusive of original issue discount does not exceed 1.0% of the principal amount of the Bonds; and (iii) the net interest cost does not exceed 5.500-.. The Chairman or Executive Director or Finance Director is hereby authorized and directed, for and in the name and on behalf of the Authority, to purchase the Bonds from the Agency and to accept the offer of the Underwriter to purchase the 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 3. The officers of the Authority and members of the Governing Board are hereby authorized to take such other actions and execute such documents and certificates as are necessary or appropriate for the accomplishment of the purposes of this resolution. Section 4. This resolution shall take effect from and after its adoption. PASSED AND ADOPTED on April 7, 1998, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Chairman of the La Quinta Financing Authority ATTEST: Secretary of the La Quinta Financing Authority G .CIAO 124/015610-0012/3150611.1 a03/30/98 - 2 - SECRETARY'S CERTIFICATE I, SAUNDRA L. JUHOLA, Secretary of the La Quinta Financing Authority, do hereby certify as follows: The foregoing resolution is a full, true and correct copy of a resolution duly adopted by a vote of a majority of the members of the Governing Board of said Authority at an adjourned regular meeting of the Governing Board of said Authority duly and regularly and legally held at the City of La Quinta, California, on April 7, 1998, of which all of such members had due notice, as follows: AYES: NOES: ABSENT: ABSTAIN: An agenda of said meeting was posted at least 72 hours before said meeting at the City Hall, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda. I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect. Dated: May _, 1998. Secretary of the La Quinta Financing Authority 124/015610-0012/3150611.1 a03/30/98 - 3 - , LA QUINTA FINANCING AUTHORITY RESOLUTION NO. FA RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE CONTRACT BY AND AMONG THE LA QUINTA REDEVELOPMENT AGENCY, THE LA QUINTA FINANCING AUTHORITY, AND MILLER AND SCHROEDER FINANCIAL, INC. WHEREAS, the City of La Quinta (the "City") and the La Quinta Redevelopment Agency (the "Agency") have entered into a Joint Exercise of Powers Agreement, dated as of November 3, 1988 (the "Agreement"), creating the La Quinta Financing Authority (the "Authority"); WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of the Government Code of the State of California (the "Act") and the Agreement, the Authority is authorized to purchase bonds issued by the Agency for financing public capital improvements, working capital, liability and other insurance needs, or projects whenever there are significant public benefits as determined by the Agency; and WHEREAS, pursuant to the Act and the Agreement the Authority is further authorized to sell bonds so purchased to public or private purchasers by public or negotiated sale; and WHEREAS, the Authority desires to purchase not to exceed $8,000,000 aggregate principal amount of bonds of the Agency designated "La Quinta Redevelopment Agency, La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998" (the "Bonds") solely from the proceeds received from the Authority's concurrent sale of such Bonds to Miller & Schroeder Financial, Inc. (the "Underwriter"); and WHEREAS, in accordance therewith, the Authority now desires to authorize the execution of a bond purchase contract by and among the Authority, the Agency and the Underwriter (the "Purchase Contract"); and WHEREAS, the Agency has determined that "significant public benefits" as defined in Section 6586 of the Act will be derived by the Agency in undertaking the issuance of the Bonds and their sale to the Authority and resale to the Underwriter, in furtherance of the corporate purposes of the Agency; NOW, THEREFORE, BE IT RESOLVED by the Governing Board of the La Quinta Financing Authority as follows: Section 1. The foregoing recitals are true and correct and this Authority so finds and determines. 1241016150-0012/3149953.1 a03/30/98 — 1— 0� 0 6 0 9 Section 2. The proposed form of Purchase Contract by and among the Agency, the Authority and the Underwriter, on file with the Secretary of the Governing Board and incorporated into this Resolution by reference are hereby approved, provided however, (i) the principal amount of the Bonds does not exceed $8,000,000; (ii) the underwriter's discount exclusive of original issue discount does not exceed 1.0o of the principal amount of the Bonds; and (iii) the net interest cost does not exceed 5.500-. The Chairman or Executive Director or Finance Director is hereby authorized and directed, for and in the name and on behalf of the Authority, to purchase the Bonds from the Agency and to accept the offer of the Underwriter to purchase the 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 3. The officers of the Authority and members of the Governing Board are hereby authorized to take such other actions and execute such documents and certificates as are necessary or appropriate for the accomplishment of the purposes of this resolution. Section 4. This resolution shall take effect from and after its adoption. PASSED AND ADOPTED on April 7, 1998, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Chairman of the La Quinta Financing Authority ATTEST: Secretary of the La Qu Financing Authority to L Jl)UrJJ 124/016150-0012/3149953.1 a03/30/98 - 2 - SECRETARY'S CERTIFICATE I, SAUNDRA L. JUHOLA, Secretary of the La Quinta Financing Authority, do hereby certify as follows: The foregoing resolution is a full, true and correct copy of a resolution duly adopted by a vote of a majority of the members of the Governing Board of said Authority at an adjourned regular meeting of the Governing Board of said Authority duly and regularly and legally held at the City of La Quinta, California, on April 7, 1998, of which all of such members had due notice, as follows: AYES: NOES: ABSENT: ABSTAIN: An agenda of said meeting was posted at least 72 hours before said meeting at the City Hall, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda. I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect. Dated: May _, 1998. Secretary of the La Quinta Financing Authority 124/016150-0012l3149953.] a03/30/98 - 3 - � w r 0 (1) �_ �1 ATTACHMENT NO. 2 $15,000,000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 BOND PURCHASE CONTRACT April_, 1998 La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 La Quinta Financing Authority 78-495 Calle Tampico La Quinta, California 92253 Ladies and Gentlemen: Miller & Schroeder Financial, Inc. (the "Underwriter"), acting not as fiduciary or agent for you, but on behalf of itself, hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the La Quinta Redevelopment Agency (the "Issuer") and the La Quinta Financing Authority (the "Authority") for the purchase and sale from the Authority simultaneously with the purchase by the Authority from the Issuer, of the Issuer's La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998 (the "Bonds"). This offer is made subject to acceptance thereof by the Authority and the Issuer prior to 9:00 a.m., Pacific time, on the date hereof, and upon such acceptance, as evidenced by the respective signatures of the Executive Director of the Issuer and by an officer of the Authority in the spaces provided below, this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the Issuer, the Authority and the Underwriter. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations and agreements herein set forth, (i) the Authority hereby agrees to purchase from the Issuer, but only to the extent the Underwriter is obligated hereunder to purchase from the Authority, for offering to the Underwriter and the Issuer hereby agrees to sell to the Authority for such purpose, and (ii) the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter all (but not less than all) of the Issuer's $15,000,000* aggregate principal amount of La Quinta Redevelopment Project Area No. 1, Tax Allocation Refunding Bonds, Series 1998, at a discount of %, original issue discount of $ , plus accrued interest of $ . The Preliminary, subject to change. QuG�1�_ p Bonds will mature and bear interest as set forth in Appendix A and will be subject to redemption according to the terms set forth in the Indenture. The Bonds will be authorized and issued pursuant to an Indenture of Trust dated as of April 1, 1998 (the "Indenture") by and between the Issuer and U.S. Bank Trust National Association, Los Angeles, California (the "Trustee"), and in accordance with the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) (the "Law"), and the Constitution and other applicable laws of the State of California (the "State"). The Bonds are being issued on a parity basis with the Issuer's 1994 Bonds issued pursuant to the 1994 Indenture. The Bonds will be purchased and sold by the Authority pursuant to the provisions of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code (the "JPA Act"). The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering price set forth in the Official Statement; however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the Official Statement prepared in connection with the Bonds. The Underwriter also agrees to notify the Issuer in writing of the "end of the underwriting period" as defined in Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"). Terms defined in the Official Statement are used herein as so defined. 