Katten Draft 1/28/22
1 4837-4083-1692v7/-
151824379v4
$[ ]
CITY OF RIALTO
TAXABLE PENSION OBLIGATION BONDS,
SERIES 2022
BOND PURCHASE AGREEMENT
[___________, 2022]
City of Rialto
150 S. Palm Avenue
Rialto, California 92376
Ladies and Gentlemen:
BofA Securities, Inc., on behalf of itself and as representat ive (the “Representative”) of J.P.
Morgan Securities LLC (together with the Representative, the “Underwriters”) hereby offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) wit h the City of Rialto (the “City”), whereby the Underwriters will purchase and the City will sell all (but not less than all) of [$ ] City of Rialto Taxable Pension Obligation Bonds , Series 2022 (the “Bonds”) subject to the conditions set forth herein. The Underwriter s are making this offer subject to the acceptance by the City at or before 5:00 P.M., California time, on the date hereof. If the City accepts this Purchase Agreement, this Purchase Agreement shall be in full force and effect in accordance with its terms and shall bind both the City and the Underwriter s. The Underwriter s may withdraw this Purchase Agreement upon written notice delivered by the Representative to the City at any time before the City accepts this Purchase Agreement. Terms used but not defined in this Purchase Agreement are defined in the Trust Agreement (as defined below).
1. The Bonds shall be issued pursuant to that certain Trust Agreement, dated as of [_________, 2022] (the “Trust Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The issuance of the Bonds was authorized pursuant to a resolution adopted by the City Council of the City of Rialto (the “City Council”) on July 27, 2021 (the “Authorizing Resolution”). The Bonds are being issued to refund certain pension obligations of the City as more fully described in the hereinafter mentioned Official Statement. The City Council of the City will be obligated to make appropriations to pay the Bonds from any source of legally available funds of the City. The City Council will be obligated in each fiscal year to appropriate all amounts from such funds as may be required to pay the aggregate amount of the principal of and interest on the Bonds coming due and payable in such fiscal year. The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.
The Bonds shall be issued and secured pursuant to Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Bond Law”), the Trust Agreement and the Judgment entered by the Superior Court of the State 2 151824379v4
of Ca lifornia, for the County of San Bernardino on [_______, 2022] with respect to the action entitled City of Rialto vs. All Persons Interested, etc., Case No. CIVSB2123274) (the “Validation Judgment:”). The Bonds shall be payable as provided in the Trust Agr eement. The Authorizing Resolution and a resolution adopted by the City Council of the City on [_______, 2022] (the “Supplemental Resolution”), together approve the City Documents (as defined herein below), the issuance of the Bonds, the Official Statemen t, and related matters. The Authorizing Resolution and the Supplemental Resolution are referred to collectively herein as the “Resolutions.” The City is a member of the California Public Employees’ Retirement System (“ CalPERS”), and as such, is obligated by the Public Employees’ Retirement Law, constituting Part 3 of Division 5 of Title 2 of the California Government Code (the “Retirement Law”), and the contract between the Board of Administration of CalPERS and the City Council of the City, (as amended, the “CalPERS Contract”), to make contributions to CalPERS to (a) fund pension benefits with respect to certain miscellaneous employees of the City , (b) amortize the unfunded actuarial liability (“UAL”) with respect to such pension benefits, and (c) appropriate funds for the purposes described in (a) and (b).
The City is issuing the Bonds for the purpose of (i) refinancing a portion of the City’s outstanding obligation to CalPERS with respect to certain of the City’s defined benefit retirement plans for its current and retired miscellaneous and safety employees , and (ii) paying the costs of issuance of the Bonds.
The Bonds shall bear interest on June 1 and December 1 of each year, commencing December 1, 2022 at the rates set forth in Exhibit A, and sh all mature in the years, and be subject to redemption as set forth in Exhibit A. The Bonds shall be initially issued in registered form in denominations of $5,000 or in any integral multiple thereof. The Bonds shall be dated the date of issuance and delivered on [_________, 2022], or such other date as mutually agreed upon by the City and the Underwriters (the “Closing Date”).
2. The purchase price for the Bonds shall be [$___________] (representing the par amount of the Bonds less an underwriters’ discount of [$__________]) and shall be paid in full upon delivery to the Underwriters of the Bonds. Payment for the Bonds shall be by immediately available funds. The Underwriters intend to make an initial bona fide public offering of the Bonds at a price or prices described in Exhibit A hereto; provided, however, the Underwriters reserve the right to change such initial public offering prices as the Underwriter s deem necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, a nd may offer and sell the Bonds to certain dealers, unit investment trusts and money market funds, certain of which may be sponsored or managed by the Underwriters at prices lower than the public offering prices or yields greater than the yields set forth therein.
