HomeMy WebLinkAbout4673_CCv0001.pdf RESOLUTION NO. 4573
A RESOLU"T"ION OF THE CITY COUNCIL OF THE
CITY OF REDLANDS APPROVING DOCUMENTS
RELATING TO THE EXECUTION AND DELIVERY
OF ITS INSURED CERTIFICATES OF PARTICI-
PATION (REDLANDS COMMUNITY HOSPITAL
1990 _SERIES A
WHEREAS, Redlands Community Hospital- __ ( the "Cor-
poration" )
Cr-poration" ) has requested the assistance of the City of
Redlands ( the "City" ) in financing certain additions, exten-
sions, alterations and improvements to the general acute
care health facility owned and operated by the Corporation
in Redlands, California ( the "Project") through: a proposed
installment sale financing arrangement between the Corpora-
tion and: the City and the execution and delivery of the
City's Insured Certificates of Participation (Redlands Com-
munity Hospital Project) , 1990 Series A (the "Certifi-
cates" ) ;
Certifi-cater" ) ; and
WHEREAS, the payments represented by the Certifi-
cates are to be insured by the Office of Statewide Health
Planning and Development ( the "Office" ) ; and
WHEREAS, the City has determined that assisting
the Corporation in the financing of the Project is in the
best interests of the Citic and of benefit to the residents
of the City; and
WHEREAS, notice of a public ,hearing to be con-
ducted by this City Council with respect to the proposed
financing of the Project by the City was duly published at
least 14 days prior to July 3, 1990, in a newspaper of gen-
eral circulation in the City, which notice set 7:05 p.m. on
July 3, 1990 and the City Council chambers as the time and
place for said hearing;- and
WHEREAS, this City Council is the applicable gov-
ernmental
v-ernmental unit to conduct said; public hearing for purposes
of Section 147{f} of the Internal Revenue Cade of 1955, as
amended (the "Code" ) ; and
;REAS, this City Council has duly held said
public meeting and hearing with respect to the Project and
its proposed financing, all in accordance with Section
147( f) of the Code, at which public hearing interested indi-
viduals were riven a reasonable opportunity to express their
views on the Project and its proposed financing by the City;
and
WHEREAS, there has been presented to this City
Council a proposed farm of Installment Sale Agreement to b
entered into between the City, as purchaser, and the Corpo-
ration, as seller ; an Installment Purchase Agreement to be
entered into between the Corporation, as purchaser, and the
City, as seller ; a Trust Agreement to be entered into among
the City, the Corporation and Security Pacific national
Bank , as trustee (the "Trustee" ) ; a; Second Assignment Agree-
ment 'to be entered; into between the City and the Trustee,
Tax Agreement among the City, the Corporation and the
Trustee a Contract of Insurance to be entered, into among
the City, the Corporation and the Office'; a Regulatory
Agreement to be entered .into among the City, the Corporation
and the suffice; a Certificate Purchase Contract to be
entered into among the City, the Corporation and Goldman,
Sachs & Co. ; and a form of Preliminary official. Statement
relating to the Certificates
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND
ORDERED By THE CITY COUNCIL OF THE CITY OF REDLAND AS FOL-
LOWS: L-LOWS
Section; 1. Recitals, Ap2roval of Project and
Financing} That the above recitals, and each of them, are
true and correct and that this City Council hereby approves
the Project and its financing by means of an installment
sale financing through the execution and delivery of certif-
icates of participation subject to the condition that the
Corporation will reimburse the City for any expenses
incurred in connection with this transaction in the event
certificates of participation are not issued. This approval
is intended to satisfy the requirements of Section 147(f ) of
the Code..
Section 2. Installment Sale Agreement. That the
proposed form of Installment Sale Agreement presented at
this meeting is hereby approved and the Mayor or Mayor
Pro Tem or other appropriate officer and the City Clerk of
the City are hereby authorized and directed to execute such
Installment Sale Agreement for and in the name of the City,
in substantially the form hereby approved with such changes
therein as the officers executing the same may approve, such
approval to be conclusively evidenced by the execution and
delivery thereof.
Section 3 . Installment Purchase Agreement. That
the proposed form of Installment Purchase Agreement pre-
sented at this meeting is hereby approved and the Mayor or
Mayor Pro Tem or other appropriate officer and the City
Clerk of the City are hereby authorizer and directed, for
and in the name of the City, to execute such Installment
Purchase Agreement and; the City Bill of Sale ( in substan•-
-
tially the form attached thereto as Exhibit A) in substan-
tially the form hereby approved with such changes therein as
the officers executing the same may approve, such approval
to be conclusively evidenced by the execution and delivery
thereof.
Section 4. Trust Agreement . That the proposed
form of Trust Agreement presented at this meeting is hereby
approved and the Mayor or Mayor Pro Tem or other appropriate
officer and the City Clerk of the City are hereby authorized
and directed, for and in the name of the City, to execute
such Trust Agreement in substantially the form hereby
approved with such changes therein ( including any changes
necessary or desirable to reflect the fact that the Certifi-
cates may be issued as capital appreciation certificates) as
the officers executing the same may approve, such approval
to be conclusively evidenced by the execution and delivery
thereof, provided that such Trust Agreement shall be consis-
tent with the provisions of Section 9 hereof.
Section 5. Appointment of Trustee. That Security
Pacific National Bank, Los Angeles, California, is hereby
appointed as Trustee under the Trust Agreement for the City,
the Corporation and the owners of the Certificates, with the
duties and powers of such trustee as are set forth in the
Trust Agreement.
Section 6. Second Assignment Agreement . That the
proposed form of Second Assignment Agreement is hereby
approved and the Mayor or Mayor Pro Tem or other appropriate
officer and the City Clerk are hereby authorized and
directed, for and in the name of the City, to execute such
Second Assignment Agreement in substantially the form hereby
approved with such changes therein as the officers executing
the same may approve, such approval to be conclusively evi-
denced by the execution and delivery thereof .
Section 7. Contract of Insurance. That the pro-
posed form of Contract of Insurance is hereby approved and
the Mayor or Mayor Pro Tem or other appropriate officer and
the City Clerk are hereby authorized and directed, for and
in the name of the City, to execute such Contract of Insur-
ance in substantially the form hereby approved with such
changes therein as the officers executing the same may
approve, such approval to be conclusively evidenced by the
execution and delivery thereof.
Section 8. Regulatory Agreement . That the pro-
posed form of Regulatory Agreement is hereby approved and
the Mayor or Mayor Pro Tem, or other appropriate officer and
the City Clerk are hereby authorized and directed, for and
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in the name of the City, to execute such Regulatory Agree-
ment in substantially the form hereby approved with ,uch
changes therein as the officers executing the same may
approve, such approval to be conclusively evidenced by the
execution and delivery thereof.;
Section 9 . Certificate Purchase Contract . That
the farm of Certificate Purchase Contract and Letter of
Representation of the Corporation .attached thereto as
Exhibit A presented at this meeting is hereby approved and
the Mayor, payor Pro Tem, City _Manager or other appropriate
officer and the City Clerk of the City are hereby authorized
to accept, for and in the name of the City, such Certificate
Purchase Contract and the Letter of Representation of the
Corporation in substantially the forms hereby approved with
such changes therein as the officers executing the same may
approve, such approval to be conclusively evidenced by the
execution- and delivery thereof, provided that the principal
amount of Certificates to be sold pursuant to the Certifi-
cate Purchase Contract shall not exceed $4, 500,000, the
final maturity of the Certificates shall not extend beyond.
November 15, 2005, the interest component with respect to
the Certificates shall not result in a yield greater than
eight percent (5 .00 ) per annum and the Underwriter ' s dis-
count shall not exceed two percent ( 2 . 0%) of the principal
amount of Certificates sold.:
Section 10 , Official_ Statement. That the draft
of the Preliminary official Statement relating to the Cer-
tificates presented at this meeting is hereby approved with
such changes therein as may be approved by the City manager
of the City or his designee, and the Mayor, Mayor Pro Teri or
any other Councilmember is hereby authorized and directed
.for and in the name and on behalf of the City to execute the
Preliminary Official Statement and Final Official Statement
(collectively the "Official Statement" ) and the distribution
of such official Statement in connection with the sale of
the Certificates is authorized.
Section ll. Form of Certificate. That the farm
of the Certificates as set forth in the Trust Agreement as
presented to this meeting is hereby approved, provided that
the Mayor, Mayor Pro Tem, City Manager or other appropriate
officer of the City may approve any changes thereto (includ-
ing
nclud-ing any changes necessary or desirable to reflect the fact
that the Certificates may be issued as capital appreciation
certificates) such approval to be evidenced by the execu-
tion of
xecu-tion, + f the Trust Agreement as aforesaid, and the Trustee is
hereby authorized and directed, upon order of the City, to
execute by manual signature such Certificates in the aggre-
gate principal amount set forth hereinabove and all, in
4-
accordance with the terms and provisions of the Trust Agree-
ment.
Section 12. Tax Agreement . That the proposed
form of Tax Agreement is hereby approved and the mayor ,
Mayor Pro Tem, City Manager or other appropriate officer are
hereby authorized and directed, for and in the name of the
City, to execute such Tax Agreement in substantially the
form hereby approved with such changes therein as the offi-
cers executing the same may approve, such approval to be
conclusively evidenced by the execution and delivery
thereof .
Section 13 . Reguisitions., The City Manager, or
his designee, is hereby authorized and directed to execute
one or more requisitions authorizing Security Pacific
National Bank, as Trustee under the Trust Agreement, to pay
the costs of issuing the Certificates from the proceeds of
the Certificates or moneys contributed by the Corporation
pursuant to the Trust Agreement.
Section 14. Special Counsel . The law firm of
Best, Best & Krieger is hereby appointed to act as Special
Counsel in this financing on the terms set forth in the
proposal letter of said firm presented to this meeting and
the Mayor, Mayor Pro Tem or City Manager is authorized and
directed to execute and cause said proposal letter to be
delivered on behalf of the City.
Section 15 . Other Acts. The officers of the City
are hereby authorized and directed, jointly and severally,
to do any and all things and to execute and deliver any and
all documents which they may deem necessary or advisable in
order to consummate the execution, sale and delivery of the
Certificates or otherwise to effectuate the purpose of this
Resolution, and such actions previously taken by such offi-
cers are hereby ratified and confirmed.
Section 16 . Effective Date. This Resolution
shall take effect upon adoption.
ADOPTED this rd day of July, 1990 .
r.
Mayor ,,of '�he""' It /df Redlands,
ATTEST:
C'rt"y Clerk of they,)aity of
Redland Cali ofn
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I , LORRIE POYZER, City Clerk of the City of
Redlands, California, do hereby certify that the foregoing
Resolution No. 4673 was regularly introduced and adopted by
the City Council of the City of Redlands, California, at a
regular meeting thereof held on the 3rd day of July, 1990,
by the following vote of the City Council :
AYES: Councilmembers Larson, Milson;
Mayor DeMirjyn
NOES, None
ABSENT: Councilmember Beswick
ABSTAINED: Councilmember Cunningham
and that said resolution has not been amended, superseded or
repealed, and is in full force and effect .
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the official seal of the City of Redlands, Cali-
fornia, this 3rd day of July 1990.
MyClerk of !�he',,`C tv of
Redlan,ds, Calii-d'i-Inia
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2JRRO637
I , Lorrie Poyzer , City Clerk of the City Of
Redlands , California, do hereby certify that the foregoing
Resolution No. 4673 was regularly introduced and adopted by
the City Council Of the City of Redlands , California, at a
regular meeting thereof held on the 3rd day of July , 1990 ,
by the following vote of the city Council:
AYES : Councilmembers Larson, Milson ;
Mayor DeMirjyn
NOES: None
ABSENT: Councilmember Beswick
ABSTAINED: Councilmember Cunningham
and that said resolution has not been amended, superceded or
repealed , and is in full force and effect .
IN WITNESS WHERE P, I have hereunto set my hand
and affixed the official seal of the city of Redlands,
California, this 23rd day of July , 1990 .
City Clerk of the City of
Redlands , California
-6-
THIS AGREEMENT is made and entered into this aXd_ day of
Julv r 1990, by and between the
CITY OF REDLANDS, hereinafter referred to as "CITY, "
A
N
D
SEIDLER-FITZGERALDS PUBLIC FINANCE, a, division of
(SEIDLER AMDEC SECURITIES INC. ) , hereinafter referred to as
"CONSULTANT. "
W I T N E S S E T H:
WHEREAS, CITY has been approached by the Redlands Community
Hospital to obtain funds to fund a co-generation project and data
processing equipment through the issuance of Certificates of
Participation by the City; and
WHEREAS, CITY has determined it is in its best interest to
assist the Hospital finance the project; and
WHEREAS, Hospital has retained a managing underwriter to
underwrite the financing; and
WHEREAS, CITY has the need of a financial consultant to
advise the CITY on the structuring of the financing and pricing
by the underwriter so as not to impact the City' s credit standing
or expose the City to any financial risks; and
WHEREAS, CONSULTANT is qualified to serve as financial
consultant to assist CITY with the proposed issuance of
certificates; and
WHEREAS, it is in the best interest of CITY to hire
CONSULTANT.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL
PROMISES, COVENANTS AND CONDITIONS HEREIN CONTAINED, THE PARTIES
HERETO AGREE AS FOLLOWS:
A. SERVICES_
The services of CONSULTANT shall consist of the following:
1. Together with the CITY, managing underwriter, bond counsel,
trustee, outside auditor, technical consultants and
advisory groups, develop a financing plan consistent with
the goals and objectives established by the CITY.