2. Official Statement. The Issuer shall deliver, or cause to be delivered, to the Underwriter two (2) executed copies of the final Official Statement prepared in connection with the Bonds, in such form as shall be approved by the Issuer and the Underwriter and such additional conformed copies thereof as the Underwriter may reasonably request. The Issuer deems the Preliminary Official Statement (the "Preliminary Official Statement") to be "final" as of its date for purposes of Rule 15c2-12. By acceptance of this Purchase Contract, the Issuer hereby authorizes the use of copies of the Official Statement in connection with the public offering and sale of the Bonds, and ratifies and approves the distribution by the Underwriter of the Preliminary Official Statement. 3. Delivery of the Bonds. At approximately 9:00 a.m., Pacific time, on May 1998, or at such earlier or later time or date, as shall be agreed upon by the Issuer, the Authority and the Underwriter (such time and date herein referred to as the "Closing Date"), the Issuer shall deliver to the Underwriter, acting on its own behalf and as agent for the Authority at a location to be designated by the Underwriter, in New York, New York, or such other place as designated by the Underwriter, the Bonds in definitive form and authenticated by the Trustee. The Underwriter, acting on its own behalf, shall accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by same day funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Underwriter not later than the second business day before the Closing Date for purposes of inspection and packaging. The Bonds shall be delivered as registered bonds in the name of Cede & Co., Inc. 4. Representations and Agreements of the Issuer. The Issuer represents and agrees that: (a) The Issuer is a public body, corporate and politic, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the Law and the JPA Act, and has, and at the date of the Closing will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriter, acting on its own behalf and as agent for the Authority, as provided herein, (iii) to adopt the Resolution approving the Indenture, and (iv) to carry out and to consummate the transactions contemplated by this Purchase Contract, the Indenture, the Escrow Deposit and Trust Agreement between the Issuer and the Trustee as Escrow Bank (the "Escrow Agreement"), the Continuing Disclosure Agreement (the "Disclosure Agreement") between the Issuer and the Trustee as Dissemination Agent with respect to the Bonds and the Official Statement; (b) The Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did 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; (c) The Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, 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; (d) The Issuer to the best of its knowledge has complied, and will at the Closing Date be in compliance, in all respects with the Law, the JPA Act and any other applicable laws of the State; (e) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (f) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Issuer to the best of its knowledge 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 of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Issuer 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; the execution and delivery of the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject; and, except as described in the Official Statement, the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the revenues and amounts pledged pursuant to, or subject to the lien of, the Indenture; (g) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to adoption of the resolution approving the Indenture, execution and delivery by the Issuer of the Escrow Agreement, the Disclosure Agreement, the Indenture and this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; Glia u. J i , (h) The Bonds when issued, authenticated and delivered in accordance with the Indenture will be validly issued, and will be valid and binding, obligations of the Issuer; (i) To the best of its knowledge the terms and provisions of the Indenture comply in all respects with the requirements of the Law and the JPA Act, and the Indenture, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, when properly executed and delivered by the respective parties thereto and hereto, will constitute the valid, legal and binding obligations of the Issuer enforceable in accordance with their respective terms, except as enforcement may by limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); 0) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Issuer, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract or the consummation of the transactions contemplated thereby and hereby, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the power or authority of the Issuer to issue the Bonds, to adopt the resolution approving the Indenture or to execute and deliver the Indenture or this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Issuer or the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract; (k) Any certificate signed by an authorized officer or official of the Issuer and delivered to the Underwriter shall be deemed a representation of the Issuer to the Underwriter as to the statements made therein; (1) Each of the Bonds shall be secured in the manner and to the extent set forth in the Indenture under which each such Bond is to be issued; (m) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Issuer shall not be required to consent to service of process outside of California; (n) The Issuer will apply the proceeds of the Bonds in accordance with the Indenture and all other applicable documents and as described in the Official Statement; (o) The Issuer shall provide or cause to be provided to the Underwriter not more than 200 copies of the Preliminary Official Statement in order to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution to each potential customer, upon request, of a copy of a Preliminary Official Statement and not later than seven (7) business days after the date of this Purchase Contract, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to a purchaser of the Bonds, 200 copies of the final Official Statement to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution of the final Official Statement; 4 LJ�lUl4 Pn, (p) The Issuer will not invest or otherwise use proceeds of the Bonds in any manner which would cause the Bonds to be considered arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"); and (q) The Issuer will, at the Underwriter's request, take any action reasonably necessary to assure or maintain the exclusion from gross income for purposes of federal income taxes of interest on the Bonds and will not take any action, or permit any action to be taken with respect to which it may exercise control, which would result in the loss of that exclusion. 5. Representations and Agreements of the Authority. The Authority represents and agrees that: (a) The Authority is a joint powers authority, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the JPA Act, with full legal right, power and authority to purchase and sell the Bonds and to execute, deliver and perform its obligations under this Purchase Contract and to carry out and consummate the transactions contemplated by this Purchase Contract; (b) The Authority to the best of its knowledge has complied, and will at the Closing be in compliance, in all respects with the JPA Act and any other applicable laws of the State; (c) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Authority to the best of its knowledge 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 of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and, the execution and delivery of this Purchase Contract, and compliance with the provisions thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject; and, except as described in the Official Statement, the Authority has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the assets or property of the Authority; (e) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to the execution and delivery by the Authority of this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (f) This Purchase Contract, when properly executed and delivered by the respective parties hereto, will constitute the valid, legal and binding obligations of the Authority enforceable in accordance with its respective terms, except as enforcement may be limited by 5 CiJ�ul) 1- bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); (g) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Authority, threatened, against the Authority, affecting the existence of the Authority or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of this Purchase Contract or the consummation of the transactions contemplated hereby, or contesting the power or authority of the Authority to purchase the Bonds from the Issuer or to sell the Bonds to the Underwriter or to execute and deliver this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Authority or the validity or enforceability of this Purchase Contract; and (h) Any certificate signed by an authorized officer of the Authority and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter as to the statements made therein. 