EXHIBIT 10.26
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement, dated ________ __, 1999 (the
"Disclosure Agreement"), is executed and delivered by El Conquistador
Partnership L.P., S.E. (the "Borrower") and Banco Santander Puerto Rico (the
"Trustee"), in connection with the issuance of $105,200,000 Puerto Rico
Industrial, Tourist, Educational, Medical and Environmental Control Facilities
Financing Authority Tourism Revenue Bonds, 1999 Series A (El Conquistador Resort
Project) (the "Bonds"). The Bonds have the CUSIP Numbers set forth in Schedule A
attached hereto. The Bonds are being issued pursuant to a Trust Agreement, dated
as of _______ __, 1999 (the "Trust Agreement"), between Puerto Rico Industrial,
Tourist, Educational, Medical and Environmental Control Facilities Financing
Authority (the "Issuer") and the Trustee. The proceeds of the Bonds are being
loaned by the Issuer to the Borrower pursuant to a Loan Agreement, dated as of
________ ___, 1999 (the "Loan Agreement"), between the Issuer and the Borrower.
The Borrower covenants and agrees as follows:
SECTION 1. PURPOSE OF THE DISCLOSURE AGREEMENT. This Disclosure
Agreement is being executed and delivered by the Borrower and the Trustee for
the benefit of the Beneficial Owners of the Bonds and in order to assist the
Participating Underwriters in complying with the Rule. The Borrower and the
Trustee acknowledge that the Issuer has assumed no responsibility with respect
to any reports, notices or disclosures provided or required under this
Disclosure Agreement, and has no liability to any person, including any
Beneficial Owner, with respect to any such reports, notices or disclosures.
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SECTION 2. DEFINITIONS. In addition to the definitions set forth in the
Trust Agreement, which definitions 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 REPORTS" means the Annual Reports provided by the Borrower
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"BENEFICIAL OWNER" means the person in whose name a Bond is
recorded as the beneficial owner thereof by a broker-dealer, bank or other
financial institution for which The Depository Trust Company or any other
securities depository appointed as such for the Bonds holds securities.
"DISCLOSURE REPRESENTATIVE" means any officer of the Borrower or
each other person designated to act on behalf of the Borrower by written
certificate furnished to the Dissemination Agent from time to time containing
the specimen signatures of such person and signed on behalf of the Borrower by
an authorized officer thereof.
"DISSEMINATION AGENT" means the Trustee, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designated
in writing by the Borrower and which has filed with the Trustee a written
acceptance of such designation, or the Borrower if no other entity is acting as
Dissemination Agent.
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"LISTED EVENTS" means any of the events listed in Section 5(a) of
this Disclosure Agreement (other than the failure to comply with Section 3
hereof).
"MSRB" means the Municipal Securities Rulemaking Board, organized
under the Securities Exchange Act of 1934, as the same may be amended from time
to time.
"NATIONAL REPOSITORY" means any Nationally Recognized Municipal
Securities Information Repository then recognized by the Securities and Exchange
Commission for purposes of the Rule. As of the date of this Disclosure Agreement
the following are National Repositories:
Bloomberg Municipal Repository
XX Xxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Information Systems, Inc.
Attn: Xxxxx Repository Service
00 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Thomson NRMSIR
Attn: Municipal Disclosure
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
DPC Data Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxx Xxx, Xxx Xxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
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"PARTICIPATING UNDERWRITERS" means each broker, dealer or
municipal securities dealer acting as an underwriter in the primary offering of
the Bonds.
"REPOSITORY" means each National Repository and each State
Repository.
"RULE"means Rule 15c2-12 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 Commonwealth 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 Agreement, there is no State Repository.
SECTION 3. PROVISION OF ANNUAL REPORTS.
(a) The Borrower shall, or shall cause the Dissemination Agent,
to, not later than one hundred twenty (120) days after the end of its fiscal
year (currently December 31), commencing with the report for the fiscal year
ending December 31, 1998, provide to each Repository an annual report containing
the information set forth in Section 4 of this Disclosure Agreement. Not later
than fifteen (15) Business Days prior to said date, the Borrower shall provide
the Annual Report to the Dissemination Agent and the Trustee (if the Trustee is
not the Dissemination Agent). In each case, the Annual Report may be submitted
as a single document or as separate documents comprising a package, and may
cross-reference other information as provided in Section 4 of this Disclosure
Agreement. The foregoing
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notwithstanding, while the audited financial statements of the Borrower are
expected to be available within one hundred twenty (120) days after the end of
the Borrower's fiscal year, such financial statements 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.
