c. (Form) Continuing Disclosure AgreementRWG Draft 6/1/2020
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CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”), dated as of [July] 1,
2020, is executed and delivered by the City of Orange (the “City”), and ___, as dissemination agent
(the “Dissemination Agent”) in connection with the issuance by the Orange City Public Facilities
Financing Authority (the “Authority”) of its $[principal amount] aggregate initial principal amount of
Lease Revenue Bonds, Series 2020A (the “Bonds”). The Bonds are being issued pursuant to an
Indenture, dated as of [July] 1, 2020 (the “Indenture”), by and between the City and U.S. Bank National
Association. The City and the Dissemination Agent covenant and agree as follows:
Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the City and the Dissemination Agent for the benefit of the holders and
beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with
the Rule (as defined below).
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Agreement, unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the City pursuant to, and as
described in, Sections 3 and 4 of this Disclosure Agreement.
“Dissemination Agent” shall mean __ or any successor Dissemination Agent designated in
writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure
Agreement.
“MSRB” shall mean the Municipal Securities Rulemaking Board.
“Obligated Person” shall mean the City.
“Official Statement” shall mean the final Official Statement , dated ___, 2020, relating to the
Bonds.
“Participating Underwriter” shall mean any of the original underwriters of the Bonds required
to comply with the Rule in connection with offering of the Bonds.
“Rule” shall mean 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 fro m time to time.
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than March
31 after the end of the City’s fiscal year of each year, commencing March 31, 2021 with the report for
the 2019-2020 fiscal year, provide to the MSRB, in an electronic format accompanied by identifying
information as prescribed by the MSRB, an Annual Report which is consistent with the requirements
of Section 4 of this Disclosure Agreement. 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 of this Disclosure Agreement; provided that the audited financial statements of
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the City 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 City’s fiscal year
changes, it shall give notice of such change in the same manner as for a Listed Event under
Section 5(b).
(b) Not later than fifteen (15) business days prior to the date specified in subsection
(a) above for providing the Annual Report to the MSRB, the City shall provide the Annual Report to
the Dissemination Agent (if other than the City). If by the date specified in subsection (a) above, the
Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall
contact the City to determine if the City is in compliance with the first sentence of this subsection (b).
The City shall provide a written certification with each Annual Report furnished to the Dissemination
Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by
it hereunder.
(c) If the Dissemination Agent is unable to verify that an Annual Report has been
provided to the MSRB by the date required in subsection (a), the Dissemination Agent shall send a
notice, in a timely manner, to the MSRB in substantially the form attached as Exhibit A, or in such
other form as prescribed or acceptable to MSRB.
(d) The Dissemination Agent (if other than the City) shall, if and to the extent the
City has provided an Annual Report in final form to the Dissemination Agent for dissemination, file a
report with the City (which may be provided electronically on the Dissemination Agent’s website)
certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure
Agreement, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or
incorporate by reference the following:
(a) Audited financial statements of the City 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 City’s audited financial statements are not
available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual
Report shall contain unaudited financial statements in a format similar to the financia l 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) A statement of any investment losses incurred by the City’s General Fund in
excess of $1,000,000 in any Fiscal Year:
(c) If not included in the audited financial statements, a n update of Tables 1, 3, 4,
7 - 11 contained in the Official Statement.
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 City or related public entities, which have been
available to the public on the MSRB’s internet web site or filed with the Securities and Exchange
Commission. The City shall clearly identify each such other document so included by reference.
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Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be
given, notice of the occurrence of any of the following Listed Events with respect to the Bonds, which
notice shall be given in a timely manner, not in excess of ten (10) business days after the occurrence
of such Listed Event:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the Bonds, or other material events affecting the
tax status of the Bonds;
(7) Modifications to rights of security holders, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
securities, if material
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the Obligated
Person;
(13) The consummation of a merger, consolidation, or acquisition involving an
Obligated Person or the sale of all or substantially all of the assets of the
Obligated Person, other than in the ordinary course of business, the entry
into a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant
to its terms, if material; and
(14) Appointment of a successor or additional trustee or the change of name of
a trustee, if material.
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(b) The Dissemination Agent shall, within one (1) business day after obtaining
knowledge of the occurrence of any of the events listed in Section 5(a) (1), (3), (4), (5), (6), (9), (11) or
(12), inform the City of the occurrence of such event. As soon as reasonably practicable after obtaining
knowledge of the occurrence of such event (regardless of whether the source of the information is the
Dissemination Agent pursuant to the foregoing sentence or another source), the City shall, or shall cause
the Dissemination Agent to, file in a timely manner, not in excess of ten (10) business days after the
occurrence of any such event, a notice of such occurrence with the MSRB, in an electronic format
accompanied by identifying information as prescribed by the MSRB.
(c) The Dissemination Agent shall, within one (1) business day after obtaining
knowledge of the occurrence of any of any of the events listed in Section 5(a) (2), (7), (8), (10), (13) or
(14), inform the City of the occurrence of such event and request that the City promptly notify the
Dissemination Agent in writing whether or not to report the event pursuant to subsection (d).
(d) Whenever the City obtains knowledge of the occurrence of any event specified in
Section 5(a) (2), (7), (8), (10), (13) or (14), the City shall as soon as possible, in order to meet the ten (10)
business day deadline to file notices required under the Rule and pursuant to the following sentence,
determine if such event would be material under applicable Federal securities law. If the City determines
that knowledge of the occurrence of such event would be material under applicable Federal securities law,
the City shall, or shall cause the Dissemination Agent to, file in a timely manner, not in excess of ten (10)
business days after the occurrence of any such event, a notice of such occurrence with the MSRB, in an
electronic format accompanied by identifying information as prescribed by the MSRB.
Section 6. Termination of Reporting Obligation. The City’s obligations under this
Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full
of all the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give
notice of such termination in the same manner as for a Listed Event under Section 5(b).
Section 7. Dissemination Agent.
(a) The City hereby appoints and engages the Dissemination Agent to assist it in
carrying out its obligations under this Disclosure Agreement. The Dissemination Agent shall not be
responsible in any manner for the content of any notice or report prepared by the City pursuant to this
Disclosure Agreement. The City may replace the Dissemination Agent with or without cause. If at
the time there is no designated Dissemination Agent appointed by the City, the City shall be the
Dissemination Agent and undertake or assume its obligations hereunder.
Any company succeeding to all or substantially all of the Dissemination Agent’s
corporate trust business shall be the successor to the Dissemi nation Agent hereunder without the
execution or filing of any paper or any further act. The Dissemination Agent may resign its duties
hereunder by giving 30-days written notice to the City.
(b) The Dissemination Agent shall be paid compensation by the City for its
services provided hereunder in accordance with its schedule of fees agreed to between the
Dissemination Agent and the City from time to time and for all expenses, legal fees and advances made
or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination
Agent shall have no duty or obligation to review or verify any information provided to it by the City
hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, holders or
beneficial owners of the Bonds or any other party. The Dissemination Agent’s obligation to deliver
the information at the times and with the content described herein shall be limited to the extent the City
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has provided such information to the Dissemination Agent as required by this Disclosure Agreement.
The Dissemination Agent shall have no responsibility for the City’s failure to report to the
Dissemination Agent a Listed Event or a duty to determine the materiality thereof. The Dissemination
Agent shall have no duty to determine or liability for failing to determine whether the City has complied
with this Disclosure Agreement. The Dissemination Agent may rely and shall be protected in acting
or refraining from acting upon any direction from the City or an opinion of nationally recognized bond
counsel.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Agreement, the City and the Dissemination Agent may amend this Disclosure Agreement and any
provision of this Disclosure Agreement may be waived, provided that the following conditions are
satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a),
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 interpretation s
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 nationally recognized bond counsel, materially impair the
interests of the holders or beneficial owners of the Bonds.
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 filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form, the
reasons for the amendment and the impact of the change in the type of operat ing data or financial
information being provided. For purposes of this paragraph, “impact” has the meaning as that word is
used in the letter from the staff of the Securities and Exchange Commission to the National Association
of Bond Lawyers dated June 23, 1995.
If an amendment is made to the undertaking specifying the accounting principles to be followed
in preparing financial statements, the annual financial information for the year in which the change is
made shall present a comparison between the fina ncial 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 principl es
and the impact of the change in the accounting principles on the presentation of the financial
information, in order to provide information to investors to enable them to evaluate the ability of the
City to meet its obligations. To the extent reasonabl y feasible, the comparison shall be quantitative.
A notice of the change in the accounting principles shall be sent to the MSRB in the same manner as
for a Listed Event under Section 5(b).
No amendment to this Agreement which modifies the duties or rights of the Dissemination
Agent shall be made without the prior written consent of the Dissemination Agent. The Dissemination
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Agent may rely conclusively on any opinion of nationally recognized bond counsel delivered pursuant
to the provisions of this Section 8, and shall have no duty to determine or liability for failing to
determine whether any amendment made pursuant to this Section 8 is consistent with guidance
provided by the Securities and Exchange Commission with regard to permitted amendments, or the
manner of effecting such amendments, under the Rule.
Section 9. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the City from disseminating any other information, using the means of
dissemination set forth in this Disclosure Agreement 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 Agreement. If the City 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 Agreement, the City shall have no obligation under this
Disclosure Agreement to update such information or include it i n any future Annual Report or notice
of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the City or the Dissemination Agent to
comply with any provision of this Disclosure Agreement, any Participating Underwriter 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 City or the Dissemination Agent,
as the case may be, to comply with its obligations under thi s Disclosure Agreement. A default under
this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole
remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination
Agent to comply with this Disclosure Agreement shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the
City 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 misconduct. The Dissemination Agent may rely and shall
be protected in acting or refraining from acting upon any direction from the City or an opinion of
nationally recognized bond counsel. The obligations of the City under this Section shall survive
resignation or removal of the Dissemination Agent and payment of the Bonds.
Section 12. Notices. Any notices or communications to or among any of the parties to this
Disclosure Agreement may be given as follows:
To the City: City of Orange
300 E. Chapman Avenue
Orange, CA 92866
Attention: Assistant City Manager
Phone: (714) 744-2235
To Dissemination Agent:
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Section 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of
the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners
from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of
the date first written above.
CITY OF ORANGE
Mayor
as Dissemination Agent
Authorized Officer
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EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING
BOARD OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Orange City Public Facilities Financing Authority
Name of Bond Issue: $[principal amount]
Orange City Public Facilities Financing Authority
Lease Revenue Bonds, Series 2020A
Date of Issuance: ____, 2020
NOTICE IS HEREBY GIVEN that the City of Orange (the “City”) has not provided an Annual
Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement,
dated as of [July] 1, 2020, by and between the City and __, as dissemination agent. The City anticipates
that the Annual Report will be filed by __________________.
Date: , 20__
By:
Title:
cc: Assistant City Manager, City of Orange