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HomeMy WebLinkAboutItem No. 11 - JCFA EVMWD Century Homes CFD 2006-6City Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 22-315 Agenda Date: 8/9/2022 Status: Approval FinalVersion: 1 File Type: Council Consent Calendar In Control: City Council / Successor Agency Agenda Number: 11) Approve Joint Community Facilities Agreement with the Elsinore Valley Municipal Water District and Century Homes, LLC relating to Community Facilities District No. 2006-6 of the City of Lake Elsinore (Tessera) and a Custody Agreement with Wilmington Trust, National Association relating to Developer Security Deposits Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING EXECUTION AND DELIVERY OF A JOINT COMMUNITY FACILITIES AGREEMENT WITH ELSINORE VALLEY MUNICIPAL WATER DISTRICT RELATING TO CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA) AND CUSTODY AGREEMENT WITH WILMINGTON TRUST, NATIONAL ASSOCIATION RELATING TO DEVELOPER SECURITY DEPOSITS. Page 1 City of Lake Elsinore Printed on 8/4/2022 Page 1 of 2 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Jason Simpson, City Manager Date: August 09, 2022 Subject: Approve Joint Community Facilities Agreement with the Elsinore Valley Municipal Water District and Century Homes, LLC relating to Community Facilities District No. 2006-6 of the City of Lake Elsinore (Tessera) and a Custody Agreement with Wilmington Trust, National Association relating to Developer Security Deposits Recommendation 1. adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING EXECUTION AND DELIVERY OF A JOINT COMMUNITY FACILITIES AGREEMENT WITH ELSINORE VALLEY MUNICIPAL WATER DISTRICT RELATING TO CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006- 6 (TESSERA) AND CUSTODY AGREEMENT WITH WILMINGTON TRUST, NATIONAL ASSOCIATION RELATING TO DEVELOPER SECURITY DEPOSITS Background The City of Lake Elsinore (the “City”) formed Community Facilities District No. 2006-6 of the City of Lake Elsinore (Tessera) (the “District”) in 2006 according to the Mello-Roos Community Facilities District Act of 1982 (the “Mello-Roos Act”) for purposes of financing public improvements benefitting the development within the District. Century Communities, LLC, a Delaware limited liability company (the “Developer”), is currently the Developer within the District. Under Section 53316.2 of the Mello-Roos Act, the City may enter into a Joint Community Facilities Agreement (“JCFA”) with another public entity, allowing the District to finance specific public improvements of such entity in addition to facilities of the City, which will benefit the residents within the District. The Developer has requested that the City and Elsinore Valley Municipal Water District enter a JCFA with the Developer, pursuant to which the District may finance Elsinore Valley Municipal Water District facilities. Discussion In connection with the proposed issuance of special tax bonds by the District, the Developer is required to provide a cash deposit to pay debt service on such bonds in the event the Developer is delinquent in paying special taxes on the property in the District that it owns. The cash deposits (or letters of credit, in the event the Developer opts to provide a letter of credit instead of cash) are held by Wilmington Trust, National Association, as Trustee (the “Trustee”). Based on JCFA EVMWD & Century Homes, LLC CFD 2006-6 August 9, 2022 Page 2 of 2 regulations applicable to the Trustee, the Trustee now requires that the City enter into the Custody Agreement, in the form presented, to hold such funds. The Custody Agreement has been drafted so that the Trustee may hold such cash deposits/letters of credit in connection with all future special tax bonds, so there will not need to be a new custody agreement signed for each future special tax bond issuance. Approval of the attached resolution authorizes certain officers of the City to execute the JCFA and the Custody Agreement presented at this meeting. Fiscal Impact There is no fiscal impact concerning the JCFA. The Trustee charges an administrative fee under the Custody Agreement, which is to be borne by the applicable Developer that is required to provide the cash deposit. Exhibits A – Resolution B – Joint Community Facilities Agreement C – Custody Agreement 4881-7975-1466v1/022042-0034 RESOLUTION NO. 2022-___ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING EXECUTION AND DELIVERY OF A JOINT COMMUNITY FACILITIES AGREEMENT WITH ELSINORE VALLEY MUNICIPAL WATER DISTRICT RELATING TO CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-6 (TESSERA) AND CUSTODY AGREEMENT WITH WILMINGTON TRUST, NATIONAL ASSOCIATION RELATING TO DEVELOPER SECURITY DEPOSITS Whereas, on August 8, 2006, the City Council (the “City Council”) of the City of Lake Elsinore (the “City”) adopted a resolution (the “Resolution of Formation”) authorizing the formation of the City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) (“Community Facilities District No. 2006-6” or the “District”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”); and Whereas, pursuant to Section 53316.2 of the Act, a community facilities district is authorized under the Act to finance facilities to be owned or operated by an entity other than the agency that created the community facilities district pursuant to a joint community facilitie s agreement; and Whereas, the City desires to enter into a Joint Community Facilities Agreement (the JCFA”) with the Elsinore Valley Municipal Water District (the “Water District”) and Century Communities, LLC, a Delaware limited liability company relating to certain facilities proposed to be financed by the District and to be owned and operated by Water District; and Whereas, in connection with the issuance of special tax bonds from time to time by community facilities districts formed by the City, including the District, the developers therein may be required to provide cash deposits to be applied to pay debt service on the special tax bonds of such community facilities districts in the event the developers are delinquent in the payment of special taxes; and Whereas, the City desires to enter into a custody agreement (the “Custody Agreement”) with Wilmington Trust, National Association, as trustee (the “Trustee”) for the special tax bonds issued by community facilities districts formed by the City, in order for the Trustee to hold such developer cash deposits; and NOW, THEREFORE, THE CITY COUNCIL DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOW: Section 1. Each of the above recitals is true and correct. Section 2. The form of the JCFA presented at this meeting is hereby approved and each of the Mayor, the City Manager, the Assistant City Manager, or their written designees (each, an “Authorized Officer” and collectively, the “Authorized Officers”) is hereby authorized and directed to execute the JCFA in the form hereby approved, with such additions therein and changes thereto as the officer or officers executing the same deem necessary, with such approval to be conclusively evidenced by the execution and delivery of the JCFA. The City Council hereby finds and determines that the JCFA will be beneficial to the residents of the 2 4881-7975-1466v1/022042-0034 territories served by the Water District and included within the jurisdictional boundaries of the District. Section 3. The form of the Custody Agreement presented at this meeting is hereby approved and each of the Authorized Officers is hereby authorized and directed to execute the Custody Agreement in the form hereby approved, with such additions therein and changes thereto as the officer or officers executing the same deem necessary, with such approval to be conclusively evidenced by the execution and delivery of the Custody Agreement. Section 4. This Resolution shall be effective upon its adoption. Passed and Adopted at a regular meeting of the City Council of the City of Lake Elsinore, California, this 9th day of August 2022. _____________________________ Timothy J. Sheridan, Mayor Attest: _____________________________ Candice Alvarez, MMC City Clerk 3 4881-7975-1466v1/022042-0034 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE) ss. CITY OF LAKE ELSINORE) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2022-______ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of August 9, 2022, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: ___________________________ Candice Alvarez, MMC City Clerk 4837-8786-6322v5/022042-0034 JOINT COMMUNITY FACILITIES AGREEMENT BY AND AMONG CITY OF LAKE ELSINORE AND ELSINORE VALLEY MUNICIPAL WATER DISTRICT AND CENTURY COMMUNITIES OF CALIFORNIA, LLC (City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) THIS JOINT COMMUNITY FACILITIES AGREEMENT (“Agreement”) is dated August 9, 2022, by and among the ELSINORE VALLEY MUNICIPAL WATER DISTRICT, County of Riverside, State of California, a municipal water district (“EVMWD”) organized and operating pursuant to the Municipal Water District Law of 1911 as set forth in the California Water Code, the CITY OF LAKE ELSINORE, a municipal corporation (“City”), and CENTURY COMMUNITIES OF CALIFORNIA, LLC, a Delaware limited liability company (“Property Owner”). R E C I T A L S: A. Property Owner is the owner of certain real property located within the boundaries of the EVMWD and the City and described in Exhibit “A” hereto (the “Property”). B. Property Owner intends to develop the Property for residential purposes and has obtained or intends to obtain the necessary development approvals to construct approximately 90 dwelling units on the Property, as such development may be modified from time to time (the “Project”). C. The Project will require the payment, pursuant to the rules and regulations of EVMWD, as amended from time to time (“EVMWD Rules and Regulations”), of certain EVMWD Charges (defined below). The EVMWD Charges may be paid directly to EVMWD, or paid and then reimbursed to the paying party, when Bond Proceeds (defined below) are available to fund an equal amount of such EVMWD Charges so paid. D. The Project will also benefit, in whole or in part, from the construction of certain Acquisition Facilities (defined below and described on Exhibit “B” attached hereto). EVMWD and the Property Owner agree that any Acquisition Facilities to be constructed by Property Owner shall be eligible for acquisition by EVMWD and the costs thereof shall be eligible for reimbursement out of Bond Proceeds pursuant to this Agreement. E. In conjunction with the recording of the final subdivision map(s) for the Project, the issuance of building permits for the construction of homes within the Project and/or receipt of water meters for such homes, it may be necessary for Property Owner, or its successors or assigns, to advance EVMWD Charges to EVMWD (the “Advances”) before any Bond Proceeds are available to pay for EVMWD Charges. In such case, Property Owner shall be entitled to (i) reimbursement of such Advances and (ii) credit for payments made to the EVMWD from 2 4837-8786-6322v5/022042-0034 Bond Proceeds for EVMWD Charges which would otherwise be due to the EVMWD in conjunction with the Project, all as further described herein. F. The Project will also require certain public improvements to be owned, operated or maintained by the City (the “City Improvements”) which will also be eligible for financing through the CFD (defined below). G. Pursuant to the request of the Property Owner, the City Council of the City has formed the CFD pursuant to the Act (defined below) to provide financing of the EVMWD Charges, Acquisition Facilities and City Improvements. H. The City and EVMWD are authorized by Section 53313.5 of the Act to pay for or finance, by means of the CFD, the EVMWD Charges, Acquisition Facilities and City Improvements. This Agreement constitutes a “joint community facilities agreement” (“JCFA”) within the meaning of Section 53316.2 of the Act by and among EVMWD, the City and Property Owner, pursuant to which the CFD is authorized to finance the City Improvements and EVMWD Charges and to finance the construction and acquisition of Acquisition Facilities. As provided by Section 53316.6 of the Act, responsibility for providing and operating the Acquisition Facilities is delegated to EVMWD to the extent set forth herein and responsibility for constructing, providing and operating the City Improvements is delegated to the City. I. The provision of the City Improvements, Acquisition Facilities and EVMWD Charges is necessitated by the Project, and the parties hereto find and determine that the residents of the City and EVMWD will be benefited by the payment of EVMWD Charges and construction and acquisition of the Acquisition Facilities and the City Improvements and that this Agreement is beneficial to the interests of such residents. ARTICLE I GENERAL PROVISIONS Section 1.1 Recitals. The above recitals are true and correct and are hereby incorporated by this reference. Section 1.2 Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. (a) “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, commencing with California Government Code Section 53311, et seq. (b) “Acquisition Facility or Facilities” means those sewer and water facilities listed on Exhibit “B” hereto, which are eligible to be constructed by the Property Owner, acquired by EVMWD and paid for with Bond Proceeds. (c) “Acquisition Price” means the amount to be paid out of Bond Proceeds for an Acquisition Facility. (d) “Actual Costs” with respect to an Acquisition Facility includes: (i) the actual hard construction costs including labor, materials and equipment costs, (ii) the costs incurred in design, engineering and preparation of plans, (iii) the fees paid to consultants and government agencies in connection with and for obtaining permits, licenses or other required 3 4837-8786-6322v5/022042-0034 governmental approvals, (iv) a construction management fee of 5% of the costs described in clause (i) above, (v) professional costs such as engineering, legal, accounting, inspection construction staking, materials testing and similar professional services, (vi) costs of payment, performance of maintenance bonds, and insurance costs (including the costs of any title insurance) and (vii) the value of any real property or interests therein that (1) are required for the construction of the Acquisition Facility such as temporary construction easements, haul roads, etc. and (2) are required to be conveyed with such Acquisition Facility in an amount equal to the fair market value of such real property or interests therein. (e) “Advances” means an amount paid by Property Owner for EVMWD Charges prior to the issuance and sale of Bonds and which are eligible for reimbursement upon availability of Bond Proceeds to fund an equal amount of such Advances. (f) “Agreement” means this Joint Communities Facilities Agreement. (g) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds generated by the sale of the Bonds. (h) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of the Bonds. (i) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf of the CFD, as authorized by the qualified electors within the CFD. (j) “CFD” means City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera). (k) “Engineer” means the engineering firm or in-house personnel used by EVMWD to determine the value of an Acquisition Facility to be acquired with Bond Proceeds. (l) “EVMWD Charges” means water connection fees, sewer connection fees, annexation fees and all components thereof of the EVMWD imposed upon the Project to pay for the provision of water and sewer services to and the construction of EVMWD water and sewer facilities required to serve the Project. (m) “EVMWD Facilities Fund” means the fund, account or sub-account of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited, in accordance with the Bond Resolution and Funding Agreement to finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges. (n) “EVMWD Representative” means the EVMWD Chief Engineer or his Designee. (o) “Facilities” means the City Improvements, Acquisition Facilities and EVMWD Charges. (p) “Field Engineer” shall have the meaning ascribed to the term in Section 3. 4 4837-8786-6322v5/022042-0034 (q) “Funding Agreement” shall mean the Acquisition, Construction and Funding Agreement between City and Property Owner relating to the CFD, as it may be amended from time to time. (r) “Party” or “Parties” shall mean any one or all of the parties to this Agreement, including the CFD. (s) “Plans and Specifications” shall mean the plans and specifications for the design and construction of an Acquisition Facility as approved by EVMWD, which approval shall not be unreasonably withheld. (t) “Rate and Method” means the Rate and Method of Apportionment of the Special Tax authorizing the levy and collection of special taxes pursuant to proceedings undertaken for the formation of the CFD pursuant to the Act. (u) “State” means the State of California. (v) “Special Taxes” means the special taxes authorized to be levied and collected pursuant to the Rate and Method. (w) “Substantially Complete,” “Substantially Completed” or “Substantial Completion” with respect to an Acquisition Facility means that such Acquisition Facility is substantially complete in accordance with its Plans and Specifications and is available for use by the public for its intended purpose, notwithstanding any final “punch list” items still required to be completed, unless such items are required for the safe operation of such Acquisition Facility, and shall be based upon approval of EVMWD’s inspectors, which shall not be unreasonably withheld. ARTICLE II ISSUANCE OF BONDS Section 2.1 Issuance and Sale of Bonds. The City Council of the City, acting as the legislative body of the CFD, may, in its sole discretion, in accordance with its adopted policies and the Funding Agreement adopt the Bond Resolution and issue the Bonds to finance the Facilities. Section 2.2 Bond Proceeds. Upon the issuance and sale of each series of Bonds, and receipt of the Bond Proceeds, the City shall determine the amount of the Bond Proceeds allocable to finance construction and acquisition of Acquisition Facilities and to pay EVMWD Charges in accordance with the Funding Agreement, and shall deposit such amount in the EVMWD Facilities Fund. In conjunction with the recording of the final subdivision maps for the Property, the issuance of building permits for the construction of homes within the Property and/or receipt of water meters for such homes, it may be necessary for Property Owner, or its successors of assigns, to make Advances before Bonds are issued. Upon the issuance and sale of the Bonds, Property Owner may execute and submit a payment request to the CFD requesting disbursement of an amount equal to all Advances from the EVMWD Facilities Fund. The Property Owner shall only be entitled to receive reimbursement of the Advances if Bond Proceeds equal to the amount of such Advances to be reimbursed are deposited in the EVMWD Facilities Fund. 5 4837-8786-6322v5/022042-0034 From time to time following the issuance and sale of the Bonds, Property Owner shall authorize EVMWD in writing to request a disbursement from the EVMWD Facilities Fund to fund EVMWD Charges. Upon such notice and EVMWD’s receipt of such disbursement, Property Owner shall be deemed to have satisfied the applicable EVMWD Charges with respect to the number of dwelling units or lots for which the EVMWD Charges would otherwise have been required in an amount equal to such disbursement. EVMWD agrees that it will request a disbursement of Bond Proceeds only for costs related to the EVMWD facilities that are eligible for financing under the Act. With respect to the Acquisition Facilities, EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all costs included in its request. With respect to all EVMWD Charges, EVMWD agrees that prior to requesting payment from the CFD it shall review and approve all costs included in its request. EVMWD will submit a request for disbursement of Bond Proceeds along with adequate supporting documentation to the District which shall be in the form attached hereto as Exhibit “C.” EVMWD agrees that in processing the above disbursements with respect to EVMWD facilities, it will comply with all legal requirements for the expenditure of Bond Proceeds under the Act and the Internal Revenue Code of 1986 and any amendments thereto. As a condition to receiving any Bond Proceeds, EVMWD agrees that it shall provide to the CFD, a certificate to the effect that EVMWD confirms the representations contained in Section 2.2 hereof, EVMWD agrees to comply with the provisions of the tax certificate delivered by the CFD in connection with the Bonds, and such other matters as the CFD may reasonably request upon which the CFD and its bond counsel may rely in connection with the issuance of such Bonds and their conclusion that interest on such Bonds is not included in gross income for federal income tax purposes. Section 2.3 Responsibility for EVMWD Charges and Acquisition Facilities. (a) The Parties hereto acknowledge and agree that the final responsibility for the payment of the EVMWD Charges and the design, construction and dedication of Acquisition Facilities to be constructed by Property Owner lies with the Property Owner. (b) If the amounts derived from Bond Proceeds deposited in the EVMWD Facilities Fund, including investment earnings thereon, if any, are not sufficient to fund the total cost of the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner, the parties hereto agree that all responsibility and liability for the amount of such shortfall shall be and remain with the Property Owner and shall not lie with the City, CFD or EVMWD. (c) In addition to financing the EVMWD Charges described above, the Parties acknowledge that EVMWD may require the Property Owner, pursuant to the EVMWD Rules and Regulations, to design, construct and dedicate to EVMWD Acquisition Facilities as a condition to providing water and sewer service to the Property. The Parties also agree and acknowledge that all responsibility and obligation for the design, construction and dedication of such Acquisition Facilities to EVMWD, in accordance with all applicable statutes and the EVMWD Rules and Regulations, shall be and remain the responsibility of the Property Owner. (d) EVMWD agrees to utilize or apply funds provided to it by the CFD, in accordance with the Act and other applicable law, and as set forth herein, for the EVMWD Charges and Acquisition Facilities to be constructed by Property Owner. 6 4837-8786-6322v5/022042-0034 (e) Property Owner shall indemnify, defend, and hold harmless, the City, CFD, and EVMWD, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of or resulting from the design, engineering, construction, and transfer of ownership of the Acquisition Facilities constructed by Property Owner. (f) EVMWD shall indemnify, defend, and hold harmless, the City, CFD and Property Owner, their respective officers, employees and agents, and each and every one of them from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of or resulting from the design, engineering, construction, and acquisition of the Acquisition Facilities constructed by EVMWD and the facilities constructed with the proceeds of the EVMWD Charges. Section 2.4 Responsibility for Debt Service or Special Taxes. EVMWD shall have no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the Bond Proceeds available to finance the construction and acquisition of the Acquisition Facilities and to pay EVMWD Charges, the payment of the principal and interest on the Bonds, or for the levy of the Special Taxes to provide for the payment of principal and interest thereon. The CFD shall have the sole authority and responsibility for all such matters. The Parties hereto specifically agree that the liabilities of the CFD, including liabilities, if any, of the CFD pursuant to the documents providing for the issuance of Bonds, including the Bond Resolution, shall not be or become liabilities of EVMWD. Section 2.5 Administration of the CFD. The City shall have the power and duty to provide for the administration of the CFD once it is formed, subject to the terms hereof and the Funding Agreement, including employing and compensating all consultants and providing for the various other administration duties set forth in this Agreement. It is understood and agreed by Parties hereto that EVMWD will not be considered a participant in the proceedings relative to formation of the CFD or the issuance of the Bonds, other than as a Party to this Agreement. ARTICLE III CONSTRUCTION AND ACQUISITION OF ACQUISITION FACILITIES Section 3.1 Construction of Acquisition Facilities by Property Owner. The following provisions of this Article III shall apply solely with respect to those Acquisition Facilities to be constructed by the Property Owner and acquired by EVMWD with Bond Proceeds: (a) The Property Owner will complete the Plans and Specifications for such Acquisition Facilities. The Plans and Specifications shall include EVMWD’s standard specifications and shall be subject to EVMWD approval, which shall not be unreasonably withheld. EVMWD agrees to process any Plans and Specifications for approval with reasonable diligence and in a timely manner. The Property Owner may proceed with the construction of any such Acquisition Facilities in accordance with the provisions of Section 3.2 hereof. A qualified engineering firm (the “Field Engineer”) shall be employed by Property Owner to provide all field engineering surveys determined to be necessary by the EVMWD inspection personnel. Field Engineer shall promptly furnish to EVMWD a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from the Field Engineer’s engineering surveys and/or proposed facility design 7 4837-8786-6322v5/022042-0034 changes. EVMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications. (b) A full-time soils testing firm, approved by EVMWD, shall be employed by Property Owner to conduct soil compaction testing and certification. Property Owner shall promptly furnish results of all such compaction testing to the EVMWD for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in accordance or compliance with applicable specifications, Property Owner shall be fully liable and responsible therefore. A final report shall be required fully certifying trench compaction efforts prior to acceptance of each of the Acquisition Facilities. (c) The cost of all surveying, compaction testing and report costs associated with such Acquisition Facilities furnished and constructed by any contractors or sub-contractors (collectively, “Contractors”) shall be included among the costs which are eligible to be paid from the EVMWD Facilities Fund. (d) EVMWD shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements related to the Acquisition Facilities to be constructed by Property Owner that may be requested by appropriate Federal, State, and/or local agencies. Any such work shall be paid for and such work shall be conducted by, or on behalf of Property Owner and the costs of such work shall be eligible to be paid from the EVMWD Facilities Fund. Section 3.2 Public Works Requirements. In order to insure that the Acquisition Facilities to be constructed by the Property Owner, completed after formation of the CFD and acquired with Bond Proceeds will be constructed as if they had been constructed under the direction and supervision, or under the authority of, the EVMWD, so that they may be acquired by the EVMWD pursuant to Government Code Section 53313.5, the Property Owner shall comply with all of the following requirements: (a) The Property Owner shall obtain bids for the construction of such Acquisition Facilities in conformance with the standard procedures and requirements of the EVMWD with respect to its public works projects or in a manner which is approved by the EVMWD Representative. (b) The contract or contracts for the construction of such Acquisition Facilities shall be awarded to the responsible bidder(s) submitting the lowest responsive bid(s) for the construction of such Acquisition Facilities. (c) The Property Owner shall require, and the specifications and bid and contract documents shall require all such Contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of the EVMWD with respect to the construction of its public works projects. (d) Said Contractors shall be required to furnish labor and material payment bonds and contract performance bonds in an amount equal to 100 percent of the contract price naming the Property Owner and the EVMWD as obligees and issued by insurance or surety companies approved by the EVMWD. All such bonds shall be in a form approved by the EVMWD Representative. Rather than requiring its Contractors to provide such bonds, the Property Owner may elect to provide the same for the benefit of its Contractors. 8 4837-8786-6322v5/022042-0034 (e) All such Contractors shall be required to provide proof of insurance coverage throughout the term of the construction of such Acquisition Facilities which they will construct in conformance with EVMWD’s standard procedures and requirements. (f) The Property Owner and all such Contractors shall comply with such other requirements relating to the construction of such Acquisition Facilities which the EVMWD may impose by written notification delivered to the Property Owner and each such Contractor at any time either prior to the receipt of bids by the Property Owner for the construction of such Acquisition Facilities or, to the extent required as a result of changes in applicable laws, dur ing the progress of construction thereof. In accordance with this Section 3.2, the Property Owner shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code of the State of California. The Property Owner shall provide proof to the EVMWD, at such intervals and in such form as the EVMWD Representative may require, that the foregoing requirements have been satisfied as to all of the Acquisition Facilities constructed by Property Owner, acquired by EVMWD and paid for with Bond Proceeds. Section 3.3 Inspection; Completion of Construction. EVMWD shall have primary responsibility for providing inspection of the construction of the Acquisition Facilities constr ucted by the Property Owner to insure that the construction is accomplished in accordance with the Plans and Specifications. EVMWD’s personnel shall have access to the site of the work at all reasonable times for the purpose of accomplishing such inspection. Upon Substantial Completion of the construction of such Acquisition Facilities by Property Owner, the Property Owner shall notify the EVMWD in writing that the construction of such Acquisition Facilities has been Substantially Completed. Upon receiving such written notification from the Property Owner, and upon receipt of written notification from its inspectors that construction of any of the Acquisition Facilities by Property Owner has been Substantially Completed, the EVMWD shall in a timely manner notify the Property Owner in writing that the construction of such Acquisition Facilities has been satisfactorily completed. Upon receiving such notification, the Property Owner shall forthwith file with the County Recorder of the County of Riverside a Notice of Completion in accordance with procedures of the County of Riverside. The Property Owner shall furnish to the EVMWD a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County Recorder. Any actual costs reasonably incurred by the EVMWD in inspecting and approving the construction of any Acquisition Facilities by Property Owner not previously paid by the Property Owner shall be eligible to be reimbursed from the EVMWD Facilities Fund or paid directly by Property Owner. Section 3.4 Liens. The Property Owner shall provide to the EVMWD such evidence or proof as the EVMWD shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment on behalf of Property Owner for the construction of any Acquisition Facilities have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. Section 3.5 Acquisition, Acquisition Price; Source of Funds. Provided the Property Owner has complied with the requirements of this Agreement, EVMWD agrees to acquire the Acquisition Facilities from the Property Owner. The price to be paid by the CFD for the acquisition of such Acquisition Facilities by EVMWD (the “Acquisition Price”) shall be the 9 4837-8786-6322v5/022042-0034 lesser of (i) the value of the Acquisition Facilities or (ii) the total of the Actual Costs of the Acquisition Facilities. The Property Owner shall transfer ownership of the Acquisition Facilities to the EVMWD by grant deed, bill of sale or such other documentation as the EVMWD may require. Upon the transfer of ownership of the Acquisition Facilities or any portion thereof from the Property Owner to EVMWD, EVMWD shall be responsible for the maintenance of the Acquisition Facilities or the portion transferred. For purposes of determining the Acquisition Price to be paid by the CFD for the acquisition of the Acquisition Facilities by EVMWD, the value of such improvements shall b e the amount determined by the Engineer, to be the value of the Acquisition Facilities based on the Actual Costs submitted by the Property Owner, as hereinbefore specified; provided, however, that if the Engineer determines that such Actual Costs, or any of them, are excessive and that the value of the Acquisition Facilities is less than the total amount of such Actual Costs, the Acquisition Price to be paid by the CFD for the acquisition of the Acquisition Facilities shall be the value thereof as determined by the Engineer. Upon completion of the construction of any Acquisition Facilities by Property Owner, the Property Owner shall deliver to EVMWD copies of the contract(s) with the Contractor(s) who have constructed the Acquisition Facilities or other relevant documentation with regard to the payments made to such Contractor(s) and each of them for the construction of such Acquisition Facilities, and shall also provide to EVMWD copies of all invoices and purchase orders with respect to all supplies and materials purchased for the construction of such Acquisition Facilities. EVMWD shall require the Engineer to complete its determination of the value of the Acquisition Facilities as promptly as is reasonably possible. The Acquisition Price of any Acquisition Facilities may be determined and paid out of the EVMWD Facilities Fund prior to transfer of ownership of the Acquisition Facilities to EVMWD upon a determination of Substantial Completion of such Acquisition Facility. Upon transfer of ownership of an Acquisition Facilities to EVMWD, Property Owner may submit a second reimbursement request for “punch list” items and any other eligible costs not included in the initial request. Property Owner shall submit a payment request form to the CFD in the format and with the information required by the Funding Agreement, which must also contain therewith approval of EVMWD, which approval shall not be unreasonably withheld. Notwithstanding the preceding provisions of this section, the sole source of funds for the acquisition by EVMWD of the Acquisition Facilities or any portion thereof shall be the Bond Proceeds made available by the CFD pursuant to Section 2.3 above. If for any reason beyond EVMWD’s control, the proceedings for the formation of the CFD are not completed or the Bonds are not sold, EVMWD shall not be required to acquire any Acquisition Facilities from the Property Owner. In such event, the Property Owner shall complete the design and construction and offer to the EVMWD ownership of such portions of Acquisition Facilities as are required to be constructed by the Property Owner as a condition to recordation of subdivision maps for the Property or any other agreement between Property Owner and EVMWD, but need not construct any portion of the Acquisition Facilities which it is not so required to construct. Section 3.6 Easements. The Property Owner shall, at the time EVMWD acquires the Acquisition Facilities as provided in Section 3.2 hereof, grant to EVMWD, by appropriate instruments prescribed by EVMWD, all easements on private property which may be reasonably necessary for the proper operation and maintenance of such Acquisition Facilities, or any part thereof. 10 4837-8786-6322v5/022042-0034 Section 3.7 Maintenance. Prior to the transfer of ownership of an Acquisition Facility by the Property Owner to the EVMWD, as provided in Section 3.5 hereof, the Property Owner shall be responsible for the maintenance thereof and shall maintain and transfer such Acquisition Facility to EVMWD in as good condition as the Acquisition Facility was in at the time the Property Owner notified the EVMWD that construction of same had been completed in accordance with the Plans and Specifications. The Parties agree that the construction and acquisition of the Acquisition Facilities to be constructed by Property Owner is a matter between Property Owner and EVMWD only, and that the City and the CFD shall have no responsibility for on-site inspection or monitoring or for certifying that the provisions of Article III of this Agreement be satisfied. ARTICLE IV TERM AND TERMINATION Section 4.1 Effective Date. This Agreement shall become effective and of full force and effect as of the date (“Effective Date”) it is approved by the Property Owner, the City Council of the City and governing board of the EVMWD, to be confirmed by the execution hereof by the authorized representatives of the Parties hereto. Section 4.2 Termination. This Agreement shall terminate and be of no further force or effect upon the earlier of (i) ten (10) years following the issuance of building permits for all dwelling units expected to be built within the CFD, (ii) the funding of all EVMWD Facilities pursuant to this Agreement, or (iii) December 31, 2030. Notwithstanding the foregoing, this Agreement shall not terminate pursuant to (iii) of the previous sentence if, on December 31, 2030, all of the building permits within the CFD have been pulled, construction within the CFD, as contemplated by the parties hereto, is ongoing, and the Property Owner has not yet has not been fully reimbursed for Advances or has not been paid the Acquisition Price of any Acquisition Facilities pursuant to Section 3.5 above. ARTICLE V ADDITIONAL GENERAL PROVISIONS Section 5.1 Recordkeeping; Inspection of Records. EVMWD hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, paid to EVMWD for the EVMWD Charges and the City hereby agrees to keep and maintain full and accurate records of all amounts, and investment earnings, if any, expended from the EVMWD Facilities Fund. Each Party further agrees to make such records available to any other Party hereto, including Property Owner, during normal business hours upon reasonable prior notice. All such records shall be kept and maintained by the appropriate Party as provided by applicable law and their respective policies. Section 5.2 Partial Invalidity. If any part of this 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. Section 5.3 Successors and Assigns. Property Owner may assign its rights pursuant to this Agreement to a purchaser of the Property, or any portion thereof who shall be the owner of any Acquisition Facilities as payer of any EVMWD Charges and to whom Property Owner shall assign the right to receive payment of the Acquisition Price for such Acquisition Facilities or other rights under this Agreement with respect t o EVMWD Charges. Such a 11 4837-8786-6322v5/022042-0034 purchaser and assignee shall enter into an assignment agreement with the Property Owner, in a form acceptable to the EVMWD and the City, whereby such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Property Owner pursuant to this Agreement and to be bound thereby. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto. Section 5.4 Notice. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to any Party or ether person shall be deemed to have been received when personally delivered or upon deposit of the same in the United States Post Office registered or Certified, postage prepaid, addressed as follows: City: City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 Attention: City Manager EVMWD: Elsinore Valley Municipal Water District 31315 Chaney Street Lake Elsinore, CA 92530 Attention: General Manager Property Owner: Century Communities of California, LLC 4695 MacArthur Court, Suite 300 Newport Beach, CA 92660 Attention: Brian Taylor Each Party can change its address for delivery of notice by delivering written notice of such change or address to the other parties within ten (10) calendar days prior to such change. Section 5.5 Captions. The captions to Sections used herein are for convenience purposes only and are not part of this Agreement. Section 5.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in such State. Section 5.7 Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement. Section 5.8 Amendments. This Agreement may be amended or modified only in writing executed by the authorized representative(s) of each of the Parties hereto. Section 5.9 Waiver. The failure of any Party hereto to insist on compliance within any of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver constitute a relinquishment of any other right or power, for all or any other times. 12 4837-8786-6322v5/022042-0034 Section 5.10 Cooperation and Execution of Documents. The Parties hereto agree to complete and execute any further or additional documents which may be necessary to complete or further the terms of this Agreement. Section 5.11 Attorneys’ Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of suit, including reasonable attorneys’ fees. Section 5.12 Exhibits. The following exhibits attached hereto are incorporated into this Agreement by reference. Exhibit Description “A” Property Description “B” Acquisition Facilities Description Section 5.13 Signatories. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on behalf of the party for whom they sign. Section 5.14 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. [Remainder of this page is blank] S-1 4837-8786-6322v5/022042-0034 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and first year written above. CITY OF LAKE ELSINORE, a political subdivision of the State of California By: City Manager ATTEST: By: Candice Alvarez, MMC, City Clerk APPROVED AS TO FORM: CITY ATTORNEY OF THE CITY OF LAKE ELSINORE By: Barbara Leibold, City Attorney [SIGNATURES CONTINUED ON FOLLOWING PAGES] S-2 4837-8786-6322v5/022042-0034 [SIGNATURE PAGE CONTINUED] ELSINORE VALLEY MUNICIPAL WATER DISTRICT By: Its: Greg Thomas, General Manager ATTEST: By: Its: Terese Quintanar, Board Secretary APPROVED AS TO FORM: By: Its: Steve Anderson, General Counsel S-3 4837-8786-6322v5/022042-0034 [SIGNATURE PAGE CONTINUED] CENTURY COMMUNITIES OF CALIFORNIA, LLC, a Delaware limited liability company By: __________________________________ Justin Brewer Division Manager Century Community of California, LLC A-1 4837-8786-6322v5/022042-0034 EXHIBIT A PROPERTY DESCRIPTION Real property in the City of Lake Elsinore, County of Riverside, State of California, described as follows: Tract No. 33370 recorded in the Riverside County Recorder’s Office on July 25, 2017. B-1 4837-8786-6322v5/022042-0034 EXHIBIT B ACQUISITION FACILITIES DESCRIPTION Note: The description and estimated costs of the Acquisition Facilities is preliminary in nature. The final nature and location of the Acquisition Facilities will be determined upon preparation of final plans and specifications, and the Actual Costs may ultimately be higher than estimated herein. Domestic Water Improvements (Offsite Only) Estimated Quantity Unit Estimated Unit Cost Estimated Total 12. Mobilization 1 LS 3,500.00 3,500 13. 8" PVC, Mainline, w/Bedding & Backfill 94 LF 45.00 4,230 14. 12" DIP, Mainline, w/Bedding & Backfill 2,745 LF 98.00 269,010 15. 8" FxH Gate Valves 2 EA 1,600.00 3,200 16. 12" FxH Gate Valves, Includes 1 Raise, Complete 15 EA 3,800.00 57,000 17. 2" Air Vacuum Release Valves 3 EA 3,800.00 11,400 18. 6" Fire Hydrant Assembly, Includes 1 Raise, Complete 6 EA 6,600.00 39,600 19. 6" Blow off 8 EA 3,500.00 28,000 20. 12" End Cap 3 EA 550.00 1,650 21. 8" End Cap 2 EA 450.00 900 22. Remove Existing 16" Stub & Join Existing 16" Gate Valve 1 EA 2,250.00 2,250 23. Remove & Replace Existing AC 2,100 SF 15.00 31,500 24. Traffic Control 1 LS 3,500.00 3,500 25. Chlorination & Testing 2,745 LF 2.00 5,490 Subtotal - Hard Costs $ 461,230 Soft Costs (Design, Eng., Bonds, Staking, Construc. Mgmt., etc.) @ 15.0% $ 69,185 Contingency @ 10.0% $ 46,123 Total - Domestic Water $ 576,538 Sanitary Sewer Improvements (Offsite Only) Estimated Quantity Unit Estimated Unit Cost Estimated Total 10. Mobilization 1 LS $ 3,500.00 $ 3,500 11. 8" C900 PVC CL 100 (DR25), Mainline, w/Bedding & Backfill 1,895 LF 52.00 98,540 13. Concrete Encase Sewer Main 420 LF 12.00 5,040 14. 60" Manhole (Includes 1 Raise)8 EA 6,800.00 54,400 15. Video Sewer Mainline 1,895 LF 3.50 6,633 16. Join Existing 60' Manhole 1 EA 7,500.00 7,500 17. Install 8" Cap 1 EA 500.00 500 18. Remove & Replace Existing AC 3,180 SF 12.00 38,160 19. Traffic Control 1 LS 3,500.00 3,500 Subtotal - Hard Costs $ 217,773 Soft Costs (Design, Eng., Bonds, Staking, Construc. Mgmt., etc.) @ 15.0% $ 32,666 Contingency @ 10.0% $ 21,777 Total - Off-Site SanitarySewer $ 272,216 C-1 4837-8786-6322v5/022042-0034 EXHIBIT C DISBURSEMENT REQUEST FORM 1. City of Lake Elsinore Community Facilities District No. 2006-6 (Tessera) (“CFD No. 2006-6”) is hereby requested to pay from the EVMWD Facilities Fund established by the City Council of the City of Lake Elsinore (the “City”) in connection with its CFD No. 2006-6 Series _____ Special Tax Bonds (the “Bonds”), to the Elsinore Valley Municipal Water District (the “Water District”), as Payee, the sum set forth below in payment of project costs described below. 2. The undersigned certifies that the amount requested has been expended or encumbered for the purposes of constructing and completing [Acquisition Facilities] [facilities relating to the EVMWD Charges]. The amount requested is due and payable under, or is encumbered for the purpose of funding, a purchase order, contract or other authorization with respect to the project costs described below and has not formed the basis of a prior request or payment. 3. Description of [Acquisition Facilities] [EVMWD Charges]: 4. Amount requested: $______________. 5. The amount set forth is authorized and payable pursuant to the terms of the Joint Community Facilities Agreement among the City, Century Communities of California, a Delaware limited liability company and the Elsinore Valley Municipal Water District dated as of ________, 2022 (the “Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Agreement. 6. Total payments to the Water District for the [Acquisition Facilities] [facilities relating to the EVMWD Charges] from CFD No. 2006-6, including the amounts to be paid under paragraph 4 above, will not exceed the maximum amount to be disbursed for [Acquisition Facilities] [facilities relating to the EVMWD Charges] under the Agreement. C-2 4837-8786-6322v5/022042-0034 Executed by an authorized representative of the Elsinore Valley Municipal Water District. By: Name: Title: Date: Request No. CONCURRED BY: ___________ 4869-0792-9900v2/022042-0034 CUSTODY AGREEMENT THIS CUSTODY AGREEMENT (this “Agreement”) dated as of August 1, 2022, is made by and between the City of Lake Elsinore, a municipal corporation, (the “City”) and Wilmington Trust, National Association, a national banking association, as custodian hereunder (the “Custodian”). WHEREAS, the City desires to engage the services of the Custodian to act on its behalf in providing custodial services for certain assets under the City’s management. WHEREAS, the City desires to deposit with the custodian certain cash and/or letters of credit provided by developers as security, from time to time, in connection with special tax bonds issued by community facilities districts of the City. WHEREAS, the Custodian is willing to act as the City’s custodian upon the terms and conditions set forth herein. NOW, THEREFORE, the parties hereto agree as follows: 1. Services to be Provided by the Custodian. The Custodian shall: (a) Open, maintain and hold an account in the name of the City (the “Custody Account”) where it will hold all cash, cash equivalents and securities (and all certificates and instruments representing the same) deposited with, or otherwise delivered to, the Custodian, and all interest, dividend, investment income, cash and other p roceeds from time to time received in respect of any or all of the foregoing. The City shall deliver written notice to the Custodian in advance of each deposit or delivery. (b) Invest all cash held in the Custody Accounts in accordance with the written directions of the City, and in the absence of such direction, in the U.S. Government Portfolio (Service Class shares) of the Wilmington family of mutual funds. The C ity acknowledges that shares in this mutual fund are not obligations of Wilmington Trust, National Association or its affiliates, are not deposits and are not insured by the FDIC. The Custodian or its affiliate may be compensated by the mutual fund for services rend ered in its capacity as investment advisor, or other service provider, such as provider of shareholder servicing and distribution services, and such compensation is both described in detail in the prospectus for the fund, and is in addition to the compensation, if any, paid to Wilmington Trust, National Association in its capacity as the Custodian hereunder. The City acknowledges receipt of such prospectus. The Custodian shall have no responsibility or liability for any loss which may result from any investment or sale of investment made pursuant to this Agreement. The Custodian is hereby authorized, in making or disposing of any investment permitted by this Agreement, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or any such affiliate is acting as age nt of the Custodian or for any third person or dealing as principal for its own account. The C ity acknowledges that the Custodian is not providing investment supervision, recommendations, or advice. 4869-0792-9900v2/022042-0034 2 (c) Disburse cash and securities in the Custody Accounts at the written direction of an authorized person or officer of City or in accordance with a court order. (d) Present for payment all maturing securities or any securities called for redemption an d collect proceeds therefrom. (e) All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Custody Agreement shall be deposited in the fund or account which generated such interest earnings. Thereafter, interest earnings shall be transferred as directed by the City. 2. Powers of the Custodian. The Custodian is authorized and empowered to: (a) Hold assets in the City’s name or in the name of a nominee selected by the Custodian or at recognized securities depositories. (b) Employ agents other than its employees and delegate to them such ministerial and other nondiscretionary duties as it sees fit and to rely upon information furnished by such agents. (c) Make, execute, acknowledge and deliver any and all documents of t ransfer and conveyance and other instruments that may be necessary or appro priate to carry out its duties and powers. 3. Reports. The Custodian shall furnish to the City a monthly statement of the Custody Accounts reflecting all activity during the month, and an inventory of assets including their market value as of month end. The Custodian will furnish such other reports as the City may reasonably request, including reports to the City’s accountants or examiners, but no more frequently than monthly. The City shall notify the Custodian in writing with respect to any discrepancy in a report provided hereunder within thirty (30) days of the report date, and the absence of such notice is hereby deemed to be the same as a written confirmation that the City accepts the report, and all positions and transactions shown on such report, as is. 4. Fees. The Custodian shall receive compensation from the City as set forth in Exhibit A attached to this Agreement, as amended from time to time by the parties. The Custodian shall also be reimbursed by the City for its reasonable out-of pocket expenses during the performance of the Custodian’s duties under this Agreement. The Custodian is authorized and permitted to set off, recoup and/or otherwise deduct any unpaid fees, non-reimbursed expenses and/or unsatisfied indemnification rights from cash and other assets on deposit in the Custody Accounts if not paid by the City within thirty (30) days of the date due. 5. Authorized Persons. The City shall furnish a list to the Custodian of persons authorized to act on behalf of the City for the purpose of transmitting instructions to the Custodian concerning the assets in the Custody Accounts (and shall update such list from time to time when there are changes therein). An initial list is attached hereto as Exhibit B. The Custodian shall have no duty to confirm whether the information on Exhibit B is current. Unless and until written notice of any changes to Exhibit B shall be delivered to and acknowledged by the Custodian, the Custodian shall be entitled to assume that such information is current. 4869-0792-9900v2/022042-0034 3 6. Amendment and Termination. This Agreement may be amended by written agreement of the City and the Custodian at any time. This Agreement shall continue in effect until t erminated by either party upon thirty (30) days’ prior written notice to the other party. Upon termination, all cash and other assets held in the Custody Accounts shall be delivered by the Custodian to the City or to any other person in accordance with the City’s written instruction. Any outstanding and unpaid fees and expenses owed to the Custodian may be deducted by the Custodian from the cash and other assets held in the Custody Accounts prior to delivery to the City or as the City directs. 7. Indemnification and Limitation on Liability. The City agrees to indemnify, defend and hold the Custodian and its agents, affiliates, successors and assigns harmless from and against any and all damages, claims, liabilities, losses, costs and expenses (including without limitation attorney’s fees and expenses) (“Losses”), that may be imposed on, incurred by, or asserted against the Custodian by reason of its acceptance of this account or the performance of its duties under this Agreement, including, but not limited to Losses incurred by the Custodian as a result of its efforts in followi ng directions and/or any action or inaction of the Custodian or of any other authorized parties, including third parties, regar ding the Custody Accounts, unless such Losses are finally adjudicated to have been directly caused by the gross negligence or willful misconduct of the Custodian. IN NO EVENT SHALL THE CUSTODIAN BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST PROFITS) FROM ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF ACTION. The foregoing indemnification shall survive any termination or assignment of this Agreement and any resignation or removal of the Custodian. 8. Notices. All notices, instructions, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been d uly given (a) on the date of service if delivered personally to the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile transmission to the facsimile number given below, and written confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery via Federal Express or similar overnight courier service or the Express Mail service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first cla ss mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows: Notices to the City shall be directed and mailed as follows: City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 Tel: ((951) 674-3124 Email: jsimpson@lake-elsinore.org 4869-0792-9900v2/022042-0034 4 Notices to the Custodian shall be directed and mailed as follows: Wilmington Trust, National Association Corporate Client Services 650 Town Center Drive, Suite 800 Costa Mesa, CA 92626 Phone: (714) 384-4153 Email: jmar@wilmingtontrust.com Either party may change its address for purposes of the paragraph by giving the other party written notice of the new address in the manner set forth above. 9. Regarding the Custodian. (a) The Custodian shall not be liable for any action taken or not taken under this Agreement so long as it shall have acted without gross negligence or willful misconduct. (b) The rights and obligations of the City may not be assigned or delegated to any other person without the written consent of the Custodian. Subject to the foregoing, the terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No other persons shall have any rights under this Agreement. (c) The Custodian is not a party to, is not bound by, and has no duty to inquire into any agreement other than this Agreement. The Custodian shall have no implied duties, fiduciary or otherwise, beyond the express duties set forth herein. (d) The Custodian shall not be required to expen d or risk its own funds or otherwise incur financial liability (other than expenses or liabilities otherwise required to be incurred by the express terms of this Agreement) in the performance of its duties hereunder if it believes that repayment of such funds, or adequate indemnity, is not assured to it. (e) The Custodian shall have the right, but not the obligation, to consult with cou nsel or other such professionals of the Custodian’s choice and shall not be liable for action taken or omitted to be taken by the Custodian in accordance with the advice or counsel o f such professionals. (f) Notwithstanding anything to the contrary here in, any corporation or association into which the Custodian is converted or merged, or with which it is consolidated, or to which it sells or transfers all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Custodian is a party, shall be and become the successor to the Custodian under this Agreement and shall have and succeed to all of the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any other act. (g) The Custodian may resign as such following the giving of thirty (30) calendar days’ prior written notice to the City. The City may remove the Custodian upon thirty (30) calendar 4869-0792-9900v2/022042-0034 5 days’ prior written notice to the Custodian. The duties of the Custodian shall terminate thirty (30) days after recipient’s receipt of such notice (or as of such earlier date as may be mutually agreed by the Custodian and the City). The Custodian shall deliver the cash and other assets then in the Custody Accounts to a successor custodian in accordance with the City’s written direction. If the City fails to appoint a successor prior to the expiration of thirty (30) calendar day notice period, the Custodian may, in its sole discretion, deliver the cash and other assets in the Custody Accounts to the City, or may petition any court of competent jurisdiction for the appointment of a successor custodian. (h) The Custodian may assume the genuineness of, and may rely on, any written notice or communication from any person, without further verification, that the Custodian believes is from the proper party and shall be protected in doing so by the City. (i) The Custodian shall not be responsible or liable for any failure or delay in the performance of its obligation under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; wars; acts of terrorism; civil or military disturbances; sabotage; epidemic; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications services; accidents; labor disputes; ac ts of civil or military authority or governmental action; it being understood that the Custodian shall use commercially reasonable efforts which are consistent with accepted practices in the ba nking industry to resume performance as soon as reasonably prac ticable under the circumstances. (j) In the event that the Custody Accounts, or any cash or assets contained therein, shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree, shall be made or entered by any court order affecting the property deposited or held under this Agreement, the Custodian is hereby authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, and in the event that the Custodian obeys or complies with any such writ, order or decree it shall not be liable to the City or any other person, firm or corporation, by reason of such compliance notwithstanding that such writ, or der or decree be subsequently reversed, modified, annulled, set aside or vacated. 10. Confirmation Statements. The City waives its right to receive transaction confirmation statements unless the City indicates otherwise through written notice to the Custodian. 11. Identifying Information. The City acknowledges that the Custodian is obligated to provide to issuers of securities held in the Custody Accounts, or to other parties an issuer may designate, identifying information such as the names (s), address(es), and share positions of the City, unless the City objects to such disclosure through written notice to the Custodian. 12. Facsimile Transmissions. (a) The Custodian is authorized to accept directions delivered to Custodian through the means set forth in this Section 12 by authorized representatives, including duly appointed third parties. 4869-0792-9900v2/022042-0034 6 (b) The Custodian is authorized to act on written instructions conveyed by facsimile transmission, notwithstanding the fact that such instructions do not bear an original authorized signature, provided the instructions acted upon appear to be signed by a person(s) entitled to give binding instructions to the Custodian. (c) The City understands the risks associated with communicating time sensitive matters, such as trade directions, by facsimile and acknowled ges that, if it elects to do so, the Custodian will act within a reasonable time of receipt of the facsimile. The City further acknowledges that information or instructions provided by facsimile may be less confidential than information transmitted by other methods. 13. Tax Matters. (a) Reporting of Income. The Custodian shall have no duty to prepare or file any Federal or state tax report or return with respect to any funds held pursuant to this Agreement or any income earned thereon, except for the delivery and filing of tax information reporting forms required to be delivered and filed with the Internal Revenue Service. (b) Preparations and Filing of Tax Returns. The City assumes the obligation to prepare and file, to the extent applicable, any and all income or other tax returns applicable to the Custody Accounts with the IRS and any state or local taxing authorities. (c) Payment of Taxes. Any taxes payable on income earned from the investment of any sums held in the Custody Accounts shall be paid by the City, whether or not the income was distributed by the Custodian during any particular year, to the extent required under the provisions of the Code or otherwise. 14. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the sam e instrument. 15. Governing Law. This Agreement and all transactions hereunder shall be governed by, interpreted, construed and enforced in accordance with the laws of the State of California. The parties hereby (i) irrevocably submit to the exclusive j urisdiction of any federal or state court sitting in the State of California, (ii) waive any objection to laying of venue in any such action or proceeding in such courts, and (iii) waive any objection that such courts are an inconvenient forum or do not have jurisdiction over any party. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought o r taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the parties, the Custodian and the City shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. 16. Entire Agreement. This Agreement is the final integration of the agreement of the parties with respect to the matters covered by it and supersedes any prior understanding or agreement, oral or written, with respect thereto. 17. Severability. The invalidity of any portion of this Agreement shall not affect the validity of the remainder hereof. 4869-0792-9900v2/022042-0034 7 [Signature page is attached.] 4869-0792-9900v2/022042-0034 8 IN WITNESS WHEREOF, authorized officers of the parties have duly executed this Agreement as of the day and year first written above. CITY OF LAKE ELSINORE By: __________________________________________ Name: Jason Simpson Title: City Manager Wilmington Trust, National Association, as Custodian By: _____________________________________ Name: Jeanie Mar Title: Administrative Vice President 4869-0792-9900v2/022042-0034 9 Exhibit A CITY OF LAKE ELSINORE Custody Agent Fee Exhibit Administration Fee (One-time): $1,500.00 Payable at closing Payable in advance, at closing and on each anniversary date thereafter Investment Transaction Fee $ N/A Disbursements made by wire transfer $ *Waived* Disbursements made by check $ *Waived* *Investments in money market funds do not incur investment transaction fees. Out-of-Pocket Expenses include the customary expenses such as postage, shipping charges, cost of checks, travel, stationery, notices, audit requests, UCC filings and c ontinuation statements, etc., that will be passed on as incurred. Out-of-Pocket Expenses are typically four to five percent of the Administration Fee. Outside counsel expenses, if required, are in addition to the fees quoted. Expenses for attending the closing will be passed on as incurred. Payment of Expenses: If the transactions described in the recitals to this Custody Agreement do not close, Wilmington Trust, N.A. reserves the right to be paid its Administration Fee set forth above, Adjustments to Fees: All fees are non -refundable and will not be prorated in the event of an early termination. Once the fees are agreed to in writing, we agree that any changes to those fees will also be in writing. You will be notified at least 30 days in advance of any general fee increase, following 3 years after the initial closing date. The fees as quoted and the acceptance of our duties as Trustee are subject to satisfactory review and acceptance of all related financing documents by the Trustee and our counsel. Our fees may also be adjusted at any time if there is a significan t change in our responsibilities under the governing documents. In the event the financing structure is modified prior to closing, we reserve the right to review and renegotiate our fees accordingly. The information contained in this presentation is inte nded only for the use of the individual or entity named and may be privileged and/or confidential. Any unauthorized dissemination, distribution or copying of this communication is strictly prohibited by law. Wilmington Trust is a registered service mark of Wilmington Trust Corporation, a wholly owned subsidiary of M&T Bank Corporation. Investment management and fiduciary services are provided by Wilmington Trust Company, operating in Delaware only, and Wilmington Trust, N.A., a national bank. Loans, retail and business deposits, and other personal and business banking services and products are offered by M&T Bank, member FDIC. 4869-0792-9900v2/022042-0034 10 Exhibit B DESIGNATED PERSONS OF THE CITY Specimen Signature 1. Name: Jason Simpson _________________________ Title: City Manager Phone #: (951) 674-3124 Email: jsimpson@lake-elsinore.org 2. Name: _________________________ Title: Phone #: Email: 3. Name: _________________________ Title: Phone #: Email: