HomeMy WebLinkAboutC-7529-1 - Bond Purchase Agreement for Assessment District No. 117$2,955,000
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 117
LIMITED OBLIGATION IMPROVEMENT BONDS
2018 SERIES A
BOND PURCHASE AGREEMENT
July 10, 2018
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting not as fiduciary or agent for you, but on
behalf of itself, offers to enter into this Bond Purchase Agreement (the "Purchase Agreement") with the
City of Newport Beach (the "City") in connection with Assessment District No. 117 (the "Assessment
District") which, upon acceptance, will be binding upon the City and upon the Underwriter. This offer is
made subject to acceptance of it by the City on the date hereof, and, if not accepted, will be subject to
withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance
hereof by the City.
The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (as defined
below) pursuant to this Purchase Agreement is an arm's-length commercial transaction between the City
and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as a
principal and not as an agent or a fiduciary of the City; (iii) the Underwriter has financial and other
interests that differ from those of the City; (iii) the Underwriter has not assumed a fiduciary responsibility
in favor of the City with respect to: (A) the offering of the Bonds or the process leading thereto (whether
or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the City on
other matters), or (B) any other obligation to the City except the obligations expressly set forth in this
Purchase Agreement; and (iv) the City has consulted with its respective legal and municipal advisors to
the extent it deemed appropriate in connection with the offering of the Bonds. The Underwriter has
provided to the City prior disclosure under Rule G-17 of the Municipal Securities Rulemaking Board,
which have been received by the City.
Purchase, Sale and Delivery of the Bonds; Establishment of Issue Price.
(a) Subject to the terms and conditions and in reliance upon the representations,
warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City
agrees to sell to the Underwriter, all (but not less than all) of $2,955,000 aggregate principal amount of
the City of Newport Beach Assessment District No. 117 Limited Obligation Improvement Bonds 2018
Series A (the "Bonds"), bearing interest (payable semiannually on March 2 and September 2 in each year,
commencing September 2, 2018) at the rates per annum and maturing on the dates and in the amounts set
forth in Appendix A attached hereto and incorporated herein. The purchase price for the Bonds shall be
$2,928,139.35 (representing a price of par, less net original issue discount of $383.85 and less an
Underwriter's discount of $26,476.80).
4844-8928-4711.3
(b) The Underwriter agrees to assist the City in establishing the issue price of the
Bonds and shall execute and deliver to the City at Closing an "issue price" or similar certificate, together
with the supporting pricing wires or equivalent communications, substantially in the form attached hereto
as Appendix B, with such modifications as may be appropriate or necessary, in the reasonable judgment
of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or
prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City
under this section to establish the issue price of the Bonds may be taken on behalf of the City by the
City's municipal advisor identified herein and any notice or report to be provided to the City may be
provided to the City's municipal advisor.
(c) Except as otherwise set forth in Appendix A attached hereto, the City will treat
the first price at which 10% of each maturity of the Bonds (the "10% test") is sold to the public as the
issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the
Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of
Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter
agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the
public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until
either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to
the Bonds of that maturity, provided that, the Underwriter's reporting obligation after the Closing Date
may be at reasonable periodic intervals or otherwise upon request of the City or bond counsel. For
purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate
CUSIP number within that maturity will be treated as a separate maturity of the Bonds.
(d) The Underwriter confirms that:
(i) any selling group agreement and any third -party distribution agreement relating
to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will
contain language obligating each dealer who is a member of the selling group and each broker-dealer that
is a party to such third -party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds
of each maturity allocated to it, whether or not the Closing Date has occurred, until either
all Bonds of that maturity allocated to it have been sold or it is notified by the
Underwriter that the 10% test has been satisfied as to the Bonds of that maturity,
provided that, the reporting obligation after the Closing Date may be at reasonable
periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with
the hold -the -offering -price rule, if applicable, if and for so long as directed by the
Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its
knowledge, are made to a purchaser who is a related party to an underwriter participating
in the initial sale of the Bonds to the public (each such term being used as defined below),
and
(C) to acknowledge that, unless otherwise advised by the dealer or
broker-dealer, the Underwriter shall assume that each order submitted by the dealer or
broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public,
together with the related pricing wires, contains or will contain language obligating each dealer that is a
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4844-8928-4711.3
party to a third -party distribution agreement to be employed in connection with the initial sale of the
Bonds to the public to require each broker-dealer that is a party to such third -party distribution agreement
to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it,
whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have
been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the
Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable
periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the
hold -the -offering -price rule, if applicable, if and for so long as directed by the Underwriter or the dealer
and as set forth in the related pricing wires.
