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Section 10. The Underwriter has entered into this Purchase Contract in reliance upon the
<br />representations, warranties and agreements of the City contained herein and to be contained in the
<br />documents and instruments to be delivered at the Closing, and upon the performance by the City of its
<br />obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the
<br />Underwriter's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for
<br />the Bonds shall be subject to the performance by the City of its obligations to be performed hereunder
<br />and under such documents and instruments at or prior to the Closing, and shall also be subject to the
<br />following conditions:
<br />(A) The representations and warranties of the City contained herein shall be true and correct
<br />on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing;
<br />(B) At the time of the Closing the Proceedings shall be in full force and effect, and shall not
<br />have been amended, modified or supplemented, and the Offering Memorandum shall not have
<br />been amended, modified or supplemented, except in either case as may have been agreed to by
<br />both the City and the the Underwriter;
<br />(C) At the time of the Closing, all official action of the City relating to the Proceedings shall be
<br />in full force and effect, and there shall have been taken all such actions as, in the opinion of
<br />Sturgis, Ness, Brunsell & Sperry A Professional Corporation, Bond Counsel ("Bond Counsel"), shall
<br />be necessary or appropriate in connection therewith, with the issuance of the Bonds and with the
<br />transactions contemplated hereby, all as described in the Offering Memorandum;
<br />(D) The Underwriter shall have the right to terminate the Underwriter's obligations under this
<br />Purchase Contract to purchase, to accept delivery of and to pay for the Bonds by notifying the City
<br />of their election to do so if, after the execution hereof and prior to the Closing: (i) the marketability
<br />of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and
<br />adversely affected by any decision issued by a court of the United States (including the United
<br />States Tax Court) or of the State of California, by any ruling or regulation (final, temporary or
<br />proposed) issued by or on behalf of the Department of the Treasury of the United States, the
<br />Internal Revenue Service, or other governmental agency of the United States, or any governmental
<br />agency of the State of California, or by a tentative decision with respect to legislation reached by a
<br />commiftee of the House of Representatives or the Senate of the Congress of the United States, or
<br />by legislation enacted by, pending in, or favorably reported to either the House of Representatives
<br />or the Senate of the Congress of the United States or either house of the Legislature of the State
<br />of California, or formally proposed to the Congress of the United States by the President of the
<br />United States or to the Legislature of the State of California by the Governor of the State of
<br />California in an executiv~..communication, affecting the tax status of the City, its property or
<br />income, its bonds (including the Bonds) or the interest thereon, or any tax exemption granted or
<br />authorized by the Bond Law; (ii) the United States shall have became engaged in hostilities which
<br />have resulted in a declaration of war or a national emergency, or there shall have occurred any
<br />other outbreak of hostilities, or a local, national or international calamity or crisis, financial or
<br />otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion
<br />of the Underwriter, would affect materially and adversely the ability of the Underwriter to market the
<br />Bonds (it being agreed by the Underwriter that there is no outbreak, calamity or crisis of such a
<br />character as of the date hereof); (iii) there shall have occurred a general suspension of trading on
<br />the New York Stock Exchange or the declaration of a general banking moratorium by the United
<br />States, New York State or California State authorities; (iv) there shall have occurred a withdrawal or
<br />downgrading of any rating assigned to any securities of the City by a national municipal bond rating
<br />agency; (v) any of the proposed developments described in the Offering Memorandum shall have
<br />been repudiated by the applicable developer, or, except as described in the Offering Memorandum,
<br />any litigation or proceedings shall be pending or threatened questioning the proposed developments
<br />or seeking to enjoin the development thereof, or the City shall have received notice from the
<br />applicable developer that it will be unable to proceed with the development as described in the
<br />Offering Memorandum; {vi) any Federal or California court, authority or regulatory body shat! take
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