6. Representations of the Underwriter. The Underwriter represents that it has full right, power, and authority to enter into this Purchase Contract. 7. Covenants re Official Statement. The Issuer and the Authority each covenant with the Underwriter that so long as the Underwriter, or dealers, if any, are participating in the distribution of the Bonds which constitute the whole or a part of their unsold participations, if an event known to the Issuer or the Authority occurs affecting the Issuer or the Authority, as applicable, or the transactions contemplated by the Indenture and the issuance of the Bonds, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer or the Authority, as applicable, shall notify the Underwriter and if in the opinion of the Issuer, the Authority, the Underwriter or Bond Counsel, such event requires an amendment or supplement to the Official Statement, the Issuer will amend or supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter, and the Issuer will bear the cost of making and printing such amendment or supplement to the Official Statement and distributing such amendment or supplement to Owners of the Bonds. The obligations of the Issuer and the Authority under this Section 7 shall terminate on the earlier of (a) ninety (90) days from the "end of the underwriting period," as defined in Rule 15c2-12, or (b) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty-five (25) days following the end of the underwriting period. Unless otherwise notified by the Underwriter pursuant to Section 1 hereof not later than thirty (30) days after the Closing Date, the Issuer and the Authority may assume that the end of the underwriting period is the Closing Date. 8. Conditions to Obligations of Underwriter. The Underwriter has entered into this Purchase Contract in reliance upon the representations and agreements of the Issuer and the Authority contained herein and upon the accuracy of the statements to be contained in the documents, opinions, and instruments to be delivered at the Closing. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, accept delivery of, and pay 6 for the Bonds on the Closing Date is subject to the performance by the Issuer and the Authority of their respective obligations hereunder at or prior to the Closing. The following additional conditions precedent relate to the Closing, in connection with the Underwriter's obligation to purchase the Bonds: (a) At the time of the Closing, (i) the representations of the Issuer and the Authority contained herein to the best of their knowledge shall be true, complete and correct; and (ii) the Indenture shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (b) The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing, (i) legislation shall have been enacted (or indenture or resolution passed) by or introduced or pending legislation amended in the Congress of the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling shall have been made or indenture shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or State authority, with respect to State taxation upon interest on obligations of the general character of the Bonds or with respect to the security pledged to pay debt service on the Bonds, that, in the Underwriter's reasonable judgment, materially adversely affects the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (ii) there shall exist any event that, in the Underwriter's reasonable judgment, either (A) makes untrue or incorrect in any material respect any statement or information in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws, the effect of which on the financial markets of the United States will be such as in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices of securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of determination by that Exchange or by order of the Securities and Exchange Commission of the United States or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (v) a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and be in force that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (vi) legislation shall be enacted or be proposed or actively considered for enactment, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission of the United States or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any obligations of the general character of the Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or of the Trust Indenture Act of 1939, as amended and as then in effect, or otherwise are or would be in violation of any provision of the federal securities laws, or (vii) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or materially increase any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters, or (viii) there shall have been any materially adverse change in the affairs of the Issuer or the Authority which in the Underwriter's reasonable judgment materially adversely affects the market for the Bonds, or (ix) general political, economic or market conditions which, in the sole opinion of the Underwriter, shall not be satisfactory to permit the sale of the Bonds; and (c) At or prior to the Closing, the Underwriter and the Issuer shall receive the following: (1) The unqualified approving opinion of Rutan & Tucker, LLP, Costa Mesa, California, bond counsel (the "Bond Counsel"), in form and substance acceptable to the Underwriter, addressed to the Issuer, dated the date of the Closing; (2) A supplemental opinion of Bond Counsel, addressed to the Underwriter and the Issuer in form and substance acceptable to each of them, dated the date of Closing, to the following effect: (i) The Issuer has duly authorized, executed and delivered the Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract. The Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract constitute the legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles when equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (ii) The Official Statement has been duly authorized, executed and delivered by the Issuer; (iii) The statements and information contained or summarized in the Preliminary Official Statement and Official Statement under the headings "THE BONDS," "SECURITY FOR THE BONDS," "THE INDENTURE," "CONCLUDING INFORMATION — Legal Opinion," "Tax Exemption," and "Continuing Disclosure," the Cover Page and "INTRODUCTORY STATEMENT," and "APPENDIX A —Definitions" (but not including any statistical or financial information set forth under such headings, as to which no opinion need be expressed) insofar as such statements purport to summarize certain provisions of the Law, the Bonds, the Indenture, the Disclosure Agreement, the Escrow Agreement and the opinion of such Bond Counsel concerning certain federal and state tax matters relating to the Bonds, are accurate in all material respects; (iv) The Bonds are exempt from registration under the Securities Act of 1933, as amended; (v) The Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (vi) The lien of the 1991 Bonds with respect to the Pledged Tax Revenues has been discharged; (3) The opinion of counsel to the Issuer, addressed to the Underwriter and the Issuer, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Issuer is a public body, corporate and politic, duly organized and validly existing under and by virtue of the Constitution and the laws of the State; 8 Cui1i�1J (ii) The Indenture has been duly approved by a resolution of the Issuer adopted at a regular meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the Issuer was continuously present; (iii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Issuer to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds or the execution and delivery by the Issuer of, or the performance by the Issuer of its obligations under the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; or (d) if determined adversely to the Issuer or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Issuer; (iv) The Issuer has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer for the valid authorization, issuance and delivery by the Issuer of the Bonds; and (v) The statements and information contained in the Preliminary Official Statement and Official Statement under the headings, "PROPERTY TAXATION IN CALIFORNIA," "THE PROJECT AREA," "PLEDGED TAX REVENUES," "CONCLUDING INFORMATION —No Litigation" and "Legality for Investment in California" and "SUPPLEMENTAL INFORMATION —The City of La Quinta" (excluding therefrom any financial statements and statistical data