HomeMy WebLinkAboutResolution - 2366 STATE OF CALIFORNIA ) RESOLUTION NO. 2366
COUNTY OF RIVERSIDE)ss
CITY OF SAN JACINTO )
RESOLUTION
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN JACINTO APPROVING THE EXECUTION AND
DELIVERY OF A DEPOSIT AGREEMENT AND FIRST
AMENDMENT TO MEMORANDUM
WHEREAS, the City Council of the City of San Jacinto (the "City") is
considering undertaking proceedings to form City of San Jacinto Community Facilities
District No. 2002-1 (Rancho San Jacinto, Phase 2) pursuant to the terms and conditions
of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5,
Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act");
and
WHEREAS, the Developer has requested that the City form the proposed
Community Facilities District and will make a deposit to the City for the purposes of
paying the costs of forming the proposed Community Facilities District; and
WHEREAS, the City Council has been presented with a First Amendment
to Memorandum of Understanding (the "First Amendment to Memorandum") between
the City and the Elliott Associates L.P., stating the alteration of certain terms of the
Memorandum of Understanding dated September 18, 2001; and
WHEREAS, the City Council has been presented with a Landowner
Deposit Agreement (the "Deposit Agreement") between the City and Rancho San
Jacinto, L.L C., stating the terms and purpose of the advance of such costs; and
NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the
City Council of the City of San Jacinto, County of Riverside, State of California, as
follows:
Section 1. The above stated recitals are true and correct.
Section 2. Approval of Deposit Agreement. The Deposit Agreement is
approved in the form submitted to the City Council at the meeting at which this
resolution is adopted, and the City Manager is authorized to execute and deliver said
Deposit Agreement on behalf of the City.
Section 3. Approval of First Amendment to Memorandum. The First
Amendment to Memorandum is approved in the form submitted to the City Council at
Page 1 of 1
RVPU8lKAM36639
the meeting at which this resolution is adopted, and the City Manager is authorized to
execute and deliver said First Amendment to Memorandum on behalf of the City.
APPROVED AND ADOPTED this 1" day of August, 2002.
Ayes: Carlson-Buydos, Good, Ayres
Nays: None
Absent: None
Abstain: Conner
City of San Jacinto
Jim A es, Vice Mayor
ATTEST:
orothy L' Chouinard, City Clerk
Page 2 of 2
RVPUBIKAM36339
I,ANDOWNF.R DF,POSIT AGREEMENT
by and between
CITY OF SAN JACINTO
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA
and
RANCHO SAN JACINTO L.L.C., a Delaware limited liability company
as Developer
Dated as of August I, 2002
RVP JP.\KPW,E2Co 57
LANDOWNER DEPOSIT AGREEMENT
I PARTIES AND DATE
THIS LANDOWNER DEPOSIT AGREEMENT(the"Agreement")is made and entered into
as of August 1, 2002, by and between CITY OF SAN JACINTO, COUNTY OF RIVERSIDE.,
STATE OF CALIFORNIA, a legally constituted governmental entity, hereinafter referred to as the
"City," and RANCHO SAN JACINTO [...L C., a Delaware limited liability company hereinafter
referred to as "Developer."
2. RECITALS.
2.1 The City Council ofthe City(hereinafter the"City Council")proposes to establish City
of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) (the
"District") pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as
amended, commencing with Section 53311 of the Government Code of the State of California,
hereinafter referred to as the "Act " The boundaries of proposed District are depicted on the map
attached hereto and incorporated herein as Exhibit A.
22 Developer owns all of the land within the District (the "Property") Developer
anticipates developing the Property for, among other things, residential use (the"Project").
2.3 The District is to be formed for the purpose of refinancing bonds issued for the
construction or acquisition of certain public facilities of benefit to the land within the District which
were originally financed by $26,000,000 original principal amount of Community Facilities
District No. 2 1989 Special Tax Bonds, and to cause the special taxes levied with respect to
Community Facilities District No. 2 on the taxable real property located in the District to be deemed
paid and satisfied.
2.4 Developer and City wish to provide for the formation of the District and the issuance
of bonds thereof(the "Bonds"), which shall be secured by special taxes to be levied on real property
within the District.
2.5 Developer and City wish to provide for the payment of expenses in connection with the
formation of the District.
3. AGREEMENT.
.1 Proceedings Devo it and Develo er Contribution. The Developer shall deposit with
the City for the benefit of the District the amount of Twenty-Five Thousand Dollars ($25,000) (the
"Proceedings Deposit"). The City by its execution hereof, acknowledges receipt of and accepts the
Proceedings Deposit. The City will not authorize or incur expenses to form the District in excess or
the Proceedings Deposit without Developer's written consent and upon such consent, Developer shall
deposit such additional funds to pay the additional expense. City shall not be financially responsible
for additional costs incurred for the formation of the District which are approved by Developer. The
Proceedings Deposit is made in full satisfaction of Section 3.2(a) of the Memorandum of
Understanding,dated September 18, 2001, by and between the City and Flhott Associates,L.P. (the
"Memorandum"), as amended by the Pledge Agreement,dated as of March 12, 2002,by and between
the City and Elliott Associates, L.P. (the 'Pledge Agreement), and as it may be amended hereafter
(collectively,the"MOU"). The City acknowledges that neither Developer nor Elliott Associates,LR
has any obligation tinder the MOU to Fund more than$25,000 for formation costs without consenting
thereto The Proceedings Deposit is to be used to pay for any costs incurred for any authorized
purpose in connection with the formation of the District including, but not limited to, (i) the non-
contingent fees and expenses of any consultants to the City employed in connection with the
uvpl P�,KPR%6 -2-
formation of the DistRGt, including an engineer, special tax consultant, bond counsel and any other
consultant deemed necessary or advisable by the City, (ii)the costs of appraisals, market absorption
and feasibility studies and other reports deemed necessary or advisable by the City in connection with
the formation ofthe District, (iii)the costs of publication of notices, preparation and mailing of ballots
and other costs related to any hearing, election or other action or proceeding undertaken in
connection with the formation of the District,and(iv)any and all other reasonable costs and expenses
actually incurred by the City in connection with the formation of the District(collectively,the"Initial
Costs"). Estimates of the Initial Costs are set forth in Exhibit B, attached hereto. The City may draw
upon the Proceedings Deposit from time to time to pay the initial Costs The City shall provide
Developer with a written summary of expenditures made from the Proceedings Deposit, and the
unexpended balance thereof, within ten(10)business days of receipt by the City of a written request
therefor submitted by the Developer, provided that the City shall not be required to provide a
summary of expenditures morc frequently than one time each quarter. The cost of providing any such
summary shall be charged to the Proceedings Deposit. Tf the Bonds are issued by the District, the
City shall reimburse the Developer from proceeds of bonds without interest, for the portion of the
Proceedings Deposit that have been expended or encumbered, said reimbursement to be made within
ten (10)business days after the issuance of such Bonds, solely from the proceeds of such Bonds and
only to the extent otherwise permitted under the Act The City shall, within ten (10) business days
after the issuance of such Bonds, return the then unexpended and unencumbered portion of the
Proceedings Deposit to the Developer, without interest. Such reimbursement may also be made by
the City to a designated payee upon the City's receipt of such direction in writing from Developer
3.2 Termination. If for any reason including, but not limited to, (1)failure of the qualified
electors within the District to approve the proposed special tax to be levied thereon, (ii)court action
4%!P'Ja%K.ie�b+1:1 r.c -3-
or proceeding challenging the City's compliance with the California Environmental Quality Act, (Ili)
a regulation, decision or order of a State or federal regulatory agency, (iv) a voter imposed
moratorium or restriction on development or the issuance of building permits which affects
development of the Property, (v) the insolvency or bankruptcy of Developer, or (vi) any other such
matter, wherein the events listed in clauses (i) through (v) inclusive, render the City unable to
complete the formation of proceedings of the District and unable to issue and sell the Bonds, then
Citv shall, within ten (l Ol business days after any such action, terminate such proceeding and return
any unexpended portion of the Proceedings Deposit to Developer with interest accrued thereon, if
any The City shall not be obligated to return any portion of the Proceedings Deposit which have
been spent by the City for the purposes set forth in Section 3 1 hereof
3.3 Assignment This agreement or any right or duty hereunder may not be assigned by
either the City or the Developer, except as agreed by both parties in writing
3 A Mutual Assistance and Cooperation The City and Developer will assist one another
mutually in the formation of the District, the formulation of special taxes to be levied within the
District and the issuance of Bonds. Both parties will mutually assist one another in otherwise
undertaking and furthering the goals and objectives set forth in this Agreement.
3 5. Notices, Demands and Communications. Formal notices, demands and
communications-between Developer and City hereunder shall be sufficiently given when delivered by
facsimile with originals personally served,delivered by Federal Express or other nationally recognized
overnight delivery service or mailed by registered or certified rnail, postage prepaid, return receipt
requested, to the principal offices of Developer or City as set forth below. Such written notices,
demands and communications may be sent in the same manner to such other address as a party may
from time to time designate for such party by notice given as provided in this Section Such notices,
-4-
etc , shall be deemed received upon receipt of an appropriate response or other written
acknowledgment if sent by facsimile, upon receipt if personally served, three(3)business days after
sending by registered or certified mail, return receipt requested or one (1)business day after sending
by Federal Express or other nationally recognized overnight delivery service. All such notices, etc ,
to the Developer must be either made by facsimile or, if by another method, must be accompanied
by an advance notification by telephone or email
Developer Rancho San Jacinto L.L.C.
c/o Elliott Associates, L P.
712 5°i Avenue, 35'1' Floor
New York, NY 10019
Attention. Dan Gropper and Nadav Manham
Facsimile: 212-974-2092
with a copy to Robert M Haight, Jr.
Pillsbury Winthrop LLP
10100 Santa Monica Blvd., Suite 2300
Los Angeles, CA 90067
Facsimile: 310-286-6672
City City of San Jacinto
201 East Main Street
San Jacinto, CA 92583
Attention. City Manager
Facsimile 909-6.54-9896
with a copy to. Kim A. Byrens, Esq
Best Best & Krieger LLP
P,O, Box 1028
Riverside, CA 92502
Facsimile 909-686-3083
Each party can change its address for delivery of notice by delivering written notice of such change
of address to the other party within twenty (20) days of such change.
3.6 Attorneys' Fees. In the event of the bringing of any action or suit by either party
against the other arising out of this Agreement, the party in whose favor final judgment shall be
RVPCRI-bii'.'.16306SC -5
k
entered shall be entitled to recover from the other party all costs and expenses of suit, including
reasonable attorneys' fees
3.7 Severability. If any part ofthis Agreement is held to be illegal or unenforceable by a
court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest
extent reasonably possible
3 R. Bindin on Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the heirs, successors-in-interest and authorized assigns of the parties hereto
3 9 Entire Agreement. Other than the MOU, this Agreement contains the entire
agreement between the parties with respect to the matters provided for herein. There are no oral or
written representations,understandings,undertakings or agreements which are not expressly referred
to or contained herein, and any such representations,understandings,undertakings or agreements are
superseded by this Agreement, No evidence of any such representations, understandings,
undertakings or agreements shall be admissible and any proceeding of any kind or nature relating to
the terms and conditions of this Agreement shall he limited to the premises and agreements set forth
herein.
3, 10 Amendments. This Agreement may be amended or modified only in writing signed
by both parties
3 11. Governing Law. This Agreement and any dispute arising hereunder shall be governed
by and interpreted in accordance with the laws of the State of California.
3 12. Usage of Words As used herein, the singular of any word includes the plural, and
terms in the masculine gender shall include the feminine.
FtV[JD-1 Kr:3'..k.37A'.7 -6-
3.13. No Third Party Beneficiaries Except as may be specifically provided herein to the
contrary, no third party shall be the express or implied beneficiary of this Agreement or any of its
provisions, no such third party may bring action at law or in equity with respect thereto
3 14 Venue and Forin Any action at law or in equity arising under this Agreement brought
by any party hereto for the purpose of enforcing, construing or determining the validity of any
provision of this Agreement shall be filed and tried in the Superior Court ofthe County of Riverside,
State of California, and the parties waive all provisions of law providing for the filing, removal or
change of venue to any other Court.
3.15. Counterpart This Agreement shall be executed in counterparts, all of which shall
be deemed an original.
(SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed this Landowner Deposit
Agreement as of the day and year written below_
Dated
CITY OF SA J 1NTO
By: _
City Man er
ATTEST:
By
1ty Clerk
RANCHO SAN JACINTO L L.C.,
a Delaware limited liability company
By: Manchester Securities Corp.,
Manager and Member
By
Elliot Greenberg, Vice President
By: Highwood Associates, Inc.,
Member
By _
Elliot Greenberg, Vice President
-8-
EXi IIBIT A
BOUNDARY MAP OF
COMMUNITY FACILITIES Dls,rRICTNO. 2002-1
(ATTACI-IF.D)
PROPOSED BOUNDARY MAP
CITY OF SAN JACINTO COMMUNITY FACILITIES DISTRICT NO. 5
i
(RANCHO SAN JACINTO PHASE 21
C17Y OF SAN JACINTO
COU47Y OF RIVERSIDE
5TAiF OF CALIFORNIA
!MrtX 0 ONF l r[
c r.'Ou welly FAcla h6 LWYM
` I,(.eiKgOF oLAr
w«n,�r ,r
w( '1m�c:'ll oNc•
i
1
I I ill `
1
EXHIBIT B
ESTIMATED INITIAL, COSTS
BA-11
FIRST AMENDMENT
'1'O
MEMORANDUM OF UNDERSTANDING
['HIS FIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING dated as
of August 1, 2002, ('First Amendment to Memorandum") is made and entered into by and
among the CITY OF SAN JACINTO, a municipal corporation and political subdivision of the
State of California (the "City"), ELLIOTT ASSOCIATES, L.P., a Delaware limited partnership
(the `Majority Bond Owner") and RANCHO SAN JACINTO L.L.0 , a Delaware limited
liability company (the "Developer")
RECITALS
A The City and Majority Bond Owner have entered into that certain Memorandum
of Understanding dated September 18, 2001 (the "Original Memorandum") which provided the
outline for the foreclosure upon Parcels listed therein and the process for restructuring the
outstanding 1999 Bonds, and
B. On March 21, 2002, and March 28, 2002, respectively, the City acquired all of
the Parcels listed in Exhibit D to the Memorandum and has tendered quitclaim deeds to Rancho
San Jacinto L L C., as designee of the Majority Bond Owner; and
C In connection with the Foreclosure Actions, Majority Bond Owner and City
entered into that certain Pledge Agreement, dated March 12, 2002, between the City and the
Majority Bond Owner (the "Bond Pledge Agreement," and together with the Original
Memorandum, the "Mein oranduni"), and which is attached hereto as Exhibit A, and
D. City and Majority Bond Owner wish to amend the Memorandum for the purpose
of revising the terms of the bonds to be issued to restructure the 1999 Bonds;
NOW THEREFORE, IN CONSIDFRATION of the above recitals, the covenants and
agreements made herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows
t
RVN_v;K"B.63G725
ARTICLE I
DEFINED 'VFRMS
Section 1 I Definitions. Unless otherwise defined in the text hereof, the capitalized terms
used in this First Amendment to Memorandum shall have the meanings specified in Section I of
the Memorandum. All references herein to "Articles," Sections" and other subdivisions are to
the corresponding Articles, Sections or subdivisions of this First Amendment to Memorandum
and the words "herein," "hereof," "hereunder" and other words of similar impost refer to this
first Amendment to Memorandum as a whole and not to any particular Article, Section or
subdivision hereof
Section 1.2 All reference in the Memorandum to "CFD No. 2001-I" shall be changed
to "CFD No. 2002-1".