3. The City will undertake pursuant to the Trust Agreement and a Continuing Disclosure Certificate, dated [__________, 202 2] (the “Continuing Disclosure Certificate”), and executed by the City (in the form set forth in the Preliminary Official Statem ent and the Official Statement), to provide certain annual information and notices of the occurrence of certain events.
4. The City hereby ratifies the use by the Underwriter s of the Preliminary Official Statement, dated [___________, 202 2] relating to the Bonds (together with the cover page, inside cover page, and all appendices attached thereto and any amendments or supplements thereto, the “Preliminary Official Statement”), and authorizes the Underwriter s to use and distribute the Preliminary Official Statement, the Official Statement (as defined below), the Trust Agreement, and 3 151824379v4
all information contained therein, and all other documents, certificates and statements furnished by the City to the Underwriter s in connection with the offer and sale of the Bonds by the Underwriter s.
The City has heretofore “deemed final” the Preliminary Official Statement within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“ Rule 15c2- 12”).
Within seven (7) business days from the date hereof, and in any event not later than two (2) business days before the Closing Date, the City shall deliver to the Underwriter s a final Official Statement relating to the Bonds dated the date hereof (such Official Statement, including the cover page, inside cover page, and all appendices attached thereto, is referred to herein as the “Official Statement”) in sufficient quantities as the Underwriters may request to comply with Rule 15c2-12, rules of the MSRB and to meet potential customer requests for copies of the Official Statement. The Official Statement shall be in substantially the same form as the Preliminary Official Statement and, other than information previousl y permitted to have been omitted by Rule 15c12-2, the City shall only make such other additions, deletions and revisions in the Official Statement which are approved by the Representative , which approval shall not be unreasonably withheld . The Underwriters agree to file a copy of the Official Statement, including any amendments or supplements thereto prepared by the City, with the MSRB on its Electronic Municipal Markets Access (“EMMA”) system. The City hereby agrees to deliver to the Underwriter s an electronic copy of the Official Statement in a form that permits the Underwriter s to satisfy their obligations under the rules and regulations of the MSRB and the U.S. Securities and Exchange Commission (“SEC”) including in a word -searchable pdf format including any amendments thereto.
5. The City represents and warrants to the Underwriters that:
(a) The City is a general law city duly organized and existing pursuant to the Constitution and laws of the State of California (the “State”) and has all necessary power an d authority to enter into and perform its duties under the B onds, the Trust Agreement, the Continuing Disclosure Certificate and this Purchase Agreement (collectively, the “City Documents”), and, when executed and delivered by the respective parties theret o, the City Documents will constitute legally valid and binding obligations of the City, enforceable against the City in accordance with their respective terms. The City has all necessary power to perform its duties under the CalPERS Contract and the CalPERS Contract constitutes a legally valid and binding obligation of the City, enforceable against the City in accordance with its terms.
(b) The City Council has duly and validly adopted the Authorizing Resolution and the Supplemental Resolution at meetings of the City Council duly noticed and at which a quorum was present, and the Resolutions have not been modified or amended and are in full force and effect, and have duly approved the execution and delivery of the Bonds and the other City Documents, and the performance by the City of its obligations contained therein, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by each of said documents.
(c) The City is not in breach of or d efault under any applicable law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a pa rty 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 a default or an event of default under any such instrument, in each case which breach or default has or may have a material 4 151824379v4
adverse effect on the ability of the City to perform its obligations under the City Documents or the CalPERS Contract.
(d) The adoption of the Authorizing Resolution and the Supplemental Resolution and the execution and delivery by the City of the City Documents and the approval by the City of the Official Statement and compliance with the provisions on the City’s part contained in the City Documents and the CalPERS Contract, will not conflict with, or result in a violation or breach of, or constitute a default under, any law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject to, which conflict, breach or default has or may have a material adverse effect on the ability of the City to carry out its obligations under the City Documents or the CalPERS Contract , nor will any such execution, delivery, adoption or compliance result in the creation or i mposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the City Documents and the CalPERS Contract.