2 . Review managing underwriter's sizing of the issue.
3 . Review selection of the trustee bank for the financing.
4 . In cooperation with bond counsel and managing underwriter,
review all documents necessary to implement the proposed
financing plan including the supportive documents providing
security to the individual financing form.
5. Assist managing underwriter to structure those terms and
conditions such as maturities, coupon rates, call features
and security features for the bond issue which most
advantageously meet demands of current market conditions
and meet the objectives of the CITY and ensure the lowest
possible net interest cost.
6. Provide technical support in defining disclosure issues
necessary to meet GFOA and SEC guidelines.
7 . Assist in the development of an official statement for the
negotiated sale of necessary certificates of participation.
8 . Explore possibility and benefits of insuring the issue.
9. Assist managing underwriter with marketing the CITY's
issue, including obtaining the best rating possible from
the rating agencies and arranging rating agency trips, if
necessary.
10. Advise CITY on whether co-managing underwriters are needed
and assist with their selection.
11. Assist with the printing of the preliminary and final
official statements.
12. Advise the CITY on the timing of the sale in relation to
the market conditions and financing needs.
-2-
I3 . Participate in information meetings, if needed, to create
investor interest in the bond issue.
14 . Review and advise CITY on coupon rates and spread proposed
by the managing underwriter.
15. During the financing, Mr. John C. Fitzgerald shall be
available to advise CITY.
B. FEES
CONSULTANT would be compensated contingent upon the CITY's
issue being sold and delivered. The total fee for providing
these financial advisor services is $5,000.
IN WITNESS WHEREOF, the parties hereof have executed this
Agreement on the day and year first herein above written.
CITY OF REDLANDS
a political subdivision of the
State of California
I,By7
SEIDLER-FITZGERALD PUBLIC FINANCE
a division of (SEIDLER AMLEC'
SECURITIES INC. )
7
By
John"" . FJ ge
_Ma� aging Dire r
"CONSULTANT"
-3-
BEST, BEST & KRIEGER
LAWYERS
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June 27, 1990
Mayor and City Council
of the City of Redlands
City Hall
30 Cajon Street
Redlands, California 92373
Re: Proposal Regarding Legal Services in
Connection with the Issuance of
Certificates of Participation
(Redlands Community Hospital Project)
Ladies and Gentlemen:
This letter will serve as a proposal on the part
of Best, Best & Krieger to serve as special counsel in con-
nection with the authorization, issuance and sale of Insured
Certificates of Participation (Redlands Community Hospital
Project) 1990 Series A ( the "Certificates") pursuant to an
installment sale financing arrangement between the City and
Redlands Community Hospital (the "Corporation" ) to refinance
the acquisition, construction and installation of a general
acute care health facility operated by the Corporation. We
propose to perform the following services on the basis here-
inafter set forth.
We will consult with and advise City officials and
the City' s financial consultant as to the best legal methods
of accomplishing the objectives of the City inn, connection
with> the financing and the proceedings for the execution,
sale and delivery of the Certificates.
}4
BEST, BEST & KRIEGER
LAWYIERS-
ARTHUR L LMTLCW9oTH" CLARK H ALSCIP JEANNETTE.A PETERSON PA.TRrCA W.PEARCE 400 MISSION SODARE
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Pune 27, 1990
Mayor and City Council
of the City of Redlands
City dial.
Q Cajon Street
Redlands, California 92373
ReProposal Regarding Legal Services in
Connection with the Issuance of
Certificates of Participation
(Redlands Community Hospital Project)
Ladies and Gentlemen:
;
This letter will serve as s proposal on the part
of Lest, Best & Krieger to serve as special counsel in con-
nection with the authorization, issuance and sale of Insured
Certificates of Participation (Redlands Community Hospital
Project ) 1990 Series A (the "Certificates" ) pursuant to an
installment sale financing arrangement between the City and
Redlands Community Hospital (the "Corporation") to refinance
the: acquisition, construction and installation of a general
acute care health facility operated by the Corporation, We
propose to perform the following services on the basis here-
inafter set forth.
We will consult with and advise City officials and
the City's financial consultant as to the hest legal methods
of accomplishing the: objectives of the City in connection
with the financing and the proceedings for the execution,
sale and delivery of the Certificates.
q.Xr
t,A W S'}&`..F I C E S CSR S`
BEST, BEST & KRIEGER
Mayor and City Council:
of the City of Redlands
June 27, 1990
Page
We will prepare and draft all agreements, resolu-
tions, notices, certificate forms and all other legal docu-
ments required by California law for the execution, sale and
delivery of the Certificates. We will provide such assis-
tance
nsa -tance to the City and Goldman, Sachs & Co. the underwriter
for the issue,, as may be required in preparing and reviewing
any official statement to be used in connection with the
offer and sale of the Certificates.
We will also examine all proceedings for the issu-
ance and sale of the Certificates, step by step as taken,
and when the Certificates are sola, will issue our opinion
or opinions upon the validity of the Certificates and on the
exemption of the intereston the Certificates from State of
California taxation and the exclusion of interest on the
Certificates from gross income for purposes of federal
income taxation to the original purchaser of the Certifi-
cates. We will also attend all hearings and all meetings in
connection with the proceedings where attendance is
requested,.
For the services to be rendered pursuant to this
proposal, including the preparation and supervision of pro-
ceedings,
ro-ceed ngs, examination of each step as taken, and the issu-
ance of Baur unqualified legal opinion or opinions attesting
to the validity of the proceedings and the issuance of the
Certificates, the City will pay to us a fee, exclusive of
out--of-packet costs and expenses, which is equal to $25,000.
Our fee as special counsel will be payable upon
execution and delivery of the Certificates from the proceeds
of the financing. In the event we are requested to perform
additional work outside of our services as special counsel,
e will be paid additional compensation therefor at the
hourly rates of the attorneys performing such services,
provided, however, there shall be no such additional compen-
sation
omp n-sation daze us without the prior approval of the City of the
performance of such services.
In addition to the foregoing, we shall be reim-
bursed by the City .for any out-of-pocket expenses incurred
by us in the course of our employment, such as printing
costs, long distance telephone calls, reproduction of docu-
ments, travel at the; request of the City, and similar items..
LAW OFrICES OF
BEST, BEST & KRIEGER
Mayor and City Council
of the City of Redlands
June 27, 1990
Page 3
Should the contemplated proceedings be abandoned
or discontinued at any time and the Certificates not issued,
we shall be paid a reasonable fee, based on the time
expended and the hourly rates of the attorneys performing
services, for all services rendered to that time and to be
paid or reimbursed to the City by the Corporation.
If this arrangement is satisfactory to you, please
authorize our employment according to the terms of this
letter and return to us a copy of this letter executed by an
authorized officer of the City.
Respectfully submitted,
ehn.R. Rottsch�aefe
r est, Best & Krieger
TERMS OF EMPLOYMENT APPROVED
THIS 3rd DAY'OIF JULY, 1990.
7
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uth,b "Ilr of the'
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iT1A FEEEDERAL EX-PRESS
John E. Holmes
i
City Manager �` � �_`_r N11�=
F
The City of Redlands ! '
30 Cajon Street ., p w
Post Office Box 30015
Redlands, California 92373 - JUL 17 1990OF F1 CE OF
Res City of Redlands, Insured caycLERI
certificates of Participation
(Redlands Community Hospital r ...�
Project) 19903 Series A
Dear John:
The next step in the above-referenced financing is
the execution of the Certificate Purchase Contract (the
"Contract") by Redlands Community Hospital;, the City of
Redlands and Goldman, ,Sachs & Co. on Thursday, July 12 , 1990.
Towards that end, 1 have enclosed herein the fallowing
documents
1. one (1) copy of the Contract,
2. ten (1.0) copies of the execution page of the
Contract; and
3. ten (10) copies of the execution page of the Letter
p of Representation, which appears in the Contract as
Exhibit Ar
Please have an authorized individual of the City of
Redlands execute each copy of the enclosed execution page of
theContractand each copy of the "enclosed execution page of
the Letter of Representation. Upon such execution, please
forward these executed copies to my attention, and 1 will
iSEF.�i�i'r£`kSshTa}zni }}rt�i � �tt,{�4�i�itfztff �11'�7
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Y
Page y - John E. Holmes - July ll 1990
ate the same with the executed copies l receive from
coltShortly
Hospital and Goldman Sachs CO.Go. artier a
Redlands community Hasp'
thereafter,
will forward to each ofthe relevant p
complete copy of the Contract with original signatures ri
included therein. �z
questions regarding this
Should you have any lease do not
procedure car the document Jan Brockmanto be eon the undersigned.
hesitate to contact either
Thank? you
V ry truly y urs,
is or L, Castillo
for 0,melveny & 14yers
Enclosures
cc: Jan Brockman, Esq.
962ZO09L
5£ I? iiyzt E 37tt,t 3,y x� �JS ,'JS���Pt% � f�F}"���¢?�..�,��t}t
..� Ss�{�r`r���i���ie��Y�91111w�4��`r1�)'�YY���,ItX�P��s�ti€���3�ti�r�,
$3,997, 148 . 14
Insured
Certificates of Participation
(Redlands Community Hospital Project) #
1990 Series A
i�
CERTIFICATE PURCHASE CONTRACT
;duly 12 , 1990 k{
The City of Redlands
City Hall
0 Cajon Street
Redlands, California 92373
Ladies and Gentlemen:
The undersigned (the "Underwriter") , offers to enter
into this Purchase Contract (the "Purchase Contract"`) with you,
the City of Redlands (the "City") , for the purchase by the
Underwriter and execution and delivery of the above-captioned
Certificates of Participation by Security Pacific National Bank,
as trustee (the "Trustee") under that certain Trust Agreement,
dated as of July 1, 1990 (the "Trust Agreement")" among the City,
the Trustee and Redlands Community Hospital (the "Corporation")
This offer is made subject to acceptance by you and approval by
the Corporation and delivery to the Underwriter of the executed
Corporation L tter.of Representation substantially in the form of
Exhibit A hereto (;the 'Tetter of Representation") , all prior to
11:59 o'clock P.M. , California time, on: the date hereof. If this
offer is not so accepted, this offer will be subject to
withdrawal by the Underwriter upon notice delivered to you, with
copies to the Corporation, at any time prior to acceptance. Upon
acceptance, this Purchase Contract shall be in full force and
effect in accordance with its terms and shall be binding upon the
City ,and the Underwriter.
The Underwriter has been duly authorized to execute
this Purchase Contract and to take any action hereunder.
1 Pu ch se Sale d Deliyery, of the _Certificates.
(a) Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set
forth herein and in the. Letter of Representation, the
6129/90
� zrxas 1
t ,,fir ydr ls>it�hss
Underwriter hereby agrees to purchase and the City agrees to
instruct the Trustee to execute and delivery to the
Underwriter all (hut not less than all) of the $3,997, 148.14
aggregate principal amount Insured: Certificates of
4
Participation (Redlands Community Hospital Project) 1990 �
7
Series A (the "Certificates") , each evidencing proportionate,
interests of the owners thereof in Installment Payments to
be made by the City pursuant to, and as defined in, the
Installment Sale Agreement, dated as of July 1, 1995 ,
between the City and the Corporation (the "Installment Sale
Agreement") as the payment for certain equipment and;
facilities of the Corporation located within the boundaries
of the City (the "Project") . Pursuant to the Installment
Purchase Agreement, dated as sof July 1, 1990, between the
Corporation and the City (the "Installment Purchase
Agreement") ,; the City will sell the Project to the
Corporation and the Corporation will make Purchase Payments
therefor. The Corporation, pursuant to the Assignment
Agreement dated as of July 1 1990 (the "Assignment
Agreement") , will assign its interest in the Installment
Sale Agreement to the Trustee for the `benefit of the owners
of the Certificates. The City, pursuant to the Second
Assignment Agreement dated as of July 1., 1990 (the "Second;
Assignment Agreement") , will assign to the Trustee for the
benefit of the owners of the Certificates, substantially all
of the Cray"s rights under the Installment Purchase
Agreement* The aggregate purchase price for the
Certificates shall be $3,917, 205.18 plus accrued interest to
the Closing Slate (as hereinafter defined) .
The Certificates shall be substantially in the farm
described in, and shall be executed, delivered and` secured
under and pursuant to, and; shall be payable and subject to
redemption as provided in, the Trust Agreement. The
Certificates will represent the payment of the initial
principal amount thereof (the "Initial Amount") plus
interest accreted thereon at the yields to maturity set
forth in the schedule attached as Exhibit B hereto,
compounded semiannually can each May 15 ,aand, November 15,
commencing November 15, 1990.
The Certificates shall be payable: solely from Revenues
(as that term is defined in the Installment Purchase
Agreement) , which consist primarily of Purchase Payments to
he made by the Corporation to the City pursuant to the
Installment Purchase Agreement. A Preliminary Official
Statement dated. July 6, 1990, (the "Preliminary Offi,ci.al,
Statement" which, with such changes as are accepted by the
Underwriter, and including the cover page and all appendices
thereto, is herein called the Official Statement.) has been
delivered to us in connection with the Certificates.
Y' ,
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(b) ;At 10:00 o'clock ,A.M. , California time, on July 26, �r
1990, or at such ether time or on such other date as we j
mutually agree upon (the "Closing Date") .. .the Trustee will
deliver or cause to be delivered to the Underwriter, ata `
location or locations to be designated by the Underwriter in
New York, New York, the Certificates in definitive form (all
of the Certificates to be lithographed with steel engraved
borders and to bear CSIF numbers) , duly executed, together:
with the other documents mentioned herein. The Underwriter
will accept such delivery and pay the purchase price of the
certificates as set Barth in subparagraph ,a) above by
clearing house funds (such delivery and payment being herein
referred to as the "Closing") to the order of the Trustee in
an amount equal to the purchase price. The Certificates
will be made available to the Underwriter for inspection and
packaging, at an office which we may mutually agree upon,
not less than one business day prior to the Closing. The
Certificates shall be delivered as fully registered
Certificates in such denominations and; registered in such
names as the Underwriter shall request by written notice.
{c} The Underwriter's obligations under this purchase
Contract shall be subject, in addition to the conditions
described in Section 3 below, to the receipt, on or prior to
the date hereof, of a letter of Ernst & Young, dated the
date 'hereof, with work extending to a date not more than
five days prior to the date hereof, addressed to the
Corporation and the Underwriter, in substantially the farm
set forth in gxhibit C hereto.
(d) The Underwriter agrees to make a public offering of
the Certificates at the initial offering price '.set forth in
the Official Statement, which price may be changed from -time
to time by the Underwriter,
2;= Regyresentations. Warranties nd AgreMntg; thg City.
The City` hereby represents, warrants and agrees with
the Underwriter that:
(a) as of the date of the official Statement, the
statements and information contained in the Official
Statement relating to the City, its functions, duties and
responsibilities will be true, correct and complete in all
material respects, and; the Official Statement will not omit
any statements or information necessary to makethe
statements and information therein, in the light of the
circumstances under which they were made, not misleading in
any material respect; it being further understood that the
foregoing representation shall not apply to statements or
1'f^xr ,�`,��ts; 't�a'?,� +,`hX771; OR
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information in or omissions from the Official Statement 1$
�4
relating to the Certificates with respect to which the ft
Corporation agrees to indemnify the Underwriter pursuantto t
the Letter of Representations <
(b) the City is and will be at the date of Closing a z
municipal corporation p P general :law City duly organised
and existing; under the Constitution and laws of the Stats of
California with the full power and authority to enter into
the Legal Documents (as defined in Section 3 (b) below) to
l�
which the City is a party
(c) by official action of the City prior to or
concurrently with the acceptance hereof, the City has duly
approved the distribution of the Preliminary official
Statement and the distribution of the Official statement,
and has duly authorized and approved the execution and
delivery of, and the performance by the City of the
obligations on its part contained in, the Legal Documents to
which the. City is a party and the consummation by it of all
other transactions contemplated by the Official Statement
and this Purchase Contract;
(d) the execution and delivery of this Purchase
Contract and the Legal Documents to which the City is a
party and approval of the Official Statement and acceptance
of the Utter of Representation and compliance with the
provisions on the City's part contained herein and 'therein,
will not conflict with or constitute ai breach of or default
under any law, administrative regulation, judgment decree,
loan agreement, indenture, band, note, resolution, agreement
or other instrument to which the City is a party or is
otherwise subject, nor will any such execution, delivery,
adaption or compliance result in the creation or imposition
of any lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the
properties or assets of the City under the terms of any such
law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, nate, resolution, agreement or
other instrument, except as provided in the Legal Documents;
(e) the City is not in breach of or default under any
applicable law or administrative regulation of the State of
California or the United States or any applicable judgment
or decree or any loan agreement, indenture, bond, note,
resolution, agreement or other instrument to which the City
is a party or is otherwise subject which affects the
agreements mentioned above, and no event has occurred and is
continuing which, with; the passage of time or the giving of
notice or both, would constitute a default or an event of
default under- any such instrument;
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Mr
(f) there is no action, suit, proceeding, inquiry or ;
investigation, at law or in equity, .before or by any court,
governmental agency, public board or body, or to the best
knowledge of the City, pending or threatened against the ,t
City affecting the existence of the City or the titles of
its officers to their respective offices or seeking to
prohibit, restrain or enjoin the sale, execution or delivery
of the Certificates or the collection of revenues pledged or
to be pledged to pay the principal of, and premium, if any,
and interest on the Certificates, or the pledge thereof, or
in any way contesting or affecting the {validity or
enforceability of the Certificates or the Legal Documents or
contesting the powers of the City or its authority to enter
into, adopt or perform its obligations under any of the
foregoing,; or contesting in any way the completeness or
accuracy of the Preliminary official Statement or the
Official Statement, or any amendment or supplement thereto,
wherein an unfavorable decision, ruling or finding would
materially and adversely affect the validity or
enforceability of the Certificates, the Legal Documents o
this Purchase Contract;
(g) the City will furnish such information, execute
such instruments and take such other action in cooperation
with the Underwriter as it may reasonably request., in order
(a) to qualify the Certificates for offer and sale under the
Blue sky or other securities laws and regulations of such
states and other jurisdictions of the United States as the
Underwriter may designate, and b) to determine the
eligibility of the Certificates for investment under the
laws of such states and ether jurisdictions, and will use
its best efforts to continue such qualification in effect so
long as required for distribution of the Certificates;
provided, however, that in no event shall the City be
required to tape any action which would subject it to
general or unlimited service of process in any jurisdiction
in which it is notnowso subject,
(h) if between the date hereof and the date of the
Closing an event occurs, of which the City has knowledge,
which might or would cause the information relating to the
City, its functions, duties and responsibilities contained
in the official Statement, as then supplemented or amended.,
to contain an untrue statement of a material fact or to omit
to state a material fact required to be stated therein or
necessary to make such information therein, in the light of
the circumstances under which it was presented, .not
misleading, the City will notify the Trustee, the
Corporation and the Underwriter, and if in the opinion of
the City, the Trustee, the Corporation or the Underwriter,
9Gl Z009J 6/24190
v
V
x
or their respective counsel, such event requires the
preparation and publication of a supplement or amendment to
the official Statement, the City will cooperate in the
preparation of an amendment or supplement to the official
�a
Statement in a farm and manner approved by the Underwriter,
provided all expenses thereby incurred will be paid by the
corporation;
(i) the Preliminary official Statement heretofore
delivered to the Underwriter is deemed final by the City as
of the date thereof, except for the omission of such
information as is permitted to be omitted in accordance with
paragraph (b) (1) of Rule '15c2-12 of the. Securities Exchange
Commission.
Within seven (7) business days from the date hereof and
within sufficient time to accompany any confirmation
requesting payment from any customers of the Underwriter,
the City shall cause a final printed farm of the Official
Statement to be delivered to the Underwriter in sufficient
quantity to comply with paragraph (b) (- ) of Rule 15c2-12 and;
the rules of the Municipal Securities Rulemaking Board.
If, after the date of this Contract of Purchase and
until 25 days after the end of the "underwriting period" (as
defined in Rule 15c2-12) the City acquiresknowledge of any
event that might cause the Official Statement to contain any
untrue statement of a material fact or to omit to state a
material: fact necessary to make the statements therein, in
the light of the circumstances under which they were wade,
not misleading, the City shall notify the Underwriter (and'
for the purposes of this clause shall provide the
Underwriter with such information as they may from time to
time request)` , and, if in the opinion sof the Underwriter
such event requires the preparation and publication of a
supplement or amendment to the official Statement, at the
expense of the Corporation to supplement or amend the
Official Statement in a form and manner approved by the
Underwriter and furnish to the Underwriter a reasonable
number of copies of such supplement or amendmentl and.
( ) if the information relating to the City, its
functions, duties and responsibilities contained in the
Official Statement is amended or supplemented pursuant to
paragraph (h) hereof, at the time of each supplement or
amendment thereto and (unless subsequently again
supplemented or amended pursuant to such subparagraph) at
all times subsequent thereto up to and including the date of
the Closing, the portions of the official Statement so
supplemented or amended (including any financial, and
statistical data contained therein) will not contain any
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untrue statement of a material fact or omit to state a
material fact- required to be stated therein or necessary to
�u
make such information therein, in the light of the 4J
circumstances under which it was presented,, not misleading.
1. conditions to the Ob i ations of the Ude to
The Underwriter hereby enters into this Purchase 1
Contract in reliance upon the representations and warrantiesof
the City contained herein and the representations and warranties t
of the Corporation contained in the Letter of Representation and
in reliance upon the representations and warranties to be
contained in the documents and instruments to be delivered at the 7
Closing and upon the performance by the City and the Corporation
of their respective obligations hereunder, and under the Letter
of Representation, both on andasof the date hereof and as of
the closing pate. Accordingly, the Underwriter's obligations f
under this Purchase Contract to purchase, to accept delivery of <'
and to pay for the Certificates shall be subject, at the option
of the Underwriter, to the accuracy in all material respects of
the representations and warranties of the City contained herein
and of the representations and 'warranties of the Corporation
contained in the Letter of Representation, all as of the date
hereof and as of the Closing Tate, to the accuracy in all
material respectsofthe statements of the officers and other
officials of the City and the Corporation made in any certificate
or other document furnished pursuant to the provisions hereof, to
the performance by the City and the Corporation of their
respective obligations to be performed hereunder and under the
applicable document named herein, at or prier to the Closing
Late, and also shall be subject to the following additional
conditions
(a) The representations and warranties of the City
contained herein and the representations and warranties of
the Corporation contained in the Letter of Representation
shall: be 'true, complete and correct in all material respects
on the date hereof and on the Closing Late, as if made on
and at the Closing;
(b) At the Closing, the Trust Agreement, the
Installment Sale Agreement, the Installment Purchase
Agreement, the Assignment Agreement, the Second Assignment
Agreement, the Regulatory Agreement, dated as of July 1,
1990, among the City, the Corporation and the Office of
Statewide Health Planning and Development of the State of
California (the "Office") (the "Regulatory Agreement") , the
Deed of Trust, dated as of February 1, 1987, between the
Corporation, as trustor, and Security :Pacific National flank,
as trustee, for the benefit of the City and the Office (the
"Deed of Trust") , the Contract of Insurance, dated as of
July 1, 1990, among the City, the Corporation and the Office
(the ItContract of Insurance" ) and the Depository Agreement, IF
dated as of February 1, 1987, among the Corporation,, the
Trustee and Bank of America National Trust and Savings
Association (the "Depository Agreement") (collectively, the
"LegalDocuments") shall have been duly authorized, executed
and delivered by the respective parties thereto, and the
official Statement shall have been duly approved, '
authorized, executed and delivered by the City and the ti
Corporation, as the case may be, all in substantially the �.
forms heretofore submitted to the Underwriter, with only
such changes as shall have been agreed to in writings by the t
Underwriter, and shall be in full force and effect; and
there shall be in full force and effect such resolution or
resolutions of the City Council of the City as, in the
opinion of Best, Best & Krieger ("Special Counsel") shall be
necessary or appropriate in connection; with the transactions
contemplated ;hereby
(c) Between the date hereof and the Closing Bate., the
market price or marketability, at the initial offering
prices set forth in the official Statement, of the
Certificates shall not have .been materially adversely
affected, in the judgment of the underwriter (evidenced by a
written notice to the Trustee and the City' terminating the
obligation of the Underwriters to ;accept delivery of and
make any payment for the Certificates) by reason of any of
the following.
