HomeMy WebLinkAboutItem 02 - e - Council Reading File - BPA-2 CLEAN SH Draft #2
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$__,___000
CITY OF SAN LUIS OBISPO, CALIFORNIA
WATER REVENUE REFUNDING BONDS, SERIES 2018
BOND PURCHASE AGREEMENT
June __, 2018
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93401
Ladies and Gentlemen:
Raymond James & Associates, Inc. (the “Underwriter”) hereby offers to enter into this Bond
Purchase Agreement (the “Bond Purchase Agreement”) with the City of San Luis Obispo (the “City”), a
charter city duly organized and existing under the laws of the State, which upon written acceptance of this
offer will be binding upon the City and the Underwriter. This offer is made subject to the written acceptance
of the City on or before 11:59 p.m., California time, on the date hereof, and, if not so accepted, will be
subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the
acceptance hereof by the City.
Capitalized terms used and not defined herein shall have the same meanings as set forth in the
Indenture dated as of _______ 1, 2018 (the “Indenture), by and between the City and U.S. Bank National
Association, as trustee (the “Trustee”).
Section 1. Purchase and Sale of the Series 2018 Bonds
(a) Subject to the terms and conditions and in reliance upon the representations, warranties
and agreements set forth herein, the Underwriter hereby agrees to purchase from the City, and the City
hereby agrees to sell and deliver to the Underwriter, all (but not less than all) of the $__,___000 aggregate
principal amount of the City of San Luis Obispo, California, Water Revenue Refunding Bonds, Series 2018
(the “Series 2018 Bonds”). The Series 2018 Bonds will be issued on the Closing Date (as defined herein),
in the principal amount of $__,___000. The Series 2018 Bonds will bear interest at the rates and will mature
on the dates, and will be subject to redemption, all set forth on Schedule I attached hereto. The purchase
price for the Series 2018 Bonds shall be $_______.__, being the principal amount of the Series 2018 Bonds,
plus net original issue premium of $_______.__, and less an Underwriter’s discount of $_______.__.
(b) The City acknowledges and agrees that (i) the purchase and sale of the Series 2018 Bonds
pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the City, on
one hand, and the Underwriter, on the other; (ii) in connection with such transaction, including the process
leading thereto, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the City;
(iii) the Underwriter has neither assumed an advisory or fiduciary responsibility in favor of the City with
respect to the offering of the Series 2018 Bonds or the process leading thereto (whether or not the
Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the City on other
matters) nor has it assumed any other contractual obligation the City except the obligations expressly set
forth in this Bond Purchase Agreement; (iv) the Underwriter has financial and other interests that differ
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from those of the City; and (v) the City have each consulted with its own legal and financial advisors to the
extent it deemed appropriate in connection with the offering of the Series 2018 Bonds.
Section 2. Description and Purpose of the Series 2018 Bonds
The Series 2018 Bonds are being issued by the City pursuant to Articles 10 and 11 of Chapter 3 of
Part I of Division 2 of Title 5 of the California Government Code and the Indenture. The Series 2018 Bonds
are limited obligations of the City payable solely from and secured by a pledge, charge and lien upon Net
Revenues (as defined in the Indenture), which are derived by the City from the ownership or operation of
the Water System, less the Operation and Maintenance Costs (each as defined in the Indenture).
The proceeds of the Series 2018 Bonds will be used to: (i) refund and defease all of the $12,520,000
outstanding principal amount of City of San Luis Obispo 2006 Water Revenue Bonds (the “2006 Bonds”);
and (ii) pay the costs incurred with the issuance and sale of the Series 2018 Bonds.
A portion of the proceeds from the sale of the Series 2018 Bonds will be deposited in an escrow
fund (the “Escrow Fund”) established pursuant to the terms and conditions of an Escrow Agreement dated
as of _______ 1, 2018 (the “Escrow Agreement”) by and between the City and the U.S. Bank National
Association, acting as the current trustee for the Series 2006 Bonds (the “Escrow Bank”), to redeem the
2006 Bonds on _______, 2018.
Section 3. Public Offering
The Underwriter agrees to make a bona fide public offering of all the Series 2018 Bonds initially
at the public offering prices (or yields) set forth on Schedule I attached hereto and incorporated herein by
reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public
offering prices (or yields) as it deems necessary in connection with the marketing of the Series 2018 Bonds,
provided that the Underwriter shall not change the interest rates set forth on Schedule I. The Series 2018
Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.
Section 4. Delivery of Official Statement; Continuing Disclosure
(a) The City has delivered or caused to be delivered to the Underwriter prior to the execution
of this Bond Purchase Agreement, copies of the preliminary official statement with respect to the Series
2018 Bonds, dated ________, 2018 (the “Preliminary Official Statement”). Such Preliminary Official
Statement is the official statement deemed final by the City for purposes of Rule 15c2-12 under the
Securities Exchange Act of 1934 (the “Rule”) and approved by the City for distribution by the Underwriter
by the City Resolution (as defined herein). As authorized by the City Resolution, the City hereby ratifies
and confirms its authorization of the use by the Underwriter before the date hereof of the Preliminary
Official Statement.
(b) Within seven (7) business days from the date hereof, and in any event not later than two
business days prior to the Closing Date, the City shall deliver to the Underwriter a final Official Statement,
executed on behalf of the City by authorized representatives of the City, which shall include information
permitted to be omitted from the Preliminary Official Statement by paragraph (b)(1) of the Rule and with
such other amendments or supplements as shall have been approved by the City and the Underwriter (the
“Final Official Statement”) and such additional conformed copies thereof as the Underwriter may
reasonably request to meet potential customer requests for copies of the Final Official Statement to comply
with the Rule and rules of the Municipal Securities Rulemaking Board (the “MSRB”). It is acknowledged
by the City that the Underwriter may deliver the Preliminary Official Statement and a Final Official
Statement electronically over the internet and in printed paper form. For purposes of this Bond Purchase
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Agreement, the printed paper form of the Preliminary Official Statement and the Final Official Statement
are deemed controlling. The Underwriter agrees to file a copy of the Final Official Statement, including
any supplements prepared by the City, with the MSRB on its Electronic Municipal Markets Access
(“EMMA”) system. The Final Official Statement shall be in substantially the same form as the Preliminary
Official Statement and, other than information previously permitted to have been omitted by the Rule, the
City shall only make such other additions, deletions, revisions and recent developments in the Final Official
Statement as shall be approved by the Underwriter. The Underwriter hereby agrees to cooperate and assist
in the preparation of the Final Official Statement. The City hereby agrees to deliver to the Underwriter an
electronic copy of the Final Official Statement in a form that permits the Underwriter to satisfy its
obligations under the rules and regulations of the MSRB and the U.S. Securities and Exchange Commission
(“SEC”). The City hereby authorizes the Underwriter to use the Final Official Statement and the
information contained therein in connection with the offering and sale of the Series 2018 Bonds. The Final
Official Statement, including the cover pages, the appendices thereto and all information incorporated
therein by reference are hereinafter referred collectively to as the “Official Statement.”
