The opinions set forth above are further qualified as follows:
(a) Our opinions are limited to the matters expressly set forth herein and no opinion is to be implied or may be inferred beyond the matters expressly so stated; Packet Pg. 1944
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(b) We are licensed to practice law in the State of California; accordingly, the foregoing opinions only apply insofar as the laws of the State of California and the United States may be concerned, and we express no opinion with respect to the laws of any other jurisdiction; (c) We express no opinion as to the enforceability under certain circumstances of contractual provisions respecting various summary remedies without notice or opportunity for hearing or correction, especially if their operation would work a substantial forfeiture or impose a substantial penalty upon the burdened party;
(d) We express no opinion as to the effect or availability of any specific remedy provided for in the Fiscal Agent Agreement under particular circumstances, except that we believe such remedies are, in general, sufficient for the practical realization of the rights intended thereby; (e) We express no opinion as to the enforceability of any indemnification, contribution, choice of law, choice of forum, or waiver provisions contained in the Fiscal Agent Agreement or the Purchase Agreement;
(f) We express no opinion concerning the application to or compliance with federal securities law, including but not limited to the Securities Act of 1933, as amended, and the Trust Indenture Act of 1939, as amended, any state securities or “Blue Sky” law, or any federal, state or local tax law, of the Bonds or the issuance and sale thereof; (g) We disclaim any obligation to update this opinion for events occurring after the date hereof or any new facts or information that may become known to me after the date of this opinion; We hereby confirm to you that, to our current actual knowledge, there are no actions, suits, proceedings, inquiries or investigations, at law or in equity, before or by any court, governmental agency, public board or body that are pending and have been served, or overtly threatened in writing against the City, contesting the titles of its officers to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Resolution, or the Fiscal Agent Agreement, or the collection or application of the Special Taxes and the interest thereon to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Resolution, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, or the powers of the City or its authority with respect to the Bonds, the Resolutions, the Fiscal Agent Agreement, the Continuing Disclosure Certificate, the Purchase Agreement or any action on the part of the City contemplated by any of said documents.
As City Attorney to the City in this matter, we have not rendered financial advice to the City and do not represent, by this opinion or otherwise, that we have reviewed or made any assessment about, nor do we offer any opinion about, the financial condition of the City, past, present or future, including any financial information contained in the documents; nor have we reviewed the financial feasibility of this transaction or those projects that the proceeds of the Bonds will fund or any of their components, and, accordingly, we offer no opinion whatsoever regarding such financial feasibility.
This letter is furnished by us as City Attorney. No attorney-client relationship has existed or exists between us and the Underwriter in connection with the Bonds or by virtue of this letter. This letter is delivered to the Underwriter solely for their benefit in connection with the transactions covered by the first paragraph of this letter and may not be relied upon or used by, circulated, quoted or referred to, nor may copies hereof be delivered to, any other person or for any other purpose Packet Pg. 1945
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without our prior written approval; provided, however, that copies of this opinion may be included in the closing transcripts for the transactions covered by the first paragraph of this letter. This letter is not intended to be relied upon by owners of Bonds.
Very truly yours,
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EXHIBIT C
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
CLOSING CERTIFICATE OF THE CITY
I, the undersigned, hereby certify that I am the ________ of the City of San Bernardino (the “City”), the City Council of the City (the “City Council”) of which is the legislative body for Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino (the “Community Facilities District”), a community facilities district duly organized and existing under the laws of the State of California (the “State”) and I am authorized to execute this Certificate on behalf of the City in connection with the issuance of the above-captioned bonds (the “Bonds”). All capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Bond Purchase Agreement (the “Bond Purchase Agreement”), dated [BPA Date], by and between the City and Hilltop Securities Inc.