as to which no opinion need be expressed) are accurate in all material respects; (4) The opinion of counsel to the Authority, addressed to the Underwriter and the Authority, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Authority is a joint powers authority, duly created and validly existing under and by virtue of the Constitution and the laws of the State; (ii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Authority to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds, the adoption or effectiveness of the Indenture, or the execution and delivery by the Authority of, or the performance by the Authority of its obligations under, the Purchase Contract; or (d) if determined adversely to the Authority or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Authority; (iii) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Purchase Contract does not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound; 9 (iv) The Authority has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer required for the valid purchase and sale by the Authority of the Bonds; and (v) The statements and information contained in the Official Statement under the heading "THE AUTHORITY" are accurate in all material respects; (5) A certificate dated the date of the Closing, signed by the Executive Director or appropriate officer of the Issuer, to the effect that to the best of his knowledge: (i) the representations and covenants of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Issuer has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; (iii) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (iv) the Indenture remains in full force and effect and has not been amended in any respect, except as approved in writing by the Underwriter, since the date of the Indenture; (6) A certificate dated the date of the Closing, signed by an officer of the Authority, to the effect that to the best of his knowledge: (i) the representations and covenants of the Authority contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Authority has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; and (iii) no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement of information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; (7) A certificate of the Trustee dated the date of the Closing, to the effect that: (i) the Trustee is organized and existing as a national banking association under and by the virtue of the laws of the United States of America, having full power and being qualified and duly authorized to perform the duties and obligations of the Trustee, the Escrow Bank and the Dissemination Agent under and pursuant to the Indenture, the Escrow Agreement and the Disclosure Agreement; (ii) the Trustee has agreed to perform the duties and obligations of the Trustee as set forth in the Indenture, the Escrow Agreement and the Disclosure Agreement; (iii) to the best of its knowledge, compliance with the provisions on the Trustee's part contained in the Indenture, the Escrow Agreement and the Disclosure Agreement will not conflict with or constitute a breach of or default under any material law, administrative regulation, judgment, decree, loan agreement, indenture, resolution, bond, note, agreement or other instrument to which the Trustee is a party or is otherwise subject, as a result of which the Trustee's ability to perform its obligations under the Indenture would be impaired, nor will any such compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, agreement or other instrument, except as provided by the Indenture, the Escrow Agreement, the Disclosure Agreement; and (iv) to the best of the knowledge of the Trustee, the Trustee has not been served in any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending nor is any such action, suit, proceeding, inquiry or investigation threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or 10 seeking to prohibit, restrain or enjoin the delivery of the Bonds issued under the Indenture or the collection of revenues pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds issued under the Indenture, the Escrow Agreement, the Disclosure Agreement, or the pledge thereof, or in any way contesting the powers of the Trustee or its authority to enter into or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture, the Escrow Agreement, the Disclosure Agreement; (8) Two (2) copies of this Purchase Contract duly executed and delivered by the parties thereto; (9) Two (2) copies of the Official Statement, executed on behalf of the Issuer by the Executive Director of the Issuer; (10) One (1) certified copy of the Indenture, the Escrow Agreement, the Disclosure Agreement and all resolutions of the Issuer, the Authority and the City relating to the issuance of the Bonds; (11) A certificate dated the date of the Closing, signed by the Underwriter, to the effect that statements and information contained in the Preliminary Official Statement and the Official Statement under the heading "CONCLUDING INFORMATION — Underwriting" is accurate in all material respects; (12) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority 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 Authority; (13) An opinion of counsel to the Bond Insurer to the effect that (i) the Municipal Bond Insurance Policy is valid, binding and enforceable against the Bond Insurer in accordance with its terms, except as such enforceability may be limited by laws affecting the enforcement of creditors' rights generally, and (ii) the statements and information contained in the Official Statement under the heading "CONCLUDING INFORMATION —Bond Insurer" and "APPENDIX B—Specimen Municipal Bond Insurance Policy" are accurate in all material respects; (14) Rating letters from Standard & Poor's Ratings Group and Moody's Investors Services, Inc. confirming the ratings on the Bonds; (15) All pertinent documents relating to the Municipal Bond Insurance Policy including a true copy of the Municipal Bond Insurance Policy; (16) A report of a certified public accountant as to (i) the sufficiency of the amount deposited in the Escrow Fund and such other opinions and certificates reasonably required to demonstrate that the lien of the 1991 Bonds with respect to the Pledged Tax Revenues has been discharged and (ii) the "yield" on the Bonds, the "yield" on certain obligations in the Escrow Fund and other related matters considered by Bond Counsel in support of the conclusion that the Bonds are not "arbitrage bonds" within the meaning of the Code. (17) A letter, dated the date of the Closing and addressed to the Underwriter and the Issuer, of Disclosure Counsel, to the effect that based upon its participation in the preparation of the Official Statement and without having undertaken to determine 11 C.ivUll.� `_ w.3 independently the accuracy or completeness of the statements in the Official Statement such Counsel has no reason to believe that, as of the date of Closing, the Official Statement (except for financial, statistical and numerical data included in the Official Statement, as to which no view need be expressed) contains any untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (18) A copy of the report or reports of Rosenow Spevacek Group, Inc. with respect to Pledged Tax Revenues for the Project Area; and (19) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Bond Counsel or Disclosure Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority 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 Authority. The Issuer and the Authority will furnish the Underwriter with such conformed copies of such opinions, certificates, letters and documents as the Underwriter may reasonably request. If the Issuer and the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter 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, the Authority or the Issuer shall have any further obligations hereunder, except as provided in Section 9 hereof. However, the Underwriter may in its discretion waive one or more of the conditions imposed by this Purchase Contract for the protection of the Underwriter and proceed with the related Closing. 9. Expenses. The Underwriter shall be under no obligation to pay, and the Issuer shall pay from its available funds or from the proceeds of the Bonds, certain expenses set forth in this Section, including but not limited to: (i) all expenses in connection with the preparation, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) all expenses in connection with the printing, issuance and delivery of the Bonds, (iii) the fees and disbursements of Bond Counsel and Disclosure Counsel in connection with the Bonds, (iv) the fees and disbursements of counsel to the Issuer and counsel to the Authority in connection with the Bonds, (v) the disbursements of the Issuer and the Authority in connection with the issuance of the Bonds, (vi) the fees and disbursements of the Trustee, and (vii) rating agencies' fees and the Bond Insurance Premium. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 10. Notice. Any notice or other communication to be given to the Issuer under this Purchase Contract may be given by delivering the same in writing at the address set forth above. Any such notice or communication to be given to the Underwriter may be given by delivering the same in writing to: Miller & Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075-0819 Attention: Ms. Robin M. Thomas 11. Governing Law. This Purchase Contract shall be governed by the laws of the State of California. 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. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof except as provided in Section 11 hereof. Respectfully submitted, MILLER & SCHROEDER FINANCIAL, INC. By Its: Senior Vice President Accepted as of the date first stated above: LA QUINTA REDEVELOPMENT AGENCY By Its: Executive Director LA QUINTA FINANCING AUTHORITY By Its: Executive Director 13 cvf�62 APPENDIX A MATURITY SCHEDULE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 1 TAX ALLOCATION REFUNDING BONDS SERIES 1998 Maturity Date September I of Total Interest Principal Rate Price A-1 06��+ $7,500,000* LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 31 13�1 �LIC�Il��f7.��1 Y April_, 1998 La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, California 92253 La Quinta Financing Authority 78-495 Calle Tampico La Quinta, California 92253 Ladies and Gentlemen: Miller & Schroeder Financial, Inc. (the "Underwriter"), acting not as fiduciary or agent for you, but on behalf of itself, hereby offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the La Quinta Redevelopment Agency (the "Issuer") and the La Quinta Financing Authority (the "Authority") for the purchase and sale from the Authority simultaneously with the purchase by the Authority from the Issuer, of the Issuer's La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998 (the "Bonds"). This offer is made subject to acceptance thereof by the Authority and the Issuer prior to 9:00 a.m., Pacific time, on the date hereof, and upon such acceptance, as evidenced by the respective signatures of the Executive Director of the Issuer and by an officer of the Authority in the spaces provided below, this Purchase Contract shall be in full force and effect in accordance with its terms and shall be binding upon the Issuer, the Authority and the Underwriter. 1. Purchase and Sale of the Bonds. Upon the terms and conditions and upon the basis of the representations and agreements herein set forth, (i) the Authority hereby agrees to purchase from the Issuer, but only to the extent the Underwriter is obligated hereunder to purchase from the Authority, for offering to the Underwriter and the Issuer hereby agrees to sell to the Authority for such purpose, and (ii) the Underwriter hereby agrees to purchase from the Authority for offering to the public, and the Authority hereby agrees to sell to the Underwriter all (but not less than all) of the Issuer's $7,500,000* aggregate principal amount of La Quinta Redevelopment Project Area No. 2, Tax Allocation Refunding Bonds, Issue of 1998, at a discount of °/o, original issue discount of $ plus accrued interest of Preliminary, subject to change. GJUG21 .: $ . The Bonds will mature and bear interest as set forth in Appendix A and will be subject to redemption according to the terms set forth in the Indenture. The Bonds will be authorized and issued pursuant to an Indenture of Trust dated as of April 1, 1998 (the "Indenture") by and between the Issuer and U.S. Bank Trust National Association, Los Angeles, California (the "Trustee"), and in accordance with the Community Redevelopment Law (Part 1 of Division 24 of the California Health and Safety Code) (the "Law"), and the Constitution and other applicable laws of the State of California (the "State"). The Bonds will be purchased and sold by the Authority pursuant to the provisions of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code (the "JPA Act"). The Underwriter agrees to make a bona fide public offering of the Bonds at the initial offering price set forth in the Official Statement; however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering price as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the Official Statement prepared in connection with the Bonds. The Underwriter also agrees to notify the Issuer in writing of the "end of the underwriting period" as defined in Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"). Terms defined in the Official Statement are used herein as so defined. 2. Official Statement. The Issuer shall deliver, or cause to be delivered, to the Underwriter two (2) executed copies of the final Official Statement prepared in connection with the Bonds, in such form as shall be approved by the Issuer and the Underwriter and such additional conformed copies thereof as the Underwriter may reasonably request. The Issuer deems the Preliminary Official Statement (the "Preliminary Official Statement") to be "final" as of its date for purposes of Rule 15c2-12. By acceptance of this Purchase Contract, the Issuer hereby authorizes the use of copies of the Official Statement in connection with the public offering and sale of the Bonds, and ratifies and approves the distribution by the Underwriter of the Preliminary Official Statement. 3. Delivery of the Bonds. At approximately 9:00 a.m., Pacific time, on May 1998, or at such earlier or later time or date, as shall be agreed upon by the Issuer, the Authority and the Underwriter (such time and date herein referred to as the "Closing Date"), the Issuer shall deliver to the Underwriter, acting on its own behalf and as agent for the Authority at a location to be designated by the Underwriter, in New York, New York, or such other place as designated by the Underwriter, the Bonds in definitive form and authenticated by the Trustee. The Underwriter, acting on its own behalf, shall accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by same day funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Underwriter not later than the second business day before the Closing Date for purposes of inspection and packaging. The Bonds shall be delivered as registered bonds in the name of Cede & Co., Inc. 4. Representations and Agreements of the Issuer. The Issuer represents and agrees that: (a) The Issuer is a public body, corporate and politic, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the Law and the JPA Act, and has, and at the date of the Closing will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriter, acting on its own behalf and as agent for the Authority, as provided herein, (iii) to adopt the Resolution approving the 2 L iJ 0 U 1J Indenture, and (iv) to carry out and to consummate the transactions contemplated by this Purchase Contract, the Indenture, the Escrow Deposit and Trust Agreement between the Issuer and the Trustee as Escrow Bank (the "Escrow Agreement"), the Continuing Disclosure Agreement (the "Disclosure Agreement") between the Issuer and the Trustee as Dissemination Agent with respect to the Bonds and the Official Statement; (b) The Preliminary Official Statement, as of its date, was true, correct and complete in all material respects and did 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; (c) The Official Statement is, and will be, as of the Closing Date, true, correct and complete in all material respects and does not, and will not, as of the Closing Date, 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; (d) The Issuer to the best of its knowledge has complied, and will at the Closing Date be in compliance, in all respects with the Law, the JPA Act and any other applicable laws of the State; (e) By all necessary official action of the Issuer prior to or concurrently with the acceptance hereof, the Issuer has duly authorized and approved the Preliminary Official Statement and the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the Issuer of the obligations on its part contained in, the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (f) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Issuer to the best of its knowledge 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 of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Issuer 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; the execution and delivery of the Indenture, the Bonds, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Issuer is a party or is otherwise subject; and, except as described in the Official Statement, the Issuer has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the revenues and amounts pledged pursuant to, or subject to the lien of, the Indenture; (g) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to adoption of the resolution approving the Indenture, execution and delivery by the Issuer of the Escrow Agreement, the Disclosure Agreement, the Indenture and this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (h) The Bonds when issued, authenticated and delivered in accordance with the Indenture will be validly issued, and will be valid and binding, obligations of the Issuer; (i) To the best of its knowledge the terms and