EXHIBIT 12-F

FIRST AMENDMENT TO FINANCING IMPLEMENTATION AGREEMENT

This First Amendment to Financing Implementation Agreement, dated as of _________, 2004 (the “First Amendment to Financing Implementation Agreement”), is entered by and among the MONTEREY PENINSULA WATER MANAGEMENT DISTRICT, a California public agency duly organized and existing under the laws of the State of California (“MPWMD”) and PEBBLE BEACH COMPANY, a California general partnership (“PBC”).

WHEREAS, the parties hereto have previously entered into a certain Financing Implementation Agreement, dated as of December 1, 1992 (the “Original Financing Implementation Agreement”) in connection with the issuance of $33,900,000 Variable Rate Demand Certificates of Participation (Wastewater Reclamation Project) Series 1992 (the “1992 Certificates”).

WHEREAS, MPWMD and U.S. Bank National Association, formerly known as First Trust of California, National Association, have previously entered into a certain Trust Agreement, dated as of December 1, 1992 (the “Original Trust Agreement”) in connection with the issuance of the 1992 Certificates.

WHEREAS, in accordance with a certain Water Purchase Agreement, dated as of December 1, 1992, (the “Original Water Purchase Agreement”) by and among MPWMD, the Carmel Area Wastewater District, a California public agency duly organized and existing under the laws of the State of California (“CAWD”) and the Pebble Beach Community Services District, a California public agency duly organized and existing under the laws of the State of California (“PBCSD”), CAWD and PBCSD agreed to sell, and MPWMD agreed to purchase, through certain payments known as “Series 1992 Water Payments,” as defined in the Original Trust Agreement, reclaimed water (also referred to as recycled water) produced by the wastewater reclamation project which was financed and constructed with proceeds of the 1992 Certificates (the “Original Project”). These 1992 Water Payments payable by MPWMD constitute the security for payment of the principal and interest components of the Series 1992 Certificates.

WHEREAS, the performance of the Original Project has not met the expectations of the parties with regard to either quantity or quality of recycled water due to a number of factors beyond the consideration of any of the parties participating in the Original Project. Prominent among these factors are: (1) the salt sensitivity of the dominant species planted in the greens of many of the golf courses irrigated with the recycled water; (2) inadequacy of the drainage facilities to conduct accumulated salts away from the greens; (3) increased salinity due to (a) smaller than anticipated amounts of secondary effluent due to decreased flows of influent to the CAWD wastewater plant (resulting in part from consumers’ water conservation efforts), (b) the addition of water softening units, and (c) internal wastewater plant processes contributing additional salinity loading; (4) the lack of sufficient data concerning the composition of the secondary effluent produced by the CAWD Wastewater Treatment Plant or concerning the water quality and water quantity requirements for golf course irrigation; and (5) the absence of any seasonal storage of recycled water.

WHEREAS, the parties have agreed to cooperate in the implementation and financing of certain improvements to the Original Project (such improvements being the “Project Expansion”).

WHEREAS, the parties hereto desire to amend the Original Financing Implementation Agreement to provide for certain modifications thereto caused by the Project Expansion and related activities.

WHEREAS, concurrently herewith, MPWMD, CAWD and PBCSD will execute a First Amendment to Water Purchase Agreement (the “First Amendment to Water Purchase Agreement”) dated as of the date hereof.

WHEREAS, concurrently herewith, the Trustee and MPWMD will execute a First Amendment to Trust Agreement (the “First Amendment to Trust Agreement”) dated as of the date hereof.

NOW THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

A. Definitions. Unless otherwise indicated herein or in the First Amendment to Trust Agreement, all capitalized terms shall have the meanings set forth in the Original Financing Implementation Agreement, in the Original Water Purchase Agreement, as amended by the First Amendment to Water Purchase Agreement, and in the Original Trust Agreement, as amended by the First Amendment to Trust Agreement. The Original Financing Implementation Agreement, as amended by this First Amendment to Financing Implementation Agreement, is referred to herein as the “Financing Implementation Agreement.”

B. Transfer of Custody of Operation and Maintenance Reserve Fund.

The text of Section 6, shall be re-entitled “Operation and Maintenance Reserve Fund,” and is hereby amended to read as follows, in order to provide that the Operation and Maintenance Reserve Fund shall be held by CAWD and PBCSD rather than by MPWMD:

PBC and MPWMD hereby acknowledge and agree that the Operation and Maintenance Reserve Fund, created and held by MPWMD under the Original Water Purchase Agreement, shall hereafter be held by CAWD and PBCSD separate and apart from other funds. PBC and MPWMD hereby further acknowledge and agree that if and to the extent necessary, the Operation and Maintenance Reserve Fund shall hereafter be replenished at the beginning of each Fiscal Year by MPWMD from Net Operating Revenues such that the beginning balance shall be in the amount of the Operation and Maintenance Reserve Requirement (as determined by the Management Committee and specified in the budget approved for that Fiscal Year). PBC and MPWMD hereby further acknowledge and agree that such fund shall be replenished during the Fiscal Year, as requested by the Management Committee, only in the event of any withdrawal or deficiency and then solely from Net Operating Revenues (as defined under the Water Purchase Agreement) and that any such deficiency shall not constitute an Operation and Maintenance Expense and shall not be included for the purpose of calculation of any Net Operating Deficiency under the Fiscal Sponsorship Agreement or otherwise.

C. Notices.

Section 20 is hereby added to read as follows:

All written notices to be given hereunder shall be given by first-class mail or overnight delivery service to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

If to PBC:

Pebble Beach Company
Post Office Box 1767
4005 Sunridge Road
Pebble Beach, CA 93953-1767

Attn: General Manager

and

Thomas H. Jamison
Fenton & Keller, P.C.
2801 Monterey-Salinas Highway
Post Office Box 791
Monterey, CA 93942-0791

If to MPWMD:

Monterey Peninsula Water
Management District

Post Office Box 85
5 Harris Court, Bldg. G
Monterey, CA 93942-0085

Attn: General Manager

and

David C. Laredo
De Lay & Laredo
606 Forest Avenue
Pacific Grove, CA 93950

D. Execution in Counterparts. This First Amendment to Financing Implementation Agreement may be executed in counterparts, each of which shall be an original and all of which shall together constitute one instrument. A telecopied signature hereon shall be deemed an original for all purposes.

E. Complete Agreement. This First Amendment to Financing Implementation Agreement sets forth the complete agreement of the parties hereto with respect to the subject matter hereof. Further, except as specifically described herein, nothing in this First Amendment to Financing Implementation Agreement shall replace or amend the terms of the Original Financing Implementation Agreement or the other COP Documents, which, except as otherwise amended from time to time, shall remain in full force and effect, or be deemed a waiver of any right, benefit, protection, or assurance under such documents.

F. Governing Law. This First Amendment to Financing Implementation Agreement shall be governed by, interpreted, and enforced in accordance with the laws of the State of California.

G. Effective Date. This First Amendment to Financing Implementation Agreement shall become effective, as of the date first written above, upon the execution and delivery hereof by the parties hereto and execution by the Credit Bank of the written consent of the Credit Bank, attached hereto as Exhibit A, and shall terminate at the same time and upon the same conditions as the Original Financing Implementation Agreement.