ARTICLE Il
AMENDMENTS TO MEMORANDUM
Section 2 1 Section 3.1(c) shall be amended in its entirety by the following
"The Subordinate Bonds will be issued concurrently with the
Senior Bonds in a principal amount equal to the par amount of the
1989 Bonds stated in the Indenture not redeemed by the Senior
Bonds plus $650.000 in final maturity amount of additional
Subordinate Bonds, referenced in Section 3.2(b)(vii) (the "Reserve
Fund Secured Subordinate Bonds"), to be secured by the Reserve
Fund for the Senior Bonds, such additional Subordinate Bonds to
mature.or.be cancellable after 12 years,..as._applicabfe- All of the
Subordinate Bonds (including the Reserve Fund Secured
Subordinate Bonds) will be delivered to Majority Bond Owner in
exchange for all 1999 Bonds owned by Majority Bond {owner
which have not otherwise been redeemed or prepaid and such 1989
Bonds will be cancelled. Majority Bond Owner will concurrently
exchange the Subordinate Bonds (including the Reserve Fund
Secured Subordinate Bonds) with the Authority for the Authority
Bonds, defined below_(w_ hic_h,will_berssued in_an-amount equal to
the principal amount of the hereinafter-defined_CFD-Bonds The
Authority shall then cancel the Subordinate Bonds, except for the
Reserve Fund Secured Subordinate Bonds which shall remain
outstanding and be owned by the Authority
Section 2 2 The third and fourth sentences of Section 3.2(a) shall be amended to read
as follows
RVK:1VKA11 636725 -
"Prior to the adoption of a resolution of intention to form CFD No.
2002-1, Majority Bond Owner will deposit the amount of$25,000
with the City, which amount will be sufficient to pay for the costs
of formation of CFD No 2002-1 Upon the successful completion
of the formation of CFD No 2002-1, City will use its best efforts
to issue bonds of CFD No. 2002-1 (the "CFD Bonds") in an
amount equal to the principal amount of Subordinate Bonds
outstanding, plus the initial amount deposited to the Checking
Account, as defined in Section 4.3 hereof, and less all of the
Reserve Fund Secured Subordinate Bonds Pursuant to a
Landowner Deposit Agreement, dated August 1, 2002, Majority
Bond Owner will receive the Proceedings Deposit, defined therein,
in cash from proceeds of the Senior Bonds."
Section 2 3 Section 3.2(b)(i) through (vii) of the Memorandum shall stale as follows-
(i) The CFD No. 2002-1 Special Taxes will be based on house size
with a prepayment of bonds required under certain circumstances
as set forth in the Rate and Method of Apportionment attached
hereto as Exhibit B,
(ii) The CFD No. 2002-1 Special Taxes will provide for a tax on all
properties within CFD No 2002-1 in the manner set forth in the
Rate and Method of Apportionment ,
(iii) In the event that Majority Bond Owner, or Developer, as
applicable, sells or otherwise conveys the Authority Bonds within
one year of the date of issuance of the Authority Bonds, then the
amount of $315,000 in final maturity amount of capital
appreciation Reserve Fund Secured Subordinate Bonds, referenced
in Section 3.1(c) above, shall be cancelled,
(iv) CFD No 2002-1 Special Taxes shall be available, after the
payment of debt service on the CFD Bonds and administrative
expenses, to fund the reserve fund established with respect to the
CFD Bonds, or Authority Bonds, defined below Earnings on such
reserve fund shall accrue and remain in the reserve fund until the
reserve requirement for the CFD Bonds or Authority Bonds, as
applicable, is met. After the reserve fund is fully funded, the
investment earnings thereon, not needed to replenish the reserve
fund or pay debt service on the first three tranches of Authority
Bonds, shall be used to pay accrued and current interest on the
final tranche of Authority Bonds,
3
RVPL H:I:AB 636725
(v) Undeveloped properties within CFD No. 2002-1 shall be subject to
CFD No. 2002-1 Special Taxes, however, the CFD Bonds shall be
structured so that CFD No 2002-1 Special Taxes will not be levied
upon undeveloped property in the first two years for which CFD
Bonds are outstanding, and no CFD No. 2002-1 Special faxes
shall be levied on the Commercial Property, as defined in the Rate
and Method of Apportionment, in Exhibit B hereto , for the period
set forth in the Rate and Method of Apportionment ,
(vi) There shall not be established with respect to CFD No 2002-1 a
supplemental special tax which provides for services of police and
fire for the new residents within CFD No 2002-1; and
(vii) The Reserve Fund Secured Subordinate Bonds shall remain
outstanding and, to the extent and manner permitted by law, annual
principal of and interest on such Reserve Fund Secured
Subordinate Bonds shall be used to reduce the CFD No. 2002-1
Special Taxes to be levied on undeveloped property within CFD
No 2002-1, and the portion of Reserve Fund Secured Subordinate
Bonds representing accreted value at the final maturity thereof, up
to an amount not to exceed $315,000 in final maturity amount of
capital appreciation bonds, shall be transferred at maturity to the
reserve fimd for the CFD Bonds or Authority Bonds, as applicable.
If the reserve fund will be less than or equal to the reserve
requirement for the CFD Bonds or the Authority Bonds, as
applicable, following the deposit of proceeds of the Reserve Fund
Secured Subordinate Bonds, the entire amount of $315,000 shall
be so deposited into the reserve fund- 1f the reserve fund will be
greater than the reserve requirement for the CFD Bonds or the
Authority Bonds, as applicable, following the deposit of proceeds
of the Reserve Fund Secured Subordinate Bonds, then only the
amount needed to bring the reserve fund to the reserve requirement
shall be deposited into the reserve fund, and any amounts not so
deposited shall be used as directed by the Authority. To the extent
that the reserve fund is funded at the reserve requirement at the
time of the maturity of that portion of the Reserve Fund Secured
Subordinate Bonds represented by $315,000 of capital appreciation
bonds, then such portion of the Reserve Fund Secured Subordinate
Bonds shall be cancelled.
Section 2.4 Exhibit I to the Memorandum shall be replaced by Exhibit C hereto
Section 2 5 The Memorandum is hereby amended with the addition of the following
section:
4
RVPUWKA3'635725
Section 4 3 Landscaping and Lighting District Majority Bond Owner
and Developer shall consent to the annexation of all property within CFD No
2002-1 into the City's Lighting, Landscaping and Park Maintenance District No. 2
(the "Landscape Maintenance District"). The Landscape Maintenance District
shall pay for those items permitted under the California Streets and Highways
Code Sections 22500 et sect., and as listed in the proceedings to annex the
Iandscape Maintenance District. The following are conditions precedent to the
agreement of the Majority Bond Owner and Developer to consent to the
annexation of the Landscape Maintenance District-
1. The assessment applies only to maintenance of improvements
constructed for the benefit of CFD No. 2002-1 or constructed by the Developer in
connection with the development of the property in CFD No, 2002-1
2 The assessments apply only to individual lots in CFD No. 2002-1
that have been subdivided pursuant to a recorded final map (i e., individual lots
for which building permits may be issued without further subdivision). Property
in CFD No. 2002- 1 that has not been so subdivided or property in CFD No 2002-
1 that is not the .subject of a recorded final map shall not he assessed by the City
3. Majority Bond Owner and Developer acknowledge and agree that
the current assessment for fiscal vear 2002-03 in the Landscape Maintenance
District shall not exceed $275 09 per assessable parcel In each year after fiscal
year 2002-03, the maximum assessment may not exceed S275.09 per assessable
parcel as increased by the Annual Consumer Price Index for All Urban
Consumers for Los Angeles - Anaheim - Riverside and published by the U.S
Department of Labor - Bureau of Labor Statistics (the "Annual Consumer Index")
over the base year of 2002-03. City and Majority Bond Owner agree to the
foregoing maximum assessment, provided that Majority Bond Owner, or
Developer, as applicable, deposit the amount of $70,000 cash in an interest
bearing checking account (the "Checking Account") at the time of annexation of
all Parcels to the Landscape Maintenance District From and after (but not
before) the date of acceptance by the City of the first improvements in the
Landscape Maintenance District (the "Acceptance Date"), monies deposited in the
Checking Account may be directly drawn upon by the City, in its sole discretion,
in the event that actual annual and reasonable costs of the Landscape Maintenance
District for an assessable parcel exceed $275.09 plus the Annual Consumer Index,
provided, that the City may only draw monies in the Checking Account equal to
the aggregate amount of actual annual and reasonable costs in excess of S275 09
plus the Annual Consumer Index for each assessable parcel, not to exceed the
aggregate amount of S31.91 plus the Annual Consumer Index increase per
assessable parcel for such fiscal year, if the City draws monies from the
Checking Account, then City shall provide an accounting of all costs and
expenses to Developer within 90 days of such draw. Prior to the Acceptance
Date, funds on deposit in the Checking Account may not be withdrawn by the
City. Interest on the checking account shall accrue to and be retained in the
5
R VPr T3 KAn•636725
Checking Account and used for the purposes thereof Upon any draw of funds by
the City, Developer shall replenish cash on deposit in the Checking Account to
equal $70,000 plus the Annual Consumer Index. Such deposit shall be made to
the Checking Account by July I of each year. Upon the expiration of five years
from the Acceptance Date, all funds on deposit in the Checking Account, and
interest accrued thereon, shall be released by the City and promptly returned to
the Developer.
Section 2.6 Notices Section 5 9 shall be amended by adding the following addressee to
the end thereof
Developer: Rancho San Jacinto L L C
c/o Elliott Associates, L.P.
712 5`h Avenue, 35"' Floor
New York, NY 10019
Attention Dan Gropper and Nadav Manham
Facsimile: 212-974-2092
with a copy to Robert M. Haight, Jr.
Pillsbury Winthrop I.LP
10100 Santa Monica Blvd_, Suite 2300
Los Angeles, CA 90067
Facsimile 310-286-6672
Section 2 1 Payment of County Taxes City and Majority Bond Owner acknowledge that
ad valorem taxes on all of the Parcels that were subject to the County's power of sale have been
paid to the County of Riverside on June 21, 2002, in the amount of$625,095.34. Accordingly,
Section 2.2 of the Memorandum and the County Agreement attached to the memorandum as
Exhibit J are hereby deleted.
Section 2 8 Assignment The obligations and benefits set forth in Section 4.3 of the
Memorandum may be assigned by the Developer if consented to in writing by Majority Bond
Owner with notice provided to the City.
Section 2.9 Memorandum in Full Force and Effect. Except as modified by this First
Amendment to Memorandum, the terms of the Memorandum shall remain in full force and
effect.
Section 2.10 Counterparts This First Amendment to Memorandum may be executed in
counterparts, each of which shall be deemed an original.
6
R V PU13:KA13'636725
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as of the
date and year first above written-
ELLIOTT ASSOCIATES, L.P.,
a Delaware limited pailneiship
By __. ... __._ ._ .. --......_... ...._._.._
THE CITY F 'AN JACINT
By
City anager
ATTEST:
ity Clerk
ACCEPTED The Developer has read and understands, and hereby accepts, the obligations set
forth in Sec-ion 2.5 of this First Amendment to Memorandum.
RANCHO SAN JACINTO 1._1._C., a Delaware
limited liability company
By Manchester Securities Corp., Manager and
Member
By
Elliot Greenberg, Vice President
By: Highwood Associates, Inc., ;Member
By:
EII iot Greenberg, Vice President
7
RCPUR.'KA13 ti367�5
EXHIBIT A
PLLDGE AGREEMENT
1
RVP[TMKAR'636725
a
PLEDGE AGREEMENT
THIS PLEDGE .AGREEMENT, dated as of March 12, 2002 (this "Agreement"), is made
and entered into by and between the CITY OF SAN JACINTO, a municipal corporation and
political subdivision of the State of California (the "City") and ELLIOTT ASSOCIATES, L.P., a
Delaware limited partnership ("Elliott").
RECITALS
A. The City has formed its Community Facilities District No. 2 ("CFD No. 2") and, in
connection therewith, has issued its 1989 Special Tax Bonds in the original principal amount of
$26,0007000 (the "1989 Bonds")
$, The 1989 Bonds arc secured by special taxes levied by the City on property within the
boundaries of CPT) No 2 according to a rate and method of apportionment (the "Special
Taxes")
C The Special Taxes levied against those parcels listed in Exhibit A attached hereto and
incorporated herein by this reference (individually, a "Parcel" and collectively, the"Parcels")
are delinquent
D In connection with the delinquent Special Taxes levied against the Parcels, the City has
initiated judicial foreclosure proceedings in the Superior Court of the County of Riverside
entitled as follows (1) San Jacinto v Chmelnicki et at, Case No. RIC 303831, with respect to
the Parcels originally owned by Chmelnicki (the "Chmelnicki Parcels"); (2) San Jacinto v, P.R.
Equities et al , Case No. RIC 341872, with tespect to the Parcels originally owned by P R.
Equities (the "PR Equities Parcels"), (3) San Jacinto v. Framste Investments Co., Inc., et al.,
Case No. RIC 111796, with respect to the Parcels originally owned by Framste Investments Co.,
Inc. (the "Framste Parcels"), (4) San Jacinto v. "IMP Land Mortgage et al., Case No. RIC
267954, with respect to the Parcels originally owned by TMP band Mortgage (the"TMP
Parcels") (individually, a "Foreclosure Action" and, collectively, the "Foreclosure Actions")
and has obtained Judgments in Judicial Foreclosure and Order of Sale for each of the Foreclosure
Actions (individually, a "Judgment" and, collectively, the "Judgments")
E. The Riverside County Sheriff has scheduled a foreclosure sale of the TMP Parcels and
the PR Equities Parcels for March 21, 2002 (herein, the "initial Foreclosure Sale").