provisions of the Indenture comply in all respects with the requirements of the Law and the JPA Act, and the Indenture, the Escrow Agreement, the Disclosure Agreement and this Purchase Contract, when properly executed and delivered by the respective parties thereto and hereto, will constitute the valid, legal and binding obligations of the Issuer enforceable in accordance with their respective terms, except as enforcement may by limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); 0) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Issuer, threatened, against the Issuer, affecting the existence of the Issuer or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract or the consummation of the transactions contemplated thereby and hereby, or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the power or authority of the Issuer to issue the Bonds, to adopt the resolution approving the Indenture or to execute and deliver the Indenture or this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Issuer or the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or this Purchase Contract; (k) Any certificate signed by an authorized officer or official of the Issuer and delivered to the Underwriter shall be deemed a representation of the Issuer to the Underwriter as to the statements made therein; (1) Each of the Bonds shall be secured in the manner and to the extent set forth in the Indenture under which each such Bond is to be issued; (m) The Issuer will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the Issuer shall not be required to consent to service of process outside of California; (n) The Issuer will apply the proceeds of the Bonds in accordance with the Indenture and all other applicable documents and as described in the Official Statement; (o) The Issuer shall provide or cause to be provided to the Underwriter not more than 200 copies of the Preliminary Official Statement in order to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution to each potential customer, upon request, of a copy of a Preliminary Official Statement and not later than seven (7) business days after the date of this Purchase Contract, but in any event in sufficient time to accompany any confirmation sent by the Underwriter to a purchaser of the Bonds, 200 copies of the final Official Statement to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the distribution of the final Official Statement; M r N (` (�'�UU 2 0 (p) The Issuer will not invest or otherwise use proceeds of the Bonds in any manner which would cause the Bonds to be considered arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"); and (q) The Issuer will, at the Underwriter's request, take any action reasonably necessary to assure or maintain the exclusion from gross income for purposes of federal income taxes of interest on the Bonds and will not take any action, or permit any action to be taken with respect to which it may exercise control, which would result in the loss of that exclusion. 5. Representations and Agreements of the Authority. The Authority represents and agrees that: (a) The Authority is a joint powers authority, duly organized and existing, and authorized to transact business and exercise powers, under and pursuant to the Constitution and laws of the State, including the JPA Act, with full legal right, power and authority to purchase and sell the Bonds and to execute, deliver and perform its obligations under this Purchase Contract and to carry out and consummate the transactions contemplated by this Purchase Contract; (b) The Authority to the best of its knowledge has complied, and will at the Closing be in compliance, in all respects with the JPA Act and any other applicable laws of the State; (c) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in this Purchase Contract, and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded; (d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, the Authority to the best of its knowledge 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 of the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, indenture, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and, the execution and delivery of this Purchase Contract, and compliance with the provisions thereof, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, note, indenture, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject; and, except as described in the Official Statement, the Authority has not entered into any contract or arrangement of any kind which might give rise to any lien or encumbrance on the assets or property of the Authority; (e) To the best of its knowledge all approvals, consents and orders of any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to the execution and delivery by the Authority of this Purchase Contract and the issuance, sale and delivery of the Bonds have been obtained or will be obtained prior to the Closing; (f) This Purchase Contract, when properly executed and delivered by the respective parties hereto, will constitute the valid, legal and binding obligations of the Authority enforceable in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and general rules of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity); (g) To the best of its knowledge there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Authority, threatened, against the Authority, affecting the existence of the Authority or the titles of its members or officers, or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the payment or collection of any amounts pledged or to be pledged to pay the principal of, redemption premium, if any, and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of this Purchase Contract or the consummation of the transactions contemplated hereby, or contesting the power or authority of the Authority to purchase the Bonds from the Issuer or to sell the Bonds to the Underwriter or to execute and deliver this Purchase Contract, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the Authority or the validity or enforceability of this Purchase Contract; and (h) Any certificate signed by an authorized officer of the Authority and delivered to the Underwriter shall be deemed a representation of the Authority to the Underwriter as to the statements made therein. 6. Representations of the Underwriter. The Underwriter represents that it has full right, power, and authority to enter into this Purchase Contract. 7. Covenants re Official Statement. The Issuer and the Authority each covenant with the Underwriter that so long as the Underwriter, or dealers, if any, are participating in the distribution of the Bonds which constitute the whole or a part of their unsold participations, if an event known to the Issuer or the Authority occurs affecting the Issuer or the Authority, as applicable, or the transactions contemplated by the Indenture and the issuance of the Bonds, which could cause the Official Statement to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Issuer or the Authority, as applicable, shall notify the Underwriter and if in the opinion of the Issuer, the Authority, the Underwriter or Bond Counsel, such event requires an amendment or supplement to the Official Statement, the Issuer will amend or supplement the Official Statement in a form and in a manner jointly approved by the Issuer and the Underwriter, and the Issuer will bear the cost of making and printing such amendment or supplement to the Official Statement and distributing such amendment or supplement to Owners of the Bonds. The obligations of the Issuer and the Authority under this Section 7 shall terminate on the earlier of (a) ninety (90) days from the "end of the underwriting period," as defined in Rule 15c2-12, or (b) the time when the Official Statement is available to any person from a nationally recognized municipal securities information repository, but in no case less than twenty-five (25) days following the end of the underwriting period. Unless otherwise notified by the Underwriter pursuant to Section 1 hereof not later than thirty (30) days after the Closing Date, the Issuer and the Authority may assume that the end of the underwriting period is the Closing Date. 8. Conditions to Obligations of Underwriter. The Underwriter has entered into this Purchase Contract in reliance upon the representations and agreements of the Issuer and the Authority contained herein and upon the accuracy of the statements to be contained in the documents, opinions, and instruments to be delivered at the Closing. Accordingly, the Underwriter's obligation under this Purchase Contract to purchase, accept delivery of, and pay for the Bonds on the Closing Date is subject to the performance by the Issuer and the Authority of their respective obligations hereunder at or prior to the Closing. The following additional conditions precedent relate to the Closing, in connection with the Underwriter's obligation to purchase the Bonds: (a) At the time of the Closing, (i) the representations of the Issuer and the Authority contained herein to the best of their