(e) The City acknowledges that, in making the representations set forth in this
section, the Underwriter will rely on (i) in the event a selling group has been created in connection with
the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling
group to comply with the requirements for establishing issue price of the Bonds, including, but not
limited to, its agreement to comply with the hold -the -offering -price rule, if applicable to the Bonds, as set
forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third -party
distribution agreement was employed in connection with the initial sale of the Bonds to the public, the
agreement of each broker-dealer that is a party to such agreement to comply with the requirements for
establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold -
the -offering -price rule, if applicable to the Bonds, as set forth in the third -party distribution agreement
and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for
the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a
third -party distribution agreement, to comply with its corresponding agreement to comply with the
requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to
comply with the hold -the -offering -price rule, if applicable to the Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a
related party to an underwriter participating in the initial sale of the Bonds to the public (each such term
being used as defined below) shall not constitute sales to the public for purposes of this section. Further,
for purposes of this section:
(i) "public" means any person other than an underwriter or a related party,
(ii) "underwriter" means (A) any person that agrees pursuant to a written contract
with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial
sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or
indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public
(including a member of a selling group or a party to a third -party distribution agreement participating in
the initial sale of the Bonds to the public), and
(iii) a purchaser of any of the Bonds is a "related party" to an underwriter if the
underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common
ownership of the voting power or the total value of their stock, if both entities are corporations (including
direct ownership by one corporation of another), (B) more than 50% common ownership of their capital
interests or profits interests, if both entities are partnerships (including direct ownership by one
partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of
the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a
corporation and the other entity is a partnership (including direct ownership of the applicable stock or
interests by one entity of the other).
4844-8928-4711.3
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, a Fiscal Agent
Agreement, by and between the City and U.S. Bank National Association, as fiscal agent (the "Fiscal
Agent"), dated as of July 1, 2018 (the "Fiscal Agent Agreement"), approved by a resolution (the
"Resolution"), adopted by the City Council of the City (the "City Council") on June 26, 2018.
(g) Pursuant to the authorization of the City, the Underwriter has distributed copies
of the Preliminary Official Statement, dated June 27, 2018, relating to the Bonds, which, together with the
cover page and all appendices thereto, is herein called the "Preliminary Official Statement" and which, as
amended with the prior approval of the Underwriter and executed by the City, will be referred to herein as
the "Official Statement." The City hereby ratifies the use by the Underwriter of the Preliminary Official
Statement and the Official Statement and authorizes the Underwriter to use and distribute the Fiscal
Agent Agreement, the Official Statement, the Continuing Disclosure Agreement, dated July 25, 2018, by
and between the City and Digital Assurance Certification, L.L.C. ("DAC"), as dissemination agent (the
"Disclosure Agreement"), and other documents or contracts to which the City is a party, including this
Purchase Agreement, and all information contained therein, and all other documents, certificates and
statements furnished by the City to the Underwriter in connection with the transactions contemplated by
this Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter.
(h) 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 City by phone or 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.
(i) The City 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 City and the Underwriter and such additional conformed copies thereof as the
Underwriter may reasonably request. The City deems the Preliminary Official Statement to be "final" as
of its date for purposes of Rule 15c2-12. By acceptance of this Purchase Agreement, the City 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.
0) At approximately 8:00 a.m., Pacific Time, on July 25, 2018, or at such earlier or
later time or date as shall be agreed upon by the City and the Underwriter (such time and date herein
referred to as the "Closing Date"), the City shall deliver (i) through the facilities of The Depository Trust
Company, all Bonds (being in book -entry form, registered in the name of Cede & Co. and having the
CUSIP numbers assigned to them printed thereon) duly executed by the officers of the City as provided in
the Fiscal Agent Agreement and with facsimile seals printed thereon, and (ii) to the Underwriter at the
offices of Stradling Yocca Carlson & Rauth, a Professional Corporation, the other documents herein
mentioned, and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in
same day funds (such delivery and payment being herein referred to as the "Closing"). The Bonds, as so
registered, shall be made available to the Underwriter for inspection not later than the first business day
before the Closing Date.