F The Riverside County Sheriff has scheduled a foreclosure sale ofthe Chmelnicki Parcels
and the Framste Parcels for March 29, 2002 (herein, the"Second Foreclosure Sale").
G. Elliott currently has no fee ownership interest in any of the Parcels, and Elliott desires to
obtain such interest through the Initial Foreclosure Sale and the Second Foreclosure Sale subject
to the terms of the Memorandum of Understanding (the "MOU"), dated as of September 18,
2001, by and between the City and the Elliott.
10445416 8 DOCK
l
H. In the MOLL, Elliott agreed to deposit an amount of the t989 Bonds it owns into escrow
as collateral for the performance of certain obligations under the MOU. Elliott holds the 1989
Bonds in book-entry form and therefore Elliott cannot deposit certificated securities into an
escrow to serve as collateral
I The City and Elliott now desire to enter into this Agreement to provide for the terms and
conditions relating to the pledge of a portion of the 1989 Bonds owned by Elliott in book-entry
form
J. In addition, the City and Elliott desire to enter into this Agreement to provide for (i) the
timing of the formation of CFD No. 2001-1 and the refunding of the 1999 Bonds, and (ii) the
terms and conditions for Elliott's consent to the refunding of the 1989 Bonds.
K. The City has found and determined that the actions to be taken by the City and the Elliott
in this Agreement will not materially adversely affect the interests of the Minority Bond Owners.
NOW THEREFORE, IN CONSIDERATION of the above recitals, the covenants and
agreements made herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Elliott and the City agree as follows
SECTION 1
DEFINITIONS AND OPENING OF ESCROW
1.1 Definitions. Unless otherwise defined herein, the capitalized terms used in this
Agreement shall have the meanings specified in the MOU.
1.2 Opening of Escrow. The City and Elliott acknowledge that Escrow has been opened
with Union Bank of California N.A., in satisfaction of Section 2.1 of the MOU.
SECTION 2
PLEDGE OF 1989 BONDS
2.1 Pledge.of 1989 Bonds. As of the Initial Effective Date (as defined in Section 2 2
below), Elliott hereby pledges $16,144,104 principal amount of the 1999 Bonds owned by Elliott
(the"Initial Pledged Bonds")to the City. As of the Second Effective Date (as defined in
Section 2.3 below), Elliott hereby pledges $3,440,605 principal amount of the 1989 Bonds
owned by Elliott (the "Second Pledged Bonds," and together with the initial Pledged Bonds,
collectively, the"Pledged Bonds") to the City. In clarification of the foregoing, the amount of
the 1989 Bonds owned by Elliott identified in connection with the Initial Pledged Bonds above
shall not be considered Pledged Bonds until after the Initial Effective Date, and the amount of
the 1989 Bonds owned by Elliott identified in connection with the Second Pledged Bonds above
shall not be considered Pledged Bonds until after the Second Effective Date. The pledge of the
20345416 2 DUC
2
Pledged Bonds as of the Initial Effective Date and/or the Second Effective Date, as the case may
be, is being made by Elliott to secure the performance by Elliott of its obligations under the
MOU
2,2 Initial Effective_Date. The pledge of the Initial Pledged Bonds shall become effective
automatically upon the date the TMP Parcels and the PR Equities Parcels are sold to the City at
the Initial Foreclosure Sale (the "Initial Effective hate") if the Initial Foreclosure Sale is
cancelled, postponed or stayed for any reason, or any part of the TMP Parcels or the PR Equities
Parcels are (1) redeemed by any person or entity, or(ii) purchased by any person or entity other
than the City at the Initial Foreclosure Sale, then the pledge of the Initial Pledged Bonds shall not
become effective and this Agreement shall terminate automatically and become null and void
2.3 Second Effective Date. The pledge of the Second Pledged Bonds shall become
effective automatically upon the date of the Chmelnicki Parcels and the Framste Parcels are sold
to the City at the Second Foreclosure Sale (the"Second Effective Date," and together with the
Initial Effective Date, the "Effective Dates"). If the Second Foreclosure Sale is cancelled,
postponed or stayed for any reason, or any part of the Chmelnicki Parcels or the Framste Parcels
are (i) redeemed by any person or entity, or(ii) purchased by any person or entity other than the
City at the Second Foreclosure Sale, then the pledge of the Second Pledged Bonds shall not
become effective.
24 Prohibition.Against Transfer. From the respective Effective Dates to the date that the
Pledged Bonds are released pursuant to Section 3 herein, Elliott shall not convey, sell or
otherwise transfer all or any portion of the Pledged Bonds without the written consent of the
City
2.5 Vgting and Consent Rights. So long as no Event of Default shall exist, Elliott shall
be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged
Bonds or any part thereof for any purpose not inconsistent with the terms of this Agreement.
Notwithstanding this Agreement and the pledge of the Pledged Bonds, Elliott may exercise any
voting and consent rights in its sole and absolute discretion, without notice to, or consent of, the
City. Furthermore, Elliott shall be entitled to receive and retain any and all payments of
principal and interest on the Pledged Bonds.
2.6 Default. The term "Default" as used in this Agreement shall mean the following:
(a) The failure by Elliott to deposit into Escrow any additional Cash needed to finance
the Costs of Sale and City Costs pursuant to Section 2 7(c) of the MOU.
(b) The failure of the City to issue the Refunding Bonds or the Authority Bonds due
solely to the failure by Elliott to reasonably cooperate in the drafting and execution of any
reasonable continuing disclosure agreement required by law, pursuant to Sections 3.1(f) and
32(d)of the MOU.
(c) The failure of the City to issue the Refunding Bonds or the Authority Bonds due
solely to the failure by Elliott to deposit $25,000 with the City to cover the costs of formation of
CFD No 2001-1 pursuant to Section 3.2(a) of the MOU.
70345416 6 DOC
3
2 7 Event of Default Upon the occurrence of a Default, the City shall provide written
notice to Elliott, which notice shall identify the nature of the Default (the"Default Notice").
Upon receipt of the Default Notice, Elliott shall have ten (10) business days to cure the Default,
or if the Default is not reasonably susceptible to cure during such a ten (10)business day period,
such longer period of time, not to exceed ninety (90) calendar days, as Elliott deems necessary to
cure the Default (the "Cure Period") If Elliott fails to cure the Default prior to the expiration of
the Cure Period, then an "Event of Default" shall be deemed to have occurred.
2.8 Remedies in the Event of Default. At anytime upon the occurrence and during the
continuance of any Event of Default, the City shall have the right in its discretion to demand that
Elliott transfer the Required Amount (as defined below) of the Pledged Bonds to the City, or
register the Required Amount of Pledged Bonds in its name, and Elliott will take such steps and
execute such documents so as to effectuate the transfer of the Required Amount of Pledged
Bonds to the City or the registration of the Required Amount of Pledged Bonds in the name of
the City Upon the transfer or registration of the Required Amount of Pledged Bonds to the City,
the City shall cancel the Required Amount of the Pledged Bonds The term "Required
Amount" as used in this Agreement shall mean The amount of Pledged Bonds necessary to
satisfy the minimum bid requirement for all parcels for which the City credit bid or, if Elliott
provides a written waiver of the collection of interest, penalties and past-judgment interest and a
certificate that the Minority Bond Owners are not materially harmed by such waiver, the term
shall mean the amount of Pledged Bonds necessary to pay the principal amount of the applicable
Judgments for all parcels for which the City credit bid Upon the exercise of any remedies in this
Section 2.8, the City shall (a) deliver to Elliott the items in 2 7B(i) and 2.7B(ii) of the MOU, and
(b) release any amounts in excess of the Required Amount of Pledged Bonds to Elliott.
Notwithstanding anything to the contrary in this Agreement or in the MOU (specifically,
including Section 2.7E), the City shall have no recourse to all or any part of the 1999 Bonds
awned by Elliott for any reason, and shall not seek the transfer and cancellation of all or any part
of the 1989 Bonds (including the Pledged Bonds) for any reason, except upon the occurrence and
during the continuance of an Event of Default under this Agreement
2.9 Further Assurances. Elliott agrees that at any time and from time to time, at its own
cost and expense, it will promptly procure, execute and deliver all further instruments,
documents and agreements, and take all further action, that may be necessary or desirable, or that
the City may reasonably request, in order to enable the City to exercise and enforce its rights and
remedies hereunder with respect to the Required Amount of any Pledged Bonds, but only if there
is an Event of Default under this Agreement that remains uncured Without limiting the
general ity of the foregoing, Elliott further agrees that it shall, upon the request of the City during
the occurrence and continuation of an Event of Default (a) procure, execute and deliver to the
City all assignments and other instruments of transfer requested by the City, (b) deliver to the
City inunediately upon receipt the originals of the Required Amount of all Pledged Bonds and all
certificates, instruments and other writings evidencing the Required Amount of the Pledged
Bonds. and (c) cause the City's interests in the Required Amount of the Pledged Bonds to be
recorded or registered in the books of any clearing corporation or similar intermediary requested
by the City.
2 10 Satisfaction of the MOU. The pledge of a portion of the 1989 Bonds pursuant to
this Agreement is made in satisfaction of Section 2.3(ii) of the MOU for all Parcels.
K345416 3.rOC'
4
SECTION 3
RELEASE OF PLEDGED BONDS
3.1 Release ofthe Pledged Bonds Upon Restructuring As provided in Section 2.713(iii)
and Article III of the MOU, the City shall release the Pledged Bonds upon completion of both of
the following events(herein, the "Termination Events"): (i) the refunding of the 1989 Bonds
by the issuance of the Refunding Bonds, and (ii) the formation of CFD No. 2001-1 and the
issuance of bonds by CFD No. 2001-1 ("CFD Bonds")- Immediately upon the occurrence of the
Termination Events, the pledge of the Pledged Bonds made by this Agreement, and all rights and
remedies provided to the City with respect to the Pledged Bonds, shall automatically cease and
terminate.
3.2 Release of Pledn.ed Bonds Upon Termination of the MOU If the MOU is terminated
for any reason, and by any party, the pledge of the Pledged Bonds made by this Agreement, and
all rights and remedies provided to the City with respect to the Pledged Bonds, shall
automatically cease and terminate
3.3 Release of Initial Pledged Bonds Upon failure to Acquire Parcels. The pledge of the
Initial Pledged Bonds made by this Agreement, and all rights and remedies provided to the City
with respect to the Initial Pledged Bonds, shall cease and terminate, in the sole discretion of
Elliott and upon written notification from Elliott to the City, if the City fails to acquire all of the
TMP Parcels and the PR Equities Parcels at the Initial Foreclosure Sale pursuant to the MOU
3 4 Release of Second Pledged Bonds Upon Failure to Acquire j!areels. The pledge of the
Second Pledged Bonds made by this Agreement, and all rights and remedies provided to the City
with respect to the Second Pledged Bonds, shall cease and terminate, in the sole discretion of
Elliott and upon written notification from Elliott to the City, if the City fails to acquire all of the
Chmelnicki Parcels and the Frarnste Parcels at the Second Foreclosure Sale pursuant to the
MOU
3 5 Acknowledgment of Termination Notwithstanding the automatic termination of the
pledge of the Pledged Bonds pursuant to this Section 3 and Section 4.1(b)(ii), promptly upon (i)
termination of the pledge of the Initial Pledged Bonds pursuant to Sections 3.1, 3.2, 3.3, or
4.1(b)(ii), and (ii) termination of the pledge of the Second Pledged Bonds pursuant to Sections
3 1, 3.2, 3.4 or"4.I(b)(ii), the City shall provide Elliott with a written acknowledgement of the
release of the Initial Pledged Bonds or Second Pledged Bonds, as the case may be.
SECTION 4
ACTIONS UPON FAILURE TO RF,STRUCTURE
4 1 City Actions.
(a) Under the MOU, the City has agreed to use its best efforts to do, or cause to be done,
all of the following (herein, collectively, the "City Actions")-
S
(i) Issue the Refunding Bonds in the manner described in the MOU,
(ii) Form CFD No. 2001-1 in accordance with the MOU,
(III) Issue the CFl9 Bands in the manner described in the MOU, and
(iv) Issue the Authority Bonds in the manner described in the MOU.
(b) If, for any reason, the City cannot or will not take, or cause to be taken, the City
Actions within the Implementation Period (as defined below), or if, for any reason, the City
Actions do not take place within the Implementation Period, then the following actions or events
shall occur
(i) The City shall, if it has not done so already, transfer all of the Parcels
acquired at the Initial Foreclosure Sale and the Second Foreclosure Sale to Elliott; and
(ii) The pledge of the Pledged Bonds made by this Agreement, and all rights
and remedies provided to the City with respect to the Pledged Bonds, shall cease and
terminate, in the sole discretion of Elliott and upon written notification from Elliott to the
City
(c) The term "Implementation Period" shall mean the period commencing on the date
of the Initial Foreclosure Sale and ending six (6) months from the date of the Initial Foreclosure
Sale, unless extended as provided in the next (sentence. The six-month period will be
automatically extended for successive periods of three (3) moutlis unless a Release Notice (as
defined below) is received by either the City or Elliott prior to the conclusion of the six-month
period or any three-month extension period Upon delivery of a Release Notice, the
Implementation Period shall not be further extended and shall end at the conclusion of the
current period The term "Release Notice" shall mean a written notice that the Implementation
Period should not be further extended delivered (i) to the City by Elliott or(ii) to Elliott by the
City.
(d) Elliott and the City acknowledge that any of the Parcels acquired by Elliott prior to
the occurrence of the City Actions will continue to be encumbered by the delinquencies that are
the subject of the Foreclosure Actions in the same manner and in the same amount as
immediately prior to the Initial Foreclosure Sale or Second Foreclosure Sale, as the case may be.
The City and Elliott agree that there will be no Satisfaction of Judgment executed or recorded
with respect to the Foreclosure Actions and that all of the 1989 Bonds shall remain outstanding
until the completion of the City Actions pursuant to the MOU
(e) If the City Actions do not take place, Elliott, for itself as the owner of a majority of
the 1999 Bonds, hereby waives the obligation of the City to remit the amount of any credit bid
into the Bond Fund within two years of making the bid, pursuant to Government Code Section
53356.5(a)(5), provided that the City does not remit the amount of all or part of any credit bid to
any Minority Bond Owners. Asa result of this waiver, and if the credit bids take place pursuant
to the MOU but all of the City Actions do not occur, Elliott acknowledges that it will not receive
any proceeds from the City pursuant to Government Code Section 53356.5(a)(5).
20345416 B.DDC
6
(f) The failure of any or all of the City Actions to take place shall not prohibit the release
of the Pledged Bonds pursuant to any provision of Section 3 above or Section 4.1(b)(1i).
SECTION 5
FORMATION Of CFD NO. 2001-1
5.1 CFD No 2001-1_ The City shall not issue the Refunding Bonds, form CFD No.
2001-1 or issue the CFD Bonds without the written consent of Elliott.
5.2 Terms of the CFD Bonds- Except as provided in subparagraph (a) below, the CFD
Bonds shall he issued upon the terms set forth in the M01J.
(a) Section 3 2(b)(iii) of the MOU shall be amended in its entirety to read as follows:
"(iit) Any I'arcels that are developed within CTD No. 2001-1 may
parnally.srihsidize the undeveloped Parcels within CFD No. 2001-1 far
ten (10) annual tax levies following the issuance of the CID Bonds. ,4 fter
such ten (10)year period, the CID No. 2001-1 Special 7'axe.s on
developed parcels.shall decrease by approximately 1501n; "
5.3 lssuancc_of Authority Bonds Upon issuance, the Authority Bonds shall be
transferred to and registered in the name of Elliott or its nominee in exchange for the Subordinate
Bonds owned by 1* hott. All of the Authority Bonds shall be issued in certificated form, unless
otherwise requested in writing by Elliott.
SECTION 6
SIMIILTANEOUS ACTIONS
6.1 Simultaneous Actions The City acknowledges and agrees that Elliott shall not
consent to the issuance of the Refunding Bonds to refund the 1989 Bonds, and the City shall not
issue the Refunding Bonds, until after (i) the formation of CFD No. 2001-1 (i.e., following the
approval of CFD No. 2001-1 by the qualified electors in CFD No 2001-1, the certification of the
election results by the Cit_v Council of the City, and the recordation of the notice of special tax
lien against the property in CFD No. 2001-1), (ii) the authorization by the City Council of the
City of the issuance of the CFD Bonds in the amount and upon the terms provided in the MOU
and this Agreement, and (iii) the authorization by the governing board of the Authority of the
issuance of the Authority Bonds in the amount and upon the terms provided in the MOU and this
Agreement. Elliott's consent to the issuance of the Refunding Bonds to refund the 1989 Bonds
may be conditioned on the satisfaction of the conditions described in this Section 6.1, and shall
be given in reliance upon the issuance of the CFD Bonds and the Authority Bonds following
authorization by the City Council of the City and the governing board of the Authority,
?6 s45416 8 MC
7
respectively. The closing date for the Refunding Bonds shall be the same as the closing date for
the CFD Bonds and the Authority Bonds.
SECTION 7
MISCELLANEOUS PROVISIONS
7 1 Cooperation. Elliott and City acknowledge that it may be necessary to execute
documents other than those specifically referred to herein in order to complete the transactions
contemplated by this Agreement Therefore, each party hereto hereby agrees to cooperate with
each other by executing such other documents or taking such other action as may be reasonably
necessary to complete the transactions contemplated by this Agreement in accordance with the
intent of the parties as evidenced in this Agreement.
7 2 Conflict_ This Agreement is an amendment to the MOU, and in the event that any
provision of this Agreement conflicts with any other agreement, including the MOU, this
Agreement shall control.
7.3 Amendment This Agreement may be amended only by a written instrument
executed by the parties hereto or their successors in interest.
7 4 Waiver. All waivers of this Agreement must be in writing and signed by the
appropriate authorities of the parties hereto
7.5 Severahility If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining portions hereof shall not,
in any way, be affected or impaired thereby.
7 6 Inte gr ation This Agreement, and the MOU as amended by this Agreement,
constitute the entire agreement between the parties hereto pertaining to the subject matter hereof
and all prior and contemporaneous agreements, representations, negotiations and understandings
of the parties hereto, oral or written, are hereby superseded and merged herein.
2034541h A Cx7l'
_ g
7 7 Notices, Demands and Communication Formal notices, demands and
communications between Elliott and City hereunder shall be sufficiently given if personally
served, delivered by Federal Express or other nationally recognized overnight delivery service or
mailed by registered or certified mail, postage prepaid, return receipt requested, to the principal
offices of Elliott or City, as set forth below. Such written notices, demands and communications
may be sent in the same manner to such other address as a party may from time to time designate
for such party by notice given as provided in this Section. Such notices, etc., shall be deemed
received upon delivery if personally served, three (3) business days after sending by registered or
certified mail, return receipt requested or one (1) business day after sending by Federal Express
or other nationally recognized overnight delivery service.
if to City City of San Jacinto
201 E Main Street
San Jacinto, CA 92583
Attention: City Manager
With a copy to: Kim A Byrens, Esq.
Best Best & Krieger LLP
3750 University Avenue
400 Mission Square
Riverside, CA 92501
If to Elliott. Elliott Associates, L.P.
712 Fifth Avenue, 35th Floor
New York, NY 10019
Attention: Mr Dan Gropper
With a copy to: Robert M. Haight, Jr„ Esq.
Pillsbury Winthrop LLP
10100 Santa Monica Boulevard, Suite 2300
Los Angeles, CA 90067
7_8 Inter relation. The rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation of this Agreement
or any amendments or exhibits hereto. The Section headings are for purposes of convenience
only, and shall -not be construed to limit or extend the meaning of this Agreement.
7.9 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original_
20345416J DOC
9
07x24/02 14:53 CORPORPIE TRUST i 909 686 3063 NO.759 P011/02Y
W WITNESS WHEREOp, the parties hereto have executed this Agreement as of the date
and year first above written.
ELLIOTT ASSOCIATES, L.P.,
a Delaware limited partnership
By:
ads$ e o cf,e414 Ar
THE CITY OF SAN JACINTO
By:
City Manager
ATTEST:
City Clerk
20]4541ti_5 10
07/24/02 14:57 CORPORATE TRUST ; 909 626 3083 NO.759 FJ024/0 (
ITN WITNESS WHEP EDF, the parties hereto have executed this Agreement as of the date
and year first above written
ELLIOTT ASSOCIATES, L-P.,
a Delaware limited partnership
By:
THE CITY OF S !)(INTO
By:
City Manager
Pladyc AgmcmW(Lllinl:AuQ%4 t •s+n Jnclalo)poC
10
EXHIBIT A
PARCELS
Property Owner Assessors Parcel No.
Chmelnicki 438-030-012
Chmelnicki 438-040-006
Chmelnicki 438-040-007
PR Equities 438-441-015
PR Equities 438-441-016
PR Equities 438-441-017
PR Equities 438-441-018
PR Equities 438-441-019
PR Equities 438-441-020
PR Equities 438-441-021
PR Equities 438-441-022
PR Equities 438-441-023
PR Equities 438-441-024
PR Equities 438-441-025
PR Equities 438-441-026
PR Equities 438-441-027
PR Equities 438-441-028
PR Equities 438-441-029
PR Equities 438-441-030
PR Equities 438-441-031
PR Equities 438-441-039
PR Equities 438-441-040
PR Equities 438-441-041
PR Equities 438-441-042
PR Equities 438-441-043
PR Equities 438-441-044
PR Equities 438-441-045
PR Equities 438-441-046
PR Equities 438-441-047
PR Equities 438-441-048
PR Equities 438-441-049
PR Equities 438-441-050
PR Equities 438-441-051
PR Equities 438-441-052
PR Equities 438-441-053
PR Equities 438-441-054
PR Equities 438-441-055
PR Equities 438-441-056
PR Equities 438-442-034
PR Equities 438-461-012
20345415 6.D)C
A-1
Property Owner Assessors Parcel No
PR Equities 438-461-013
PR Equities 438-461-014
PR Equities 438-461-015
PR Equities 438-461-016
PR Equities 438-461-017
PR Equities 438-461-018
PR Equities 438-461-019
PR Equities 438-461-020
PR Equities 438-463-001
PR Equities 438-463-002
PR Equities 438-463-003
PR Equities 438-463-004
PR Equities 438-463-005
PR Equities 438-463-006
PR Equities 438-463-007
PR Equities 438-463-008
PR Equities 438-463-009
PR Equities 438-463-021
PR Equities 438-463-022
PR Equities 438-463-023
PR Equities 438-463-024
PR Equities 438-463-025
PR Equities 438-463-026
PR Equities 438-463-027
PR Equities 438-463-028
PR Equities 438-463-029
PR Equities 438-463-030
PR Equities 438-471-001
PR Equities 438-471-002
PR Equities 438-471-003
PR Equities 438-471-004
PR Equities 438-471-005
PR Equities 438-471-006
PR Equities 438-471-007
PR Equities 438-471-008
PR Equities 438-471-009
PR Equities 438-47 t-010
PR Equities 438-471-011
PR Equities 438-471-012
PR Equities 438-471-013
PR Equities 438-471-014
PR Equities 438-471-015
PR Equities 438-47I-016
203454 IG 5U�)C:
A-2
Property Owner Assessors Parcel No.
PR Equities 438-471-017
PR Equities 438-471-018
PR Equities 438-471-019
PR Equities 438-471-020
PR Equities 438-471-032
PR Equities 438-472-001
PR Equities 438-472-002
PR Equities 438-472-003
PR Equities 438-472-004
PR Equities 438-472-005
PR Equities 438-472-006
PR Equities 438-472-007
PR Equities 438-472-008
PR Equities 438-472-009
PR Equities 438-472-010
PR Equities 438-472-01 1
PR Equities 438-472-012
PR Equities 437-310-029
PR Equities 438-040-008
PR Equities 438-040-009
PR Equities 439-190-028
PR Equities 439-190-029
Framste 439-1 80-015
TMP Land Mortgage 438-050-051
TMP Land Mortgage 438-050-052
TMP Land Mortgage 438-050-054
TMP Land Mortgage 438-050-055
TMP Land Mortgage 438-050-056
TMP Land Mortgage 438-050-057
TMP Land Mortgage 438-050-065
TMP Land Mortgage 439-190-027
A-3
EXHIBIT B
RATE & METHOD OF APPORTIONMENT
OF CFD NO. 2002-1 SPECIAL TAX
1
RVFl:13�K AD'6;6725
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 2002-1
OF THE CITY OF SAN JACINTO
(RANCHO SAN JACINTO PHASE 2)
A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in Community Facilities
District No 2002-1 of the City of San Jacinto (Rancho San Jacinto Phase 2) ("CFD No. 2002-1")
and collected each Fiscal Year commencing in Fiscal Year 2002-03, in an amount determined by the
Council through the application of the appropriate Special Tax for"Developed Property," "Taxable
Property Owner Association Property," "Taxable Public Property," "Undeveloped Property" and
"Undeveloped Commercial Property," as described below. All of the real property in CFD No 2002-
1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent
and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel
map. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by
43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter
2.5, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs
directly related to the administration of CFD No 2002-1 the costs of computing the Special
Taxes and preparing the annual Special Tax collection schedules (whether by the City or
designee thereof or both); the costs of collecting the Special Taxes(whether by the County
or otherwise), the costs of remitting the Special Taxes to the Trustee, the costs of the Trustee
(including reasonable costs of its legal counsel) in the discharge of the duties required of it
under the Indenture or the Financing Authority Indenture; the costs to the City, CFD No.
2002-1 or any designee thereof of complying with arbitrage rebate requirements, the costs to
the City, CFD No 2002-1 or any designee thereof of complying with City, CFD No. 2002-1
or obligated persons disclosure requirements associated with applicable federal and state
securities laws and of the Act; the costs associated with preparing Special Tax disclosure
statements and responding to public inquiries regarding the Special Taxes; the costs of the
City, CFD No 2002-1 or any designee thereof related to an appeal of the Special Tax, and
the City's annual administration fees and third party expenses Administrative Expenses shall
also include amounts estimated or advanced by the City or CFD No. 2002-1 for any other
administrative purposes of CFD No. 2002-1, including reasonable attorney's fees and other
costs related to commencing and pursuing to completion any foreclosure of delinquent
Special Taxes.
GO,of San Jacinto July 30,2002
CFD No.2002-I Page I
"Assessor's Parcel" or "Assessor's Parcel Number" means a lot or parcel shown in an
Assessor's Parcel Map with an assigned Assessor's Parcel number
"Assessor's Parcel Map" means an official map of the Assessor of the County designating
parcels by Assessor's Parcel number.
"Assigned Special Tax" means the Special Tax for each Land Use Class of Developed
Property, as determined in accordance with Section C below.
"Bonds"means any bonds or other debt (as defined in Section 53317(d) of the Act), whether
in one or more series, issued by CFD No 2002-1 under the Act.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes_
"CFD No. 2002-l" means Community Facilities District No. 2002-1 of the City of San
Jacinto (Rancho San Jacinto Phase 2).
"City" means the City of San Jacinto
"Commercial Property" means, for each Fiscal Year, all Developed Property located in
Assessor's Parcel Number 438-040-009, and on 4.8 acres located within Assessor's Parcel
Number 438-040-008, as such Assessor's Parcels were designated on the Fiscal Year 2002-03
Assessor's Rolls The specific location of the 4 8 acres within Assessor's Parcel Number
438-040-008 that is to qualify as Commercial Property shall be determined by the CFD
Administrator
"Council" means the City Council of the City of San Jacinto, acting as the legislative body
of CFD No. 2002-1.
"County" means the County of Riverside
"Developed Property" means all Taxable Property, exclusive of Taxable Property Owner
Association Property and Taxable Public Property, for which (i) a Final Map was recorded
prior to the January 1 st preceding the Fiscal Year in which the Special Tax is being levied and
(2) a building permit was issued after January 1, 2002, but prior to the April 1 st preceding the
Fiscal Year in which the Special Tax is being levied
"Final Map" means a subdivision of property by recordation of a final map, parcel map, or
lot line adjustment, pursuant to the Subdivision Map Act (California Government Code
Section 66410 el seq.) or recordation of a condominium plan pursuant to California Civil
Code 1352 that creates individual lots for which building permits may be issued without
further subdivision.
"Financing Authority" means the San Jacinto Financing Authority.
City of San Jacinto July 30,2002
CFD No.1002-) Page 2
"Financing Authority Indenture" means the indenture, fiscal agent agreement, resolution
or other instrument pursuant to which bonds are issued by the
Financing Authority, as modified, amended and/or supplemented from time to time, and any
instrament replacing or supplementing the same.
"Fiscal Year" means the period starting July I and ending on the following June 30
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which Bonds are issued, as modified, amended and/or supplemented from time
to time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table I
"Mandatory Prepayment Special Tax" means a Special Tax applicable to an Assessor's
Parcel of Developed Property or Undeveloped Property, as determined in accordance with
Section D below.
"'Maximum Special Tax" means the maximum Special Tax, determined in accordance with
Section C below, that can be levied in any Fiscal Year on any Assessor's Parcei
"Multifamily Property" means any Assessor's Parcel of Residential Property that consists
of a building or buildings comprised of attached residential units available for rental by the
general public, not for sale to an end user, and under common management.
"Other Non-Residential Property" means all Assessor's Parcels of Developed Property for
which a building permit(s) has been issued for a non-residential use, other than Commercial
Property
"Outstanding Bonds" means all Bonds which are deemed to be outstanding under the
Indenture.
"Property Owner Association Property" means any property within the boundaries of CFD
No. 2002-1 that is owned by or dedicated to a property owner association, including any
master or sub-association
"Proportionately" means for Developed Property that the ratio of the actual Special Tax
levy to the Assigned Special Tax is equal for all Assessor's Parcels of Developed Property
within CFD No. 2002-1. For Undeveloped Property and Undeveloped Commercial Property,
"Proportionately" means that the ratio of the actual Special 'fax levy per Acre to the
Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Piopelty
and Undeveloped Commercial Property in CFD No 2002-1 For Taxable Property Owner
Association Property and Taxable Public Property, "Proportionately" means that the ratio of
the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all
Assessor's Parcels of Taxable Property Owner Association Property and Taxable Public
Property in CFD No. 2002-1.
City of San Jacinia July 30, 2002
CFD!Ja.2002-1 Page 3
"Public Property" means any property within CFD No. 2002-1 that is owned by, irrevocably
otTered for dedication to, or dedicated to the federal government, the State, the County, the
City or any a.her public agency, provided however that any property leased by a public
agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be
taxed and classited in accordance with its use To ensure that property is classified as Public
Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to,
or dedicated to a public agency, the property owner shall notify the CFD Administrator in
writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in
which the acquisition, offer, or dedication occurred if(i) such property was acquired by,
irrevocably offered for dedication to, or dedicated to a public agency after January I but on
or before June 30 of such Fiscal Year or(ii)the property is subject to an irrevocable offer for
dedication that is not reflected on a recorded tract map
"Qualified Investor" means an entity that owns 100% of all Outstanding Bonds and has
purchased such Outstanding Bonds through a private sale
"Reserve Fund" means a reserve fiord established pursuant to the Indenture or the Financing
Authority Indenture, as applicable.
"Residential Fluor Area" means, for an Assessor's Parcel of Residential Property, all of the
square footage of living area within the perimeter of a residential structure or dwelling unit,
not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area.
The determination of Residential Floor Area shall be made by reference to the building
permit(s) issued for such Assessor's Parcel.
"Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit has been issued for purposes of constructing one or more residential dwelling
units
"Resolution of Formation" means the Resolution of Formation for CFD No 2002-1.
"Single Family Property" means Assessor's Parcels of Residential Property that will contain
only one single family detached dwelling unit or one single family attached dwelling unit.
"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's
Parcel of Developed Property, Undeveloped Property, Undeveloped Commercial Property,
Taxable Property Owner Association Property and Taxable Public Property to fund the
Special Tax Requirement.
"Special Tax Requirement" means that amount required in any Fiscal Year for CFD No.
2002-1 to: (1) pay debt service on all Outstanding Bonds, (ii) pay periodic costs on the Bonds,
including but not limited to, credit enhancement and rebate payments on the Bonds, (iii) pay
reasonable Administrative Expenses; (iv) pay any amounts required to establish or replenish
any Reserve Fund for either (but not both) of the Outstanding Bonds or debt issued by the
Financing Authority (however, no Special Taxes will be levied on Undeveloped Property for
purposes of establishing any Reserve Fund) , and (v) pay for reasonably anticipated delinquent
Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal
City of San Jacinto July 30,2002
CFD No. 2002-1 Page J
Year, less (vi) a credit for funds available to reduce the annual Special Tax levy, as
determined by the CFD Administrator pursuant to the Indenture or the Financing Authority
Indenture.
"State" means the State of California
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No.
20K-1 that are not exempt from the Special Tax pursuant to law or Section F below
"Taxable Property Owner Association Property" means all Assessor's Parcels of Property
Owner Association Property that are not exempt pursuant to Section F below.
"Taxable Public Properly" means all Assessor's Parcels of Public Property that are not
exempt pursuant to Section F below.
"Trustee" means the trustee or fiscal agent under the Indenture or the Financing Authority
Indenture.
"Undeveloped Commercial Property" means, for each Fiscal Year, all property for which
building permits were not issued prior to April I" preceding the Fiscal Year in which tyre tax
is being levied, that is located in Assessor's Parcel Number 438-040-009 and on 4.9 acres
located within Assessor's Parcel Number 438-040-008, as such Assessor's Parcels were
designated on the Fiscal Year 2002-03 Assessor's Rolls. The specific location of the 4.8
acres within Assessor's Parcel Number 438-040-009 that is to qualify as Undeveloped
Commercial Property shall be determined by the CFD Administrator.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified
as Developed Property, Undeveloped Commercial Property, Taxable Property Owner
Association Property or Taxable Public Property
"Update Property" means an Assessor's Parcel of Undeveloped Property or Undeveloped
Commercial Property for which a building permit has been issued. For purposes of all
calculations in Sections D and 1, Update Property shall be taxed as if it were Developed
Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property within CFD No. 2002-1 shall be classified as
Developed Property, Taxable Public Property, Taxable Property Owner Association Pr operty,
Undeveloped Property or Undeveloped Commercial Property, and shall be subject to Special
Taxes in accordance with the rate and method of apportionment determined pursuant to
Sections C, D and E, below Single Family Property shall be assigned to Land Use Classes
1-8, Multifamily Property shall be assigned to Land Use Class 9, Commercial Property shall
be assigned to Land Use Class 10, and Other Non-Residential Property shall be assigned to
Land Use Class I l
City of San Jacinto July 30,2002
CFD No.2 002-1 Page 5
The Assigned Special Tax for Single Family Property shall be based on the Residential Floor
Area of the dwelling unit located on the Assessor's Parcel. The Assigned Special Tax for
Multifamily Property. Commercial Property and Other Non-Residential Property shall be
based on the Acreage of the Assessor's Parcel.
C. MAXIMUM ANNUAL SPECIAL TAX RATE
I. Developed Property
a Maximum Special Tax
The Maximum Special "fax that can be levied annually for each Assessor's
Parcel classified as Developed Property shall be the amount derived by
application of the Assigned Special Tax.
b Assigned Special 'fax
The Assigned Special Tax for each Land Use Class for Fiscal Year 2002-03
is shown below in Table 1
TABLE 1
Assigned Special Taxes for Developed Property
_ Community Facilities District No. 2002-1
FY 2002 - 2003
Land Use Description Residential Floor Assigned Special Tax
Class Area Per Unit/Acre
1 Single Family Property - > 2,550 sq ft $1,448.32 per Unit
2 Single Family Property 2,250- 2,549 sq. ft. $1,354.11 per Unit
3 Single Family Property 1,950 2,249 sq, ft. $1,259.91 per Unit
4 Single Family Propert- 1,800 - 1,949 sq. ft. $]217.23 per Unit
5 Single Family Propert,,. 1,650 - 1,799 sq- ft, $1,179.55 per Unit
6 Single Family Property 1,500 - 1,649 sq ft $1,095.34 per Unit
7 Single Family Property. 1,350 - 1,499 sq ft. $1,028.82 per Unit
8 Single Family Property < 1,3 50 sq. ft. $991.14 per Unit
9 Multifamily Property Not Applicable $10,611 per Acre
10 Commercial Property Not Applicable $6.248 per Acre
I I Other Non-Residential Property Not Applicable $10.611 per Acre
City of Sun Jtreinto July 30,2002
CFD No.2002-1 Page 6
c. Increase in the,Assigned Special Tax
The Assigned Special Taxes in Table l shall be applicable for Fiscal Year
2002-03, and shall increase thereafter, commencing on July 1, 2003 and on
July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2°Jo)
of the Assigned Special Tax for the previous Fiscal Year
d. Multiple Land Use Classes
In some instances an Assessor's Parcel of Developed Property may contain
more than one Land Use Class. The Assigned Special Tax levied on an
Assessor's Parcel shall be the sum of the Assigned Special Taxes for all Land
Use Classes located on that Assessors Parcel For an Assessor's Parcel that
contains Multifamily Property, Commercial Property or Other Non-
Residential Property, the Acreage of such Assessor's Parcel shall be allocated
to each type of property based on the amount of Acreage designated for each
land use as referenced in the site plan approved for such Assessor's Parcel, as
determined by the CFD Administrator.
2, Undeveloped Property, Undeveloped Commercial Property, Taxable Property
Owner Association Property and Taxable Public Property
a. Maximum Special Tax
The Maximum Special Tax for Undeveloped Property, Taxable Property
Owner Association Property and Taxable Public Property in CFD No. 2002-1
shall first be levied in Fiscal Year 2004-05, and shall equal $l 1,040 per Acre
in that Fiscal Year The Maximum Special Tax for Undeveloped Commercial
Property in CFD No. 2002-1 shall first be levied in Fiscal Year 2006-07, and
shall equal $6,763 per Acre in that Fiscal Year. There shall be no Special Tax
levied on Undeveloped Property, Taxable Property Owner Association
Property and Taxable Public Property in Fiscal Years 2002-03 and 2003-04
There shall be no Special Tax levied on Undeveloped Commercial Property
in Fiscal Year 2002-03 through Fiscal Year 2005-06.
b Increase in the Maximum Special Tax
The Maximum Special Tax for Undeveloped Property, Taxable Property
Owner Association Property and Taxable Public Property in CFD No 2002-1
shall increase on July 1 of each Fiscal Year, commencing on July 1, 2005, by
an amount equal to two percent (2%) of the Maximum Special Tax for the
previous Fiscal Year, The Maximum Special Tax for Undeveloped
Commercial Property in CFD No 2002-1 shall increase on July l of each
Fiscal Year, commencing on July J, 2007, by an amount equal to two percent
(2%) of the Maximum Special Tax for the previous Fiscal Year.
City of San Jacinto July 30,2002
CFD No.2002-I Page 7
D. MANDATORY PREPAYMENT SPECIAL TAX
The following definitions apply to this Section D
"Aggregate Credits" means the total Assigned Special Taxes from all Developed Property
and Update Property within all Built Out Development Phases minus the total Assigned
Special Taxes that would have been levied in [hose Built Out Development Phases as
projected in the current Original Report. Aggregate Credits shall be calculated only with
respect to a Built Out Development Phase.
"Builder" means the merchant builder(s) for each Development Phase
"Builder Certificate" means a certificate from the Builder of a Development Phase stating
that such Development Phase will generate at least the amount of Assigned Special Taxes that
was projected in the Original Report or Updated Report that was relied upon by the CFD
Administrator in issuing the most recent Letter of Compliance for such Development Phase.
"Builder Propertv" means all Assessor's Parcels within a Development Phase that are
currently owned by the Builder.
"Buildout" means, for any Development Phase, that all expected building permits have been
issued.
"Built Out Development Phase" means a Development Phase that has reached Buildout.
"Certificate of Satisfaction of Prepayment Special Tax" means a certificate from the CFD
Administrator stating that the property described in such certificate has sufficiently met the
Prepayment Special Tax Requirement for such property as calculated under Section D 7
below. This Certificate shall be issued even when the Prepayment Special Tax Requirement
is SO.
"Development Phase" means a geographic area representing the expected construction
phases planned to be developed by each Builder The Original Report will designate the
geographic area included in each Development Phase by tract and lot.
"Excess Aggregate Credits" means the total Aggregate Credits minus both (i) the Aggregate
Credits previously allocated to Development Phases with shortfalls, as computed under step
4 of Section D.7, and (ii) the Aggregate Credits previously allocated to allow the
reimbursement of Mandatory Prepayment Special Taxes under Section T) 8 , below Excess
Aggregate Credits are to be credited as discussed under Sections D.7, and D 8. on a first-
come first-served basis by the CFD Administrator
"Letter of Compliance" means a letter from the CFD Administrator stating that, based on
the most recent Updated Report, the property described in such letter will generate at least
the amount of Assigned Special Taxes that was established for such property in the current
Original Report_
City of San Jacinto July 30,2002
CFD,'Vo.2002-1 Page 8
"Master Developer" means Rancho San Jacinto 1„L C and/or any assignees) or
successor(s) serving as the master developer of infrastructure within CFD No. 2002-1. If no
specific entity(ies) is serving this function at a given point in time, the responsibilities of the
Master Developer shall be assumed by the CFD Administrator
"Prepayment Special Tax Account" means, for each Development Phase, the fund or
account (regardless of its name) identified in the Indenture or the Financing Authority
Indenture to hold payments of Mandatory Prepayment Special Taxes received from the
property owners within such Development Phase
"Prepayment Special Tax Requirement" means the total amount of Special Taxes
necessary to be prepaid as calculated under Section D.7 below, as of the date of any
Mandatory Prepayment Special 'Fax calculation.
1. Original Report
Concurrently with the adoption of the Resolution of Formation by the Council, the
Master Developer shall submit a report (the "Original Report") to the CFD
Administrator containing a listing for each Development Phase that identifies the
tract(s) and lot(s) within the Development Phase, as well as its total Acreage, the
anticipated number of dwelling units in each Land Use Class at Buildout, the
anticipated number of Acres of Multifamily, Commercial and Other Non-Residential
Property at Buildout, and the Assigned Special Taxes to be generated by such
projected development based on the then current Fiscal Year's Special Tax rates
At the request of the Master Developer, the CFD Administrator may amend the
Original Report to reflect changes proposed by the Master Developer, provided that
Changes in the Original Report shall not be permitted if the total Assigned Special
Taxes for all property in CFD No 2002-1 at Buildout are reduced by such changes,
based on the then current Fiscal Year's Special Tax rates, or if the CFD Administrator
determines that such changes are not feasible.
2. Updated Report
The Master Developer shall submit updated reports to the CFD Administrator
quarterly(within 45 days after each March 31, June 30, September 30, and December
31)until CFD No 2002-1 reaches Buildout for all Development Phases Such reports
shall contain a listing for each Development Phase that identifies the total Acreage
within the Development Phase, the actual and expected number of dwelling units in
each Land Use Class, the actual and expected number of Acres of Multifamily,
Commercial and Other Non-Residential Property, and the Assigned Special Taxes to
be generated based on the actual and expected development at Buildout and the then
current Assigned Special Tax rates. Such reports shall also contain a comparison of
the information in the updated report to the information provided for each
Development Phase in the current Original Report, assuming the then current Fiscal
Year's Special Tax rates For Assessor's Parcels of Developed Property and Update
Property within the Development Phase, the quarterly updated report shall also
City of San Jacinto July 30,2002
CFD No. 2002-1 Page 9
include the dates that their building permits were issued. Upon approval by the CFD
Administrator, such report shall constitute an Updated Report (the "Updated
Deport") The failure to provide a report in a timely manner will result in the
rescission of any outstanding Letters of Compliance for the appropriate Development
Phase, and the CFD administrator shall, within 30 days of the due date of the
delinquent report, notify the Master Developer, Builder and City Building Department
that all Letters of Compliance for the appropriate Development Phase have been
rescinded
3. Initial Letters of Compliance
If, based on the initial Updated Report, the CFD Administrator determines that a
Development Phase will generate at least the amount of Assigned Special Taxes that
was established for such Development Phase in the current Original Report, the CFD
Administrator shall, within 30 days of the submittal of the initial Updated Report,
issue an initial Letter of Compliance with respect to such Development Phase If the
CFD .Administrator determines that a Development Phase will not generate at least
the amount of Assigned Special Taxes that was established for such Development
Phase in the current Original Report, then a Letter of Compliance will not be issued
for such Development Phase at such time.
4. Letters of Compliance Based on Subsequent Updated Reports
Upon the receipt of each Updated Report, the CFD Administrator shall compare the
data provided for each Development Phase to the data included in the current Original
Report and make one of the dctcrntinations set forth in the following two paragraphs.
If the CFD Administrator determines that a Development Phase at Buildout will
generate at least the amount of Assigned Special Taxes that was established for such
Development Phase in the current Original Report, then, if a Letter of Compliance is
not currently in effect for such Development Phase, the CFD Administrator shall,
within 30 days of the submittal of an Updated Report, issue a Letter of Compliance
with respect to such Development Phase.
If the CFD Administrator determines that a Development Phase at Buildout will not
generate the amount of Assigned Special Taxes that was established for such
Development Phase in the current Original Report, then any Letter of Compliance
previously issued for such Development Product will be rescinded. The CFD
Administrator shall, within 30 days of the submittal of an Updated Report, notify the
Master Developer, Builder, and City Building Department that such Letter of
Compliance has been rescinded. Whether or not building permits have already been
issued for such Development Phase, the CFD Administrator shall calculate and levy
the Mandatory Prepayment Special Tax on all Builder Property pursuant to Section
D.7 below.
City of San Jacinto July 30,2002
CFD No, 2002-1 Page 10
5. Issuance of Building Permits for Parcels with a Letter of Compliance
Fach time a request for a building permit (or group of permits) is submitted to the City
Building Department within a Development Phase, the Builder shall provide a copy
of the Letter of Compliance for the applicable property, along with either a Builder
Certificate or a Certificate of Satisfaction of Prepayment Special Tax. No building
permit shall be issued without (i) a Letter of Compliance and (ii) either a Builder
Certificate or a Certificate of Satisfaction of Prepayment Special Tax
6. Builder Notification for Parcels without a Letter of Compliance and Builder
Certificate
At least M days prior to submitting a building permit application for property that has
not yet received a Letter of Compliance, or for property that has received a Letter of
Compliance but for which the Builder is unable to provide the certification required
by Section D.5 above, the Builder shall notify the CFD Administrator of its intent to
request building permits for particular lots within a Development Phase. The
Builder's notification ("Builder Notification") shall include for each Assessor's Parcel
of Single t-amily Property for which building permits are being requested the proposed
Residential Floor Area, Land Use Class, Assigned Special Tax, and Acreage. For
each Assessor's Parcel of Multifamily, Commercial or Other Non-Residential
Property, the Builder Notification shall include the Acreage of such Assessor's Parcel
If the CFD Administrator determines based on the calculations in Section D 7 that no
Mandatory Prepayment Special Tax is required as a result of the Assessor's Parcels
included within the Builder Notification, then the CFD Administrator shall, within 30
days of the submittal of the Builder Notification, issue a Letter of Compliance and a
CertiEcatc of Satisfaction of Prepayment Special Tax with respect to such property_
If the CFD Administrator determines based on the calculations in Section D.7 that
a Mandatory Prepayment Special Tax is required, then the CFD Administrator shall
calculate and levy the Mandatory Prepayment Special Tax pursuant to Section D.7
below on all Builder Property.
7. Calculation of Mandatory Prepayment Special Tax
Upon the receipt of a Builder Notification or determination under Section DA or
Section D 6 that a Mandatory Prepayment Special Tax is required to be calculated,
the CFD Administrator shall determine the Mandatory Prepayment Special Tax to be
applied to all Builder Property in a Development Phase by undertaking the following
steps:
Step 1 Compute the sum of the actual Assigned Special Taxes from all Developed
Property and Update Property within the Development Phase in which the
property is located, plus both the Assigned Special Taxes from the property
described in the Builder Notification (if applicable)and the expected Assigned
Special Taxes on the remaining property within the Development Phase
(assuming all such property will be taxed as Developed Property).
City of,San JarLnto July 30,2002
CFD Na.2002-1 Pine 11
Step 2 Compute the sum of the expected Assigned Special Taxes from the
Development Phase assuming that all such property will be developed as set
forth in the current Original Report-
Step 3 If the amount computed pursuant to step 1 is greater than or equal to the
amount computed pursuant to step 2, then no Mandatory Prepayment Special
Tax will he required. If the amount computed pursuant to step 1 is less than
the amount computed pursuant to step 2, then continue to step 4.
Step 4 If there are Excess Aggregate Credits currently available, assign a sufficient
number of such Excess Aggregate Credits to the Development Phase to cover
the shortfall calculated under step 3, so that the sum of the Assigned Special
Taxes as computed under step 1 plus the Excess Aggregate Credits assigned
to the Development Phase is equal to the Assigned Special Taxes as computed
under step 2 If the total number of Excess Aggregate Credits currently
available are not sufficient to cover the shortfall calculated under step 3, then
assign all of the available Excess Aggregate Credits to the Development
Phase.
Step .5 If the sum of the Assigned Special Taxes and the Excess Aggregate Credits
assigned pursuant to step 4 is greater than or equal to the amount computed
pursuant to step 2, then no Mandatory Prepayment Special Tax will be
required. If the sum of the Assigned Special 'faxes and the Excess Aggregate
Credits assigned pursuant to step 4 is less than the amount computed pursuant
to step 2, then continue to Step 6.
Step 6 (i) After subtracting such Development Phase's pro rata share of estimated
Administrative Expenses from the Assigned Special Taxes and Excess
Aggregate Credits determined under Step 4, determine the amount of CFD
No. 2002-1 Bonds that can be supported by the remaining Assigned Special
Taxes plus the Excess Aggregate Credits assigned to the Development Phase
as computed under step 4, with 105% debt service coverage, and
(ii) After subtracting such Development Phase's pro rata share of estimated
Administrative Expenses from the Assigned Special Taxes determined under
Step 2, determine the amount of CFD No. 2002-1 Bonds that could be
supported by the remaining Assigned Special Taxes computed tinder step 2,
with 105% debt service coverage.
Step 7 The Prepayment Special Tax Requirement shall be calculated using the
prepayment formula described in Section I.1, with the following exceptions:
(i) skip Paragraphs 1 and 2, and begin with Paragraph 3; (ii) the Bond
Redemption Amount in Paragraph 3 of the prepayment formula described in
Section I I shall equal the difference between the amount calculated pursuant
to step 6(i) and the amount calculated pursuant to step 6(i), (iii) in Paragraph
4 of Section I.1, calculate the premium on (a) the first available redemption
City of Sun Jacinto July 30,2002
CeDNo.2002-1 Page 12
date after 3 years From the date of prepayment, or (b) in the case of the final
Development Phase as referenced in the last paragraph in Step 8, the first
available redemption date following the Buildout of the final Development
Phase (collectively, (a) and (b) shall be referred to as the "Mandatory
Prepayment Call Date"), (iv) in Paragraph 5 of Section 1.1, compute the
amount needed to pay interest on the Bond Redemption Amount from the
date of prepayment until the applicable Mandatory Prepayment Call Date; (v)
no determination of amounts pursuant to Paragraphs b and 7 in Section 1. 1
need be made, (vi) in Paragraph 8 of the prepayment formula described in
Section 1. 1, cornpute the amount of reinvestment earnings from the date of
prepayment to the applicable Mandatory Prepayment Call Date, (vii) any
payments of the Mandatory Prepayment Special Tax (less Administrative Fees
and Expenses) shall be deposited into the Mandatory Prepayment Special Tax
Account and disbursed pursuant to the Indenture or the Financing Authority
Indenture, (viii) the Assigned Special Taxes applicable to any Assessor's
Parcel in a Development Phase shall not be reduced or relieved as a result of
payment of the Mandatory Prepayment Special Tax, and (ix) the "Coverage
Test" discussed in Section 1.1 shall not be applicable to the implementation of
the Mandatory Prepayment Special Tax
Step 8 The Prepayment Special Tax Requirement computed for a Development Phase
under Step 7 (above) shall be satisfied by levying Mandatory Prepayment
Special 'faxes on all Assessor's Parcels of Builder Property within that
Development Phase. The amount of Mandatory Prepayment Special Taxes
levied on each Assessor's Parcel shall be calculated by multiplying the
Mandatory Prepayment Special Tax Requirement for the Development Phase
by the quotient of the Acreage of each Assessor's Parcel divided by the
Acreage of all Assessor's Parcels of Builder Property within the Development
Phase,
The Mandatory Prepayment Special 'Taxes computed under step 8 shall be billed
directly to all Assessor's Parcels of Builder Property and shall be due within 30 days
of the billing date if Mandatory Prepayment Special Taxes are not paid within 45
days of the billing date, a delinquent penalty of 10 percent shall be added to the
Mandatory Prepayment Special Taxes, and no additional building permits shall be
issued for any property owned by the Builder or Master Developer until payment is
received. Upon receipt of the Mandatory Prepayment Special Tax payment, the CFD
Administrator shall issue a Letter of Compliance (if one has not been issued for such
Assessor's Parcels) and a Certificate of Satisfaction of Prepayment Special Tax for
the subiect property
8. Use/Release of Mandatory Prepayment Special Tax Payments
In implementing this section of the Mandatory Prepayment Special Tax program, the
three year period discussed below shall be determined separately each tine a
Mandatory Prepayment Special Tax is levied, depending upon the date of that levy
For example, there may be cases within a Development Phase where some
City of San Jacinto July 30,2002
CFD No. 2002-1 Page 13
Mandatory Prepayment Special Taxes have been levied within three years prior to
Buildout. while other Mandatory Prepayment Special Taxes have been levied more
than three years prior to Buildout. In all cases, each levy of the Mandatory
Prepayment Special Tax would be treated individually, based on the circumstances
which apply to that specific Mandatory Prepayment Special Tax levy, as discussed
below
If a Development Phase has not reached Buildout within three years after the payment
of a Mandatory Prepayment Special Tax for such Development Phase, then such
Mandatory Prepayment Special Tax shall he used to redeem CFD No. 2002-1 Bonds
on the next available redemption date after the end of the three year period.
If a Development Phase reaches Buildout prior to three years after the payment of a
Mandatory Prepayment Special Tax, the CFD Administrator shall calculate the actual
Assigned Special Taxes that will be generated from such Development Phase. If the
actual Assigned Special Taxes at Buildout are greater than or equal to the amount of
Assigned Special Taxes established for such Development Phase in the current
Original Report, the entire balance in the Prepayment Special Tax Account
attributable to that Development Phase shall be returned to the payer(s). If
Mandatory Prepayment Special Taxes have been paid by more than one entity, the
amount of Mandatory Prepayment Special Taxes returned to each payer shall be in
proportion to the amount paid by each entity.
if a Development Phase reaches Buildout prior to three years after the payment of a
Mandatory Prepayment Special Tax, and if at Buildout the actual Assigned Special
'Faxes are less than the amount of Assigned Special Taxes established for such
Development Phase in the current Original Report, then the Mandatory Prepayment
Special Taxes remaining in the Prepayment Special Tax Account attributable to that
Development Phase shall each continue to be held for the remainder of their three year
period. At the end of each three year period, if Excess Aggregate Credits are
available at that time in other Development Phases, all or a portion of the Mandatory
Prepayment Special Tax, in an amount that is equal to the Excess Aggregate Credits
available, shall be returned to the payer Any remaining balance of the Mandatory
Prepayment Special Tax for which Excess Aggregate Credits are not available shall
be used to redeem CFD No. 2002-1 Bonds on the next available redemption date
The Mandatory Prepayment Special Tax Account shall be maintained until three years
after the last Mandatory Prepayment Special Tax was levied within the Development
Phase under Section D.7., above.
Notwithstanding the above, if at Buildout of the last Development Phase within CFD
2002-1, the actual Assigned Special 'faxes are less than the amount of Assigned
Special Taxes established for such Development Phase in the current Original Report,
then after any Excess Aggregate Credits have been applied and, if appropriate,
portions of Mandatory Prepayment Special Taxes have been returned to the payer(s),
any remaining funds in the Prepayment Special Tax Account (or required to be
deposited therein) attributable to that Development Phase shall be used to redeem
CFD No. 2002-1 Bonds on the next available redemption date, and shall not be held
City of San Jacinto July 30,2002
CFO No. 2002-) Page 14
for the obligatory three year period
9. Casts and Expenses Related to Implementation of Mandatory Prepayment
Special Tax
Master Developer and/or Builder(s) shall pay all costs of the CFD Administrator or
other consultants required to review Update Reports, calculate Mandatory
Prepayment Special Taxes, issue Compliance Letters or any other actions required
under Section D. Such payments shall be due 30 days after receipt of invoice by
Master Developer and/or Builder.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2002-0 3 and for each following Fiscal Year, the Council shall
levy the Special Tax on Developed Property as described under the First Step listed below_
Commencing with Fiscal Year 2004-05, Special Taxes may also be levied as described under
the Second and Third Steps listed below, as necessary to satisfy the Special Tax Requirement-
First: Commencing with Fiscal Year 2002-03, the Special Tax shall be levied on each
Assessor's Parcel of Developed Property that is Residential Property, Conunercial Property
or Other Non-Residenlial Property at 1001/a of the applicable Assigned Special Tax,
Second: If additional monies are needed to satisfy the Special Tax Requirement after the first
step has been completed, commencing with Fiscal Year 2004-05, the Special Tax shall be
levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of
the Maximum Special Tax for Undeveloped Property, and commencing with Fiscal Year
2006-07, the Special Tax shall be levied Proportionately on each Assessor's Parcel of
Undeveloped Property and Undeveloped Commercial Property at up to 1000/a of the
Maximum Special Tax for Undeveloped Property and Undeveloped Commercial Property,
respectively,
Third: Commencing with Fiscal Year 2004-05, if additional monies are needed to satisfy the
Special Tax Requirement after the first two steps have been completed, then the Special Tax
shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner
Association Property and Taxable Public Property at up to the Maximum Special Tax for
Taxable Property Owner Association Property or Taxable Public Property.
Notwithstanding the above, the Council may, in any Fiscal Year, levy Proportionately less
than 100% of the Assigned Special Tax in step one of Section E (above), when (i) the
Reserve Fund is fully funded at its required level, (i) the Council is no longer required to levy
a Special Tax pursuant to steps two and three above in order to meet the Special Tax
Requirement and (iii) all authorized CFD No. 2002-1 Bonds have already been issued or the
Council has covenanted that it will not issue any additional CFD No 2002-1 Bonds (except
refunding bonds)to be supported by Special Taxes
Further notwithstanding the above, under no circumstances will the Special Tax levied against
anv ,Assessor's Parcel of Residential Property for which an occupancy permit for private
City of San Jacinto July 30,2002
CFD.'Vo.2002-1 Page 15
residential use has been issued be increased by more than ten percent as a consequence of
delinquency or default by the owner of any other Assessor's Parcel within CFD No 2002-1,
except for Residential Property whose owners are also delinquent or in default on their
Special Tax payments for one or more other properties within CFD No. 2002-1.
F. EXEMPTIONS
No Special Tax shall be levied on up to 58,6 Acres of Property Owner Association Property
and Public Property Tax-exempt status will be assigned by the CFD Administrator in the
chronological order in which property becomes Property Owner Association Property or
Public Property. However, should an Assessor's Parcel no longer be classified as Property
Owner Association Property or Public Property, its tax-exempt status will be revoked.
Property Owner Association Property or Public Property that is not exempt from Special
"faxes under this section shall be subject to the levy of the Special Tax and shall be taxed
Proportionately as part of the third step in Section E above at up to 100% of the applicable
Maximum Special Tax for Taxable Property Owner Association Property or Taxable Public
Property
G. APPEALS AND INTERPRETATIONS
Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD
Administrator. provided that the appellant is current in his/her payments of Special 'Taxes.
During the pendency of an appeal, all Special Taxes previously levied must he paid on or
before the payrnem date established when the levy was made. The appeal must specify the
reasons why the appellant claims the calculation of the Special Tax is in error The CFD
Administrator shall review the appeal, meet with the appellant if the CFD Administrator
deems necessary, and advise the appellant of its determination. If the CFD Administrator
agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax
on the appellant's property and/or provide a refund to the appellant If the CFI
Administrator disagrees with the appellant and the appellant is dissatisfied with the
determination, the appellant then has 30 days in which to appeal to the Council by filing a
written notice of appeal with the City clerk, provided that the appellant is current in his/her
payments of Special Taxes The second appeal must specify the reasons for its disagreement
with the CFD Administrator's determination. The decision of the Council shall be final.
11. MANNER OF COLLECTION
The annual Special Tax shall be collected in the same manner and at the same time as ordinary
ad valorem property taxes; provided, however, that CFD No. 2002-1 may directly bill the
Special Tax, may collect Special Taxes at a different time or in a different manner if necessary
to meet its financial obligations, and may covenant to foreclose and may actually foreclose
on delinquent Assessor's Parcels as permitted by the Act The Mandatory Prepayment
Special Tax shall be directly billed to the property owner at the time such Special Tax is being
levied.
1. PREPAYMENT OF SPECIAL TAX
City of San Jacinto Jule 30, 2002
CFD PVo. 2002-1 Page 16
The following definitions apply to this Section l
"Accrued Amount" means the then current accrued but unpaid interest on Tranche D
Bonds
"Outstanding Bonds" means all Bonds which are deemed to be outstanding under the
Indenture after the first interest and/or principal payment date following the current Fiscal
Year
"Tranche U Bonds" are all Outstanding Bonds sold under 'Tranche D as part of the first
bond sale for CFD No. 2002-1 .
1. Prepayment in Full
The Special 'fax obligation of any Assessor's Pat cc] of Developed Property, Update Property
or Undeveloped Commercial Property may be prepaid. The Special Tax obligation applicable
to any such Assessor's Parcels in CFD No 2002-1 may be fully prepaid and the obligation of
the Assessor's Parcel to pay the Special Tax permanently satisfied as described herein,
provided that a prepayment may be made only if there are no delinquent Special Taxes with
respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's
Parcel intending to prepay the Special Tax obligation shall provide the CFD Administrator
with written notice of intent to prepay. Within 30 days of reccipt of such written notice, the
CFD Administrator shall notify such owner of the prepayment amount of such Assessor's
Parcel. The CFD Administrator may charge a reasonable fee for providing this amount.
Prepayment must be made not less than 45 days prior to the next occurring date that notice
of A edemption of Bonds from the proceeds of such prepayment may be given by the Trustee
pursuant to the Indenture or the Financing Authority Indenture
The Prepayment Amount (defined below) for any Assessor's Parcel of Developed Property
or Update Property, or for any Undeveloped Comuieicial Property, shall be calculated as
summarized below (capitalized terms as defined below)
Bond Redemption Amount
plus Redemption Premium
plus Defeasance Amount
RIMS Administrative Fees and Expenses
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined below) shall be
calculated as follows:
Parap_raph No.:
l For Assessor's Parcels of Developed Property, compute the llssibned Special Tax for
the current Fiscal Year applicable for the Assessor's Parcel to be prepaid. For
C4 of San Jacinto July M,2002
CFD No,2002-1 Page 17
Assessor's Parcels of Update Property, compute the Assigned Special Tax for the
current Fiscal Year for that Assessor's Parcel as though it was already designated as
Developed Property, based upon the building permit which has already been issued
for that Assessor's Parcel For Assessor's Parcels of Undeveloped Commercial
Property tot which a building permit has not yet been issued, compute the Assigned
Special Tax for the current Fiscal Year for that Assessor's Parcel as though it were
already designated as Commercial Property.
2 For Assessor's Parcels of Developed Property, Update Property and Undeveloped
Commercial Property, divide the Assigned Special Tax computed pursuant to
paragraph 1 by the total estimated Assigned Special Taxes for the entire CFD No
2002-1 based on the Developed Property Special Taxes which could be charged in the
current Fiscal Year on all expected development through buildout of CFD No. 2002-1
based on the most recent Updated Report submitted under Section 4, excluding any
Assessor's Parcels which have been prepaid.
3. Multiply the quotient computed pursuant to paragraph 2 by the sum of the
Outstanding Bonds plus the Accrued Amount to compute the amount of Outstanding
Bonds and Accrued Amount to be retired and prepaid (the "Bond Redemption
Amount")_
4 Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the
applicable redemption premium, if any, on the Outstanding Bonds to be redeemed on
the next available call date (the"Redemption Premium")
5. Compute the amount needed to pay interest on the Bond Redemption Amount from
the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Outstanding Bonds.
6 Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
7 Determine the Special Taxes that would be levied (but for the prepayment) or have
been levied on the Assessor's Parcel in the current Fiscal Year that have not yet been
paid
8. Compute the minimum amount the CFD Administrator reasonably expects to derive
from the reinvestment of the Bond Redemption Amount less the Administrative Fees
and Expenses from the date of prepayment until the redemption date for the
Outstanding Bonds to be redeemed with the prepayment.
9, Add the amounts computed pursuant to paragraphs 5 and 7 and subtract the amount
computed pursuant to paragraph 8.
10 Compute the net present value of the amount computed pursuant to paragraph 9,
using as a discount rate the rate of return assumed by the CFD Administrator in
paragraph 8 (the "Defeasance Amount').
City of Nall Jacinto July 30,2002
CFD No, 2002-1 Page l8
1 1. Verify the administrative fees and expenses of CFD No. 2002-1, including the costs
of computation of the prepayment, the costs to invest the prepayment proceeds, the
costs of redeeming Bonds, and the casts of recording any notices to evidence the
prepayment and the redemption (the "Administrative Fees and Expenses")
12. The Special Tax prepayment is equal to the sum of the amounts computed pursuant
to paragraphs 3, 4, 10 and 1 1 (the"Prepayment Amount").
13 From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4,
and 10, shall be deposited into the appropriate fund as established under the Indenture
or the Financing Authority Indenture and be used to retire Outstanding Bonds
(including an appropriate amount of Tranche D Bonds) or make debt service
payments The amount computed pursuant to paragraph 1 I shall be retained by CFD
No 2002-1
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained
in the appropriate find established under the Indenture or the Financing Authority Indenture
to be used with the next prepayment of Bonds or to make debt service payments.
Notwithstandinp the above, during the period in which all of the Outstanding Bonds are held
by a Qualified Investor, increments as small as $1,000 may be redeemed. In such cases, the
increment above $1,000 or integral multiple thereof will be retained in the appropriate fund
established under the Indenture or the Financing Authority Indenture to be used with the next
prepayment of Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax levy as determined under
paragraph 7 (above), the CFD Administrator shall remove the current Fiscal Year's Special
Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's
Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance
with the Act, to indicate the prepayment of Special Taxes and the release of the Special Tax
lien on such Assessor's Parcel, and the obligation of such Assessors Parcel to pay the Special
Tax shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of Assigned Special Taxes that may be levied on Taxable Property in any given year
within CFD No. 2002-1 both prior to and after the proposed prepayment (based on the
Special Taxes that could be charged on all expected development through buildout of CFD
No. 2002-1 according to the most recent Updated Report, assuming that it were all
Developed Property in any given year) is at least 1,05 times the maximum annual debt service
in that given Year on all Outstanding Bonds plus estimated Administrative Expenses for that
given year (the "Coverage Test")
City of San Jacinto July 30,2002
CFD No.2002-1 Page 19
2, Prepayment in Part
The Special Tax on an Assessor's Parcel of Developed Property, Update Property or
Undeveloped Commercial Property may he partially prepaid. The amount of the prepayment
shall be calculated as in Section I 11 except that a partial prepayment shall be calculated
according to the following formula
PP - PrxF
These terms have the following meaning.
PP = the partial prepayment
Pr. — the Prepayment Amount calculated according to Section I
F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Special Tax.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special Tax
shall notify the CFD Administrator of(i) such owner's intent to partially prepay the Special
Tax, (ii) the percentage by which the Special Tax shall be prepaid, and (iii) the company or
agency that will be acting as the escrow agent, if applicable The CFD Administrator shall
provide the owner with a statement of the amount required for the partial prepayment of the
Special Tax for an Assessor's Parcel within 30 days of the request and may charge a
reasonable fee for providing this service.
With respect to any Assessor's Parcel that is partially prepaid, the Council shall (1) distribute
the funds remitted to it according to Paragraph 13 of Section 1. 1., and (ii) indicate in the
records of CFD No 2002-1 that there has been a partial prepayment of the Special Tax and
that a portion of the Special Tax equal to the outstanding percentage (1.00 - F) of the
remaining Special Tax shall continue to be authorized to be levied on such Assessor's Parcel
pursuant to Section E.
I TERM OF SPECIAL TAX
The Special "fax shall be levied for the period not to exceed Harty-five years commencing in
Fiscal Year 2002-03.
K'<=leents2G:Irtet[Cmu�t5anlacinloILlLA 2.Joe
City of San Jacinto July 30,2002
CFD No. 1002-1 Page 20
EXHIBIT C
REVISED PRO FORMA DEBT SERVICE
1
ti
c
r
CITY OF 84N.IACINTOISANJACINTO PUBLIC FINANCMG AUTHORITY iU
2002 REVENUE BONDS (n
(C FD 2002411) NN
m
COMBINED SERIES N
Pertlad Compounded Total Currant Accrued
Year Ending P0aciyal Interest(11 PrincIpall Coupon hderest 2 ln110re A D9btseryice
1 09101m3 - - -
2 09mm
3 a9i011R5 - 6.53% 1,287,650.00 - 1287,650 oo
4 D9fr01106 - - - 6.50% 1,287,65D.00 - 1,287,650.00
5 09101107 - - 6.60% 1.297,650,00 - 1,287,650.00 S
6 OPJ01108 - - 6.50% 1,2B7,65000 - 1,287,650.00
7 49J01Ia9 - - 6.50`Yv 1287,650.00 - 1,Z87,650.00 rm-
8 09lO1M0 - 65096 1,2B7,660.00 - 1,287,650.00 r
9 D91D1111 - 65096 7�H6,Tt1D.00 12B571I0.00 QO
t0 WD1112 - - 6.50% 1,282,125.00 1262,125,00
11 09m1113 57.52R45 7.479,55 65.000.00 6.50% 1,276,600.00 1,341.60D.00 0
12 D9101114 274,328.30 35,671,70 31D,000.00 6.504E 1,268,3C0.00 - 1,578,800.CIO
13 09/01115 269,9M 65 35896.35 305,000.00 FiW% 1,761,000_0D - 1,5m.uao.00
14 @9101116 314.150.15 40,849.65 356,Oa0.00 6,50% 1241,500.00 - 1,596,500.00
15 09mo1117 362,82130 47.178.70 410.000.00 6.50% 1,218,750.00 - 1,62%750.00
16 08101118 42D,341.75 64,650.25 475.000.00 6.EO% 1,192,425.00 - 1667,425.00
17 09101119 473,437.55 61.562.45 sm,D130.00 6.50% 1,162,525.00 - 1.69752500
18 09/61120 535,382.66 69,617,36 605,000.00 6.50% 1,128,400.00 - 1,733,400.00
19 C91011`21 601,752.40 78,241.60 080,00om 6_50% 1,089,725.00 1,769,72a00
20 OW01122 672,54&80 87,453.20 760,000-01) 6.504ro 1,046,500.00 1,806,500A11
21 DM1123 752.190,50 97,809.50 850,mo-00 ELSD% 920,075.00 1,8415,075.00
22 09OU24 831.034,20 1t18,165.80 940,0010 6.509R 944,125-00 1,884,125.00
23 09101f25 920,3Z7.20 119,672.80 1,040,000_CO 5.50% 884,325.00 - 1,924,325.00
24 OM1126 1,013,244.65 131.755.15 1,146,000.00 615091 818,350.110 - 1,963,350.00
25 09/01/27 1.115,011,190 1444988.20 1,M.000,00 6-50% 745,550.00 - 2,005,560.00
26 09/01/28 1,221,203.40 168.796.60 1,380,000.00 6.5096 665,Z75.00 - 2,045,275.00
27 091011P9 1.340,661195 174.331 D5 1,515;000.OID 6.6D% 577,ffi0.00 - 2,092,200.00
28 COM420 1,464,559.15 190,440.85 1,655,000.00 6.50% 481,000.o0 - 2,136,000.00
29 OW01131 1,697,298.65 207,701.35 1,805,000.00 8.50% 376,700.00 - 2,180,700.00
30 09(01132 1,738,887A5 226,112.55 1,955,000.00 6.50% 260,975.00 - 2,225,975.00
31 C0101133 1,893,750.20 246,249.80 2,140,000.00 6.5D% 136,850.00 - 2,275,860.00 2
32 OM1134 715,000.00 - 715.000.00 7.00% 1,568,00D.00 2283,000.00 c
18.586,161,35 2,323,839.65 20,910,C00.OD 29,066,375.01) 7,Sfi8 00D.00 61,544 375.(M
R
(1)kdare51 en the Principal Amourrtal6andsCompounds vnM 911lMD4
(2)Current Inteaesibegins vri0i the Mardi,2005 payrnenf dale Z
(3)Interest on 4te Principal Amount of Bonds accrues until maturity unless certain comdi ions are met
JUL.25.2002 4:03PH HRRRELL & CO, r{o.d6G
CITY OF SAN JACINTOISAN JACINTO PUBLIC FINANCING AUTHORITY
2002 REVENUE BONDS
(CFD 2002-01)
TRANCHE 1: SERIES A-SENIOR(1ST) LIEN BONDS
Period Compounded Total Current
Y. Fndim P incipal terest 4 principal Coupon Jntere-sU?AQ, ektsServlce
1 09/01/03 - - - -
2 09/01/04 - - - -
3 09101/05 - - - 5.50% 439,075.00 439,075.00
4 09101/06 - - - 6.50% 489,075.00 439,075,00
5 09101/07 - - - 6,50% 439,075.00 439,075.00
6 0910110E - - 6,50% 439,076.00 439,075.00
7 09/01/09 - - - 6,50% 439,075.00 439,075-00
8 09/01/10 - - - 6.50% 439,075.00 439,075.00
9 09/01/11 - - - 6.60% 439,075.00 438,075,00
10 09/01/12 - - 6,50% 439,075.00 439,075,00
11 09/01113 48,671.15 6,328.85 56,000.00 6.50% 439,075.00 494,075.00
12 09/01114 92,917.85 12,082.36 105,000.00 6.50% 435,500.00 640,500,00
13 09/01/16 92,917.85 12,082.35 105,000.00 6,50% 428,575.00 533,675,00
14 09/01/16 106,191.80 13,608.40 120,000.00 6.50% 421,850.00 541,850.00
15 09/01/17 119,465,55 15,534.45 135,000.00 6,50% 414,050,00 549,050.00
16 09/01/16 141,588.80 18,411,20 160,000.00 6.50% 406,275.00 565,275.00
17 09101119 159,287,40 20,712.60 180.000,00 6,50% 394,876.00 574,875.00
1i3 0910V20 176,986.00 23,014.00 200,000.00 6.500/16 383,175.00 583,175.00
19 09/01/21 199,109,25 25,990.76 225,000.00 6.50% 370,175.00 595,'75.00
20 09101/22 225,657.16 29,342,85 255,000.00 6,50% 355,550.00 810,550.00
21 091CII23 252,205.05 32,794.95 285,000.00 6.50% 338,976.00 623,975.00
22 09101f24 274,328.30 35,671.70 310,000.00 6,50%�( 320,460,00 830,450.00
23 09101/25 309,725.50 40,274.60 350,000.00 6.500/0 300,300.00 660,300.00
24 09101l26 336,273.40 43.726.60 380,000,00 6.50% 277,550.00 657,550.00
25 09/01127 371.670.60 48,329.40 420,000.00 8,501% 252,850.00 672,S50.00
26 09/01128 402,643.15 62,356.85 456,000.00 6.50% 225,550.00 680,550.00
27 09/01/29 442,466.00 571535,00 500,000.00 6.50% 195,075.00 896,976,00
28 09/01130 486,711.50 63,28B.50 550,000.00 6,60% 183,475,00 713,475.00
29 09101f31 530,858.00 69,042,00 600,000.00 6.50°A 127,725,00 727,725.00
30 09/01132 579,629.15 75,370A5 855,000.00 6,50% 88,725.00 743,725.00
31 09/01133 626,300.30 81.699.70 710,000.00 6.50% 46,150.00 756,150.00
32 09101/34 - - - - -
5,977,702.15 777,297.86 6,755,000,00 9,690,526.00 16,653,526.00
(1) Interest on the Principal Amount of Bonds Compounds until 911/2004
(2) Current interest begins with the March, 2006 payment date
JUL.25.2002 4:03PM HRRRELL & CO. NO.862 P.4r7
CITY OF SAN JACINTOISAN JACINTO PUBLIC FINANCING AUTHORITY
2002 REVENUE BONDS
(CFD 2002.01)
TRANCHE 2, SERIES 5-SUBORDINATE (2ND) LIEN BONDS
Period Compounded Total Current
Princ' pI Interest Psnci& Coup o Interest(2) Debt ervice
1 09/01103 - - -
2 09101104 - - - -
3 09/01/05 - - - 6.509A 430,625.00 430,625.00
4 00101106 - - - 6.50% 430,825.00 430,625.00
5 09101/07 - 6.50°/a 430,625.00 430,625,00
6 09/01/08 - - 6,50% 430,625.00 4301625,00
7 09/01109 - - 6.50% 430,626.00 430r625.00
8 09101110 - - 6.500/6 430,625.00 430,625.00
9 09/01/11 - - 6.60% 430,625.00 430,625.00
10 09/01/12 - - 6,50% 430,625.00 430,025.00
11 09/01/13 4,424.66 576,35 5,000.00 6.500/a 430,625.00 435,625.00
12 09/01114 88,493.00 11,507.00 100,000.00 640% 430.300.00 530,300.00
13 09/01/15 88,493.00 11,507.00 100,000.00 6.50% 423,800.00 523,800.00
14 09/01/16 101,766.85 13,233.05 115,000,00 6.50% 417,300,00 532,300.00
15 09/01117 119,465.55 •15,534.46 135,000.00 &50% 409,825.00 544,825.00
16 D9101/16 1377164.15 17,836.85 155,000.00 5.50% 401,050.00 55B4O50,00
17 09/01/19 154,862.75 20.137.25 175,000.00 5.50% 390,976.00 585,975.00
18 09/01/20 176,986.00 23,014.00 200.000.00 6.50% 379,600.00 579,600.00
19 09/01/21 199,109.25 26,890.76 226,000.00 6.60% 386,600.00 591,600.00
20 09/01122 221,232.60 28,767.50 250,000.00 6.50% 351,975.00 601,975.00
21 09101/23 247.780.40 32,219.60 280,000.00 6,600/6 335,725.00 615,725.00
22 09/01/24 274,328.30 36,671.70 310,000.00 6.50% 317,525.00 027,525.00
23 09/01/25 300,875.20 39,123.80 340,000,00 6,50% 297,276.00 637,375.00
24 09/01/26 331,848.75 43,151.25 375,000.00 6.50% 275.275.00 660,275.00
25 09/01127 367,245.96 47,754.06 415.000.00 6.50% 250,900.00 665,900.00
26 09/01/28 402,643.15 82,356.85 455,000.00 5.50% 2,3,925.00 678,925.00
27 09/01/29 442,465.00 57,535.00 600,000.00 6.50% 194,350,00 594,350.00
28 09101130 482,286.85 62,713.15 545,000.00 6,50% 161,850.00 708,850.00
29 091D1131 526?533.38 68,466.85 595,000.00 6,500A 126.425,00 721,426.00
30 09/01/32 570,779,85 74,220.16 645,000.00 6.500/0 87,750.00 732,750.00
31 09/01/33 623,875,65 81,124.35 705.000.00 6.500A 45,025.00 750,826.00
32 09/01/34 - - -
5,862,661.25 762,338.75 6,625,000.00 9,763,B75.00 16,388,975.00
(1) Interest on the Principal Amount at Bonds Compounds until 9/1/2004
(2) Current Interest begins with the March, 2005 payment date
SUL.25.2002 4:04PM HARRELL & CC. NO.B62 P,5i7
CITY OF 5AN JAClNTOISAN JACINTO PUBLIC FINANCING AUTHORITY
2002 REVENUE BONDS
(CFD 2002-01)
TRANCHE 3: SERIES C-SUBORDINATE(31RD) LIEN BONDS
Period Compounded Total Current
Year E�n,-din P-dapi a1Interest(i PrinSWO cougerf IntcreAt a Debt SqLvice
1 09101103 - - - -
2 09101/04 - - -
3 09/01105 - - - 6.50% 442,976.00 442,975.00
4 09/01/06 - 6.510% 442,975.00 442,976.00
5 09/01/07 - - 8.50% 442.675.00 442,975.00
6 09101108 - - 6.50% 442,975.00 442,975.00
7 09/01109 - - 6.50% 442$975.00 4421075,00
8 09101/10 - - 6.50% 442,975,00 442,975.00
9 09101111 - - - 6,50% 442,975.00 442,975.00
10 09/01/12 - - - 5,60% 442,975.00 442,975.00
11 09/01113 4,424.65 575.35 57000.00 6.60% 442,075.00 447,975.00
12 0910 Ill 4 92,917.65 12,082.35 105,000.00 6.60% 442,660.00 647,650.00
13 09/01/15 88,493,00 11,607.00 100,000.00 6.50% 435,825.00 535,825.00
14 02/01116 106091.60 13,808,40 120,000.00 6150% 429,325.00 549,325.00
15 09101/17 123,690.20 16,lC9,80 140,000.00 6.50% 421,525.00 581.526,00
16 09101118 141,588.80 18,411.20 160,000,00 6.50% 412,425.00 572,425.00
17 09/01/19 159,287.40 20,712,60 180,000.00 6,50°A 402,028.00 582,025.00
18 09/01/20 181,410.65 23,569.35 205.000.00 6,50% 390,325.00 595,325.00
19 09/01/21 203,533.90 26,466.10 220,000.00 6.50% 3770000.00 607,000,00
20 09/01/22 225,657.15 29,342.65 266,000.00 6.50% 362,050.00 617,050.00
21 09/01/23 252,205.05 32,784.95 285,000.00 6.50% 345,475.00 630,475.00
22 09/01/24 283,177.60 36,822.40 320,000.00 6,50% 326,950,00 646,950,00
23 09/01125 309,725.50 40,274.50 350,000.00 5.50% 305,150.00 056,150.00
24 09/01/26 345,122.70 44,877.30 300,000.00 5,50% 283,400.00 673,400.00
25 09/01/27 376,095.25 46,904,75 425,000.00 6.50% 256,050.00 683,050.00
26 09/01/28 415,917.10 54,082.20 470,000.00 6.50% 230,425.00 700,425.00
27 0910"128 465,738.95 59,261.05 515,000.00 6.50% 199,875.00 714,875.00
28 09/01/30 495,560,80 64,439,20 560.000.00 6.5011A 166,400.00 725,400.00
29 09/01/31 539,807.30 70,192,70 610,000.00 6.50% 130,000.00 740,000.00
30 09/01/32 588,478.45 76,521.65 665,000.00 6,50%0 90,350.00 755,350.00
31 09/01/33 641,574.25 83,425.75 725,000.00 6.50% 47,125.00 772,125.00
32 09/01/34 - - -
6,030,797.95 784,202.05 6,815,000.00 10,044,125A0 16,859,125.00
(1) Interest an the Principal Amount o Bonds Compounds untll 9/1/2004
(2) Current Interest begins with the March, 2006 payment date
JUL.25.2002 4-04PM H4RRELL & CO. N0,862 P.6i7
CITY OF SAN JACINTOISAN JACINTO PUBLIC FINANCING AUTHORITY
2002 REVENUE BONDS
(CFD 2002.01)
TRANCHE 4: SERIES D-SUBORDINATE(41TI4) LIEN BONDS
Period Accrued Debt
Your Eadi� Prjoizinal terest 1 Couoan S rvi e 2
1 09101/03 - - -
2 09/01104 - -
3 09/01/06 -
4 09/01/06 - - -
5 09/01/07 - -
6 09101/08 - -
7 09/01109 - -
B QW1110 -
8 09/01111
10 09/01/12 - - -
11 09/01113 - -
12 09/01/14 - - -
13 C9101115 - - -
14 09/01/16 - -
15 09/01117 - -
16 09/01118 - -
17 09/01/19 - - -
18 09101/20 - -
19 09/01/21 - - -
20 09/01/22 -
21 09/01123 - - -
22 08/01/24 - -
23 09/01125 - - -
24 09/01/26 - - -
25 09/01/27 - - -
26 09/01 M - - -
27 09/01/29 - - -
28 09101/30 - - -
29 09/01/31 - - -
30 09/01/32 - -
31 09/01/33 -
32 09/01/34 716,000.00 1,597,151.11 7.00% 2,312,161.11
715,000.00 1,597,151,11 2,312,151.11
(1) Interest on the Principal Amount of Bonds accrues until maturity unless Certain conditions are met
(2) Bonds can convert to current interest bonds once Reserve Fund for Tranches 1, 2 and 3 is fully funded
71JL.Lt.20az 4:04PPI HRRRELL & CO. nu.HbL
CITY OF SAN JACINTOISAN JACINTO PUBLIC FINANCING AUTHORITY
2002 REVENUE BONDS
(GFD No 2)
RESERVE FUND SECURED SUBORDINATE BONDS
Period Compound Debt
Y,_e,�r Ending P c' aI Interest Interell Cipupon Service
1 09/01103 20,603.00 17,396.86 - 5.00% 37,999.86
2 09/01/04 21,633.00 16,366.70 - 5.00% 37,099.70
3 08101/05 22,714.00 15,285,06 6,00% 37,999.06
4 09/01/06 23,860.00 14,149.36 - 5.00%6 37,999,36
5 09101107 25,043.00 12,956.86 5.00% 37,999.86
6 0910110B 26,295.00 11,704.70 5.00% 37,990,70
7 09/01109 27,510.00 10,389.96 - 5.00% 37,999,96
6 09/01/10 28,990.00 9,009.46 - 5.00% 37,999.46
9 09101/11 30,440.00 7,559.96 6.000/8 37,999.96
10 09101/12 31,961.00 6.037.96 5,00% 37,99B.96
11 09/01/13 33,560.00 4,439,90 - 5.00%6 37,999.90
12 09/01/14 229,392.05 2,761.90 140,845.95 5.00% 372,999,90
522,C 91.05 128,058.68 140,846.95 790,995.68
The 2014 maturity includes a principal amount of$174,154.05 Capital Apprec!ation Bonds
with a maturity vaWe of$315,000,which may be canceled under certain conditions.
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE)ss
CITY OF SAN JACINTO )
CERTIFICATION
i, Dorothy L. Chouinard, City Clerk of the City of San Jacinto, California, do
hereby certify that the foregoing Resolution No. 2366 was passed, adopted and
approved at a regular meeting of the City Council of City of San Jacinto held on
the 1st day August, 2002, by the following vote:
Ayes: Ayres, Carlson-Buydos, Good
Nays: None
Absent: None
Abstain: Conner
WITNESS MY HAND AND OFFICIAL SEAL this 2nd day of August, 2002.
'' rothy L. C uinard, City Clerk