(c) To enable the Underwriter to comply with the Rule, the City will execute a Continuing
Disclosure Certificate concurrently with issuance of the Series 2018 Bonds substantially in the form
attached as Appendix E to the Official Statement (the “Continuing Disclosure Certificate”).
Section 5. Closing
At 8:30 a.m. California time on ________, 2018, or such other time as shall be agreed upon by the
Underwriter and the City (the “Closing Date”), the City will deliver or cause to be delivered to the
Underwriter at the offices of Orrick, Herrington & Sutcliffe LLP, bond counsel to the City (“Bond Counsel”)
in _______, California (or such other location as may be designated by the Underwriter and approved by
the City) the closing documents hereinafter mentioned and, through the facilities of The Depository Trust
Company, the Series 2018 Bonds in the form of registered book-entry bonds evidenced by one certificate
for each maturity, interest rate and series of Bonds (which may be typewritten) in denominations of $5,000
or any multiple thereof, duly executed by the City and authenticated by the Trustee, and subject to the terms
and conditions hereof the Underwriter will accept delivery of the Series 2018 Bonds in book-entry form,
and the Underwriter will pay the purchase price of the Series 2018 Bonds set forth in Section 1 by Federal
Funds wire (such delivery and payment being herein referred to as “Closing”).
Section 6. Representations, Warranties and Agreements of the City
The City represents, warrants and covenants with the Underwriter that:
(a) the City is a charter city duly organized and existing under the laws of the State;
(b) the City has full legal right, power and authority to execute, deliver and perform its
obligations, as the case may be, under the Indenture, the Escrow Agreement, this Bond Purchase
Agreement, and the Continuing Disclosure Certificate (collectively, the “City Legal Documents”) and to
carry out and consummate all transactions contemplated by each of the aforesaid documents and the Official
Statement, and compliance with the provisions of the City Legal Documents will not materially conflict
with or constitute a breach of or default under any applicable constitutional provision, law, administrative
regulation, court order or consent decree or any applicable judgment or decree or any loan agreement, note,
resolution, indenture, agreement or other instrument to which the City is a party or it or any of its assets
may be otherwise subject;
(c) Resolution No. _______ adopted by the City Council of the City on June 5, 2018 approving
and authorizing the execution and delivery by the City of the City Legal Documents and the preparation
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and distribution of the Preliminary Official Statement and the Official Statement (the “City Resolution”)
was duly adopted at a meeting of the City Council of the City called and held pursuant to law and with all
public notice required by law and at which a quorum was present and acting throughout, and is in full force
and effect and has not been amended or repealed;
(d) by adoption of the City Resolution, the City has duly authorized and approved the
execution and delivery by the City of the City Legal Documents and when executed and delivered, the City
Legal Documents, assuming due authorization, execution and delivery by the other respective parties
thereto, as applicable, will constitute the legally valid and binding obligations of the City enforceable in
accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights
generally;
(e) at the date hereof and as of the Closing Date, except as otherwise disclosed in the
Preliminary Official Statement and the Official Statement, the City will be in compliance with the covenants
and agreements contained in the City Legal Documents, and no event of default and no event has occurred
and is continuing which, with the passage of time or giving of notice, or both, would constitute an event of
default thereunder shall have occurred and be continuing;
(f) all approvals, consents and orders of any governmental authority or agency having
jurisdiction in the matter which would constitute a condition precedent to the due performance by the City
of its obligations under the City Legal Documents have been duly obtained or made, and are, and will be
as of the Closing Date, in full force and effect;
(g) the City will comply with the requirements of the Tax Certificate executed by the City in
connection with the delivery of the Series 2018 Bonds;
(h) any certificate signed by any officer of the City and delivered to the Underwriter pursuant
to the City Legal Documents or any document contemplated hereby or thereby shall be deemed a
representation and warranty by the City to the Underwriter as to the statements made therein and that such
officer shall have been duly authorized to execute the same;
(i) to the best knowledge of the City there is no public vote or referendum pending or
proposed, the results of which could materially adversely affect the transactions contemplated by the City
Legal Documents or the Official Statement or the validity or enforceability of the Series 2018 Bonds;
(j) the Indenture creates a valid pledge of and grant of a first, direct and exclusive charge and
lien on the Net Revenues purported to be pledged thereby, subject to no prior pledges, liens or security
interests;
(k) the Official Statement is, and at all times subsequent to the date of the Official Statement
up to and including the Closing will be, true and correct in all material respects, and the Official Statement
contains and up to and including the Closing will contain no misstatement of any material fact and does
not, and up to and including the Closing will not, omit any statement necessary to make the statements
contained therein, in the light of the circumstances in which such statements were made, not misleading
(excluding therefrom the information relating to DTC and its book-entry only system and under the caption
“UNDERWRITING,” as to which no representations or warranties are made);
(l) the City will advise the Underwriter promptly of any proposal to amend or supplement the
Official Statement and will not effect or consent to any such amendment or supplement without the consent
of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter
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promptly of the institution of any proceedings known to it by any governmental agency prohibiting or
otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of
the Series 2018 Bonds;
(m) as of the time of acceptance hereof and as of the time of the Closing, the City is not and
will not be in breach of or in default under any applicable constitutional provision, law or administrative
rule or regulation of the State or the United States, or any applicable judgment or decree or any trust
agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument relating to the
City to which the City is a party or any of its assets is otherwise subject, and no event has occurred and is
continuing which, with the passage of time or the giving of notice, or both, would constitute a default or
event of default under any such instrument which breach or default would materially adversely affect the
security of the Series 2018 Bonds or the City’s performance under the City Legal Documents; and, as of
such times, except as disclosed in the Preliminary Official Statement and the Official Statement, the
authorization, execution and delivery of the City Legal Documents and the Series 2018 Bonds and
compliance with the provisions of each of such agreements or instruments do not and will not conflict with
or constitute a breach of or default under any applicable constitutional provision, law or administrative rule
or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust
agreement, loan agreement, bond, note, resolution, ordinance agreement or other instrument relating to the
City (or any of its officers in their respective capacities as such) is subject, or by which it or any of its
properties is bound; nor will any such authorization, execution, delivery or compliance result in the creation
or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon
any of its assets or properties or under the terms of any such law, regulation or instrument, except as may
be provided by the Series 2018 Bonds and the City Legal Documents;
(n) as of the time of acceptance hereof and the Closing, except as disclosed in the Preliminary
Official Statement and the Official Statement, no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, government agency, public board or body, is pending or, to the best of
the City’s knowledge after reasonable investigation, threatened (i) in any way questioning the corporate
existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting,
contesting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of any of the Series 2018
Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and
interest on the Series 2018 Bonds, or in any way contesting or affecting the validity of the Series 2018
Bonds, the City Legal Documents or the consummation of the transactions contemplated thereby or hereby;
(iii) which may result in any material adverse change relating to the City; or (iv) contesting the
completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement
or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement
contained any untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the
nature described in clauses (i) through (iv) of this sentence;
(o) for purposes of the Rule, the City has heretofore deemed final the Preliminary Official
Statement prior to its use and distribution by the Underwriter, except for the information specifically
permitted to be omitted by paragraph (b)(1) of the Rule;
(p) except as otherwise disclosed in the Preliminary Official Statement and the Official
Statement, the City has not previously failed to comply in any material respect with any continuing
disclosure obligation undertaken pursuant to the Rule; and
(q) except for information which is permitted to be omitted pursuant to the Rule, the
Preliminary Official Statement is, as of its date and as of the date hereof (excluding therefrom the
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information relating to DTC and its book-entry only system, and under the caption “UNDERWRITING,” as
to which no representations or warranties are made) was and is true and correct in all material respects and
did not and does not contain any untrue or misleading statement of a material fact or omitted or omits to
state any material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
All representations, warranties and agreements of the City shall remain operative and in full force
and effect, regardless of any investigations made by or on the Underwriter’s behalf, and shall survive the
delivery of the Series 2018 Bonds.