(e) Except as described in or contemplated by the Official Statement or as may be required under the securities or blue s ky laws of any state, there is no consent, approval, authorization or other order of, filing with, or certification required by, any regulatory authority having jurisdiction over the City which is required for, or which would constitute a condition precedent to, or the absence of which would materially adversely affect the consummation by the City of the transactions contemplated by the Resolution s, the City Documents or the CalPERS Contract, except such as have been obtained or will be obtained on or prior to the Closing Date. (f) As of the time of acceptance hereof and as of the Closing Date , 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 with respect to wh ich proper notice has been duly served upon the City or, to the knowledge of the City, 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 execution or delivery of any of the Bonds, or in any way contesting or affe cting the validity of the Bonds, the City Documents or the CalPERS Contract or the consummation of the transactions contemplated thereby or contesting the power of the City to enter into the City Documents; (iii) which may result in any material adverse change to the financial condition of the City or to its ability to make payme nt of principal or redemption price of and interest on the Bonds when due; 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 Prelimin ary 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 whic h they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iv) of this sentence. (g) The City agrees to cooperate with the Underwriter s in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriters may request; provided, however, that in no event shall the City be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject.
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(h) Prior to the date hereof, the City has provided to the Underwriters for its review the Preliminary Official Statement, that the City has deemed final for purp oses of Rule 15c2- 12, has approved the distribution of the Preliminary Official Statement and the Official Statement, and has duly authorized the execution and delivery of the Official Statement (including in electronic form). The Preliminary Official Sta tement, at the date thereof, and as of the date hereof, did not and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading. As of the date hereof and on the Closing Date, the Official Statement did not and will not contain any untrue statement of a mater ial fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed ), in light of the circumstances under which they were made, not misleading.
(i) The City will advise the Representative 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 Representative, which consent will not be unreasonably withheld. The City will advise the Representative 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 Bonds. (j) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2021 as set forth in the Preliminary Official Statement and in the Official Statement fairly represent the financial position and results of operations of the City as of the dates and for the periods therein set forth in accordance with generally accepted acco unting principles. Except as disclosed in the Preliminary Official Statement or the Official Statement, there has not been any materially adverse change in the financial position and results of operations of the City or in it s operations since June 30, 20 21 and, except as disclosed in the Preliminary Official Statement or the Official Statement, there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change. (k) If between the date hereof and the date which is 25 days after the End of the Underwriting Period for the Bonds, an event occurs which might or would cause the Official Statement (other than the i nformation relating to DTC and its book -entry system, as then supplemented or a mended, 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 light of the circumstances under which it was presented, not misleading, the City will notify the Representative, and, if in the reasonable opinion of the City, the Representative or their respective counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will forthwi th prepare and furnish to the Representative (at the expense of the City) a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter in its reasonable opinion ) 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 Off icial Statement is delivered to prospective purchasers, not misleading. 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 Bonds, the City will furnish such information with respect to itself as the Representative may from time to time reasonably request. As used herein and for the purposes of the foregoing, the term “End of the Underwriting Period” for the 6 151824379v4
Bonds shall mean the earlier of (i) the Closing Date unless t he City shall have been notified in writing to the contrary by the Representative on or prior to the Closing Date, or (ii) the date on which the End of the Underwriting Period for the Bonds has occurred under Rule 15c2-12; provided, however, that the City may treat as the End of the Underwriting Period for the Bonds the date specified as such in a notice from the Representative stating the date which is the End of the Underwriting Period.
(l) The City will deliver all opinions, certificates, letters and other i nstruments and documents reasonably required by the Representative and this Purchase Agreement. (m) Any certificate of the City delivered to the Representative shall be deemed a representation and warranty by the City to the Underwriters as to the statements made therein. (n) Between the date of this Purchase Agreement and the Closing Date, the City will not, without the prior written consent of the Representative, and except as disclosed in the Official Statement, offer or issue any bonds, notes or other obligations for borrowed money payable from the City’s general fund, or incur any liabilities payable from the City’s general fund, direct or contingent, which are reasonably foreseeable to materially adversely affect the ability of the City to perform its obligations under the City Documents or the CalPERS Contract. (o) The City is not presently and as a result of the execution of the City Documents and the sale of the Bonds will not be in violation of any debt limitation, appropriation limitation or any other provision of the State Constitution or statutes or any additional debt or similar provision of any bond, note, contract or other evidence of indebtedness to which the City is a party or to which the City is bound.
(p) The City will not knowingly take or omit to take any action, which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner other than as provided in the City Documents.
