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6.3.B. - Page 6 <br /> Debt Disclosure Policies and Procedures <br /> General <br /> These Debt Disclosure Policies and Procedures ("Disclosure Policy") are intended to <br /> formally confirm and enhance existing policies and procedures of the City of Redwood City <br /> ("City") in order to facilitate compliance with federal securities laws and existing continuing <br /> disclosure obligations. The Disclosure Policy is applicable to other related entities of the City, <br /> such as the Successor Redevelopment Agency of the City of Redwood City, the City of <br /> Redwood City Public Financing Authority, Silicon Valley Clean Water Joint Powers Authority, of <br /> which the City is a member, and any other entity for which the City Council acts as legislative <br /> body and all of such related entities are considered to be the "City" for purposes of these <br /> policies and procedures. <br /> Federal securities laws require accurate and complete disclosure of material facts in the <br /> City's disclosure documents. Under federal securities laws, the City must exercise reasonable <br /> care to avoid material misstatements or omissions in preparing Public Statements that are used <br /> to sell the City's bonds in primary offerings and it may not knowingly or recklessly include <br /> material misstatements or misleading statements in other Public Statements while its bonds are <br /> outstanding. Knowledge of any officer or employee of the City as well as information in <br /> files of the City may be imputed to the City. <br /> (i) Specifically, under Section 17(a) of the Securities Act of 1933 (the <br /> "Securities Act"), it is unlawful for any person (including the City) in the offer or sale of <br /> any securities through means of communication in interstate commerce, for example, to <br /> obtain money or property by means of any untrue statement of a material fact or to omit <br /> a material fact necessary in order to make the statements made, in light of the <br /> circumstances under which they were made, not misleading. <br /> (ii) Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange <br /> Act") contains additional anti-fraud provisions. It provides the authority for Securities and <br /> Exchange Commission ("SEC") Rule 10b-5 (17 CFR 240.10b-5 - Employment of <br /> manipulative and deceptive devices). Rule 10b-5 prohibits, in connection with the <br /> issuance of a municipal security, a municipal issuer from making any untrue statement of <br /> a material fact or omitting to state a material fact necessary in order to make the <br /> statements made, in the light of the circumstances under which they were made, not <br /> misleading. Rule 10b-5 also applies to the distribution by the City of information outside <br /> the initial issuance context that is reasonably expected to reach investors and the <br /> marketplace for the City's securities. <br /> (iii) SEC Rule 15c2-12 (§ 240.15c2-12 Municipal securities disclosure), <br /> prohibits underwriters from purchasing and selling the City's bonds unless the <br /> underwriter has reasonably determined that the City has made a contractual undertaking <br /> to provide certain disclosures prescribed in the rule, including annual financial <br /> information, audited financial statements, and Listed Event notices. To facilitate <br /> compliance with this rule by the underwriter the City enters into continuing disclosure <br /> agreements for each transaction, thereby contractually promising to provide the market <br /> with these disclosures. <br /> Page 1 of 11 <br />