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HomeMy Public PortalAbout13. Repurchase of 2006 Pension Obligation BondClaremont City Council Agenda Report File #:4924 Item No:13. TO:ADAM PIRRIE, CITY MANAGER FROM:JEREMY STARKEY, FINANCE DIRECTOR DATE:NOVEMBER 14, 2023 Reviewed by: City Manager:AP SUBJECT: REPURCHASE OF 2006 PENSION OBLIGATION BOND (FUNDING SOURCE: GENERAL FUND) SUMMARY In January 2006,the City Council approved and adopted Resolution No.2006-01 establishing a Trust Agreement that allowed the City to issue $6,060,000 in Taxable Pension Obligation Bonds,2006 Series A (the “Bonds”),for the purpose of funding the unfunded accrued actuarial liability of the City’s safety plan of the California Public Employees’ Retirement System (CalPERS). The 2006 Bonds are outstanding in the principal amount of $2,030,000,carry an interest rate of 5.18 percent and mature on June 1,2027.The 2006 Bonds are solely owned by FMS WERTMANAGEMENT,a wind-up institution organized as a public law entity under public law of the Federal Republic of Germany (the “Owner”). The Owner has offered to sell the Bonds back to the City for the discounted purchase price of 90 percent of their outstanding balance plus accrued interest.Based on projected savings of approximately $157,000,staff recommends that the City Council authorize the repurchase of the outstanding Bonds from the Owner subject to the attached Bond Repurchase Agreement (the “Agreement”). The City proposes to engage Stifel,Nicolaus &Company,Inc.to serve as the City’s repurchase agent in connection with the repurchase of the Bonds. RECOMMENDATION Staff recommends that the City Council: A.Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA,AUTHORIZING THE REPURCHASE OF ITS OUTSTANDING TAXABLE PENSION OBLIGATION BONDS,2006 SERIES A,APPROVING A REPURCHASE AGENT AGREEMENT AND A BOND REPURCHASE AGREEMENT AND AUTHORIZING CERTAIN CLAREMONT Printed on 11/9/2023Page 1 of 3 powered by Legistar™ AGREEMENT AND A BOND REPURCHASE AGREEMENT AND AUTHORIZING CERTAIN ADDITIONAL ACTIONS IN CONNECTION THEREWITH; B.Approve the Repurchase Agent Agreement in form,approve the Bond Repurchase Agreement in form and approve the attached Instructions to Trustee re: Bond Repurchase in form; C.Authorize the City Manager to execute the Repurchase Agent Agreement in an amount not to exceed $20,000; D.Authorize the City Manager to execute the Bond Repurchase Agreement in an amount not to exceed $1,835,000; and E.Appropriate an additional $1,235,403 from the unassigned General Fund balance to finalize the payment of the 2006 Pension Obligation Bonds and the related transaction costs. ALTERNATIVES TO RECOMMENDATION In addition to the recommendation, there are the following alternatives: ·Request additional information ·Do not approve the repurchase of the outstanding 2006 Pension Obligation Bonds FINANCIAL REVIEW Pursuant to the Trust Agreement entered into in January 2006,the Bonds are subject to optional redemption prior to their maturity at the option of the City,in whole or in part on any date,at a redemption price equal to the principal amount plus accrued interest to the redemption date.The outstanding principal amount is currently $2,030,000 with interest of approximately $238,896 to be accrued and paid through the remaining term of the existing bond purchase agreement. The 2022-24 Budget included a payment of $639,597 for the 2023-24 principal and interest portion scheduled.This payment has already been made.An additional appropriation of $1,235,403 from the City’s unassigned General Fund balance will allow the City to repurchase the outstanding balance of the Bonds,including accrued interest,and pay estimated transaction costs of $40,000.Transaction costs for this repurchase include $20,000 to Stifel,Nicolaus &Company,Inc.,$5,000 to the City’s financial advisor on the transaction (Urban Futures,Inc.),$7,500 to bond counsel (Stradling Yocca Carlson & Rauth), and a contingency of $7,500 for trustee or other miscellaneous costs. The early repurchase of the outstanding Bonds is estimated to save the City debt service payments of $660,991,$680,052 and $288,256 in 2024-25,2025-26 and 2026-27,respectively.Staff proposes to include additional discretionary payments to CalPERS to pay down the City’s unfunded pension liabilities in those years using the debt service savings that will result from the repurchase of the outstanding bonds. The staff cost to prepare this report and administer this program is estimated at $1,913 and is included in the operating budget of the Financial Services Department. ANALYSIS Based on a projected repurchase settlement date of November 20,2023,staff has developed the following estimates for the savings that would result from the repurchase of the outstanding 2006 Pension Obligation Bonds: CLAREMONT Printed on 11/9/2023Page 2 of 3 powered by Legistar™ Outstanding Par Amount (A)$2,030,000.00 Purchase Price Offered 90.00% Net Amount $1,827,000.00 Plus Accrued Interest from Nov 1, 2023 $5,549.79 Purchase Price (B)$1,832,549.79 Less: Estimated Transaction Costs (C) * ($40,000.00) City Discount (A-B-C) * $157,450.21 *Preliminary and subject to change.Transaction costs (in particular,costs of the Trustee,and accrued interest, depending on the settlement date) may slightly change. The repurchase of the 2006 Pension Obligation Bond will require the one-time payment of the remaining principal and accrued interest for the period owed based on the settlement date. RELATIONSHIP TO CITY PLANNING DOCUMENTS Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents:Council Priorities,Sustainable City Plan, Economic Sustainability Plan, General Plan, 2022-24 Budget. CEQA REVIEW This item is not subject to environmental review under the California Environmental Quality Act (CEQA). PUBLIC NOTICE PROCESS The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office. Submitted by: Jeremy Starkey Finance Director Attachments: A - Resolution Authorizing the Repurchase of its Outstanding Taxable POB B - Repurchase Agent Agreement C - Bond Repurchase Agreement D - Instructions to Trustee re: Bond Repurchase CLAREMONT Printed on 11/9/2023Page 3 of 3 powered by Legistar™ RESOLUTION NO. 2023- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLAREMONT, CALIFORNIA, AUTHORIZING THE REPURCHASE OF ITS OUTSTANDING TAXABLE PENSION OBLIGATION BONDS, 2006 SERIES A, APPROVING A REPURCHASE AGENT AGREEMENT AND A BOND REPURCHASE AGREEMENT AND AUTHORIZING CERTAIN ADDITIONAL ACTIONS IN CONNECTION THEREWITH WHEREAS, in order to refinance certain pension liabilities of the City of Claremont (the “City”), the City issued its Taxable Pension Obligation Bonds, 2006 Series A (the “2006 Bonds”) on January 26, 2006, pursuant to that certain Trust Agreement dated as of January 1, 2006 (the “Trust Agreement”), by and between the City and Computershare Trust Company, N.A., as successor trustee (the “Trustee”); WHEREAS, the 2006 Bonds are outstanding in the principal amount of $2,030,000 and carry an interest rate of 5.18% and mature on June 1, 2027; WHEREAS, FMS Wertmanagement, a wind-up institution organized as a public law entity (Anstalt öffentlichen Rechts) under public law of the Federal Republic of Germany, the sole owner of the 2006 Bonds (the “Owner”) has offered to sell the 2006 Bonds to the City for a discounted purchase price, subject to the terms of a Bond Repurchase Agreement in substantially the form submitted herewith (the “Bond Repurchase Agreement”); WHEREAS, subject to the terms and conditions set forth in the Bond Repurchase Agreement, the City wishes to purchase the 2006 Bonds from the Owner for a purchase price of $1,827,000.00 plus accrued interest thereon to the Settlement Date set forth in the Bond Repurchase Agreement (collectively, the “Purchase Price”), as set forth in the Bond Repurchase Agreement (the “Repurchase”); WHEREAS, the City shall utilize legally available monies in the City’s General Fund to purchase the outstanding 2006 Bonds pursuant to the Bond Repurchase Agreement; WHEREAS, pursuant to the Bond Repurchase Agreement, the Owner will deliver the 2006 Bonds to the Trustee for cancellation; WHEREAS, the cancellation of the outstanding 2006 Bonds will reduce the overall principal amount and eliminate future interest payable by the City with respect to the cancelled 2006 Bonds; and WHEREAS, the City Council desires to engage Stifel, Nicolaus & Company, Incorporated (“Stifel”) to serve as the City’s repurchase agent in connection with the repurchase of the 2006 Bonds pursuant to the terms of a Repurchase Agent Agreement by and between the City and Stifel, in substantially the form submitted herewith (the “Repurchase Agent Agreement”). Resolution No. 2023- Page 2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CLAREMONT DOES HEREBY RESOLVE: SECTION 1. The City Council finds that the above recitals are true and correct. SECTION 2. The Repurchase as described herein is hereby approved; and, in connection therewith, the Mayor, the Mayor Pro Tem, the City Manager, the Finance Director (each an “Authorized Officer”), and their authorized designees, are each hereby authorized to utilize monies in the City’s General Fund to purchase the 2006 Bonds from the Owner pursuant to the Bond Repurchase Agreement. SECTION 3. The form of the Bond Repurchase Agreement between the City and the Owner, in substantially the form presented herewith, is hereby approved as to form. Each Authorized Officer, acting on behalf of the City, is hereby authorized and directed to execute and deliver the final form of the Bond Repurchase Agreement, with such additions thereto or changes therein as such Authorized Officer may deem necessary and advisable. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of such documents or instruments by such Authorized Officer, following consultation with and review by Stradling Yocca Carlson & Rauth (“Special Counsel”). SECTION 4. The form of the Repurchase Agent Agreement between the City and Stifel, in substantially the form presented herewith, is hereby approved as to form. Each Authorized Officer, acting on behalf of the City, is hereby authorized and directed to execute and deliver the final form of the Repurchase Agent Agreement, with such additions thereto or changes therein as such Authorized Officer may deem necessary and advisable. The approval of such additions or changes shall be conclusively evidenced by the execution and delive ry of such documents or instruments by such Authorized Officer, following consultation with and review by Special Counsel. SECTION 5. Each Authorized Officer, in consultation with Special Counsel, is hereby authorized to negotiate, execute, and deliver one or more amendments or supplements to the Trust Agreement if necessary or advisable in the view of such special counsel to accomplish the Repurchase as described herein, and each Authorized Officer is hereby authorized and directed to take any actions necessary to effectuate such amendment or supplement to the Trust Agreement. SECTION 6. The following professionals are hereby appointed to serve the City in connection with the Repurchase: • Urban Futures, Inc. is hereby engaged as Municipal Advisor; and • Stradling Yocca Carlson & Rauth is hereby engaged as Special Counsel. Each Authorized Officer is hereby authorized to enter into contracts or to sign such other documentation as is necessary or appropriate to evidence such engagements and retain such services in connection with the Repurchase. Resolution No. 2023- Page 3 SECTION 7. Each Authorized Officer is hereby authorized and directed, jointly and severally, to execute and sign any and all approvals, certificates, statements, requests, requisitions, instructions and orders of the City in connection with the Repurchase and the purchase and cancelation of the 2006 Bonds pursuant thereto; and any action specifically authorized or directed by this Resolution to be undertaken by any of such officers may be undertaken by another with the same force and effect as if it had been undertaken by the officer specifically authorized or directed to do so. SECTION 8. The Mayor shall sign this Resolution and the City Clerk shall attest to the adoption thereof. PASSED, APPROVED AND ADOPTED on this 14th day of November, 2023. ____________________________ Mayor, City of Claremont ATTEST: ____________________________ City Clerk, City of Claremont APPROVED AS TO FORM: ___________________________ City Attorney, City of Claremont 4872-6541-5819v4/022489-0013 ATTACHMENT B REPURCHASE AGENT AGREEMENT November 1, 2023 Adam Pirrie City of Claremont City Manager 207 Harvard Ave Claremont, CA 91711 Ladies and Gentlemen: The City of Claremont (the “City”) has received an offer from FMS WERTMANAGEMENT, a wind-up institution organized as a public law entity (Anstalt öffentlichen Rechts) under public law of the Federal Republic of Germany (the “Bank”), the beneficial owner of the City’s Taxable Pension Obligation Bonds, 2006 Series A (the “Target Bonds”), to sell the Target Bonds to the City, all upon the terms and subject to the conditions set forth in a Bond Repurchase Agreement between the City and the Bank, dated as of November 1, 2023 (the “Bond Repurchase Agreement”). This Repurchase Agent Agreement (this “Agreement”) will confirm the understanding between the City and Stifel, Nicolaus & Company Incorporated (“Stifel”) pursuant to which the City has retained Stifel to act as the exclusive repurchase agent (the “Repurchase Agent”), on the terms and subject to the conditions set forth herein, in connection with the City’s proposed repurchase of the Target Bonds (the “Repurchase”). If the City chooses to purchase the Target Bonds from the Bank, t he City will do so and will fund expenses incurred in connection with the Repurchase with cash on hand. The Repurchase Agent is not authorized to accept on the City’s behalf any Repurchase offer made by the City, or otherwise bind the City, without the City’s prior written consent. The date on which Target Bonds are repurchased for cash pursuant to the Bond Repurchase Agreement is referred to herein as the “Settlement Date”. SECTION 1. Engagement. Subject to the terms and conditions set forth herein: (a) The City hereby retains the Repurchase Agent, and subject to the terms and conditions hereof, the Repurchase Agent agrees to act as the exclusive repurchase agent to the City in connection with the Repurchase until the Settlement Date or earlier termination of this Agreement pursuant to Section 3 hereof. (b) The City acknowledges that the Repurchase Agent has been retained solely to provide the services set forth in this Agreement. The City also acknowledges and agrees that the Repurchase Agent shall