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HomeMy WebLinkAbout1984-07-17; City Council; 7820 Exhibit 08; OFFICIAL REQUEST TO STATE OF CALIFORNIA FOR MORTGAGE REVENUE BOND ALLOCATION Exhibit 08l-b-0 /DM , . '4 /- .- CITY OF CARLSBAD HOME MORTGAGE REVENUE BONDS (AMBAC INSURED), 1985 SERIES A PURCHASE CONTRACT , 1985 City of Carlsbad Carlsbad, California Ladies/Gentlemen: The undersigned (the "Purchaser"), acting not as fiduciaries or agents for you but on behalf of themselves, offer to enter into this Purchase Contract with you (the "City") which, upon acceptance, will be binding upon the City and upon the Purchaser. This offer is made subject to the City's acceptance on or before 11:59 P.M., California time, on the date hereof, and if not so accepted, will be subject to withdrawal by the Purchaser upon written notice delivered to the City at any time prior to the acceptance hereof by the City. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Purchaser hereby agrees to purchase from the City, and the City hereby agrees to sell to the Purchaser, all (but not less than all) of the above-captioned bonds which are more fully described in the Official Statement hereinafter mentioned (the "Bonds"). The purchase price for the Bonds shall be $ , plus accrued interest, calculated on a 360-day year basis, from , 1985 to the Closing Date. (hereinafter defined). The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, an Indenture, dated as of June 1, 1985 (the "Indenture"), between the City and [TRUSTEE], as trustee (the "Trustee"). The Bonds are authorized to be issued pursuant to the provisions of Chapters 1-5 of Part 5 of * Division 31 of the Health and Safety Code of the State of California (the "Act") and a resolution of the City Council of the City adopted on , 1985 (the "Resolu-$ion"). The Bonds will be limited obligations of the City payable solely from Revenues (as that term is defined in the Indenture) and unexpended proceeds of the sale of the Bonds pledged therefor pursuant to the Indenture. Proceeds of the - sale of the Bonds will be used by the City in accordance with the Indenture and the Act to acquire Home Mortgages (as that term is defined in the Indenture) made to finance the purchase of homes located in the City constructed by certain developers pursuant to Developer Agreements, each dated as of June 1, 1985 (the "Developer Agreements"), among the City, the Trustee and [DEVELOPERS] (the "Developers"), which Home Mortgages shall be originated and serviced pursuant to a Mortgage Sale and Service Agreement, dated as of June 1, 1985 (the "Agreement"), among the City, the Trustee, and, in its capacity as lender for the origination and servicing of Home Mortgages (the "Lender"), all as part of a home financing program (the "Program") to increase the housing supply in the City of Carlsbad. (b) Attached hereto as Exhibit A is a form of the official statement of the City relating to the Bonds. The form of official statement, together with such changes as may be made thereto, with the approval of the Purchaser and the City, from time to time prior to the Closing Date (including any supplements thereto), is herein called the "Official Statement.'' The City hereby authorizes the Purchaser to use and distribute the Official Statement, the Indenture, the Agreement, the Developer Agreements and this Purchase Contract and all information contained in each thereof, and all other documents, certificates and statements furnished by the City to the Purchaser in connection with the transactions contemplated by this Purchase Contract, in connection with the offer and sale of the Bonds. (c) At 8:OO A.M., California time, on 1 1985, or at such earlier or later time or date as shall be agreed upon by the Purchaser and the City (such time and date being herein referred to as the "Closing Date"), the City will deliver to the Purchaser, at the office of the Purchaser at Los Angeles, California, the Bonds in definitive form (all Bonds being printed or lithographed on steel engraved borders and bearing CUSIP numbers), duly executed by the City and authenticated by the Trustee; provided, however, that the Bonds may be issued in the form of temporary bonds upon approval by the Purchaser provided that the Bonds in definitive form are delivered as soon as practicable after the Closing Date; and the Purchaser will accept such delivery and pay the purchase price of the Bonds as set forth in 3 - 040181-0039-161-5150f 06/03/85 paragraph (a) of this Section at the offices of payable in Clearing House funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Purchaser not later than two business days before the Closing Date for the purposes of inspection and packaging. The Bonds shall be in registered - form, in such denominations and registered in such names as the Purchaser shall request by written notice not later than five business days prior to the Closing Date. , by certified or official bank check 2. Good Faith Deposit. Delivered to you herewith is a cashier's check payable to the order of the City in an amount equal to .2% of the principal amount of the Bonds. You agree to hold this check uncashed until the Closing Date as security for the performance by the Purchaser of its obligations under this Purchase Contract; in the event of its performance of such obligations, such check shall be returned to the Purchaser on the Closing Date. In the event you do not accept this offer, such check shall be returned immediately to the Purchaser. Once such acceptance has occurred, then, in the event of a failure to deliver the Bonds on the Closing Date or to satisfy the conditions to the Purchaser's obligations (unless waived by the Purchaser) or if the Purchaser's obligations shall have been terminated for any reason permitted hereby, the check shall be immediately returned to the Purchaser. In the event that the Purchaser fails, for a reason not permitted hereby, to accept and pay for the Bonds on the Closing Date as herein provided, the check shall be retained by you as and for liquidated damages for such faiure and for any defaults hereunder on the part of the Purchaser. The Purchaser and the City understand that, in such event, the City's actual damages may be greater or may be less than such sum. Accordingly, the Purchaser hereby waives any right to claim that the City's actual damages are less than such sum and the City's acceptance of this offer shall constitute a waiver of any right the Issuer may have to additional damages from the Purchaser. 