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HomeMy WebLinkAboutDeveloper Continuing Disclosure Agreement, by and among Tanamera/Roripaugh Entities and the Fiscal Agent and Dissemination Agent DEVELOPER CONTINUING DISCLOSURE AGREEMENT This DEVELOPER CONTINUING DISCLOSURE AGREEMENT (this "Disclosure Agreement") is executed and entered into as of March 1,2006, by and among U. S. Bank National Association, a national banking association organized and existing under and by virtue of the laws of the United States of America, as Dissemination Agent (the "Dissemination Agent") and as Fiscal Agent (the "Fiscal Agent"), and Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC, each a California limited liability company ("Tanamera/Roripaugh, LLC," "Tanamera/Roripaugh II, LLC" and "Traditions atRoripaugh, LLC," respectively, and together, the "Tanamera/Roripaugh Entities"). The parties hereto may be referred to in some instances as a party ("Party"); WITNESSETH: WHEREAS, pursuant to the Fiscal Agent Agreement, dated as of March 1, 2006 (the "Fiscal Agent Agreement"), by and between the Temecula Public Financing Authority (the "Authority"), for and on behalf of the Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) (the "District"), and the Fiscal Agent, the Authority has issued its 2006 Special Tax Bonds, in the aggregate principal amount of $51,250,000 (the "2006 Bonds"); WHEREAS, the Tanamera/Roripaugh Entities are the owner of property within the District planned for residential development; and WHEREAS, this Disclosure Agreement is being executed and delivered by the Tanamera/Roripaugh Entities and the Fiscal Agent for the benefit of the owners and beneficial owners of the 2006 Bonds and in order to assist the underwriter of the 2006 Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5); NOW, THEREFORE, for and in consideration of the mutual premises and covenants herein contained, the parties hereto agree as follows: Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Fiscal Agent Agreement. In addition, the following capitalized terms shall have the following meanings: "Affiliate" of another Person means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 15% or more of the outstanding voting securities of such other Person, (b) any Person 15% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person; for purposes hereof, "control" means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. Notwithstanding the foregoing, none of the following entities shall be considered to be an "Affiliate" of Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC or Traditions atRoripaugh, LLC: Ashby USA, LLC, Continental Residential, Inc.,Davidson Roripaugh Ranch 122, LLC and KB Home Coastal Inc. "Assumption Agreement" means an agreement between a Major Developer, or an Affiliate thereof, the Fiscal Agent and the Dissemination Agent containing terms substantially similar to this Disclosure Agreement, whereby such Maj or Developer or Affiliate agrees to provide Semi-Annual Reports and notices of significant events with respect to the portion of the Property owned by such Major Developer and its Affiliates. "Bond Counsel" means an attorney or a firm of attorneys whose experience in matters relatingto the issuance of obligations by the states and their political subdivisions and the tax-exempt status of the interest thereon is recognized nationally. "Development Plan" means, with respect to a Major Developer, the specific improvements such Maj or Developer intends to make, or cause to be made, to such Maj or Developer's Property in order for such Property to enable production units or commercial property within the Property to be completed and sold to third parties, the time frame in which such improvements are intended to be made and the estimated costs of such improvements; Tanamera/Roripaugh Entities' Development Plan, as of the date hereof, is described in the Official Statement under the caption "PROPERTY OWNERSHIP AND DEVELOPMENT -The Tanamera/Roripaugh Entities." "Dissemination Agent" means the Fiscal Agent, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writingby the Tanamera/Roripaugh Entities and which has filed with the Fiscal Agent a written acceptance of such designation. "Event of Bankruptcy" means, with respect to aPerson, that such Person files a petition or institutes a proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an an insolvent, or as a debtor, or in any similar capacity, wherein or whereby such Person asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of such Person's debts or obligations, or offers to such Person's creditors to effect a composition or extension of time to pay such Person's debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of such Person's debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character is filed or instituted or taken against such Person and the same shall remain undismissed for aperiod of 60 days, or if a receiver of the business or of the property or assets of such Person is appointed by any court, or if such Person makes a general assignment for the benefit of such Person's creditors. "Financial Statements" means, with respect to a Major Developer, the full financial statements, special purpose financial statements, project operating statements or other reports reflecting the financial position of such Major Developer; provided that, if full financial statements, special purpose financial statements, project operating statements or other reports reflecting the financial position are audited and prepared in accordance with generally accepted accounting principles as in effect from time to time, then Financial Statements shall include such audited financial statements or reports. "Financing Plan" means, with respect to a Major Developer, the method by which such Major Developer intends to finance its