Section 7. Conditions to the Obligations of the Underwriter
The Underwriter hereby enters into this Bond Purchase Agreement in reliance upon the
representations and warranties of the City contained herein and the representations and warranties to be
contained in the documents and instruments to be delivered on the Closing Date and upon the performance
by the City and the Trustee of their respective obligations both on and as of the date hereof. Accordingly,
the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and
to pay for the Series 2018 Bonds on the Closing Date shall be subject, at the option of the Underwriter, to
the accuracy of the representations and warranties of the City contained herein as of the date hereof and as
of the Closing Date, to the accuracy of the statements of the officers and other officials of the City and the
Trustee made in any certificate or document furnished pursuant to the provisions hereof, to the performance
by the City and the Trustee of their respective obligations to be performed hereunder and under the City
Legal Documents to which it is a party at or prior to the date hereof and at or prior to the Closing Date, and
also shall be subject to the following additional conditions:
(a) On the Closing Date, the City Legal Documents shall have been duly authorized, executed
and delivered by the City, all in substantially the forms heretofore submitted to the Underwriter, with only
such changes as shall have been agreed to in writing by the Underwriter, and shall be in full force and effect;
and there shall be in full force and effect such resolutions of the City Council of the City as, in the opinion
of the Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated
hereby;
(b) On the Closing Date, all necessary action of the City relating to the issuance and sale of
the Series 2018 Bonds will have been taken and will be in full force and effect and will not have been
amended, modified or supplemented;
(c) On 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:
(i) City Legal Documents and City Resolution. The City Legal Documents, each duly
executed by the respective parties thereto, and a certified copy of the City Resolution (defined
herein);
(ii) Official Statement. A copy of the Official Statement, executed by an authorized
officer of the City;
(iii) Opinion of Bond Counsel. The approving opinion, dated the date hereof and
addressed to the City, of Bond Counsel in substantially the form of Appendix D to the Official
Statement;
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(iv) Supplemental Opinion of Bond Counsel. A supplemental opinion or opinions of
Bond Counsel addressed to the Underwriter, in form and substance acceptable to the Underwriter,
and dated the date of the Closing substantially in the form attached as Exhibit B:
(v) Defeasance Opinion of Bond Counsel. An opinion of Bond Counsel, dated the
Closing Date, and addressed to the U.S. Bank National Association, as trustee for the Prior Bonds,
substantially in the form attached hereto as Exhibit C;
(vi) Opinion of the City Attorney. An opinion of the City Attorney to the City dated
the Closing Date and addressed to the Underwriter, to the effect that:
(A) the City is a charter city duly organized and existing under the laws of the
State;
(B) the City Resolution was duly adopted at a meeting of the City Council of
the City that was called and held pursuant to law and with all public notice required by law
and at which a quorum was present and acting throughout, and is in full force and effect
and has not been amended or repealed;
(C) other than as otherwise disclosed in the Preliminary Official Statement and
the Official Statement, there is no action, suit, proceeding or investigation at law or in
equity before or by any court, public board or body, pending or, to the best knowledge of
such counsel after reasonable investigation, threatened against or affecting the City, to
restrain or enjoin the execution, delivery or sale of the Series 2018 Bonds, or in any way
contesting or affecting the validity or enforceability of the City Legal Documents, or in any
way contesting or affecting the existence of the City or the title of any official of the City
to such person’s office, or contesting the power of the City or its authority with respect to
the City Legal Documents or contesting the completeness or accuracy of the Preliminary
Official Statement or the Official Statement or any supplement or amendment thereto or
asserting that the Preliminary Official Statement or the Official Statement contained any
untrue statement of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(D) The rates, fees and charges for the services provided by the Water System
have been established in a manner that complies in all material respects with the applicable
requirements of Articles XIIIC and XIIID of the California Constitution and other
applicable laws of the State;
(E) the execution and delivery by the City of the City Legal Documents, the
adoption of the City Resolution, and compliance by the City with the provisions of the
foregoing, under the circumstances contemplated thereby, 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 bound or
by any existing law, regulation, court order or consent decree to which the City or any of
its assets is subject;
(F) as authorized by the City Resolution, the City Legal Documents have been
duly authorized, executed and delivered by the City and, assuming due authorization,
execution and delivery by the other parties thereto, as applicable, constitute legal, valid and
binding agreements of the City enforceable in accordance with their respective terms,
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subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement
of creditors’ rights generally and the limitations on legal remedies against public agencies
in the State and the application of equitable principles if equitable remedies are sought; and
(G) no authorization, approval, consent, or other order of the United States of
America, the State, or any other governmental authority or agency within the State having
jurisdiction over the City is required for the valid authorization, execution, delivery and
performance by the City of the Legal Documents or for the adoption of the City Resolution
which has not been obtained;
(vii) Opinion of Underwriter’s Counsel. The opinion of Schiff Hardin, LLP
(“Underwriter’s Counsel”), dated the Closing Date and addressed to the Underwriter, to the effect
that, the on the basis of the information made available to them, no facts came to their attention in
connection with the preparation of the Official Statement which cause them to believe that the
Official Statement as of its date (excluding therefrom financial and statistical data, projections,
statements relating to DTC, Cede & Co. and the operation of the book-entry system and the
appendices, except for APPENDIX E “FORM OF CONTINUING DISCLOSURE CERTIFICATE,” as to all
of which no view need be expressed) contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading in any material respect, and the Continuing Disclosure
Certificate provides a suitable basis for the Underwriter, in connection with the Offering (as defined
in Rule 15c2-12) of the Series 2018 Bonds to make a reasonable determination as required by
section (b)(5) of such Rule;
(viii) Certificate of the City. A certificate of a duly authorized official of the City, dated
the Closing Date, in form and substance satisfactory to the Underwriter, to the effect that (A) the
City’s representations and warranties contained in the City Legal Documents are true and correct
on and as of the Closing Date with the same effect as if made on the Closing Date; (B) the City
Legal Documents have been executed and are in full force and effect; (C) the City has complied or
is then in compliance with all agreements and has satisfied all conditions on its part to be observed
or satisfied under each City Legal Document at or before the Closing; and (D) no event 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, as
then supplemented or amended or is not reflected in the Official Statement but should be reflected
therein in order to make the statements therein, in light of the circumstances under which they were
made, not misleading in any material respect;
(ix) Certificate of U.S. Bank. A certificate of a duly authorized official of U.S. Bank
National Association (“U.S. Bank”), dated the Closing Date, to the effect that: (A) U.S. Bank is a
national banking association organized and existing under and by virtue of the laws of the United
States, having the full power and being qualified to enter into and perform its duties under the
Indenture and the Escrow Agreement, and to authenticate and deliver the Series 2018 Bonds to the
Underwriter; (B) U.S. Bank is duly authorized to enter into the Indenture and the Escrow
Agreement, and to authenticate and deliver the Series 2018 Bonds to the Underwriter pursuant to
the Indenture; (C) when delivered to and paid for by the Underwriter at the Closing, the Series 2018
Bonds will have been duly authenticated and delivered by U.S. Bank; (D) the execution and
delivery of the Indenture and compliance with the respective provisions on the part of U.S. Bank
contained therein, will not conflict with or constitute a breach of or default under any law,
administrative regulation, judgment, decree, loan agreement, indenture, note, resolution, agreement
or other instrument to which U.S. Bank is a party or is otherwise subject (except that no
representation, warranty or agreement is made with respect to any federal or state securities or blue
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sky laws or regulations), which conflict, breach or default would materially impair the ability of
U.S. Bank to perform its respective obligations under the Indenture or the Escrow Agreement, 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 U.S. Bank pursuant to the lien created by the Indenture under the
terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture,
bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and
(E) to the best of the knowledge of U.S. Bank, it has not been served with any action, suit,
proceeding, inquiry or investigation in law or in equity, before or by any court, governmental
agency, public board or body, nor is any such action or other proceeding threatened against U.S.
Bank, affecting the existence of U.S. Bank, or the titles of its officers to their respective offices or
seeking to prohibit, restrain, or enjoining the execution and delivery of the Series 2018 Bonds or
the collection of revenues to be applied to pay the principal, premium, if any, and interest with
respect to the Series 2018 Bonds, or the pledge thereof, or in any way contesting or affecting the
validity or enforceability of the Indenture or the Escrow Agreement, or contesting the powers of
U.S. Bank or its authority to enter into, adopt or perform its obligations under any of the foregoing
to which it is a party, wherein an unfavorable decision, ruling or funding would materially adversely
affect the validity or enforceability of the Indenture or the Escrow Agreement or the power and
authority of U.S. Bank to enter into and perform its duties under the Indenture or the Escrow
Agreement and to authenticate and deliver the Series 2018 Bonds to or upon the order of the
Underwriter;
(x) General Resolution of U.S. Bank. A certified copy of the general resolution of
U.S. Bank authorizing the execution and delivery of the Indenture and the Escrow Agreement;
(xi) Opinion of Counsel to U.S. Bank. The opinion, dated the Closing Date and
addressed to the Underwriter and the City, of Counsel to U.S. Bank in its capacities as the Trustee
and the Escrow Bank, to the effect that: (A) U.S. Bank has been duly organized as a national
banking association under the laws of the United States with trust powers, having full power and
authority to enter into and to perform its duties as Trustee under the Indenture and the Escrow
Agreement; (B) U.S. Bank has duly authorized, executed and delivered the Indenture and the
Escrow Agreement, and by all proper corporate action has authorized the acceptance of the trusts
of the Indenture; (C) the Indenture and the Escrow Agreement each constitute the legally valid and
binding agreement of U.S. Bank, enforceable against U.S. Bank in accordance with its respective
terms, and (D) the Series 2018 Bonds have been validly authenticated and delivered by U.S. Bank
to the Underwriter;
(xii) Verification Report. A verification report of ________________ (the
“Verification Agent”) with respect to the _______________;
(xiii) Tax Certificate. A Tax Certificate of the City in form and substance acceptable to
Bond Counsel;
(xiv) IRS Form 8038-G. Evidence that the federal tax information form 8038-G has
been prepared for filing;
(xv) CDIAC Notices of Sale. A copy of the Notice of Proposed Sale and Report of Final
Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant
to Section 8855(g) of the California Government Code;
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(xvi) DTC Blanket Letter of Representations. A copy of the City’s executed Blanket
Letter of Representation to The Depository Trust Company;
(xvii) Rating Letter. Evidence of a rating of “__” by S&P Global Ratings (“S&P”), being
in full force and effect as of the Closing Date; and
(xviii) Additional Documents. Such additional legal opinions, certificates, instruments or
evidences thereof and other documents as the Counsel to the Underwriter or Bond Counsel may
request to evidence the due authorization, execution and delivery of the Series 2018 Bonds and the
conformity of the Series 2018 Bonds, the City Legal Documents with the terms of the Series 2018
Bonds and the descriptions thereof in the Official Statement.
(d) the Underwriter shall have the right to terminate this Bond Purchase Agreement, without
liability therefor, by notification to the City if at any time at or prior to the Closing:
(i) any event shall occur or facts are discovered which causes any statement contained
in the Official Statement to be materially misleading or results in a failure of the Official Statement
to state a material fact necessary to make the statements in the Official Statement, in the light of
the circumstances under which they were made, not misleading; or
(ii) the marketability of the Series 2018 Bonds or the market price thereof, in the
reasonable opinion of the Underwriter, has been materially and adversely affected by disruptive
events, occurrences or conditions in the securities or debt markets, including but not limited to, an
amendment to the Constitution of the United States or by any legislation in or by the Congress of
the United States or by the State, or the amendment of legislation pending as of the date of this
Bond Purchase Agreement in the Congress of the United States, or the recommendation to Congress
or endorsement for passage (by press release, other form of notice or otherwise) of legislation by
the President of the United States, the Treasury Department of the United States, the Internal
Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the
United States Senate or the Committee on Ways and Means of the United States House of
Representatives, or the proposal for consideration of legislation by either such Committee or by
any member thereof, or the presentment of legislation for consideration as an option by either such
Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States,
or the favorable reporting for passage of legislation to either House of the Congress of the United
States by a Committee of such House to which such legislation has been referred for consideration,
or any decision of any Federal or State court or any ruling or regulation (final, temporary or
proposed) or official statement on behalf of the United States Treasury Department, the Internal
Revenue Service or other federal or State authority materially adversely affecting the federal or
State tax status of the City, or the interest on bonds or notes or obligations of the general character
of the Series 2018 Bonds; or
(iii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted
by any governmental body, department or agency of the State, or a decision by any court of
competent jurisdiction within the State or any court of the United States shall be rendered which,
in the reasonable opinion of the Underwriter, materially adversely affects the market price of the
Series 2018 Bonds; or
(iv) legislation shall be enacted by the Congress of the United States, or a decision by
a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement
by, or on behalf of, the Securities and Exchange Commission or any other governmental agency
having jurisdiction of the subject matter shall be issued or made to the effect that the issuance,
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offering or sale of obligations of the general character of the Series 2018 Bonds, or the issuance,
offering or sale of the Series 2018 Bonds, including all underlying obligations, as contemplated
hereby or by the Preliminary Official Statement or the Official Statement, is in violation or would
be in violation of, or that obligations of the general character of the Series 2018 Bonds, or the Series
2018 Bonds, are not exempt from registration under, any provision of the federal securities laws,
including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs
to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or
(v) there shall have occurred any outbreak or escalation of hostilities or terrorist
activities or other local, national or international calamity or crisis, or a default with respect to the
debt obligations of, or the institution of proceedings under the federal bankruptcy laws by or
against, any state of the United States or agency thereof, or any city in the United States having a
population of over one million, the effect of which on the financial markets of the United States
will be such as in the Underwriter’s reasonable judgment, makes it impracticable for the
Underwriter to market the Series 2018 Bonds or enforce contracts for the sale of the Series 2018
Bonds; or
(vi) there shall have occurred or any notice shall have been given of any intended
downgrading, suspension, withdrawal or negative change in credit watch status by any national
rating service to the City’s obligations; or
(vii) the commencement of any action, suit or proceeding described in Section 6(m) or
Section 7(n) which, in the reasonable judgment of the Underwriter, materially adversely affects the
market price of the Series 2018 Bonds; or
(viii) the declaration of a general banking moratorium by federal, New York or
California authorities, the general suspension of trading on any national securities exchange or a
material disruption in securities settlement, payment or clearance services, which event, in the
reasonable judgment of the Underwriter, would materially adversely affect the market price of the
Series 2018 Bonds; or
(ix) the imposition by the New York Stock Exchange or other national securities
exchange, or any governmental authority, of any material restrictions not now in force with respect
to obligations of the general character of the Series 2018 Bonds or securities generally, or the
material increase of any such restrictions now in force, including those relating to the extension of
credit by, or the charge to net capital requirements of, the Underwriter, which, in the judgment of
the Underwriter, would materially adversely affect the market price of the Series 2018 Bonds; or
(x) there shall have been any materially adverse change in the affairs of the City which
in the reasonable judgment of the Underwriter materially adversely affects the ability of the
Underwriter to market the Series 2018 Bonds.
