CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the “ Disclosure Certificate ”) is executed and delivered by the City of Manhattan Beach (the “City”) in connection with the execution and delivery of $_________ Certificates of Participation Series 2025A (the “ 2025A Certificates”) and the $_________ Certificates of Participation Series 2025B (the “2025B Certificates” and, together with the 2025A Certificates, the “2025 Certificates” ). The 2025A Certificates are being executed and delivered in fully registered form pursuant to a Trust Agreement, dated as of August 1, 2025 (the “2025A Trust Agreement”), by and among the City, the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”) . The 2025B Certificates are being executed and delivered in fully registered form pursuant to a Trust Agreement, dated as of August 1, 2025 (the “2025B Trust Agreement”), by and among the City, the Corporation and the Trustee. The City covenants as follows:
1. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the City for the benefit of the Beneficial Owners of the 2025 Certificates and in order to assist the Participating Underwriter in complying with the Rule.
2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply to any capitalized term used in this Disclosure Certificate 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 Certificate. “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any 2025 Certificates (including persons holding 2025 Certificates through nominees, depositories or other intermediaries), or (b) is treated as the owner of any 2025 Certificates for federal income tax purposes. “Disclosure Representative” shall mean the City Manager or the Director of Finance, or their respective designees, or such other officer or employee as the City shall designate in writing from time to time.
“Dissemination Agent” shall mean the City, 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 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board. “Official Statement” shall mean the Official Statement relating to the 2025 Certificates, dated August __, 2025.
“Participating Underwriter” shall mean the original underwriter of the 2025 Certificates required to comply with the Rule in connection with offering of the 2025 Certificates. “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 from time to time. 2 “State” shall mean the State of California.
3. Provision of Annual Reports.
(a) The City shall, or, upon delivery of the Annual Report to the Dissemination Agent, shall cause the Dissemination Agent to, not later than the last day of the ninth month after the end of the City’s fiscal year (presently such fiscal year ends June 30), commencing with the report for the fiscal year ending June 30, 2025, provide to the MSRB through the EMMA system, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate.
The Annual Report may be submitted as a single document or as separate documents, and may cross- reference other information as provided in Section 4 of this Disclosure Certificate ; provided that the audited financial statements of 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 they are 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) Not later than fifteen (15) Business Days prior to said date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If the City is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the City shall send a notice to the MSRB in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall (if the Dissemination Agent is other than the City), file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided.
4. Content of Annual Reports . The City’s Annual Report shall contain or include by reference the audited financial statements of the City for the most recent fiscal year of the City then ended. If the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the City in a format similar to the financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements, if any, of the City shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the City may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide a notice of such modification to the MSRB, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis. In addition, to the extent not included in the information in the audited financial statements, the Annual Report shall contain an annual updating of the tables and information of the type contained in the Official Statement identified below. Such updating shall consist of updating of information as of the end of the fiscal year to which the Annual Report relates unless noted otherwise; projections do not have to be updated.
(i) “Unrepresented Unit and Employee Associations” (Table 1) (ii) “Combined Statement of Revenues, Expenditures and Changes in Fund Balances – General Fund” (Table 4)
3 (iii) “General Fund Revenues” (Table 6)
(iv) “General Fund Tax Revenues” (Table 7)
(v) “Total Assessed Value” (Table 8)
(vi) “Principal Property Taxpayers” (Table 9)
(vii) “Taxable Sales” for the most recent available calendar year (Table 11) (viii) “Direct and Overlapping Debt” (Table 13)
(ix) “Outstanding Principal Amounts of Long Term Obligations” (Table 14)
(x) “Investment Portfolio Summary” (Table 15)
(xi) “Historical Payments to PERS” (Table 16)
(xii) “Funding History” (Tables 17A through 17E)
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 submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so included by reference.
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 events with respect to the 2025 Certificates in a timely manner not more than ten (10) business days after the event:
1. Principal and interest payment delinquencies;
2. Unscheduled draws on debt service reserves reflecting financial difficulties;
3. Unscheduled draws on credit enhancements reflecting financial difficulties;
4. Substitution of credit or liquidity providers, or their failure to perform;
5. Issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB);
6. Tender offers;
7. Defeasances;
8. Rating changes; or
9. Bankruptcy, insolvency, receivership or similar event of the obligated person. 4 10. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation, any of which reflect financial difficulties.
Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) 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 events with respect to the 2025 Certificates, if material:
1. Unless described in paragraph 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the 2025 Certificates or other material events affecting the tax status of the 2025 Certificates;
2. Modifications to rights of 2025 Certificate holders;
3. Optional, unscheduled or contingent 2025 Certificate calls;
4. Release, substitution, or sale of property securing repayment of the 2025 Certificates;
5. Non-payment related defaults;
6. 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; or
7. Appointment of a successor or additional trustee or the change of name of a trustee.
8. Incurrence of a financial obligation, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation, any of which affect 2025 Certificate holders.
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event described in subsection 5(b), the City shall as soon as possible determine if such event would be material under applicable federal securities laws.
5 (d) If the City determines that the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of such occurrence with EMMA in a timely manner not more than ten (10) business days after the event. (e) For purposes of the events identified in subparagraphs (a)(10) and (b)(8), the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2025 Certificates. If such termination occurs prior to the final maturity of the 2025 Certificates, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5.
7. Dissemination Agent . The City 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. 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 Certificate . The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee. The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the City and shall have no duty to review any information provided to it by the City. The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the City in a timely manner and in a form suitable for filing.
8. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate , and any provision of this Disclosure Certificate may be waived, provided that, in the opinion of nationally recognized bond counsel, such amendment or waiver is permitted by the Rule; provided, the Dissemination Agent shall have first consented to any amendment that modifies or increases its duties or obligations hereunder. In the event of any amendment or waiver of a provision of this Disclosure Certificate , the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City 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 City chooses to include any information in any Annual Report or notice of occurrenc e of a Listed Event in addition to that which is specifically 6 required by this Disclosure Certificate , the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate , any Holder or Beneficial Owner of the 2025 Certificates may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City 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 Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
No 2025 Certificate holder or Beneficial Owner may institute such action, suit or proceeding to compel performance unless they shall have first delivered to the City satisfactory written evidence of their status as such, and a written notice of and request to cure such failure, and the City shall have refused to comply therewith within a reasonable time.
11. 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 City agrees, to the extent permitted by law, 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 attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct, The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to tome and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. In performing its duties hereunder, the Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the City, the 2025 Certificate holders, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2025 Certificates.
7 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:
To the City: City of Manhattan Beach
1400 Highland Avenue
Manhattan Beach, California 90266
Attention: City Manager
Telephone: (310) 802-5053
Fax: (310) 802-5001
To the Trustee: U.S. Bank Trust Company, National Association 633 W. Fifth Street, 24th Floor
Los Angeles, CA 90071
Attention: Corporate Trust Services
Ref: City of Manhattan Beach
Telephone: (213) 615-6023
Fax: (213) 615-6199
13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the 2025 Certificates, and shall create no rights in any other person or entity.
14. Signature. This Disclosure Certificate has been executed by the undersigned on the date hereof, and such signature binds the City to the undertaking herein provided.
Dated: August __, 2025
CITY OF MANHATTAN BEACH,
CALIFORNIA
By:
City Manager
A-1
EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Manhattan Beach, California
Name of Issue: Certificates of Participation Series 2025A Certificates of Participation Series 2025B
Date of Issuance: August __, 2025
NOTICE IS HEREBY GIVEN that the above -named Issuer has not provided an Annual Report with respect to the above -named Certificates of Participation as required by the Continuing Disclosure Certificate dated August __, 2025. The Issuer anticipates that the Annual Report will be filed by _________________
Dated:
[ISSUER/DISSEMINATION AGENT]
By:_____________________________