act as an independent contractor, on an arm’s-length basis under this 2 4872-6541-5819v4/022489-0013 Agreement with duties solely to the City and that nothing contained herein or the nature of the Repurchase Agent’s services hereunder is intended to create or shall be construed as creating an agency or fiduciary relationship between the Repurchase Agent (or any of its affiliates) and the City (or its security holders, directors, officers, employees or creditors) or any other person. The City further acknowledges that (i) the Repurchase Agent shall not be deemed to act as a partner, joint venturer or agent of, or a member of a syndicate with, the City (except that in any jurisdiction in which the Repurchase is required to be made by a registered licensed broker or dealer, it shall be deemed made by the Repurchase Agent on behalf of the City), and the City shall not be deemed to act as the agent of the Repurchase Agent, and (ii) no securities broker, dealer, bank, trust company or nominee shall be deemed to act as the agent of th e Repurchase Agent or as the agent of the City, and the Repurchase Agent shall not be deemed to act as the agent of any securities broker, dealer, bank, trust company or nominee. The City acknowledges and agrees that none of the Repurchase Agent, its affiliates and their respective officers, directors, employees, agents and controlling persons (each, a “Repurchase Agent-Related Person”) shall have any liability in tort, contract or otherwise to the City for any act or omission on the part of any securities broker, dealer, bank, trust company or nominee or any other person other than the Repurchase Agent or a Repurchase Agent-Related Person. The City shall have sole responsibility for the acceptance or rejection of the Target Bonds for purchase. (c) [Reserved] (d) The City acknowledges that Stifel and its affiliates are engaged in a broad range of securities activities and financial services. In the ordinary course of Stifel’s business, Stifel or its affiliates (i) may at any time hold long or short positions, and may trade or otherwise effect transactions, for Stifel’s account or the accounts of its customers, in debt securities of the City and (ii) may at any time be providing or arranging financing and other financial services to companies or entities that may be involved in a competing transaction. (e) The Repurchase Agent agrees to use its customary reasonable efforts to negotiate the terms of the Repurchase. The Repurchase Agent agrees, in accordance with its customary practices and consistent with industry practice for investment banking concerns of national standing and in accordance with the terms of the Repurchase, to perform those services in connection with the Repurchase as are customarily performed by repurchase agents in connection with similar transactions of a like nature, including, without limitation, participating in meetings with, furnishing information to, and assisting the City in negotiating with, the Bank. (f) [Reserved] (g) [Reserved] (h) [Reserved] (i) The City agrees to advise the Repurchase Agent promptly of (i) the occurrence of any event which, in the reasonable judgment of the City or its counsel, could cause or require the City to withdraw, rescind or modify the Bond Repurchase Agreement or any subsequent, related agreement for the purchase and sale of the Target Bonds, (ii) the occurrence of any event that would permit the City to exercise any right not to purchase Target Bonds, (iii) 3 4872-6541-5819v4/022489-0013 the occurrence of any event that would cause any representation or warranty of the City contained in this Agreement to be untrue or inaccurate in any material respect, (iv) any material developments in connection with the Repurchase, including, without limitation, the commencement of any litigation or administrative action concerning or related to the Repurchase, or (v) the issuance by any agency of any comment or order or the taking of any other action concerning the Repurchase (and, if in writing, the City will furnish the Repurchase Agent with a copy thereof). The City will also provide the Repurchase Agent with any other information relating to the Repurchase or this Agreement that the Repurchase Agent may from time to time reasonably request. (j) [Reserved] (k) The City is authorized to and will, subject to the terms of the Bond Repurchase Agreement, use available cash to pay the full purchase price of the Target Bonds to the Bank on the Settlement Date. (l) Pursuant to and subject to satisfaction of the conditions to the Repurchase set forth in the Bond Repurchase Agreement, the City will instruct the Trustee to cancel the Target Bonds on the Settlement Date. SECTION 2. Compensation and Expenses. (a) The City shall pay to the Repurchase Agent, as compensation for the Repurchase Agent’s services hereunder, a fee of $20,000. Such fee shall be payable concurrently