If the City shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or
if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase
Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the City shall
be under further obligation hereunder, except as further set forth in Section 9 and Section 10.
Section 8. Expenses
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be
paid the expenses incident to the performance of the obligations of the City hereunder including but not
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limited to (i) the costs of the preparation and printing, or other reproduction (for distribution on or prior to
the date hereof) of the City Legal Documents and the cost of preparing, printing, issuing and delivering the
definitive Bonds, (ii) the fees and disbursements of the Municipal Advisor, the Verification Agent,
accountants, or other experts or consultants retained by the City, (iii) the fees and disbursements of the City
Attorney, Bond Counsel, and Disclosure Counsel, (iv) the fees and disbursements of U.S. Bank, and (v) the
cost of preparation and printing of the Preliminary Official Statement and any supplements and amendments
thereto and the cost of preparation and printing of the Official Statement and any supplements and
amendments thereto, including the requisite number of copies thereof for distribution by the Underwriter.
The City and the Underwriter intend that the City will pay all expenses of City’s employees that are
incidental to implementing this Bond Purchase Agreement, including, but not limited to, meals,
transportation, and lodging, of those employees, and the City shall reimburse the Underwriter if the
Underwriter pays for any of such expenses on behalf of the City.
(b) The Underwriter shall pay all expenses incurred by them in connection with the public
offering and distribution of the Series 2018 Bonds including, but not limited to: (i) the fees and
disbursements of Underwriter’s Counsel; (ii) all advertising expenses in connection with the offering of the
Series 2018 Bonds; and (iii) all out-of-pocket disbursements and expenses incurred by the Underwriter in
connection with the offering and distribution of the Series 2018 Bonds (including travel and other expenses,
CDIAC and blue sky filing fees, CUSIP Service Bureau fees, and any other fees and expenses), except as
provided in Section 9(a) or as otherwise agreed to by the Underwriter and the County from the
Underwriter’s discount set forth in Section 1.
Section 9. Covenants of the City
The City covenants with the Underwriter that:
(a) If between the date hereof and the date which is not less than 25 days after the End of the
Underwriting Period for the Series 2018 Bonds (as defined below), an event occurs, or facts or conditions
become known of which the City has knowledge which in the opinion of counsel to the Underwriter or
counsel to the City, might or would cause the information 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 made, not misleading, the City will notify the Underwriter, and, if in the
opinion of the Underwriter, such event requires the preparation and publication of a supplement or
amendment to the Official Statement, the City will forthwith prepare and furnish to the Underwriter (at the
expense of the City) a reasonable number of copies of an amendment of or supplement to the Official
Statement (in the form and substance satisfactory to the Underwriter) 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 the light of the circumstances existing at the time
the Official Statement is delivered to prospective purchasers, not misleading. If such notification shall be
after the Closing, the City shall forthwith provide to the Underwriter such certificates as the Underwriter
may deem necessary to evidence the truth and accuracy of such supplement or amendment to the Official
Statement. For the purposes of this subsection, between the date hereof and the date which is 25 days after
the End of the Underwriting Period for the Series 2018 Bonds, the City will furnish such information with
respect to itself as the Underwriter may from time to time reasonably request;
(b) If the information contained in the Official Statement is amended or supplemented pursuant
to subparagraph (a) of this Section 10, at the time of such 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 which is 25 days after the “End of the Underwriting Period” for the
Series 2018 Bonds, the portions of the Official Statement so supplemented or amended (including any
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financial and statistical data contained therein), excluding therefrom the information relating to DTC and
its book-entry only system and under the caption “UNDERWRITING”), will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary to make such
information therein, in the light of the circumstances under which it was made, not misleading;
(c) As used herein and for the purposes of the foregoing, the term “End of Underwriting
Period” for the Series 2018 Bonds shall mean the earlier of (i) the Closing Date unless the City shall have
been notified in writing to the contrary by the Underwriter on or prior to the Closing Date or (ii) the date
on which the End of the Underwriting Period for the Series 2018 Bonds has occurred under the Rule,
provided, however, that the City may treat as the End of the Underwriting Period for the Series 2018 Bonds
the date specified as such in a notice from the Underwriter stating the date which is the End of the
Underwriting Period;
(d) The City will advise the Underwriter immediately of receipt by the City of any notification
with respect to the suspension of the qualification of the Series 2018 Bonds for sale in any jurisdiction or
the initiation or threat of any proceeding for that purpose;
(e) The City will furnish such information, execute such instruments and take such other action
in cooperation with the Underwriter as the Underwriter may request to qualify the Series 2018 Bonds for
offer and sale under the Blue Sky or other securities laws and regulations of such states and other
jurisdictions of the United States as the Underwriter may designate; provided, however, that the City shall
not be required to register as a dealer or broker or foreign corporation in any such state or jurisdiction or
consent to service of process therein; and
(f) The City will perform all actions as may be requested by the Underwriter (including
delivery of an appropriate certificate with respect to the Preliminary Official Statement) in order for the
Underwriter to comply with the applicable provisions of the Rule.
(g) Between the date hereof and the Closing Date, without the prior written consent of the
Underwriter, the City will not have issued any bonds, notes, or other obligations for borrowed money, in
each case payable from Revenues.
Section 10. Establishment of Issue Price
(a) The Underwriter agrees to assist the City in establishing the issue price of the Series 2018
Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together
with the supporting pricing wires or equivalent communications, substantially in the form attached hereto
as Exhibit A, with such modifications as may be appropriate or necessary, in the reasonable judgment of
the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or
the initial offering price or prices to the public of the Series 2018 Bonds. All actions to be taken by the
City under this section to establish the issue price of the Series 2018 Bonds may be taken on behalf of the
City by PFM Financial Advisors LLC (the “Municipal Advisor”) to the City and any notice or report to be
provided to the City may be provided to the Municipal Advisor.
(b) Except as otherwise set forth in Schedule A to Exhibit A attached hereto, the City will treat
the first price at which 10% of each maturity of the Series 2018 Bonds (the “10% test” is sold to the public
as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP
number within that maturity will be subject to the 10% test). At or promptly after the execution of this
Bond Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold
to the public each maturity of Bonds.
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(c) The Underwriter confirms that it has offered the Series 2018 Bonds to the public on or
before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering price”),
or at the corresponding yield or yields, set forth in Schedule A to Exhibit A attached hereto, except as
otherwise set forth therein. Schedule A to Exhibit A also sets forth, as of the date of this Bond Purchase
Agreement, the maturities, if any, of the Series 2018 Bonds for which the 10% test has not been satisfied
and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall
apply, which will allow the City to treat the initial offering price to the public of each such maturity as of
the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-
the-offering-price rule remains applicable to any maturity of the Series 2018 Bonds, the Underwriter will
neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial
offering price to the public during the period starting on the sale date and ending on the earlier of the
following:
(i) the close of the fifth (5th) business day after the sale date; or
(ii) the date on which the Underwriter has sold at least 10% of that maturity of the
Series 2018 Bonds to the public at a price that is no higher than the initial offering price to the
public.
(d) The Underwriter shall promptly advise the City when it has sold 10% of that maturity of
the Series 2018 Bonds to the public at a price that is no higher than the initial offering price to the public,
if that occurs prior to the close of the fifth (5th) business day after the sale date.
(e) The Underwriter confirms that any selling group agreement and any retail distribution
agreement relating to the initial sale of the Series 2018 Bonds to the public, together with the related pricing
wires, contains or will contain language obligating each dealer who is a member of the selling group and
each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices
at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the
Underwriter that either the 10% test has been satisfied as to the Series 2018 Bonds of that maturity or all
Bonds of that maturity have been sold to the public and (B) comply with the hold-the-offering-price rule,
if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that,
in making the representation set forth in this subsection, the Underwriter will rely on (i) in the event a
selling group has been created in connection with the initial sale of the Series 2018 Bonds to the public, the
agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price
rule, if applicable, as set forth in a selling group agreement and the related pricing wires, and (ii) in the
event that a retail distribution agreement was employed in connection with the initial sale of the Series 2018
Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with
the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related
pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any
dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution
agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as
applicable to the Series 2018 Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party
to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes
of this section:
(i) “public” means any person other than an underwriter or a related party,
(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with
the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial
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sale of the Series 2018 Bonds to the public and (B) any person that agrees pursuant to a written
contract directly or indirectly with a person described in clause (A) to participate in the initial sale
of the Series 2018 Bonds to the public (including a member of a selling group or a party to a retail
distribution agreement participating in the initial sale of the Series 2018 Bonds to the public),
(iii) a purchaser of any of the Series 2018 Bonds is a “related party” to an underwriter
if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common
ownership of the voting power or the total value of their stock, if both entities are corporations
(including direct ownership by one corporation of another), (ii) more than 50% common ownership
of their capital interests or profits interests, if both entities are partnerships (including direct
ownership by one partnership of another), or (iii) more than 50% common ownership of the value
of the outstanding stock of the corporation or the capital interests or profit interests of the
partnership, as applicable, if one entity is a corporation and the other entity is a partnership
(including direct ownership of the applicable stock or interests by one entity of the other), and
(iv) “sale date” means the date of execution of this Bond Purchase Agreement by all
parties.
Section 11. Notices
Any notice or other communication to be given to the City under this Bond Purchase Agreement
may be given by delivering the same in writing at the address of the City set forth above and any such notice
or other communication to be given to the Underwriter shall be delivered to the following address:
Raymond James & Associates, Inc.
One Embarcadero, Suite 650
San Francisco, CA 94111
Attention: Robert J. Larkins, Managing Director
Telephone: (415) 616-8025
Facsimile: (415) 616-8070
Section 12. Parties in Interest
This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter and
no other person shall acquire or have any right hereunder or by virtue hereof. All the representations and
warranties of the parties hereto contained in this Bond Purchase Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of the Underwriter, the City until
the earlier of (a) delivery of and payment for the Series 2018 Bonds hereunder and (b) any termination of
this Bond Purchase Agreement.
Section 13. Execution in Counterparts; Electronic Transmission
This Bond Purchase Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may execute the Purchase
Agreement by signing any such counterpart.
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Section 14. Headings
The headings of the sections of this Bond Purchase Agreement are inserted for convenience only
and shall not be deemed to be part hereof.
Section 15. Effectiveness
This Bond Purchase Agreement shall become effective and binding upon the respective parties
hereto upon the execution by the Underwriter and the acceptance hereof by the duly authorized
representatives of the City and shall be valid and enforceable as of the time of such acceptance.
Section 16. Choice of Law
The validity, interpretation and performance of this Bond Purchase Agreement shall be governed
by the laws of the State, without regard to conflicts of law.
Section 17. Severability
In the event any provision of this Bond Purchase Agreement shall be held invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other
provision hereof.
Section 18. Entire Agreement
The Bond Purchase Agreement, when accepted by the City in writing as heretofore specified, shall
constitute the entire agreement between the City and the Underwriter.
Section 19. Headings
The headings of the sections of this Bond Purchase Agreement are inserted for convenience only
and shall not be deemed to be part hereof.
Section 20. No Assignment
The rights and obligations created by this Bond Purchase Agreement shall not be subject to
assignment by the Underwriter or the City without the prior written consent of the other parties hereto.
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IN WITNESS WHEREOF, the parties hereto, by their representatives thereunto duly authorized,
have executed and delivered this Agreement, effective as of the day and year first above written.
RAYMOND JAMES & ASSOCIATES, INC.
By:
Managing Director
Accepted at _______ [AM/PM] as of the date hereof:
CITY OF SAN LUIS OBISPO
By:
Authorized Officer
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SCHEDULE I
CITY OF SAN LUIS OBISPO
WATER REVENUE BONDS, SERIES 2018
$__,___000 Serial Bonds
Maturity Date
(June 1) Principal Amount Interest Rate
Yield Price
REDEMPTION PROVISIONS
Optional Redemption. The Series 2018 Bonds maturing on and before June 1, 20__ are not subject
to call or redemption prior to maturity.