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4844-8928-4711.3
2. Representations, Warranties and Agreements of the CitX. The City represents, warrants
and covenants to and agrees with the Underwriter that:
(a) The City is duly organized and validly existing as a municipal corporation under
the laws of the State; and has, and at the Closing Date will have, as the case may be, full legal right,
power and authority (i) to execute, deliver and perform its obligations under this Purchase Agreement, the
Fiscal Agent Agreement, the Resolution and the Disclosure Agreement (collectively, the "City
Documents"), (ii) to execute and deliver the Official Statement, and to carry out all transactions
contemplated by each of the City Documents, (iii) to adopt the Resolution approving the Fiscal Agent
Agreement and enter into the other authorizing documents, (iv) to issue, sell and deliver the Bonds to the
Underwriter pursuant to the Fiscal Agent Agreement as provided herein, and (v) to carry out, give effect
to and consummate the transactions contemplated by the Official Statement and the City Documents;
(b) The City Council has duly and validly (i) taken or caused to be taken, all
proceedings necessary under the Constitution and the laws of the State of California in order to form the
Assessment District and to confirm assessments (the "Assessments") on the parcels located within the
Assessment District in the respective amounts shown in the report of the Assessment Engineer, approved
by the City Council on November 24, 2015 (the "Engineer's Report"), to cause each of the Assessments
to be a valid lien upon the parcel upon which it was confirmed and to authorize the sale and issuance of
the Bonds, (ii) authorized and approved the execution and delivery of the City Documents and the Bonds,
(iii) authorized the preparation and delivery of the Preliminary Official Statement and the Official
Statement and (iv) 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 the City Documents (including, without limitation, the collection of the
Assessments) and the Assessment District has been validly formed, the Assessments have been validly
confirmed and constitute liens on the respective parcels within the Assessment District, and (assuming
due authorization, execution and delivery by other parties thereto, where necessary) the City Documents
and the Bonds will constitute the valid, legal and binding obligations of the City and will be enforceable
in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws affecting the enforcement of creditors' rights in general and to the application of equitable
principles if equitable remedies are sought;
(c) The City is not in breach of or default under any applicable law or administrative
rule or regulation of the State, the United States of America, or of any department, division, agency or
instrumentality thereof, or under any applicable court or administrative decree or order, or under any loan
agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party
or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the
performance by the City of its obligations under the Bonds or the City Documents, and compliance with
the provisions of each thereof, will not conflict with or constitute a breach of or default under any
applicable law or administrative rule or regulation of the State, the United States of America, or of any
department, division, agency or instrumentality thereof, or under any applicable court or administrative
decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other
instrument to which the City is a party or is otherwise subject or bound;
(d) Except as may be required under the "blue sky" or other securities laws of any
jurisdiction, all approvals, consents, authorizations, elections and orders of or filings or registrations with
any State 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, or under the City Documents or the Bonds have
been obtained and are in full force and effect;
4844-8928-4711.3
(e) Except as disclosed in the Official Statement, there are, to the best knowledge of
the City, no outstanding assessment liens against any of the properties within the City which are senior to
or on a parity with the Assessments;
(f) Each of the Assessments has been duly and lawfully confirmed, may be collected
in installments under the laws of the State, and constitutes a valid and legally binding lien on the property
on which it has been confirmed;
(g) As of the date thereof, to the best knowledge of the City, the Preliminary Official
Statement did not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading. The information contained in the Official Statement is, as of the date
hereof and will be, as of the Closing Date and as of the date of any supplement or amendment thereto
pursuant to paragraph (i) below, true, correct and complete in all material respects and does not, as of the
date hereof and will not, as of the Closing Date or as of the date of any supplement or amendment thereto
pursuant to paragraph (i) below, 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) Until the date which is twenty-five (25) days after the "end of the underwriting
period" (as hereinafter defined) if any event shall occur of which the City becomes aware as a result of
which it may be necessary to supplement the Official Statement in order to make the statements therein,
in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the
Underwriter of any such event, and shall cooperate fully in furnishing any information available to it for
any supplement to the Official Statement necessary so that the statements therein as so amended or
supplemented will not be misleading in light of the circumstances existing at such time; and the City shall