(q) The City has not, in the last five years, failed to comply in any material respect in its obligations under any continuing disclosure undertaking entered into pursuant to Rule 15c2-12 except as disclosed in the Preliminary Official Statement and the Official Statement.
The City will undertake, pursuant to the Continuing Disclosure Certificate to provide annual reports and notices of certain events in accordance with the requirements of Rule 15c2-12. A form of the Continuing Disclosure Certificate is set forth as Appendix D to the Official Statement. (r) The Validation Judgment was duly entered, the appeal period has run without any appeal having been filed, and the Validation Judgment is in full force and effect.
6. The Underwriter s have entered into this Purchase Agreement in reliance upon the representations, warranties and agreeme nts of the City contained herein, and the opinions of Bond Counsel, Counsel to the Trustee, and the City Attorney re quired hereby. The Underwriter s’ obligations under this Purchase Agreement are and shall be subject to the conditions set forth in Sections 8 and 9 and elsewhere herein.
7. The obligations of the Underwriters to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriters, to the accuracy in all respects of the statements of the officers and ot her officials of the City, as well as authorized representatives of 7 151824379v4
the City Attorney, Bond Counsel and the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations t o be performed hereunder at or prior to the Closing Date, and to the delivery of the following documents in form and substance satisfactory to the Representative:
(a) The legal opinion of Norton Rose Fulbright US LLP , Bond Counsel in the form attached to the O fficial Statement, dated the Closing Date and addressed to the City, and a reliance letter addressed to the Underwriters.
(b) A supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the City and the Underwriters, substantially to the effect that (i) this Purchase Agreement and the other City Documents have been duly authorized, executed and delivered by the City, as appropriate, and, assuming due authorization, execution and delivery by the oth er parties thereto, are legal, valid and binding agreements of the City, respectively, enforceable in accordance with their terms, except as limited by bankruptcy, moratorium, insolvency or other laws affecting creditors’ rights or remedies and are subje ct to general principles of equity (regardless of whether such enforceability is considered in equity or at law, to the joint exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governme ntal entities in the State); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended ; and ( iii) the statements contai ned in the Official Statement under the captions “THE SERIES 2022 BONDS,” “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2022 BONDS,” “TAX MATTERS,” “CONTINUING DISCLOSURE ,” “VALIDATION PROCEEDINGS” and in “APPENDIX C – SUMMARY AND CERTAIN PROVISIONS OF T HE TRUST AGREEMENT” and “APPENDIX E –FORM OF OPINION OF BOND COUNSEL” (insofar as such statements purport to summarize certain provisions of the Bonds, the validation action with respect to the Bonds, the City Documents, Bond Counsel’s final opinion and th e tax status of the Bonds) are accurate in all material respects. (c) A no -litigation certificate of the City, dated the Closing Date, to the effect that, other than as disclosed in the Official Statement, there is no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending with respect to which proper notice has been duly served upon the City , or to the best knowledge of the City threatened, against the City, nor to the best knowledge and belie f of the City is there any basis therefor, to restrain or enjoin the application by the City of its funds as described in the Official Statement as security for the Bonds, or in any way contesting or affecting the validity of any of the City Documents or t he CalPERS Contract , or contesting the powers of the City to enter into or perform its obligations under any of the foregoing, as applicable. (d) An opinion of Norton Rose Fulbright US LLP, as disclosure counsel (“Disclosure Counsel”), dated the Closing Date a nd addressed to the City and the Underwriter s, to the effect that, without passing upon or assuming any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Official Statement and without having independently verified the accuracy, completeness or fairness of the statements contained in the Official Statement, but on the basis of their participation in conferences with the City, the City Attorney, t he Municipal Advisor, the Underwriters, Underwriter s’ Counsel and others, and their reliance thereon and on certain specified records, documents, certificates, opinions and matters, no facts came to the attention of the attorneys in the firm rendering legal services in connection with the issuance of the Bonds which caused them to believe that the Official St atement as of its date and as 8 151824379v4
of the Closing Date contained or contains any untrue statement of a material f act or omitted or omits to state any material fact necessar y to make the statements therein, in the ligh t of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any CUSIP numbers, financial, accounting, statistical, economic, engineering or demographic data or forecasts, numbers, charts, tab les, graphs, estimates, projections, assumptions or expressions of opinion, or as to any Appendices thereof, and information concerning DTC and its book-entry system contained in the Official Statement).