(b) If the Dissemination Agent has not received a copy of the
Annual Report by the fifteenth (15th) Business Day prior to the date specified
in subsection (a) for providing the Annual Report to the Repositories, the
Dissemination Agent shall contact the Borrower to determine if the Borrower is
in compliance with subsection (a).
(c) If the Dissemination Agent is unable to verify that an Annual
Report has been provided to the Repositories by the date required in subsection
(a), the Trustee shall send a notice to each Repository or to the MSRB in
substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) prior to the date for providing each Annual Report
determine the name and address of each National Repository and each State
Repository, if any; and
(ii) file a report with the Borrower, the Issuer and (if the
Dissemination Agent is not the Trustee) the Trustee certifying that the Annual
Report has been provided pursuant to this Disclosure Agreement, stating the date
it was provided, and listing all the Repositories to which it was provided.
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SECTION 4. CONTENT OF ANNUAL REPORTS. The Annual Report shall contain
or incorporate by reference the following:
(i) Core financial information and operating data for such
fiscal year, including (i) audited financial statements, prepared in accordance
with generally accepted accounting principles in effect from time to time, and
(ii) operating data and revenues, expenditures, financial operations and
indebtedness generally found in the Official Statement and Prospectus relating
to the Bonds, dated ___________ __, 1999.
Any or all of the items listed above may be included by specific
reference to other documents, including official statements of debt issues with
respect to which the Borrower is an "obligated person" (as defined by the Rule)
which have been filed with each of the Repositories or the Securities and
Exchange Commission. If the document incorporated by reference is a final
official statement, it must be available from the MSRB. The Borrower shall
clearly identify each such documents so incorporated by reference in any Annual
Report.
SECTION 5. REPORTING OF SIGNIFICANT EVENTS. In accordance with the
provisions of this Section 5, the Dissemination Agent shall file notice of any
failure of the Borrower to comply with Section 3 hereof and the Borrower shall
file, or shall cause the Dissemination Agent to file, notice of the occurrence
of any of the following events with respect to the Bonds, if material, within
the meaning of the Securities Exchange Act of 1934, as the same may be amended
from time to time, with the MSRB and with each Repository:
1. principal or interest payment delinquencies;
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2. non-payment related defaults;
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 or events affecting the tax-exempt
status of the Bonds;
7. modifications to rights of the holders (including
Beneficial Owners) of the Bonds;
8. Bond calls;
9. defeasances;
10. release, substitution, or sale of property securing
repayment of the Bonds; and
11. rating changes.
The Borrower does not undertake to provide notice of the Listed Event
in item 8 above with respect to any scheduled redemption, not otherwise
contingent upon the occurrence of an event, if the terms, dates and amounts of
such redemption are set forth in the Official Statement and Prospectus relating
to the Bonds.
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(b) The Trustee shall, within three (3) Business Days of obtaining
actual knowledge of the occurrence of any of the Listed Events (other than the
Listed Event in item 8 above with respect to a scheduled redemption) notify the
Disclosure Representative of such occurrence, and request that the Borrower
promptly notify the Dissemination Agent in writing whether or not to report the
event pursuant to subsection (f) of this Section.
(c) Whenever the Borrower obtains knowledge of the occurrence of a
Listed Event, because of a notice from the Trustee pursuant to subsection (b) of
this Section or otherwise, the Borrower shall as soon as possible determine if
the occurrence of such Listed Event is material.
(d) If the Borrower has determined that such Listed Event is
material, the Borrower shall promptly notify the Dissemination Agent and the
Trustee, if it is not the Dissemination Agent, in writing. Such notice shall
instruct the Dissemination Agent to report the occurrence pursuant to subsection
(f) of this Section and shall provide the text of such report.
(e) If in response to a request under subsection (b) of this
Section, the Borrower determines that the occurrence of the particular Listed
Event would not be material, the Borrower shall so notify the Trustee and
Dissemination Agent (if other than the Trustee) in writing and instruct the
Dissemination Agent not to report the occurrence pursuant to subsection (f).
(f) If the Dissemination Agent has been instructed by the Borrower
to report the occurrence of a Listed Event, the Dissemination Agent shall file a
notice of such occurrence with the
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MSRB and each Repository. Concurrently with any filing, the Dissemination Agent
shall file a copy with the Borrower and the Trustee, if it is not the
Dissemination Agent.
SECTION 6. TERMINATION OF REPORTING OBLIGATION. The obligations of the
Borrower under this Disclosure Agreement shall terminate upon the defeasance or
provision for payment, prior redemption or payment in full of all of the Bonds.
If El Conquistador Partnership L. P., S.E. ceases to be an "obligated person"
(as such term is defined in the Rule) with respect to the Bonds and the
Borrower's obligations under the Loan Agreement and this Disclosure Agreement
are assumed in full in writing by an entity other than El Conquistador
Partnership L. P., S.E., such other entity shall become the Borrower under this
Disclosure Agreement and the obligations of the Borrower hereunder shall
terminate upon such assumption.
SECTION 7. DISSEMINATION AGENT. The Borrower may, from time to time,
appoint or engage a Dissemination Agent to assist it in carrying out its
obligations under this Disclosure Agreement, and may discharge any such Agent,
without appointing a successor Dissemination Agent. If at any time there is not
any other designated Dissemination Agent, the Borrower shall be the
Dissemination Agent.
SECTION 8. AMENDMENT; IMPOSSIBILITY OF PERFORMANCE. Notwithstanding
any other provision of this Disclosure Agreement, the Borrower and the Trustee
may amend or the Trustee may waive the covenants set forth in this Disclosure
Agreement (and the Trustee shall agree to any amendment so requested by the
Borrower), only if each of the following conditions have been met:
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(a) the amendment or waiver is 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 any obligated person (as defined in
the Rule), or the type of business conducted thereby; the covenants, as amended,
would have complied with the requirements of the Rule at the time of issuance of
the Bonds, after taking into account any amendments or change in circumstances;
and the amendment does not materially impair the interests of bondholders or
Beneficial Owners, as determined by an opinion of counsel of recognized
expertise in federal securities laws, acceptable to both the Borrower and the
Trustee; or
(b) all or any part of the Rule, as interpreted by the Staff of
the Securities and Exchange Commission at the date of the adoption of such Rule,
ceases to be in effect for any reason and the Borrower elects that the covenants
shall be deemed amended accordingly.
The Borrower and the Trustee further agree that with any such
amendment the Annual Report containing amended operating data or financial
information will explain, in narrative form, the reasons for the amendment and
the impact of the change in the type of operating data or financial information
being provided.
If any part of the financial or operating data or information
required by Section 4 hereof to be in an Annual Report can no longer be
generated because the operations to which it is related have been materially
changed or discontinued, the Borrower will disseminate a statement to such
effect as part of its Annual Report for the year in which such event first
occurs.
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SECTION 9. ADDITIONAL INFORMATION. Nothing in this Disclosure Agreement
shall be deemed to prevent the Borrower 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 Borrower
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 Borrower shall have no obligation under this
Disclosure Agreement to update such information or include it in any future
Annual Report or notice of occurrence of a Listed Event.
SECTION 10. DEFAULTS. In the event of a failure of the Borrower to
comply with any provision of this Disclosure Agreement, the Trustee may (and, at
the request of any Participating Underwriter or the Beneficial Owners of at
least 25% in aggregate principal amount of outstanding Bonds, shall), or (if
such Beneficial Owner stipulates that no challenge is made to the adequacy of
any information provided) any Beneficial Owner may, take such actions as may be
necessary and appropriate, including seeking mandamus or specific performance by
court order, to cause the Borrower or the Trustee to comply with its obligations
under this Disclosure Agreement; provided that any such action may be instituted
only in the federal court located in the Commonwealth or in any Commonwealth
court located in the Municipality of San Xxxx. In addition, holders of not less
than a majority in aggregate principal amount of Bonds outstanding may take such
actions as may be permitted by law, to challenge the adequacy of any information
provided pursuant to this Disclosure Agreement, or to enforce any other
obligation of the
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Borrower hereunder. A default under this Disclosure Agreement shall not be
deemed an Event of Default under the Trust Agreement or the Loan Agreement or
any other related instrument, and the sole remedy under this Disclosure
Agreement in the event of any failure by the Borrower to comply with this
Disclosure Agreement shall be an action to compel specific performance. Nothing
in this Section shall be deemed to restrict the rights or remedies of any holder
pursuant to the Securities Exchange Act of 1934, the rules and regulations
promulgated thereunder, or other applicable laws, as the same may be amended
from time to time.
SECTION 11. DUTIES, IMMUNITIES AND LIABILITIES OF DISSEMINATION AGENT.
Article IX of the Trust Agreement is hereby made applicable to this Disclosure
Agreement as if this Disclosure Agreement were (solely for this purpose)
contained in the Trust Agreement. The Dissemination Agent (if other than the
Trustee or the Trustee in its capacity as Dissemination Agent) shall have only
such duties as are specifically set forth in this Disclosure Agreement, and the
Borrower agrees to indemnify and save the Dissemination Agent, its officers,
directors, employees and agents, harmless against any loss, expense and
liability 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
reasonable attorneys' fees) of defending against any claim of liability, but
excluding liabilities due to the Dissemination Agent's gross negligence or
wilful misconduct. The obligations of the Borrower under this Section shall
survive resignation or removal of the Dissemination Agent and payment of the
Bonds.
The Dissemination Agent (if other than the Trustee or the Trustee in
its capacity as Dissemination Agent) shall not have any
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responsibility, nor shall it render any services directed to the substance and
content of the Annual Report or other reports or disclosures pursuant to this
Disclosure Agreement. In all respects, the Borrower shall retain full and
complete responsibility for the content, accuracy and completeness of all
disclosures, irrespective of the Dissemination Agent's (if other than the
Trustee or the Trustee in its capacity as Dissemination Agent) contribution to
the physical or electronic preparation or filing of materials required for the
efficient distribution of the disclosures.
SECTION 12. BENEFICIARIES. This Disclosure Agreement shall inure solely
to the benefit of the Issuer, the Borrower, the Trustee, the Dissemination
Agent, the Participating Underwriters, and the Beneficial Owners from time to
time of the Bonds, and shall create no rights in any other person or entity.
SECTION 13. 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.
SECTION 14. RECORD KEEPING. The Borrower shall maintain records of all
Annual Reports and reports pursuant to Section 5 hereof including the content
thereof, the names of the entities with whom the same was filed and the date of
filing thereof.
SECTION 15. FEES. The Borrower agrees to compensate the Dissemination
Agent in accordance with the Fee Schedule attached hereto as Exhibit B. This
compensation is unrelated to and may be in addition to any fees previously
agreed upon for fiduciary and agency services which may be provided to the
Borrower by the Dissemination Agent in its capacity as Trustee or otherwise.
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SECTION 16. OUT-OF POCKET EXPENSES. The Borrower agrees to pay the
Dissemination Agent's reasonable out-of-pocket expenses, as incurred.
SECTION 17. TERMINATION OF DISSEMINATION AGENT'S OBLIGATIONS. This
Disclosure Agreement shall terminate as provided in Section 6 hereof. The
Dissemination Agent may also resign from its duties and obligations hereunder
upon not less than 60 days' prior written notice to the Borrower. All reasonable
fees and expenses incurred and invoiced by the Dissemination Agent shall be paid
by the Borrower prior to the termination of the Dissemination Agent's
obligations hereunder. If the Trustee resigns or is removed from the office of
trustee under the Trust Agreement, its duties and obligations hereunder shall
terminate effective upon the acceptance of appointment of trustee by a successor
trustee in accordance with the provisions of the Trust Agreement.
SECTION 18. MISCELLANEOUS. The Dissemination Agent may act directly, or
through agents, in the delivery of its services to the Borrower.
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SECTION 19. GOVERNING LAW. This Disclosure Agreement shall be governed
by, and construed in accordance with, the laws of the Commonwealth.
EL CONQUISTADOR PARTNERSHIP L.P., S.E.
By: Conquistador Holding (SPE), Inc.
By:_________________________________
Name:
Title:
BANCO SANTANDER PUERTO RICO
By:_________________________________
Name:
Title:
