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HomeMy WebLinkAbout2022-05-24 - RESOLUTIONS - TESORO BOLD PRGM RESOLUTION NO. 22-22 A RESOLUTION OF THE CITY COUNCIL OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, AUTHORIZING USE OF THE BOND OPPORTUNITIES FOR LAND DEVELOPMENT PROGRAM, AND AUTHORIZING THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY TO ACCEPT APPLICATION FROM BLC TESORO, LLC, CONDUCT PROCEEDINGS AND LEVY SPECIAL TAXES FOR TESORO HIGHLANDS, WHICH IS SUBJECT TO A PRE-ANNEXATION AGREEMENT WITH THE CITY OF SANTA CLARITA PURSUANT TO THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982 AS AMENDED, AND AUTHORIZING RELATED ACTIONS WHEREAS, the California Municipal Finance Authority (CMFA) is a joint exercise of powers authority, the members of which include numerous cities, counties, and other local agencies in the State of California (State); and WHEREAS, City of Santa Clarita (City) is currently a member of CMFA in good standing; and WHEREAS, the CMFA has established the Bond Opportunities for Land Development Program (BOLD Program) to allow the financing of certain public facilities and/or certain development impact fees that finance public facilities, as specified in a Pre-Annexation Agreement or Acquisition Funding Agreement (Improvements), owned, operated, or maintained by local agencies in the State through the levy of special taxes under the Mello-Roos Community Facilities Act of 1982, as amended (Act); and WHEREAS, the CMFA from time to time may be requested by owners of land within the City, or to be annexed to the City, to use the BOLD Program for the financing of Improvements related to new development within the City or that is subject to a Pre-Annexation Agreement, which Improvements will be financed through the BOLD Program in connection with such new development; and WHEREAS, the City desires to allow BLC Tesoro, LLC, the owner of property that is currently within a non-incorporated portion of the City but which is subject to a pre-annexation agreement (Participating Developer), to participate in the BOLD Program and to allow the CMFA to conduct proceedings under the Act to form a Community Facilities District (CFD) under the Act, to levy special taxes within such CFD, and to issue bonds secured by such special taxes under the Act to finance the Improvements, provided that such Participating Developer voluntarily agrees to participate and consents to the levy of such special taxes and the issuance of such bonds; and WHEREAS, the City will not be responsible for the conduct of any proceedings under the Act for the formation of any CFD, the levy or collection of special taxes for any CFD, or any required remedial action in the case of delinquencies in any special tax payments, or the issuance, sale, or administration of any bonds issued in connection with the BOLD Program; and Page 1 of 3 WHEREAS, the City finds that the BOLD Program offered by the CMFA can provide significant public benefits, and in conformance with Government Code Section 6586.5 relating to the issuance of bonds by a Joint Powers Authority of which the City is a member, notice was published at least five days prior to the adoption of this resolution at a public hearing, which was duly conducted by this City Council concerning the significant public benefits of the BOLD Program and the bond financing of the Improvements from time to time. NOW THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as follows: SECTION 1. The use of the BOLD Program, in connection with the financing of Improvements for the Participating Developer and its Tesoro Highlands project, is hereby authorized and approved. SECTION 2. The City hereby finds and declares that the issuance of bonds by the CMFA, in connection with the BOLD Program, will provide significant public benefits, including without limitation, savings in effective interest rate, bond preparation, bond underwriting, and bond issuance costs, and the more efficient delivery of local agency services to residential and commercial development within the City. SECTION 3. The City Council hereby approves the Joint Community Facilities Agreement (JCFA) between the City and CMFA, attached hereto as Exhibit A, and the ........ Acquisition Funding Agreement among the City, CMFA, and BLC Tesoro, LLC, attached hereto as Exhibit B. and authorizes the City Manager to execute each on behalf of the City with such changes, additions, or deletions as may be approved by the City Manager and City Attorney. The City hereby finds that the JCFA and Acquisition Funding Agreement will be beneficial to the residents of the City. SECTION 4. The appropriate officials and staff are hereby authorized and directed to allow and approve BOLD Program participation available to the Participating Developer who is required to install public improvements and/or the payment of fees in connection with the development of Tesoro Highlands in the City, and to advise the Participating Developer requesting participation in the BOLD Program that the City has approved the BOLD Program, provided the CMFA shall be responsible for providing applications and processing of documentation and related materials at its own expense. This resolution shall evidence the official intent of the City to reimburse itself for its incurred costs of Improvements from the proceeds of tax-exempt obligations issued by CMFA as part of the BOLD Program for the Tesoro Highlands project. SECTION 5. This resolution shall take effect immediately upon its adoption. The Clerk of the City Council is hereby authorized and directed to transmit a certified copy of this resolution to the Secretary of the CMFA. MINIM Page 2 of 3 PASSED, APPROVED, AND ADOPTED this 24th day of May, 2022. C s MAYOR ATTEST: L4t/tC4i1 CITY CLERK t429/?? /29- DATE: _ STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF SANTA CLARITA ) I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 22-22 was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the 24th day of May, 2022, by the following vote: AYES: COUNCILMEMBERS: Smyth, Gibbs, Miranda, Weste NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: McLean TY CLERK Page 3 of 3 EXHIBIT A FORM OF JOINT COMMUNITY FACILITIES AGREEMENT CMFA BOLD PROGRAM Joint Community Facilities Agreement by and between CMFA and City of Santa Clarita Relating to the Tesoro Highlands project in the City This Joint Community Facilities Agreement (this "Agreement"), dated as of 2022, by and between the California Municipal Finance Authority, a joint exercise of powers authority duly organized and existing under the Constitution and laws of the state of California (the "CMFA"), and the City of Santa Clarita, a municipal corporation and general law city, duly organized and existing under the Constitution and laws of the state of California (the "City," and together with CMFA, the "Parties"). Wl TNESSETH: WHEREAS, CMFA intends to conduct proceedings under the Mello-Roos Community Facilities Act of 1982 (California Government Code section 53311 et seq.) (the "Act") to form a community facilities district (the "CFD") for the Tesoro Highlands project ("Tesoro Highlands") to finance certain public facilities, Bridge and Thoroughfare development impact fees used for capital improvements, net of applicable credits (the "B&T Fees"), and certain services authorized to be financed under the Act (the "CFD Improvements," the "B&T Fees," and the "CFD Services," respectively) as part of its Bond Opportunities for Land Development ("BOLD") program; WHEREAS, the CFD Improvements, B&T Fees and CFD Services will be described in the resolution of formation for the CFD but shall include CFD Improvements to be acquired by the City, B&T Fees and CFD Services for the City as set forth on Exhibit A hereto (the "City Improvements," the "B&T Fees" and the "City Services," respectively); WHEREAS, CMFA intends to utilize the proceeds of sale of special tax bonds of the CFDs (the "Bonds") to finance some or all of the City Improvements and B&T Fees; WHEREAS, under Section 53316.2 of the Act, CMFA may form a CFD to, among other things, finance the City Services, City Improvements and B&T Fees, provided that CMFA and the City enter into a joint community facilities agreement such as this Agreement; and WHEREAS, City is willing to cooperate with CMFA in accomplishing the financing of the City Services, City Improvements and B&T Fees pursuant to the Act, and to confer upon the CMFA full power to provide financing (i) for the City Services with the proceeds of a special tax of the CFD levied for such purpose (the "Services Special Tax") and (ii) for the City Improvements and B&T Fees with the proceeds of special taxes levied for such purpose (the "Facilities Special Tax") and the proceeds of Bonds; 1 WHEREAS, this Agreement is made under the authority of Section 53316.2 of the Act; and VVHERE/\8, in consideration for the mutual undertakings ofthe Parties stated herein, the Parties eQnae as follows: AGREEMENT- 1 Administration ofCFD and Issuance of Bonds by [|MFA. CMFA shall administer the CFD, including employing and paying all consultants, annually levying the Services Special Tax and Facilities Special Tax and paying and administering the Bonds, and complying with all state and federal requirements appertaining to the proceedings establishing the CFD and issuing and using the proceeds ofthe Bonde, including the requirements ofthe United States Internal Revenue Code of 1986. as amended (the "Code"). In addiiion, the rate and method of apportionment of special tax for the CF[} shall take into account the City'a po|ioies, if any, regarding overall projected tax rates on properties in the City and account for any special -taxes and/or assessments anticipated to be levied by the City on properties within the CFD1 2. Agreement to Hold Special Taxes and Bond Proceeds. CMFA shall establish two separate funds, accounts oraub0000unta designated the "City Services Project Fund^ and the "Acquisition and Project Fund.^ The @en/ioea Special Taxes shall be deposited in the City 8en/ioeo Project Fund and the Facilities Special Taxes and proceeds of Bonds available tofund the City Improvements and B&T Fees shall be deposited in the Acquisition and Project Fund. CMFA shall dioburae, or cause to be dioburaed, moneys on deposit in the City Services Project Fund only ao provided herein. CMFA shall disburse, or cause tobo disbursed, moneys ondeposit in the Acquisition and Project Fund as provided in the Acquisition Funding Agreement to be entered into by and among CMFA, the City and BLC Tesoro LLC (the "Acquisition Agreement"). 3. Use of Services Special Tax for City Services. The City acknowledges that the City Services may be financed through the levy of the Services Special Taxes of the CFD formed byCMFAoa part of the BOLD program. CMFA shall transfer the Services Special Taxes tothe City within 10 (ton) business days of receipt for use by the City as Stewardship Funds pursuant to the Open Space Agreement dated as of by and between the City and (as such term ie defined in the Open Space Agreernent). 4. Disbursements from City Services Project Fund. Moneys on deposit in the City Gen/ioea Project Fund shall be disbursed to the City by wire transfer of immediately available fundoorbyoheokpoyob|etoiheCity'abanka000untnunnberatobanh /ooetedvvithinthoUnited States on file with CMFA as part of the BOLD progrern, unless another method of payment is requested in writing by the City. 5. Purchase of City Improvements and Payment of BQT Fees. The City Improvements shall be acquired by the City and the B&T Fees paid or reimbursed in accordance with the Acquisition Agreement. Neither CMFA nor any of its agents aho|| be responsible for inspection or review of any such documents relating to financed City Improvements or improvements funded with the B&T Fees (collectively, the "Improvements"), unless set forth in the Acquisition Agreement, 6. Covenants. The City covenants to ovvn, and for the entire useful life of the |rnprovernento, reasonably expects to own, all of the Improvements financed by the CFD. 2 To the extent any of the Improvements are sold to an entity that is not a state or local government, the City will seek the advice and approval of bond counsel to CMFA for the BOLD program prior to any such sale. The City will not allow any of the Improvements to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public). All of such Improvements will be used in the performance of essential governmental functions of the City or another state or local government agency. The average expected useful life of such Improvements is at least five years. The representations and covenants contained in this paragraph are intended to support the conclusion that the interest paid on the bonds issued to finance the Improvements is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code"). 7. Amendments. This Agreement may be amended by a writing signed by the Parties, including to update Attachment #1 to this Exhibit, to reflect additional or different City Services and/or City Improvements and/or B&T Fees to be financed through the BOLD program from time-to-time. 8. Term of this Agreement. This Agreement shall be in full force and effect from this date to and including its termination by mutual written agreement of the parties hereto. CMFA agrees to terminate this agreement upon request of the City upon delivery to CMFA of an opinion Bond Counsel to the effect that the termination of this Agreement will not adversely affect the exclusion from gross income of interest on the Bonds for federal income tax purposes. 9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Signatures on Following Page] 3 IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their authorized representatives as of the effective date stated above. CMFA: CITY: CALIFORNIA MUNICIPAL CITY OF SANTA CLARITA FINANCE AUTHORITY By: By: Authorized Signatory Name: Title: 4 ATTACHMENT #1 DESCRIPTION OF CITY SERVICES, CITY IMPROVEMENTS, and B&T FEES 1. The City Services to be funded with the proceeds of the Services Special Taxes shall include the operation and maintenance of open space. 2. The City Improvements shall include: the extension of Avenido Ranch Tesoro ("A" Street") improvements as further described in the Acquisition Funding Agreement. 3. The B&T Fees shall include the Bridge and Thoroughfare development impact fees imposed and collected by the City pursuant to City Ordinance No. , as it may be amended or superseded, net of applicable credits. #201798 v6 9202.2 EXHIBIT B ACQUISITION FUNDING AGREEMENT California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Community Facilities District No. ( ) THIS ACQUISITION AGREEMENT ("Agreement") is made and entered into on this day of , 2022 ("Effective Date") among BLC Tesoro LLC, a Delaware limited liability company (the "Developer"), the California Municipal Finance Authority ("Authority"), and the City of Santa Clarita, California ("City"). RECITALS A. On , 2022, the governing board of the Authority adopted Resolution No. (the "Resolution") forming Community Facilities District No. ( ) (the "CFD") and designating Improvement Area No. 1 and Improvement Area No. 2 therein (each, an "Improvement Area"), under the provisions 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"). The Authority is authorized to levy special taxes upon land within each Improvement Area (the "Facilities Special Taxes") and issue bonds secured by the Facilities Special Taxes (the "Bonds") in one or more series for each Improvement Area to provide financing for infrastructure and other public capital improvements to be owned, operated or maintained by the City and other public agencies, including the County of Los Angeles ("County") and the Santa Clarita Valley Sanitation District of Los Angeles County (the"Sanitation District"). The boundaries of the CFD and each Improvement Area are illustrated on Exhibit A hereto; and B. In connection with the CFD, the Developer applied to the Authority and the City for the financing of (i) certain public capital improvements as further described in Exhibit B hereto to be constructed by, or on behalf of, the Developer and owned, operated or maintained by the City (the "Acquisition Improvements") and (ii) Bridge and Thoroughfare fees payable in conjunction with development within the CFD, net of applicable credits (the "Financed Fees" and, with the Acquisition Improvements, the "Improvements"). C. The City has conducted proceedings to annex all of the property in the CFD into the City. Such annexation will become effective (the "Annexation Effective Date"). Upon the Annexation Effective Date, certain public capital improvements of the County identified in Exhibit B will also be deemed Acquisition Improvements of the City and shall be eligible for financing pursuant to this Agreement. D. The CFD is authorized to levy Facilities Special Taxes and issue Bonds, in one or more series, within each Improvement Area to fund, among other things, all or a portion of the costs of the Improvements. Collectively, for all Improvement Areas, the portion of the proceeds of the Facilities Special Taxes (including prepayments) and Bonds allocable to the cost of the -6- Improvements, together with interest earned thereon, is referred to herein as the "Available Amount." E. From the Available Amount, the CFD will provide financing for (i) the payment of the Acquisition Price (as defined herein) of the Acquisition Improvements and (ii) the advance payment or reimbursement of the Financed Fees. Attached hereto as Exhibit B is a description of the Acquisition Improvements that are eligible to be acquired from the Developer. F. The parties anticipate that pursuant to this Agreement the Developer may be reimbursed for costs of the Acquisition Improvements and, subject to the terms and conditions of this Agreement, the City will acquire the completed Acquisition Improvements. G. Any and all monetary obligations of the Authority arising out of this Agreement are the special and limited obligations of the Authority payable only from the Available Amount, and no other funds whatsoever of the Authority or the City shall be obligated therefor under any circumstances. H. In consideration of the formation of the CFD and the issuance of the Bonds, and the mutual covenants, undertakings and obligations set forth below, the City, the Authority and the Developer agree as stated below. I. Attached to this Agreement are Exhibit A (Map of CFD Boundary), Exhibit B (Description of Acquisition Improvements), Exhibit C (Actual Cost Certificate), Exhibit D (Disbursement Request Form), and Exhibit E (Bidding, Contracting and Construction Requirements for Acquisition Improvements), all of which are incorporated into this Agreement for all purposes. AGREEMENT NOW, THEREFORE, in consideration of the faithful performance of the terms and conditions set forth in this Agreement, the parties hereto agree as follows: 1. Incorporation of Recitals. The foregoing Recitals are true and correct and are hereby incorporated into and form a material part of this Agreement. 2. Effect on Other Agreements. Nothing in this Agreement shall be construed as affecting the Developer's or the City's duty to perform their respective obligations under any other agreements (including the Development Documents defined below), land use regulations or subdivision requirements related to the Project, which obligations are and shall remain independent of the Developer's and the City's rights and obligations under this Agreement. 3. Definitions. As used herein, including the Recitals and all Exhibits, the following capitalized terms shall have the meanings ascribed to them below: "Acceptable Title" means free and clear of all monetary liens, encumbrances, assessments, whether any such item is recorded or unrecorded, and taxes, except (i) those items which are reasonably determined by the Director not to interfere with the intended use and therefore are not required to be cleared from the title and (ii) the lien of the CFD or any other community facilities district or assessment district provided that the property owned by the City is exempt from such taxation or assessment. -7- "Acquisition and Project Fund" means the "CMFA CFD ( ) Acquisition and Project Fund" established and held by the Authority pursuant to the Resolution and Section 5.2 hereof for the purpose of paying the Acquisition Price of the Acquisition Improvements and the Financed Fees. "Acquisition Improvement" means a public capital improvement, including an Eligible Portion thereof as described in Section 5.6 hereof, described in Exhibit B, as may be amended from time to time. "Acquisition Price" means the total amount eligible to be paid to the Developer from the Available Amount upon acquisition of an Acquisition Improvement or Eligible Portion thereof, as provided in Sections 5.6 and 5.7, not to exceed the Actual Cost of the Acquisition Improvement. "Act" means 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. "Actual Cost" means the total paid cost of an Acquisition Improvement or Eligible Portion thereof, as documented by the Developer to the satisfaction of the Administrator in an Actual Cost Certificate including, without limitation, (a) the Developer's cost of constructing such Acquisition Improvement or Eligible Portion thereof, including a portion of the grading costs in the amount attributable to Acquisition Improvements, as determined by the Administrator, labor, material and equipment costs, (b) the Developer's cost of designing and engineering the Acquisition Improvement, preparing the plans and specifications and bid documents for such Acquisition Improvement, and the costs of inspection, materials testing and construction staking for such Acquisition Improvement, (c)the Developer's cost of any performance, payment and maintenance bonds and insurance, including title insurance, required hereby for such Acquisition Improvement, (d) the Developer's cost of environmental evaluation or mitigation required for such Acquisition Improvement to the extent approved by the City, (e) the amount of any fees, such as permit and plan processing fees relating directly to the Acquisition Improvement, and (f) the Developer's construction management costs in an amount equal to 5% of the eligible hard construction cost, as determined by the Administrator. "Actual Cost Certificate" means a certificate prepared by the Developer in substantially the form shown in Exhibit C detailing the Actual Cost of an Acquisition Improvement or Eligible Portion thereof, to be acquired hereunder, as may be revised by the Director pursuant to Section 5.6. "Administrator" means Francisco & Associates, Inc., as the acquisition consultant and auditor for the Authority. "Agreement" means this Acquisition Agreement, dated as of , 2022, by and among the City, the Authority, and the Developer. "Authority" means the California Municipal Finance Authority. "Authority Trust Agreement" means a trust agreement, indenture or fiscal agent agreement entered into by the Authority and an Authority Trustee or Fiscal Agent in connection with the issuance of a series of Bonds on behalf of the CFD for an Improvement Area. -8- "Authority Trustee" means the financial institution identified as trustee or fiscal agent in an Authority Trust Agreement. "Available Amount" shall have the meaning assigned to the term in Recital D. "Board of the Authority" means the Board of Directors of the California Municipal Finance Authority. "Bonds" means bonds or other indebtedness issued in one or more series by the Authority that are to be repaid with Facilities Special Taxes levied in an Improvement Area. "City" means the City of Santa Clarita, California. "Code" means the Government Code of the State of California. "City Resolution" means City Resolution No. , adopted , 2022 titled "CFD" shall have the meaning assigned to the term in Recital A. "Developer" means BLC Tesoro LLC, a Delaware limited liability company, and its successors and assigns. "Development Documents" means, as applicable, one or more of the following: (i) an improvement agreement between the Developer and the City concerning an Acquisition Improvement; (ii) improvement plans submitted by the Developer to the City concerning an Acquisition Improvement; (iii) a pre-annexation agreement between the City and Developer; or (iv) any other agreement with the County or City or condition of development concerning an Acquisition Improvement or Financed Fee. "Director" means the Director of Public Works of the City or his/her designee or representative (which may include a third party person or entity providing services on behalf of the Director) who will be responsible for administering the acquisition of the Acquisition Improvements hereunder. "Disbursement Request Form" means a requisition for payment of funds from an Acquisition and Project Fund for an Acquisition Improvement or an Eligible Portion thereof or with respect to Financed Fees in substantially the form contained in Exhibit D. "Eligible Portion" shall have the meaning ascribed to it in Section 5.6 below. "Facilities Special Taxes" means annual special taxes, and prepayments thereof, authorized by the CFD to be levied by the Board of the Authority within any Improvement Area to pay for the Improvements. "Financed Fees" means Bridge and Thoroughfare development impact fees imposed pursuant to City Ordinance No. , as it may be amended or superseded, net of applicable credits. "Improvement Area" means, as the context requires, Improvement Area No. 1 or Improvement Area No. 2. -9- "Improvement Area No. 1" means Improvement Area No. 1 of the CFD. "Improvement Area No. 2" means Improvement Area No. 2 of the CFD. "Improvements" means the Acquisition Improvements and Financed Fees. "Installment Payment" means an amount equal to ninety percent (90%) of the Acquisition Price of an Eligible Portion. "Project" means the development of the property in the CFD or offsite improvements serving property in the CFD, including the design and construction of the Acquisition Improvements. "Title Documents" means, for each Acquisition Improvement acquired hereunder, a grant deed or similar instrument necessary to transfer title to any real property or interests therein (including easements), or an irrevocable offer of dedication of such real property with interests therein necessary to the operation, maintenance, rehabilitation and improvement by the City of the Acquisition Improvement (including, if necessary, easements for ingress and egress) and a bill of sale or similar instrument evidencing transfer of title to the Acquisition Improvement (other than said real property interests) to the City, where applicable. 4. Purpose; Effective Date. 4.1. Purpose. The purpose of this Agreement is to provide financing for the Acquisition Improvements and Financed Fees from the Available Amount for all Improvement Areas in the CFD. 4.2. Effective Date. The Effective Date of this Agreement shall be as set forth in the preamble above. 4.3. Acquisition Improvements. Notwithstanding anything to the contrary, the Acquisition Improvements and Financed Fees are authorized to be financed by Bonds and Facilities Special Taxes from each and every Improvement Area, and the Acquisition Improvements may be located anywhere, regardless of the Improvement Area from which such Bonds and Facilities Special Taxes are derived. 5. CFD. 5.1. Establishment of CFD. Pursuant to the City Resolution, the City authorized the Authority to form the CFD to finance the Improvements, subject to certain conditions being met. The CFD has been established by the Authority, and through the successful landowner election held in conformance with the Act, the Board of the Authority is authorized to levy the Facilities Special Taxes and to issue the Bonds to finance the Improvements. Developer, the City and the Authority agree to reasonably cooperate with one another in the completion of the financing through the issuance of the Bonds in one or more series for any Improvement Area. 5.2. Deposit and Use of Available Amount. 5.2.1. Acquisition and Project Fund Held by Authority -10- CMFA shall establish two separate funds, accounts or subaccounts designated the City Services Project Fund and the Acquisition and Project Fund. Prior to the issuance of the first series of Bonds for an Improvement Area, Facilities Special Taxes collected by the Authority (including from prepayments of Facilities Special Taxes) shall be deposited in the Acquisition and Project Fund established by the Authority for that Improvement Area and may be disbursed to pay the Acquisition Price of Acquisition Improvements or Eligible Portions thereof and to pay or reimburse Financed Fees in accordance with this Agreement. All funds in the Acquisition and Project Fund shall be considered a portion of the Available Amount, and upon the issuance of the first series of Bonds for such Improvement Area, the Acquisition and Project Fund shall be transferred to the Authority Trustee to be held in accordance with the Authority Trust Agreement. 5.2.2. Acquisition and Project Fund Held by Trustee Upon the issuance of the first series of Bonds for an Improvement Area, the Authority will cause the Authority Trustee to establish and maintain a separate Acquisition and Project Fund for the purpose of holding all funds derived from that Improvement Area for the financing of Improvements. Separate subaccounts may be established for each issue of Bonds. All earnings on amounts in an Acquisition and Project Fund shall remain in such Acquisition and Project Fund for use as provided herein and pursuant to the applicable Authority Trust Agreement. Money in each and every Acquisition and Project Fund shall be available to respond to delivery of a Disbursement Request Form and to be paid to the City or its designee or the Developer or its designee to pay the Acquisition Price of the Acquisition Improvements or Eligible Portion thereof to the extent the Acquisition Price has not previously been paid from Available Amount and to pay or reimburse Financed Fees. Upon completion of all of the Acquisition Improvements and the payment of all costs thereof and the payment or reimbursement of all Financed Fees, any remaining funds in each Acquisition and Project Fund (less any amount determined by the City as necessary to reserve for claims against the account) that are not required to fund other CFD eligible items of the County or Sanitation District (i) shall be applied to pay the costs of any additional Acquisition Improvements eligible for acquisition and, to the extent not so used, (ii) shall be applied by the Authority to call Bonds or to reduce Facilities Special Taxes as the Authority shall determine. 5.3. Letting and Administering Design Contracts. The Developer has awarded and administered, or will award and administer, engineering design contracts for the Acquisition Improvements. All eligible expenditures for design engineering and related costs in connection with the Acquisition Improvements shall be reimbursed upon a request for payment made pursuant to Section 5.6 hereof, as reviewed and approved by the Director. Requests for reimbursement for solely design engineering and related costs prior to construction of an Acquisition Improvement shall not exceed 10% of the estimated construction costs of said Acquisition Improvement, as reviewed and approved by the Director. Requests received in excess of 10% of the estimated construction costs of said Acquisition Improvement shall include justification and related documentation for review, with determination of costs in excess of 10% to be made by the Director based on the extent to which hard improvements have been completed or are reasonably expected to be completed. Such reimbursement may also include certain indirect costs of the Developer related to establishment of the CFD and the design and construction of the Acquisition Improvements; provided that the Administrator shall determine the amount to be so reimbursed on the basis of detailed itemizations of costs provided by Developer and the decision of the Administrator shall be final. Where a specific contract has been awarded for design or engineering work relating solely to an Acquisition Improvement or Acquisition Improvements, one hundred percent (100%) of the costs under the contract will be allocated to that Acquisition Improvement. -11- Where a specific contract has been awarded for design or engineering work relating to an Acquisition Improvement and private improvements, the eligible percentage allocated to the Acquisition Improvement shall be determined by the Administrator, for review and approval by the Director in his/her sole discretion. 5.4. Letting and Administering Construction Contracts: Prevailing Wages. State law requires that all Acquisition Improvements for which an Actual Cost Certificate is submitted pursuant to this Agreement that were not completed prior to the formation of the CFD shall be constructed as if they were constructed under the direction and supervision, or under the authority, of the City. In order to assure compliance with those provisions, except for any contracts entered into prior to the date hereof, Developer agrees to comply with the requirements set forth in Exhibit E, with respect to the bidding and contracting for the construction of the Acquisition Improvements being constructed by the Developer for which a Request for Payment is submitted pursuant to this Agreement, included, but not limited to, California Labor Code Section 1771, et seq. ("Labor Code Regulations"). Developer agrees and acknowledges that the construction of such Acquisition Improvements is subject to the payment of prevailing wages and agrees to comply with the requirements of the Labor Code. Further, Developer agrees to defend, indemnify and hold the Authority and the City, its elected officials, officers, employees, and agents free and harmless from any and all claims, damages, suits or actions arising out of or incident to Developer's obligations under this section. Developer agrees to satisfy, to the extent applicable, its obligation of registering with the Department of Industrial Relations and furnishing electronic certified payroll records to the Labor Commissioner pursuant to Senate Bill 854 (2014). The Developer's indemnification obligation set forth in Section 6.1 of this Agreement shall also apply to any alleged failure to comply with the requirements of this Section, and/or applicable State laws regarding public contracting and prevailing wages. 5.5. Estimated Cost of Acquisition Improvements and Financed Fees. The estimated cost of the Acquisition Improvements are shown in Exhibit B attached hereto. Notwithstanding this estimate, Developer and the City hereby acknowledge and agree that (a) the actual costs to complete the Acquisition Improvements may vary from this estimate, and (b) the Acquisition Price shall never exceed the Actual Cost of any Acquisition Improvement. The estimated cost of the Finance Fees are shown in Exhibit B attached hereto. The amount of Financed Fees that may be paid from the Available Amount shall be the cumulative total of the Financed Fees obligation for the Project less the amount of credits granted for the Copper Hill Bridge Widening. Notwithstanding this estimate, Developer and the City hereby acknowledge and agree that (a) the actual B&T Fee obligation or the amount of the credit for the Cooper Hill Bridge Widening may vary from this estimate, and (b) any amount of the B&T Fee obligation not financed as part of the Financed Fees or the B&T credit, shall be the responsibility of the Developer. 5.6. Sale of Acquisition Improvements. The Developer agrees to convey to the City each Acquisition Improvement to be constructed by Developer (including any rights-of-way or other easements necessary for the Acquisition Improvements, to the extent not already publicly owned), when the Acquisition Improvement is completed to the satisfaction of the City. Exhibit B, attached hereto and incorporated herein, contains a list of the Acquisition Improvements. Under no circumstances shall the City have the obligation to accept a completed Acquisition Improvement consisting of a street until the underlying or related sewer and storm drainage improvements have been completed and approved for maintenance by the Los Angeles County Sewer Maintenance District or Los Angeles County Flood Control District, as applicable. -12- At the time of full completion of each Acquisition Improvement, the Developer shall deliver to the Director Title Documents required by the City for the transfer of the Acquisition Improvement where necessary, and record plans (if record plans are not available the Developer shall submit constructed quantities that are verified and stamped by a civil engineer licensed in the State of California). Request for Payment. Following commencement of construction of any Acquisition Improvement, and each 30 days thereafter, or such other dates as are mutually agreeable to the City, the Administrator and Developer, Developer will submit to the Administrator and the City an Actual Cost Certificate in the form attached hereto as Exhibit C for the portion or phase of Acquisition Improvements previously constructed (the "Eligible Portion"), which shall constitute a written request for payment (the "Request for Payment") of the Acquisition Price (as determined below) for the Eligible Portion, except that for any Acquisition Improvement having a total estimated finished cost of less than $1,000,000, no portion of the cost thereof shall be an Eligible Portion (i.e., no periodic progress payments shall be made and acquisition shall only occur upon completion). The Actual Cost Certificate shall include such necessary information (including invoices, receipts, worksheets and other evidence of cost as required by the Administrator) in sufficient detail to allow the Administrator to verify the Acquisition Price of such Eligible Portion. Determination of Acquisition Price/City Inspection. Upon submittal of a complete (as reasonably determined by Administrator) Actual Cost Certificate, the Administrator shall determine the Acquisition Price (or in the case of a reimbursement, the reimbursement amount, which hereinafter is included in the term "Acquisition Price") to be paid for the acquisition from Developer of the Eligible Portion constructed by Developer during said prior period. The Acquisition Price for the Eligible Portion shall include the actual cost of construction (or payment) thereof as determined by the contract prices as set forth in contracts and purchase orders entered into by Developer with its contractors, and suppliers, in accordance with standards and procedures therefore as prescribed by the Administrator. At the time of submittal of each Actual Cost Certificate, the Developer shall pay to the City $3,500 as a processing fee, which fee may be included as an Actual Cost. The Administrator shall have thirty (30) days from receipt of an Actual Cost Certificate to review and determine the Acquisition Price. Further, Developer may submit an Actual Cost Certificate in advance of issuance of the Bonds; however, no payment of the Acquisition Price shall be made prior to issuance of the Bonds unless funds are available in the Acquisition and Project Fund from the collection of Facilities Special Taxes. The Developer shall not submit more than one (1) Actual Cost Certificate every 30 days. Upon determination of the Acquisition Price, the Administrator shall promptly notify Developer in writing of such Acquisition Price. In the event that the Administrator, during such time period, finds that the supporting paperwork submitted by the Developer fails to demonstrate the required relationship between the subject Actual Cost and eligible work, the Administrator shall advise the Developer that the determination of the Actual Cost (or the ineligible portion thereof) has been disallowed and shall request further documentation from the Developer. Once the Developer delivers the further documentation, the Administrator shall have twenty (20) days to review the additional documentation. If the further documentation is still not adequate, the Administrator shall notify the Developer in writing within such twenty-day period and may revise the Actual Cost Certificate to delete any disallowed items and the determination shall be final and conclusive. If -13- only a portion of the Actual Cost requires further documentation, the Administrator shall include the Actual Costs that do not require further documentation in the determination of the Acquisition Price. Upon determination of the Acquisition Price, the Administrator shall prepare a Disbursement Request Form as shown in Exhibit D for review and approval by the Director. The Director shall finalize and approve the Disbursement Request Form within thirty (30) days after determination of the Acquisition Price. Conditions Precedent to Payment of Acquisition Price/City Inspection. Payment to the Developer or its designee of the Acquisition Price for an Acquisition Improvement or Eligible Portion from an Acquisition and Project Fund shall in every case be conditioned first upon the determination of the Administrator that the Acquisition Improvement, or Eligible Portion to be paid for, satisfies all City regulations and ordinances and is otherwise constructed in accordance with Section 5.4 above and, if payments include a final amount of the Acquisition Price of a particular Acquisition Improvement, and if the Acquisition Improvement is completed (i.e., not just an Eligible Portion) such improvement is ready for acceptance by the City, and shall be further conditioned upon satisfaction of the following additional conditions precedent if requested by the Administrator or the City: (a) The Developer shall have provided the City with the lien releases or other similar documentation satisfactory to the Director as evidence that none of the property (including any rights-of-way or other easements necessary for the operation and maintenance of the Acquisition Improvement, to the extent not already publicly owned) comprising the Acquisition Improvement, and the property which is subject to the Facilities Special Taxes of the CFD, is subject to any prospective mechanics lien claim respecting the Acquisition Improvements. (b) The Developer shall be current in the payment of all due and payable general property taxes, and all Facilities Special Taxes of the CFD, on property owned by the Developer or under option to the Developer within the CFD. (c) The Developer shall have provided the City with Title Documents needed to provide the City with title to the site, right-of-way, or easement upon which the subject Acquisition Improvement is situated. All such Title Documents shall be in a form acceptable to the City and shall convey Acceptable Title. The Developer shall provide a policy of title insurance as of the date of transfer in a form acceptable to the Director and the City Counsel insuring the City as to the interests acquired in connection with the acquisition of any interest for which such a policy of title insurance is not required by another agreement between the City and the Developer. Each title insurance policy required hereunder shall be in the amount equal to the Acquisition Price. The amount paid to the Developer or its designee upon satisfaction of the foregoing conditions precedent shall be the Acquisition Price less all Installment Payments paid previously with respect to the Acquisition Improvement. 5.7. Payment of Acquisition Price. Within thirty (30) days after receipt of a complete Disbursement Request Form, the Authority, through the Trustee, shall authorize payment for the Eligible Portion from the Available Amount the Acquisition Price then due to Developer. If the Payment Request indicates that Developer is withholding from its contractor a retention of a least ten percent (10%) of the contract price for the portion of the constructed Acquisition Improvement, then the full amount of the approved Acquisition Price shall be authorized for payment to Developer; if the Payment Request does not indicate the withholding by Developer of such ten percent (10%) retention, then the amount to be paid to Developer shall -14- be equal to the Acquisition Price, less a retention of ten percent (10%) of the contract price for the Eligible Portion. Upon completion of such Acquisition Improvement in its entirety, including all "Punch List" work, and acceptance of the Acquisition Improvement by the City, the Authority, through the Trustee, shall authorize and shall pay from the Available Amount the balance of the Acquisition Price then due Developer for such Acquisition Improvement, including any 10% progress retention then paid by Developer or any 10% retentions previously retained by Authority with respect thereto. Payments to Developer shall be payable solely from the Available Amount. The amount to be paid to Developer shall be a reimbursement for actual costs incurred as determined by the Administrator in accordance with this Agreement and shall not exceed the Developer's cost thereof as reasonably determined by the Administrator in consultation with the City to be eligible under the Act to be part of the Acquisition Price of Acquisition Improvement. All portions of the Acquisition Improvement not acquired with the Available Amount shall nonetheless be constructed by the Developer, to the extent required by the project approvals. In the event the Available Amount is insufficient to pay the eligible Acquisition Price, any shortfall shall be the responsibility of the Developer, however Developer may request that all or any portion of such shortfall be reimbursed from additional series of Bonds for the CFD if and when such additional Bonds are issued or additional Facilities Special Tax proceeds are available, and in such event the deferred amount will be eligible for reimbursement from proceeds of such future Bonds or Facilities Special Tax proceeds, to the extent funds are available. 5.8. Disbursement Request Form. Upon a determination by the Administrator to pay the Acquisition Price of an Acquisition Improvement or to pay an Installment Payment for an Eligible Portion as provided in Sections 5.6 — 5.7 hereof, the Director shall, within thirty (30) days after such determination, cause a Disbursement Request Form substantially in the form attached hereto as Exhibit D to be submitted to the Authority Trustee, and the Authority Trustee shall make payment directly to the City or its designee or the Developer or its designee, as appropriate, of the amount pursuant to the applicable Authority Trust Agreement. The Authority, the City and the Developer acknowledge and agree that the Authority Trustee shall make payment strictly in accordance with the Disbursement Request Form and shall not be required to determine whether or not the Acquisition Improvement or Eligible Portion has been completed or what the Acquisition Price may be with respect to the Acquisition Improvement or Eligible Portion. The Authority Trustee shall be entitled to rely on the executed Disbursement Request Form on its face without any further duty of investigation. In the event that the Acquisition Price of an Acquisition Improvement or the Installment Payment for an Eligible Portion is in excess of the Available Amount, the Authority Trustee shall withdraw all funds remaining in the applicable Acquisition and Project Fund and shall transfer those amounts to the Developer or the City, as applicable, or its designee. The unpaid portion of the Acquisition Price shall be paid from funds that may subsequently be deposited in the same or another Acquisition and Project Fund from a subsequent issuance of Bonds, from prepayments of Facilities Special Taxes to be used for construction or acquisition of Acquisition Improvements, or from Facilities Special Tax revenues, if any of those occurs. The Acquisition Price of an Acquisition Improvement may be paid from the Acquisition and Project Fund for each or both Improvement Areas, provided that the total payment for an Acquisition Improvement shall not exceed its Acquisition Price. 5.9. Limitation on Obligations. In no event shall the Authority be required to pay the Developer or its designee more than the Available Amount (available from time to time). 5.10. Audit. The City and the Authority shall have the right, during normal business hours and upon the giving of ten days' written notice to the Developer, to review all -15- books and records of the Developer pertaining to costs and expenses incurred by the Developer (for which the Developer seeks reimbursement pursuant to this Agreement) in constructing the Acquisition Improvements. 5.11 Financed Fees. Financed Fees may be financed from the Available Amount. For Financed Fees that have not already been paid for any portion of the Project, Financed Fees may be prepaid from the Available Amount and the Developer shall be considered to have paid such Financed Fees on the date of such prepayment. Financed Fees paid by the Developer or a merchant builder to the City or County prior to the availability of the Available Amount shall be reimbursed to the Developer from the Available Amount (as and when available), subject to any applicable provisions of the Internal Revenue Code required to maintain the tax- exempt status of any Bonds. Notwithstanding, to the extent the City or County, at the time of issuance of the Bonds, is unable to provide the certifications or information required by bond counsel to the Authority in order for the Financed Fees to be financed with the proceeds of tax-exempt Bonds, the Authority agrees to issue a series of taxable Bonds to finance such Financed Fees upon the request of the Developer. The City may request disbursement of any Financed Fees funded with the Available Amount in accordance with the provisions of an Authority Indenture by submitting a Disbursement Request to the Authority Trustee in substantially the form attached hereto as Exhibit D pertaining to a Financed Fees disbursement and the Authority Trustee shall make payment directly to the City Treasurer or the City's designee. 6. Indemnity and Insurance. 6.1. Indemnification. Developer agrees to indemnify, defend and hold the City and Authority, including elective and appointed boards, commissions, officers, agents, employees and consultants (each an "Indemnified Party" and collectively the "Indemnified Parties"), harmless from and against any and all claims, liabilities, losses, damages or injuries of any kind (collectively, "Claims") arising out of Developer's, or Developer's contractors', subcontractors', agents' or employees', acts, omissions, or operations under this Agreement, including, but not limited to, the construction by the Developer of any Acquisition Improvement, whether such acts, omissions, or operations are by Developer or any of Developer's contractors, subcontractors, agents or employees, except to the extent such Claims are caused by the sole negligence or willful misconduct of an Indemnified Party. This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorneys' fees, and related costs or expenses, and the reimbursement of City and Authority, its elected officials, officers, employees, and/or agents for all legal expenses and costs incurred by each of them. Developer shall defend the City as required by California Civil Code Section 2778, and with counsel reasonably acceptable to the City and Authority. Developer shall have no right to seek reimbursement from City or Authority for the costs of defense. The aforementioned indemnity shall apply regardless of whether or not City has approved plans and/or specifications for the Acquisition Improvements and regardless of whether any insurance, workers compensation, disability or other employee benefit acts or terms required under this Agreement are applicable to any Claims. The City does not and shall not waive any of its rights under this indemnity provision because of its acceptance of the bonds or insurance required under the provisions of this Agreement. Developer's obligations to indemnify the City and Authority shall survive the expiration or termination of this Agreement. Developer agrees to obtain executed indemnity agreements in favor of the City with provisions identical to those set forth here in this section from each and every construction contractor involved by, for, with or on behalf of Developer in the performance of this Agreement. In the event Developer fails to obtain such indemnity obligations from others as required here, Developer agrees to be fully responsible -16- according to the terms of this section. Failure of City to monitor compliance with these requirements imposes no additional obligations on City and will in no way act as a waiver of any rights hereunder. 6.2. Insurance. For an Acquisition Improvement, Developer shall maintain insurance in amount and substance as required by the City under any Development Documents applicable to such Acquisition Improvement. 7. Breach of Agreement; Opportunity to Cure; Remedies. 7.1. Notice of Breach and Default. The occurrence of any of the following constitutes a breach and default of this Agreement: (1) Developer refuses or fails to complete any Acquisition Improvement within the time set forth in the applicable Development Documents or abandons the construction of an Acquisition Improvement. (2) Developer assigns the Agreement to an unaffiliated entity without the prior written consent of City. (3) Developer is adjudged bankrupt or makes a general assignment for the benefit of creditors, or a receiver is appointed in the event of Developer's insolvency. (4) Developer or Developer's contractors, subcontractors, agents or employees, fail to comply with any terms or conditions of this Agreement to which the Developer or Developer's contractors, subcontractors, agents, or employees are subject. (5) Developer fails to perform any obligation under this Agreement. The City must serve written notice of breach and default upon Developer (and any surety that has provided bonds with respect to an Acquisition Improvement). Developer shall have 30 days to cure the breach and default described in the written notice of breach and default. (6) City fails to perform any obligation under this Agreement. Developer must serve written notice of breach and default upon the City. The City shall have 30 days to cure the breach and default described in the written notice of breach and default. 7.2. Breach of Agreement; Performance by City. If the City gives Developer notice under Section 7.1 and Developer fails to cure the breach and default described in the written notice prior to the expiration of the applicable cure period, a "Developer Event of Default" shall be deemed to have occurred. In the event of the occurrence and continuation of a Developer Event of Default, the City may exercise the remedies described in Section 7.1 and in Section 7.3 below, including the right of the City to proceed to complete the Acquisition Improvement by contract or other method the City considers advisable, at the sole expense of Developer, however City is under no financial or performance obligation to complete the Acquisition Improvement. Where funds are currently available from the collection of Facilities Special Taxes said funds shall be used first for completion of the Acquisition Improvements in the event that the City elects to complete the Acquisition Improvement. In the event of the occurrence and continuance of a Developer Event of Default, (i) Developer, immediately upon demand, shall pay the costs and charges related to the Acquisition Improvement and any subsequent repairs, provided, upon such payment, Developer shall be entitled to payment for the Acquisition Improvement from the Available Amount, (ii) City, without liability for doing so, may take possession of and utilize in -17- completing the Acquisition Improvement and repairs, if any, such materials and other property belonging to Developer as may be on or about the Property and necessary for completion of the Acquisition Improvement, and (iii) the City may draw upon any surety bonds required by the applicable Development Documents. If the Developer gives the City notice under Section 7.1(6) and City fails to cure the breach and default described in the written notice prior to the expiration of the applicable cure period, a "City Event of Default" shall be deemed to have occurred. 7.3. Remedies. It is acknowledged by the parties that the City would not have entered into this Agreement if it were to be liable in damages under or with respect to this Agreement or the application thereof, other than for the payment to the Developer of any (i) moneys owing to the Developer hereunder, or (ii) moneys paid by the Developer pursuant to the provisions hereof which are misappropriated or improperly obtained, withheld or applied by the City. In general, upon the occurrence and continuation of a Developer Event of Default or a City Event of Default, the applicable party may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that the City shall not be liable in damages to the Developer or to any assignee or transferee of the Developer other than for the payments to the Developer specified in the preceding paragraph. Subject to the foregoing, the Developer covenants not to sue for or claim any damages for any alleged breach of, or dispute which arises out of, this Agreement. 8. Miscellaneous. 8.1. Compliance with Laws. Developer shall fully comply with all federal, state, and local laws, ordinances, and regulations in the performance of this Agreement. Developer shall, at its own cost and expense, obtain all necessary permits and licenses for each Acquisition Improvement, give all necessary notices, pay all fees and taxes required by law and make any and all deposits legally required by those public utilities that will serve the development on the Project. Copies and/or proof of payment of said permits, licenses, notices, fee and tax payments and deposits shall be furnished to the Director upon request. 8.2. Cooperation. The City, the Authority and the Developer agree to cooperate with respect to the completion of the financing of the Improvements by the Authority through the levy of the Facilities Special Taxes and issuance of Bonds. The City, the Authority, and the Developer agree to meet in good faith to resolve any differences on future matters which are not specifically covered by this Agreement. 8.3. General Standard of Reasonableness. Any provision of this Agreement which requires the consent, approval or acceptance of either party hereto or any of their respective employees, officers or agents shall be deemed to require that the consent, approval or acceptance not be unreasonably withheld or delayed, unless the provision expressly incorporates a different standard. The foregoing provision shall not apply to provisions in the Agreement which provide for decisions to be in the sole discretion of the party making the decision. 8.4. Notices. Formal written notices, demands, correspondence and communications between City and Developer shall be sufficiently given if: (a) personally delivered; or (b) dispatched by next day delivery by a reputable carrier such as Federal Express to the offices of City and Developer indicated below, provided that a receipt for delivery is -18- provided; or (c) if dispatched by first class mail, postage prepaid, to the offices of City and Developer indicated below. Such written notices, demands, correspondence and communications may be sent in the same manner to such persons and addresses as either party may from time- to-time designate by next day delivery or by mail as provided in this section. City: City of Santa Clarita Attn: Director of Administrative Services 23920 Valencia Boulevard Santa Clarita, CA 91355 Email: cmagana©santa-clarita.com Authority: California Municipal Finance Authority 2111 Palomar Airport Road, Suite 320 Carlsbad, CA 92011 Attn: Edward J. Becker Administrator: Francisco & Associates, Inc. Attn: Ed Espinoza 5927 Balfour Court, Suite 109 Carlsbad, CA 92008 Developer: BLC Tesoro LLC 100 Bayview Circle, Suite 240 Newport Beach, CA 92660 Attn: John Patterson With a copy to: O'Neil LLP Attn: John P. Yeager 19900 MacArthur Blvd., Suite 1050 Irvine, CA 92612 Norton Rose Fulbright LLP Attn: Maryann Goodkind 555 South Flower Street, 41st Floor Los Angeles, CA 90071 Facsimile No. (213) 892-9328 Notices delivered by deposit in the United States mail as provided above shall be deemed to have been served two (2) business days after the date of deposit if addressed to an address within the State of California, and three (3) business days if addressed to an address within the United States but outside the State of California. 8.5. Attorney Fees. Should any legal action or arbitration be brought by either party because of breach of this Agreement or to enforce any provision of this Agreement, the prevailing party shall be entitled to all costs of suit; reasonable attorney fees, arbitration costs and such other costs as may be determined by the court or arbitrator. 8.6. Entire Agreement. The terms and conditions of this Agreement constitute the entire agreement among Authority, City, and Developer with respect to the matters addressed in this Agreement. This Agreement may not be altered, amended or modified without the written consent of all parties hereto. -19- 8.7. Conflict with Other Agreements. Nothing contained herein shall be construed as releasing the Developer from any condition of development or requirement imposed by any other agreement between the City and the Developer or any Member of Developer. 8.8. Several Obligations. The Developer, by executing this Agreement in the space provided below, agrees that it shall be severally responsible for all obligations of the Developer under Sections 5.4 and 6.1 hereof to the extent of the percentages set forth adjacent to their respective signatures. 8.9. Assignment. The obligations and rights of the parties to this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, but, those rights and obligations shall not be assignable, transferable or delegable, without the written consent of the other parties hereto, such consent to not be unreasonably withheld, and any attempted assignment, transfer or delegation thereof which is not made pursuant to the terms hereof shall be void. Any assignment shall be contingent on Developer providing a written assignment and assumption agreement to City and Authority immediately upon such assignment. 8.10. Time is of the Essence. Time is of the essence of this Agreement and of each and every term and condition hereof. 8.11. Severability. If any provision of this Agreement is held, to any extent, invalid, the remainder of this Agreement shall not be affected, except as necessarily required by the invalid provision, and shall remain in full force and effect. 8.12. Waiver or Modification. Any waiver or modification of the provisions of this Agreement must be in writing and signed by the authorized representative(s) of each party. Failure by a parity to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of the party's right to insist upon and demand strict compliance by the other party with the terms of this Agreement. 8.13. Relationship of the Parties. Neither Developer nor the Authority nor either's contractors, subcontractors, agents, officers, or employees are agents, partners, joint ventures or employees of City and the Developer's relationship to the City, if any, arising herefrom is strictly that of an independent contractor. Developer's contractors and subcontractors are exclusively and solely under the control and dominion of Developer. Further, there are no intended third-party beneficiaries of any right or obligation assumed by the parties. 8.14. Binding upon Heirs, Successors and Assigns. The terms, covenants and conditions of this Agreement shall be binding upon all heirs, successors and permitted assigns of the parties hereto; provided, however, that this Agreement shall not be binding upon a purchaser or transferee of any portion of the Property unless this Agreement has been assigned and assumed pursuant to Section 8.9, in which event this Agreement shall remain binding upon purchaser or transferee. 8.15. Governing Law; Venue. This Agreement shall be construed and enforced in accordance with the laws of the State of California, without reference to choice of law provisions. Any legal actions under this Agreement shall be brought only in the Superior Court of the County of Los Angeles, State of California. -20- 8.16. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original. 8.17. Interpretation. This Agreement shall be construed according to its fair meaning, and not strictly for or against any party. No presumptions or rules of interpretation based upon the identity of the party preparing or drafting the Agreement, or any part thereof, shall apply to the interpretation of this Agreement. 8.18. Headings. Section headings in this Agreement are for convenience only and are not intended to be used in interpreting or construing the terms, covenants or conditions contained in this Agreement. 8.19. Authority. Each party executing this Agreement on behalf of a party represents and warrants that such person is duly and validly authorized to do so on behalf of the entity it purports to bind and if such party is a partnership, corporation or trustee, that such partnership, corporation or trustee has full right and authority to enter into this Agreement and perform all of its obligations hereunder. 8.20. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine 8.21. Sole Agreement. This Agreement, including all exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof. [Signature Page Follows] -21- IN WITNESS WHEREOF, City, Authority, and Developer have executed this Agreement as of the Effective Date. "CITY" CITY OF SANTA CLARITA, a political subdivision of the State of California By: City Manager ATTEST: City Clerk "DEVELOPER" BLC TESORO LLC, a Delaware limited liability company By: Its: By: Its: "AUTHORITY" CALIFORNIA MUNICIPAL FINANCE AUTHORITY, a joint powers authority By: Name: Title: Authorized Signatory -22- EXHIBIT A TO ACQUISITION FUNDING AGREEMENT MAP OF THE CFD BOUNDARY . ii n A-1 EXHIBIT B ACQUISITION FUNDING AGREEMENT DESCRIPTION OF ACQUISITION IMPROVEMENTS AND FINANCED FEES Unless specifically excluded in the Agreement, the list of eligible facilities and estimated costs consist of the following and are depicted in the maps attached hereto: I. Acquisition Improvements Extension of Avenida Rancho Tesoro ("A" Street) (subject to annexation) (est. cost $4,500,000) II. Financed Fees The B&T Fees shall include the Bridge and Thoroughfare development impact fees imposed and collected through the Bridge and Major Thoroughfare Fee District, as it may be amended or superseded, net of applicable credits. Estimated B&T Fees-455 SFD Units x$26,800 = $12,194,000 365 Senior Units x$10,720= $3,912,800 Total Estimated B&T Fees=$16,106,800 less the credit for the Copper Hill Bridge($4,884,5001 estimated net reimbursement of B&T Fees=$11,222,300 III. Administrative and Incidental Expenses In addition to the above facilities, other incidental expenses that may be financed by the CFD include but are not limited to the following: the cost of planning, permitting, approving and designing the authorized facilities (including the cost of environmental evaluation, orthophotography, environmental remediation/mitigation); land acquisition and easement payments for authorized facilities; project management, construction staking; engineering studies and preparation engineer's reports (if required); utility relocation and demolition costs incidental to the construction of the public facilities; and any other expenses incidental to the construction, completion, and inspection of the facilities and related expenses associated with any of the foregoing. In addition, the CFD shall fund the direct and indirect expenses incurred by the City in carrying out its duties with respect to the CFD including reimbursement of costs related to the formation of the CFD as well as reimbursement of any costs advanced by the City. The description of each Acquisition Improvement is general in nature. The scope and final description of each Acquisition Improvement shall be based upon the plans for it approved by the City or County, as necessary to serve the development within the CFD. B-1 EXHIBIT C ACQUISITION FUNDING AGREEMENT ACTUAL COST CERTIFICATE Pursuant to the Funding Acquisition Agreement, dated as of , 2022 (the "Acquisition Agreement"), by and between BLC Tesoro LLC, a Delaware limited liability company (the "Developer"), the California Municipal Finance Authority ("Authority"), and the City of Santa Clarita, California ("City"), the Developer hereby requests (a) payment of the Acquisition Price of the Acquisition Improvements or Eligible Portion thereof, described in Attachment 1 hereto. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Acquisition Agreement. In connection with this Actual Cost Certificate the undersigned hereby represents and warrants to the City as follows: 1. The undersigned is an authorized representative of the Developer, qualified to execute this certificate on behalf of the Developer and knowledgeable as to the matters set forth herein. 2. The Developer has submitted or submits herewith to the Director and the Administrator Record Drawings or in the case of an Eligible Portion, commits to submit Record Drawings at the completion of construction and acceptance by the City of the Acquisition Improvements, for each of the Acquisition Improvements described in Attachment 1, and such drawings, as applicable, are true, correct and complete representations of the Acquisition Improvements listed in Attachment 1. 3. Each of the Acquisition Improvements or Eligible Portion thereof described in Attachment 1 has been constructed in accordance with the approved improvement plans (the "Plans"), and in accordance with all applicable City standards and the requirements of the Acquisition Agreement, and the Plans, and none of the Acquisition Improvements described in Attachment 1 or Eligible Portion thereof has been the subject of any prior Payment Request. 4. The true and correct Actual Cost of each of the Acquisition Improvements and/or Eligible Portion is set forth in Attachment 1 hereto. 5. The Developer has submitted or submits herewith to the Director and the Administrator a copy of each construction contract for each of the Acquisition Improvements described in Attachment 1, a copy of the bid notice for each such contract, a copy of each change order applicable to each such contract, all change orders having been approved by the Director, or his designee, and construction quantities certified by the engineer of record. 6. The Developer has submitted or submits herewith to the Director and the Administrator invoices, receipts, worksheets and other evidence of costs for each of the Acquisition Improvements described in Attachment 1 or Eligible Portion thereof, which are in sufficient detail to allow the Director and Administrator to verify the Actual Cost of such Acquisition Improvements or Eligible Portion thereof. 7. The Developer has submitted or submits herewith to the Director and the Administrator evidence that each of the invoices, receipts, worksheets and other evidence of C-1 costs referred to in the preceding paragraph, has been paid in full, which evidence is in the form of copies of cancelled checks or such other form as the Administrator has approved in writing. 8. There has not been filed with or served upon the Developer notice of any lien, right to lien or attachment upon, or claim affecting the right to receive, the payment of the Acquisition Price for each of the Acquisition Improvement described in Attachment 1 or Eligible Portion thereof which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen's or mechanics' liens accruing by operation of law. 9. The Developer has submitted or submits herewith to the Director and the Administrator copies of unconditional or conditional (providing for release upon payment) lien releases from the General Contractor for all work with respect to each Eligible Portion of the Acquisition Improvements described in Attachment 1. In the case of a Payment Request for a completed Acquisition Improvement including the release of prior held retention for Eligible Portions thereof, the Developer submits herewith to the Director and the Administrator copies of unconditional or conditional (providing for release upon payment) lien releases from all contractors, subcontractors and materialmen in addition to a recorded Notice of Completion for said Acquisition Improvement, 10. The representations and warranties of the Developer set forth in the Acquisition Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of the date hereof. 11. The Developer represents that it has satisfied the conditions specified in the Acquisition Agreement for the payment of the Acquisition Price. I hereby declare under penalty of perjury that the above representations and warranties are true and correct. a By: Name: Title: C-2 ATTACHMENT 1 Acquisition Improvement (or Actual Eligible Portion thereof) Cost [Insert detailed description tion of p Acquisition Improvement to be acquired] Total C-3 EXHIBIT D ACQUISITION FUNDING AGREEMENT DISBURSEMENT REQUEST FORM To: Attention: Fax: Phone: E-mail: Re: CMFA CFD No. ( ) The undersigned, a duly authorized officer of the CITY OF SANTA CLARITA (the "City") hereby requests a withdrawal from the CFD Acquisition and Project Fund for Improvement Area No. _, as follows: Request Date: [Insert Date of Request] Name of Developer: Withdrawal Amount: [Insert Acquisition Price/Installment Payment/Amount for Financed Fees] Acquisition Improvements and/or Financed Fees [Insert Description of Acquisition Improvement(s)/Eligible Portion(s)/Financed Fees] Payment Instructions: [Insert Wire Instructions or Payment Address for Developer or Developer's designee as provided by the Developer] [In the event of a direct payment of Financed Fees to the City, insert City Wire Instructions] The undersigned hereby certifies as follows: The Withdrawal is being made in accordance with a permitted use of the monies pursuant to the Acquisition Agreement and the Withdrawal is not being made for the purpose of reinvestment. None of the items for which payment is requested have been reimbursed previously from this or any other Acquisition and Project Fund. If the Withdrawal Amount is greater than the funds held in the Acquisition and Project Fund, the Authority Trustee is authorized to pay the amount of such funds and to pay remaining amount(s) as funds are subsequently deposited in the Acquisition and Project Fund, should that occur. [For Financed Fees to be reimbursed to the Developer that are financed with tax-exempt Bonds: The Financed Fees referenced above have been spent by the City or will be spent within D-1 three years of the issuance of the Bonds for a permitted use of the listed fees for public capital improvements as of the date hereof.] [For Financed Fees funded by tax-exempt Bonds: The amounts to be disbursed hereunder have been or will be spent by the City for public capital improvements as of the date hereof or within three years hereafter.] [For Acquisition Improvements: The amounts being disbursed pursuant to this request are being used to finance or refinance certain public infrastructure and facilities (the "Acquisition Improvements"). The City will own, and for the entire useful life of such Acquisition Improvements reasonably expects to own, all such Acquisition Improvements, except those facilities identified in Government Code Section 53313.5(e). To the extent any of such Acquisition Improvements are sold to an entity that is not a state or local government agency, the City will seek the advice and approval of bond counsel to the Authority prior to any such sale. The City will not allow any of such Acquisition Improvements to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public) except as permitted pursuant to Government Code Section 53313.5(e). All such Acquisition Improvements will be used in the performance of essential governmental functions of the City or another state or local government agency. The average expected useful life of such Acquisition Improvements is at least 20 years. The representations and covenants contained in this paragraph are intended to support the conclusion that the interest paid on the Bonds issued to finance the Acquisition Improvements is excluded from gross income for federal income tax purpose under Section 1.03 of the Internal Revenue Code of 1986 (the "Code").] CITY OF SANTA CLARITA By: Title: D-2 EXHIBIT E ACQUISITION FUNDING AGREE N E NT BIDDING, CONTRACTING AND CONSTRUCTION REQUIREMENTS FOR ACQUISITION IMPR•VENIENTS With respect to construction contracts awarded after approval of the Agreement, the Developer shall solicit three (3) bids for each contract for Acquisition Improvements for which an Actual Cost Certificate is submitted. No contractor or subcontractor may be listed on a bid proposal for the public Acquisition Improvements unless registered with the Department of Industrial Relations pursuant to Labor Code Section 1725.5. No contractor or subcontractor may work on the public Acquisition Improvements unless registered with the Department of Industrial Relations pursuant to Labor Code Section 1725.5. Owner shall be responsible for ensuring that these contractor registration requirements are adhered to since construction of the public Acquisition Improvements is subject to compliance monitoring and enforcement by the Department of Industrial Relations. An authorized representative of the City and the Administrator shall be provided a copy of the tabulation of bid results upon request. Contract(s) for the construction of the public Acquisition Improvements shall be awarded to the qualified contractor(s) submitting the lowest responsible bid(s), as determined by the Developer. Developer shall not award a contract to a contractor that is in conflict of interest with the Developer or the City pursuant to Government Code Section 1090. The contractor to whom a contract is awarded shall be required to pay not less than the prevailing rates of wages pursuant to Labor Code Sections 1770, 1773 and 1773.1. A current copy of applicable wage rates shall be on file in the Office of the Clerk of the City, as required by Labor Code Section 1773.2.