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16-0906_TPB INVESTMENTS, INC_Agenda Report_C1TO: FROM: Successor Agency to the San Juan Capistrano Community Redevelopment Agency Agenda Report Honorable Chair and Members of the Board ~n Siegel, Executive Director SUBMITTED BY: Ken At-Imam, Finance Officer t:'t.- DATE: September 6, 2016 SACRA 9/6/2016 C1 SUBJECT: Consideration of a Resolution to Authorize Issuance of Refunding Note to Refinance Existing Bank Loan RECOMMENDATION : By motion, 1. Approve the accompanying resolution and loan agreement, substantially in the form attached, to issue debt to refinance an existing obligation owed to Farmers & Merchants Bank, and, 2. Authorize the Executive Director to execute the Agreement and any related documents to complete the issuance. EXECUTIVE SUMMARY: The Successor Agency has a loan with Farmers & Merchants Bank ("the Bank") with a current balance of $3,094,550. The Successor Agency does not have sufficient annual revenue available to pay this loan in its entirety on the loan's extended due date of January 6, 2017. The accompanying resolution authorizes the Successor Agency to refinance the existing bank loan by issuing a Subordinate Tax Allocation Note ("Refunding Note"). The Refunding Note will provide permanent financing to fully amortize the Refunding Note over a five year period with no balloon payment at maturity. Successor Agency Agenda Report September 6, 2016 Page 2 of 4 DISCUSSION/ANALYSIS : On April 22, 2006, the Community Redevelopment Agency ("CRA") of the City purchased certain parcels of land associated with the Lower Rosan Ranch property (Parcels No. 121-253-13 and 121-253-15). This purchase was financed by a five-year loan agreement entered into with Farmers & Merchants Bank. On June 21, 2011, the CRA entered into an agreement with Farmers & Merchants Bank to refinance this loan over another five year period with a large balloon payment at maturity. On August 16, 2016, the Successor Agency approved a resolution to extend the due date of the Farmers & Merchants Bank loan to January 6, 2017 to give the Successor Agency time to refinance the balloon payment that came due at that time. State law (Health and Safety Code Section 34177.5) sets forth the process to refinance balloon maturities. That process requires that a successor agency engage an independent Financial Advisor to ascertain the least costly means to refinance the obligation in question. The City's Financial Advisor (Fieldman, Rolapp & Associates) has determined that the least costly method of refinancing the existing bank note is to issue a Subordinate Tax Allocation Note in the form of a private placement with a bank. This Refunding Note will be paid off over a five year period with no balloon payment. This will allow debt service on the Refunding Note to be spread over enough years such that the total of all of the debt service payments of the Successor Agency that are due each year will not exceed the total tax increment revenue that is available to the Successor Agency that year. As the first step in this process, the Successor Agency considers a resolution to approve issuance of the Refunding Note. The proposed resolution and the proposed Loan Agreement are included with this agenda report as attachments. Because the Refunding Note has not yet been issued, certain particulars (the date of debt issuance, the exact amount, etc.) are not reflected in the attached and will be incorporated upon issuance. By approving the accompanying resolution, the Successor Agency is approving the issuance of the Refunding Note. The resolution also sets forth the objective of the refunding (to address the cash shortfall created by the aforementioned balloon payment) and provides for payment of the costs of issuance that are associated with the Refunding Note. After the Successor Agency has considered the accompanying resolution and loan agreement, the Oversight Board will consider a resolution approving the issuance of the Refunding Note. That meeting will take place on September 7, 2016. Staff will then submit the signed resolutions to the California Department of Finance for approval. After approval by the California Department of Finance, the Refunding Note will be issued and the existing bank note extinguished. Successor Agency Agenda Report September 6, 2016 Page 3 of 4 The Refunding Note will be secured by the tax increment revenues of the Successor Agency, rather than a lien against the Lower Rosan Ranch property, as had been the case with the Farmers & Merchants note. This will allow the Lower Rosan Ranch property to be sold and the proceeds immediately distributed to the various taxing entities without reduction for early extinguishment of this obligation. FISCAL IMPACT: The proposed Refunding Note will refinance over five years the $3.1 million balloon payment that is required to be paid on January 6, 2017. Projections of tax increment based on information provided by the County of Orange indicate that the tax increment revenue of the Successor Agency is sufficient to provide for debt service on the Refunding Note over the entire period that the Refunding Note is outstanding. The interest rate for the Refunding Note is tied to the two-year LIBOR rate in effect at the time of funding. This rate is estimated to be 4.1% based on current market conditions. The Refunding Note will be fully amortized over five years with no balloon payment at the end of the five year period. The amount paid per year will be $7 46,193 ($565,863 in the first year). Over the five year period, the average amount of interest paid per year will be $76,218. Principal and interest on the Refunding Note will be paid in their entirety from the tax increment funds that are made available to the Successor Agency. Costs of issuance (primarily in the form of legal costs and Financial Analyst costs) are estimated to be $75,000. These costs are payable from the proceeds of the Refunding Note. ENVIRONMENTAL IMPACT: Not applicable. PRIOR CITY COUNCIL REVIEW : On June 21, 2011, the Board of Directors of the San Juan Capistrano Community Redevelopment Agency ("Agency") approved Resolution No. CRA 11-06-21-01 that authorized the Agency to enter into a loan with Farmers & Merchants Bank. On August 16, 2016, the Successor Agency directed the Executive Director of the Successor Agency to execute the documents necessary to extend the due date of the existing bank note by six months in order to provide time for the Successor Agency to issuing debt to refinance the existing note. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: On August 23, 2016, the Oversight Board approved extending the due date of the existing bank note by six months in order to provide time for the Successor Agency to issue debt to refinance the existing note. Successor Agency Agenda Report September 6, 2016 Page 4 of 4 NOTIFICATION : Farmers & Merchants Bank Oversight Board California Department of Finance County of Orange Auditor-Controller's Office ATTACHMENTS : Attachment 1 -SACRA Resolution No. 16-09-06-XX Attachment 2 -Loan Agreement Attachment 3-Summary of Terms RESOLUTION NO. SACRA 16-09-06-XX A RESOLUTION OF THE BOARD OF DIRECTORS OF THE SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY APPROVING A LOAN AGREEMENT AND NOTE TO PREPAY A 2011 PROMISSORY NOTE, REQUESTING OVERSIGHT BOARD APPROVAL OF THE ISSUANCE OF THE LOAN AGREEMENT AND NOTE, REQUESTING CERTAIN DETERMINATIONS BY THE OVERSIGHT BOARD, AND PROVIDING FOR OTHER MATTERS PROPERLY RELATING THERETO WHEREAS, the San Juan Capistrano Community Redevelopment Agency (the "Former Agency") was a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the Health and Safety Code of the State (the "Redevelopment Law"); WHEREAS, pursuant to Section 34172(a) of the California Health and Safety Code (unless otherwise noted, all Section references hereinafter being to such Code), the City Council has elected to assume the activities and obligations of the Former Agency, as the successor entity to the Former Agency (the "Successor Agency"); WHEREAS, prior to the dissolution of the Former Agency, the Former Agency delivered its promissory note (the "Prior Note") in the amount of $4,100,000 dated July 6, 2011, to Farmers' and Merchants' Bank for the purpose of financing redevelopment activities; WHEREAS, the Prior Note was issued to purchase property (the "Property") within the City by the Former Agency for redevelopment purposes and the Successor Agency now intends to sell the Property and use the proceeds of such sale to distribute to other taxing agencies pursuant to the Dissolution Act; WHEREAS, pursuant to Section 34179, this Oversight Board has been established for the Successor Agency; WHEREAS, Section 34177.5 authorizes the Successor Agency to issue refunding bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding Law") for the purpose of refinancing debt service spikes, including balloon maturities, so long as existing debt service is not accelerated, except to achieve substantially level debt service, and the principal amount of the debt does not exceed the amount necessary to finance the debt service spikes, including establishing customary debt service reserves and paying related costs of issuance parameters set forth in Section 34177 .5(a)(2) (the "Parameters"); WHEREAS, Western Alliance Bank, and its affiliated entities (the "Purchaser"), have provided a term sheet proposal for the proposed refinancing of the Prior Note; ATTACHMENT 1 -Page 1 of 5 WHEREAS, to determine compliance with the Parameters for purposes of the delivery by the Successor Agency of its Loan Agreement and Refunding Note, the Successor Agency has caused its financial advisor, Fieldman, Rolapp & Associates (the "Financial Advisor"), to prepare an analysis of the proposed debt service in order to pay the Prior Note and to pay related costs of issuance (the "Debt Service Analysis"); WHEREAS, the Successor Agency wishes at this time to approve the Loan Agreement and Refunding Note; WHEREAS , pursuant to Section 34179, an oversight board (the "Oversight Board") has been established for the Successor Agency; WHEREAS, the Successor Agency requests that the Oversight Board approve the Loan Agreement and Refunding Note to refund the Prior Note as selected by the Successor Agency pursuant to this Resolution ; and, WHEREAS, the Successor Agency further requests that the Oversight Board make certain determinations described below on which the Successor Agency will rely in undertaking the refunding proceedings and the Loan Agreement and