3. Representations, Warranties and Agreements of the City. The City represents, warrants to and agrees with the Purchasers that: (a) The City is a municipal corporation, organized and existing under the Constitution and laws of the State of California and has, and at the Closing Date will have, full legal right, power and authority (i) to enter into this Purchase Contract, the Indenture, the Agreement and the Developer Agreements, (ii) to adopt the Resolution, (iii) to issue, sell and deliver the Bonds to the Purchasers pursuant to the Indenture as provided herein, and (iv) to carry out, give effect to 3 040181-0039-161-5150f 06/03/85 and consummate the transactions contemplated by this Purchase Contract, the Resolution, the Indenture, the Agreement, the Developer Agreements and the Official a Statement; (b) The City has complied, and will at the Closing Date be in compliance, in all respects with the Resolution, the Indenture, the Agreement, the Developer Agreements, the Act, the Program, and the Rules and Regulations of the Program adopted by the City on , 1985 (the "Rules and Regulations"). (c) The City has duly and validly adopted the Resolution and the Rules and Regulations, has duly authorized and approved the execution and delivery of the Bonds, the Indenture, this Purchase Contract, the Agreement, the Developer Agreements and the Official Statement and has duly authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by each of said documents, and at the Closing Date the Bonds, the Indenture, the Agreement, the Developer Agreements and this Purchase Contract will constitute the valid, legal and binding obligations of the City (assuming due authorization, execution and delivery by the other parties thereto, where necessary) in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws relating to or affecting creditors' rights generally and by equitable principles if equitable remedies are sought, and the Resolution will be in full force and effect at such date; (d) The City is not in breach of or in default under any applicable law or administrative rule or regulation of the State of California, the United States, or of any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound which in any material way, directly or indirectly, affects the issuance of the Bonds or the validity thereof, the Program, the Indenture, the Agreement, the Developer Agreements and this Purchase Contract; the adoption of the Resolution and the Rules and Regulations and the execution and delivery of the Bonds, the Indenture, this Purchase Contract, the Agreement, the Developer Agreements and compliance with the provisions of each n 1 040181-0039-161-5150f 06/03/85 , thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States, or of any department, division, -agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound; (e) All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder and under the Indenture, the Bonds, the Agreement and the Developer Agreements have been obtained and are in full force and effect except for such approvals, consents, authorizations, elections, orders, filings or registration as may be required under "blue sky" laws of the several states in connection with the public offering of the Bonds by the Purchaser; (f) The Bonds, when delivered in accordance with the Indenture and paid for by the Purchaser at the Closing Date as provided herein, will be validly issued and outstanding limited obligations of the City entitled to all the benefits and security of the Indenture; (9) The Official Statement, insofar as it relates to the City, is, and (as supplemented with the written approval of the Purchaser and the City, if the Official Statement shall have been supplemented) 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 a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (h) For a period of 90 days from the date hereof or until such time (if earlier) as the Purchaser shall no longer hold any of the Bonds for sale, if any event shall occur as a result of which it is necessary, in the opinion of the City or the Purchaser, to supplement the Official Statement in order to make the statements therein, in liqht of the circumstances existing at such time, not misleading, the City shall forthwith notify the Purchaser of any such event of which it has 5 040181-0039-161-5i50f 06/03/85 knowledge and shall amend or supplement the Official Statement so that, in the opinion of the Purchaser and the City, the statements therein as so amended or supplemented will not be misleading in the ligh% of the circumstances existing at such time; (i) The Indenture creates a valid pledge of the Revenues, as defined in the Indenture, and the proceeds of the Bonds, including the investments thereof, and a lien upon, security interest in and assignment to the Trustee of the Revenues, the proceeds of the Bonds, moneys in all funds and accounts established pursuant to the Indenture, including the investments thereof, except to the extent of the Nonmortgage Investment Excess (as that term is defined in the Indenture), and all right, title and interest of the City in the Home Mortgages, the Agreement and the Developer Agreements subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein; (j) No action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to the best knowledge of the City, threatened in any way affecting the existence of the City or the titles of its officers to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or the collection or application of Revenues pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof or of the proceeds of the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Agreement, the