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SR-203-001-06 (3) CONTINUING DISCLOSURE CERTIFICATE REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA Dated as of ____________ 1, 1999 Relating to $____________ Redevelopment Agency of the City of Santa Monica Santa Monica Earthquake Recovery Redevelopment Project Tax Allocation Bonds, Series 1999 DOCSLA1:322180.2 40233-4GH107/5/07 CONTINUING DISCLOSURE CERTIFICATE THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”), dated as of _____________ 1, 1999, is executed and delivered by the Redevelopment Agency of the City of Santa Monica (the “Agency”). * * * * * * * WHEREAS, pursuant to the Indenture, dated as of _____________ 1, 1999 (the “Indenture”), by and between the Agency and BNY Western Trust Company, as trustee (the “Trustee”), the Agency has issued $____________ aggregate principal amount of Redevelopment Agency of the City of Santa Monica, Santa Monica Earthquake Recovery Redevelopment Project Tax Allocation Bonds, Series 1999 (the “Bonds”); and WHEREAS, this Disclosure Certificate is being executed and delivered by the Agency for the benefit of the holders and beneficial owners of the Bonds and in order to assist the underwriters of the Bonds in complying with Securities and Exchange Commission Rule 15c2- 12(b)(5); NOW, THEREFORE, the Agency covenants as follows: Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. In addition, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the Agency pursuant to, and as described in, Sections 2 and 3 hereof. “Annual Report Date” means the date in each year that is eight months after the end of the Agency’s fiscal year, which date, as of the date of this Disclosure Certificate, is March 1. “Dissemination Agent” means the Agency, or any successor Dissemination Agent designated in writing by the Agency and which has filed with the Agency a written acceptance of such designation. “Federal Securities Laws” means all federal securities laws, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, all rules and regulations promulgated thereunder and all administrative and case law interpretations thereof. “Listed Events” means any of the events listed in Section 4(a) hereof. “National Repository” means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. “Official Statement” means the Official Statement, dated _________, 1999, relating to the Bonds. DOCSLA1:322180.2 40233-4GH107/5/07 “Participating Underwriter” means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Repository” means each National Repository and each State Repository. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State Repository” means any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Disclosure Certificate, there is no State Repository. Section 2. Provision of Annual Reports. (a) The Agency shall, or shall cause the Dissemination Agent to, provide to each Repository an Annual Report which is consistent with the requirements of Section 3 hereof, not later than the Annual Report Date, commencing with the report for the 1998-99 fiscal year. Not later than 15 Business Days prior to said date, the Agency shall provide the Annual Report to the Dissemination Agent (if other than the Agency). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 hereof; provided, however, that the audited financial statements of the Agency may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. If the Agency’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 4(c) hereof. (b) If the Agency is unable to provide to the Repositories an Annual Report by the date required in subsection (a), the Agency shall send a notice to the Municipal Securities Rulemaking Board in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and each State Repository, if any; and (ii) if the Dissemination Agent is other than the Agency, file a report with the Agency certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided and listing all the Repositories to which it was provided. Section 3. Content of Annual Reports. The Agency’s Annual Report shall contain or incorporate by reference the following: (a) Audited Financial Statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Agency’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 2(a) hereof, the Annual Report shall contain unaudited financial statements in a format similar to the DOCSLA1:322180.2 2 40233-4GH107/5/07 financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) The following information with respect to the Bonds: (i) The principal amount of Bonds Outstanding as of the January 2 next preceding the Annual Report Date. (ii) The balance in the Reserve Account, and a statement of the Reserve Requirement, as of the January 2 next preceding the Annual Report Date. (iii) The balance in the Redevelopment Fund and the Series 1999 Housing Account as of the January 2 next preceding the Annual Report Date. (c) The following items, providing financial and operating data substantially similar to that provided in the corresponding tables and charts in the Official Statement; (i) The top ten largest local secured property taxpayers in the Project Area, together with the assessed value and percentage of aggregate assessed value of the property owned by such assessees. (ii) Information regarding historical assessed values and tax increment revenues, similar to the information provided in Table __ of the Official Statement, rolled forward on an annual basis. (iii) Information on aggregate appeals in the Project Area and on appeals by top ten taxpayers in the Project Area. (iv) Description of outstanding indebtedness payable from Tax Revenues. (v) Any material information pertaining to amendments to the Redevelopment Plan. (d) In addition to any of the information expressly required to be provided under subsections (a), (b) and (c) of this Section, the Agency shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Agency or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Agency shall clearly identify each such other document so included by reference. Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section, the Agency shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material under applicable Federal Securities Laws: (i) Principal and interest payment delinquencies. (ii) Non-payment related defaults. (iii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iv) Unscheduled draws on credit enhancements reflecting financial difficulties. (v) Substitution of credit or liquidity providers, or their failure to perform. (vi) Adverse tax opinions or events affecting the tax-exempt status of the security. DOCSLA1:322180.2 3 40233-4GH107/5/07 (vii) Modifications to rights of security holders. (viii) Contingent or unscheduled Bond calls. (ix) Defeasances. (x) Release, substitution, or sale of property securing repayment of the securities. (xi) Rating changes. (b) Whenever the Agency obtains knowledge of the occurrence of a Listed Event, the Agency shall as soon as possible determine if such event would be material under applicable Federal Securities Laws. (c) If the Agency determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal Securities Laws, the Agency shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(viii) and (ix) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Indenture. Section 5. Termination of Reporting Obligation. The Agency’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Agency shall give notice of such termination in the same manner as for a Listed Event under Section 4(c) hereof. Section 6. Dissemination Agent. The Agency may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. During any period in which there is no other entity acting as Dissemination Agent, the Agency shall act as Dissemination Agent. Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Agency may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to the provisions of Sections 2(a), 3 or 4(a) hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of the Trustee or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds. DOCSLA1:322180.2 4 40233-4GH107/5/07 If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information or operating data filed pursuant hereto containing the amended financial information or operating data shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of financial information or operating data being provided. If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial statements or information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial statements or information, in order to provide information to investors to enable them to evaluate the ability of the Agency to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to the Repositories in the same manner as for a Listed Event under Section 4(c) hereof. Section 8. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Agency from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Agency chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Agency shall have no obligation under the Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 9. Default. In the event of a failure of the Agency to comply with any provision of this Disclosure Certificate, as provided in the Indenture, the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% aggregate principal amount of Outstanding Bonds, shall), or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Agency to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an event of default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the Agency to comply with this Disclosure Certificate shall be an action to compel performance. Section 10. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Agency agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful DOCSLA1:322180.2 5 40233-4GH107/5/07 misconduct. The obligations of the Agency under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 11. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Agency, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA By: ATTEST: ____________________________________ Maria M. Stewart, Secretary APPROVED AS TO FORM: Marsha Jones Moutrie, Agency Counsel DOCSLA1:322180.2 6 40233-4GH107/5/07 EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Redevelopment Agency of the City of Santa Monica Name of Issue: Redevelopment Agency of the City of Santa Monica, Santa Monica Earthquake Recovery Redevelopment Project Tax Allocation Bonds, Series 1999 Date of Issuance: ___________, 1999 NOTICE IS HEREBY GIVEN that the Redevelopment Agency of the City of Santa Monica (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate, dated as of ______________1, 1999, executed by the Agency. [The Agency anticipates that the Annual Report will be filed by _____________.] Dated: ____________________ REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA By: Exhibit A-1 DOCSLA1:322180.2 40233-4GH107/5/07