Refunding Note. NOW, THEREFORE, BE IT RESOLVED BY THE SUCCESSOR AGENCY OF THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY: Section 1. Determinations on Financing. The Successor Agency has determined to approve and deliver the Loan Agreement and Refunding Note to provide funds to refund and defease all or a portion of the Prior Note and to cure any default which may be declared by the owner of the Prior Note, all as evidenced by the Debt Service Analysis on file with the Successor Agency, which Debt Service Analysis is hereby approved. Section 2 . Approval of the Loan Agreement and Refunding Note . The Successor Agency hereby approves the Loan Agreement and Refunding Note prescribing the terms and provisions of the Refunding Note and the application of the proceeds of the Refunding Note in compliance with the Parameters. Each of the Successor Agency Chair, or the City Manager of the City of San Juan Capistrano, as the chief administrative officer of the Successor Agency (each , an "Authorized Officer"), is hereby authorized and directed to execute and deliver, and the Secretary .of the Successor Agency, is hereby authorized and directed to attest to, the Loan Agreement and Refunding Note for and in the name and on behalf of the Successor Agency, in substantially the form on file with the Successor Agency Clerk, with such changes therein, deletions therefrom and additions thereto as the Authorized Officer executing the same shall approve, such approval to be conclusively evidenced by the execution and delivery of the Loan Agreement. The Successor Agency hereby authorizes the delivery and performance of the Loan Agreement. Section 3. Financing Terms. The financing terms presented to the Successor Agency by the Purchaser are approved as follows: maximum principal amount of ATTACHMENT 1 -Page 2 of 5 financing is $3,500,000, maximum interest rate with respect to the financing is 4.30% and maximum term for the financing is 5 years. Section 4. Oversight Board Approval of the Issuance of the Bonds. The Successor Agency hereby requests the Oversight Board as authorized by Section 34177 .5(f) and Section 34180 to approve the issuance of the Loan Agreement and Refunding Note pursuant to Section 34177 .5(a)(2) and this Resolution. Section 5. Determinations by the Oversight Board . The Successor Agency requests that the Oversight Board make the following determinations upon which the Successor Agency will rely in undertaking the refunding proceedings and the delivery of the Loan Agreement and Refunding Note: (a) The Successor Agency is authorized, as provided in Section 34177.5(f), to recover its costs related to the delivery of the Loan Agreement and Refunding Note from the proceeds of the Refunding Note, including the cost of reimbursing the City for administrative staff time spent with respect to the authorization and delivery of the Loan Agreement and Refunding Note; (b) The application of proceeds of the Refunding Note by the Successor Agency to the refunding of all of the Prior Note, as well as the payment by the Successor Agency of costs of issuance of the Refunding Note, as provided in Section 34177.5(a), shall be implemented by the Successor Agency promptly without the approval of the Oversight Board, the California Department of Finance, the Orange County Auditor-Controller or any other person or entity other than the Successor Agency;. (c) The Successor Agency shall be entitled to receive its full Administrative Cost Allowance under Section 34181 (a)(3) without any deductions with respect to continuing costs related to the delivery of the Loan Agreement and Refunding Note, such as trustee's fees, auditing and fiscal consultant fees and continuing disclosure and rating agency costs (collectively, "Continuing Costs of Issuance"), and such Continuing Costs of Issuance shall be payable from property tax revenues pursuant to Section 34183 . In addition and as provided by Section 34177 .5(f), if the Successor Agency is unable to complete the issuance of the Refunding Bonds for any reason, the Successor Agency shall , nevertheless, be entitled to recover its costs incurred with respect to the refunding proceedings from such property tax revenues pursuant to Section 34183 without reduction in its Administrative Cost Allowance. Section 6. Filing of Debt Service Analysis and Resolution. The Successor Agency Clerk is hereby authorized and directed to file the Debt Service Analysis, together with a certified copy of this Resolution, with the Oversight Board, and, as provided in Section 341800) with the Orange County Administrative Officer, the Orange County Auditor-Controller and the California Department of Finance . ATTACHMENT 1 -Page 3 of 5 Section 7 . Agreements with Consultants . The firm of Best Best & Krieger LLP is hereby designated as Bond Counsel, and the firm of Fieldman, Rolapp & Associates is hereby designated as financial advisor to the Successor Agency (the "Financial Advisor"). The City Manager is hereby authorized and directed to execute and deliver agreements with such firms for their services related to the Loan Agreement, each such agreement to be in the respective form on file with the Secretary. Section 8. Official Actions. The Authorized Officers and any and all other officers of the Successor Agency are hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to do any and all things and take any and all actions, which they, or any of them, may deem necessary or advisable in obtaining the requested approvals by the Oversight Board and the California Department of Finance and in the delivery of the Loan Agreement and Refunding Note. Whenever in this Resolution any officer of the Successor Agency is directed to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer is absent or unavailable. Section 9. Effective Date. This Resolution shall take effect immediately upon adoption. Section 10. The Secretary shall certify to the adoption of this Resolution. PASSED, APPROVED and ADOPTED this __ day of ____ , 2016. Kerry K. Ferguson, Chair ATTEST: Maria Morris, Agency Secretary ATTACHMENT 1 -Page 4 of 5 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF SAN JUAN CAPISTRANO ) I, Maria Morris, Secretary of the Successor Agency of the San Juan Capistrano Community Redevelopment Agency, hereby certify that the above and foregoing Resolution was duly and regularly adopted by the Successor Agency at a regular meeting thereof held on the __ day of , 2016, and that it was so adopted by the following vote: ' . AYES : NOES : ABSENT: Maria Morris, Agency Secretary ATTACHMENT 1 -Page 5 of 5 LOAN AGREEMENT Dated as of 2016 -----' by and between the SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY and the as Lender Relating to $ ____ _ 2016 SUBORDINATE TAXALLOCATIONNOTE (LOWER ROSAN RANCH PROPERTY) ATTACHMENT 2-Page 1 of 29 Section 1.1. Section 1.2. Section 2.1. Section 2.2. Section 2.3. Section 2.4. Section 2.5. Section 2.6. Section 2.7. ARTICLE 1 DEFINITIONS Definitions ........................................................................................................ 2 Rules of Construction ...................................................................................... 6 ARTICLE2 THE SERIES 2016 NOTE; ESTABLISHMENT OF FUNDS Authorization ................................................................................................... 6 Terms ofthe Series 2016 Note ......................................................................... 6 Prepayment ...................................................................................................... 6 Application of Proceeds of the Series 2016 Note ............................................ 6 Establishment and Application of Costs oflssuance Fund .............................. 7 Validity ofthe Series 2016 Note ...................................................................... 7 TransferofSeries2016Note ........................................................................... 7 ARTICLE 3 PLEDGE OF PROJECT AREA TAX REVENUES APPLICATION OF FUNDS Section 3.1. Section 3.2. Section 3.3. Section 3.4. Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.6. Section 4.7. Section 4.8. Section 4.9. Section 4.10. Section 4.11. Section 5 .1. Section 5.2. Pledge of Tax Revenues ................................................................................... 7 Redevelopment Obligation Retirement Fund .................................................. 8 Issuance of Parity Debt .................................................................................... 8 Issuance of Subordinate Debt .......................................................................... 9 ARTICLE4 OTHER COVENANTS OF THE AGENCY Punctual Payment ............................................................................................. 9 Limitation on Additional Indebtedness ............................................................ 9 Payment of Claims ........................................................................................... 9 Books and Accounts; Financial Statements ..................................................... 9 Protection of Security and Rights .................................................................. 1 0 Payments of Taxes and Other Charges .......................................................... 10 Disposition of Property .................................................................................. 1 0 Maintenance of Tax Revenues ....................................................................... 10 Compliance with the Law; Recognized Obligation Payment Schedules ....... 10 Payment of Administrative Expenses; Indemnification ................................ 12 Further Assurances ......................................................................................... 12 ARTICLE 5 LOAN AGREEMENT EVENTS OF DEFAULTS AND REMEDIES Loan Agreement Events of Default and Acceleration of Maturities ............. 12 Application of Revenues and Other Funds After Default.. ............................ 13 ATTACHMENT 2-Page 2 of 29 Section 5.3. Section 5.4. Section 6.1. Section 6.2. Section 6.3. Section 6.4. Section 6.5. Section 6.6. EXHIBIT A EXHIBIT B EXHIBIT C EXHIBITD No Waiver ...................................................................................................... 14 Remedies Not Exclusive ................................................................................ 14 ARTICLE6 MISCELLANEOUS Benefits Limited to Parties ............................................................................. 14 Successor is Deemed Included in All References to Predecessor ................. 14 Amendment. ................................................................................................... 14 Waiver ofPersonal Liability .......................................................................... 15 Notices ........................................................................................................... 15 Partial Invalidity ............................................................................................. 15 SERIES 2016 NOTE PAYMENT SCHEDULE .......................................... A-1 FORM OF SERIES 2016 NOTE ................................................................... B-1 FORM OF INVESTOR LETTER ................................................................. C-1 REQUISITION FOR DISBURSEMENT FROM COSTS OF ISSUANCE FUND ....................................................................................... D-1 ATTACHMENT 2 -Page 3 of 29 LOAN AGREEMENT This LOAN AGREEMENT (Lower Rosan Ranch Property) (herein referred to as the "Loan Agreement"), made and entered into as of by and between the SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a successor agency organized and existing under the laws of the State of California (the "Agency" or "Successor Agency") and · as lender bank (the "Bank") ; W I TN E S S E T H: WHEREAS, the Former Agency was a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 ofthe Health and Safety Code ofthe State (the "Redevelopment Law"); WHEREAS, the Agency has heretofore delivered its promissory note (the "Prior Note") in the amount of $4,100,000, dated July 6, 2011, to Farmers & Merchants Bank of Long Beach, for the purpose of acquiring the Lower Rosan Ranch Parcel (the "Project"); and WHEREAS, the Prior Note was issued to purchase property within the City by the Former Agency for redevelopment purposes and the Successor Agency now intends to sell the property and use the proceeds of such sale to distribute to other taxing agencies pursuant to the Dissolution Act; and WHEREAS, by implementation of California Assembly Bill XI 26, which amended provisions of the California Redevelopment Law (found at Health and Safety Code Section 33000, et.seq.) and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, the Former Agency was dissolved as of February 1, 2012 in accordance with California Assembly Bill XI 26 approved by the Governor of the State of California on June 28, 2011 (as amended, the "Dissolution Act"), and as of February 1, 2012, the Successor Agency, in accordance with and pursuant to the Dissolution Act, assumed the duties and obligations of the Former Agency as provided in the Dissolution Act, including, without limitation, the obligations of the Former Agency; and WHEREAS, Section 34177.5(a)(2) of the Dissolution Act authorizes the Successor Agency to undertake proceedings for the refunding of outstanding bonds and other obligations of the Former Agency, subject to the conditions precedent contained in said Section 34177.5; and WHEREAS, said Section 34177.5 also authorizes the Successor Agency to issue bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding Law") for the purpose of refinancing debt service spikes, including balloon maturities, so long as existing debt service is not accelerated, except to achieve substantially level debt service, within the parameters set forth in said Section 34177.5(a)(2); and WHEREAS, the Successor Agency has determined that it will achieve debt service within such parameters by the issuance pursuant to the Dissolution Act and the Refunding Law of its $ aggregate principal amount 2016 Subordinate Tax Allocation Note (the ATTACHMENT 2-Page 4 of 29 "Series 2016 Note") payable from amounts due pursuant to this Loan Agreement in order to refund, on a current basis the Prior Note; and WHEREAS, in order to establish and declare the terms and conditions upon which the Series 2016 Note is to be made and secured, the Agency and the Bank wish to enter into this Loan Agreement; and WHEREAS, all acts and proceedings required by law necessary to make this Loan Agreement, when executed by the Agency and the Bank, the valid, binding and legal obligations of the Agency, and to constitute this Loan Agreement a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Loan Agreement have been in all respects duly authorized; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto do hereby agree as follows: ARTICLE 1 DEFINITIONS Section 1.1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Loan Agreement shall have the respective meanings which such terms have in the Indenture. In addition, the following terms defined in this Section 1.1 shall, for all purposes of this Loan Agreement, have the respective meanings herein specified. "Administrative Expenses" has the meaning set forth in the Indenture. "Business Day" means a day which is a Saturday or Sunday or a day of the year on which banks in New York, New York and Los Angeles, California are not required or authorized to remain closed. "City" means the City of San Juan Capistrano, California. "Closing Date" means the date upon which there is a physical delivery of the Series 2016 Note in exchange for the purchase price therefor. "Continuing Disclosure Agreement" means that certain Continuing Disclosure Agreement between the Agency and the Bank dated the Closing Date, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "County" means the County of Orange. "Debt Service" means the scheduled amount of interest and amortization of principal payable on the Series 2016 Note during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period. "Debt Service Year" means each twelve-month period extending from [August 2] in one calendar year to [August 1] of the succeeding calendar year, both dates inclusive, except in the ATTACHMENT 2-Page 5 of 29 case of the initial Debt Service Year which shall be the period from the Closing Date to [August 1, 2017,] both dates inclusive. "Dissolution Act" means the provisions of Assembly Bill X1 26, signed by the Governor June 28, 2011, and filed with the Secretary of State June 29, 2011, consisting of Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) of Division 24 of the California Health and Safety Code, as amended by Assembly Bill 1484, signed by the Governor on June 27, 2012, and filed with the Secretary of State on June 27, 2012 and as amended by Senate Bill 107 signed by the Governor on September 22 , 2015. "Event of Default" means any of the events described in Section 5 .1. "FedeTal ecmities" means any direct, noncallable general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and CATS and TGRS), or obligations the payment of principal of and interest on which are unconditionally guaranteed by the United States of America. "Fiscal Year" means any twelve-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other twelve-month period selected and designated by the Agency as its official fiscal year period. "Fonner Agency" means the City of San Juan Capistrano Community Redevelopment Agency, a public body corporate and politic duly organized and formerly existing under the Law and dissolved in accordance with the Dissolution Act. "Independent Redevelopment Consultant" means any consultant or firm of such consultants appointed by the Successor Agency, and who, or each of whom: (a) is judged by the Successor Agency to have experience in matters relating to the collection of Tax Revenues or otherwise with respect to the financing of redevelopment projects; (b) Agency; is in fact independent and not under the domination of the Successor (c) does not have any substantial interest, direct or indirect, with the Successor Agency, other than as original purchaser of the Series 2016 Note or any Parity Debt; and (d) is not connected with the Successor Agency as an officer or employee of the Successor Agency, but who may be regularly retained to make reports to the Successor Agency. "Interest Payment Date" means each (February] 1 and [August] 1, commencmg (February] 1, 2017, for so long the Series 2016 Note remains unpaid. "Investor Letter" means a letter in substantially the form of Exhibit C attached hereto and delivered pursuant to Section 2.7. ATTACHMENT 2 -Page 6 of 29 "Law" means the Redevelopment Law, as amended by the Dissolution Act. "Loan AgTeement" means this Loan Agreement (Lower Rosan Ranch Property) dated ______ by and between the Agency and the Bank as originally entered into or as amended or supplemented pursuant to the provisions hereof. "Series 2016 Note Payments" means the installment payments of principal and interest payable on the Series 2016 Note pursuant to this Loan Agreement. "Parity Debt" means any loans, bonds, notes, advances or indebtedness payable from the Tax Revenues on a parity with the Series 2016 Note. 'Parity Debt Instrument" means any resolution, indenture of trust,e agreement or other instrument authorizing the issuance of any Parity Debt. This Loan Agreement is a Parity Debt Instrument. "Redevelopment Law" means the Community Redevelopment Law of the State, constituting Part 1 of Division 24 of the Health and Safety Code of the State, and the acts amendatory thereof and supplemental thereto. "Recognized Obligation Payment Schedule" means a Recognized Obligation Payment Schedule, each prepared and approved from time to time pursuant to subdivision (1) of Section 34177 ofthe California Health and Safety Code . "Redevelopment Obligation Retirement Fund" means the fund by that name established pursuant to California Health and Safety Code Section 34170.5(b) and administered by the Successor Agency. "Redevelopment Property Tax Trust Fund" or "RPTTF" means the fund by that name established pursuant to California Health and Safety Code Sections 34170.5(a) and 34172( c) and administered by the County auditor-controller. "Refunding Law' means Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State, and the acts amendatory thereof and supplemented thereto. "Report" means a document m writing signed by an Independent Redevelopment Consultant and including: (a) a statement that a person or firm making or giving such Report has read the pertinent provisions of this Loan Agreement to which such report related; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) a statement that, in the opinion of such person or firm, sufficient examination or investigation was made as is necessary to enable said consultant to express and informed opinion with respect to the subject matter referred to in the Report. ATTACHMENT 2-Page 7 of 29 " enior Bonds" means the $9,780,000 original principal amount of San Juan Capistrano Central Redevelopment Project 2008 Tax Allocation Series A Bonds, the $10,540,000 original principal amount of San Juan Capistrano Central Redevelopment Project 2008 Tax Allocation Subordinate Taxable Series B Bonds (Housing), the 1997 Subordinate Taxable Tax Allocation Bonds outstanding in the amount of $460,000, the 1998 Tax Allocation Refunding Bonds outstanding in the amount of $975,000, and the $3,916,450.71 and $4,080,246.64 non-negotiable promissory notes, each dated February 28, 2011, and payable to Kinoshita Enterprises and Bobby Kinoshita and any Additional Senior Bonds. ,"Subordinate Debt" means any bonds, notes, loans, advances or other indebtedness issued or incurred by the Successor Agency in accordance with the requirements of Section 3.06, which are either: (a) payable from, but not secured by a pledge of or lien upon, the Tax Revenues; or (b) secured by a pledge of or lien upon the Tax Revenues which is subordinate to the pledge of and lien upon the Tax Revenues hereunder for the security of the Series 2016 Notes. "Successor Agency" means the Successor Agency to the San Juan Capistrano Community Redevelopment Agency, a public entity existing under the Dissolution Act, as successor to the Former Agency. "Tax Revenues" means all monies deposited from time to time in the Redevelopment Property Tax Trust Fund as provided in paragraph (2) of subdivision (a) of Section 34183 of the California Health and Safety Code but excluding (i) amounts of such taxes required to be paid by the Successor Agency pursuant to its Tax Sharing Agreements or pursuant to Section 33607.5 or 33607.7 of the Redevelopment Law, except and to the extent that any amounts so payable are payable on a basis subordinate to the payment of the Series 2016 Note, any additional Parity Debt, as applicable, and (ii) principal of and interest due on the Senior Bonds outstanding. If, and to the extent, that the provisions of Section 34172 or paragraph (2) of subdivision (a) of Section 34183 are invalidated by a final judicial decision, then Tax Revenues shall include all tax revenues allocated to the payment of indebtedness pursuant to Health & Safety Code Section 33670 or such other section as may be in effect at the time providing for the allocation of tax increment revenues in accordance with Article XVI, Section 16 of the California Constitution, subject to the exclusions set forth above. "Tax Sharing Agreements" means those certain agreements entitled respectively "Agreement for Reimbursement for Tax Increment Funds (Redevelopment Plan for the San Juan Capistrano Central Redevelopment Project)" dated April 10, 1984 by and among the San Juan Capistrano Redevelopment Agency, the City of San Juan Capistrano and the County of Orange, and amended on December 10, 1985 and September 1, 1987, that certain "Amended and Restated Agreement for Cooperation Between the Capistrano Unified School District and the San Juan Capistrano Community Redevelopment Agency and the City of San Juan Capistrano" dated as of January 7, 1986, as amended June 7, 1997, and on file in the office ofthe Secretary of the Agency, as such Agreement may be amended from time to time. "Written Request of U1e Agency or "Cet1ificate of the Agency" means a request or certificate, in writing, signed by the Executive Director, Treasurer or Secretary of the Agency or by any other officer of the Agency duly authorized by the Agency for that purpose. ATTACHMENT 2-Page 8 of 29 Section 1.2. Rules of Construction. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Loan Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Loan Agreement as a whole and not to any particular Article, Section or subdivision. ARTICLE2 THE SERIES 2016 NOTE; ESTABLISHMENT OF FUNDS Section 2.1. Authorization. The Bank hereby agrees to loan to the Agency, the aggregate principal amount of$ all under and subject to the terms of this Loan Agreement, the Bond Law and the Redevelopment Law and shall be represented by the delivery of a 2016 Subordinate Tax Allocation Note (the "Series 2016 Note") in the form set forth in Exhibit B hereto. This Loan Agreement constitutes a continuing agreement with the Bank to secure the full and final payment of the Series 2016 Note, subject to the covenants, agreements, provisions and conditions herein contained. Section 2.2. Terms of the Series 2016 Note. The Series 2016 Note shall be paid in installments of principal and interest (the "Series 2016 Note Payments"). The Principal component of a Series 2016 Note Payment shall be payable in installments not later than five (5) Business Days prior to [August 1] in each of the years and in the amounts as set forth in Exhibit A attached hereto and made a part hereof. Interest on each installment of the principal of the Series 2016 Note will be calculated on the basis on a 360-day year of twelve 30-day months and will accrue on each installment of principal for and including the Closing Date, to but not including the Interest Payment Date of the Series 2016 Note with respect to which such installment of principal is payable. Interest accrued on each installment of principal ofthe Series 2016 Note will be payable on each Interest Payment Date. Any installment of principal and interest which is not paid when due will continue to accrue interest from and including the Interest Payment Date with respect to which such principal or interest is payable to, but not including, the date of actual payment. Series 2016 Note Payments are more particularly set forth in Exhibit "A" attached hereto and hereby made a part hereof. Payments of the Series 2016 Note shall be payable by the Agency to the Bank in immediately available funds which constitute lawful money of the United States of America. Series 2016 Note Payments shall be deposited with the Bank at the times as set forth in this Section 2.2. Section 2.3. Prepayment. The Series 2016 Note shall not be subject to optional prepayment. Section 2.4. Application of Proceeds of the Series 2016 Note. From the Proceeds of the Series 2016 Note shall be disbursed, or otherwise credited, as follows: (1) The Bank shall deposit $ ______ into the Costs of Issuance Fund; and ATTACHMENT 2-Page 9 of 29 (2) The Bank shall wire $ ______ directly to ________ _ to pay the Prior Note. Section 2.5. Establishment and Application of Costs of Issuance Fund. The Bank shall establish, maintain and hold in trust a separate fund designated as the "Costs of Issuance Fund." The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Bank to pay the Costs of Issuance upon submission of Written Requisitions of the Agency stating the person to whom payment is to be made, the amount to be paid, the purpose for which the obligation was incurred and that such payment is a proper charge against said fund, as shown in Exhibit D hereto. On 2016, or upon the earlier Written Request of the Agency, all amounts remaining in the Costs of Issuance Fund shall be transferred by the Bank to the payment of the Series 2016 Note. Section 2.6. Validity of the Series 2016 Note. The validity of the Series 2016 Note shall not be dependent upon the completion of the Redevelopment Project or upon the performance by anyone of its obligation with respect to the Redevelopment Project. Section 2.7. Transfer of Series 2016 Note. The Series 2016 Note may be transferred to any affiliate of the Bank or to a trust or custodial arrangement established by the Bank or an affiliate of the Bank, each of the beneficial owners of which are "qualified institutional buyers" as defined in Rule 144A promulgated under the Securities Act of 1933, as amended. The Series 2016 Note may be transferred to another purchaser (other than an Affiliate of the Bank or a trust or custodial arrangement as described in the preceding sentence) if (i) written notice of such transfer, together with addresses and related information with respect to such purchaser, is delivered to the Agency by such transferor and (ii) such purchaser shall have delivered to the Agency and the transferor an Investor Letter which contains the certifications 1-9 of the form attached hereto as Exhibit C executed by a duly authorized officer of such purchaser; provided that each such purchaser shall constitute a "qualified institutional buyer" as defined in Rule 144A promulgated under the Securities Act of 1933, as amended. ARTICLE3 PLEDGE OF PROJECT AREA TAX REVENUES APPLICATION OF FUNDS Section 3.1. Pledge of Tax Revenues. Except as provided herein, the Series 2016 Note and all Parity Debt, shall be secured by a pledge of, security interest in and lien on all of the Tax Revenues excluding the Tax Revenues distributed on January 2 in each Debt Service Year not required for debt service on the Series 2016 Note on June 1 of such year, but including all Tax Revenues distributed on January 2 in each Debt Service Year to be reserved for 50% of the August 1 payment of principal on the Series 2016 Note in such Debt Service Year pursuant to Section 4.9; provided, however, that so long as any Senior Bonds remain outstanding, the Successor Agency shall first deposit amounts deposited in the Redevelopment Obligation Retirement Fund as required pursuant to the Senior Bonds Indentures. Such pledge, security interest in and lien shall be for the equal security of the Series 2016 Note and all Parity Debt without preference or priority for series, issue, number, dated date, sale date, date of execution or date of delivery. Except for the Tax Revenues and such moneys, no funds of the Successor Agency are pledged to, or otherwise liable for, the payment of principal of or interest or prepayment premium (if any) on the payment of this Loan Agreement or the Series 2016 Note. ATTACHMENT 2-Page 10 of 29 Section 3.2. Redevelopment Obligation Retirement Fund. The Successor Agency has established a special trust fund known as the "Redevelopment Obligation Retirement Fund," which shall be held by the Successor Agency pursuant to Section 34170.5(b) of the California Health and Safety Code. The Successor Agency shall deposit all of the funds received in any Debt Service Year from the RPTTF in accordance with the Dissolution Act for the purpose of paying debt service on any outstanding Senior Bonds, this Loan Agreement together with the Series 2016 Note and any Parity Debt in the Redevelopment Obligation Retirement Fund immediately upon receipt thereof by the Successor Agency, and shall transfer amounts therein in the following priority: (1) to the trustee for deposit in the Debt Service Fund established under the Senior Bonds Indentures and for any payment of amounts required thereunder, (2) to the Bank on each Interest Payment Date such amounts as are due hereunder excluding the Tax Revenues distributed on January 2 in each Debt Service Year not required for debt service on the Series 2016 Note on [February 1] of such year, but including all Tax Revenues distributed on January 2 in each Debt Service Year to be reserved for 50% of the August 1 principal on the Series 2016 Note payable in such Debt Service Year pursuant to Section 4.9, and (3) for deposit in such Debt Service Year in the funds and accounts established with respect to Parity Bonds, as provided in any Parity Debt Instrument. The Successor Agency may take into account any funds on deposit with the Bank for the payment of amounts due under this Loan Agreement and the Series 2016 Note in the Recognized Obligation Payment Schedule period covered by the deposit. In the event that the amount of Tax Revenues (available after payment of debt service on the Senior Bonds) is not sufficient to pay amounts due under this Loan Agreement and the Series 2016 Note and any Parity Debt outstanding, any such insufficiency shall be allocated among the Series 2016 Note and any Parity Debt on a pro rata basis (based on the amount of debt service coming due during any such period of insufficiency). Section 3.3. Issuance of Parity Debt. The Successor Agency will not incur any obligations payable from Tax Revenues on a basis superior to or on parity with the payments of the principal of and interest on any outstanding Senior Bonds and any other payments required under the Senior Bonds Indentures except as described below. So long as this Loan Agreement is effective and the Series 2016 Note remains outstanding, the Successor Agency shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case payable from all or any part of the Tax Revenues, excepting only as provided herein. The Successor Agency will not otherwise encumber, pledge or place any charge or lien upon any of the Tax Revenues or other amounts pledged to repayment of this Loan Agreement or the Series 2016 Note superior to the pledge and lien created for the benefit of this Loan Agreement and the Series 2016 Note; provided, that the Successor Agency (a) may issue and sell refunding bonds payable from Tax Revenues on a basis senior to this Loan Agreement and the Series 2016 Note ("Additional Senior Bonds") or as Parity Debt payable from Tax Revenues on a parity with this Loan Agreement and the Series 2016 Note (as determined by the Agency, in its sole discretion) to refund the Senior Bonds and (b) may issue and sell refunding bonds as Parity Debt payable from Tax Revenues on a parity with the Series 2016 Note to refund a portion of the Series 2016 Note and/or any Parity Debt, provided further that, with respect to any such refunding: (i) annual debt service on such Additional Senior Bonds or Parity Debt, as applicable, is lower than annual debt service on the obligations being refunded during every Debt Service Year the obligations would otherwise be outstanding, (ii) the final maturity of any such Additional Senior Bonds or Parity Debt, as applicable, does not exceed the final maturity of the obligations being refunded, or (iii) the purpose of the refinancing is to create ATTACHMENT 2-Page 11 of 29 level debt service due to a balloon maturity and Tax Revenues will exceed payments due on all Senior Bonds, the Series 2016 Note and all Parity Debt by 120%. Section 3.4. Issuance of Subordinate Debt. To the extent permitted by law, the Successor Agency may issue or incur Subordinate Debt in such principal amount as shall be determined by the Successor Agency. Such Subordinate Debt may be payable from any assets or property of the Successor Agency, including Tax Revenues on a subordinate basis to the payment of debt service on the Series 2016 Note and any Parity Debt. ARTICLE4 OTHER COVENANTS OF THE AGENCY Section 4.1. Punctual Payment. The Agency will punctually pay or cause to be paid the principal of and interest on the Series 2016 Note, together with any prepayment premiums thereon, in strict conformity with the terms of this Loan Agreement, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Loan Agreement. Section 4.2. Limitation on Additional Indebtedness. The Successor Agency hereby covenants that so long as this Loan Agreement remains unpaid and the Series 2016 Note remains outstanding, the Successor Agency shall not issue any bonds, notes or other obligations which are otherwise secured on a basis which is senior to the pledge and lien which secures the Series 2016 Note, except refunding bonds of the Senior Bonds with Additional Senior Bonds, if any. The Successor Agency hereby covenants that it shall not issue any bonds, notes or other obligations, enter into any agreement or otherwise incur any indebtedness, which is in any case payable from all or any part ofthe Tax Revenues, excepting only the Series 2016 Note and Parity Debt, and any Subordinate Debt. Section 4.3. Payment of Clajms. The Agency will pay and discharge, or cause to be paid and discharged, any and all lawful claims for labor, materials or supplied whlch, if unpaid, might become a lien or charge upon the properties owned by the Agency or upon the Tax Revenues, or any part thereof, or upon any funds in the hands of the Bank or which might impair the security of the Series 2016 Note. Nothing herein contained shall require the Agency to make any such payment so long as the Agency in good faith shall contest the validity of said claims. Section 4.4. Books and Accounts; Financial Statements. The Agency will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Agency and the City, in which complete and correct entries shall be made of all transactions relating to the Project, the Tax Revenues and the Redevelopment Obligation Retirement Fund. Such books of record and accounts shall at all times during business hours be subject, upon prior written request, to the reasonable inspection of the Bank or its representative authorized in writing. The Agency will cause to be prepared and filed with the Bank annually, within one hundred and eighty (180) days after the close of each Fiscal Year during the term of the Series 2016 Note, complete audited financial statements with respect to such Fiscal Year showing the Tax Revenues, all disbursements from the Redevelopment Obligation Retirement Fund and the financial condition of the Redevelopment Project, including the balances in all funds and accounts relating to the Redevelopment Project as of the end of such Fiscal Year, which ATTACHMENT 2-Page 12 of 29 statement shall be accompanied by a written certificate of the Agency stating that the Agency is in compliance with its obligations under this Loan Agreement. Section 4.5. Protection of Security and Rights. The Agency will preserve and protect the security of this Loan Agreement and the. rights of the Bank with respect to this Loan Agreement. From and after the Closing Date, this Loan Agreement shall be incontestable by the Agency. Section 4.6. Payments of Taxes and Other Charges. The Agency will pay and discharge,. or cause to be paid and discharged, all taxes, service charges, assessments and other governmental charges which may be hereafter lawfully imposed upon the Agency or the properties then owned by the Agency in the Redevelopment Project when the same shall become due. Nothing herein contained shall require the Agency to make any such payment to long as the Agency in good faith shall contest the validity of said taxes, assessments or charges. The Agency will duly observe and conform with all valid requirements of any governmental authority relative to the Redevelopment Project or any part thereof. Section 4.7. Disposition of Property. The Agency will not participate in the disposition of any land or real property in the Redevelopment Project to anyone which will result in such property becoming exempt from taxation because of public ownership or use or otherwise so that such disposition shall, when taken together with other such dispositions, aggregate more than ten percent (10%) of the land area in the Redevelopment Project, or will result in an accumulated reduction in assessed value of more than ten percent (10%). In any event, no disposition will be permitted which would reduce Tax Revenues below the requirements for Parity Debt specified in Section 3.3 then in effect. Section 4.8. Maintenance of Tax Revenues. The Successor Agency shall comply with all requirements of the Redevelopment Law and the Dissolution Act to insure the allocation and payment to it of the Tax Revenues. In the event that the applicable property tax revenues provisions of the Dissolution Act are determined by a court in a final judicial decision to be invalid and, in place of the invalid provisions, provisions of the Redevelopment Law or the equivalent become applicable to the Series 2016 Note, the Successor Agency shall, comply with all requirements of the Redevelopment Law or the equivalent to insure the allocation and payment to it of the Tax Revenues, including without limitation the timely filing of any necessary statements of indebtedness with appropriate officials of the County and (in the case of supplemental revenues and other amounts payable by the State) appropriate officials of the State of California. The Successor Agency shall manage its fiscal affairs in a manner which ensures that it will have sufficient Tax Revenues in the amounts and at the times required to enable the Successor Agency to pay the principal of and interest and premium (if any) on the Series 2016 Note and any Parity Debt when due. Section 4.9. Compliance with the Law; Recognized Obligation Payment Schedules. (a) The Successor Agency will take all actions required under the Dissolution Act to file a Recognized Obligation Payment Schedule by February 1 in each year, commencing February 1, 2017, in accordance with Section 34177(0) of the Redevelopment Law. Each such Recognized Obligation Payment Schedule for the semi-annual period ending each June 30 shall ATTACHMENT 2-Page 13 of29 request the payment to the Successor Agency of an amount of Tax Revenues which is at least equal to the following: (1) 1 00% of the amount of principal of and interest on the Senior Bonds coming due and payable on the next succeeding respective interest payment dates and maturity dates; (2) 100% of the amount of interest on this Loan Agreement and the Series 2016 Note and all Outstanding Parity Debt coming due and payable on the next succeeding Interest Payment Dates; (3) 50% of the amount of principal on this Loan Agreement and the Series 2016 Note and all Outstanding Parity Debt coming due and payable on the next succeeding maturity date of principal due hereunder; and (4) any amount then required to replenish the amount in any reserve account established for outstanding Senior Bonds or Parity Debt. (b) Each Recognized Obligation Payment Schedule for the semi-annual period ending each December 31 shall request the payment to the Successor Agency of an amount of Tax Revenues which is at least equal to the following: (1) 100% of the interest due on the Series 2016 Note and all Outstanding Parity Debt coming due and payable on the next succeeding Interest Payment Date, (2) the remaining principal due on this Loan Agreement and the Series 2016 Note and all outstanding Parity Debt coming due and payable on the next succeeding maturity date of principal due hereunder and not reserved in the period ending June 30; and (3) reserves and amounts due to any bond insurer. (c) These actions will include, without limitation, placing on the periodic Recognized Obligation Payment Schedule for approval by the Oversight Board and State Department of Finance, to the extent necessary, the amounts to be held by the Successor Agency as a reserve until the next six-month period, as contemplated by paragraph (1)(A) of subdivision (d) of Section 34171 of the Dissolution Act, that are necessary to comply with this Loan Agreement and to provide for the payment of principal and interest under this Loan Agreement when the next property tax allocation is projected to be insufficient to pay all obligations due under this Loan Agreement for the next payment due thereunder and hereunder in the following six-month period. In the event that the Successor Agency defeases any Senior Bonds with funds on hand, or refinances any Senior Bonds the amount of any annual debt service savings as a result of such defeasance or refunding will be requited to be requested in the Recognized Obligation Payment Schedule period beginning January 2 of each year to first be used to pay the following Interest Payment Date debt service on this Loan Agreement and the Series 2016 Note and any Parity Debt, pro rata, not already funded in accordance with paragraphs (a) above, and then as a reserve for the timely payment of principal and interest due on this Loan Agreement and the Series 2016 ATTACHMENT 2-Page 14 of 29 Note and any Parity Debt, pro rata, on the following Interest Payment Date of such year, and the amounts requested in paragraph (b) above shall be reduced by the same amount. Section 4.10. Payment of Administrative Expenses: Indemnjfication. The Agency shall pay Administrative Expenses attributable to this Loan Agreement. Upon the occurrence of any Event of Default, the Bank shall have a first lien on Tax Revenues to be distributed in accordance with 5.2 of this Loan Agreement. The Agency further covenants and agrees to indemnify and save the Bank and its officers, directors, agents and employees; harmless against any loss, expense and liability which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, and under this Loan Agreement, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, expenses and liabilities which are due to the negligence or intentional misconduct of the Bank, its officers, directors, agents or employees. Section 4.11. Further Assurances . The Agency will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Loan Agreement and for the better assuring and confirming unto the Bank rights and benefits provided in this Loan Agreement. ARTICLE 5 LOAN AGREEMENT EVENTS OF DEFAULTS AND REMEDIES Section 5.1. Loan Agreement Events of Default and Acceleration of Maturities. The following events will constitute Events of Default under this Loan Agreement: (a) Failure by the Agency to pay the principal of or interest or prepayment premium, if any, on this Loan Agreement and the Series 2016 Note made hereunder, or any Parity Debt when and as the same shall become due and payable. (b) Failure by the Agency to observe and perform any of the covenants, agreements or conditions on its part contained in this Loan Agreement, other than as referred to in the preceding clause (a), for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied has been given to the Agency by the Bank; provided, however, that if in the reasonable opinion of the Agency the failure stated in such notice can be corrected, but not within such sixty ( 60) day period, the Bank will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Agency within such sixty (60) day period and diligently pursued until such failure is corrected. (c) The Agency commences a voluntary action as a debtor under Title 11 of the United States Code or any substitute or successor statute. If an Event of Default has occurred and is continuing with respect to this Loan Agreement and the Series 2016 Note, the Bank may declare the principal ofthis Loan Agreement and the Series 2016 Note, together with the accrued in~erest on all unpaid installments thereof, to be due and payable immediately, and upon any such declaration the same will become immediately due and payable, anything in this Loan Agreement to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the ATTACHMENT 2-Page 15 of 29 Loan has been so declared due and payable, and before any judgment or decree for the payment of the moneys due has been obtained or entered, the Agency will deposit with the Bank a sum sufficient to pay all installments of principal of this Loan Agreement and the Series 2016 Note matured prior to such declaration and all accrued interest thereon, with interest on such overdue installments of principal and interest, and the reasonable fees and expenses of the Bank, and any and all other defaults known to the Bank (other than in the payment of principal of and interest on this Loan Agreement and the Series 2016 Note due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Bank or provision deemed by the Bank to be adequate shall have been made therefor, then, and in every such case, the Bank may, by written notice to the Agency, rescind and annul ·such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. Section 5.2. Application of Revenues and Other Funds After Default. Subject to the equal application of default provisions of any other Parity Debt Instrument, all amounts received by the Bank pursuant to any right given or action taken by the Bank under the provisions of this Loan Agreement relating to this Loan Agreement and the Series 2016 Note will be applied by the Bank in the following order: First, to the payment of the costs and expenses of the Bank in declaring such Event of Default and in carrying out the provisions of this Loan Agreement, including reasonably compensation to their agents, attorneys and counsel and also including any outstanding fees and expenses of the Bank; and Second, to the payment of the whole amount of interest on and principal of this Loan Agreement and the Series 2016 Note and any Parity Debt, as the case may be, then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest under this Loan Agreement and borne by the Series 2016 Note and any other Parity Debt, as the case may be; provided, however, that in the event such amounts shall be insufficient to pay in full the full amount of such interest and principal, then such amounts shall be applied in the following order or priority: (a) first, to the payment of all installments of interest on this Loan Agreement and the Series 2016 Note and any other Parity Debt then due and unpaid on a pro rata basis in the event that the available amounts are insufficient to pay all interest in full; (b) second, to the payment of principal of all installments of this Loan Agreement and the Series 2016 Note and any other Parity Debt then due and unpaid on a pro rata basis in the event that the available amounts are insufficient to pay all such amounts in full; (c) third, to the payment of the prepayment price (including principal and interest accrued to the prepayment date, but excluding any premium) of this Loan Agreement and the Series 2016 Note and any other Parity Debt to be redeemed pursuant to this Loan Agreement or any other Parity Debt Instrument on a pro rata basis in the event that the available amounts are sufficient to pay all such amounts in full; and ATTACHMENT 2-Page 16 of 29 (d) fourth, to the payment of interest on overdue installments of principal and interest on this Loan Agreement and the Series 2016 Note and any other Parity Debt on a pro rata basis in the event that the available amounts are insufficient to pay all such amounts in full. Section 5.3. No Waiver. Nothing in this Article V or in any other provision of this Loan Agreement shall affect or impair the obligation of the Agency, which is absolute and unconditional, to pay from the Tax Revenues and other amounts pledged hereunder, the principal of and interest and premium, if any, on this Loan Agreement and the Series 2016 Note on the respective Interest Payment Dates, as herein provided, or affect or impair the right of action, which is also absolute and unconditional, of the Bank to institute suit to enforce such payment by virtue of the contract embodied in this Loan Agreement. A waiver of any default by the Bank shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of the Bank to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Bank by the Redevelopment Law, the Dissolution Act or by this Article V may be enforced and exercised from time to time and as often as shall be deemed expedient by the Bank. If a suit, action or proceeding to enforce any right or exercise any remedy shall be abandoned or determined adversely to the Bank, the Agency and the Bank shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 5.4. Remedies Not Exclusive . No remedy herein conferred upon or reserved to the Bank is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Redevelopment Law, the Dissolution Act or any other law. ARTICLE6 MISCELLANEOUS Section 6.1. Benefits Limited to Parties. Nothing in this Loan Agreement, expressed or implied, is intended to give to any person other than the Agency and the Bank, any right or remedy, claim under or by reason of this Loan Agreement. All covenants, stipulations, promises or agreements in this Loan Agreement contained by and on behalf of the Agency shall be for the sole and exclusive benefit ofthe Bank as owners ofthe Series 2016 Note. Section 6.2. Successor is Deemed Included in All References to Predecessor. Whenever in this Loan Agreement either the Agency or the Bank is named or referred to, such reference shall be deemed to include the successors or assigns thereof and all the covenants and agreements in this Loan Agreement contained by or on behalf of the Agency shall bind and insure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 6.3. Amendment. This Loan Agreement and the Series 2016 Note may be amended in writing by the parties hereto. ATTACHMENT 2-Page 17 of 29 Section 6.4. Waiver of Personal Liability. No member, officer, agent or employee of the Agency shall be individually or personally liable for the payment of the principal of or interest on this Loan Agreement; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 6.5. Notices. All written notices to be given under this Loan Agreement shall be sufficiently given and shall be deemed given when delivered or mailed by first class mail, posted prepaid, or sent by telegram, addressed as follows: If to the Agency: If to the Bank: Successor Agency to the San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Attn : Executive Director [TO COME] The Bank, and the Agency may designate any further or different addresses to which subsequent notices shall be sent. Copies of all required notices to any party shall be provided to the Insurer. Section 6.6. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Loan Agreement shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Loan Agreement. The Agency hereby declares that it would have adopted this Loan Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the Series 2016 Note irrespective of the fact that any one or more Sections, paragraphs , sentence, clauses or phrases of this Loan Agreement may be held illegal, invalid or unenforceable. ATTACHMENT 2-Page 18 of 29 IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, and as Bank, have caused this Loan Agreement to be signed by their respective officers, all as of the date and year first above written. SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY By: ______________________________ __ Executive Director ------------------> as Bank By: ______________________________ __ Authorized Officer ATTACHMENT 2-Page 19 of 29 EXHIBIT A TO LOAN AGREEMENT SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY SERIES 2016 NOTE PAYMENT SCHEDULE Maturity Date Principal Interest Rate Interest TotalP&I Totals ATTACHMENT 2 -Page 20 of 29 No. __ _ EXHIBITB FORM OF SERIES 2016 NOTE UNITED STATES OF AMERICA STATE OF CALIFORNIA SUCCESSOR AGENCY TO THE $ ___ _ SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY 2016 SUBORDINATE TAX ALLOCATION REFUNDING NOTE RATE OF INTEREST MATURITY DATE ORIGINAL ISSUE DATE CUSIP % REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY, a public entity duly existing under the laws of the State of California (the "Agency"), for value received, hereby promises to pay (but only out of the Tax Revenues and other moneys and securities hereinafter referred to) to the Registered Owner identified above or registered assigns (the "Registered Owner"), on the Maturity Date identified above, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Rate of Interest identified above in like lawful money from the date hereof, which date shall be the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Note (unless this Note is authenticated on or before an Interest Payment Date and after the fifteenth calendar day of the month preceding such Interest Payment Date (a "Record Date"), in which event it shall bear interest from such Interest Payment Date, or unless this Note is authenticated on or prior to in which event it shall bear interest from the Original Issue Date identified above; provided, however, that if, at the time of authentication of this Note, interest is in default on this Note, this Note shall bear interest from the Interest Payment Date to which interest hereon has previously been paid or ATTACHMENT 2-Page 21 of 29 made available for payment), payable semiannually on [February 1] and [August 1] in each year, commencing [February 1, 2017] (the "Interest Payment Dates"), until payment of such Principal Amount in full. This Note is designated as the "Successor Agency to the San Juan Capistrano Community Redevelopment Agency 2016 Subordinate Tax Allocation Refunding Note" (the "Note") of an aggregate principal amount of $ and delivered pursuant to the provisions of the Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (the "Refunding Law") and the Community Redevelopment Law, constituting Part 1 of Division 24 of the California Health and Safety Code, as amended by the provisions of the Dissolution Act (the "Law"), and pursuant to a Loan Agreement, dated as of by and between the Successor Agency and (the "Loan Agreement"). The Successor Agency may issue or incur additional obligations on a parity with the Note, but only subject to the terms of the Loan Agreement. This Note and the interest hereon and all other parity obligations and the interest thereon (to the extent set forth in the Loan Agreement) are payable from, and are secured by a charge and lien on the Tax Revenues derived by the Successor Agency. As and to the extent set forth in the Loan Agreement, all of the Tax Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Loan Agreement and the Law, to the payment of the principal of and interest and premium (if any) on this Note and any such parity obligations. This Note and any such parity obligations are secured by a pledge on, security interest in and lien on the Tax Revenues which is a pledge, security interest and lien on the Tax Revenues in favor of certain outstanding obligations of the Successor Agency, as provided in the Loan Agreement. Notwithstanding the foregoing, certain amounts out of Tax Revenues may be applied for other purposes as provided in the Loan Agreement. This Note is not a debt of the County of Orange, the State of California, or any of its political subdivisions, other than the Successor Agency, and neither said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties other than the Tax Revenues. This Note may not be called before maturity and redeemed by the Successor Agency. If an Event of Default, as defined in the Loan Agreement, shall occur, the principal of all outstanding Note may be declared due and payable upon the conditions, in the manner and with the effect provided in the Loan Agreement, but such declaration and its consequences may be rescinded and annulled as further provided in the Loan Agreement. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of this Note do exist, have happened or have been performed in due and regular time, form and manner as required by the Law and the laws of the State of California and that the amount of this Note, together with all other indebtedness of the Successor Agency, does not exceed any limit prescribed by the Law or any laws of the State of California, and is not in excess ofthe amount of the Note permitted to be issued under the Loan Agreement. ATTACHMENT 2-Page 22 of 29 IN WITNESS WHEREOF, the SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY has caused this Note to be executed in its name and on its behalf with the facsimile signature of the Mayor of the City in his capacity as Chair of the Successor Agency and attested to by the facsimile signature of the City Clerk of the City in her capacity as Secretary of the Successor Agency, all as of the Original Issue Date specified above. ATTEST: SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY By: ______________________________ __ Chair By: --------------------------- Secretary ATTACHMENT 2-Page 23 of 29 [FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto ___ _ (Name , Address and Tax Identification or Social Security Number of Assignee) the within Note and do(es) hereby irrevocably constitute and appoint _________ _ -------------------attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature guarantee shall be made by a Note: guarantor institution participating in the Securities Transfer Agents Medallion Program or in such other guarantee program acceptable to the Trustee. The signature( s) on this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. ATTACHMENT 2-Page 24 of 29 EXHIBIT C FORM OF INVESTOR LETTER Successor Agency to the San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 [DATE] Re: $ ____ _ SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY (Lower Rosan Ranch Property) Ladies and Gentlemen: This letter is to provide you with certain representations and agreements with respect to our purchase of all of the above-referenced note (the "Note"), dated their date of issuance. The Note was delivered under and secured in the manner set forth pursuant to a Loan Agreement, dated as of 2016 (the "Loan Agreement"), between the Successor Agency to the San Juan Capistrano Community Redevelopment Agency (the "Agency") and _________ ___j as bank (the "Bank"). We hereby represent and warrant to you and agree with you as follows: 1. We understand that the Note has not been registered pursuant to the Securities Act of 1933, as amended (the "1933 Act"), the securities laws of any state nor has the Loan Agreement been qualified pursuant to the Trust Indenture Act of 1939, as amended, in reliance upon certain exemptions set forth therein. We acknowledge that the Note (i) is not being registered or otherwise qualified for sale under the "blue sky" laws and regulations of any state, (ii) will not be listed on any securities exchange, and (iii) will not carry a rating from any rating service. 2. We have not offered, offered to sell, offered for sale or sold any of the Note by means of any form of general solicitation or general advertising, and we are not an underwriter of the Note within the meaning of Section 2(11) of the 1933 Act. 3. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits ofthe investment represented by the purchase of the Note. ATTACHMENT 2-Page 25 of 29 4. We have authority to purchase the Note and to execute this letter and any other instruments and documents required to be executed by the Bank in connection with the purchase ofthe Note. 5. The undersigned is a duly appointed, qualified and acting representative of the Bank and is authorized to cause the Bank to make the certifications, representations and warranties contained herein by execution of this letter on behalf of the Bank. 6. The Bank is a "qualified institutional buyer" as defined m Rule 144A promulgated under the 1933 Act (a "QIB"). 7. The undersigned understands that no official statement, prospectus, offering circular, or other comprehensive offering statement is being provided with respect to the Note, and that the Agency will not be entering into a continuing disclosure agreement to provide ongoing disclosure respecting the Note. The undersigned has made its own inquiry and analysis with respect to the Agency, the Note and the security therefor, and other material factors affecting the security for and payment of the Note. 8. The undersigned acknowledges that it has either been supplied with or been given access to information, including financial statements and other financial information, regarding the Agency, to which a reasonable investor would attach significance in making investment decisions, and has had the opportunity to ask questions and receive answers from knowledgeable individuals concerning the Agency, the Note and the security therefor, so that as a reasonable investor, it has been able to make its decision to purchase the Note. 9. The Note is being acquired by the Bank for investment for its own account and not with a present view toward resale or distribution; provided, however, that the Bank reserves the right to sell, transfer or redistribute the Note, but agrees that any such sale, transfer or distribution by the Bank shall be to a Person: (a) that is an affiliate ofthe Bank; (b) that is a trust or other custodial arrangement established by the Bank or one of its affiliates, the owners of any beneficial interest in which are limited to qualified institutional buyers; or (c) that the Bank is be a qualified institutional buyer who executes an investor letter substantially in the form of this letter. 10. The Bank is not acting as a fiduciary for the Agency or in the capacity of broker, dealer, municipal securities underwriter or dealer, placement agent, financial advisor or municipal advisor in connection with the Bank's acquisition ofthe Note. None ofthe Bank, the Trust or any related entity thereto has provided, nor will provide, financial, legal, tax, accounting or other advice to or on behalf of the Agency with respect to the Note. The Bank acknowledges that Best Best & Krieger LLP, Bond Counsel for the Note, expresses no opinion whatsoever as to whethe~ the owners of trust receipts in the Trust will be deemed owners of the Note for tax purposes or as to whether any portion of the payments received by the owners of such trust ATTACHMENT 2-Page 26 of 29 receipts will be excluded from gross income for federal or California income tax purposes. The Agency has sought and obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to the Note from their financial, legal and other advisors (and not the Bank or any related entity thereto) to the extent that the Agency desired to obtain such advice. Very truly yours, By ______________________________ _ Name: ----------------------------- Title: ------------------------------ ATTACHMENT 2-Page 27 of 29 EXHIBITD REQUISITION FOR DISBURSEMENT FROM COSTS OF ISSUANCE FUND The undersigned hereby states and certifies: (i) that the undersigned is the duly appointed, qualified and acting Executive Director of the Successor Agency to the San Juan Capistrano Community Redevelopment Agency (the "Agency"), and as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that the undersigned is an "Authorized Representative" of the Agency, as such term is defined in that certain Loan Agreement, dated as of 2016 (the "Loan Agreement"), by and between the Agency and as bank (the "Bank"); (iii) that, pursuant to Section 2.5 of the Loan Agreement, the Bank is hereby requested to disburse on or after this date, from the Cost of Issuance Fund established under the Loan Agreement, to the payees designated on Exhibit D-1 attached hereto and by this reference incorporated herein, an amount that does not exceed the amount set forth opposite each such payee, in payment of Costs of Issuance described on said Exhibit D-1 and such payments shall be made by check or wire transfer in accordance with the payment instructions set forth in Exhibit D-1 and the Bank shall rely on such payment instructions as though given by the Agency with no duty to investigate ·or inquire as to the authenticity of the payment instructions or the authority under which they were given; (iv) that each obligation identified on Exhibit D-1 has been properly incurred, is a proper charge against the Cost of Issuance Fund and has not been the basis of any previous disbursement; and (v) that the Bank is hereby directed to disburse pursuant to paragraph (iii) above upon receipt by the Bank of an invoice or other evidence supporting the amounts due which shall not exceed the amounts identified on Exhibit D-1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement. Dated:------> 2016 SUCCESSOR AGENCY TO THE SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY By: _____________ _ ATTACHMENT 2-Page 28 of 29 TOTAL EXHIBIT D -1 REQUISITION FOR DISBURSEMENTS FROM COST OF ISSUANCE FUND PAYEE PURPOSE OF OBLIGATION AMOUNT $ ___ _ $ ___ _ ATTACHMENT 2-Page 29 of 29 Aug 24, 2016 6:08 pm Prepared by Fieldman, Rolapp & Associates (San Juan Capistrano, City of:PP _NOTE-WESTERN) Pagel Notes: SOURCES AND USES OF FUNDS City of San Juan Capistrano Successor Agency Payoff of Lower Rosan Note Private Placement with Westem Alliance **************************************************************************************************** Interest payments are taxable **************************************************************************************************** Sources: Bond Proceeds: Dated Date Delivery Date Par Amount Uses : Project Fund Deposits: Escrow Fund Delivery Date Expenses: Cost oflssuance 10/28/2016 10/28/2016 3,169,549.65 3,169,549.65 3,094,549.65 75,000.00 3,169,549.65 (1) Assumes COl paid at closing. (2) Interest rate per Western Alliance Proposal dated August 22, 20 16. (3) Escrow proceeds will be used to pay offF&M Note of October 28,2016. ATTACHMENT 3-Page 1 of 5 Aug 24 ,2016 6 :08pm Prepared by Fieldman, Rolapp & Associates (San Juan Capistrano, City of:PP _NOTE-WESTERN) Page 2 BOND DEBT SERVICE City of San Juan Capistrano Successor Agency Payoff of Lower Rosan Note Private Placement with Western Alliance **************************************************************************************************** Interest payments are taxable **************************************************************************************************** Period Annual Ending Principal Coupon Interest Debt Service Debt Service 02/0112017 33,570.81 33,570.81 08/0112017 467,316 .81 4 .100% 64,975.77 532,292.58 565,863 .39 02/0112018 55,395 .77 55,395.77 08/0112018 635,401.93 4.100% 55 ,395.77 690 ,797 .70 746 ,193 .47 02/01 /2019 42,370.03 42,370 .03 08 /0112019 661,453.41 4.100% 42,370 .03 703,823.44 746,193.47 02/01 /2020 28 ,810.24 28,810.24 08/0112020 688 ,573.00 4.100% 28,810.24 717,383.24 746,193 .48 02/01/2021 14,694.49 14,694.49 08/01/2021 716,804.50 4.100% 14,694.49 731,498.99 746,193 .48 3,169,549.65 381 ,087.64 3,550,637.29 3,550,637.29 ATTACHMENT 3-Page 2 of 5 Aug 24,2016 6:08pm Prepared by Fieldman, Rolapp & Associates (San Juan Capistrano, City of:PP _NOTE-WESTERN) Page 3 BOND DEBT SERVICE City of San Juan Capistrano Successor Agency Payoff of Lower Rosan Note Piivate Placement with Western Alliance **************************************************************************************************** Interest payments are taxable **************************************************************************************************** Peliod Ending Principal Coupon Interest Debt Service 08/01/2017 467,316.81 4.100% 98,546.58 565,863.39 08/01/2018 635,401.93 4.100% 110,791.54 746,193.47 08/0112019 661,453.41 4.100% 84,740.06 746,193.47 08/01/2020 688,573.00 4 .100% 57,620.48 746,193.48 08/0112021 716,804.50 4.100% 29,388.98 746,193.48 3,169,549.65 381,087.64 3,550,637.29 ATTACHMENT 3-Page 3 of 5 Aug 24,2016 6:08pm Prepared by Fieldman, Rolapp & Associates (San Juan Capistrano, City of:PP _NOTE-WESTERN) Page 4 BOND PRJCING City of San Juan Capistrano Successor Agency Payoff of Lower Rosan Note Private Placement with Western Alliance **************************************************************************************************** Interest payments are taxable **************************************************************************************************** Bond Component Maturity Date Serial Bond: 08/01/2017 08/01/2018 08/0112019 08/0112020 08/01/2021 Dated Date Delivery Date First Coupon Par Amount Original Issue Discount Production Undenvriter's Discount Purchase Price Accmed Interest Net Proceeds Amount Rate Yield Price 467,316.81 4.100% 4.100% 100.000 635,401.93 4.100% 4.100% 100.000 661 ,453.41 4.100% 4.100% 100 .000 688,573.00 4.100% 4.100% 100.000 716,804.50 4.100% 4.100% 100.000 3,169,549.65 10/28/2016 10/28/2016 02/01/2017 3,169,549.65 3,169,549.65 100.000000% 3,169,549.65 100.000000% 3,169,549.65 ATIACHMENT 3-Page 4 of 5 Aug 24,2016 6:08pm Prepared by Fieldman, Rolapp & Associates (San Juan Capistrano, City of:PP _NOTE-WESTERN) Page 5 BOND SUMMARY STATISTICS City of San Juan Capistrano Successor Agency Payoff of Lower Rosan Note Private Placement with Western Alliance **************************************************************************************************** Interest payments are taxable **************************************************************************************************** Bond Component Dated Date Delivery Date First Coupon Last Maturity Arbitrage Yield True Interest Cost (TIC) Net Interest Cost (NIC) All-In TIC Average Coupon Average Life (years) Duration of Issue (years) ParAmount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt Service Underwriter's Fees (per $1000) Average Takedown Other Fee Total Underwriter's Discount Bid Price Par Value Price Serial Bond 3,169,549.65 100 .000 Par Value + Accrued Interest +Premium (Discount) -Underwriter's Discount -Cost of Issuance Expense -Other Amounts Target Value Target Date Yield 3,169,549.65 TIC 3,169,549.65 3,169,549.65 10/28/20 I 6 4.101902% 10/28/2016 10/28/2016 02/01/2017 08/01/2021 4.101902% 4.101902% 4.100000% 4.992918% 4.100000% 2.933 2.757 3,169,549.65 3,169,549.65 381,087.64 381,087.64 3,550,637.29 746,193 .48 746,193.48 100.000000 Average Average PVofl bp Coupon Life change 4.100% 2.933 855.05 2.933 855.05 All-In Arbitrage TIC Yield 3,169,549.65 3,169,549.65 -75,000.00 3,094,549.65 3,169,549.65 10/28/2016 10/28/2016 4.992918% 4.101902% ATTACHMENT 3-Page 5 of 5