with the payment for the Target Bonds, pursuant to the Bond Repurchase Agreement, on the Settlement Date. SECTION 3. Termination; Withdrawal. (a) Subject to Section 7 hereof, this Agreement shall terminate upon the earliest to occur of (i) the termination, withdrawal or cancellation of the Bond Repurchase Agreement, (ii) the close of business on the Settlement Date, (iii) the withdrawal by Stifel as the Repurchase Agent pursuant to Section 4(m)(A) hereof, (iv) the time and date on which this Agreement shall be terminated by mutual consent of the parties hereto, and (v) the date that is sixty (60) days after the date of this Agreement. (b) Subject to Section 7 hereof, this Agreement may be terminated by the City, at any time upon notice to the Repurchase Agent, if (i) at any time prior to the Settlement Date, the Bond Repurchase Agreement is terminated or withdrawn by the City for any reason, or (ii) the Repurchase Agent does not comply in any material respect with any of its obligations hereunder in the reasonable opinion of the City. (c) Subject to Section 7 hereof, this Agreement shall be subject to termination in the absolute discretion of the Repurchase Agent without any liability or penalty to the Repurchase Agent and to each Dealer-Manager Related Person, at any time upon notice to the City, if (i) prior to the Settlement Date, (A) the Bond Repurchase Agreement is terminated or withdrawn by the City for any reason other than as provided in Section 3(b)(ii) above, or (B) any proceeding, litigation or investigation has been initiated, with respect to or otherwise affecting any action or transaction contemplated by this Agreement, which the Repurchase 4 4872-6541-5819v4/022489-0013 Agent reasonably believes renders it inadvisable for it to continue to act hereunder, or (ii) the City shall have breached in any material respect any representation, warranty or covenant contained herein (including, but not limited to, the conditions set forth in Section 4 hereof). SECTION 4. Representations and Warranties by the City. The City represents and warrants to the Repurchase Agent, as of the date hereof, and as of the Settlement Date that: (a) The City is a duly organized and validly existing under the laws of the State of California (the “State”). (b) The City has full legal right, power and authority to execute and deliver this Agreement, and to perform all its obligations hereunder. (c) The City has taken all necessary official action to authorize the making and consummation of the Repurchase and the execution, delivery, and performance by the City of this Agreement; and this Agreement has been duly executed and delivered by the City and, assuming due authorization, execution and delivery by the Repurchase Agent, this Agreement constitutes a legal, valid and binding contractual obligation of the City, enforceable against the City in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting the creditors’ rights generally, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against entities such as the City in the State. SECTION 5. Conditions and Obligations. The obligation of the Repurchase Agent to act as a Repurchase Agent hereunder shall at all times be subject, in its discretion, to the following conditions and obligations: (a) No event shall occur, nor shall any circumstance exist, that causes the representations and warranties of the City contained herein or in any certificate or writing delivered hereunder at all times during the terms of the Bond Repurchase Agreement and at all times at or prior to the Settlement Date, not to be true and correct. (b) The City at all times during the Repurchase and at all times at or prior to the Settlement Date shall have performed all of its obligations hereunder required as of such time to have been performed by it. (c) [Reserved] (d) [Reserved] (e) [Reserved] (f) The City shall have advised the Repurchase Agent promptly of the occurrence of any event that would permit the City to terminate the Bond Repurchase Agreement prior to the Settlement Date. 5 4872-6541-5819v4/022489-0013 SECTION 6. No Repurchase Agent Duties and Obligations Beyond Those Set Forth Herein. It is expressly understood and agreed that the Repurchase Agent’s duties and obligations in connection with this Agreement are limited to those expressly set forth herein, and no additional covenants or obligations shall be read into this Agreement against the Repurchase Agent. SECTION 7. Survival. This Section 7 and Sections 2, 6, 8 and 10 hereof shall survive any termination, except a termination pursuant to Section 3(b)(ii) hereof, expiration or cancellation of this Agreement, any completion of the engagement provided for by this Agreement and shall survive the Repurchase pursuant to the Bond Repurchase Agreement. SECTION 8. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. SECTION 9. Notices. Except as otherwise expressly provided in this Agreement, all notices, demands and formal actions hereunder will be in writing, mailed, forwarded by nationally recognized overnight carrier, electronically transmitted, or in some commercially accepted manner delivered, if to the City, to 207 Harvard Ave., Claremont, California 91711, Attention: Adam Pirrie, City Manager; or if to the Underwriter, to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, CA 90067; Attention: Tom Jacob, Managing Director, or to such other address specified in a notice delivered in accordance with this Section 9. SECTION 10. Miscellaneous. (a) This Agreement embodies the entire agreement and understanding between the parties relating to the subject matter hereof and supersedes all prior agreements and understandings related to such subject matter, and it is agreed that there are no terms, understandings, representations or warranties, express or implied, other than those set forth herein. (b) This Agreement will inure to the benefit of and be binding upon the parties and their successors (including any successors or assigns of the Repurchase Agent), and will not confer any rights upon any other person. No member of the City Council of the City or any other employee or official of the City shall incur any personal liability for approving or executing this Agreement, taking any action or omitting to take any action required or permitted hereunder or otherwise by reason of or in connection with this Agreement or any of the transactions or other matters contemplated. (c) The Repurchase Agent may share any information or matters relating to the City and the transactions contemplated hereby with its affiliates, and such affiliates may likewise share information relating to the City with the Repurchase Agent. (d) All representations, warranties, covenants and agreements by the City and the Repurchase Agent in this Agreement shall remain operative and in full force and effect and shall survive the Repurchase. (e) If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants, and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The City 6 4872-6541-5819v4/022489-0013 and the Repurchase Agent shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions. (f) Urban Futures, Inc., an independent registered municipal advisor (as defined in SEC Rule 15Ba1-1(d)(3)(vi)), has been engaged to advise the City in connection with the Repurchase. The City acknowledges that in connection with the provision of the services under this Agreement, the Repurchase Agent has informed the City that it is relying on the exemption provided under SEC Rule 15Ba1-1(d)(3)(vi) for the participation by an independent registered municipal advisor. The Repurchase Agent is not acting as a Municipal Advisor (as defined in Section 15B of the 1934 Act) and shall have no fiduciary duty to the City in connection with the Repurchase. The City has consulted with its municipal and other advisors to the extent it deems appropriate in connection with the Repurchase. (g) In connection with the transactions contemplated hereby and the process leading to such transactions, the Repurchase Agent is and has been acting solely as a principal and is not the municipal advisor, financial advisor, agent or fiduciary of the City or any of the City’s affiliates, directors, officers, employees, creditors or any other person (irrespective of whether the Repurchase Agent has provided other services or is currently providing other services to any of them on other matters). The City expressly disclaims any agency or fiduciary relationship with the Repurchase Agent hereunder. The City understands that neither the Repurchase Agent nor the Repurchase Agent-Related Parties is a municipal advisor and neither is providing (nor is the City relying on the Repurchase Agent or its affiliates for) tax, regulatory, legal or accounting advice. The City acknowledges that it has consulted with its financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate. The rights and obligations that the City may have to the Repurchase Agent or its affiliates, under any credit or other agreement, are separate from the City’s rights and obligations under this Agreement and will not be affected in any way by this Agreement. (h) [Reserved] (i) This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which, taken together, will constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or email transmission shall be as effective as delivery of a manually signed counterpart hereof. [Remainder of page intentionally left blank; signature page follows] 4872-6541-5819v4/022489-0013 If the foregoing correctly sets forth our understanding, please indicate your acceptance of the terms hereof signing in the appropriate space below and returning to the Repurchase Agent the enclosed duplicate originals hereof, whereupon this letter shall be come a binding agreement between us. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED, as Repurchase Agent By: Authorized Representative Accepted and agreed to as of the date first written above: City of Claremont By: Adam Pirrie, City Manager 1 4853-8014-6314/022489-0013 ATTACHMENT C BOND REPURCHASE AGREEMENT This BOND REPURCHASE AGREEMENT (the “Agreement”) dated as of November 1, 2023 is between the CITY OF CLAREMONT, a California municipal corporation (the “City”), and FMS WERTMANAGEMENT, a wind-up institution organized as a public law entity (Anstalt öffentlichen Rechts) under public law of the Federal Republic of Germany, the sole owner of the Bonds (defined below) (the “Owner”). RECITALS: WHEREAS, the City issued its Taxable Pension Obligation Bonds, 2006 Series A (the “Bonds”) on January 26, 2006, pursuant to that certain Trust Agreement dated as of January 1, 2006 (the “Trust Agreement”) by and between the City and Computershare Trust Company, N.A., as successor trustee (the “Trustee”); WHEREAS, the Owner is the sole owner of the Bonds; WHEREAS, the Bonds are outstanding in the principal amount of $2,030,000; WHEREAS, the Owner offered to sell the Bonds to the City for a discounted purchase price , subject to the terms of this Agreement; WHEREAS, the City has determined that, subject to the terms and conditions set forth herein, it wishes to purchase the Bonds from the Owner for the purchase price set forth herein and subject to the terms of this Agreement; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the City and Owner agree, as follows: SECTION 1. PURCHASE OF BONDS. (A) Purchase of Bonds. Subject to the terms and conditions set forth herein, the Owner hereby offers and agrees with the City to deliver to the City, in exchange for payment of the Purchase Price, on the Settlement Date, all of the Bonds, and the City agrees to accept the Bonds from the Owner for retirement and cancellation. (B) Purchase Price. Subject to the terms and conditions set forth in this Agreement, the Owner agrees to pay a purchase price of $______ in exchange for the Bonds (the “Purchase Price”). The Purchase Price is the sum of the following: (i) a payment of $1,827,000.00, which equates to 90% of the outstanding principal amount of the Bonds, plus (ii) accrued interest on the Bonds to the Settlement Date. SECTION 2. SETTLEMENT. (A) Settlement Date. The “Settlement Date” shall be November [20], 2023. 2 4853-8014-6314/022489-0013 (B) Settlement Process. Not later than one (1) business day prior to the Settlement Date, (1) the City shall transfer the Purchase Price to the Trustee for deposit into the [Principal Account of the Bond Fund], (2) City shall execute and deliver to the Trustee instructions in substantially the form attached hereto as Exhibit A and incorporated herein and (3) the Owner shall cause to be delivered the original Bonds to the Trustee. On the Settlement Date, provided that the Trustee has received the Purchase Price from the City and the original Bonds from the Owner, the Trustee shall (a) pay the Purchase Price to the Owner by wire transfer and (b) destroy the Bonds and deliver a certificate to the City stating that all outstanding Bonds have been cancelled and retired and the Trust Agreement is discharged pursuant to its terms. SECTION 3. REPRESENTATIONS AND AGREEMENTS OF OWNER. The Owner acknowledges and represents to the City that: (1) it is a “qualified institutional buyer” as defined in Rule 144A promulgated under the Securities Act of 1933, as amended (the “1933 Act”); (2) it has made its own independent decision to sell the Bonds to the City on the terms set forth in this Agreement; (3) such decisions are based upon Owner’s own judgment and upon advice from such advisors as Owner has consulted; (4) Owner is not relying on any communication from the City as investment advice or as a recommendation to make the offer to sell the Bonds; and (5) it has either been supplied with or been given access to information, including financial statements and other financial information, to which a reasonable investor would attach significance in making investment decisions, and it has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the City and the City’s financial condition so that, as a reasonable investor, it has been able to make its decision to sell the Bonds. SECTION 4. MISCELLANEOUS AND NOTICE. This Agreement shall inure to the benefit of the Owner and the City and their respective successors. Nothing in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. Any notice or other communication to be given to the City under this Agreement may be given by mailing or delivering the same in writing to the City as follows: City of Claremont 207 Harvard Avenue Claremont, California 91711 Attn: Adam Pirrie, City Manager Email: apirrie@ci.claremont.ca.us Any notice or other communication to be given to Owner under this Agreement may be given by mailing or delivering the same