I further certify on behalf of the City that:
(i) The representations, warranties and covenants of the City contained in the Bond Purchase Agreement are true and correct in all material respects on and as of the date hereof as if made on the date hereof;
(ii) The Community Facilities District Resolutions, Formation Documents and the City Documents are in full force and effect and have not been amended, modified or supplemented; (iii) Except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation at law or in equity, or by any court or regulatory agency, public board or body pending, with respect to which the City or the Community Facilities District has been served with process, or to the knowledge of the City, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of their officers to their respective offices, (b) enjoin or restrain the issuance, sale and delivery of the Bonds, the levy or collection of the Special Taxes or any other moneys or property pledged or to be pledged under the Fiscal Agent Agreement, or the pledge thereof, (c) in any way question or affect any of the rights, powers, duties or obligations of the City or the Community Facilities District with respect to the Special Taxes or moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Bonds, (d) in any way question or affect any authority for the issuance of the Bonds, or the validity or enforceability of the Bonds or the proceedings relating to the issuance of the Bonds, or (e) in any way question or affect the Bond Purchase Agreement or the transactions contemplated thereby, the Official Statement or the City Documents;
(iv) The information in the Preliminary Official Statement (other than statements pertaining to the book-entry system, as to which no view is expressed) as of its date was and as of the date hereof is, and in the Official Statement (other than statements pertaining to the book-entry system, as to which no view is expressed) as of its date was and as of the date hereof is, true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
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(v) The City has complied with all agreements and covenants, and satisfied all conditions, on its part to be complied with or satisfied under the Bond Purchase Agreement and under the Community Facilities District Resolutions, the Formation Documents, the City Documents and the Official Statement at or prior to the date hereof; (vi) No event has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the date hereof any statement or information contained in the Preliminary Official Statement or the Official Statement (other than statements pertaining to the book-entry system as to which no view is expressed) or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; and
(vii) The use of and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offer and sale of the Bonds is hereby ratified.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date set forth below.
Dated: [Closing Date] CITY OF SAN BERNARDINO
By:
Its:
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EXHIBIT D
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
CERTIFICATE OF SPECIAL TAX CONSULTANT
The undersigned hereby states and certifies:
1. That the undersigned is an authorized officer of Spicer Consulting Group, LLC (the “Special Tax Consultant”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.
2. That the Special Tax Consultant has reviewed and is familiar with the Rate and Method of Apportionment of Special Tax (the “Rate and Method”) as set forth in Appendix A to the Official Statement dated [BPA Date], for Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino (the “Community Facilities District”) 2023 Special Tax Bonds.
Capitalized terms not otherwise defined herein shall be defined as provided in the Rate and Method or the Fiscal Agent Agreement, dated as of _______ 1, 2023, between the City of San Bernardino (the “City”) and U.S. Bank Trust Company, National Association, as Fiscal Agent .
3. That the Special Taxes, if levied in accordance with the Rate and Method and collected will annually yield sufficient revenue to make timely payments of the Annual Debt Service on the Bonds, and annual Administrative Expenses related to the levy and collection of the Special Taxes and the expenses of the Fiscal Agent for the Bonds (no representation is made as to the actual amounts that will be collected in future years).
4. That the Special Tax, if collected in the maximum amounts permitted pursuant to the Rate and Method on the Closing Date, after payment of annual Administrative Expenses related to the levy and collection of the Special Taxes and the expenses of the Fiscal Agent for the Bonds, would annually generate at least 110% of the Annual Debt Service payable with respect to the Bonds payable from such Special Taxes assuming the debt service schedule shown in the Official Statement is true and correct.
5. That all information supplied by the Special Tax Consultant for use in the Official Statement is true and correct, as of the date of the Official Statement and as of the date hereof.
6. That, as of the dates of the Preliminary Official Statement and the Official Statement and as of the date hereof, the information contained in those portions of the Official Statement entitled “THE DISTRICT” and “APPENDIX A,” including the tables sourced to the Special Tax Consultant, and the other data provided by the Special Tax Consultant and included in the Official Statement, do not, to our knowledge, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.
7. The City, Hilltop Securities Inc., Best Best & Krieger LLP and all the professionals involved in the financing are entitled to rely on this Certificate.
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Dated: [Closing Date] SPICER CONSULTING GROUP, LLC
By:
Authorized Representative
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EXHIBIT E
$_______
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Hilltop Securities Inc. (“Hilltop”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1. Sale of the Bonds.
(a) Hilltop offered each Maturity of the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated [BPA Date], between the Issuer and Hilltop, Hilltop agreed in writing that, (i) for each Maturity of the Bonds, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offeringprice rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-theoffering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
2. Defined Terms.
(a) Holding Period means, for each Maturity of the Bonds, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Hilltop has sold at least 10% of such Maturity of the Bonds to the Public at prices that are no higher than the Initial Offering Price for such Maturity. (b) Issuer means the City of San Bernardino.
(c) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly.