Developer Agreements, the Program, the Resolution, the Rules and Regulations, this Purchase Contract, or in any way contesting the completeness or accuracy of the Official Statement or the powers of the City or its authority with respect to the Bonds, the Indenture, the Agreement, the Developer Agreements, the Program, the Resolution, the Rules and Regulations, or this Purchase Contract, and the City has not received notice of any such action, suit, proceeding, inquiry or investigation which would adversely affect the exemption of interest paid on the Bonds from federal income taxation or State of California personal income taxation; (k) The City will furnish such information, execute such instruments and take such other action in 5 06/03/85 040181-0039-161-5150f cooperation with the Purchaser as the Purchaser 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 Purchaser may designate, provided that in connection therewith the City shall not be required to consent to service of process or register as a dealer or broker in any jurisdiction or to comply with any other requirements reasonably deemed by it to be unduly burdensome, and provided further that the City will not incur any liability or cost by reason thereof; (1) The issuance and sale of the Bonds is not subject to any transfer or other documentary stamp taxes of the State of California or any political subdivision thereof; (m) The City will not issue any bonds, notes or other obligations for borrowed money in connection with the Homes described in the Official Statement as long as moneys are available in the Program Fund (as defined in the Indenture) in relation thereto; (n) Any certificate signed by any authorized official or individual of the City, shall be deemed a representation and warranty by the City to the Purchaser as to the statements made therein; and (0) The City will cause the Trustee to apply the proceeds of the Bonds in accordance with the Indenture. 4. Conditions to the Obligations of the Purchaser. The obligations of the Purchaser to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Purchaser, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City, the Developers and the Lender made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the. City of its obligations to be performed hereunder at or prior to the Closing Date, to the receipt by the City (or the provision by the City on behalf of Developers) prior to the Closing of the Developer Commitment Fees (as defined in the Indenture) and to the following additional conditions: (a1 At the Closing Date, the Indenture, the Agreement, the Developer Agreements, the special hazard insurance policy, and the private mortgage guaranty 7 040181-0039-161-5150f 06/03/85 master insurance policies described in the Official Statement shall have been duly authorized, executed and delivered by the respective parties thereto (wh=ich shall be the same as those identified in the Official Statement), and in substantially the forms heretofore submitted to the Purchaser, with only such changes as shall have been agreed to by the Purchaser and the City, and together with the Resolution and the Rules and Regulations shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to by the Purchaser and the City, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Contract, all such actions as, in the opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Bond Counsel, or Orrick, Herrington & Sutcliffe, counsel for the Purchaser, shall be necessary and appropriate; (b) At the Closing Date, the Official Statement shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Purchaser and the City; (c) Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth in the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Purchaser (evidenced by a written notice to the City terminating the obligation of the Purchaser to accept delivery of and pay for the Bonds), by reason of any of the following: (1) legislation enacted by or introduced in the Congress or recommended for passage by the President or Department of the Treasury of the United States, or a decision rendered by a court established under Article I11 of the Constitution of the United States or by the Tax Court of the United States, or an order, ruling, regulation or official statement (final, temporary or proposed) issued or made by or on behalf of the Treasury Department of the United States or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such Revenues as would be received by the City or the Trustee and pledged under the Bonds, or upon such interest as would be received by the holders of the Bonds or by or on behalf of the Securities and Exchange Commission, or any 0 Y 040181-0039-161-5150f 06/03/85 other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or,the Bonds are not exempt from registration under, or other requirements of, the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under, or other requirements of, the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds as contemplated hereby or by the Official Statement, otherwise is or would be in violation of the federal securities laws as amended and then in effect; (2) the declaration of war or engagement in major hostilities by the United States or the occurrence of any other national emergency or calamity relating to the effective operation of the government of or the financial community in the United States; (3) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange; (4) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of 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 the material increase of any such restrictions now in force, including those relating to the extension of credit by, or a change in the net capital requirements of, underwriters ; (5) the withdrawal or downgrading of any rating of the Bonds; (6) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), the validity or enforceability of this Purchase Contract, the Indenture, the Aureement, the Developer Agreements or the Home Mortgages (other than with respect to prepayment penalties, if