promptly furnish to the Underwriter a reasonable number of copies of such supplement (as used herein,
the term "end of the underwriting period" means the later of such time as (i) the City delivers the Bonds
to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting
syndicate, an unsold balance of the Bonds for sale to the public);
(i) If the information contained in the Official Statement is amended or
supplemented pursuant to paragraph (h) above, at the time of each supplement or amendment thereto and
(unless subsequently again supplemented or amended pursuant to such paragraph), at all times subsequent
thereto up to and including the Closing Date, the Official Statement so supplemented or amended
(including any financial and statistical data contained therein) will 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 such
information therein, in light of the circumstances under which it was presented, not misleading;
0) The Fiscal Agent Agreement creates a valid pledge of the Assessments and the
moneys in the Assessment Fund, the Redemption Fund, the Improvement Fund and the Reserve Fund
established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases
to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on
the terms and conditions set forth therein; and said pledge constitutes a first lien on and security interest in
all of the foregoing;
(k) Except as disclosed in the Official Statement, 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 knowledge of the City, threatened against the City (i) which would materially adversely
affect the ability of the City to perform its obligations under the City Documents or the Bonds, or
4844-8928-4711.3
(ii) seeking to restrain or to enjoin: (A) the development of any of the land within the Assessment District,
(B) the issuance, sale or delivery of the Bonds, (C) the application of the proceeds thereof in accordance
with the Fiscal Agent Agreement, or (D) the collection or application of the Assessments, or the pledge
thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the City
Documents, any tentative or final subdivision map or building permits applicable to property within the
Assessment District, any other instruments relating to the development of any of the property within the
Assessment District, or any action contemplated by any of said documents, or (iii) in any way contesting
the completeness or accuracy of the Preliminary Official Statement, or the Official Statement or the
powers or authority of the City with respect to the Bonds, the City Documents, or any action of the City
contemplated by any of said documents; nor is there any action pending or, to the knowledge of the City,
threatened against the City which alleges that interest on the Bonds is not excludable from gross income
for federal income tax purposes or is not exempt from California personal income taxation;
(1) The City will furnish such information, execute such instruments and take such
other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for
the Underwriter 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 of America as the Underwriter may
designate; provided, however, the City shall not be required to register as a dealer or a broker of securities
or to consent to service of process in connection with any "blue sky" filing;
(m) Any certificate signed by any authorized official of the City authorized to do so
shall be deemed a representation and warranty to the Underwriter as to the statements made therein;
(n) The City will apply the proceeds of the Bonds in accordance with the Fiscal
Agent Agreement and as described in the Official Statement;
(o) Based upon projections which the City believes are reasonable, the Assessments
supporting the Bonds, when levied and collected by the City in accordance with the terms of the
Assessments formula, assuming normal and reasonable delinquency rates, will provide a yearly cash flow
sufficient to make timely payment of principal and interest on the Bonds;
(p) The City is not aware of any toxic waste conditions or adverse soils condition
which would impair development within the Assessment District;
(q) The City will undertake, pursuant to the Disclosure Agreement, to provide annual
reports and notice of certain events;
(r) The Official Statement (except the portions thereof relating to DTC or its book -
entry only system and the information under the sections entitled "CONCLUDING INFORMATION -
Legal Opinion" and " - Tax Matters," and APPENDIX E - "BOOK -ENTRY ONLY SYSTEM," as to
which no view need be expressed) is, as of the date thereof, and will be, as of the Closing Date, true,
correct and complete in all material respects; and the Official Statement (except the portions thereof
mentioned above, as to which no view need be expressed) does not, as of the date thereof, 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; and
(s) The Preliminary Official Statement heretofore delivered to the Underwriter has
been deemed final by the City as of its date, except for the omission of such information as is permitted to
be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees
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4844-8928-4711.3
that, within seven (7) business days from the date hereof, or (upon reasonable written notice from the
Underwriter) within sufficient time to accompany any confirmation requesting payment from any
customers of the Underwriter, the City shall cause a final printed or electronic form of the Official
Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and
the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-
15, G-32 and G-36 of the Municipal Securities Rulemaking Board.
3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to
accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the
Underwriter, to the accuracy in all material respects of the representations and agreements 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 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 and to the following additional conditions:
(a) At the Closing Date, the City Documents, the Resolution of Formation and any
other applicable agreements 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, 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 Agreement, all such actions as, in the opinion of Stradling
YoccaCarlson & Rauth, a Professional Corporation, Bond Counsel for the City, shall be necessary and
appropriate;
(b) Between the date hereof and the Closing Date, the market price or marketability
of the Bonds at the initial offering prices set forth in the Official Statement shall not have been materially
adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the
City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason
of any of the following:
(1) legislation introduced in or enacted (or resolution passed) by the
Congress of the United States of America or recommended to the Congress by the President of the United
States of America, the Department of the Treasury, the Internal Revenue Service, or any member of
Congress, or favorably reported for passage to either House of Congress by any committee of such House
to which such legislation had been referred for consideration or a decision rendered by a court established
under Article III of the Constitution of the United States of America or by the Tax Court of the United
States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other
form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service
of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal
income taxation upon the interest as would be received by the owners of the Bonds beyond the extent to
which such interest is subject to taxation as of the date hereof;
(2) legislation introduced in or enacted (or resolution passed) by the
Congress of the United States of America, or an order, decree or injunction issued by any court of
competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or
other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any
other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the
general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not
exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that
the Fiscal Agent Agreement 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
4844-8928-4711.3
character of the Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated
hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws,
rules or regulations as amended and then in effect;
(3) any amendment to the federal or State Constitution or action by any
federal or State 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 the Assessments or the ability of the City to construct or acquire the improvements as
contemplated by the City Documents, the Resolution of Formation and the Official Statement;
(4) any event occurring, or information becoming known, which, in the
judgment of the Underwriter, makes untrue in any material respect any statement or information
contained in the Official Statement, or results in the Official Statement containing any untrue statement of
a material fact or omitting 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;
(5) the United States of America has become engaged in hostilities which
have resulted in a declaration of war or a national emergency or there has occurred any other outbreak or
escalation of hostilities (it being agreed by the Underwriter that there is no outbreak, calamity or crisis of
such character as of the date hereof);
(6) 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; or
(7) 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 the charge to the net capital requirement of, the Underwriter.
(c) On the Closing Date, the Underwriter shall have received counterpart originals or
certified copies of the following documents, in each case satisfactory in form and substance to the
Underwriter:
(1) The City Documents and the Resolution of Formation together with a
certificate dated as of the Closing Date of the City Clerk of the City, as applicable, to the effect that each
such document is a true, correct and complete copy of the one duly adopted by the City Council and that
it has not been amended, modified or rescinded since its adoption (except as may have been agreed to by
the Underwriter) and is in full force and effect as of the Closing Date;
(2) The Official Statement duly executed;
(3) An unqualified approving opinion, dated the Closing Date and addressed
to the City, of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel for the City,
in substantially the form set forth as Appendix D to the Official Statement;
(4) A supplemental opinion, dated the Closing Date and addressed to the
Underwriter, of Bond Counsel to the effect that (i) the statements contained in the Official Statement on
the cover and under the captions "INTRODUCTION," "THE BONDS," "SECURITY FOR THE
BONDS," "CONCLUDING INFORMATION — Legal Opinion" and "CONCLUDING INFORMATION
9
4844-8928-4711.3
— Tax Matters," APPENDIX C — "SUMMARY OF THE FISCAL AGENT AGREEMENT" and
APPENDIX D — "OPINION OF BOND COUNSEL," insofar as such statements purport to summarize
certain provisions of the Fiscal Agent Agreement, Bond Counsel's final approving legal opinion with
respect to the Bonds, and federal and State tax law, present an accurate summary of such provisions; (ii)
the Bonds are exempt from registration under the Securities Act of 1933, as amended, and the Fiscal
Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and
(iii) the Fiscal Agent Agreement, the Purchase Agreement and the Disclosure Agreement have been duly
authorized, executed and delivered by the City and, assuming due authorization, execution and delivery
by the other parties thereto, constitute legal, valid and binding agreements of the City enforceable in
accordance with their respective terms, subject to laws relating to bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally and the application of equitable principles if
equitable remedies are sought;
(5) An opinion, dated the Closing Date and addressed to the City and the
Underwriter, of Stradling Yocca Carlson & Rauth, a Professional Corporation, Disclosure Counsel, to the
effect that, without passing upon or assuming any responsibility for the accuracy, completeness or
fairness of any of the statements contained in the Official Statement or making any representation that
they have independently verified the accuracy, completeness or fairness of any such statements, but on
the basis of their participation in telephone conferences with the City's representatives, Bond Counsel,
representatives of the Underwriter and others, during which conferences the contents of the Official
Statement and related matters were discussed and in reliance thereon and on the records, documents,
certificates and opinions herein mentioned (as set forth above), during the course of their representation of
the City on the matter, no facts came to the attention of the attorneys in such firm rendering legal services
in connection with such representation which caused such firm to believe that the Official Statement as of
its date contained any untrue statement of a material fact or omitted to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were made, not misleading
(except that no opinion need be expressed as to the Appendices of the Official Statement or any financial,
statistical, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs,
estimates, projections, assumptions or expressions of opinion or any information about feasibility,
valuation, appraisals, absorption, real estate, archaeological or environmental matters, or any information
about book -entry, tax exemption or The Depository Trust Company included or referred to therein);
(6) A Certificate, dated the Closing Date and signed by an authorized
representative of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official
Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying
that (i) the representations and warranties of the City contained in Section 2 hereof 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 the best of his or her knowledge, no event has occurred since the date of the Official Statement
affecting the matters contained therein which should be disclosed in the Official Statement for the
purposes for which it is to be used in order to make the statements and information contained in the
Official Statement not misleading in any material respect and the Bonds and the City Documents conform
as to form and tenor to the descriptions thereof contained in the Official Statement and (iii) the City has
complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
under the City Documents and the Official Statement at or prior to the Closing Date;
(7) An opinion, dated the Closing Date and addressed to the Underwriter, of
the City Attorney, to the effect that (i) to the best of his or her knowledge, except as described in the
Official Statement, 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 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
10
4844-8928-4711.3
enjoin the development of property within the Assessment District, the issuance, sale or delivery of the
Bonds or the exclusion from gross income for federal income tax purposes or State personal income taxes
of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent
Agreement, or the collection or application of the Assessments to pay the principal of and interest on the
Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Fiscal Agent
Agreement, the Resolution of Formation, the Purchase Agreement or any action of the City or which the
City contemplated by any of said documents; (ii) the City is duly organized and validly existing under the
laws of the State, with, as the case may be, full legal right, power and authority to issue the Bonds and to
perform all of its obligations under the Purchase Agreement, the Bonds and the Fiscal Agent Agreement;
(iii) the Resolution, which authorized issuance of the Bonds and approved the form and substance of the
Fiscal Agent Agreement, the Purchase Agreement and the Disclosure Agreement, has been duly adopted
by the City Council of the City; (iv) to the best of his or her knowledge after due inquiry, the City has
obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any
State governmental authority, board, agency or commission having jurisdiction which constitute a
condition precedent to the levy of the Assessments, the issuance of the Bonds or the performance by the
City of its obligations thereunder or under the Fiscal Agent Agreement, except that no opinion is
expressed regarding compliance with "blue sky" or other securities laws or regulations whatsoever;
(v) the City Council has duly and validly adopted the resolutions and the Resolution of Formation at
meetings of the City Council which were called and held pursuant to law and with all public notice
required by law, and the resolutions and the Resolution of Formation are now in full force and effect and
have not been amended; (vi) the City has duly authorized, executed and delivered the Purchase
Agreement, the Fiscal Agent Agreement and the Bonds and has duly authorized the preparation and
delivery of the Official Statement; and (vii) the Purchase Agreement, the Disclosure Agreement, the
Bonds and the Fiscal Agent Agreement constitute legal, valid and binding agreements of the City,
enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights in general and to the application
of equitable principles if equitable remedies are sought;
(8) One counterpart original or copy certified by the Clerk of the City of a
transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds;
(9) The Certificate of the Fiscal Agent, dated the Closing Date, to the effect
that (i) the Fiscal Agent is duly organized and existing as a national association under the laws of the
State having the full power and authority to perform its duties under the Fiscal Agent Agreement; (ii) the
Fiscal Agent is duly authorized to accept the obligations created by the Fiscal Agent Agreement and to
authenticate the Bonds pursuant to the terms of the Fiscal Agent Agreement; (iii) no consent, approval,
authorization or other action by any governmental or regulatory authority having jurisdiction over the
Fiscal Agent that has not been obtained is or will be required for the authentication of the Bonds or the
consummation by the Fiscal Agent of the other transactions contemplated to be performed by the Fiscal
Agent in connection with the authentication of the Bonds and the acceptance and performance of the
obligations created by the Fiscal Agent Agreement; and (iv) compliance with the terms of the Fiscal
Agent Agreement will not conflict with, or result in a violation or breach of, or constitute a default under,
any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the
Fiscal Agent is a party or by which it is bound, or any law or any rule, regulation, order or decree of any
court or governmental agency or body having jurisdiction over the Fiscal Agent or any of its activities or
properties;
(10) A certified copy of the general resolution of the Fiscal Agent authorizing
the execution and delivery of any City Documents to which the Fiscal Agent is a party;
11
4844-8928-4711.3
(11) An opinion, dated the Closing Date and addressed to the Underwriter and
the City, of counsel to the Fiscal Agent in form and substance acceptable to the Underwriter;
(12) The Disclosure Agreement;
(13) A certificate of Willdan Financial Services, dated the Closing Date, to
the effect that (i) the statements contained in the Official Statement relating to the size and location of the
Assessment District, the amounts of the Assessments and the Engineer's Report and all other information
furnished by it therein do not contain an 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 and (ii) in the opinion of Willdan Financial Services, the
assessments, as set forth in the Engineer's Report, have been spread in conformance with the requirements
of the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code);
(14) A certificate of the City, dated the Closing Date, in a form acceptable to
Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended;
(15) A copy of Internal Revenue Service Form 8038-G, executed by an
authorized officer of the City; and
(16) Such additional legal opinions, certificates, instruments and other
documents as the Underwriter or Bond Counsel may reasonably request to evidence the truth and
accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in
the Preliminary Official Statement and the Official Statement, of the City's representations and warranties
contained herein, and the due performance or satisfaction by the City and the Fiscal Agent at or prior to
the Closing of all agreements then to be performed and all conditions then to be satisfied by either of
them in connection with the transactions contemplated hereby by the City Documents and by the Official
Statement.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to
purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the
obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated
for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and
neither the Underwriter nor the City shall be under any further obligation hereunder, except that the
respective obligations of the City and the Underwriter set forth in Section 4 and Section 5 hereof shall
continue in full force and effect.
4. Conditions of the Ci , 's Obligations. The City's obligations hereunder are subject to the
Underwriter's performance of their obligations hereunder, and are also subject to the following
conditions:
(a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the
duly authorized officer of the City executing the certificate referred to in Section 3 hereof, threatened, to
restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity
of the Bonds or the City Documents or the existence or powers of the City; and
(b) As of the Closing Date, the City shall receive the approving opinions of Bond
Counsel and Disclosure Counsel referred to in Section 3 hereof, dated as of the Closing Date.
12
4844-8928-4711.3
Expenses.
Whether or not the Bonds are delivered to the Underwriter set forth herein:
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or
cause to be paid (out of any legally available funds of the City) all expenses incident to the performance
of the City's obligations hereunder, including, but not limited to, the cost of printing and delivering the
Bonds to DTC, the cost of printing, distribution and delivery of the Fiscal Agent Agreement, the
Preliminary Official Statement, the Official Statement and all other agreements and documents
contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the
Underwriter; the cost of the overlapping debt statement and the fees and disbursements of the Fiscal
Agent for the Bonds, Disclosure Counsel and Bond Counsel and any accountants, engineers or any other
experts or consultants the City have retained in connection with the Bonds; and
(b) The City shall be under no obligation to pay, and the Underwriter shall pay,
CUSIP Bureau and CDIAC fees; the cost of preparation of any "blue sky" or legal investment
memoranda; expenses to qualify the Bonds for sale under any "blue sky" or other state securities laws;
and all other expenses incurred by the Underwriter in connection with its public offering and distribution
of the Bonds (except those specifically enumerated in paragraph (a) of this Section), including the fees
and disbursements of its counsel and any advertising expenses.
The City acknowledges that the Underwriter will pay from the underwriter's expense
allocation of the underwriting discount certain fees, including the applicable per bond assessment charged
by the California Debt and Investment Advisory Commission.
6. Notices. Any notice or other communication to be given to the City under this Purchase
Agreement may be given by delivering the same in writing to the City of Newport Beach, 100 Civic
Center Drive, Newport Beach, California 92660; any notice or other communication to be given to the
Underwriter under this Purchase Agreement may be given by delivering the same in writing to Hilltop
Securities Inc., 2533 South Coast Highway 101, Suite 250, Cardiff by the Sea, California 92007.
7. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City
and the Underwriter (including their successors or assigns), and no other person shall acquire or have any
right hereunder or by virtue hereof. This Purchase Agreement shall not be assigned by the City or the
Underwriter.
8. Survival of Representations, Warranties and Agreements. The representations,
warranties and agreements of the City set forth in or made pursuant to this Purchase Agreement shall not
be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or
termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the
Underwriter (or statements as to the results of such investigations) concerning such representations and
statements of the City and regardless of delivery of and payment for the Bonds.
9. Effective. This Purchase Agreement 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. This Purchase Agreement may be signed in counterparts
by each party.
13
4844-8928-4711.3
10. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior
negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds by
the City and represents the entire agreement of the parties as to the subject matter herein.