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(e) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [BPA Date]. (f) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Hilltop’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in a Certificate as to Arbitrage and Tax Compliance Procedures for the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Best Best & Krieger LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
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Dated: [Closing Date] HILLTOP SECURITIES INC.
By:
Title:
-Signature PageIssue Price Certificate
Packet Pg. 1953
Schedule
SCHEDULE A
SALE PRICES
(To be attached)
Packet Pg. 1954
Schedule
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
Packet Pg. 1955
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EXHIBIT F
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
CERTIFICATE OF
JEC ENTERPRISES, INC.
[POS Date]
City of San Bernardino
Community Facilities District No. 2018-2
(Verdemont Ranch) of the City of San Bernardino
290 North “D” Street
San Bernardino, CA 92401
Hilltop Securities Inc.
2533 South Coast Highway 101, Suite 250
Cardiff, CA 92007
Reference is made to the Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino, 2023 Special Tax Bonds (the “Bonds”) and to the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be entered into by and between the City of San Bernardino (the “City”), for and on behalf of Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino (the “Community Facilities District”), and Hilltop Securities Inc., as underwriter (the “Underwriter”). This Certificate of JEC Enterprises, Inc. (the “Certificate”) is delivered pursuant to and in satisfaction of Section 3(E)(20) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.
As used in this Certificate, the phrase “Actual Knowledge of the Undersigned” means, as of the date of this Certificate, the actual knowledge (as opposed to constructive) that the undersigned currently has or has obtained through (i) interviews with such current officers and responsible employees of the Property Owner as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Certificate, and/or (ii) review of documents reasonably available to the undersigned and which the undersigned reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Certificate. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Property Owner’s current business and operations. The undersigned has not contacted individuals who are no longer employed by the Property Owner.
As used in this Certificate, the term “Relevant Entity” means, with respect to the Property Owner, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Property Owner, and (ii) for whom information, including financial information or operating data, concerning such Packet Pg. 1956
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Person is material to an evaluation of the Bonds (i.e. such person or entity’s assets or funds would materially affect the Property Owner’s ability to develop the Property (defined below) as described in the Preliminary Official Statement or to pay its Special Taxes on the Property to the extent the responsibility of the Property Owner) prior to delinquency). As used in this Certificate, the term “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
As used in this Certificate, the term “Property” means the real property currently owned by the Property Owner within Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino (the “Community Facilities District”), as further described in the Preliminary Official Statement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of JEC Enterprises, Inc., a California corporation (the “Property Owner”), and the undersigned, on behalf of the Property Owner, further certifies as follows:
(1) The Property Owner is duly organized and validly existing under the laws of the State of California and is in good standing under the laws of the State of California, and has or will have prior to the Closing, all requisite corporate right, power and authority:
(i) to execute and deliver this Certificate;
(ii) to own and develop the Property, as described in the Preliminary Official Statement;
(iii) to execute and deliver the Property Owner Continuing Disclosure Certificate at Closing;
(iv) to perform its obligations under the Property Owner Continuing Disclosure Certificate; and
(v) to carry on its business as described in the Preliminary Official Statement. (2) The Property Owner agrees to execute at Closing the Property Owner Continuing Disclosure Certificate substantially in the form attached as an appendix to the Preliminary Official Statement, with such additional changes as may be agreed upon by the Underwriter, Bond Counsel and the Property Owner.
(3) Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Property Owner is not aware of any material failures by it or any Relevant Entity to comply in all material respects with any previous continuing disclosure undertaking in a written certificate or agreement executed by it or its Relevant Entities to provide periodic continuing disclosure reports or notices of listed events with Packet Pg. 1957
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respect to community facilities district or assessment district bond issues in California within the past five years.
(4) To the Actual Knowledge of the Undersigned, the Property Owner and its Relevant Entities are not in breach of or in default under any applicable judgment or decree or any loan agreement, line of credit, option agreement, development agreement, indenture, fiscal agent agreement, bond or note (collectively, the “Material Agreements”) to which the Property Owner or its Relevant Entities are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the ability of the Property Owner:
(i) to own and develop the Property, as described in the Preliminary Official Statement;
(ii) to pay Special Taxes on the Property (to the extent the responsibility of the Property Owner) prior to delinquency;
(iii) to carry on its business as described in the Preliminary Official Statement; or
(iv) to perform its obligations under the Property Owner Continuing Disclosure Certificate.
(5) Except as described in the Preliminary Official Statement, the Property Owner has no loans outstanding and unpaid and no lines of credit that are secured by the Property.
(6) Except as disclosed in the Preliminary Official Statement, with respect to property owned by the Property Owner or any of its Relevant Entities located within the boundaries of a community facilities district or assessment district in California, to the Actual Knowledge of the Undersigned, within the last five (5) years, neither the Property Owner nor any of its Relevant Entities has (i) intentionally failed to pay when due any property taxes, special taxes, or assessments levied or assessed against such property absent a bona fide dispute as to the amount owed, (ii) had any such property become either tax deeded to any governmental agency or the subject of judicial foreclosure proceedings for failure to pay such property taxes, special taxes, or assessments levied or assessed against such property, or (iii) failed to cure such delinquencies within forty-five days of becoming aware of such delinquencies (to the extent the responsibility of the Property Owner or any such Relevant Entity).
(7) Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there is no litigation, inquiry, investigation or administrative proceeding, by or before any court, regulatory agency, public board or body, pending against the Property Owner (with service of process to the Property Owner having been accomplished), or to the Actual Knowledge of the Undersigned, overtly threatened in writing against the Property Owner, or to the Actual Knowledge of the Undersigned, pending against any Relevant Entity (with service of process to such Relevant Entity having been accomplished), or to the Actual Knowledge of the Undersigned, overtly threatened in writing Packet Pg. 1958
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against any Relevant Entity, in each case which, if successful, could reasonably be expected to:
(i) materially and adversely affect the ability of the Property Owner to own and develop the Property, as described in the Preliminary Official Statement; (ii) materially and adversely affect the ability of the Property Owner to pay Special Taxes on the Property (to the extent the responsibility of the Property Owner) prior to delinquency;
(iii) materially and adversely affect the ability of the Property Owner to carry on its business as described in the Preliminary Official Statement; (iv) materially adversely affect the ability of the Property Owner to perform its obligations under the Property Owner Continuing Disclosure Certificate; (v) challenge, question the validity or enforceability of, or restrain or enjoin the performance of, the Special Taxes, the Bonds, the Resolution, the Fiscal Agent Agreement, the Property Owner Continuing Disclosure Certificate or the Bond Purchase Agreement; or
(vi) restrain or enjoin collection of Special Taxes or other sums to be pledged to pay the principal of and interest on the Bonds.
(8) Except as disclosed in the Preliminary Official Statement or in this Certificate:
(i) the Property Owner and, to the Actual Knowledge of the Undersigned, its Relevant Entities, are able to pay their respective bills as they become due; (ii) neither the Property Owner nor, to the Actual Knowledge of the Undersigned, any of its Relevant Entities, has filed for bankruptcy or been declared bankrupt in the last ten (10) years; and
(iii) to the Actual Knowledge of the Undersigned, there are no proceedings pending against the Property Owner (with service of process to the Property Owner having been accomplished) or overtly threatened in writing in which the Property Owner or any of its Relevant Entities may be adjudicated as bankrupt, become the debtor in a bankruptcy proceeding, be discharged from any or all of its respective debts or obligations, be granted an extension of time to pay its respective debts or obligations, or be granted a reorganization or readjustment of its respective debts or obligations.
(9) As of the date of the Preliminary Official Statement, the information contained therein solely with respect to the Property Owner, its Relevant Entities, the proposed development of the Property, ownership of the Property, the Property Owner’s development plan, the Property Owner’s financing plan, the Property Owner’s lenders (if any), and contractual arrangements of the Property Owner or any Relevant Entities (including, if material to the Property Owner’s development plan or the Property Owner’s financing plan, loans of the Property Owner or such Relevant Entities) as set forth under the Packet Pg. 1959
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sections of the Preliminary Official Statement captioned “THE DISTRICT—General Description of the District,” “—The Developer” and “—The Development” and “CONTINUING DISCLOSURE—The Developer Continuing Disclosure” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report, market value ratio and annual special tax rates and ratios, and (ii) information which is identified as having been provided by a source other than the Property Owner) is true and correct in all material respects, and did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (10) Except as disclosed in the Preliminary Official Statement, the Property Owner has not submitted an application for, nor received actual notice of:
(i) the formation or authorization of any other assessment district or community facilities district that would include any portion of the Property, or (ii) the authorization or issuance of any debt secured by an assessment or another special tax to be levied on any portion of the Property, other than the Special Tax.
(11) Except as set forth in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there are no claims, disputes, lawsuits, actions or contingent liabilities of or against the Property Owner or its Relevant Entities, or among, by or between the Property Owner and any contractors working on the development of the Property, which could reasonably be expected to materially and adversely affect:
(i) the ability of the Property Owner to own and develop the Property, as described in the Preliminary Official Statement;
(ii) the ability of the Property Owner to pay Special Taxes on the Property (to the extent the responsibility of the Property Owner) prior to delinquency; (iii) the ability of the Property Owner to carry on its business as described in the Preliminary Official Statement; or
(iv) the ability of the Property Owner to perform its obligations under the Property Owner Continuing Disclosure Certificate.
(12) The Property Owner covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Property Owner will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way:
(i) seeks to challenge or overturn the formation of the Community Facilities District;
(ii) seeks to challenge the adoption of the ordinance levying Special Taxes within the Community Facilities District;
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(iii) seeks to invalidate the Community Facilities District or any of the Bonds or any refunding obligations relating thereto; or
(iv) seeks to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto.
The foregoing covenant shall not prevent the Property Owner in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity relating to the following:
(a) a claim that the Special Tax has not been levied in accordance with the Rate and Method;
(b) the application or use of the Special Taxes levied and collected; or (c) the enforcement of the obligations of the City or the Community Facilities District under the Fiscal Agent Agreement or any agreements among the Property Owner and it Relevant Entities, the City and/or the Community Facilities District or to which the Property Owner or its Relevant Entities is a party or beneficiary. (13) The Property Owner has received a copy of the Rate and Method containing the prepayment formula. The Property Owner acknowledges that any prepayment of the Special Taxes may only be made in accordance with the Rate and Method. (14) The Property Owner intends to comply with the provision of the Mello-Roos Community Facilities Act of 1982, as amended, relating to the Notice of Special Tax described in California Government Code Section 53341.5 in connection with the sale of the Property.
(15) Based upon its current development plans, including, without limitation, its current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the sections “RISK FACTORS” and “THE DISTRICT,” the Property Owner anticipates that it will have sufficient funds to develop and sell the Property as described in the Preliminary Official Statement and pay Special Taxes on the Property (to the extent the responsibility of the Property Owner) prior to delinquency.
However, no assurance can be given that sources of financing available to the Property Owner will be sufficient to complete the property development and home construction as currently anticipated and as described in the Preliminary Official Statement. While the Property Owner has made such internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither the Property Owner nor any of its Relevant Entities has any legal obligation of any kind to make any such funds available or to obtain loans. Other than pointing out the willingness of the Property Owner to provide internal financing in the past, the Property Owner has not represented in any way that it will do so in the future. If and to the extent that internal financing and home sales revenues are inadequate to pay the costs to complete the Property Owner’s planned development in the Community Facilities District and other financing by the Property Owner Packet Pg. 1961
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is not put into place, there could be a shortfall in the funds required to complete the proposed development by the Property Owner and portions of the Property may not be developed. (16) The Property Owner consents to the issuance of the Bonds. The Property Owner acknowledges and agrees that the proceeds of such Bonds will be used for the acquisition and construction of the improvements described in the Preliminary Official Statement. The Property Owner acknowledges that the costs to acquire and construct such improvements are estimates, and that any increase in costs in excess of the estimated costs relating to improvements will reduce the improvements which may be financed by the City, and neither the City, nor the Community Facilities District has any obligation to provide moneys to pay for any such costs.
(17) If between the date of this Certificate and the Closing Date, any event relating to or affecting such Property Owner, its Relevant Entities, or the ownership, development or sale of the Property shall occur of which the undersigned has actual knowledge and which the undersigned believes would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 9 hereof (and subject to the limitations and exclusions contained in Section 9 of this Certificate) to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, Property Owner shall notify the City and the Underwriter and if, in the opinion of counsel to the City or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Property Owner shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City and to the Underwriter.
(18) The Property Owner agrees to deliver a Bring-Down Certificate, dated the Closing Date, in substantially the form attached as Appendix G to the Bond Purchase Agreement. If any event related to or affecting the Property Owner, its Relevant Entities or the ownership, development or sale of the Property occurs, as a result of which it is necessary to modify the form of Bring-Down Certificate, the Property Owner agrees to deliver at the time of issuance of the Bonds a new form of Bring-Down Certificate revised to reflect such event.
(19) The Property Owner acknowledges and agrees that:
(i) in connection with the purchase and sale of the Bonds under the Bond Purchase Agreement, and with the discussions, undertakings and procedures leading up to the consummation of the purchase and sale of the Bonds under the Bond Purchase Agreement, the Underwriter is and has been acting solely as principal and is not acting as the agent or fiduciary of the Property Owner; (ii) the Underwriter has not assumed a fiduciary responsibility in favor of the Property Owner with respect to (a) the offering of the Bonds contemplated hereby or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the Property Owner on other matters), or (b) any other obligation to the Property Owner with respect to the offering contemplated by the Bond Purchase Agreement; and Packet Pg. 1962
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(iii) the Property Owner has consulted its own legal, financial and other advisors to the extent it has deemed appropriate in connection with the offering contemplated by the Bond Purchase Agreement.
(20) On behalf of the Property Owner, I have reviewed the contents of this Certificate and consulted with counsel regarding the meaning of its contents. The Property Owner acknowledges and understands that a variety of state and federal laws, including but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Property Owner, and that under some circumstances certification as to the matters set forth in this Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the Property Owner under such laws.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] Packet Pg. 1963
F-9
The undersigned has executed this Certificate solely in his or her capacity as an authorized officer or representative of Property Owner and he or she will have no personal liability arising from or relating to this Certificate. Any liability arising from or relating to this Certificate may only be asserted against the Property Owner.
JEC ENTERPRISES, INC.,
a California corporation
By:___________________________________________
Name:________________________________________
Title:_________________________________________
Packet Pg. 1964
G-1
EXHIBIT G
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
BRING-DOWN CERTIFICATE OF
JEC ENTERPRISES, INC.
[Closing Date]
City of San Bernardino
Community Facilities District No. 2018-2
(Verdemont Ranch) of the City of San Bernardino
290 North “D” Street
San Bernardino, CA 92401
Hilltop Securities Inc.
2533 South Coast Highway 101, Suite 250
Cardiff, CA 92007
Reference is made to the Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino, 2023 Special Tax Bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [BPA Date] (the “Bond Purchase Agreement”), entered in connection therewith.
This Bring-Down Certificate of JEC Enterprises, Inc. (the “Bring-Down Certificate”) is delivered by JEC Enterprises, Inc., a California corporation (the “Property Owner”) pursuant to Section 3(E)(22) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Certificate of JEC Enterprises, Inc. (the “Certificate”), dated [POS Date] delivered by the Property Owner in connection with the distribution of the Preliminary Official Statement relating to the Bonds.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Property Owner, and the undersigned, on behalf of the Property Owner, further certifies as follows:
(1) The undersigned has received the final Official Statement relating to the Bonds, dated [BPA Date] (the “Final Official Statement”). Each statement made in the Certificate is affirmed and restated as if made on the date hereof; except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Final Official Statement. (2) To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement that has, in any material way, adversely affected the statements and information described in Paragraph 9 of the Certificate (and subject to the limitations and exclusions contained in Paragraph 9 of the Certificate) relating to the Property Owner and its Relevant Entities, the Property, the Property Owner’s development and financing plans, and the Property Owner’s contractual arrangements (but excluding any information cited as coming from a source other than the Property Owner), which should be disclosed in the Final Official Statement for Packet Pg. 1965
G-2
the purposes for which it is to be used in order to make such statements and information contained in the Final Official Statement not misleading in any material respect. (3) For a period of 25 days after the Closing Date, if the undersigned has actual knowledge of any event relating to or affecting the Property Owner, its Relevant Entities, or the ownership development or sale of the Property which could cause the information under the captions of the Final Official Statement indicated in Paragraph 9 of the Certificate (and subject to the limitations and exclusions contained in Paragraph 9 of the Certificate) to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Property Owner shall notify the City and the Underwriter and if, in the opinion of counsel to the City or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Final Official Statement, the Property Owner shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Final Official Statement in form and substance satisfactory to counsel to the City and to the Underwriter.
(4) The Property Owner has duly executed and delivered the Property Owner Continuing Disclosure Certificate, and the Property Owner Continuing Disclosure Certificate constitutes the legal, valid and binding obligation of the Property Owner, enforceable against the Property Owner in accordance with its terms, except as such enforcement is limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance, and other similar laws relating to or affecting the rights of creditors and certain equitable, legal, or statutory principles affecting the enforcement of contractual rights generally, regardless of whether such enforcement is considered in a proceeding in equity or at law.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] Packet Pg. 1966
G-3
The undersigned has executed this Bring-Down Certificate solely in his or her capacity as an authorized officer or representative of Property Owner and he or she will have no personal liability arising from or relating to this Bring-Down Certificate. Any liability arising from or relating to this Bring-Down Certificate may only be asserted against the Property Owner.
JEC ENTERPRISES, INC.,
a California corporation
By:___________________________________________
Name:________________________________________
Title:_________________________________________
Packet Pg. 1967
H-1
EXHIBIT H
COMMUNITY FACILITIES DISTRICT NO. 2018-2
(VERDEMONT RANCH) OF THE CITY OF SAN BERNARDINO
2023 SPECIAL TAX BONDS
CERTIFICATE OF APPRAISER
The undersigned hereby states and certifies:
1. That she is an authorized principal of Kitty Siino &Associates, Inc., Tustin, California (the “Appraiser”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.
2. That the Appraiser has prepared an appraisal report dated _______, 2023, with a date of value as of February 21, 2023 (the “Appraisal Report”), on behalf the Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino (the “Community Facilities District”) and in connection with the Official Statement dated [BPA Date] (“Official Statement”), concerning Community Facilities District No. 2018-2 (Verdemont Ranch) of the City of San Bernardino 2023 Special Tax Bonds (the “Bonds”).
3. That the Appraiser hereby consents to the reproduction and use of the Appraisal Report appended to the Preliminary Official Statement and the Official Statement. The Appraiser also consents to the references to the Appraiser and the Appraisal made in the Preliminary Official Statement and the Official Statement.
4. In the opinion of the Appraiser the assumptions made in the Appraisal Report are reasonable.
5. That the Official Statement has been reviewed on behalf of the Appraiser and to the best knowledge of the Appraiser the statements concerning the Appraisal Report and the value of the property contained under the captions “THE DISTRICT – Appraisal Report,” and “APPENDIX B – APPRAISAL REPORT” are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
6. Each of the parcels appraised by the Appraiser is encompassed within the Community Facilities District as set forth in the boundary map of the Community Facilities District and the Appraisal Report fairly and accurately described, as of the stated date of value, the market values of the properties in the Community Facilities District that are subject to the special taxes.
7. That, as of the date of the Official Statement and as of the date hereof, the Appraisal Report appended to the Official Statement, to the best of my knowledge and belief, and subject to all of the Limiting Conditions and Major Assumptions set forth in the Appraisal Report, does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and no events or occurrences have been ascertained by us or have come to our attention that would materially and adversely affect the conclusions as to the market value of the Packet Pg. 1968
H-2
appraised property stated in the Appraisal Report. However, we have not performed any procedures since the date of value of the Appraisal Report to obtain knowledge of such events or occurrences nor are we obligated to do so in the future.
8. The Appraisal Report complies with the Appraisal Standards for Land-Secured Financings issued by the California Debt and Investment Advisory Commission dated July, 2004.
The City and Hilltop Securities Inc., as underwriter, are entitled to rely on this Certificate.
Dated: [Closing Date]
KITTY SIINO &ASSOCIATES, INC.
By:
Packet Pg. 1969
ITEMS TO BE CONSIDERED FOR FUTURE MEETINGS
City of San Bernardino
Request for Council Action
Date: May 3, 2023
To: Honorable Mayor and City Council Members
From: Ben Reynoso, Council Member, 5th Ward
Department: Council Office
Subject: Consider Extending Notification Period of Public Hearings (All Wards) – Council Member Reynoso
Packet Pg. 1970
ITEMS TO BE CONSIDERED FOR FUTURE MEETINGS
City of San Bernardino
Request for Council Action
Date: May 3, 2023
To: Honorable Mayor and City Council Members
From: Ben Reynoso, Council Member, 5th Ward
Department: Council Office
Subject: Consider Removal of Oxbow Cement Pile (Ward 5) – Council Member Reynoso
Packet Pg. 1971