any, provided for therein 9 040181-0039-161-5150f 06/03/85 to the extent enforceability of such prepayment penalties may be limited by California law) or the ability of participating lenders to originate or sell and the City to purchase Home Mortgages as contemplated by the Indenture, the Agreement, the Developer Agreements and the Official Statement; or - (7) any event occurring, or information becoming known which, in the judgment of the Purchasers, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (d) A policy of municipal bond insurance (the "Bond Insurance Policy"), in form and substance reasonably satisfactory to the Purchaser and the City insuring the payment, when due, of principal of and interest on the Bonds shall have been issued by AMBAC Indemnity Corporation. (e) At or prior to the Closing Date, the Purchaser shall have received one counterpart original of the following documents (plus two counterpart originals as soon as practicable thereafter), in each case satisfactory in form and substance to the Purchaser: (1) The Official Statement, executed on behalf of the City by the Mayor; (2) The Resolution and the Rules and Regulations, each certified by the City Clerk of the City as a true, correct and complete copy of the ones duly adopted or authorized by the City and that it has not been amended, modified or rescinded (except as may have been agreed to by the Purchaser) and is in full force and effect as of the Closing Date; (3) The Indenture, the Agreement and the Developer Agreements, each duly executed and delivered by the respective parties thereto (including, in the case of the Developer Agreements, each of the Developers identified in the Official Statement); in A" 040181-0039-161-5150f 06/03/85 (4) An approving opinion, dated the Closing Date and addressed to the City, of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Bond Counsel, in substantially the form attached hereto as Exhibit B, and a letter of such-counsel, dated the Closing Date and addressed to the Purchaser, to the effect that such opinion addressed to the City may be relied upon by the Purchaser to the same extent as if such opinion were addressed to them; - (5) An opinion, dated the Closing Date and addressed to the Purchaser, of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Bond Counsel, to the effect that (i) the statements contained in the Official Statement under the captions "Introduction, 'I "The Bonds, It "The Program, If "Definitions of Certain Terms, I' "The Indenture, 'I "Legality for Investment" and "Tax Exemption" are fair and accurate summaries of the matters set forth therein; and (ii) based upon the information made available to them in the course of their participation in the preparation of the Official Statement as Bond Counsel and without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, such counsel do not believe that the Official Statement as of its date and as of the Closing Date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein, in the light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial or statistical data contained in the Official Statement or the statements contained in the Official Statement under the caption "Bond Insurance" or in any appendices to the Official Statement); (6) An opinion, dated the Closing Date and addressed to the Purchaser, of Orrick, Herrington & Sutcliffe, counsel for the Purchaser, to the effect that (i) the Bonds are exempt from the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; (ii) based upon the information made available to them in the course of their participation in the preparation of the Official 11 &A. 040181-0039-161-5150f 06/03/85 Statement as counsel fer the Purchaser and without having undertaken to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements- Contained in the Official Statement, such counsel de not believe that the Official Statement as of its date and as of the Closing Date contained any - untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial and statistical data contained in the Official Statement or the statements contained in the Official Statement under the caption "Bond Insurance" or in any appendices to the Official Statement); and (iii) with respect to such other matters as the Purchaser may require (in rendering such opinions, such counsel will not pass upon, and accordingly such opinion will be subject to, the tax-exempt status of interest on the Bonds); (7) A certificate, dated the Closing Date and signed by an authorized officer or individual of the City, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to his best knowledge no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under this Purchase Contract, the Resolution, the Indenture, the Agreement, the Developer Agreements or otherwise at or prior to the Closing; . (8) An opinion, dated the Closing Date and - addressed to the Purchaser, of , City Attorney, to the effect that (i) the City is a municipal corporation and [chartered/general law] city duly organized and validly existing under the Constitution and laws of the State of California, with full right, power and authority to conduct its 19 AI 040181-0039-161-5150f 06/03/85 business as described in the Official Statement; (ii) the City has duly and validly adopted the Resolution authorizing the execution and delivery of and has duly executed and delivered thq Purchase Contract, the Indenture, the Agreement, the Developer Agreements, the Official Statement and the Bonds; (iii) no approval, authorization, already obtained is legally required for the issuance and sale of the Bonds, or the execution and delivery of the Purchase Contract, the Indenture, the Agreement, the Developer Agreements, the Official Statement and the Bonds; (iv) the City has duly taken all necessary action prerequisite to (a) the authorization, issuance, sale and delivery of the Bonds upon the terms set forth in the Purchase Contract and the Official Statement; (b) the approval, execution, delivery, receipt and due performance of the Purchase Contract, the Indenture, the Agreement, the Developer Agreements, the Official Statement and the Bonds, and (c) the carrying out, giving effect to and consummation of the transactions contemplated by the Purchase Contract, the Indenture, the Agreement, the Developer Agreements, the Official Statement and the Bonds; (v) the Resolution and all other proceedings pertinent to the validity and enforceability of the Bonds have been duly and validly adopted or undertaken in compliance with all applicable procedural requirements of the City, and in compliance with the Constitution and laws of the State of California; (vi) the City has taken all action necessary or required by the Act to enable the City to exercise its powers under the Act with respect to the Program and the issuance, sale and delivery of the Bonds; (vii) there are no legal or governmental proceedings pending or, to the best knowledge of such counsel after due injury, threatened, or any basis therefor, wherein an unfavorable decision, ruling or finding would have a material and adverse affect on the validity of the Bonds, the Purchase Contract, the Indenture,. the Agreement, the Developer Agreements or the Official Statement; (viii) the execution and delivery of the Official Statement by the City, and the distribution thereof, have been duly authorized by the City; the statements and information relating to the City contained in the Official Statement are true and correct in all material respects, and do not contain any untrue statements - consent or order of any public board or body not . of a material fact, or omit to state any material 73 A- 040181-0039-i6i-51SOf 06/03/85 facts required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (ix) the statements and information in the Official Statement under the headings "No Litigation" and in Appendix C entitled "The City" are true and correct in all material respects, and fact or omit to state any material facts required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; - do not contain any untrue statements of a material (9) A certificate of a duly authorized officer of the Trustee, dated the Closing Date, as to the acceptance of the trusts under the Indenture by the Trustee and the due authentication and delivery of the Bonds by the Trustee thereunder; (10) An opinion, dated the Closing Date and addressed to the City, to Bond Counsel and to the Purchaser, of counsel for the Trustee, to the effect that (i) the Trustee is a the laws of the , legally doing business in and duly qualified to exercise trust powers in the State of California, eligible under the Indenture to act as Trustee thereunder, and has full corporate right, power and authority to accept the trusts contemplated by and to perform all duties and obligations on its part to be performed and to take all actions required or permitted on its part to be taken under and pursuant to the Indenture, the Agreement, Developer Agreements and the Investment Agreement (as hereinafter defined); (ii) the Trustee has duly authorized the acceptance of the trusts contemplated by the Indenture, has duly accepted the duties and obligations of Trustee thereunder, and has duly authorized, executed and delivered the Indenture, the Agreement, the Developer Agreements and the Investment Agreement and the duties and obligations of the Trustee under the Indenture, the Agreement, the Developer Agreements and the Investment Agreement constitute the-legal, valid and binding obligations of the Trustee enforceable against it in accordance with their respective terms except as the same may be limited by applicable insolvency, reorganization, liquidation, moratorium, readjustment of debt or other similar laws affecting the enforcement of creditors' rights generally; (iii) all approvals, , duly organized and validly existing under -In r-2 040181-0039-161-5150f 06/03/85 consents, authorizations, elections and orders of or filings or registrations with any governmental authority, agency, board or commission haying jurisdiction in the matter which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Trustee of its duties and obligations under the Indenture, the Agreement, the Developer Agreements and the Investment Agreement have been obtained and are in full force and effect; (iv) the acceptance of the duties and obligations of the Trustee under the Indenture, the execution and delivery of the Indenture, the Agreement, the Developer Agreements and the Investment Agreement and the performance of the obligations on the part of the Trustee contemplated in the Indenture, the Agreement, the Developer Agreements and the Investment Agreement and the compliance by the Trustee with the terms, conditions and provisions of such documents have been duly authorized by all necessary corporate action on the part of the Trustee; (v) the acceptance of the duties and obligations of the Trustee under the Indenture, the Agreement, the Developer Agreements and the Investment Agreement and the performance of the obligations on the part of the Trustee contemplated by the Indenture, the Agreement, the Developer Agreements and the Investment Agreement and the compliance by the Trustee with the terms, conditions and provisions of such documents do not contravene any provision of applicable law or regulation or any order, decree, writ or injunction or the Trustee's Articles of Incorporation or By-Laws, and do not require consent under (except to the extent such consent has been obtained), or result in a breach of or default under, any credit agreement, resolution, indenture, note, contract, agreement or other instrument to which the Trustee is a party or is otherwise subject or bound; and (vi) there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the best knowledge of such counsel, threatened, in any way contesting or affecting the creation, organization or existence of the Trustee or the authority of the Trustee to accept or perform the duties and obligations of the Trustee under the Indenture, the Agreement, the Developer Aureements and the Investment Agreement; ir &d 040181-0039-161-5150f 06/03/85 (11) An opinion, dated the Closing Date and addressed to the City, to Bond Counsel, to the Trustee and to the Purchaser, of counsel for [Mortgage Insurer] (the "Insurer"), to the'effect that: (i) the Insurer is a private mortgage guaranty insurance company, duly organized, validly existing and holding a current certificate of authority to transact insurance business under the laws of the state of its incorporation, is duly qualified to do business under the laws of the state of its incorporation, is duly qualified to do business in the State of California, is a [Qualified Insurer] within the meaning of [Section __ 1 of the Agreement (except as to acceptability to the City and AMBAC Indemnity Corporation) and has the corporate power to issue, and take all action required of it under, the master private mortgage guaranty insurance policy and any commitment or certificate of insurance on Home Mortgages issued pursuant thereto, including all endorsements thereto (collectively, the Insurance Policies"); (ii) the execution, issuance and delivery of and performance under the Insurance Policies by the Insurer do not require the consent or approval of, the giving of notice to, the filing or registration with, or the taking of any other action in respect of, any federal, state or other governmental authority which has not previously been effected and which is not in full force and effect as of the Closing Date; (iii) the execution, issuance and delivery of and performance under the Insurance Policies have been duly authorized by all necessary corporate action on the part of the Insurer, and to the best of the knowledge of such counsel, will not conflict with or constitute on the part of the Insurer a violation or breach of, or default under, the Charter or By-Laws of the Insurer or any existing laws or regulations, court or administrative decree or order or any agreement, indenture, contract or other instrument to which the Insurer is subject or party or by which it is bound; (iv) the Insurance Policies comply, or upon issuance will comply, with the requirements set forth in the Agreement and constitute, or upon issuance will constitute, the valid, legal and binding obligations of the Insurer in accordance with their terms except as the enforceability thereof may be limited by applicable bankruptcy, rehabilitation, insolvency or other similar laws affecting the enforcement of creditors' rights generally and/or insurance claimants' rights - IT 1c *" 040181-0039-161-5150f 06/03/85 generally or by general equitable principles; (v) the information contained in the Official Statement under the caption "Insurance, '' i-nsofar as it relates to the Insurer and the Insurance Policies, to the best of such counsel's knbwledge, does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; (12) Copies of the Insurance Policies issued or to be issued by the Insurer pursuant hereto, each as contemplated by the Official Statement and a special hazard insurance policy as contemplated by the Official Statement; (13) Receipts executed by the Trustee or other evidence that the Trustee shall have received from the Developers amounts as required by the Developer Agreements and as contemplated by the Official Statement; (14) A non-arbitrage certificate of the City in substance and form satisfactory to Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Bond Counsel ; (15) A letter from Laventhol & Horwath, independent certified public accountants, dated the Closing Date and addressed to the City and Bond Counsel, to the effect that based on certain assumptions specifically set forth in the letter, the yield on the Home Mortgages will not exceed the yield on the Bonds by more than is permitted by, and in each case determined in accordance with, Treasury Regulation Q 1.103-13 and 6a.103A-Z(i); (16) A certificate of a duly authorized officer of the Lender, dated the Closing Date, that (i) the statements and information relating to the Lender in Appendix B to the Official Statement entitled "The Lender" are true and correct in all material respects, and do not contain any untrue statements of a material fact or omit to state any material facts required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (ii) the representations and 77 &. 040181-0039-16i-5150f 06/03/85 warranties of the Lender in the Agreement are true and correct as though made on the Closing Date. (17) An opinion of counsel to the Le<#er, dated the Closing Date and addressed to the Trustee, to the City, to Bond Counsel and to the Purchaser to the effect that (i) the Lender is a customarily provides servicing and origination of home mortgages in the City of Carlsbad, is authorized to do business in the State, and is either a FNMA or FHLMC approved seller/servicer; (ii) the Agreement has been duly authorized, executed, and delivered by the Lender and, when executed and delivered by City, and Trustee, will constitute legal, valid and binding obligations of the Lender enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws or by equitable principles affecting creditors' rights generally; (iii) all corporate proceedings legally required to be taken by it in connection with the authorization, execution and performance of the Agreement and the consummation of the transactions contemplated thereby and related thereto, and all approvals, authorizations, consents, licenses or other orders of state or federal regulatory agencies, public boards or bodies, if any, as may be legally required to be obtained by it with respect to all or any of such matters, have been taken or obtained; (iv) the Lender has full legal authority to engage in the activities covered by the Agreement; (v) the execution and delivery of the Agreement and compliance with the terms, conditions and provisions thereof will not conflict with or result in a breach of any of the terms, conditions or provisions of the charter or by-laws of the Lender or, to such counsel's best knowledge after reasonable inquiry and investigation, any agreement or instrument to which it is a party or by which it is bound, or any law or regulations or any administrative decree or order to which it is subject, or constitute a default thereunder; (vi) to such counsel's best knowledge after reasonable inquiry and investigation, no written information, exhibit or report furnished to City or Trustee by the Lender in connection with the negotiation or execution of the Agreement and the consummation of the transactions contemplated hereby and related hereto (including, without - duly organized and existing corporation which :E 040181-0039-161-5150f 06/03/85 limitation, any information furnished by it to the City or its agents or representatives or the Purchasers in connection with its application to the City to originate and service Home Moctgages, in the preparation of any official statement, preliminary or final, any appendices thereto, any application, any disclosure statement or any loan omits to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading and all such documents comply with federal and state laws where applicable; (vii) to such counsel's best knowledge after reasonable inquiry and investigation, the Lender is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the operation of it or its properties or might have consequences that would affect its performance under the Agreement; (viii) to such counsel's best knowledge after reasonable inquiry and investigation, the Lender is not a party to or bound by any agreement or instrument or subject to any charter or any other corporate restriction or any judgment, order, writ, injunction, decree, law or regulation which now or in the future may materially and adversely affect the ability of it to perform its obligations under the Agreement or which requires the consent of any third person to the execution of the Agreement or the consummation of the transactions contemplated thereby; and (ix) to such counsel's best knowledge after reasonable inquiry and investigation, no litigation is pending or threatened against it which would prohibit the Lender from entering into the Agreement or consummating the transactions contemplated thereby; - file) contains any material misstatement of fact or (18) A duly authorized and executed investment agreement or agreements between the Trustee and of all amounts held by the Trustee under the Indenture, in such form and with a rate of return on amounts so invested as are acceptable to the City and the Purchaser (the "Investment Agreement"); (the "Borrower") under the Investment Agreement, . addressed to the Trustee, to the City and to the , providing for the investment l(191 An opinion of counsel to the borrower 19 040181-0039-161-5150f 06/03/85 Purchasers, to the effect that the Borrower has duly authorized, executed and delivered the Investment Agreement and the Investment Agyeement is, and the note(s) of the Borrowers to be,issued pursuant thereto will be upon such issuance, the valid, legal and binding obligations of the Borrower enforceable in accordance with the terms bankruptcy, insolvency, reorganization or similar laws or by equitable principles affecting creditors’ rights generally;] - thereof, except as enforcement may be limited by (20) If the performance by the Borrower of its obligations under the Investment Agreement is insured or guaranteed by another party, an opinion of counsel to such other party, in form and substance satisfactory to Bond Counsel and Counsel to the Purchaser; (21) A copy of the Bond Insurance Policy; (22) An opinion of counsel to AMBAC Indemnity Corporation, addressed to the City and the Purchaser, as to such matters as Bond Counsel or the Purchaser may reasonably request; (23) Certificates and opinions of the Developers and their counsel in the forms of Exhibits - and to the Developer Agreements; (24) a letter, dated the Closing Date and addressed to the Purchaser, from Empire Economics, confirming that it is an independent firm specializing in preparation of feasibility studies with respect to real estate developments of the types described in the Official Statement and other related matters and stating that, on the basis of specified procedures, nothing has come to its attention which would cause it to believe that any amendment of or supplement to its report referred to in the Official Statement (or any summary or conclusions thereof appearing in the Official Statement) is required in order for said report or summary not to contain any untrue statement of a material fact nor omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; qn 040181-0039-161-5150f 06/03/85 a” (25) Counterpart originals of a transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds;, (26) Evidence of a rating of the Bonds from Standard & Poor's Corporation of AAA; and - (27) Such additional legal opinions, certificates, instruments and other documents as the Purchaser may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the City's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Indenture, the Agreement, the Developer Agreements and the Official Statement. If any of the conditions to the obligations of the Purchaser contained in this Section or elsewhere in this Purchase Contract shall not have been satisfied when and as required herein, all obligations of the Purchaser hereunder may be terminated by the Purchaser at, or at any time prior to, the Closing Date by written notice to the City. Notwithstanding any provision herein to the contrary, the performance of any and all obligations of the City hereunder and the performance of any and all conditions contained herein for the benefit of the Purchaser may be waived by the Purchaser. 5. Expenses. (a) Whether or not the Purchaser accepts delivery of and pay for the Bonds as set forth herein, they shall be under no obligation to pay, and the City shall pay or cause to be paid (out of the proceeds of the Bonds or any other legally available funds of the City) any expenses incident to the performance of the City's obligations hereunder, including but not limited to the cost of printing, engraving and delivering the Bonds to the Purchaser; the cost of preparation, printing (and/or word processing and reproduction), distribution and delivery of the Indenture, the Agreement, the Developer Agreement, the Official Statement and all other agreements and documents contemplated hereby and drafts of any thereof in reasonable quantities as requested by the Purchaser; the initial premium on the Bond Insurance Policy; the fees and disbursements of the Trustee, Bond Counsel, attorneys, accountants, financial advisers and any other experts or consultants retained in 9.7 16 040181-0039-161-5150f 06/03/85 connection with the Bonds; any fees charged by the rating agencies for rating the Bonds; and any other expenses not specifically enumerated in paragraph (b) of this Section incurred in connection with the issuance of the Bond>. (b) Whether or not the Bonds are delivered to the Purchasers as set forth herein, the City shall be under no the California Debt Advisory Commission, the cost of preparation, printing (and/or word processing and reproduction), distribution and delivery of the "blue sky" and legal investment memoranda and this Purchase Contract; expenses to qualify the Bonds for sale under any "blue sky" laws; and all other expenses incurred by the Underwriter in connection with their public offering and distribution of the Bonds not specifically enumerated in paragraph (a) of this Section, including all advertising and computer expenses, the fees and disbursements of their counsel and expenses incurred relative to a supplement to the Official Statement. - obligation to pay, and the Purchaser shall pay, the fees of 6. Tax Matters. (a) The Purchaser represents that the Purchaser will not, pursuant to any arrangement, formal or informal, sell Bonds to the Lender or any Developer (or, in each case, any related person as defined in Section 103(b) of the Internal Revenue Code of 1954, as amended) in an amount related to the amount of Home Mortgages to be originated or sold by the Lender or to the number of residences constructed or to be constructed by such Developer under the Program. (b) The Purchaser agrees to make a bona fide public offering of all the Bonds at prices not in excess of the initial public offering prices set forth on the cover page of the Official Statement. (c) The obligation of the City to sell the Bonds on the Closing Date shall be subject, at the option of the City, to the receipt by the City on or prior to the Closing Date, of a certificate signed by the Purchaser, specifying the initial offering price of the Bonds to the public (excluding bond houses, brokers and other intermediaries). 7. Indemnification by the Purchaser. The Purchaser agrees to indemnify and hold harmless the City against any and all losses, claims, damages and liabilities arising out of any statement or information contained in the Official Statement under the heading "Underwriting" that is untrue in any material respect, or the omission therefrom of any information which to the knowledge of the Purchaser should be contained therein which is necessary to make the statements therein, in the light of the circumstances under 3- -& 040181-0039-161-5150f 06/03/85 which they are made, not misleading in any material respect. In case any claim shall be made or action brought against the City, based upon the provisions of the Official Statement referred to hereinabove in this Section 7, in respect to - which indemnity may be brought against the Purchaser, the City shall promptly notify the Purchaser in writing setting forth the particularities of such claim or action and the retaining of counsel and the payment of all expenses. The City shall have the right to retain separate counsel, in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the party retaining such counsel unless the retaining of such counsel has been specifically authorized by the Purchaser. - Purchaser shall assume the defense thereof including the 8. Finalization of Rating. The Purchaser shall file with Standard & Poor's Corporation such documents as are required by such rating agency in order to finalize the initial rating on the Bonds. The Purchaser shall have no responsibility to maintain such rating, to notify the City or any person of any change (or proposed change) in or withdrawal (or proposed withdrawal) of such rating or to oppose any change in or withdrawal of such rating. The City shall, upon the request of the Purchaser, provide to the Purchaser all documents necessary to finalize the initial rating on the Bonds. 9. Notices. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to the City at , Carlsbad, California , Attention: I( ); and any notice or other communication to be given to the Purchaser under this Purchase Contract may be given by delivering the same in writing to Paine Webber Incorporated, 100 California Street, San Francisco, California 94111, Attention: Stephen L. Hicks. 10. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Purchaser (including successors or assigns of Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. 11. Survival of Representations and Warranties. The representations and warranties of the City set forth in or made pursuant to this Purchase Contract shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Contract and regardless of any investigations or statements as to the results thereof made by or on behalf of q3 -u 040181-0039-161-5150f 06/03/85 the Purchaser and regardless of delivery of and payment for the Bonds. 12. Governing Law. This Purchase Contract shall -be construed in accordance with the laws of the Stat& of California applicable to contracts made and performed therein and the obligations, rights and remedies of the parties - hereunder shall be determined in accordance with such laws. 13. Effective. This Purchase Contract shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, PAINE WEBBER INCORPORATED BY Accepted , 1985. CITY OF CARLSBAD BY 3n LIT 040181-0039-161-5150f 06/03/85 EXHIBIT A TO PURCHASE CONTRACT - - - [Here attach form of Official Statement as set forth-in Section l(a) and (b) hereof.] - + * EXHIBIT B TO PURCHASE CONTRACT - - [Here attach copy of form of opinion of Bond Counsel_] -