(1) legislation enacted` (or resolution passed) by
or introduced or pending legislation amended in the
Congress or recommended for passage by the President of
the United States, or a decision rendered by a court
established under Article III of the Constitution of
the United States or by the Tax Court of the United
States, or an order, ruling, regulation (final,
temporary or proposed) , press release or other form of
communication 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 moneys as would be received by the City
or the Trustee under the Trust Agreement or the
Installment 'Purchase Agreement or upon such interest as
would be received by the owners of the Certificates;
(2) the declaration of war or engagement in major
military 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
9GtZ X19 8 6/20190
{
(3) the declaration of a general banking
moratorium by federal.., New York or California IR
authorities, or the general suspension of trading can
any national securities exchange,
{
(4) the imposition by the New York Stock Exchange
i
or other national securities exchange, or any
governmental authority, of any material restrictions
not now in force with respect to the Certificates or
obligations of the general character of the �r
Certificates or securities generally, or the material
increase of any such restrictions now in force,
including these relating to the extension of credit by,
or the charge tothenet capital requirements of,
underwriters;
(5) legislation enacted or resolution passed) b
or introduced or pending legislation amended in the
Congress or recommended for passage by the President o t,
the United States, 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 communication
issued or made by or on behalf of the Securities and:
Exchange Commission, or any other goernmental agency
having jurisdiction of the subject matter, to the
effect that obligations of the general character of the
Certificates or of the Certificates, including, any or
all underlying arrangements, are not exempt from
registration under or other requirements from which
they are now exempt under the Securities Act of 1933,
as amended, or that the Trust 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 character of the Certificates, or the
Certificates, including any or all underlying
arrangements, 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;
(6) the withdrawal or downgrading of any rating of
the Certificates by a national rating agency; or
(7) 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 has
the effect that the Official Statement contains any
untrue statement of a. material fact or omits to state a
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material fact required to be stated therein or
necessary in order to make the statements therein, in
the light of the circumstances under which they were tYr,
made, not misleading and
4�
(d) At or prior to the Closing Date, the Underwriter
shall have received the following documents, In each case
satisfactory in form and substance to the Underwriter;
(1) All of the Legal Documents, each duly executed
and delivered by the respective parties;
(2) The unqualified approving opinion, dated the
Closing Date and addressed to the City, of special
Counsel., in substantially the form attached hereto as
Exhibit. 4, and an unqualified opinion of such counsel,
dated the Closing Date and addressed to the Underwriter
and to the Trustee, to the effect that such opinion may
be relied upon by the 'Underwriter and the Trustee to
the same extent as if such opinion were addressed to
them;
( ) The unqualified supplemental opinion, dated.
the Closing Date and addressed to the Underwriter, of
Special Counsel, substantially to the effect that (i)
the Official Statement has been duly approved, executed
and delivered by the City and this Purchase Contract
has been duly authorized, executed and delivered by the
City; (ii) the Contract of Insurance and Regulatory
Agreement have been duly authorized, executed and
delivered by the Office and, assuming due authorization
by the other parties thereto, constitute binding and
enforceable agreements of the Office in accordance with
their terms, subject to laws relating to bankruptcy,
insolvency, reorganization or creditors' rights and the
application of equitable principles of equitable
remedies are sought, (iii) the statements contained in
the Official Statement under the captions "Introductory
Statement", "Security and Source of Payment", "The
Certificates", and "Tax Exemption", and in Appendix B
to the Official Statement, "Summary of Principal:
Documents", ;insofar as such statements purport to
summarize certain provisions of the Certificates and
the Legal Documents, present an accurate summary of
such provisions, (iv) based upon information made
available to such counsel in the course of such
counsel's participation in the transaction as Special
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, nothing came to
IZ009a 10
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5
such counsel's attention that would lead them to
believe that the Official Statement, as of the date
thereof or the Closing Tate, contains any untrue
statement of a material fact, or omits to state a
material fact necessary .in order to make the statements
made, in the light of the circumstances under which
they were made, not misleading (except that such>
counsel need express no view as to the financial
statements or the statistical data contained in the
Official Statement) , and (v) the Certificates are
exempt from registration under the Securities Act of
1933, as amended, and the Trust Agreement is exempt
from qualification under the Trust Indenture Act of
1939, as amended, together with an unqualified opinion
of such counsel, dated the Closing Date and addressed
to the Trustee, to the effect that such opinion may be j
relied upon by the Trustee to the same extent as if
such opinion were addressed to the Trustee;
(4) The opinion- of Best, Best & Krieger, in their ,
capacity as City Attorney for the City, dated the
Closing tate and addressed to the Underwriter to the
effect that the City is a general lair' city duly
organized and validly existing under the Constitution:
and laws of the state of California; nothing has come
to the attention of such counsel which; would lead them
to believe that the official Statement (excluding
therefrom financial statements and the statistical_ data
included in the. official Statement, as to which no
opinion need: be expressed) contains an untrue statement
of a material fact or omits to state a material fact
required to be stated; therein or necessary in order to
make the- statements therein, in the light of the
circumstances under which they were made, not
misleading, the resolution or resolutions of the City
approving and authorizing the execution and delivery by
the City of the Trust Agreement, the Regulatory
Agreement, the Installment Sale Agreement, the
Installment Purchase Agreement, the Second Assignment
Agreement and the Contract of Insurance (collectively,
the "City Documents") , the Purchase Contract and the
Official Statement (the "Resolutions") were duly
adopted at meetings of the governing body of the City
which were called and held pursuant to law and with all
public notice required by law and: at which a quorum was
present and acting throughout; to the best knowledge of
such counsel after reasonable investigation, there is
no action, suit,: proceeding or investigation at law or
in equity before or by any court, public board or body,
pending or threatened against or affecting the City, to
restrain or enjoin the collection of Revenues or of
9SIZ005 6/29/00
3n
Purchase Payments under the Installment Purchase
Agreement, or to restrain or enjoin the payment by the
City of the Instillment Payments or the pledge by the
City of its interest in Revenues to the Trustee
pursuant to the 'gust Agreement, or in any way s
contesting or affecting the validity of the
Resolutions, the City Documents or this Purchase
Contract,* the approval, execution and delivery of the
Official Statement, the adoption of the Resolutions,
and compliance by the City with the provisions of the:
foregoing, under the circumstances contemplated
thereby, to the best of their knowledge after
reasonable investigation, do not and will not in any
material: respect conflict with or constitute on the
part of the City a breach or default under any
agreement or other instrument to which the City is a
party or by which it is hound or any existing law,
regulation, court order or consent decree to which the
City* is subject, the City Documents, this Purchase
Contract and the official ,Statement 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* no authorization,
approval, consent, or other order of the State of
California or any other governmental authority or
agency within the State of California having
jurisdiction over the City is required for the valid
authorization, execution and delivery by the City of
the City Documents, this Purchase Contract or the:
Official Statement or for the adoption of the
Resolutions; and the Assignment Agreement and the
Second Assignment Agreement have been duly recorded,
and,; the Trust Agreement, the Depository Agreement and
all financing statements (including any financing
statements required to be fired under the provisions o
the California Uniform commercial Code) have been duly
recorded and filed in such manner and, in such place a
s required by law to establish, preserve and protect
the security interests thereby created on all
collateral specifically or generally described in such
documents as subject to such security interest and
under the laws in force, and it will not be necessary
to rerecord any such documents except that it will be
necessary to file continuation statements at the end of
each five (S) year period as required by the California
xa lxf
s#�1
f
Uniform commercial Code, together with an unqualified
opinion of such counsel, dated the closing Date and
addressed to the Trustee, to the effect that such
opinion may be relied upon by the Trustee to the same t
i
extent as if such opinion were addressed to the }{
Trustee
(5) The opinion, dated the closing date and
i`
addressed to the City and the Underwriter, of counsel
to the Trustee, to the effect that (i) the Trustee is
and will be as of the date thereof a national banking
corporation duly organized and validly existing under
the laws of the United States of America having full
power and being qualified to enter, accent and
administer the trust created under the Trust Agreement
and to execute and deliver the certificates; ( ii )
Trust Agreement, the Assignment Agreement and the
Second Assignment Agreement have been duly authorized,
executed and delivered by the Trustee and, assuming due
authorization, execution and delivery by the other
parties thereto, constitute legal, valid and binding
agreements of the Trustee enforceable in accordance
with their' respective terms, subject to laws relating
to bankruptcy, insolvency or other laws or equitable
principles affecting the enforcement of creditors'
rights, generally and the application of equitable
principles if equitable remedies are sought,. (iii) to
the best knowledge of ,such counsel after: reasonable
le or
investigation, there s no action, suit, pasona
investigation at law or in equity before or by any
court, public board or` body, pending or, to the best
,
knowledge of such counsel, threatened against or
affecting the Trustee to restrain or enjoin or in any
way contesting the existence or powers of the
e trustee
with respect o theexecution and delivery
Certificates or the security therefor or the execution
and delivery by the Trustee of the Trust Agreement, the
Assignment Agreement or the Second Assignment Agreement
wherein an unfavorable decision, ruling or finding
would adversely affect the transactions contemplated by
the Legal Documents or the validity of the
,Certificates;' and (iv) the execution and delivery b
the Trustee of the Certificates and the Frust
Agreement, the Assignment agreement and theseconustoe
Assignment Agreement and the compliance by t
with the provisions thereof, under the circumstances
contemplated thereby, do not and will not in any
material respect conflict with or constitute on the
part, of the Trustee a breach of or default under any
agreement or other instrument to which the Trustee is a
party or by which it is bound +or any existing law,
13
4rIZOO9J
l
iJ
k
�y
regulation, court order or consent decree to which the �<
Trustee is subject; provided, however, that no opinion'
need be expressed with respect to compliance with
federal and state securities laws,-
(6)
aws(6) The opinion, dated the Closing Date and
addressed to the underwriter, of O'Melveny & Myers,
counsel for the Underwriter ("Underwriter's Counsel") ,
,
to the effect that (a) the Certificates are exempt from
registration under the securities Act of 1933, as
amended, and the Trust Agreement is exempt from
qualification under the Trust Indenture Act of 1939, as
amended, and (b) based upon the information made
available to them in the course of their participation
in the preparation of the official Statement as counsel
for the Underwriter and without having undertaken to
determine independently, and acknowledging that the
limitations inherent in their examination andinthe
knowledge available to them renders them unable to
assume, and therefore without assuming, any
responsibility for the accuracy, completeness or
fairness of the statements contained in the Official
Statement, nothing has come to thein attention which
would lead them to believe that the Official Statement
(excluding therefrom financial statements and the
statistical data included in the official Statement)
contains an untrue statement of a material fact or
omits to state a, material fact required to be 'stated
therein or necessary to make the statements, therein, in
the light of the circumstances under which they were
made, not misleading,
(7) An opinion, dated the Closing Date and
addressed to the Underwriter, of counsel to the
Corporation, in substantially the form attached hereto
as =Jbit .E with such assumptions and qualifications
as are customary,
(8) A certificate or certificates dated the
Closing Date, signed by a: duly authorized official of
e City satisfactory to the Underwriter, in form and
substance satisfactory to the Underwriter, to the
effect that, to the best of his knowledge, (a) the
representations and warranties contained in this
Purchase Contract are true and correct in all material
respects on and as of the Closing mate with the same
effect as if made on the closing Tate, (b) no
litigation is pending or threatened (i) to restrain; or
enjoin i.n the execution, sale or delivery of any of the
Certificates or the collection of Revenues or the
Purchase: Payments under the Installment Purchase
9 IZ009J 14 /xs so
e
t
Agreement, or the pledge thereof by the City to the
Trustee pursuant to the Trust Agreement, or the payment
by the City of Installment Payments under the
Installment Sale Agreement, (ii) in any way contesting
or affecting the validity of the Certificates, this
Purchase Contract or the Citic Documents, or (iii) in
any gray contesting the existence or powers of the City;
and (c) no event affecting the City has occurred since
the date of the Official Statement which either makes
untrue or incorrect in any material respect as of the
Closing Date any statement or information contained; in
the Official Statement or is not reflected in the
official Statement, but should be reflected: therein in
carder to make the statements and information therein
not misleading in any material respect,
( ) A certificate of an authorized officer of the
Corporation, dated the Closing Date, to the effect
that:
(i) since September 30, 1959, no material and
adverse change has occurred in the financial position
or results of operation of the Corporation which is not
described in the official Statement,
(ii) the Corporation has not, since September
0, 1989, incurred any material liabilities other than
in the ordinary course of business which are not
described in or contemplated by the official Statement,
(iii) no litigation is pending or, to the
knowledge of; such officer after reasonable
investigation, threatened (a) to restrain or enjoin the
execution or delivery of the. Certificates or the
payment by the Corporation of the Purchase Payments
under the Installment Purchase Agreement or the
assignment by the Corporation to the Trustee of its
right to receive Installment Payments to be paid by the
City pursuant to the Installment Sale Agreement, (b) in
any way contesting or affecting the authority for the
sale, execution and delivery of the Certificates or the
validity of the Certificates, the Legal Documents, the
Letter of Representation or the Purchase Contract, or
(c) in any way contesting the corporate existence or
powers of the Corporation
(i ) no proceedings are pending or, to the
knowledge of such officer after reasonable
investigation, threatened in any way contesting or
affecting the Corporation's status as an organization
described in Section 501(e) (3) of the Internal Revenue
9G ZOO93 1 �j /
t,
L
Yz
Cade of 1986, as amended, or which would subject any
income of the Corporation to federal income taxation;
(v) no event affecting the Corporation has
occurred since the date of the official Statement which
either makes untrue or incorrect in any material
respect as of the Closing Date any statement or
information contained in the official Statement or is
not reflected in the official Statement, but should be
reflected therein in order to make the statements and
information therein not misleading in any material
respect and
(vi) the representations and warranties made
by the Corporation in the Legal Documents and in the
Letter of Representation are true and correct as of the
Closing Date
(10) Copies of the Corporation's articles of
incorporation and a good standing certificate of recent
date, both certified by the secretary of State of the
State of California® and certified copies of the
Corporation's bylaws and resolutions of its Board of
Directors authorizing, the execution and delivery of the
Legal Documents to which the Corporation is a party and
the Letter of Representation, and the official
Statement (and distribution thereof) and ratifying the
distribution of the Preliminary official Statement and
approving this Purchase Contract;
(1.1) Evidence that the Corporation is an
organization described in Section 501(c) (3) of the
Internal Revenue Code of 1.986, as amended; and <a copy
of a letter from the California Franchise Tax Board'
stating that the Corporation is exempt from California-
franchise and; income taxation under section 3701(d
Revenue and Taxation Code, together with an exempt
letter of good standing of recent date from the
California Franchise Tax Board,
(12) A letter of Ernst & Young, certified public
accountants, dated the Closing Date, to the effect that
such accountants reaffirm, as of the Closing Date and
as though made at the Closing Date, the statements made
in the letter furnished to the Underwriter by such
accountants pursuant to section 1(c) hereof., except
that the specified procedures referredtoin such
letter will be to a clave not more than five (5) days
prior to the Closing Date,
rt
e
(l ) A certificate of the Trustee, dated as of the
Closing Date, to the effect that; (a) the Trustee is a
national banking association organized and existing
under the laws of the United States of America, having
the full power and being qualified to enter into,
accept and administer the trust created, under the Trust
Agreement and to execute and deliver the Certificates,
(b) the Trustee is duly authorized to enter into the
Trust Agreement, the Assignment Agreement and the
Second Assignment Agreement and. to execute and deliver
the Certificates to the Underwriter pursuant to the
'gust Agreement, (c) when delivered to and ;paid for by
the Underwriter at the Closing, the Certificates will
have been duly executed and delivered by the Trustee;
(d) the execution and delivery of the Certificates and
the Frust Agreement, the Assignment Agreement and the
Second Assignment Agreement and compliance with the
provisions on the Trustee's pert contained: therein,
will not conflict with or constitute a breach of or
default under any law, administrative regulation,
judgment, decree, lean agreement, indenture, bond,
note, resolution, agreement or other instrument to
which the Trustee is a party or is otherwise subject,
nor will: any such execution, delivery, adoption or
compliance result in the creation or imposition of any
lien, charge or other security interest or' encumbrance
of any nature whatsoever upon any of the properties or
assets held by the Trustee pursuant to the lien created
by the Trust Agreement under the terms of any such law,
administrative regulation,, judgment, decree, loan
agreement, indenture, bond, nate, resolution, agreement
or other instrument, except as provided by the Trust
g're+ement# (e) to the best knowledge of the Trustee,
there is no action, .suit, proceeding, inquiry or
investigation, at law or in equity, before: or by any
court, governmental agency, public board or body,
pending or threatened against the Trustee affecting the
+existence of the Trustee, or the titles of its officers
to theirrespective offices or seeking to prohibit,
restrain or enjoin the execution and delivery of the
Certificates or the collection of revenues pledged or
to be pledged to pay the principal of, premium, if any,
and interest with respect to the Certificates, or the
pledge thereof, or in any way contesting or affecting
the, validity or enforceability of the Certificates or
the Trust Agreement, the Assignment Agreement or the
Second Assignment Agreement, or contesting the powers
of the Trustee or its authority to enter into, adopt or
perform its obligations under any of the Certificates
or the Trust Agreement, the Assignment Agreement or the
Second Assignment Agreement wherein an unfavorable
9 IZO09i 17
decision, ruling or finding would materially adversely
affect the validity or enforceability of the
Certificates or the Trust Agreement, the Assignment
Agreement or the Second Assignment Agreement; and (f)
within the scope of its trust obligations imposed by
the Trust Agreement, the Assignment Agreement or the
Second Assignment Agreement, the Trustee will furnish
such information as it has in its possession, execute
such applications and take such other action in
cooperation with the Underwriter as the Underwriter may
reasonably request in writing in order to enable (1)
the qualification of the Certificates 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, and (2) the determination of the eligibility
of the Certificates for investment under the laws of
such states and other jurisdictions, or to enable the
continuation of such qualification in effect so long as
required for distribution of the Certificates;
provided, however, that in no event shall the Trustee
be required to take any action which would (i) subject
it to general or unlimited service of process in any
jurisdiction in which it is not now so subject or (ii)
subject it to income or franchise tax in any
jurisdiction in which it is not now so subject.
(14) Two signed copies of the Financial Statements
included in Appendix A to the Official Statement;
(1 5) A nonarbitrage certificate in form
satisfactory to Special Counsel;
(16) Two copies of the Official Statement,
executed on behalf of the City by its duly authorized
official and on behalf of the Corporation by its duly
authorized officer,*
(17) Two certified copies of the general
resolution of the Trustee authorizing the execution and
delivery of the Certificates, Trust Agreement, the
Assignment Agreement and the Second Assignment
Agreement;
(18) Two certified copies of the resolutions of
the City authorizing the execution and delivery of the
Legal Documents, the Official Statement and the
Purchase Contract and ratifying the distribution of the
Preliminary Official Statement;
9G1Z009J 18 6/29190
(19) Evidence that the rating of "AAA" by Standard
Poor's Corporation is in full force and effect with
respect to the Certificates;
(20) Two copies of the Blue Sky Memorandum and
Memorandum as to Legality for Investment with respect
to the Certificates, prepared by Underwriter's Counsel ;
and
(22) Such additional legal opinions, certificates,
proceedings, instruments, title insurance, other
insurance policies or evidences thereof and other
documents as the Underwriter, underwriter's Counsel or
Special Counsel may reasonably request to evidence the
truth and accuracy, as of the date hereof and as of the
Closing Date, of the representations of the City and
the Corporation herein and in the Letter of
Representation and of the statements and information
contained in the Official Statement, and the due
performance or satisfaction by the Trustee, the City
and the Corporation at or prior to the Closing of all
agreements then to be performed and all conditions then
to be satisfied by the Trustee, the City and the
Corporation, respectively, in connection with the
transactions contemplated hereby and by the Legal
Documents.
If any of the conditions to the Underwriter's
obligations contained in this Purchase Contract shall not have
been satisfied when and as required herein or if the
Underwriter's obligations shall be terminated for any reason
permitted herein, all obligations of the Underwriter hereunder
may be terminated by the Underwriter at, or at any time prior to,
the Closing Date by written notice to the City and the
corporation.
4. pnse
All expenses and costs of the Trustee and the City
incident to the performance of its obligations in connection
with the authorization, execution, delivery and sale of the
Certificates to the Underwriter, including the costs of
printing of the Certificates, printing and mailing of the
Preliminary Official Statement and the Official Statement,
CUSIP Service Bureau charges, the cost of duplicating the
documents named therein, the fees and expenses of
consultants retained by the Corporation and rating agencies,
the California Health Facility Construction Loan Insurance
Program application and inspection fees, the fees and
expenses of the Trustee and its counsel in connection with
the execution and delivery of the Certificates and the fees
9GIZO09i 19
and expenses of Special Counsel, the City Attorney and
counsel for the Trustee, fees and expenses in connection
with qualification of the Certificates for sale under the
Blue Sky or other securities laws and regulations of various
jurisdictions and printing and preparation of the Blue Sky
Memorandum and the Memorandum as to Legality for Investment,
shall be paid by the Corporation. All such fees and
expenses paid by the Corporation may be paid from
Certificate proceeds to the extent permitted under the Trust
Agreement and the Internal Revenue Code of 1986, as amended.
In the event that the Certificates for any reason, other
than by reason of default by the Underwriter, are not
executed and delivered, or to the extent proceeds of the
Certificates are insufficient or unavailable therefor, any
fees, costs and expenses owed by the City or the Trustee,
which otherwise would have been paid from the proceeds of
the certificates, shall be paid by the Corporation. All
out-of-pocket- expenses of the Underwriter, including travel,
California Debt Advisory Commission fee and other expenses,
and the fees and expenses of Underwriter's Counsel shall be
paid by the Underwriter.
5. 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 at the address set forth above. Any
notice or other communication to be given to the following
parties may be given by delivering the same in writing to
the respective party at the following address:
To the Underwriter: Goldman, Sachs & Co.
555 California Street
Suite 3120
San Francisco, California 94104
Attention: Vincent F. Forte
Vice President
To the Corporation: Redlands Community Hospital
350 Terracina Boulevard
P.O. Box 3391
Redlands, California 92373
Attention: James R. Holmes
Senior Vice President and
Chief Financial officer
6. Eart igg in InterestL* Counterpazts,*
. gove=ing ,14
This Purchase Contract is made solely for the benefit
of the City, the Corporation and the Underwriter (including
successors or assigns of the Underwriter) and no other
9GIZOO94 2 0 6/29/90
person shall acquire or have any right 'hereunder or by
virtue hereof.. This Purchase Contract may be executed in
several counterparts, each of which shall be an original and
all of which shall constitute one and the same agreement.
This Purchase Contract shall be governed by the laws of the
State of California.
7 . survival ;of Re resents ions and_warrantiegs.
The representations and warranties of the City set
forth in or made pursuant to this Purchase Contract and the
representations and warranties of the Corporation set fort
in the Letter of Representation or otherwise made pursuant C
to this Purchase Contract, shall not be deemed to have been
discharged, satisfied or otherwise rendered void by reason
of this 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 the Underwriter and
regardless of delivery of and payment for the Certificates.
. Effective.
This Purchase Contract shall become effective and
binding upon the respective parties hereto upon the
execution of the acceptance hereof by the duly authorized
officials of the City and shall: be valid and, enforceable as
of the time of such. acceptance.
GOLDMAN, SACHS & CO.
ACCEPTED:
THE CITY OF DISH
By:
Its:
Attest:
City Clerk
APPROVED:
RED LH COMMUNITY HOSPITAL
H .
Its:
9GIZ009i 21
EXHIBIT A
LETTER OF REPRESENTATION
July 12, 1990
GOLDMAN, SACHS & CO.
555 California Street
San Francisco, California 94104
THE CITY OF REDLANDS
City Hall
30 Cajon Street
Redlands, California 92373
Ladies and Gentlemen:
The City of Redlands (the "City") and the undersigned
Redlands Community Hospital (the "Corporation") propose to
execute and enter into an Installment Sale Agreement dated as of
July 1, 1990 (the "Installment Sale Agreement") pursuant to which
the Corporation sells to the City certain equipment and
facilities as more fully described therein (the "Project") and
the City agrees to pay therefor Installment Payments, and an
Installment Purchase Agreement dated as of July 1, 1990 (the
"Installment Purchase Agreement") pursuant to which the City
sells the Project to the Corporation and the Corporation agrees
to pay therefor Purchase Payments in an amount equal to the
Installment Payments payable by the City under the Installment
Sale Agreement. The Corporation proposes to assign to security
Pacific National Bank (the "Trustee") , its right to receive
Installment Payments from the City pursuant to an Assignment
Agreement, dated as of July 1, 1990 (the "Assignment Agreement") .
The City proposes to assign to the Trustee its right to receive
Purchase Payments from the Corporation pursuant to a Second
Assignment Agreeiftent,, dated as of July 1, 1990 (the '$Second
Assignment Agreement") . In consideration for such assignment,
the Trustee proposes to enter into a Trust Agreement with the
City and the corporation, dated as of July 1, 1990 (the "Trust
Agreement") , pursuant to which the Trustee proposes to execute
and deliver $3,997,148. 14 aggregate principal amount of Insured
certificates of Participation (Redlands Community Hospital
Project) 1990 Series A (the "Certificates") ,, evidencing
proportionate interests of the owners thereof in Installment
Payments to be made by the City pursuant to the Installment Sale
Agreement. The Certificates shall be limited obligations of the
9612009i A-1 $129/90
City payable solely from Revenues (as defined in the Trust
Agreement) , consisting primarily of Purchase Payments received by
the City pursuant to the Installment Purchase Agreement. The
Certificates are secured by a Deed of Trust, dated as of February
1, 1987 (the #!Heed of Trust,#) , between the Corporation, as
trustor, and Security Pacific National Bank, as trustee, for the
benefit of the City and the Office of Statewide Health Planning
and Development. The offering of the Certificates is described
in a preliminary official statement dated June 6, 1990 (the
"Preliminary official Statement,,) which, together with such
changes, if any, as are: accepted by the Underwriter and including
the cover page andallappendices, exhibits, maps, reports and
statements included therein or attached thereto, is herein called:
the "Official Statement's. Pursuant to the Trust Agreement and
the Installment Purchase Agreement, the Cross Revenues (as
defined in the Installment Purchase Agreement) of the Corporation
are pledged to the Trustee to secure payment of the Certificates,
including the interest thereon, and to secure the obligations: of
the Corporation under the Installment Purchase Agreement,
including its obligation to make the Purchase Payments.
In order to induce. the City and, Goldman, Sachs & Co
(the "Underwriter") to enter into a certificate purchase contract
with respect to the Certificates (the "Purchase Contract") , and
to consummate the transactions therein contemplated, the
Corporation hereby represents, warrants and agrees with each of
you as follows.-
(1)
ollows.(1) The Corporation is a nonprofit public benefit
corporation, validly existing and in goad standing under the laws
of the State of California, has full legal right, power and
authority to enter into this Letter of Representation and the
Legal Documents (as defined in the Purchase Contract) to which it
is a party, to approve the Purchase Contract, the Preliminary
official Statement and the Official statement and to carry out
and consummate all transactions contemplated by the Purchase
Contract, the Legal Documents, the Official Statement, and this
Letter of Representation to be carried out and consummated by the
Corporation, and by proper corporate action has duly authorized
the execution and delivery of this Letter of Representation and
the Legal Documents to which the Corporation is a party, the
approval of the Purchase Contract and the Official. Statement and
distribution of the Official statement and has ratified the
distribution of the Preliminary official Statement.
(2) The officers of the Corporation executing this
Letter of Representation and the Legal Documents to which the
Corporation is a party and approving the Purchase Contract and
the Official Statement are duly and properly in office and fully`
authorized, to execute the same.
(3) The Purchase Contract and the Official Statement
have been duly approved by the Corporation- this Letter of
Representation has been duly authorized, executed and delivered
by the Corporation; the Legal Documents to which the Corporation
is a party have been duly authorized and at the Closing (as that
term is defined in the Purchase Contract) will have been duly
executed and delivered by the Corporation; and the performance by
the Corporation of its obligations thereunder and the
consummation of the transactions contemplated thereby have been
duly authorized and approved; and this Letter of Representation
and the Legal Documents to which the Corporation is a party will,
when so executed and delivered, constitute valid, binding and
enforceable obligations of the Corporation in accordance with
their respective terms except as the same may be limited b
bankruptcy, insolvency and ether laws affecting creditors' rights
generally and except as the enforceability of indemnification
provisions in this ;Letter of Representation may be limited by
applicable law.
(4) The Corporation is not in any material gray in
breach of or default under (i) to the best of its knowledge, any
applicable 'law or administrative regulation of the Mate o
California or the United States material to the business of the
Corporation or any applicable judgment or decree or (ii) any loan
agreement, indenture, bond, nate, resolution, material agreement
or other instrument to which the Corporation is a party or is
otherwise subject, and no event has occurred and is continuing
which, with the passage of time or the giving of notice or both,
would constitute an event of default under any such instrument,
except as expressly 'set forth in the official Statement; and
neither the execution and delivery of this Letter of
Representation, the approval of the Purchase Contract or the
Official Statement, the execution and delivery of the Legal
Documents to which the Corporation is a party, the consummation
of the transactions therein contemplated, or the fulfillment of
or compliance with the terms and: conditions thereof will conflict
with or constitute a violation or breach of or default (with due
notice or the passage of time or both) under the articles of
incorporation of the Corporation, its bylaws or, to the knowledge
of the Corporation, any applicable law or administrative rule or
regulation, or any applicable court or administrative decree or
order, or any indenture, mortgage, deed of trust, loan agreement,
lease, contract or other agreement or instrument to which the
Corporation is a party or by which it or its properties are
otherwise subject or bound, or result in the creation or
imposition of any prohibited lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of the
Corporation, which conflict, violation, breach, default, lien,
charge or encumbrance might have consequences that would
materially and adversely affect the consummation of the
transactions contemplated by the Purchase Contract, this Letter
9G1ZG 9J - 6/2919
of Representation, the Official Statement or the other Legal
Documents or the financial condition, assets, properties or
operations of the Corporation or its properties.
(5) No consent or approval of any trustee or holder of
any indebtedness of the Corporation, and no consent, permission,
authorization, order or license of, or filing or registration
with, any governmental authority is necessary in connection with
the execution and delivery of this Letter of Representation, the
execution and delivery of the Legal Documents by the Corporation;
the approval of the Purchase Contract or the Official Statement;
or the consummation of any transaction therein contemplated,
except as have been obtained or made and as are in full force and
effect.
(6) There is no action, suit, proceeding, inquiry or
investigation before or by any court of federal, state, municipal
or other government authority pending or, to the knowledge of the
Corporation, threatened against or affecting, the existence of
the Corporation or the titles of its officers to their respective
offices or seeking to prohibit, restrain or enjoin the sale,
execution and delivery of the Certificates or the execution and
delivery of the Legal Documents or the payment by the Corporation
of moneys owed by it under the Installment Purchase Agreement or
the pledge by the Corporation of its Gross Revenues to secure
payment of the principal of, and premium, if any, and interest on
the Certificates, or in any way contesting or affecting the
validity or enforceability of the Certificates, the Legal
Documents or this Letter of Representation or contesting the
powers of the Corporation or its authority to enter into, adopt
or perform its obligations under any of the foregoing, or
contesting in any way the completeness or accuracy of the
Preliminary Official Statement or the Official Statement, or any
amendment or supplement thereto, or otherwise affecting the
corporation or the assets, properties or operations of the
Corporation which, if determined adversely to the Corporation or
its interests, would have a material and adverse effect upon the
consummation of the transactions contemplated by or the validity
of the Purchase Contract, this Letter of Representation, the
official Statement or the other Legal Documents or upon the
Corporation, and the Corporation 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 other governmental
authority, which default might have consequences that would
materially and adversely affect the consummation of the
transactions contemplated by the Purchase Contract, this Letter
of Representation, the Official Statement or the other Legal
Documents or the financial condition, assets, properties or
operations of the Corporation care its properties.
9GIZ009i A-4 61241"
( ) The Corporation is an organization described in
Section 541(c) ( ) of the Internal Revenue Code of 1986, as
amended, or corresponding provisions of prior law, based on a
determination from the Internal Revenue Service; said
determination has not been modified, limited or revoked as to the
Corporation; there is no action, suit, proceeding, inquiry or
investigation before or by any court or other governmental
authority or agency pending or, to the knowledge of the
Corporation, threatened which could affect the Corporation's
status as an organization described in Section 501 (c) (3) of said
Code; the Corporation is in compliance with the terms, conditions
and limitations in said determination; the facts and
circumstances that form the basis of such determination as
represented to the Internal Revenue Service continue
substantially to exist and based upon such determination the
Corporation is exempt from federal income taxes under Section
501(a) of the Internal Revenue Code of 1986, as amended, except
.for unrelated business income subject to taxation under Section
511 of the Internal, Revenue Code of 1986, as amended.
(8) The Corporation is a corporation organized and
operated exclusively for charitable purposes within the meaning
of Section 501 (a) of the Internal Revenue Code. of 1986, as
amended, not for pecuniary profit, no part of the net earnings of
which inure to the benefit of any private shareholder or
individual.
(9) The proceeds of the Certificates will not be used
inconnectionwith any unrelated trade or business of the
Corporation as defined in Section 513 of the Internal Revenue
Code of 1986, as amended.
(10) The-Corporation has all necessary power and
authority to conduct the business now being conducted by it and
as contemplated by the Legal Documents. The Corporation has
complied in all material respects with all applicable
requirements of the' United States of America and the State of
California, and of their respective agencies and
instrumentalities, to operate the Health Facilities substantially
as they are being operated and is fully qualified by all
necessary permits, licenses, certifications, accreditations and
qualifications, including, without limitation, accreditation of
its existing facilities, to conduct its business as it is
presently being conducted and to enter into this Letter of
Representation and the Legal Documents to which it is a party, to
approve the Purchase Contract and: the official Statement, and to
be reimbursed (to the extent such reimbursement is available
under existing applicable statutes, regulations and
administrative practices) for its costs and expenses under all
third party payor programs accounting for a significant portion
9G1ZOtl9J A 6/29190
of the Corporation's gross revenues in its fiscal year ended
September 30, 1989 including, without limitation, Medicare.
(11) At the Closing, the Corporation will have good and
marketable title to the Health Facilities free and clear from all
encumbrances other than Permitted Encumbrances, as that to is
defined in the Installment Purchase Agreement.
(12) The Corporation has not incurred any material
liabilities, direct or contingent, nor has there been any
material adverse change in the financial position, results of
operation or condition, financial or otherwise, of the
corporation since September 30, 1989 which is not described in
the Official Statement, whether or not arising from transactions
in the ordinary course of business.
(13) Between the date hereof and the date of the
Closing, the Corporation will not, without the prior written
consent of the Underwriter, except as described in or
contemplated by the Official Statement, incur any material
liabilities, direct or contingent, other than in the ordinary
course of business.
(14) As of the date hereof, the Official Statement
(including the financial statement, and other financial and
statistical data contained elsewhere in the official Statement) ,
as amended or supplemented pursuant to the Purchase contract or
this Letter of Representation, if applicable, does not and will
note 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.
(15) Preliminary Official Statement heretofore
delivered to the Underwriter is deemed final by the Corporation
as of the date thereof, except for the omission of such
information as is permitted to be omitted in accordance with
paragraph (b) (1) of Rule l5c2-12 of the Securities Exchange
Commission.
Within seven (7) business days from the date hereof and
within sufficient time to accompany any confirmation requesting
payment from any customers of the Underwriter, the Corporation
shall cause a final printed form of the Official Statement to be
delivered to the Underwriter in sufficient quantity to comply
with paragraph (b) (4) of Rule 15c2-12 and the rules of the
Municipal Securities Rulemaking Board.
If, after the date hereof and until 25 days after the
end of the "underwriting period" (as defined in Rule 15c2-13) the
Corporation acquires knowledge of any event that might cause the
9GIZO09i A-6 IS/z9/90
Official Statement to contain any untrue statement of a material
fact or to omit to state a material fact necessary to 'make the
statements therein, in the light of the circumstances under which
they were made, not misleading, the Corporation shall notify the
Underwriter (and for the purpose of this clause shall provide the
Underwriter with such information as they may from time to time
request) , and, if in the opinion of the Underwriter such event
requires the preparation and publication of a supplement or
amendment to the Official Statement, at its expense to supplement
or amend the official Statement in a form and manner approved by
the Underwriter and furnish to the Underwriter a reasonable
number of copies of such supplement or amendment.
(16) If between the date hereof and the date of the
Closing any event shall occur which might or would cause the
Official Statement, as then supplemented or amended, to contain
an untrue statement of a material fact or to 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 Corporation shall notify the
City, the Trustee and the Underwriter and, if, in the opinion of
the Corporation, the City, the Trustee or the Underwriter or
their respective counsel such event requires the preparation and
publication of a supplement or amendment to the Official
Statement, the Corporation will request the City at the
Corporation's expense, to cause the official Statement to be
amended or supplemented in a form and manner approved by the
Underwriter.
(17) After the Closing, the Corporation will
(a) not participate in the issuance of any amendment of or
supplement to the Official Statement to which, after being
furnished with a copy, you shall reasonably object in writing or
which shall be disapproved by your counsel and (b) if any event
relating to or affecting the City, the Trustee or the
Corporation, or the Health Facilities shall occur as a result of
which it is necessary, in the opinion of counsel for the
Underwriter or the City, to amend or supplement the Official
Statement in order to make the Official Statement not misleading
in light of the circumstances existing at the time it is
delivered to a purchaser, forthwith prepare and furnish to the
Underwriter, the Trustee and the City (at the expense of the
Corporation) a reasonable number of copies of an amendment of or
supplement to the Official Statement (in form and substance
satisfactory to counsel for the Underwriter and counsel to the
City) which will amend or supplement the Official Statement so
that it will not contain an untrue statement of a material fact
or omit to state a 'material fact necessary in order to make the
statements therein, in light of the circumstances existing at the
time the official Statement is delivered to a purchaser, not
misleading. For the purposes of this subsection, the Corporation
9GIZ004i A-7 612$190
will furnish such information with respect to itself, its present
and proposed Health Facilities as any of you may from time to
time reasonably request.
(18) The Corporation 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 (i) to qualify the certificates for
offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the United
States as the Underwriter may designate and (ii) to determine the
eligibility of the Certificates for investment under the laws of
such states and other jurisdictions, and will use its best
efforts to continue such qualifications in effect so long as
required for the distribution of the Certificates; provided,
however, that in no event shall the Corporation be required to
take any action which would subject it to general or unlimited
service of process in any jurisdiction in which it is not now so
subject.
(19) The Corporation hereby authorizes the use of the
Official Statement, including all amendments and supplements
thereto, by the Underwriter in connection with the public
offering and sale of the Certificates and consents to thea use by
the Underwriter prior to the date hereof of the Preliminary
Official Statement in connection with the public offering and
sale of the Certificates.
(20) To the extent permitted by law, the Corporation
agrees to indemnify and hold you harmless and each person, if
any, who controls (as such term is defined in Section 15 of the
Securities Act of 1933, as amended) you and your officers, agents
and employees against any and all losses, claims, damages,
liabilities and expenses (i) arising out of any statement or
information in the Preliminary Official Statement or in the
Official Statement relating to the Corporation and the Health
Facilities, all as defined in the Official Statement, that is or
is alleged to be untrue or incorrect in any material respect or
the omission or alleged omission therefrom of any statement or
information that should be stated therein or that is necessary to
make the statements therein relating to the Corporation and the
Health Facilities not misleading in any material respect and (ii)
to the extent of the aggregate amount paid in settlement of any
litigation commenced or threatened arising from a claim based
upon any such untrue statement or omission if such settlement is
effected with the written consent of the Corporation. In case
any claim shall be made or action brought against any of you or
any controlling person based upon the Official Statement for
which indemnity may be sought against the Corporation, as
provided above, you shall promptly notify the Corporation in
writing setting forth the particulars of such claim or action and
9GIZ009J A-8 6/29/90
the corporation shall assume the defense thereof, including the
retaining of counsel acceptable to you and the payment of all
expenses. You or any such controlling person shall have the
right to retain separate counsel in any such action, but shall
bear the fees and expenses of such counsel, unless (i) the
Corporation shall have specifically authorized the retaining of
such counsel or (ii) the parties to such suit include the
Underwriter or controlling person or persons, and the Corporation
and the Underwriter or controlling person or persons have been
advised by such counsel that one or more legal defenses may be
available to it or them which may not be available to the
corporation, in which case the Corporation shall not be entitled
to assume the defense of such suit but you shall bear the fees
and expenses of such counsel.
(21) The Corporation hereby agrees to pay the expenses
described in Paragraph 4 of the Purchase Contract, and to pay any
expenses incurred in amending or supplementing the Official
Statement pursuant to the Purchase Contract or this Letter of
Representation.
The representations, warranties, agreements and
indemnities herein shall survive the Closing under the Purchase
Contract and any investigation made by or on behalf of any of you
or any person who controls any of you of any matters described in
or related to the transactions contemplated hereby and by the
Purchase Contract, the official Statement, and the other Legal
Documents.
This Letter of Representation shall be binding upon and
inure solely to the benefit of each of you and the Corporation
and, to the extent set forth herein, persons controlling any of
you, and their respective officers, employees, agents and
personal representatives, successors and assigns, and no other
person or firm shall acquire or have any right under or by virtue
of this Letter of Representation. This Letter of Representation
may be executed in several counterparts, each of which shall be
an original and all of which shall constitute one and the same
agreement.
If the foregoing is in accordance with your
understanding of the agreement between us, please sign and return
94120091 A-9 6129/90
to the Corporation a duplicate of this Letter of Representation
whereupon this will constitute a binding agreement between us in
accordance with the terms hereof.
Very truly yours,
REDLANDS COMMUNITY HOSPITAL
By:
Its:
Accepted and confirmed
as of the date
first above written
GOLDMAN, SACHS & Co.
THE CITY OF REDLANDS
By:
Its: - Mayor
ATTEST:
City Clerk, City of- Redlands
9GIZ009i A-10 spa fs
EXHIBIT B
THE CERTIFICATES
Aggregate Initial Amount
Due Initial per$5,000 Yield to
{November 151 Amount Final Com pQand ed Amount aturity
2000 $ 561,756-90 $2,485.65 6.900%
2001 667,455.33 2,297.39 7.000%
2002 573,489.17 2,131.93 7,050%
2003 573,179.20 1,976.48 7.100%
2004 571,147.20 1,830.60 7.150%
2005 1,160,120.34 1,706.41 7.150%
$3,227,148.14
94SIZO09-J B-1 6/29/90
EXHIBIT
Letterhead of Ernst & Young
Redlands Community Hospital
350 Terracina Boulevard
P.O. Box 3391
Redlands, California 92373-0742
Goldman, Sachs & Co
SS California Street
Suite 3120
San Francisco, California 94104
Ladies and Gentlemen:
We have audited the balance sheets of Redlands
Community Hospital (the "Corporation") as of September 30, 1989
and 1988, and the related statements of revenues and expenses,
changes in fund balances and cash flows for the years then ended,
included in Appendix B to the official Statement dated July 12,
1990 (the "Official Statement") , relating to the offering of
$3 ,997, 148. 14 Insured Certificates of Participation (Redlands`
Community Hospital Project) 1990 Series A (the "Certificates")
evidencing proportionate interests of the owners thereof in
installment payments to be paid by the City of Redlands as the
purchase price of certain property pursuant to the Installment
Sale Agreement with the Corporation. Our report with respect
thereto, dated December 20, 1989, is also included in Appendix B
to the official Statement.
In connection with. the +Official. Statement.
1 e are independent auditors with respect to the Corporation
within the meaning of that terminology as defined in
Rule 1.01 of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
2. We have not audited any financial statements of the
Corporation as of any date or for any period subsequent to
September 30, 1989. The purpose (and therefore the scope.)
9GIZODI3 -1: 6/29/90
of the audit was to enable us to express our opinion on the;
financial, statements as of September 30, 1989, and for the
year then ended, but not on the financial statements for any
interim period within such year. Therefore, we are unable
to and do not express an opinion on the unaudited balance
sleets as of May 31, 1990 and the unaudited statements o
revenues and expenses and cash flows for the eight-month
periods ended May 31, 1990 and May 31, 1989 or on the
financial position, results of operations or cash flows as
of any date or for any period subsequent to September 30,
1989.`
3 . For purposes of this letter we have read the minutes of the
meetings of the Board of Directors and the; finance
Committee) of the Corporation as set forth in the minute
beaks at July 11, 1990, officials of the corporation having
advised us that the minutes ofallsuch meetings through;
thatdatewere set forth therein and have carried out other
procedures to July 11, 1990, (our work did not extend to
include July 12, 1990) asfollows:
i) read the unaudited balance sheet as of May 31., 1990 and
the unaudited statements of revenues and expenses for
the eight-month periods ended May 31, 1990 and 1989
furnished by the Corporation (see copy attached which
does not include all the disclosures required by
generally accepted accounting principles) . and
ii) made inquiries of certain officials of the, Corporation
who have responsibility for financial and accounting'
matters as to whether the unaudited statements of
revenues and expenses referred to under 3 (i) above are
in conformity with generally accepted accounting
principles applied, on a basis substantially consistent
with that of the audited financial statements included
in Appendix B to the Official Statement.
The foregoing procedures old not constitute an audit made in
accordance with generally accepted auditing standards.
Also, they would not necessarily reveal matters of
significance with respect to the comments in the following
paragraph. Accordingly, we made no representations
regarding the sufficiency of the foregoing procedures for
your purposes.
4. Nothing came to our attention as a result of the foregoing
procedures, however, that caused us to believe that:
(a) The unaudited statements of revenues and expenses of
the Corporation described in 3i) above are not in
conformity with generally accepted accounting
a a ao ;i C- /29/1;0
principles applied on a basis substantially consistent
with the audited financial statements included in
Appendix B to the official Statement; or
( i) at May 31, 1990, there was any change in the long-
term debt (other than scheduled payments) of the
Corporation, or any decreases in net current assets or
net assets as compared with amounts shown on the
September 30, 1983 audited balance sheet included in
Appendix S to the official Statement, or (ii) for the
period from October 1, 1989 to May 31, 1990, as
compared with the corresponding period in the preceding
year, there were any decreases in operating income or
increase in the total amounts of excess of expenses
over revenues., except in all instances for changes,
increases or decreases which the official Statement
discloses have occurred or may occur.
a. Corporation officials have advised 'us that no financial
statements as of any date or for any period subsequent to
May 31, 1990, are available; accordingly, the procedures
carried out by us with .respect to changes in financial-
statement items after May 31, 1990, have, of necessity, been
even more 'limited than those with respect to the periods
referred to above. we have made inquiries of certain
officials of the Corporation who have responsibility for
financialandaccounting matters regarding (i) whether there
was any increase at duly 11, 1990, in the long-term debt of
the Corporation or any decrease in net current assets or net
assets as compared with amounts shown can the September 30,
1989, statement of financial position included in Appendix B
to the Official Statement, or (ii) for the period from,
June 1, 1994, to July 11, 199th, there were any decreases, as
compared with °the corresponding period in the preceding
year, in operating income or the excess of revenues over
expenses. on the basis of these inquiries and our reading
of the minutes as described in Paragraph 3, nothing came to
our attention that caused us to believe: that there was any
such change or decrease, except in all instances for changes
or decreases that the Official. Statement discloses have
occurred or may occur.
6. For the purposes of this letter, we have also read the
following information appearing in Official Statement on the;
indicated pages.
9 1 ZO09J - 6/29/90
ITEC PAGE DESCRIPTION
A 22 Under the table "Summary of Revenues and
Expenses, " the dollar amounts under the
columns for the years ended Septem-
ber 30, 1989, and 1988, and the eight
months. ended May 31, 1990, and, 1989
(unaudited) ..
H 18 The three percentage= amounts under the
caption "Historical Utilization of
Corporation's Facility" under the line
item "Occupancy (Percent) " .
17 Under the caption entitled "Medical
Staff" the four numbers in the 11total'f
line relating to physician specialty and
the percentage amount in the columns
headed "Percent: of Total" relating to
medical staff age distribution.
our audits of the financial statements for the periods
referred to in the introductory paragraph of this letter
comprises audit tests and procedures deemed necessary for
the purpose of expressing an opinion on such financial
statements taken as a whole. For neither of the periods
referred to therein nor for any tither period did we perform
audit tests for the purpose of expressing an opinion on
individual balances of accounts or summaries of selected
transactions such as those referred to in Paragraph 6 and,,
accordingly, we express no opinion thereon
7 For the purposes of this letter, we have performed the
following additional procedures, which were applied as
indicated with respect to the items enumerated in
Paragraph 6 above.
9 1ZO09J C-4 6/29/90
ITEMS IN PARA-
GRA G PM 6 ADQVE PROCEDURES 2 FINDINGS
A We compared the dollar amounts under the
columns for the years ended Septem-
ber 30, 1990, and 1989, to the corre-
sponding amounts included in the audited
financial statements included in Appen-
dix B to the official Statement-. We
compared the dollar amounts under the
columns ;for the eight-month periods
ended May 31,, 1990, and 1989, to the un-
audited statements of revenues and ex-
penses prepared by the Corporation and
found them to be in agreement.
We recomputed the mathematical percent-
age calculations under the. caption
"Historical Utilization of Corporation's
Facility" for the "Occupancy (Percent) "
amounts for each of the three periods
shown and found them to be in agreement.
C We recomputed the total under the col-
umns in the table relating to physician
specialty and in the table relating to
medical staff age distribution and found
them to be in agreement.
8. It should he understood that we make no representations
regarding questions of legal interpretation or regarding the
sufficiency for your purposes of the procedures enumerated
in the preceding paragraph; also;, such procedures would not
necessarily reveal any material misstatement of the amounts
listed above. Further,; we have addressed ourselves solely
to the foregoing date as set forth in the official Statement
and make no representationsasto the adequacy of disclosure
or as to Whether any material facts have: been omitted
9. This letter is solely for the information of the addressees
and to assist the underwriter in conducting and documenting
its investigation of the affairs of the Corporation in
connection with the offering of the Certificates and is not
to be used, circulated., quoted or otherwise referred to for
any other purpose, including, but not limited to, the
purchase or sale of securities, nor is it to be filed with
or referred to in whole or in part in the Official Statement
or in any ether document, except that reference may be made
to it in the Purchase Contract related to the Certificates
or in any list of closing documents pertaining to the
offering of said Certificates by the Official Statement.
9G1Z0 9J C 6129/90
EXHIBIT D
FORM OF OPINION OF SPECIAL COUNSEL
City Council of the
City of Redlands
Re: $3,997, 148 . 14 Insured Certificates of
Participation (Redlands Community Hospital
Project) 1990 Series A Evidencing
Proportionate Interests of the Owner Thereof
in an Installment Sale Agreement, including
the Right to Receive Installment Payments
Thereunder to be made by the City of
Redlands, California
Ladies and Gentlemen:
We have reviewed the Constitution and the laws of the
State of California and certain proceedings taken by the City of
Redlands, California (the "City") in connection with the
authorization, execution and delivery by the City of the
Installment Sale Agreement dated as of July 1, 1990 by and
between Redlands Community Hospital, a California nonprofit
benefit corporation (the "Corporation") and the City (the "Sale
Agreement") , and the Installment Purchase Agreement dated as of
July 1, 1990 by and between the City and the Corporation (the
"Purchase Agreement") . We have also reviewed the executed Sale
Agreement, the executed Purchase Agreement, the executed Trust
Agreement dated as of July 1, 1990 (the "Trust Agreement") by and
among the City, the Corporation and Security Pacific National
Bank, as trustee (the "Trustee") , the executed Second Assignment
Agreement between the City and the Trustee dated as of July 1,
1990 (the "Second Assignment Agreement") and such other documents
and information as we consider necessary to render this opinion.
Pursuant to the Trust Agreement, the Trustee has agreed
to execute and deliver certificates of participation (the
"Certificates of Participation") evidencing a proportionate
interest in installment payments to be made by the City pursuant
to the Sale Agreement ("Installment Payments") .
Based upon the foregoing we are of the opinion that the
Sale Agreement, the Purchase Agreement, the Trust Agreement and
the other agreements mentioned above have been duly authorized,
executed and delivered by the City and constitute legally valid
and binding obligations of the City enforceable against the City
in accordance with their respective terms, except <as the same may
be limited by bankruptcy, insolvency, reorganization, moratorium
9GIZ009i D-1 6/29/90
or other laws relating to or affecting generally the enforcement
of creditors' rights, and except as their enforcement may be
subject to the exercise of judicial discretion in accordance with
general principles of equity. The Certificates of Participation
have been duly executed and delivered by the Trustee pursuant to
the Trust Agreement and are entitled to the benefits of the Trust•
Agreement.
The obligations of the City under the Sale Agreement to
make Installment Payments constitute a limited obligation payable
from and secured solely by payments to be received under the
Purchase Agreement and certain other fund held as a part of the
trust estate created under the Trust Agreement. The obligation
to pay the principal of and interest with respect to the
Certificates of Participation is not an indebtedness of the City,
the State of California or any political subdivision thereof or a
loan of the credit thereof within the meaning of any
constitutional or statutory provision.
We are further of the opinion that, under existing
laws, regulations, rulings and judicial decisions, the portion of
each Installment Payment due under the Sale Agreement designated
as and comprising interest and received by the owners of the
Certificates of Participation ("interest paid with respect to the
Certificates") is exempt from personal income taxation imposed by
the State of California.
The Internal Revenue Code of 1986, as amended (the
"Code") , sets forth certain investment, rebate and related
requirements which must be met subsequent to the execution and
delivery of the Certificates of Participation for the interest
paid with respect to the Certificates to be and remain excluded
from gross income for purposes of federal income taxation.
Noncompliance with such requirements could cause the interest
paid with respect to the Certificates to be subject to federal
income taxation retroactive to the date of execution and delivery
of the Certificates of Participation. Pursuant to the Trust
Agreement, the City has covenanted to comply with the
requirements of the Code. We are of the opinion that, assuming
compliance with the aforementioned covenant, the interest paid
with respect to the Certificates is excluded from gross income
for purposes of federal income taxation under existing statutes,
regulations, rulings and court decisions. We are further of the
opinion that interest paid with respect to the Certificates is
not a specific preference item for purpose of the alternative
minimum tax provisions of the Code. However, interest paid with
respect to the Certificates received by corporations will be
included in corporate adjusted net book income and adjusted
current earnings, a portion of which may increase the alternative
minimum taxable income of such corporations.
961 Z009J D-2 6/29/90
Although interest paid with respect to the Certificates
is excluded from gross income for federal tax purposes, the
accrual or receipt of interest paid with respect to the
Certificates may otherwise affect the federal income tax
liability of the recipient. The extent of these other tax
consequences will depend on the recipient's particular tax status
or other items of income or deduction. We express no opinion
regarding any such consequences.
Respectfully submitted,
9G1ZOO9J D-3 6/29/90
EXHIBIT E
FORM OF OPINION OF HANSON, BRIDGETT, MARCUS, VLAHOS AND RUQ?Y
PURSUANT TO SECTION 3 (d) (7) OF THE PURCHASE CONTRACT
July 26, 1990
GOLDMAN, SACHS & CO.
555 California Street
San Francisco, California 94104
Re: $ 3 ,997, 148 .14 Insured Certificates of
Participation (Redlands Community Hospital
Project) 1990 Serjes ,A
Ladies and Gentle-men:
We have acted as counsel to Redlands Community
Hospital, a California nonprofit public benefit corporation (the
"Corporation") in connection with the execution and delivery by
the City of Redlands (the "City") and Security Pacific National
Bank (the "Trustee") , as Trustee, of that certain Trust Agreement
dated as of July 1, 1990 (the "Trust Agreement") among the
Corporation, the Trustee and the City and the purchase by you, of
$3 ,997, 148. 14 aggregate principal amount of City of Redlands
Insured Certificates of Participation (Redlands Community
Hospital Project) 1.990 Series A (the "Certificates") as provided
in the Certificate Purchase Contract dated as of July 12, 1990
(the '*Purchase Contract") by and between you and the City, as
approved by the Corporation.
In this connection, we have examined the following:
(a) A certified copy of the Articles of Incorporation
of the Corporation, as amended to date.
(b) A Certificate of Good Standing of the Corporation
issued by the Secretary of State of the State of
California on , 1990.
(c) The Bylaws of the corporation, as amended to date.
(d) Resolution No, of the City, adopted by the
City on July 10, 1990 authorizing the execution and delivery
of the Certificates.
(e) Resolutions relating to the transactions herein
referred to, adopted by the Board of Directors of the
9GIZ009i E-1 6/29/90
Corporation at a meeting heed on ,, 1990 and b
the Board of Directors of RHS Corp. , as the sole member of
the Corporation, at a meeting held on
1990.
(f) The Installment Sale Agreement, dated as of July 1,,
1990 between the City and the Corporation ("Installment Sale
Agreement") .
(g) The Installment Purchase Agreement, dated as of
July 1, 1990, between the. City and the Corporation (the
°"Installment Purchase Agreement") .
(h) The 'Frust Agreement.
(i) The Assignment Agreement dated as of July 1, 1990,
between the Corporation and: the Trustee (the "Assignment
Agreement") .
(j) The Second Assignment Agreement dated as of July 1,
1990 between the. City and the Trustee (the "Second
Assignment Agreement") .
(k) The Depository Agreement dated as of February 1,
1987, among the Trustee, the Corporation and. Bank of America
National Trust and Savings Association, as depository (the
"Depository Agreement")
(1) The Purchase Contract.
(m) The Letter of Representation from the Corporation
to the Underwriter, dated July 12, 1989 (the "Letter of
Representation")
(n) The Official Statement, dated. July 12, 1990,
relating to the Certificates (the "Official Statement,,) .
(o) The Regulatory Agreement, dated as of July 1, 199
(the "Regulatory Agreement") , and, the Contract of
Insurance, dated as of July 1, 1990 (the "Contract o "
Insurance") , both among the Office of Statewide Health
Planning and Development of the State of California (the
"Office") , the City and the Corporation.
(p) The meed of Trust, dated. February 1, 1987, by and
between the Corporation, as trustor, and Security Pacific
National Ban} , as trustee, for the joint and several benefit
of the City and the Office.
We have also made such ether investigations of fact and
law, examined such documents, obtained such certificates from
9=009JE-2 15/29190
;public officials and officers of the Corporation, and done such
other things as we have determined necessary to render this
opinion. In rendering the opinions expressed in paragraphs )
(4) , ) (6) (7) and (9) , we have relied, to the extent of the
factual matters expressed therein, on certificates of officers o
the Corporation satisfactory to us and have made reasonable
inquiries relative thereto.
Based wren the foregoing, it is our opinion that:
(1) The Corporation is a. nonprofit public benefit
corporation duly formed and in good standing under the laws of
the State of California, has full legal right, power and
authority to approve the Purchase Contract and.. the Official
Statement and to enter into the Letter of Representation, the
Installment Sale Agreement, the Installment Purchase Agreement,
the Trust Agreement, the Assignment Agreement, the Regulatory
Agreement, the Contract of Insurance, the deed of Trust and the
Repository Agreement (hereinafter collectively referred to as the
"Corporation o s Agreements"')
(2) The Corporation's Agreements have been duly
authorized, executed and delivered by the Corporation, and the
Purchase contract and the official Statement have been early
approved by the Corporation; the Corporation's Agreements
constitute the Legal,, valid and binding agreements of the
Corporation enforceable against the Corporation in accordance
with their respective terms, except as enforcement of each may be
limited by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally and by the application
of equitable principles if equitable remedies are sought.
( The approval: of the Purchase Contractandthe
Official Statement and the execution and delivery of the
Corporation's Agreements, the consummation of the transactions
therein contemplated and the fulfillment of or compliance with
the terms and conditions thereof, will not conflict with or
constitute a violation or breach of or default (with due notice
or the passage of time or bath) under the Articles o'
Incorporation of the Corporation, its Bylaws or, to the best of
our knowledge after reasonable investigation, any applicable law
or administrative rule or regulation (except for state Blue Sky
or federal securities laws, as to which we express no opinion) ,
or, to the best of our knowledge after reasonable investigation,
any applicable court or administrative decree or order, necessary`
to accommodate this certificate of participation financing or any
indenture,, mortgage, deed of trust, loan agreement, lease, or
other material contract, agreement or instrument to which the
Corporation is a party or by which it or its properties i
otherwise subject or bound of which we are aware after reasonable
investigation, or result in the creation or imposition of any
prohibited lien, charge or encumbrance of any nature whatsoever
upon any of the property or assets of the Corporation, which
conflict, violation, breach, default, lien, charge or encumbrance
might have consequences that would materially and adversely
affect the consummation of the transactions contemplated by the
Corporation's Agreements or the financial condition, assets,
properties or operations of the Corporation.
(4) To the best of our knowledge, after reasonable
investigation, no consent or approval of any trustee or bolder of
any indebtedness of the Corporation, and no consent, permission,
authorization, order or license of, or filing or registration
with, any governmental authority is necessary in connection with
the approval of the Purchase Contract or the Official Statement
or the execution and delivery of the Corporation's Agreements or
the consummation of any transaction therein contemplated, except
as have been obtained or made and as are in full force and
effect. We express no opinion as to any approvals, obligations
or consents as may, be required under any state Blue Sky or
federal securities laws.
(5) To the best of our knowledge after reasonable
investigation: (a) there is no action, suit, proceeding, inquiry
or investigation before or by any court or federal, state,
municipal or other governmental authority pending or threatened
against or affecting the Corporation or the assets, properties or
operations of the Corporation which, if determined adversely to
the Corporation or its interests, would have a material and
adverse effect upon the consummation of the transactions
contemplated by or the validity of the Purchase Contract, the
corporation's Agreements, or upon the financial condition,
assets, properties or operations of the Corporation, and (b) the
Corporation 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 other governmental authority, which default
'might have consequences that would materially and adversely
affect the consummation of the transactions contemplated by the
Purchase Contract, the Corporation's Agreements, or the financial
condition, assets, properties or operations of the Corporation.
(6) The Corporation is an organization described in
Section 501(c) (3) of the Internal Revenue Code of 1986, as
amended, and the Corporation is exempt from federal income taxes
under Section 501(a) of the Internal Revenue Code of 1986, as
amended, except for unrelated business income subject to taxation
under Section 511 of the Internal Revenue Code of 1986, as
amended.
(7) The Corporation has all necessary power and
authority to conduct the business now being conducted by it, and
to be reimbursed (to the extent that such reimbursement is
9GIZO0913 E-4 6/29/90
available under existing applicable statutes, regulations and
administrative practices) for its costs and expenses under
Medicare.
8) Based upon the information mads available to us in
the course of our participation in the preparation of the
Official. Statement as counsel for the Corporation, 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, nothing has come
to our attention which would lead us to believe that the
statements and information contained in the official Statement
(excluding therefrom the financial statements and the statistical
data included in the Official statement, as to which we express
no opinion) as of the date of the. Official, statement or as of the
date hereof, 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 the light of the
circumstances under which they were made, not misleading.;
'very truly yours,
9GU0091)