11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of
California.
14
4844-8928-4711.3
12. Counterparts. This Purchase Agreement may be executed simultaneously in several
counterparts, each of which shall be an original and all of which shall constitute one and the same
instrument.
Very truly yours,
HILLTOP SECURITIES INC.
ACCEPTED:
CITY OF NEWPORT BEACH
Authorized Officer
Time of Execution:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
Office of the City Attorney
By:
Assistant City Attorney
15
Signature Page of Bond Purchase Agreement relating to
City of Newport Beach
Assessment District No. 1 ] 7
Limited Obligation Improvement Bonds
2018 Series A
4944-8923-471 L3
12. Counterparts. This Purchase Agreement may be executed simultaneously in several
counterparts, each of which shall be an original and all of which shall constitute one and the same
instrument.
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
By:
�tiauiui�
4844-8928-47I 1.3
arlson & Rauth
15
Very truly yours,
HILLTOP SECURITIES [NC.
By:
Authorized Officer
ACCEPTED:
CITY OF NEWPORT BEACH
Attorney
Signature Page of Bond Purchase Agreement relating to
City of Newport Beach
Assessment District Na. 117
Limited Obligation Improvement Bonds
2018 Series A
APPENDIX A
MATURITY SCHEDULE
$2,955,000
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 117
LIMITED OBLIGATION IMPROVEMENT BONDS
2018 SERIES A
Maturity Date
(September 2)
Principal
Interest
Rate
Yield
2019
$115,000
2.000%
1.490%
2020
115,000
2.000
1.650
2021
115,000
2.000
1.880
2022
120,000
3.000
2.080
2023
125,000
3.000
2.240
2024
125,000
3.000
2.400
2025
130,000
3.000
2.570
2026
135,000
3.000
2.720
2027
140,000
2.750
2.830
2028
145,000
3.500
2.920
2029
150,000
3.000
3.000
2030
150,000
3.000
3.070
2031
155,000
3.000
3.150
2032
160,000
3.000
3.220
2033
165,000
3.125
3.310
2034
170,000
3.250
3.370
2035
175,000
3.250
3.430
2036
180,000
3.375
3.480
2037
190,000
3.375
3.510
2038
195,000
3.375
3.530
A-1
4844-8928-4711.3
A-1
4844-8928-4711.3
Subject to
10% Test
Hold -The -
Maturity Date
10% Test
Not
Offering -Price
(September 2)
Satisfied
Satisfied
Rule
2019
X
2020
X
2021
X
2022
X
2023
X
2024
X
2025
X
2026
X
2027
X
2028
X
2029
X
2030
X
2031
X
2032
X
2033
X
2034
X
2035
X
2036
X
2037
X
2038
X
A-1
4844-8928-4711.3
M990400►.e:3
FORM OF ISSUE PRICE CERTIFICATE
$2,955,000
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 117
LIMITED OBLIGATION IMPROVEMENT BONDS
2018 SERIES A
The undersigned, on behalf of Hilltop Securities Inc. (the "Hilltop") hereby certifies as
set forth below with respect to the sale and issuance of the above -captioned obligations (the "Bonds").
1. Sale of the Bonds. As of the date of this certificate, for each Maturity of the
Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the
respective price listed in Schedule A.
2. Defined Terms.
(a) Issuer means City of Newport Beach.
(b) Maturity means Bonds with the same credit and payment terms. Bonds
with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are
treated as separate Maturities.
(c) Public means any person (including an individual, trust, estate,
partnership, association, company, or corporation) other than an Underwriter or a related party to an
Underwriter. The term "related party" for purposes of this certificate generally means any two or more
persons who have greater than 50 percent common ownership, directly or indirectly.
(d) Underwriter means (i) any person that agrees pursuant to a written
contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in
the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract
directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale
of the Bonds to the Public (including a member of a selling group or a party to a retail distribution
agreement participating in the initial sale of the Bonds to the Public).
B-1
4844-8928-4711.3
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents Hilltop's interpretation of any laws, including specifically Sections
103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the Issuer with respect
to certain of the representations set forth in the Tax Certificate relating to the Bonds and with respect to
compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson &
Rauth, a Professional Corporation in connection with rendering its opinion that the interest on the Bonds
is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue
Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time
relating to the Bonds.
HILLTOP SECURITIES INC.
Name:
Dated: , 2018
B-1
4844-8928-4711.3