knowledge shall be true, complete and correct; and (ii) the Indenture shall be in full force and effect and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter; (b) The Underwriter shall have the right to cancel its obligation to purchase the Bonds if between the date hereof and the Closing, (i) legislation shall have been enacted (or indenture or resolution passed) by or introduced or pending legislation amended in the Congress of the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling shall have been made or indenture shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or State authority, with respect to State taxation upon interest on obligations of the general character of the Bonds or with respect to the security pledged to pay debt service on the Bonds, that, in the Underwriter's reasonable judgment, materially adversely affects the market for the Bonds, or the market price generally of obligations of the general character of the Bonds or (ii) there shall exist any event that, in the Underwriter's reasonable judgment, either (A) makes untrue or incorrect in any material respect any statement or information in the Official Statement or (B) is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect, or (iii) there shall have occurred any outbreak of hostilities or other local, national or international calamity or crisis, or a default with respect to the debt obligations of, or the institution of proceedings under the federal bankruptcy laws, the effect of which on the financial markets of the United States will be such as in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices of securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of determination by that Exchange or by order of the Securities and Exchange Commission of the United States or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (v) a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and be in force that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds, or (vi) legislation shall be enacted or be proposed or actively considered for enactment, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the Securities and Exchange Commission of the United States or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that the Bonds or any obligations of the general character of the Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or of the Trust Indenture Act of 1939, as amended and as then in effect, or otherwise are or would be in violation of any provision of the federal securities laws, or (vii) the New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or materially increase any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, underwriters, or (viii) there shall have been any materially adverse change in the affairs of the Issuer or the Authority which in the Underwriter's reasonable judgment materially adversely affects the market for the Bonds, or (ix) general political, economic or market conditions which, in the sole opinion of the Underwriter, shall not be satisfactory to permit the sale of the Bonds; and (c) At or prior to the Closing, the Underwriter and the Issuer shall receive the following: (1) The unqualified approving opinion of Rutan & Tucker, LLP, Costa Mesa, California, bond counsel (the "Bond Counsel"), in form and substance acceptable to the Underwriter, addressed to the Issuer, dated the date of the Closing; (2) A supplemental opinion of Bond Counsel, addressed to the Underwriter and the Issuer in form and substance acceptable to each of them, dated the date of Closing, to the following effect: (i) The Issuer has duly authorized, executed and delivered the Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract. The Indenture, the Disclosure Agreement, the Escrow Agreement and the Purchase Contract constitute the legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles when equitable remedies are sought and to the exercise of judicial discretion in appropriate cases; (ii) The Official Statement has been duly authorized, executed and delivered by the Issuer; (iii) The statements and information contained or summarized in the Preliminary Official Statement and Official Statement under the headings "THE BONDS," "SECURITY FOR THE BONDS," "THE INDENTURE," "CONCLUDING INFORMATION — Legal Opinion," "Tax Exemption," and "Continuing Disclosure," the Cover Page and "INTRODUCTORY STATEMENT," and "APPENDIX A —Definitions" (but not including any statistical or financial information set forth under such headings, as to which no opinion need be expressed) insofar as such statements purport to summarize certain provisions of the Law, the Bonds, the Indenture, the Disclosure Agreement, the Escrow Agreement and the opinion of such Bond Counsel concerning certain federal and state tax matters relating to the Bonds, are accurate in all material respects; (iv) The Bonds are exempt from registration under the Securities Act of 1933, as amended; (v) The Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (vi) The lien of the 1992 Bonds with respect to the Pledged Revenues has been discharged; (3) The opinion of counsel to the Issuer, addressed to the Underwriter and the Issuer, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Issuer is a public body, corporate and politic, duly organized and validly existing under and by virtue of the Constitution and the laws of the State; �1 U V3� (ii) The Indenture has been duly approved by a resolution of the Issuer adopted at a regular meeting duly called and held in accordance with the requirements of all applicable laws and at which a quorum of the members of the Issuer was continuously present; (iii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Issuer to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds or the execution and delivery by the Issuer of, or the performance by the Issuer of its obligations under the Bonds, the Indenture, the Escrow Agreement, the Disclosure Agreement or the Purchase Contract; or (d) if determined adversely to the Issuer or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Issuer; (iv) The Issuer has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer for the valid authorization, issuance and delivery by the Issuer of the Bonds; and (v) The statements and information contained in the Preliminary Official Statement and Official Statement under the headings, "PROPERTY TAXATION IN CALIFORNIA," "THE PROJECT AREA," "PLEDGED REVENUES," "CONCLUDING INFORMATION —No Litigation" and "Legality for Investment in California" and "SUPPLEMENTAL INFORMATION —The City of La Quinta" (excluding therefrom any financial statements and statistical data as to which no opinion need be expressed) are accurate in all material respects; (4) The opinion of counsel to the Authority, addressed to the Underwriter and the Authority, in form and substance acceptable to each of them, dated the date of the Closing, to the following effect: (i) The Authority is a joint powers authority, duly created and validly existing under and by virtue of the Constitution and the laws of the State; (ii) Except as described in the Official Statement, there is no litigation pending or, to the best of such counsel's knowledge after due inquiry, threatened, which: (a) challenges the right or title of any member or officer of the Authority to hold his or her respective office or exercise or perform the powers and duties pertaining thereto; (b) challenges the validity or enforceability of the Purchase Contract; (c) seeks to restrain or enjoin the issuance and sale of the Bonds, the adoption or effectiveness of the Indenture, or the execution and delivery by the Authority of, or the performance by the Authority of its obligations under, the Purchase Contract; or (d) if determined adversely to the Authority or its interests, would have a material and adverse affect upon the financial condition, assets, properties or operations of the Authority; (iii) The execution and delivery by the Authority of, and the performance by the Authority of its obligations under, the Purchase Contract does not conflict with, violate or constitute a default under any provision of any law, court order or decree or any contract, instrument or agreement to which the Authority is a party or by which it is bound; 2 (iv) The Authority has obtained all authorizations, approvals, consents or other orders of the State or any other governmental authority or agency within the State having jurisdiction over the Issuer required for the valid purchase and sale by the Authority of the Bonds; and (v) The statements and information contained in the Official Statement under the heading "THE AUTHORITY" are accurate in all material respects; (5) A certificate dated the date of the Closing, signed by the Executive Director or appropriate officer of the Issuer, to the effect that to the best of his knowledge: (i) the representations and covenants of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Issuer has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; (iii) no event affecting the Issuer has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and (iv) the Indenture remains in full force and effect and has not been amended in any respect, except as approved in writing by the Underwriter, since the date of the Indenture; (6) A certificate dated the date of the Closing, signed by an officer of the Authority, to the effect that to the best of his knowledge: (i) the representations and covenants of the Authority contained herein are true and correct in all material respects on and as of the date of the Closing with the same effect as if made on the date of Closing; (ii) the Authority has complied with all the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the Closing; and (iii) no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing Date any statement of information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; (7) A certificate of the Trustee dated the date of the Closing, to the effect that: (i) the Trustee is organized and existing as a national banking association under and by the virtue of the laws of the United States of America, having full power and being qualified and duly authorized to perform the duties and obligations of the Trustee, the Escrow Bank and the Dissemination Agent under and pursuant to the Indenture, the Escrow Agreement and the Disclosure Agreement; (ii) the Trustee has agreed to perform the duties and obligations of the Trustee as set forth in the Indenture, the Escrow Agreement and the Disclosure Agreement; (iii) to the best of its knowledge, compliance with the provisions on the Trustee's part contained in the Indenture, the Escrow Agreement and the Disclosure Agreement will not conflict with or constitute a breach of or default under any material law, administrative regulation, judgment, decree, loan agreement, indenture, resolution, bond, note, agreement or other instrument to which the Trustee is a party or is otherwise subject, as a result of which the Trustee's ability to perform its obligations under the Indenture would be impaired, nor will any such compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, agreement or other instrument, except as provided by the Indenture, the Escrow Agreement, the Disclosure Agreement; and (iv) to the best of the knowledge of the Trustee, the Trustee has not been served in any action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending nor is any such action, suit, proceeding, inquiry or investigation threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or 0 J0�3' 10 t r.. seeking to prohibit, restrain or enjoin the delivery of the Bonds issued under the Indenture or the collection of revenues pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds issued under the Indenture, the Escrow Agreement, the Disclosure Agreement, or the pledge thereof, or in any way contesting the powers of the Trustee or its authority to enter into or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture, the Escrow Agreement, the Disclosure Agreement; (8) Two (2) copies of this Purchase Contract duly executed and delivered by the parties thereto; (9) Two (2) copies of the Official Statement, executed on behalf of the Issuer by the Executive Director of the Issuer; (10) One (1) certified copy of the Indenture, the Escrow Agreement, the Disclosure Agreement and all resolutions of the Issuer, the Authority and the City relating to the issuance of the Bonds; (11) A certificate dated the date of the Closing, signed by the Underwriter, to the effect that statements and information contained in the Preliminary Official Statement and the Official Statement under the heading "CONCLUDING INFORMATION — Underwriting" is accurate in all material respects; (12) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority 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 Authority; (13) An opinion of counsel to the Bond Insurer to the effect that (i) the Municipal Bond Insurance Policy is valid, binding and enforceable against the Bond Insurer in accordance with its terms, except as such enforceability may be limited by laws affecting the enforcement of creditors' rights generally, and (ii) the statements and information contained in the Official Statement under the heading "CONCLUDING INFORMATION —Bond Insurer" and "APPENDIX B—Specimen Municipal Bond Insurance Policy" are accurate in all material respects; (14) Rating letters from Standard & Poor's Ratings Group and Moody's Investors Services, Inc. confirming the ratings on the Bonds; (15) All pertinent documents relating to the Municipal Bond Insurance Policy including a true copy of the Municipal Bond Insurance Policy; (16) A report of a certified public accountant as to (i) the sufficiency of the amount deposited in the Escrow Fund and such other opinions and certificates reasonably required to demonstrate that the lien of the 1992 Bonds with respect to the Pledged Revenues has been discharged and (ii) the "yield" on the Bonds, the "yield" on certain obligations in the Escrow Fund and other related matters considered by Bond Counsel in support of the conclusion that the Bonds are not "arbitrage bonds" within the meaning of the Code. (17) A letter, dated the date of the Closing and addressed to the Underwriter and the Issuer, of Disclosure Counsel, to the effect that based upon its participation in the preparation of the Official Statement and without having undertaken to determine 11 C '�G35 independently the accuracy or completeness of the statements in the Official Statement such Counsel has no reason to believe that, as of the date of Closing, the Official Statement (except for financial, statistical and numerical data included in the Official Statement, as to which no view need be expressed) contains any untrue statement of material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (18) A copy of the report or reports of Rosenow Spevacek Group, Inc. with respect to Pledged Revenues for the Project Area; and (19) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, Bond Counsel or Disclosure Counsel may reasonably request to evidence compliance by the Issuer and the Authority with this Purchase Contract, legal requirements, and the performance or satisfaction by the Issuer and the Authority 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 Authority. The Issuer and the Authority will furnish the Underwriter with such conformed copies of such opinions, certificates, letters and documents as the Underwriter may reasonably request. If the Issuer and the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter 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, the Authority or the Issuer shall have any further obligations hereunder, except as provided in Section 9 hereof. However, the Underwriter may in its discretion waive one or more of the conditions imposed by this Purchase Contract for the protection of the Underwriter and proceed with the related Closing. 9. Expenses. The Underwriter shall be under no obligation to pay, and the Issuer shall pay from its available funds or from the proceeds of the Bonds, certain expenses set forth in this Section, including but not limited to: (1) all expenses in connection with the preparation, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto, (ii) all expenses in connection with the printing, issuance and delivery of the Bonds, (iii) the fees and disbursements of Bond Counsel and Disclosure Counsel in connection with the Bonds, (iv) the fees and disbursements of counsel to the Issuer and counsel to the Authority in connection with the Bonds, (v) the disbursements of the Issuer and the Authority in connection with the issuance of the Bonds, (vi) the fees and disbursements of the Trustee, and (vii) rating agencies' fees and the Bond Insurance Premium. The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds. 10. Notice. Any notice or other communication to be given to the Issuer under this Purchase Contract may be given by delivering the same in writing at the address set forth above. Any such notice or communication to be given to the Underwriter may be given by delivering the same in writing to: Miller & Schroeder Financial, Inc. 505 Lomas Santa Fe Drive, Suite 100 Solana Beach, California 92075-0819 Attention: Ms. Robin M. Thomas 12 ��'�i�36 11. Governing Law. This Purchase Contract shall be governed by the laws of the State of California. 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. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the signatories hereto (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof except as provided in Section 11 hereof. Respectfully submitted, MILLER & SCHROEDER FINANCIAL, INC. By Its: Senior Vice President Accepted as of the date first stated above: LA QUINTA REDEVELOPMENT AGENCY By Its: Executive Director LA QUINTA FINANCING AUTHORITY By Its: Executive Director C�v63,l, 13 APPENDIX A MATURITY SCHEDULE LA QUINTA REDEVELOPMENT AGENCY LA QUINTA REDEVELOPMENT PROJECT AREA NO. 2 TAX ALLOCATION REFUNDING BONDS ISSUE OF 1998 Maturity Date Interest September 1 of Principal Rate Price 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2018 2028 Total l.1 A-1