Development Plan, including specific sources of funding for such Development Plan; the Tanamera/Roripaugh Entities' Financing Plan, as of the date hereof, is described in the Official Statement under the caption "PROPERTY OWNERSHIP AND DEVELOPMENT -The Tanamera/Roripaugh Entities." "First Report Date" means March 31, of each year, commencing March 31, 2007. "First Report Period" means with respect to a Report due on the First Report Date, the last six months of the fiscal year just ended. "Listed Events" means any of the events listed in Section 4(a) hereof. "Major Developer" means any Property Owner, including the Tanamera/Roripaugh Entities, that owns any portion of the Property within the District, for which production units are not completed and sold to third parties, for which the Property owned by such Property Owner together with Property owned by Affiliates of such Property Owner, is subject to 15% or more of the Special Tax levy of the District for the then current Fiscal Year of the District; provided, however, that the term shall not include any Property Owner that would otherwise qualify as a Major Developer if such Property Owner has assumed the obligations hereunder pursuant to Section 5. "National Repository" means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The Nationally Recognized Municipal Securities Information Repositories for purposes of the Rule are identified in the Securities and Exchange Commission website located at sec.gov/info/municipal/nrmsir.htm. "Official Statement" means the Official Statement, dated April 13,2006, relating to the 2006 Bonds. "Participating Underwriter" means Stone & Youngberg LLC. "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. "Property" means the real property within the boundaries of the District owned on the date of the Official Statement by the Tanamera/Roripaugh Entities and that is not exempt from the Special Taxes. "Property Owner" means any Person that owns a fee interest in any Property. "Report Dates" means, collectively, the First Report Dates and the Second Report Dates. "Report Period" means, with respect to a Report due on the First Report Date, the last six months of the calendar year just ended, and with respect to a Report due on the Second Report Date, the first six months of the then current calendar year. "Repository" means each National Repository and each State Repository. "Rule" means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "Second Report Date" means September 30 of each year, commencing September 30, 2006. "Second Report Period" means with respect to a Report due on the Second Report Date, the first six months of the current calendar year. "Semi-Annual Report" means any Semi-Annual Report provided by the Tanamera/Roripaugh Entities pursuant to, and as described in, Sections 2 and 3 hereof. "State Repository" means any public or private repository or entity designated by the State of California as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Disclosure Agreement, there is no State Repository. Section 2. Provision of Semi-Annual Reports, (a) So long as the Tanamera/Roripaugh Entities' obligations hereunder have not been terminated pursuant to Section 6, (i) Tanamera/Roripaugh Entities shall prepare a Semi-Annual Report not later than March 31 and September 30 of each year, and (ii) not later later than April 15 and October 15(15 days after the Report Date) Tanamera/Roripaugh Entities shall, or, upon receipt of the Semi-Annual Report by the Dissemination Agent, the Dissemination Agent shall, provide to each Repository, the Authority, the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent), the District and the Participating Underwriter a Semi-Annual Report which is consistent with the requirements of Section 3 of this Disclosure Agreement, commencing with the first Semi-Annual Report Date to occur September 30, 2006. The Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 3 hereof; provided, however,that the audited financial statements of the Tanamera/Roripaugh Entitiesmay be submitted separately from the balance of the Semi-Annual Report that is to be provided no later than the First Report Date, and later than the date required above forme filing of such Semi-Semi-Annual Report if not available by that date. The Semi-Annual Report may be provided in electronic format to each Repository and the Participating Underwriter and may be provided through the services of a "central post office" approved by the Securities and Exchange Commission. For example, any filing under this Continuing Disclosure Agreement may be made solely by transmitting such filing to the Texas Municipal Advisory Council (the "MAC") as provided at http://www.disclosureusa.org unless the United States Securities and Exchange Commission has withdrawn the interpretive advice in its letter to the MAC dated September 7, 2004. (b) If by April 15 or October 15(15 days after a Report Date), the Fiscal Agent has not received a copy of the Semi-Annual Report, the Fiscal Agent shall notify the Tanamera/Roripaugh Entities and the Dissemination Agent of such failure to receive the Semi-Annual Report. The Tanamera/Roripaugh Entities shall provide a written certification with, or as part of, each Semi-Annual Report furnished to the Fiscal Agent to the effect that such Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by it hereunder. The Fiscal Agent and Dissemination Agent may conclusively rely upon such certification of the Tanamera/Roripaugh Entities and shall have no duty or obligation to review such Semi-Annual Report. (c) If the Fiscal Agent is unable to verify that a Semi-Annual Report has been provided to the Repositories by the date required in subsection (a), the Fiscal Agent shall send a notice to the Municipal Securities Rulemaking Board, the appropriate State Repository, if any, the Fiscal Agent and the Participating Underwriter in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) determine prior to each Report Date the name and address of each National Repository and each State Repository, if any; (ii) provide any Semi-Annual Report received by it to each Repository, as provided herein; and (iii) with respect to each Semi-Annual Report received by it and provided by it to each Repository, file a report with the Authority, the Tanamera/Roripaugh Entities, the Fiscal Agent (if the Dissemination Agent is not the Fiscal Agent) and each Participating Underwriter certifying that the Semi-Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. Section 3. Content of Semi-Annual Reports. Tanamera/Roripaugh Entities' Semi-Annual Report shall contain or incorporate by reference the following: (a) With respect only to the Semi-Annual Report that is required to be provided no later than each First Report Date, such Semi-Annual Report shall contain Financial Statements for each Major Developer (other than any Major Developer with respect to which the Tanamera/Roripaugh Entities' obligations hereunder have been assumed in accordance with Section 5 or terminated in accordance with Section 6 hereof). If audited Financial Statements are required to be provided, and such audited Financial Statements are not available by the time such Semi-Annual Report is required to be filed pursuant to Section 2(a) hereof, such Semi-Annual Report shall contain unaudited Financial Statements, Statements, and the audited Financial Statements shall be filed as a supplement or amendment to the Semi-Annual Report when they become available. Such Financial Statements shall be for the most recently ended fiscal year for the entity covered thereby. The Semi-Annual Report shall contain the following caveat about all Financial Statements delivered as a part of the Semi-Annual Report: "The Financial Statements of the Tanamera/Roripaugh Entities included with, or referred to in, the Semi-Annual Report are for informational purposes only. In the event of a failure to pay any installment of Special Taxes, and after depletion of the Reserve Funds, the real property in Community Facilities District No. 03-02 is the sole security for the 2006 Bonds. The obligation of the Tanamera/Roripaugh Entities to pay unpaid Special Tax installments does not constitute a personal indebtedness of the Tanamera/Roripaugh Entities or any member, parent, subsidiary, or person or entity controlling or controlled by the Developer ((each an "Affiliate") for which the funds or assets (other than the property in Community Facilities District No. 03-02 that is delinquent) ofthe Tanamera/Roripaugh Entities or any Affiliate may be required, by operation of law or otherwise, to be used to pay debt service on the 2006 Bonds. It should not be inferred from the inclusion ofthe Financial Statements in the Semi-Annual Report ofthe Tanamera/Roripaugh Entities that the funds or assets of the Tanamera/Roripaugh Entities or any Affiliate (other than the property in Community Facilities District No 03-02) are available to cure any delinquencies in the payment of Special Taxes." (b) With respect to all Semi-Annual Reports, such Semi-Annual Reports shall contain the following information with respect to each Major Developer (other than any Major Developer with respect to which the Tanamera/Roripaugh Entities' obligations hereunder have been assumed in accordance with Section 5 or terminated in accordance with Section 6 hereof) for the First Report Period or Second Report Period, as applicable; provided, that, if such information is required from the Tanamera/Roripaugh Entities as to another Major Developer which is not an Affiliate of the Tanamera/Roripaugh Entities, the Tanamera/Roripaugh Entities shall only be required to provide such information that it has actual knowledge of: (i) If information regarding such Major Developer has not previously been included in a Semi-Annual Report or in the Official Statement, the Development Plan of such Major Developer or, if information regarding such Major Developer has previously been included in a Semi-Annual Report or in the Official Statement, a description of the progress made in the Development Plan of such Major Developer since the date of such information and a description of any material changes in such Development Plan and the causes or rationale for such changes; (ii) If information regarding such Major Developer has not previously been included in a Semi-Annual Report or in the Official Statement, the Financing Plan of such Major Developer or, if information regarding such Major Developer has previously been included in a Semi-Annual Report or in the Official Statement, a description of any material changes in the Financing Plan of such Major Developer and the causes or rationale for such changes; (iii) A description or update of the status of tentative and final maps recorded within the District relating to Property owned by such Major Developer; (iv) The number of building permits issued with respect to any of such Major Developer's Property during the six-month period ending on the last day of the applicable Report Period as well as the number of building permits issued with respect to such Major Developer's Property included in each previous Semi-Annual Report, set forth opposite such previous reporting period; (v) A description of how many residential lots and acres and how many commercial acres of Property were owned by such Major Developer as of the end of the Report Period covered by such Semi-Annual Report, and how many residential lots and acres and how many commercial acres of such Major Developer's Property (i) with respect to residential or commercial uses, have production units or commercial buildings completed and sold to third parties, (ii) with respect to the Major Developer's Property planned for park/open space uses, have been developed with a park or designated as open space on a final residential tract map and (iii) with respect to the Major Developer's Property planned for infrastructure use, have the infrastructure planned for such property been constructed during the applicable Report Period, and how many acres of such Major Developer's Property hadnot reached such level of development described in clauses (i), (ii)and (iii) above; (vi) A description of any sales (including pending sales for which a non-refundable deposit equal to or in excess of $50,000 has been made) of portions of such Major Developer's Property during the applicable Report Period, including the identification of each buyer (other than individual home buyers) and the number of residential lots and commercial or other acres sold; provided, provided, however, that sales of five or fewer commercial or other acres may be aggregated for the purpose of such description; (vii) A statement as to whether or not such Maj or Developer and all of its Affiliates paid, priorto their becoming delinquent, all Special Taxes, property taxes, assessments and special taxes levied on the Property owned by such Major Developer and such Affiliates that would have been delinquent had they not been paid by the preceding December 10 or April 10, respectively, and if such Major Developer or any of such Affiliates is delinquent in the payment of such Special Taxes, property taxes, assessments or special taxes levied on the Property owned by such Maj or Developer and its Affiliates, a statement identifying each parcel that is so delinquent, specifying the amount of each such delinquency and describing any plans to resolve such delinquency; (viii) An update of the status of any previously reported Listed Event described in Section 4 hereof and information regarding Listed Events, if any, required to be reported pursuant to Section 4 hereof; (ix) Unless disclosed in the Official Statement or a prior Semi-Annual Report, any material change in the legal structure or organization of a Major Developer; (x) The filing and service of process on such Major Developer of a lawsuit against such Major Developer seeking damages, or ajudgment in a lawsuit against the Major Developer, either of which could have a significant impact on the Major Developer's ability to pay Special Taxes or to sell or develop all or any portion of the Major Developer's Property; (xi) If applicable, a statement that a Property Owner no longer meets the definition of Major Developer, which statement shall be provided in the manner required for Semi-Annual Reports by the next succeeding date on which a Semi-Annual Report would have been filed unless such fact has previously been reported under this Section 3 or Section 4; and (xii) Information regarding the letter of credit provided with respect to the Tanamera/Roripaugh Entities' properties. Describe Letter of Credit(s) provided, provided, if applicable. (c) In addition to any of the information expressly required to be provided under paragraphs (a) and (b) of this Section, the Tanamera/Roripaugh Entities shall provide such further information, if any, as maybe necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Major Developers that are Affiliates of each other may, but are not required to, file a single Semi-Annual Report covering all such entities. Any or all of the items listed above may be included by specific reference to other documents which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Tanamera/Roripaugh Entities shall clearly identify each such other document so included by reference. If a Property Owner which was a Major Developer no longer meets the definition of Major Developer, no Semi-Annual Report shall be required to be filed by or with respect to such Property Owner under this Section 3; provided, however, that notice that the Property Owner does not meet the definition of Major Developer shall be provided in the manner required for Semi-Annual Reports by the next succeeding date on which a Semi-Annual Report would have been filed unless such fact has previously been reported under Section 3 or Section 4. Section 4. Reporting of Listed Events, (a) Pursuant to the provisions of this Section 4, the Tanamera/Roripaugh Entities shall promptly give, or cause to be given notice of the occurrence of any of the following events with respect to each Major Developer (other than any Major Developer with respect to which the Tanamera/Roripaugh Entities' obligations hereunder have been assumed in accordance with Sections or terminated in accordance with Section 6 hereof); provided, however, that, if such information is required from the Tanamera/Roripaugh Entities as to another Major Developer which is not an Affiliate of the Tanamera/Roripaugh Entities, the Tanamera/Roripaugh Entities shall only be required to provide such information that it has actual knowledge of: (i) Unless disclosed in the Official Statement or a prior Semi-Annual Report, any conveyance by such Maj or Developer of any of its Property to an entity that is not an Affiliate of such Major Developer, the result of which conveyance is to cause the transferee to become a Major Developer. In addition, if the transferee has assumed any obligations of the Developer under this Disclosure Agreement pursuant to Section 5 hereof, a copy of the executed Assumption Agreement shall be attached to the Notice; (ii) Any failure of such Major Developer, or any Affiliate of such Major Developer, to, in the reasonable judgment of such Major Developer, pay prior to delinquency general property taxes, special taxes or assessments with respect to its Property; (iii) Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds expected to be used for the Project that would have a material adverse affect on such Major Developer's most recently disclosed Financing Plan or Development Plan or on the ability of such Major Developer, or any Affiliate of such Major Developer, to pay Special Taxes within the District prior to delinquency; (i v) The occurrence of an Event of Bankruptcy with respect to such Maj or Developer, or any Affiliate of such Maj or Developer, that, in the reasonable judgment of such Maj or Developer, would have a material adverse affect on such Maj or Developer's most recently disclosed Financing Plan or Development Plan or on the ability of such Maj or Developer, or any Affiliate of such Major Developer that owns any portion of the Property, to pay Special Taxes within the District prior to delinquency; (v) Any significant amendments to land use entitlement approvals for such Major Developer's Property, if such amendments, in the reasonable judgment of such Major Developer, would prevent or significantly delay the implementation of such Major Developer's Development Plan as described in the Official Statement or in any previous Semi-Annual Report; (vi) Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on such Major Developer's Property, if such preconditions, in the reasonable judgment of such Major Developer, would prevent or significantly delay such Major Developer's Development Plan as described in the Official Statement or in any previous Semi-Annual Report; (vii) Any previously undisclosed legislative, administrative or judicial challenges to development on such Major Developer's Property, if such challenges, in the reasonable judgment of such Maj or Developer, would prevent or significantly delay such Maj or Developer's Development Plan as described in the Official Statement or in any previous Semi-Annual Report; (viii) Any changes, in the reasonable judgment of such Maj or Developer, in the alignment, design or likelihood of completion of significant public improvements affecting such Major Developer's Property, including major thoroughfares, sewers, water conveyance systems and similar facilities that, in the reasonable judgment of such Major Developer, would prevent or significantly delay such Major Developer's Development Plan as described in the Official Statement or any previous Semi-Annual Report; (ix) The filing of any lawsuit against a Major Developer which, in the reasonable judgment of such Major Developer, will adversely affect the completion of the development of Property owned by such Major Developer, or litigation which if decided against the Major Developer, in the reasonable judgment of the Major Developer, would materially adversely affect the financial condition of the Major Developer; or (x) Any previously undisclosed information relating to endangered species, hazardous substances or archaeological resources, which could have a significant impact on the Major Developer's ability to pay Special Taxes or to sell or develop all or any portion of the Major Developer's Property. (b) Whenever the Tanamera/Roripaugh Entities obtain knowledge of the occurrence of a Listed Event, the Tanamera/Roripaugh Entities shall promptly notify the Dissemination Agent, the Fiscal Agent, the Participating Underwriter and the District in writing. The Fiscal Agent shall report the occurrence pursuant to subsection (c) below. The Tanamera/Roripaugh Entities shall provide the Dissemination Agent with a form of notice of such event in a format suitable for reporting to the Municipal Securities Rulemaking Board and each State Repository, if any. (c) If the Fiscal Agent has received notice of a Listed Event, the Fiscal Agent shall file a notice of such occurrence with each Repository or the Municipal Securities Rulemaking Board and each State Repository and shall provide a copy of such notice to each Participating Underwriter, to the Fiscal Agent and to the District. A form of information cover sheet for municipal secondary market disclosure recommended by the Municipal Securities Rulemaking Board is attached as Exhibit B. Section 5. Assumption of Obligations If any portion of the Property owned by the Tanamera/Roripaugh Entities, or any Affiliate of the Tanamera/Roripaugh Entities, is conveyed to a Person such that, upon such conveyance, such Person will be a Major Developer, all of the obligations of the Tanamera/Roripaugh Entities hereunder with respect to the Property owned by such Major Developer and its Affiliates shall be assumed by such Major Developer or by an Affiliate. In order to effect such assumption, such Major Developer or Affiliate thereof shall enter into an Assumption Agreement. A copy of the Assumption Agreement shall be provided to the Participating Underwriter and to the Dissemination Agent, the Fiscal Agent and the District as set forth in Section 4(a)(i) in the manner provided in Section 4(b) and 4(c). Property sold in numerous takedowns to a Major Developer may be the subject of a single Assumption Agreement that will automatically include any additional property purchased by such Major Developer. Notwithstanding the foregoing, there shall be no requirement that a transferee enter into an Assumption Agreement provided that such transferee is an Affiliate of the Tanamera/Roripaugh Entities pursuant to the Option Agreements (as defined in the Official Statement), as such agreements may be amended. Section 6. Termination of Reporting Obligation. The Tanamera/Roripaugh Entities' obligations under this Disclosure Agreement with respect to a Major Developer shall terminate upon the earliestto occur of (a) the date on which such Maj or Developer is no longer a Maj or Developer, as defined herein, (b) the date on which the Tanamera/Roripaugh Entities' obligations with respect to such Major Developer are assumed under an Assumption Agreement entered into pursuant to Section 5 hereof, or (c) the date on which all Special Taxes levied on any Property owned by such Major Developer and its Affiliates are paid or prepaid inM\; provided, however, that upon the occurrence of any of the events described in clause (a) through (c) with respect to a Major Developer, the Tanamera/Roripaugh Entities' obligations hereunder with respect to each other Major Developer, if any, not previously terminated shall remain in full force and effect. All of the Tanamera/Roripaugh Entities' obligations under this Disclosure Agreement shall terminate, except as provided in Section 11 hereof, upon the earliest to occur of (x) the date on which no Property Owner is a Maj or Developer, (y) the date on which (i) the Tanamera/Roripaugh Entities is no longer a Maj or Developer, and (ii) the Tanamera/Roripaugh Entities no longer have any obligations under this Disclosure Agreement with respect to any remaining Property as a result of the sale of Property to owners who are not Major Developers or such obligations having been assumed under one or more Assumption Agreements entered into pursuant to Section 5 hereof, or (z) the date on which all of the 2006 Bonds have been legally defeased, redeemed, or paid in full. Upon the occurrence of any such termination prior to the final maturity of the 2006 Bonds, the Tanamera/Roripaugh Entities shall give notice of such termination in the same manner as for a Listed Event under Section 4 hereof. Section 7. Dissemination Agent. The initial Dissemination Agent shall be U.S. Bank National Association. The Tanamera/Roripaugh Entities may, from time to time, appoint or engage a Dissemination Agent to assist them in carrying out their obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Tanamera/Roripaugh Entities may serve as Dissemination Agent. The Dissemination Agent may resign by providing thirty (30) days' written notice to the Tanamera/Roripaugh Entities, the Authority and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent), such resignation to become effective upon acceptance of the appointment by a successor Dissemination Agent. Upon receiving notice of such resignation, the Tanamera/Roripaugh Entities shall promptly appoint a successor Dissemination Agent by an instrument in writing, delivered to the Fiscal Agent. If no appointment of a successor Dissemination Agent shall be made pursuant to the foregoing provisions of this Section within forty-five (45) days after the Dissemination Agent shall have given to the Tanamera/Roripaugh Entities, the Authority and the Fiscal Agent written notice of its resignation, the Dissemination Agent may apply to any court of competent jurisdiction to appoint a successor Dissemination Agent. Said court may thereupon after such notice, if any, as such court may deem proper, appoint a successor Dissemination Agent. The Authority shall provide the Tanamera/Roripaugh Entities and the Fiscal Agent with written notice of the identity of any successor Dissemination Agent appointed or engaged by the Tanamera/Roripaugh Entities. The Dissemination Agent shall have no duty to prepare the Semi-Annual Report nor shall the Dissemination Agent be responsible for filing any Semi-Annual Report not provided to it by the Tanamera/Roripaugh Entities in a timely manner and in a form suitable for filing. If the Dissemination Agent is other than the Fiscal Agent, the Dissemination Agent shall be paid compensation by the Tanamera/Roripaugh Entities for its services provided hereunder in accordance with the Dissemination Agent's schedule of fees as amended from time to to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable legal fees and advances incurred by the Dissemination Agent in for the performance of its duties hereunder. If the Dissemination Agent is the Fiscal Agent, the Authority shall be responsible for payingthe fees and expenses of the Dissemination Agent for its services provided hereunder in accordance with its agreement with the Authority. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement the Tanamera/Roripaugh Entities, the Dissemination Agent and the Fiscal Agent may amend this Disclosure Agreement (and the Fiscal Agent shall agree to any amendment so requested by the Tanamera/Roripaugh Entities,provided that the Fiscal Agent shall not be obligated to enter into such amendment that modifies or increases its duties and obligations hereunder), and any provision of this Disclosure Agreement may be amended or waived, provided that the following conditions are satisfied: (a) if the amendment or waiver relates to Sections 2(a), 3 or 4(a) hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person (as defined in the Rule) with respect to the 2006 Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of Bond Counsel approved by the Authority, have complied with the requirements of the Rule at the time of the primary offering of the 2006 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by owners of the 2006 Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of owners of the 2006 Bonds, or (ii) does not, in the opinion of Bond Counsel, materially impair the interests of owners or beneficial owners of the 2006 Bonds. If the financial information or operating data contained within the Financial Statements to be provided in the Semi-Annual Report or amendment or supplement thereto is amended pursuant to the provisions hereof, the first Semi-Annual Report containing the operating data or financial information in accordance with such amendment shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. As required by the Rule, if an amendment is made to the provisions hereof specifying the accounting principles to be followed in preparing Financial Statements, the financial information for the year in which the change is made shall present a comparison between the Financial Statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the Financial Statements, in order to enable investors to evaluate the ability of the Major Developer to generally meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be sent to the Repositories in the same manner as for a Listed Event under Section 4 hereof. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Tanamera/Roripaugh Entities from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Semi-Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Tanamera/Roripaugh Entities choose to include any information in any Semi-Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Tanamera/Roripaugh Entities shall have no obligation under this Disclosure Agreement to update such information or include it in any future Semi-Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Tanamera/Roripaugh Entities or the Fiscal Agent to comply with any provision of this Disclosure Agreement, the Fiscal Agent may (and, at the written direction of the Participating Underwriter or the owners of at least 25% aggregate principal amount of OutstandmgBonds, and after adequate indemnification, shall), or any owner or beneficial owner of the 2006 Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Tanamera/Roripaugh Entities, the Dissemination Agent or the Fiscal Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Fiscal Agent Agreement and the sole remedy under this Disclosure Agreement in the event of any failure of the Tanamera/Roripaugh Entities, the Dissemination Agent or the Fiscal Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Fiscal Agent and Dissemination Agent. Neither the Fiscal Agent nor the Dissemination Agent (if other than the Fiscal Agent or the Fiscal Agent in its capacity as Dissemination Agent) shall have any responsibility for the content of any Semi-Annual Report. The Dissemination Agent (if other than the Fiscal Agent or theFiscal Agent in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Tanamera/Roripaugh Entities agree to indemnify and save the Dissemination Agent (if other than the Fiscal Agent), its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it or they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the reasonable costs and expenses (including attorneys fees) of defending against any claim of liability with counsel approved by the Tanamera/Roripaugh Entities, which approval shall not be unreasonably withheld, but excluding losses, expenses and liabilities due to such Dissemination Agent's negligence, willful misconduct or failure to comply with any provision of this Disclosure Agreement. The obligations of the Tanamera/Roripaugh Entities under this Section shall survive resignation or removal of such Dissemination Agent and payment of the 2006 Bonds and the resignation or removal of the Fiscal Agent. Any action for which indemnification is sought from the Tanamera/Roripaugh Entities shall be deemed an action on a contract (this Agreement) for which the provisions of Section 18 are applicable. All of the protections from liability applicable to the Fiscal Agent shall apply to the Dissemination Agent. The Dissemination Agent and Fiscal Agent shall have no responsibility for the preparation, review, form or content of any Semi-Annual Report or any notice of a Listed Event. No provision of this Disclosure Agreement shall require or be construed to require the Dissemination Agent or Fiscal Agent to interpret or provide an opinion concerning any information disclosed hereunder. Information disclosed hereunder by the Dissemination Agent may contain such disclaimer language concerning the Dissemination Agent's responsibilities hereunder with respect thereto as the Dissemination Agent may deem appropriate. The Dissemination Agent and Fiscal Agent may conclusively rely on the determination of the Tanamera/Roripaugh Entities as to the materiality of any event for purposes of Section 4 hereof. Neither the Fiscal Agent nor the Dissemination Agent make any representation as to the sufficiency of this Disclosure Agreement for purposes of the Rule. The Tanamera/Roripaugh Entities' obligations under this Section shall survive the termination of this Disclosure Agreement. Section 12. Notices. Any notice or communications to or among any of the parties to this Disclosure Agreement shall be given to all of the following and may be given as follows: If to the Tanamera Twinleaf Homes, LLC Entities: 28475 Old Town Front Street, Suite D Temecula, California 92590 Telephone: (951)857-0070 Telecopier: (951) 639-9025 Attention: Ken Rose If to the Community Temecula Public Financing Authority Facilities District: Community Facilities District No. 03-02 (Roripaugh Ranch) 43200 Business Park Drive Temecula, California 92590 Telephone: (951) 694-6430 Telecopier: (951)694-6499 Attention: Finance Director If to the U.S. Bank National Association Dissemination 633 West Fifth Street, 24th Floor Agent: LM-CA-T24T Los Angeles, California 90071 Telephone: (213) 615-6005 Telecopier: (213) 615-6199 10 If to the U.S. Bank National Association Fiscal Agent: 633 West Fifth Street, 24th Floor LM-CA-T24T Los Angeles, California 90071 Telephone: (213) 615-6005 Telecopier: (213) 615-6199 If to the Stone & Youngberg LLC Participating One Ferry Building Underwriter: San Francisco, California 94111 Telephone: (415) 445-2300 Telecopier: (415) 445-2395 Attention: Municipal Research Department Section 13. Beneficiaries. The Participating Underwriter and the owners and beneficial owners from time to time of the 2006 Bonds shall be third party beneficiaries under this Disclosure Agreement. This Disclosure Agreement shall inure solely to the benefit of the Tanamera/Roripaugh Entities, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and owners and beneficial owners from time to time of the 2006 Bonds, and shall create no rights in any other person or entity. Any action by a beneficiary of this Agreement shall be subject to Section 18 below. Section 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 15. Merger. Any person succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor Dissemination Agent without the filing of any paper or any further act. Section 16. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Section 17. State of California Law Governs. The validity, interpretation and performance of this Disclosure Agreement shall be governed by the laws of the State of California. Section 18. Attorneys' Fees. In the event of the bringing of any action or suit by any Party against another Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the other Party all costs and expenses of suit, including reasonable attorneys' fees. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; EXECUTION PAGE FOLLOWS] 11 IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written. TANAMERA/RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member Kenneith V. Rose II Managing Member TANAMERA/RORIPAUGH II, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kefhneith V. Rose II Managing Member TRADITIONS AT RORIPAUGH, LLC, a California limited liability company By: USA Investors II, LLC, a Nevada limited liability company, Its Manager By: Twinleaf Homes, LLC, a California limited liability company, Its Managing Member By: Kenneith V. Rose II Managing Member 12 U.S. BANK NATIONAL ASSOCIATION, as Fiscal Agent By: ./g^ -" //AAuutthhodrriized Officer U.S. BANK NATIONAL ASSOCIATION, as Dissemination Agent By:_ ,Auitthrtoo]rized Officer 13 EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE SEMI-ANNUAL REPORT Name of Obligated Person:: Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC, each a California limited liability company Name of Bond Issue: Temecula Public Financing Authority Community Facilities District No. 03-02 (Roripaugh Ranch) 2006 Special Tax Bonds Date of Issuance: April 27, 2006 NOTICE IS HEREBY GIVEN that Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC have not provided a Semi-Annual Report with respect to the above-named Bonds as required by Section 2 of the Continuing Di sclosure Agreement, dated as of March 1,2006, by and among Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions atRoripaugh, LLC and U.S. Bank National Association, as Fiscal Agent. Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC anticipate that the Semi-Annual Report will be filed by . Dated: U.S. BankNational BankNational Association, as Dissemination Agent, on behalf of Tanamera/Roripaugh, LLC, Tanamera/Roripaugh II, LLC and Traditions at Roripaugh, LLC Authorized Officer cc: Temecula Public Financing Authority c/o City of Temecula A-l EXHIBIT B Municipal Secondary Market Disclosure Information Cover Sheet This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the filing is voluntary or made pursuant to Securities and Exchange Commission Rule 15c2-12 or any analogous state statute. See www.sec.gov/info/municipal/nrmsir.htm for list of current NRMSIRs and SIDs IF THIS FILING RELATES TO A SINGLE BOND ISSUE: Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of state where Issuer is located): $51,250,000 TEMECULA PUBLIC FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 03-02 (RORIPAUGH RANCH) 2006 SPECIAL TAX BONDS Provide nine-digit CUSIP* numbers* if available, to which the information relates: (Maturity) 2007 2008 2009 2010 2011 2012 87972YBV7 87972YBW5 87972YBX3 87972YBY1 87972YBZ8 87972YCA2 (Maturity) 2013 2014 2015 2016 2026 2036 87972YCBO 87972YCC8 87972YCD6 87972YCE4 87972YCM6 87972YCN4 IF THIS FILING RELATES TO ALL SECURITIES ISSUED BY THE ISSUER OR ALL SECURITIES OF A SPECIFIC CREDIT OR ISSUED UNDER A SINGLE INDENTURE: Issuer's Name (please include name of state where Issuer is located): Other Obligated Person's Name (if any): (Exactly as it appears on the Official Statement Cover) Provide six-digit CUSIP* number(s)*, if available, of Issuer: '(Contact CUSIP*'s Municipal Disclosure Assistance Line at 212.438.6518 for assistance with obtaining the proper CUSIP18 numbers.) TYPE OF FILING: D Electronic (number of pages attached) D Paper (number of pages attached) If information is also available on the Internet, give URL: B-l WHAT TYPE OF INFORMATION ARE YOU PROVIDING? (CHECK ALL THAT APPLY) A. D Annual Financial Information and Operating Data pursuant to Rule 15c2-12 (Financial information and operating data should not be filed with the MSRB.) Fiscal Period Covered: B. D Audited Financial Statements or CAFR pursuant to Rule 15c2-12 Fiscal Period Covered: C. D Notice of a Material Event pursuant to Rule 15c2-12 (Check as appropriate) 1. D Principal and interest payment delinquencies 6. D Adverse tax opinions or events affecting the taxexempt status of the security 2. D Non-payment related defaults 7. D Modifications to the rights of security holders 3. D Unscheduled draws on debt service reserves 8. D Bond calls reflecting financial difficulties 4. D Unscheduled draws on credit enhancements 9. D Defeasances reflecting financial difficulties 5. D Substitution of credit or liquidity providers, or 10. D Release, substitution, or sale of property securing their failure to perform ,. . repayment of the securities 11. D Rating changes changes D. D Notice of Failure to Provide Annual Financial Information as Required E. D Other Secondary Market Information (Specify): I hereby represent that I am authorized by the Issuer or obligor or its agent to distribute this information publicly: Issuer Contact: Name Title Employer Address City State Zip Code Telephone Fax Email Address Issuer Web Site Address Dissemination Agent Contact, if any: Name Title Employer Address Telephone Email Address City State Fax Relationship to Issuer Zip Code Obligor Contact, if any: Name Title Employer Address Telephone Email Address City State Fax Obligor Web site Address Zip Code Investor Relations Contact, if any: Name Title Telephone Email Address B-2