(e) An opinion of the City Attorney, dated the Closing Date and addressed to the Underwriters, in substantially the form set forth in Exhibit B. (f) An opinion of counsel to the Underwriter s in a form acceptable to the Representative.
(g) A certificate, dated the Closing Date, signed by a duly authorized offic er of the City satisfactory in form and substance to the Representative to the effect that: (i) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Cl osing Date with the same effect as if made on the Closing Date by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in orde r to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement ( other than the i nformation relating t o DTC and its book -entry system) did not as of its date and do not as of the Closing Date contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respe ct; (iv) the City is not in breach of or default under any applicable law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, which breach or default would have a material adverse impact on the City’s ability to perform its obligations under the City Documents or the CalPERS Contract , 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 an event of default under any such instrument; and (v) no further consent is required for inclusion of its audited financial statements in the Preliminary Official Statement and the Official Statement;.
(h) An opinion of counsel to the Trustee, dated the Closing Date and addressed to the City and the Underwriters, to the effect that: (i) the Trustee is a national banking association duly organized and validly existing under the laws of the United States of America, having full power and being qualified to enter into and to perform its duties as Trustee under the Trust Agreement; and (ii) the Trust Agreement has been duly authorized, executed a nd delivered by the Trustee and assuming due authorization, execution and delivery by the other party thereto, constitutes the legal, valid and binding obligation of the Trustee enforceable in accordance with its terms, except as such enforcement may be li mited by bankruptcy, insolvency, moratorium, reorganization or other similar laws or equitable principles relating to or limiting creditors’ rights generally; and (iii) the Bonds have been duly authenticated and delivered by the Trustee to the purchaser or purchasers thereof pursuant to the Trust Agreement.
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(i) A certificate of the Trustee dated the Closing Date, signed by a duly authorized officer of the Trustee, in form and substance satisfactory to the Representative, to the effect that: (i) the Trustee is a national banking association duly organized and in good standing under the laws of the United States of America and has all necessary power and authority to enter into and perform its duties under the Trust Agreement; (ii) the Trustee is duly authorized to enter into the Trust Agreement and to authenticate and deliver the Bonds to the purchaser or purchasers thereof pursuant to the terms of the Trust Agreement ; (iii) the Bonds have been duly authenticated and delivered by the Trustee to the purchaser or p urchasers thereof pursuant to the Trust Agreement ; (iv) the Trustee is not in breach of or default under any law or administrative rule or regulation of the State or the United States of America, or of any department, division, agency or instrumentality thereof, or any applicable court or administrative decree or order, or any other instrument to which the Trustee is a party or is otherwise subject or bound and which would materially impair the ability of the Trustee to perform its obligations under the Trust Agreement; (v) the execution and delivery of the Trust Agreement and authentication and delivery of the Bonds will not conflict with or constitute a breach of or default under the Trustee’s duties under such documents, or any law, administrative regulation, court decree, resolution, charter, bylaws or other agreement to which the Trustee is subject or by which it is bound; (vi) the representations and agreements of the Trustee in the Trust Agreement are true and correct in all material respects as of the Closing Date; and (vii) 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 T rustee, 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 Trust Agreement against the Trustee, or contesting the power of the Truste e or its authority to enter into, adopt or perform its obligations under the Trust Agreement , wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Trust Agreement against the Trustee or the authentication and delivery of the Bonds. (j) Evidence satisfactory to the Representative that the Bonds have been assigned the rating set forth in the Official Statement.
(k) Fully executed copies of the CalPERS Contract and the City Documents, and certified copies of the Authorizing Resolution and the Supplemental Resolution. (l) A certificate of the City, dated the date of the Preliminary Official Statement, signed by a duly authorized representative of the City, to the effect that Preliminary Official Statement distributed in connection with the Bonds is “deemed final” within the meaning of Rule 15c2-12;
(m) A letter of CalPERS’ actuary with the estimated unfunded accrued actuarial liability of the City as of the Closing Date (the “Unfunded Liability”) with respect to the contributions to CalPERS to fund pension benefits under the CalPERS Contract for cert ain City employees.
(n) Evidence of payment to CalPERS of payment of the Unfunded Liability. (o) At least one copy of the Official Statement manually executed on behalf of the City by a duly authorized officer of the City, and such reasonable number of certified or conformed copies of the foregoing as the Underwriters may request. 10 151824379v4
(p) A copy of the Vali dation Judgment entered by the Superior Court of the County of San Bernardino in connection with the validity of the Bonds and related matters. (q) Such additional legal opinions, certificates, instruments and other documents as the Representative or Bond Counsel may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the City herein and in the Official Statement and the due performance or satisfaction by the City on or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City.
