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HomeMy WebLinkAboutA06 CommitmentAgtQuint & Thimmig LLP $4,125,000 TUSTIN PUBLIC FINANCING AUTHORITY Water Revenue Bonds, Series 2024 (Subordinate Lien) COMMITMENT AGREEMENT February 7, 2024 Tustin Public Financing Authority 300 Centennial Way Tustin, California 92780 City of Tustin 300 Centennial Way Tustin, California 92780 Ladies and Gentlemen: 12/18/23 01/03/24 01/10/24 01/22/24 01/26/24 01/30/24 The undersigned, Capital One Public Funding, LLC, acting solely as lender and not as broker, dealer, municipal securities underwriter, municipal advisor, or fiduciary (the "Purchaser"), hereby offers to enter into this Commitment Agreement (the "Agreement") with the Tustin Public Financing Authority (the "Authority") and the City of Tustin (the "City"), which, upon the Authority's and City's acceptance hereof, will be binding upon the Authority, the City and the Purchaser. This offer is made subject to written acceptance by the Authority and the City and the delivery of such acceptance to the Purchaser at or prior to 5:00 P.M., California time, on the date hereof. If this offer is not so accepted, this offer will be subject to withdrawal by the Purchaser upon notice delivered to the Authority and the City at any time prior to acceptance by the Authority and the City. This Agreement is provided to the Authority and the City pursuant to and in reliance upon the "bank exemption" provided under the municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1 et seq. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Indenture (as defined herein). The Authority and the City acknowledge that: (a) The Purchaser is acting in this transaction solely for its own loan account and not as a fiduciary for the Authority or the City or in the capacity of broker, dealer, municipal securities underwriter, placement agent, or municipal advisor; (b) The Purchaser has not provided, and will not provide, financial, legal (including securities law), tax, accounting or other advice to or on behalf of the Authority or the City (including to any financial advisor or placement agent engaged by the Authority or the City) 20027.04 with respect to the structuring of the financing or the execution and delivery of the Indenture or the Installment Sale Agreement or the issuance of the Bonds; (c) The Purchaser has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934, as amended, to the Authority or the City with respect to the transactions relating to the structuring of the financing or the execution and delivery of the Indenture or the Installment Sale Agreement or the issuance of the Bonds and the discussions, undertakings, and procedures leading thereto; (d) Each of the Authority, the City, their financial advisor, and their placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to the Indenture, the Installment Sale Agreement, the Bonds, and the financing transaction from its financial, legal, and other advisors (and not the Purchaser or its affiliates) to the extent that the Authority, the City, their financial advisor, or their placement agent desires to, should, or needs to obtain such advice; (e) The Purchaser has expressed no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the financial advisor or the placement agent for the Authority and the City, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the financial advisor or placement agent for the Authority and the City, with respect to any such matters; and (f) The transactions between the Authority, the City, and the Purchaser are arm's-length, commercial transactions in which the Purchaser is acting and has acted solely as a principal and for its own interest, and the Purchaser has not made recommendations to the Authority or the City with respect to the transactions relating to the Indenture, the Installment Sale Agreement, and the Bonds. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions, and in reliance upon the representations, warranties and agreements set forth herein, the Purchaser hereby agrees to extend credit to the Authority and the City by purchasing, and the Authority agrees to sell and deliver to the Purchaser, all (but not less than all) of the $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) (the "Bonds"). The Bonds shall be dated the date of delivery thereof and shall mature on such date and shall bear interest at such rate set forth in Schedule I attached hereto. Interest on the Bonds shall be payable semiannually on April 1 and October 1 of each year, commencing October 1, 2024. The aggregate purchase price for the Bonds shall be $4,125,000, being the principal amount of the Bonds. (b) The Bonds shall be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985, consisting of Article 4, Chapter 5, Division 7, Title 1 of the California Government Code (commencing with Section 6584) (the "Bond Law"), and an Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), a resolution of the governing body of the Authority adopted on February 6, 2024 (the "Authority Resolution"), and a resolution of the City Council of the City, adopted on February 6, 2024 (the "City Resolution"). The Bonds shall be substantially in the form described in, and shall be issued and secured under the provisions of, the Indenture. The Bonds shall be secured by a pledge, charge and lien upon Revenues which consist primarily of installment payments (the "Installment -2- Payments") to be made by the City to the Authority pursuant to an Installment Sale Agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the City and the Authority. The City's obligations under the Installment Sale Agreement will be subordinate to the City's obligations with respect to the payment of debt service on its City of Tustin (Orange County, California) 2016 Water Refunding Revenue Bonds and its City of Tustin (Orange County, California) Taxable Water Refunding Revenue Bonds, Series 2020. The Bonds are being issued for the purpose of providing funds to finance the acquisition and construction of certain improvements and facilities to the City's municipal water enterprise (the "Enterprise"). The Indenture, the Installment Sale Agreement and this Commitment Agreement are herein referred to as the "Financing Documents." (c) At 8:00 o'clock A.M., Pacific Standard time, on February 14, 2024, or at such other time or on such other date as mutually agreed upon by the Authority, the City and the Purchaser (such time and date herein referred to as the "Closing Date"), the Authority will, subject to the terms and conditions hereof, sell and deliver, or cause to be delivered, the Bonds to the Purchaser, in definitive form, duly executed and authenticated, together with the other documents mentioned herein, and subject to the terms and conditions hereof, the Purchaser will accept such delivery and pay the purchase price of the Bonds as set forth in subparagraph (a) above in immediately available funds (such delivery and payment being herein referred to as the "Closing") to the order of the Trustee. Sale, delivery and payment as aforesaid shall be made at the offices of Quint & Thimmig LLP ("Bond Counsel"), 900 Larkspur Landing Circle, Suite 270, Larkspur, CA 94939-1726, or such other place as shall have been mutually agreed upon by the Authority, the City and the Purchaser. 3. Representations, Warranties and Agreements of the Authority and the City. (a) The Authority hereby represents, warrants and agrees with the Purchaser as follows: (1) The Authority is, and will be on the Closing Date, a joint exercise of powers entity organized and operating pursuant to the laws of the State of California with the full power and authority to issue the Bonds pursuant to the Bond Law and to enter into the Financing Documents to which the Authority is a party; (2) By all necessary official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in, the Financing Documents to which the Authority is a party and the consummation by it of all other transactions contemplated by the Financing Documents to which the Authority is a party; (3) The Financing Documents to which the Authority is a party, when duly executed by the other party thereto, will constitute the legal, valid and binding agreements of the Authority enforceable against the Authority in accordance with their respective terms; except as enforcement of each of the Financing Documents may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance laws, laws affecting the enforcement of creditors rights, the application of equitable principles and judicial discretion, by the covenant of good faith and fair dealing which may be implied by law into contracts, and by the limitations on legal remedies against public agencies in the State of California; -3- (4) The Authority is not in breach of or default under any applicable constitutional provision, law or administrative regulation to which it is subject or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or to which the Authority or any of its property or 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 such a default or event of default in any material respect under any such instrument; and the issuance of the Bonds and the execution and delivery of the Financing Documents to which the Authority is a party and compliance with the provisions on the Authority's part contained herein and therein, will not in any material respect conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority 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 of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided in the Indenture or the Installment Sale Agreement; (5) 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, to the best knowledge of the Authority, threatened against the Authority affecting the corporate existence of the Authority or affecting or seeking to prohibit, restrain or enjoin the issuance, sale or delivery of the Bonds or contesting or affecting the execution and delivery of the Financing Documents or the Bonds or the lien or pledge or application of any moneys or security provided thereby, or in any way contesting or affecting the validity or enforceability of the Financing Documents, the Bonds or the Authority Resolution, or the compliance by the Authority with the covenants contained in the Financing Documents, or contesting the power of the Authority to execute and deliver the Financing Documents to which the Authority is a party or the Bonds, nor to the best of the Authority's knowledge, is there any basis therefore, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Financing Documents or materially impair the investment quality or value of the Bonds; (6) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations in connection with the issuance of the Bonds under the Indenture have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; and all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the Authority of its obligations under the Financing Documents to which the Authority is a party have been duly obtained; (7) Any certificate signed by any authorized official of the Authority, and delivered to the Purchaser in connection with the delivery of the Bonds, shall be deemed -4- a representation and warranty by the Authority to the Purchaser as to the statements made therein. (b) The City represents, warrants and covenants to the Purchaser that: (1) The City is and on the Closing Date will be a municipal corporation of the State of California, with the legal right, power and authority to approve the issuance of the Bonds, execute, deliver and perform its obligations under the Financing Documents to which it is a party, and to carry out its obligations as described therein; (2) The City has duly approved the Financing Documents to which it is a party, the execution and delivery of, and the performance by the City of the obligations on its part contained in the Bonds and the Financing Documents to which it is a party, and the consummation by it of all other transactions contemplated by the Financing Documents; (3) The Financing Documents to which the City is a party, when duly executed by the other party thereto, will constitute the legal, valid and binding agreements of the City enforceable against the City in accordance with their respective terms; except as enforcement of each of the Financing Documents may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance laws, laws affecting the enforcement of creditors rights, the application of equitable principles and judicial discretion, by the covenant of good faith and fair dealing which may be implied by law into contracts, and by the limitations on legal remedies against public agencies in the State of California; (4) The City is not in any material respect, in breach of or default under (i) any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or (ii) any material loan agreement, indenture, bond, note, resolution, agreement or other instrument to which it 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; (5) The execution and delivery of the Bonds and the Financing Documents to which the City is a party, the consummation of the transactions herein and therein contemplated, and the fulfillment of or compliance with the terms and conditions hereof and thereof will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or, to the knowledge of the City, any indenture, mortgage, deed of trust, installment purchase agreement, lease, contract or other agreement or instrument to which it is a party, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the City's assets, 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 Financing Documents to which the City is a party, or the financial condition, assets, properties or operations of the City; (6) No consent or approval of any trustee or holder of any indebtedness of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority (except in connection with Blue Sky proceedings, if any) is necessary in connection with the execution and delivery of the Bonds or the Financing Documents to which the City is a party, or the consummation of -5- any transaction therein or herein contemplated on the part of the City, except as have been obtained or made and as are in full force and effect or, as appropriate, will be in full force and effect at the Closing; (7) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the City, threatened against or affecting the City which, if determined adversely to the City or the interests thereof, would (a) affect the creation, organization, existence or powers of the City or the titles of its officers or officials to their respective offices; (b) in any way question or affect the validity or enforceability of any of the Financing Documents or the City Resolution; (c) find illegal, invalid or unenforceable any of the Financing Documents or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds; (d) affect the issuance or delivery of any of the Bonds, the payment or collection of any revenues or charges of the Enterprise, the validity of the pledge of or lien on such revenues or charges for the payment of the Installment Payments payable by the City under the Installment Sale Agreement; (e) affect the power and authority of the City to establish, maintain and collect rates and charges for water collection and treatment and other services, facilities and commodities sold, furnished or supplied through the facilities of the Enterprise; or (f) affect the City's water supply; (8) The City does not and will not have outstanding any indebtedness or obligation which is secured by a pledge of or lien on the Pledged Net Revenues superior to or on a parity with the lien of the Installment Payments on the Pledged Net Revenues; (9) Between the date of this Commitment Agreement and the Closing Date, the City will not, without the prior written consent of the Purchaser, offer or issue any bonds, notes or other obligations for borrowed money, or incur any material liabilities direct or contingent, payable from Pledged Net Revenues of the Enterprise, other than in the ordinary course of its business, nor will there be any adverse change of a material nature in the financial position, results of operations or condition, financial or otherwise, of the City; (10) The City has not in the previous five years failed to comply in any material respect, and is as of the date hereof in compliance in all material respects, with its disclosure obligations under any prior undertaking related to the Securities and Exchange Commission Rule 15c2-12 to provide annual reports or notices of material event; and (11) Any certificate signed by any authorized official of the City, and delivered to the Purchaser in connection with the delivery of the Bonds, shall be deemed a representation and warranty by the City to the Purchaser as to the statements made therein. (c) The representations, warranties and agreements herein shall survive the Closing Date and any investigation made on behalf of the Authority (with respect to subsection (a) of this Section 3), the City (with respect to subsection (b) of this Section 3) and the Purchaser of any matters described in or related the transactions hereby and by this Commitment Agreement, the Bonds and the Financing Documents to which the Authority or the City, as the case may be, is a party. 4. Conditions to the Obligations of the Purchaser. The Purchaser hereby enters into this Commitment Agreement in reliance upon the representations and warranties of the Authority lei and the City contained herein and the representations and warranties of the Authority and the City to be contained in the documents and instruments to be delivered on or prior to the Closing Date and upon the performance by the Authority and the City of their obligations both on and as of the date hereof and as of the Closing Date. Accordingly, the Purchaser's obligations under this Commitment Agreement to purchase, to accept delivery of and to pay for the Bonds shall be subject, at the option of the Purchaser, to the accuracy in all material respects of the representations and warranties of the Authority and the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the Authority and the City made in any certificate or other document furnished pursuant to the provisions hereof, to the performance by the Authority and the City of their obligations to be performed hereunder and under such documents and instruments at or prior to the Closing Date, and also shall be subject to the following additional conditions: (a) The representations and warranties of the Authority and the City contained herein shall be true and correct on the date hereof and on the Closing Date, as if made on and at the Closing Date; (b) As of the Closing Date, the Financing Documents shall have been duly authorized, executed and delivered by the respective parties thereto, all in substantially the forms heretofore submitted to the Purchaser, with only such changes as shall have been agreed to in writing by the Purchaser, and such Financing Documents shall be in full force and effect and shall not have been amended, modified or supplemented; and there shall be in full force and effect such resolution or resolutions of the Authority and the City as, in the opinion of Bond Counsel, shall be necessary or appropriate in connection with the transactions contemplated hereby; (d) Between the date hereof and the Closing Date, the marketability of the Bonds shall not have been materially adversely affected, in the judgment of the Purchaser (evidenced by a written notice to the Authority terminating the obligation of the Purchaser to accept delivery of and make any payment for the Bonds), by reason of any of the following: (1) an amendment to the Constitution of the United States or the State of California shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or the legislature of any state having jurisdiction of the subject matter or legislation pending in the Congress of the United States shall have been amended or legislation shall have been recommended to the Congress of the United States or to any state having jurisdiction of the subject matter or otherwise endorsed for passage (by press release, other form of notice or otherwise) 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 legislation shall have been proposed for consideration by either such Committee by any member thereof or presented as an option for consideration by either such Committee by the staff of such Committee or by the staff of the Joint Committee on Taxation of the Congress of the United States, or legislation shall have been favorably reported for passage 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 a decision shall have been rendered by a court of the United States or of the State of California or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal -7- or State of California authority, with respect to federal or State of California taxation upon revenues or other income of the general character to be derived by the Authority or upon interest received on obligations of the general character of the Bonds which may have the purpose or effect, directly or indirectly, of affecting the tax status of the Authority, its property or income, its securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by State of California legislation or materially and adversely affecting the market for the Bonds or the market price generally of obligations of the general character of the Bonds; (2) legislation enacted, introduced 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) or official statement issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter shall have been made or issued to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; (3) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of California, or a decision by any court of competent jurisdiction within the State of California or any court of the United States of America shall be rendered which, in the reasonable opinion of the Purchaser, materially adversely affects the market price of the Bonds; (4) the escalation in military hostilities or declaration by the United States of a national emergency or war or other calamity or crisis; (5) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange; (6) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Purchaser; (7) an order, decree or injunction of any court of competent jurisdiction, or order, ruling, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby, is or would be in violation of the federal securities laws as amended and then in effect; (8) any litigation shall be instituted, pending or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way contesting the validity of the Bonds or the Financing Documents, or the existence or powers of the Authority or the City or having a material adverse impact on the availability of Net Revenues; M (9) the withdrawal or downgrading of any rating of the Bonds by a national rating agency; or (10) any other event shall have occurred since the date hereof that in the reasonable judgment of the Purchaser materially adversely affects the marketability or market price of the Bonds. (e) At or prior to the Closing Date, the Purchaser shall have received the following documents, in each case satisfactory in form and substance to the Purchaser: (1) Copies of each of the Financing Documents, each duly executed and delivered by the respective parties thereto; (2) The approving opinion of Bond Counsel, dated the Closing Date and addressed to the Authority and a reliance letter relating thereto addressed to the Purchaser; (3) The supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Purchaser, to the effect that; (i) this Commitment Agreement has been duly authorized, executed and delivered by the Authority and the City, and assuming the valid execution and delivery by the Purchaser, is valid and binding upon the Authority and the City enforceable in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally; and (ii) the Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939; (4) The opinion of counsel to the Authority and the City, dated the Closing Date and addressed to the Purchaser, is substantially the form attached hereto as Exhibit A; (5) The opinion of counsel to the Trustee, dated the Closing Date and addressed to the Authority, the City and the Purchaser, to the effect that (i) the Trustee has duly authorized, executed and delivered the Indenture and duly authenticated and delivered the Bonds on the Closing Date; and (ii) the Indenture constitutes the legally valid and binding obligation of the Trustee, enforceable against the Trustee in accordance with its terms, except that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws in effect from time to time affecting the rights of creditors generally and except to the extent that the enforceability thereof may be limited by the application of general principles of equity; (6) A certificate or certificates, dated the Closing Date, signed by a duly authorized official of the Authority to the effect that (i) the representations and warranties of the Authority contained in this Commitment Agreement and in the Financing Documents to which it is a party are true, complete and correct on and as of the Closing Date; (ii) there is no action, suit, proceeding, inquiry or investigation pending or, to the best knowledge of such official, threatened (a) to restrain or enjoin the execution and delivery of any of the Bonds, (b) in any way affecting the validity of the Bonds or the Financing Documents to which the Authority is a party, or (c) in any way ME contesting the corporate existence or powers of the Authority to execute and deliver the Financing Documents to which the Authority is a party or the Bonds; (7) A certificate or certificates, dated the Closing Date, signed by a duly authorized official of the City to the effect that (i) the representations and warranties of the City contained in this Commitment Agreement and the Financing Documents to which the City is a party are true, complete and correct on and as of the Closing Date; and (ii) there is no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body, pending or, to the best knowledge of such official, threatened (a) to restrain or enjoin the execution and delivery of the Financing Documents to which the City is a party, (b) in any way contesting or affecting the validity of the Financing Documents to which the City is a party, (c) in any way contesting the power of the City to execute and deliver the Financing Documents to which the City is a party, or (d) seeking to prohibit, restrain or enjoin the collection of moneys from the Enterprise to pay the Installment Payments securing the Bonds, or the compliance by the City of the covenants contained in the Financing Documents to which the City is a party, or questioning the authority of the City to fix, charge and collect rates for the services provided by the Enterprise as provided in the Installment Sale Agreement, nor to the best knowledge of such official, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Bonds or the Financing Documents to which the City is a party or materially adversely impair the City's ability to perform its obligations the Financing Documents to which the City is a party;; (8) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, satisfactory in form and substance to the Purchaser, to the effect that: (i) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the full power and being qualified to enter into and perform its duties under the Indenture; (ii) the Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Purchaser pursuant to the terms of the Indenture; (iii) the execution and delivery of the Indenture and compliance with the provisions on the Trustee's part contained therein, and the authentication and delivery of the Bonds will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Trustee 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 Sky laws or regulations), 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 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 (iv) 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, served on, or, to the best knowledge of such officer, threatened against, the Trustee, affecting the existence of the Trustee or the titles of its officers to their respective offices, or in any way contesting or affecting the validity or enforceability of the Indenture against the Trustee, or contesting the power of the Trustee or its authority to enter into, adopt or perform its obligations under the Indenture, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Indenture against the Trustee or the authentication and delivery of the Bonds; -10- (9) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of the Indenture; (10) A certified copy of the Authority Resolution; (11) A certified copy of the City Resolution; (12) Such additional legal opinions, certificates, proceedings, instruments, insurance policies or evidences thereof and other documents as the Purchaser, the Purchaser's counsel or Bond Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the representations of the Authority herein, and the due performance or satisfaction by the Authority and the City on or prior to the Closing Date of all agreements then to be performed and all conditions then to be satisfied by the Authority and the City in connection with the transactions contemplated hereby and the Financing Documents. If the Authority and / or the City shall be unable to satisfy the conditions to the Purchaser's obligations contained in this Commitment Agreement or if the Purchaser's obligations shall be terminated for any reason permitted herein, all obligations of the Purchaser hereunder may be terminated by the Purchaser at, or at any time prior to, the Closing Date by written notice to the Authority and neither the Purchaser nor the Authority shall have any further obligations hereunder. 5. Expenses. The Authority or the City shall pay the expenses incident to the performance of their obligations hereunder including, but not limited to: (i) the cost of preparation, printing and distribution of the Financing Documents, including a reasonable number of certified or conformed copies thereof; (ii) the cost of preparation and printing of the Bonds; (iii) the fees and disbursements of Bond Counsel; (iv) the fees and disbursements of the Purchaser's counsel; (v) the fees and disbursements of any engineers, accountants and other experts, consultants or advisors retained by the Authority or the City; (vi) reimbursement of any incidental expenses incurred by the Purchaser on behalf of the City; and (vii) fees, if any, payable to the California Debt and Investment Advisory Commission, the Municipal Securities Rulemaking Board. 6. Notices. Any notice or other communication to be given to the Authority, the City or the Purchaser under this Commitment Agreement may be given by delivering the same in writing to Authority: Tustin Public Financing Authority c / o City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager City: City of Tustin 300 Centennial Way Tustin, CA 92780 Attention: City Manager Purchaser: Capital One Public Funding LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Attention: President -11- 7. Survival of Representations and Warranties. Representations, warranties and agreements contained in this Commitment Agreement or made in any certificate delivered by the Authority or the City hereunder shall remain operative and in full force and effect, regardless of: (i) any investigations or statements made by or on behalf of the Purchaser; and (ii) delivery of and payment for the Bonds pursuant to this Commitment Agreement. 8. Effectiveness and Counterpart Signatures. This Commitment Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by duly authorized officers of the Authority and approval by duly authorized officers of the City and shall be valid and enforceable as of the time of such acceptance and approval. This Commitment Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument_ 9. Parties in Interest. This Commitment Agreement is made solely for the benefit of the Authority, the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. 10. Headings. The headings of the sections of this Commitment Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 11. Governing Law. This Commitment Agreement shall be construed in accordance with the laws of the State of California. Accepted: TUSTIN PUBLIC FINANCING AUTHORITY 10 Treasurer CITY OF TUSTIN Finance Director -12- Very truly yours, CAPITAL ONE PUBLIC FUNDING LLC , as Purchaser By Catherine DeLuca Vice President 7. Survival of Representations and Warranties. Representations, warranties and agreements contained in this Commitment Agreement or made in any certificate delivered by the Authority or the City hereunder shall remain operative and in full force and effect, regardless of: (i) any investigations or statements made by or on behalf of the Purchaser; and (ii) delivery of and payment for the Bonds pursuant to this Commitment Agreement. 8. Effectiveness and Counterpart Signatures. This Commitment Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by duly authorized officers of the Authority and approval by duly authorized officers of the City and shall be valid and enforceable as of the time of such acceptance and approval. This Commitment Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 9. Parties in Interest. This Commitment Agreement is made solely for the benefit of the Authority, the City and the Purchaser (including the successors or assigns of the Purchaser) and no other person shall acquire or have any right hereunder or by virtue hereof. 10. Headings. The headings of the sections of this Commitment Agreement are inserted for convenience only and shall not be deemed to be a part hereof. 11. Governing Law. This Commitment Agreement shall be construed in accordance with the laws of the State of California. Accepted: TUSTIN PUBLIC FINANCING AUTHORITY By Treasurer CITY OF TUSTIN Finance Director 5VA Very truly yours, CAPITAL ONE PUBLIC FUNDING LLC , as Purchaser By Catherine DeLuca Vice President SCHEDULE I MATURITY SCHEDULE Maturity Date Principal Interest (Al2rill Amount Rate Price 2044 $4,125,000 4.820% 100.000 REDEMPTION The Bonds are subject to redemption, at the option of the City on any date on or after April 1, 2034, as a whole or in part, by such maturities as shall be determined by the City, and by lot within a maturity, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. The Bonds are also subject to mandatory redemption from sinking account payments made by the Authority, in part by lot, on April 1, 2025, and on April 1 in each year thereafter to and including April 1, 2044, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table: t Maturity. Redemption Date (April 1) 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 Schedule I Page 1 Principal Amount $105,000 135,000 140,000 145,000 155,000 160,000 170,000 180,000 185,000 195,000 205,000 215,000 225,000 235,000 245,000 260,000 270,000 285,000 300,000 315,000 EXHIBIT A FORM OF OPINION OF CITY ATTORNEY AND AUTHORITY COUNSEL Tustin Public Financing Authority 300 Centennial Way Tustin, California 92780 City of Tustin 300 Centennial Way Tustin, California 92780 Capital One Public Funding LLC 1307 Walt Whitman Road, 3rd Floor Melville, NY 11747 Re: $4,125,000 Tustin Public Financing Authority Water Revenue Bonds, Series 2024 (Subordinate Lien) Ladies and Gentlemen: I have acted as legal counsel to the City of Tustin, California (the "City") and the Tustin Public Financing Authority (the "Authority") in connection with the issuance of the above -referenced Bonds by the Authority. In such capacity, I have examined the original, certified copies, or copies otherwise identified to my satisfaction as being true copies of such resolutions, documents, ordinances, certificates, and records as I have deemed relevant and necessary as the basis for the opinions set forth herein. Relying on such examination and applicable law, I am of the opinion that: 1. The Authority is a joint exercise of powers entity duly organized and validly existing under all applicable laws, with full legal right, power and authority to enter into and perform its obligations under the Installment Sale Agreement, dated as of February 1, 2024 (the "Installment Sale Agreement"), by and between the Authority and the City, the Indenture of Trust, dated as of February 1, 2024 (the "Indenture"), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), and the Commitment Agreement, dated February 7, 2024 (the "Commitment Agreement"), by and among the Authority, the City and First Southwest Company, as Purchaser, (collectively, the "Authority Documents"). The Authority has duly authorized, executed and delivered the Authority Documents and, assuming due authorization, execution and delivery by the other parties thereto (other than the City), each of the Authority Documents constitutes a legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, equitable remedies and other laws affecting creditors' rights or remedies. 2. The City is a municipal corporation organized and validly existing under all applicable laws, with full legal right, power and authority to enter into and perform its obligations under the Installment Sale Agreement and the Commitment Agreement (collectively, the "City Documents"). The City has duly approved the City Documents and has duly authorized, executed and delivered the City Documents and, assuming due authorization, execution and delivery by the other parties thereto (other than the Authority), each of the City Documents constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, equitable remedies and other laws affecting creditors' rights or remedies. 3. The Authority has duly and validly adopted Resolution No. approving the Authority Documents at a meeting duly called and held, and such Resolution is in full force and effect and has not been amended, modified or repealed since its adoption. Exhibit A Page 1 4. The City has duly and validly adopted Resolution No. approving the City Documents at a meeting duly called and held, and such Resolution is in full force and effect and has not been amended, modified or repealed since its adoption. 5. There is no action, suit or proceeding before or by any court, government agency, public board or body pending or, to the best of our knowledge, threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers of the Authority or the City or the titles of their respective officers or officials to their respective offices, (b) in any way question or affect the validity or enforceability of any of the Authority Documents, the City Documents, or any resolutions, (c) find illegal, invalid or unenforceable any of the Authority Documents, the City Documents, or the Ordinances or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Authority or the City is a party, (d) affect the issuance or delivery of any of the Bonds, the payment or collection of any revenues or charges of the City's water enterprise, the validity of the pledge of or lien on such revenues or charges for the benefit of the owners of the Bonds, the exclusion of interest on the Bonds from gross income, the powers of the Authority or the City, or the authority of the Authority to issue the Bonds or the consummation of any of the transactions contemplated by the Authority Documents, the City Documents, the Ordinances or the Bonds, or (e) affect the power and authority of the City to establish, maintain and collect rates and charges for water collection and treatment and other services, facilities and commodities sold, furnished or supplied through the facilities of the City's water system. 6. The execution and delivery of the Authority Documents and the City Documents and the other instruments contemplated by any of such documents, and compliance with the provisions thereof, do not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department or agency of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Authority or the City is subject or bound in a manner which would materially adversely affect the Authority's or the City's performance thereunder. 7. Any and all consents, authorizations, approvals and orders of or filings or registrations with any governmental authority, legislative body, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Authority or the City of its obligations under the Authority Documents or the City Documents, respectively, have been obtained and are in full force and effect. I am furnishing this opinion to you solely for your benefit. This opinion is rendered in connection with the transaction described herein, and may not be relied upon by you for any other purpose. This opinion shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without my prior written consent. Very truly yours, Exhibit A Page 2