The Series 2018 Bonds maturing on and after June 1, 20__, are subject to redemption prior to their
respective stated maturity dates, at the option of the City, from any source of available funds, as a whole or
in part (in such amounts and maturities as may be specified by the City, or if the City fails to specify such
maturities, in inverse order of maturity) on any date, on or after June 1, 20__, at a redemption price equal
to the principal amount of Series 2018 Bonds called for redemption, together with accrued interest thereon
to the date fixed for redemption, without premium.
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EXHIBIT A
ISSUE PRICE CERTIFICATE
$__,___000
CITY OF SAN LUIS OBISPO, CALIFORNIA
WATER REVENUE REFUNDING BONDS, SERIES 2018
ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Raymond James & Associates, Inc. (the “Underwriter”), hereby
certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the
“Series 2018 Bonds”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity
of the General Rule Maturities, the first price at which at least 10% of such Maturity of the Series 2018
Bonds was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities.
(a) The Underwriter offered the Hold-the-Offering-Price Maturities to the Public for
purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or
before the Sale Date. A copy of the pricing wire or equivalent communication for the Series 2018 Bonds
is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement dated June __, 2018, between the City of
San Luis Obispo, as issuer of the Series 2018 Bonds and the Underwriter, the Underwriter has agreed in
writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell
any of the Series 2018 Bonds of such Maturity to any person at a price that is higher than the Initial
Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-
price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a
member of the selling group, and any retail distribution agreement shall contain the agreement of each
broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-
price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any
Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial
Offering Price for that Maturity of the Series 2018 Bonds during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Series 2018 Bonds listed in
Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Series 2018 Bonds
listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.”
(c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period
starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale
Date (i.e. ________, 2018), or (ii) the date on which the Underwriter has sold at least 10% of such Hold-
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the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for
such Hold-the-Offering-Price Maturity.
(d) Issuer means the City of San Luis Obispo.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different
maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as
separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association,
company, or corporation) other than an Underwriter or a related party to an Underwriter.
(g) Related Party means any entity if an Underwriter and such entity are subject, directly or
indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock,
if both entities are corporations (including direct ownership by one corporation of another), (ii) more than
50% common ownership of their capital interests or profit interests, if both entities are partnerships
(including direct ownership by one partnership of another), or (iii) more than 50% common ownership of
the value of the outstanding stock of the corporation or the capital interests or profit interests of the
partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including
direct ownership of the applicable stock or interests by one entity of the other).
(h) Sale Date means the first day on which there is a binding contract in writing for the sale
of a Maturity of the Series 2018 Bonds. The Sale Date of the Series 2018 Bonds is June __, 2018.
(i) Underwriter means (i) any person that agrees pursuant to a written contract with the
Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of
the Series 2018 Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly
or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the
Series 2018 Bonds to the Public (including a member of a selling group or a party to a retail distribution
agreement participating in the initial sale of the Series 2018 Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this
certificate represents the Underwriter's interpretation of any laws, including specifically Sections 103 and
148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The
undersigned understands that the foregoing information will be relied upon by the Issuer with respect to
certain of the representations set forth in the Tax Certificate and with respect to compliance with the
federal income tax rules affecting the Series 2018 Bonds, and by Orrick, Herrington & Sutcliffe LLP,
Bond Counsel, in connection with rendering its opinion that the interest on the Series 2018 Bonds is
excluded from gross income for federal income tax purposes, the preparation of Internal Revenue Service
Form 8038-G, and other federal income tax advice it may give to the Issuer from time to time relating to
the Series 2018 Bonds. Except as expressly set forth above, the certifications set forth herein may not be
relied upon or used by any third party or for any other purpose.
Dated: _______, 2018
RAYMOND JAMES & ASSOCIATES, INC.
By:__________________________________
Name:________________________________
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND
INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
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SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
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EXHIBIT B
FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
[CLOSING DATE], 2018
Raymond James & Associates, Inc.
San Francisco, California
City of San Luis Obispo
Water Revenue Refunding Bonds, Series 2018
(Supplemental Opinion)
Ladies and Gentlemen:
This letter is addressed to you, as Underwriter, pursuant to Section [7(c)(iv)] of the Bond Purchase
Agreement, dated ___________, 2018 (the “Purchase Contract”), between you and the City of San Luis
Obispo, California (the “Issuer”), providing for the purchase of $____________ principal amount of City
of San Luis Obispo Water Revenue Refunding Bonds, Series 2018 (the “Bonds”). The Bonds are being
issued pursuant to the Indenture, dated as of _____ 1, 2018 (the “Indenture”), between the Issuer and U.S.
Bank National Association, as trustee (the “Trustee”). Capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Purchase
Contract.
We have delivered our final legal opinion (the “Bond Opinion”) as bond counsel to the Issuer
concerning the validity of the Bonds and certain other matters, dated the date hereof and addressed to the
Issuer. You may rely on such opinion as though the same were addressed to you.
In connection with our role as bond counsel to the Issuer, we have reviewed the Purchase Contract,
the Indenture, the Tax Certificate, certain portions of the Official Statement dated _____________, 2018,
with respect to the Bonds (the “Official Statement”), opinions of counsel to the Issuer, the Trustee and
others, certificates of the Issuer, the Trustee and others, and such other documents, opinions and matters to
the extent we deemed necessary to provide the opinions or conclusions set forth herein.
The opinions and conclusions expressed herein are based on an analysis of existing laws,
regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities.
Such opinions or conclusions may be affected by actions taken or omitted or events occurring after the date
hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken
or omitted or events do occur or any other matters come to our attention after the date hereof. We have
assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies)
and the due and legal execution and delivery thereof by, and validity against, any parties other than the
Issuer. We have assumed, without undertaking to verify, the accuracy of the factual matters represented,
warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to
in the third paragraph hereof. We have further assumed compliance with all covenants and agreements
contained in such documents. In addition, we call attention to the fact that the rights and obligations under
the Bonds, the Indenture, the Tax Certificate and the Purchase Contract and their enforceability may be
subject to bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance,
moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable
principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies
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against cities in the State of California. We express no opinion with respect to any indemnification,
contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of
set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of
remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any
opinions with respect to the state or quality of title to or interest in any assets described in or as subject to
the lien of the Indenture or the accuracy or sufficiency of the description contained therein of, or the
remedies available to enforce liens on, any such assets.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the
following opinions or conclusions:
1. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as
amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as
amended.
2. The Purchase Contract has been duly executed and delivered by, and is a valid and binding
agreement of, the Issuer.
3. The statements contained in the Official Statement under the captions “THE SERIES 2018
BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS,”
APPENDIX C—“SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE” and APPENDIX D
– “PROPOSED FORM OF BOND COUNSEL OPINION,” excluding any material that may be treated as
included under such captions by cross reference or reference to other documents or sources, insofar as such
statements expressly summarize certain provisions of the Indenture, and the form and content of our Bond
Opinion, are accurate in all material respects.