in writing to Owner as follows: FMS Wertmanagement c/o FMS-WM Service Company Dublin Branch Kilmore House Park Lane, Spencer Dock D01 YE64 Dublin 3 4853-8014-6314/022489-0013 Ireland Attn: Tobias Bogner Email: tobias.bogner@fms-sg.de No officer, agent or any employee of the City shall be charged personally by Owner with any liability, or held personally accountable to Owner, under any term or provision of this Agreement, or because of its execution or attempted execution, or because of any breach, or attempted or alleged breach, of this Agreement. SECTION 5. APPLICABLE LAW; NONASSIGNABILITY. This Agreement shall be governed by the laws of the State of California, without regard to conflict of law principles. This Agreement shall not be assigned by the City or Owner. [Remainder of page intentionally left blank.] 4 4853-8014-6314/022489-0013 SECTION 6. EXECUTION OF COUNTERPARTS EFFECTIVE UPON ACCEPTANCE. This Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. This Agreement shall supersede all previous agreements relating to the same subject matter between the parties and shall become effective upon acceptance by the City as evidenced by the execution hereof by any authorized officer of the City as set forth below. FMS WERTMANAGEMENT, a wind-up institution organized as a public law entity (Anstalt öffentlichen Rechts) under public law of the Federal Republic of Germany By: FMS Wertmanagement Service GmbH, as servicer and attorney in fact By: [Name and Title] By: [Name and Title] CITY OF CLAREMONT, a California municipal corporation By: Adam Pirrie, City Manager A-1 4853-8014-6314/022489-0013 EXHIBIT A INSTRUCTIONS TO TRUSTEE 4866-8114-1130v5/022489-0013 ATTACHMENT D $6,060,000 CITY OF CLAREMONT TAXABLE PENSION OBLIGATION BONDS, 2006 SERIES A INSTRUCTIONS TO TRUSTEE RE BOND REPURCHASE To: COMPUTERSHARE TRUST COMPANY, N.A, as successor trustee (the “Trustee”) under the Trust Agreement dated as of January 1, 2006, by and between the City of Claremont (the “City”) and the Trustee (the “Trust Agreement”) relating to the issuance of $6,060,000 aggregate principal amount of City of Claremont Taxable Pension Obligation Bonds, 2006 Series A (the “Bonds”). Pursuant to the Trust Agreement, the City is authorized to repurchase all or a portion of the Bonds. The City has agreed to repurchase all of the Bonds pursuant to the terms and conditions set forth in Resolution No. ___ of the City adopted on November 14, 2023, and that certain Bond Repurchase Agreement dated as of November 1, 2023 (the “Bond Repurchase Agreement”), by and between the City and FMS Wertmanagement, a wind-up institution organized as a public law entity (Anstalt öffentlichen Rechts) under public law of the Federal Republic of Germany, the current sole holder of the Bonds (the “Owner”). All terms not defined herein shall have the meaning set forth in the Trust Agreement. You are hereby authorized and directed as follows: (1) Accept the sum of $____________ (the “City Funds”) from the City and deposit the City Funds to the Principal Account [and Interest Account] maintained by the Trustee pursuant to the Trust Agreement; (2) Immediately upon the receipt of the City Funds, transfer $______ from the funds and accounts maintained under the Trust Agreement to the Principal Account [OR Interest Account]; (3) The Trustee is hereby instructed to accept the transfer of the Bonds from the Owner; (4) On the Settlement Date stated in the Bond Repurchase Agreement, the Trustee shall pay $__________ to the Owner, from the City Funds deposited into the Principal Account [and Interest Account] pursuant to paragraph (1), above; and (5) Destroy the Bonds and execute and deliver a certificate stating that the Bonds have been cancelled and destroyed pursuant to Sections 10.05 and 10.06 of the Trust Agreement, in the form attached hereto as Exhibit A. If you cannot comply with these instructions, you shall not accept the deposit of the City Funds and you shall immediately contact Vanessa Legbandt, Bond Counsel, at (949) 725-4073. (Signature page follows) 4866-8114-1130v5/022489-0013 Dated: November [20], 2023 CITY OF CLAREMONT By: _______________________________________ Adam Pirrie City Manager A-1 4866-8114-1130v5/022489-0013 EXHIBIT A FORM OF CERTIFICATE OF CANCELLATION AND DESTRUCTION $6,060,000 CITY OF CLAREMONT TAXABLE PENSION OBLIGATION BONDS, 2006 SERIES A CERTIFICATE OF CANCELLATION AND DESTRUCTION COMPUTERSHARE TRUST COMPANY, N.A., as trustee (the “Trustee”) under the Trust Agreement dated as of January 1, 2006, by and between the City of Claremont (the “City”) and the Trustee, (the “Trust Agreement”), upon written direction of the City, has cancelled and destroyed the $6,060,000 principal amount of bonds referred to as City of Claremont Taxable Pension Obligation Bonds, 2006 Series A, dated January 26, 2006. Dated: _________, 2023 COMPUTERSHARE TRUST COMPANY, N.A. By: [Name and Title]