8. The Underwriter s hereby enter into thi s Purchase Agreement in reliance upon the representations and warranties of the City contained herein and in reliance upon the representations and warranties contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the City of its obligations hereunder, both on the date hereof and as of the Closing Date. Accordingly, the Underw riters’ obligations under this Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned u pon the performance by the City of its obligations to be performed hereunder and under such documents and instruments on or prior to the Closing Date, and shall also be subject, at the option of the Representative, to the following additional conditions:
(a) The representations and warranties of the City contained herein shall be true, complete and correct on the Closing Date, as if made on and as of the Closing Date. (b) On the Closing Date, the City Documents shall have been executed and delivered, and the City D ocuments and the CalPERS Contract shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Representative; and there shall be in full force and effect such resolutions a s, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby.
(c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices shall not have been m aterially adversely affected in the reasonable judgment of the Representative (evidenced by a written notice to the City terminating the obligations of the Underwriters to accept delivery of and pay of the Bonds) by reason of any of the following:
(1) Legislation enacted (or resolution passed) by the Congress of the United States of Am erica, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Comm ission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under other requirements of the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities laws as amended and then in effect.
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(2) The withdrawal or downgrading , or placement of “credit watch” or similar status, of any rating of any General Fund obligation of the City by a national municipal bond rating agency.
(3) Any amendment to the United States or State Constitution or action by any Un ited States or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income securities (or interest thereon), the validity or enforceability of the Trust Agreement or the Continuing Disclosure Certificate, the State personal income tax exemption of interest on the Bonds or the ability of the City to issue Bonds as contemplated by the Trust Agreement and the Official Statement. (4) any event shall occur or be discovered which ma kes untrue any material statement or results in an omission to state a material fact necessary to make the statements in the Preliminary Official Statement or the Official Statement, in the light of the circumstances under which they were made, not misleading. (5) Any outbreak or escalation of hostilities or other national or international calamity or crisis, the effect of such outbreak, escalation, calamity or crisis on the financial markets of the United States being such as in the reasonable judgment of the Representative, would make it impracticable for the Underwriter s to market or enforce contracts for the sale of the Bonds, or (i) there shall be in force a general suspension of trading on the New York Stock Exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of a determination by that Exchange or by order of the Securities and Exchange C ommission or any other governmental authority having appropriate jurisdiction, or (ii) a general banking moratorium shall have been declared by either federal, State or New York authorities having jurisdiction, or (iii) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or the charge to the net capital requirements of, underwriters establ ished by the New York Stock Exchange, the Securities and Exchange Commission, any other federal agency of the Congress of the United States, or by Executive Order, or any agency of the State having appropriate jurisdiction. (6) The occurrence of a major financ ial crisis, a material disruption in commercial banking or securities settlement or clearance services, or a material disruption or deterioration in the fixed income or municipal securities market. (7) Additional material restrictions not in force or being enf orced as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange. (8) Any adverse event affecting the City occurs which, in the reasonable judgment of the Representative, requires a supplement or amendment to the Official Statement.
9. The Underwriters shall be under no obligation to pay, and the City shall pay or cause to be paid out of the proceeds of the Bonds, expenses and costs of the City incident to the performance of its obligations in connection with the authorization, issuance and sale of the Bonds to the Underwriters, including the costs of printing or reproduction of the Bonds, the City Documents , 12 151824379v4
and the Official Statement in reasonable quantities, fees and exp enses of any consultants, accountants, actuaries, financial advisors or other experts the City has retained in connection with the Bonds, fees of rating agencies, advertising expenses, fees and expenses of the Trustee and its counsel and fees and expenses of counsel to the City, Bond Counsel and Disclosure Counsel, shall be paid by the City from the proceeds of the Bonds or other revenues of the City. The City shall be solely responsible for and shall pay for any expenses incurred by the Underwriter s on behalf of the City’s employees and representatives which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees and representatives. Except as indicated abo ve, all out -of-pocket expenses of the Underwriter s, including traveling and expenses of selling the Bonds, California Debt and Investment Advisory Commission fees, any fees charged by the MSRB, Blue Sky fees and the fees and expenses of counsel to the Underwriters, shall be paid by the Underwriters (which may be included as an expense component of the underwriter’s discount). Notwithstanding that the California Debt and Investment Advisory Commission fees are solely the legal obligation of the Underwriter s, the City agrees to reimburse the Underwriter s for such fees as an expense component of the underwriter’s discount.
The City acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds.
10. Any notice or other communication to be given to the Underwriters may be given by delivering the same to BofA Securities, Inc., 555 California Avenue, Suite 1160, San Fr ancisco, CA 94104, Attention: Holly Vocal , Managing Director , phone: 415-913-2327, e -mail:
[email protected]. Any notice or other communication to be given to the City may be given by delivering the same to addresses initially provided herein, Attent ion: City Manager with respect to the City. The approval of the Underwriters when required hereunder or the determination of satisfaction as to any document referred to herein shall be in writing signed by the Representative and delivered to you.
11. This Pu rchase Agreement may be executed by the parties hereto in separate counterparts, each of which such counterparts shall together constitute but one and the same instrument.
12. This Purchase Agreement is made solely for the benefit of the City and the Underwriters (including any successors or assigns of the Underwriters duly authorized pursuant to Section 17 hereof) and no other persons, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. All covenants and repr esentations of the City in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters and shall survive the delivery of and payment for the Bonds.
13. This Purchase Agree ment shall be governed by the laws of the State of California applicable to contracts made and performed in such State.
14. The City acknowledges and agrees that: (i) the Underwriter s are not acting as municipal advisors within the meaning of Section 15B of the Securities Exchange Act, as amended; (ii) the primary role of the Underwriter s, as underwriter s, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the City and th e Underwriters and the Underwriters have financial and other interests that differ from those of the City; (iii) the Underwriters are acting solely as principals and are not acting as municipal advisors, financial 13 151824379v4
advisors or fiduciaries to the City and have not assumed any advisory or fiduciary responsibility to the City with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter s have provided other services or are currently providing other services to the City on other matters); (iv) the only obligations the Underwriters have to the City with respect to the transaction contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City has consulted its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate.
The City hereby further acknowledges and agrees that the Underwriter s and their affiliates are full service f inancial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Underwriter s and their affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the City, for which it received or will receive customary fees and expenses. In the ordinary course of its various business activities, the Underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the City.
15. This Purchas e Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and the Representative and shall be valid and enforceable as of the time of such acceptance.
16. The City hereby irrevocably waives to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Purchase Agreement or the transactions contemplated hereby.
17. This Purchase Agreement shall be governed by the laws of the State of California.
This Purchase Agreement shall not be assigned by either party hereto without the prior written consent of the other party.
[Signature page follows]
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18. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds by the City and represents the entire agreement of the parties as to the subject matter herein.
Respectfully submitted.
BofA SECURITIES, INC., as Representative of the
Underwriters
By:
Authorized Representative
Approved and accepted by the
CITY OF RIALTO
By:
Authorized Representative
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EXHIBIT A
Maturities, Principal Amounts, Interest Rates, Yields, Prices and Redemption Provisions [$____________]
CITY OF RIALTO
TAXABLE PENSION OBLIGATION BONDS,
SERIES 2022
Maturity Date
(June 1)
Principal
Amount Interest Rate Yield Price
$__________ ______% Term Bond due June 1, 20__; Yield _____%; Price ______%
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Redemption Provisions:
Optional Redemption of the Bonds
The Bonds maturing on or after June 1, 20__ are subject to redemption prior to their maturity date, at the option of the City, pro rata within a maturity on any date on or after June 1, 20__, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.
Mandatory Sinking Fund Redemption of the Bonds
The Term Bonds maturing on June 1, 20__ are subject to mandatory sinking fund redemption on June 1 in each year, commencing June 1, 20__, at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, without premium. The principal amount of such term bonds to be so redeemed and the dates therefor shall be as follows.
Redemption Date
(June 1)
Principal
Amount
$
*
* Maturity Date
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EXHIBIT B
FORM OF CITY ATTORNEY OPINION
[___________. 2022]
City of Rialto
Rialto, California
BofA Securities, Inc., as Representative
Los Angeles, California
Opinion of City Attorney
with reference to
[$___________]
City of Rialto
Taxable Pension Obligation Bonds,
Series 2022
Ladies and Gentlemen:
This opinion letter is being delivered to you pursuant to Section 7(e) of the Bond Purchase Agreement, dated [_________, 2022] (the “Purchase Agreement”), by and between the City of Rialto (the “City”) and BofA Securities, Inc., as representative of the Underwriters named therein.
Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Purchase Agreement. We serve as City Attorney to the City. In such capacity, in connection with the issuance of the above -referenced bonds (the “Bonds”), we have examined the originals, certified copies, or copies otherwise identified to us as being true copies o f the City Documents, the CalPERS Contract, and such other documents, certificates, and records as we have deemed relevant and necessary as the basis for the opinions set forth in this letter, in cluding without limitation the Validation Judgment , dated [____________, 202 2] (the “Judgment”), executed by Honorable _____________, Judge of the Superior Court of the State of California, County of San Bernardino, with respect to the action entitled City of Rialto v. All Persons Interested et al. (Case No.
CIVSB2123274), referenced in the Officia l Statement under the captions “INTRODUCTION – JUDICIAL VALIDATION” and “ VALIDATION PROCEEDINGS.” Relying on such examination and the Judgment and subject to the limitations and qualifications set forth in this letter, we are of the opinion under existing law that:
1. The City is a general law city duly organized and validly existing under and by vir tue of the Constitution and laws of the State of California.
2. Each of (i) Resolution No. 7762 of the City Council (the “Resolution”), and (ii) Resolution No. ____ of the City Council (the “Supplemental Resolution”), which together approve and authorize t he issuance of the Bonds, the execution and delivery of the City Documents, the delivery of the Official Statement, and related matters, was duly adopted at a regular meeting of the City Council of the City, which was cal led and held on, respectively, July 27, 2021 and [_______, 2022], pursuant to law with all public notice required by law and at which a quorum was present and
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acting throughout, and each of the Resolution and the Supplemental Resolution is in full force and effect and has not been modified, amended or rescinded.
3. Except as disclosed in the Preliminary Official Statement and in the Official Statement, there is no action, suit or proceeding pending with respect to which proper notice has been duly served upon the City, or to the best of our knowledge, threatened agai nst the City to (i) restrain or enjoin the execution or delivery of the City Documents, (ii) in any way contesting or affecting the validity of the City Documents, the Resolution, the Supplemental Resolution, or the CalPERS Contract or the authority of the City to enter into the City Documents, or (iii) in any way contesting or affecting the powers of the City in connection with any action contemplated by the Official Statement, the Resolution, the Supplemental Resolution, the City Documents, or the CalPERS Contract.
4. To the best of our knowledge, the execution and delivery of the City Documents by the City, and compliance by the City with the provisions thereof and of the CalPERS Contract, do not and will not in any material respect conflict with or const itute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which conflict, b reach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the City Documents or the CalPERS Contract.
The opinions expressed herein are based on such examination of the law of the State of California as we deemed relevant for the purposes of this opinion. We have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this letter. We have assumed the genuineness of all documents and signatures presented t o us. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. We express no opinion herein as to the status of the Bonds or the interest thereon, the City Documents, or the CalPERS Contract under any federal securities laws or any state securities or “Blue Sky” law or any federal, state or local tax law. No opinion is expressed herein with respect to the validity of the Bonds for which the City is relying on the opinion given by Bond Counsel. Further, 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, or waiver provisions contained in the City Documents or the CalPERS Contract. Without limiting any of the foregoing, we express no opinion as to any matter other than as expressly set forth above.
Whenever a statement herein is qualified by “to the best of our knowledge,” it shall be deemed to indicate that, during the course of our representation of the City in connection with the financing described herein, no information tha t would give us current, actual knowledge of the inaccuracy of such statement has come to our attention. We have not, however, undertaken any independent investigation to determine the accuracy of such statements, and any limited inquiry undertaken by us during the preparation of this opinion letter should not be regarded as such investigation. No inference as to our knowledge of any matters bearing upon the accuracy of any such statement should be drawn from the fact of our representation of the City.
This opinion letter is furnished by us as City Attorney to the City. Except for the City, no attorney-client relationship has existed or exists between our firm and the addressees hereof in connection with the Bonds or by virtue of this opinion letter. This opinion letter is rendered solely in
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connection with the financing described herein, and may not be relied upon by you for any other purpose. We disclaim any obligation to update this opinion letter. This opinion letter and the opinions expressed herei n shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without our prior written consent; provided, however, a copy may be included in the transcript of the proceedings for the Bonds.
Very truly yours,