4. We are not passing upon and do not assume any responsibility for the accuracy (except as
explicitly stated in paragraph 3 above), completeness or fairness of any of the statements contained in the
Official Statement, and make no representation that we have independently verified the accuracy,
completeness or fairness of any such statements. We do not assume any responsibility for any electronic
version of the Official Statement, and assume that any such version is identical in all respects to the printed
version. In our capacity as bond counsel to the Issuer in connection with issuance of the Bonds, we
participated in conferences with your representatives, your counsel, representatives of the Issuer, its
counsel, the municipal advisor and others, during which conferences the contents of the Official Statement
and related matters were discussed. Based on our participation in the above-referenced conferences (which
did not extend beyond the date of the Official Statement), and in reliance thereon, on oral and written
statements and representations of the Issuer and others and on the records, documents, certificates, opinions
and matters herein mentioned, subject to the limitations on our role as bond counsel, we advise you as a
matter of fact and not opinion that no facts came to the attention of the attorneys in our firm rendering legal
services with respect to the Official Statement which caused us to believe that the Official Statement as of
its date (except for any CUSIP numbers, financial, accounting, statistical or economic, engineering or
demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or
expressions of opinion, any information about valuation, real estate, environmental matters or about
litigation, any statements about compliance with prior continuing disclosure undertakings, or any
information about book-entry, DTC, ratings, rating agencies, the Underwriter, underwriting, and the
information contained in Appendices A, E and F, included or referred to therein or omitted therefrom, which
we expressly exclude from the scope of this paragraph and as to which we express no opinion or view)
contained any untrue statement of a material fact or omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading. No
responsibility is undertaken or view expressed with respect to any other disclosure document, materials or
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activity, or as to any information from another document or source referred to by or incorporated by
reference in the Official Statement.
This letter is furnished by us as bond counsel to the Issuer. No attorney-client relationship has
existed or exists between our firm and you in connection with the Bonds or by virtue of this letter. We
disclaim any obligation to update this letter. This letter is delivered to you as Underwriter of the Bonds, is
solely for your benefit as such Underwriter in connection with the original issuance of the Bonds on the
date hereof, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other
purpose or by any other person. This letter is not intended to, and may not, be relied upon by owners of
Bonds or by any other party to whom it is not specifically addressed.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
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EXHIBIT C
FORM OF DEFEASANCE OPINION OF BOND COUNSEL
[CLOSING DATE], 2018
U.S. Bank National Association
Los Angeles, California
City of San Luis Obispo
2006 Water Revenue Bonds
(Defeasance Opinion)
Ladies and Gentlemen:
We have acted as bond counsel to the City of San Luis Obispo (the “Issuer”) in connection with its
issuance of $_________ principal amount of City of San Luis Obispo Water Revenue Refunding Bonds,
Series 2018 (the “Refunding Bonds”). A portion of the proceeds of the Refunding Bonds will be applied
to refund the City of San Luis Obispo 2006 Water Revenue Bonds (the “Bonds”). The Bonds were issued
pursuant to an Indenture of Trust, dated as of August 1, 2006 (the “Indenture”), between the Issuer and U.S.
Bank National Association, as trustee (the “Trustee”). This opinion is being provided for purposes of
Article IX of the Indenture related to defeasance.
In such connection, we have reviewed portions of the Indenture, an escrow agreement, dated as of
_________, 2018 (the “Escrow Agreement”), between the Issuer and U.S. Bank National Association, as
escrow agent (the “Escrow Agent”), a report by [VERIFICATION AGENT] verifying the accuracy of
certain computations relating to the escrow and the Bonds (the “Verification Report”), a written direction
of the Issuer dated ____________, 2018 (the “Written Direction”), and such other documents and matters
to the extent we deemed necessary to render the opinion set forth herein.
The opinion expressed herein is based on an analysis of existing laws, regulations, rulings and court
decisions and covers certain matters not directly addressed by such authorities. Such opinion may be
affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to
determine, or to inform any person, whether any such actions are taken or omitted or events do occur or
any other matters come to our attention after the date hereof. We express no opinion as to the effect of any
bankruptcy, insolvency, receivership, reorganization, arrangement, fraudulent conveyance, moratorium or
other laws relating to or affecting creditors’ rights. We have assumed the genuineness of all documents
and signatures presented to us (whether as originals or copies) and the due and legal execution and delivery
thereof by, and validity against, all parties thereto. We have assumed, without undertaking to verify, the
accuracy of the factual matters represented, warranted or certified in the documents referred to in the second
paragraph hereof [and the certifications and representations made in connection with the subscription for
certain United States Treasury Obligations - State and Local Government Series]. We have further
assumed compliance by all parties with all covenants and agreements contained in such documents.
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In rendering the following opinion, we have made no independent calculations or verifications
concerning the actual deposit of the amounts and obligations specified in the Escrow Agreement, the
outstanding principal amount of the Bonds, the principal or redemption price and interest requirements with
respect to the Bonds, the adequacy of the amounts deposited pursuant to the Escrow Agreement and the
investment income thereon to pay such principal or redemption price and interest requirements when due,
or the accuracy of any of the numbers, computations, assumptions or conclusions contained in the
Verification Report, but with respect to all such matters have relied solely upon, and assumed, the accuracy
of the Verification Report, the representations in the Escrow Agreement and related certificates. We have
also assumed that the deposit required to be made to the Escrow Fund established pursuant to the Escrow
Agreement has been made, that all other instructions set forth in the Indenture, the Written Direction and
the Escrow Agreement have been complied with, and that provision satisfactory to the Trustee has been
made with respect to the giving of notice of redemption of the Bonds.
Certain actions (including, without limitation, investment or reinvestment of any cash in the Escrow
Fund now or hereafter arising or substitution of any investments in the Escrow Fund) may be taken under
the circumstances and subject to the terms and conditions set forth in the Escrow Agreement. No opinion
is expressed herein if any such change occurs or action is taken or omitted other than with our advice and
approval.
Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the
opinion that the pledge of Net Revenues and other funds provided for in the Indenture and all other
obligations of the Trustee and the Issuer under the Indenture with respect to the bonds shall cease and
terminate, except only the obligations of the Issuer under Section 5.10 of the Indenture regarding tax
covenants relating to the Bonds, the obligation of the Trustee to transfer and exchange Bonds under the
Indenture, the obligation of the Issuer to pay or cause to be paid to the Owners of such Bonds, from the
amounts so deposited with the Trustee, all sums due thereon, and the obligations of the Issuer to compensate
and indemnify the Trustee under Section 6.06 of the Indenture.
This letter is furnished by us as bond counsel to the Issuer. No attorney-client relationship has
existed or exists between our firm and the addressee of this letter in connection with the Bonds or by virtue
of this letter. We disclaim any obligation to update this letter. This letter is delivered to the addressee
hereof solely for their benefit in connection with the defeasance of the Bonds on the date hereof and is not
to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other
person. This letter is not intended to, and may not, be relied upon by owners of Bonds or by owners of
Refunding Bonds or by any other party to whom it is not specifically addressed.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP