2022-07-12; City Council; ; Consideration of Refunding of Outstanding Bonds for Reassessment District No. 2012-1 — Carlsbad City Council, July 12, 2022 (part 1 of 2)

CA Review CKM
Meeting Date: July 12, 2022
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Laura Rocha, Deputy City Manager, Administrative Services [email protected], 442-339-2415
Zach Korach, Finance Director
[email protected], 442-339-2127
Subject: Consideration of Refunding of Outstanding Bonds for Reassessment District No. 2012-1
District: 2 and 3
Recommended Actions
Adopt the following resolutions:

1.Adopt a resolution declaring the intention to levy reassessments and issue refunding bonds for Reassessment District No. 2012-1.

2.Adopt a resolution adopting the reassessment report, confirming and ordering the reassessment by summary proceedings, and authorizing and directing related actions.

3.Adopt a resolution authorizing the issuance of refunding bonds, approving and authorizing related documents and actions.

Executive Summary
Staff have determined that refunding one of the bonds the city has issued to fund public infrastructure could save the affected property owners money because of a decline in interest rates since the bonds were initially issued in 2012.

This bond was issued for Reassessment District No. 2012-1, which paid for infrastructure in two areas of the city:
•Along the eastern part of Poinsettia Lane, roughly from El Camino Real to just past El Fuerte Street, and from Palomar Airport Road south to Alga Road •Along and near College Boulevard and north of Cannon Road Refunding this bond will provide property owners in the district annual savings in their property tax bills starting in fiscal year 2022-23.

Discussion
The city has periodically issued tax exempt bonds to finance the construction of public infrastructure such as roadways, utilities and other items in certain areas of the city. Each bond was priced and sold at the most favorable interest rates available at the time they were taken July 12, 2022 Item #17 Page 1 of 463

to market. As interest rates rise and fall in the general economy, they also rise and fall in the public finance market. When interest rates fall sufficiently below the rates at which a bond issue was originally sold, it may be in the best interest of the city to refinance the applicable bond issues through a refunding. A refunding is similar to refinancing a home in that the old debt is paid off, or satisfied in some manner, and the new loan, with its lower interest rates and annual debt service payments, is carried forward, though the maturity date is not extended.

There is one debt issue that is a good candidate for refunding due to decreases in interest rates:

1. Reassessment District No. 2012-01 consisting of Poinsettia Lane East, and Benefit Area No. 1 (College Boulevard and Cannon Road East) of Assessment District No. 2003-01 The potential savings from refunding this debt issue will be discussed in the Fiscal Impact section below. The actual savings will depend on the market conditions when the refunding bonds are issued.

To carry out this refunding, it will be necessary for the City Council to:
• Declare its intention to levy reassessments
• Approve a reassessment engineer’s report
• Issue refunding bonds
• Approve the form of the refunding documents
With those City Council actions, staff can then proceed with the sale of the refunding bonds.

The documents the City Council is being asked to approve, which have been reviewed by bond counsel and the City Attorney’s Office, are:

Bond purchase agreement – Specifies the conditions under which the underwriter, Stifel, Nicolaus & Company, Incorporated, will purchase the reassessment bonds. (Exhibit 4)
Continuing disclosure agreement – Spells out the city’s ongoing responsibility to provide information to investors. (Exhibit 5)
Escrow agreement – Provides instructions to the city’s escrow agent, The Bank of New York Mellon Trust Company, on how to hold and distribute the proceeds of the refunding bonds. (Exhibit 6)
Indenture agreement – This agreement identifies the ongoing responsibilities of the city and its trustee, The Bank of New York Mellon Trust Company, N.A., with regard to the payment of principal and interest to the bond holders, as well as other related matters. (Exhibit 7)
Preliminary official statement – The document, prepared by Stradling Yocca Carlson & Rauth, that will be delivered to prospective buyers of the reassessment bonds to provide information about the reassessment district, the reassessment bonds and the city along with other information necessary to make an informed investment decision. (Exhibit 8)
Reassessment engineer’s report – This report has been prepared by NBS Government Finance Group, a consulting engineer, and reflects the amount of the July 12, 2022 Item #17 Page 2 of 463

assessment that shall be placed on each parcel within the reassessment district and the method by which the reassessment has been spread. (Exhibit 9) According to the current refunding schedule, final bond pricing will occur in late July 2022 and the final sale will occur in early August 2022.

Under the terms of California Streets & Highways Code Section 9525 of the Refunding Act of 1984 for 1915 Improvement Act Bonds, refunding a bond like the one issued by this reassessment district cannot be done without satisfying the following three requirements:

1. Each estimated annual installment of principal and interest on the reassessment is less than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted
(i.e., each property will receive savings in each year)

2. The number of years to maturity of all refunding bonds is not more than the number of years to the last maturity of the bonds being refunded (i.e., the maturity date isn’t increased)

3. The principal amount of the reassessment on each subdivision of land within the district is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each subdivision of land within the district (i.e., the assessment liens will be decreased)
As shown in the reassessment engineer’s report (Exhibit 9), all three requirements have been satisfied. For the bonds to be refunded, the City Council must find that these conditions have been satisfied. Staff recommend the City Council do so by adopting the attached resolutions, which will allow the sale of refunding bonds for Reassessment District No. 2012-01.

Options
Staff provide the following options for the City Council’s consideration:

1. Adopt the attached resolutions required to refund outstanding Reassessment District No. 2012-1 Bonds
Pros
• Affected property owners will benefit from lower property tax payments each year over the life of the bonds.

Cons
• None identified

2. Do not adopt the attached resolutions
Pros
• None identified
Cons
• Homeowners and other property owners will not benefit from lower property tax payments
Staff recommend Option 1.

July 12, 2022 Item #17 Page 3 of 463

Fiscal Analysis
Refunding Reassessment District No. 2012-01 will lower the annual cost to property owners within both districts beginning in fiscal year 2022-23.

Staff based the estimates of savings shown below on the projected minimum savings numbers used in the reassessment engineer’s report. Those minimum savings numbers are derived from an average interest rate of 3.94%, which is higher than current market rates. The market rates were approximately 3.52% as of June 13, 2022. Using an interest rate sufficiently higher than the current market rates allows the city to determine the minimum acceptable savings threshold. Because of that, the estimated annual savings ranges could be greater when the bonds are issued if market rates remain steady.

The following table shows the estimated percentage savings of refunded bonds given the average interest rate and the current market rates.

Estimated percentage savings of refunded bonds
Interest rate Percentage of savings from
refunded bonds1
Average rate - 3.94% approximately 0.25%
Market rate - 3.52% approximately 4%
1 - These percentages have been rounded to the nearest quarter percent.

The numbers shown above are preliminary and subject to change. The actual rates will be determined when refunding bonds are issued.

The table below details the estimated annual average savings for property owners based on current market rates as of June 13, 2022, and an average interest rate of 3.52 percent.

Estimated annual savings ranges for property owners1
Parcels Average savings per parcel
2,143 $154
1 - The amount shown above does not include administrative costs of approximately $11 for comparison purposes, and was rounded to the nearest whole dollar.

The fiscal year 2022-23 levy amounts were compared with the “typical estimated levy” in the proposed bond issuance.

The city is not obligated in any manner to pay any costs related to the refunding bonds. The costs of issuing the bonds will be paid as part of the proceeds from the sale. The obligation for repayments rests solely with the property owners within the reassessment district.

Next Steps
With the City Council’s approval, staff will continue working with the city’s financing team to sell the refunding bonds in mid-July, close the sale in early August and the pay off the outstanding bonds in September.

Environmental Evaluation
In keeping with California Public Resources Code Section 21065, this action does not constitute a project within the meaning of the California Environmental Quality Act in that it has no July 12, 2022 Item #17 Page 4 of 463

potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review.

Public Notification
This item was noticed in keeping with the state's Ralph M. Brown Act and it was available for public viewing and review at least 72 hours before the scheduled meeting date.

Exhibits

1.Resolution declaring the intention to establish Carlsbad Reassessment District No. 2022-1, levy and issue refunding bonds

2.Resolution adopting reassessment report

3.Resolution authorizing issuance of refunding bonds

4.Bond purchase agreement

5.Continuing disclosure agreement

6.Escrow agreement

7.Indenture agreement with The Bank of New York Mellon Trust Company

8.Preliminary official statement

9.Preliminary reassessment engineer’s report

10.District map
July 12, 2022 Item #17 Page 5 of 463

RESOLUTION NO. 2022-176

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,

CALIFORNIA, DECLARING THE INTENTION TO ESTABLISH REASSESSMENT DISTRICT NO. 2022-1 AND LEVY REASSESSMENTS AND TO ISSUE REFUNDING BONDS
WHEREAS, the City Council of the City of Carlsbad, California has determined that; and WHEREAS, pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division

1.That the above recitations are true and correct.

2.The City Council establishes the Reassessment District in accordance with the Act for the purpose of levying reassessments as described herein.

3.The City Council declares its intention to refund the 2012 Bonds and to levy reassessments as security for the Refunding Bonds as hereinafter provided. The proceedings for the levy and collection of reassessments as security for the issuance and payment of the Refunding Bonds shall be conducted pursuant to the Act.

Exhibit 1
July 12, 2022 Item #17 Page 6 of 463

4.The City Council finds that the contemplated reassessments and refunding, in the opinion of the City Council, are of more than local or ordinary public benefit, and the costs and expenses thereof are made chargeable upon the Reassessment District, the exterior boundaries of which are shown on a reassessment diagram thereof heretofore filed in the office of the City Clerk, and to be filed in the office of the County of San Diego Recorder, to which reassessment diagram reference is hereby made for further particulars. The reassessment diagram indicates by a boundary line the extent of the territory included in the Reassessment District and shall govern for all details as to the extent thereof.

5.The City Council refers the reassessment and refunding to NBS, a qualified firm employed by the City for the purpose hereof (the "Reassessment Consultant"), and the Reassessment Consultant is hereby directed to make and file with the City Clerk a report in writing, presenting the following:
a.A schedule setting forth the unpaid principal and interest on the 2012 Bonds to be refunded and the total amounts thereof and the unpaid assessment being continued, if any;
b.The total estimated principal amount of the reassessment and of the Refunding Bonds and the maximum interest rate thereon, together with an estimate of cost of the reassessment and of issuing the Refunding Bonds, including all costs of issuing the Refunding Bonds, as defined by subdivision (a) of Section 9600 of the Act; c.The auditor's record kept pursuant to Section 8682 of the California Streets and Highways Code showing the schedule of principal installments and interest on all unpaid original assessments and the total amounts thereof; d.The estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number on the reassessment diagram, together with a proposed auditor's record for the reassessment prepared in the manner described in Section 8682 of the California Streets and Highways Code; and e.A reassessment diagram showing the Reassessment District and the boundaries and dimensions of the subdivisions of land within the Reassessment District. Each July 12, 2022 Item #17 Page 7 of 463

subdivision, including each separate condominium interest as defined in Section 783 of the California Civil Code, shall be given a separate number upon the diagram.

When any portion or percentage of the costs and expenses of the refunding and reassessment is to be paid from sources other than reassessments, the amount of such portion or percentage shall first be deducted from the total estimated cost and expenses of the refunding and reassessment, and the reassessments shall include only the remainder of the estimated cost and expenses. If any excess shall be realized from the reassessment, it shall be used, in such amounts as the City Council may determine, in accordance with the provisions of law, in a manner or manners to be provided in these proceedings.

6.The City Council provides notice that serial and/or term Refunding Bonds to represent the reassessments, and bearing interest at the rate of not to exceed 5.00% per annum, will be issued hereunder in the manner provided by the Act, the last installment of which bonds shall mature not later than September 2, 2035. It is the intention of the City that the City will not obligate itself to advance available funds from the treasury of the City to cure any deficiency in the redemption fund to be created with respect to the Refunding Bonds; provided, however, that a determination not to obligate itself shall not prevent the City from, in its sole discretion, so advancing the funds.

7.The City Council determines that the provisions of Part 11.1 of Division 10 of the California Streets and Highways Code, providing for an alternative procedure for the advance payment of reassessments and the calling of bonds, shall apply to the Refunding Bonds issued pursuant to proceedings under this Resolution.

8.The City Council makes reference to the proceedings previously undertaken pursuant to the Act with respect to the 2012 Bonds, which are on file in the office of the City Clerk.

9.The City Council declares that it is the intention of the City Council to create a special reserve fund with respect to the Refunding Bonds and that the amount of such fund shall be included in the reassessment.

10.The City Council appoints the firm of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as bond counsel for the purpose of the reassessment and refunding proceedings, the firm of Fieldman Rolapp & Associates, July 12, 2022 Item #17 Page 8 of 463

Inc., Irvine, California, as municipal advisor for the Refunding Bonds, the firm of NBS, Temecula, California, as Reassessment Consultant for the Refunding Bonds and the firm of Stifel, Nicolaus & Company, Incorporated, as underwriter for the Refunding Bonds.

The fees of such firms shall be fixed in the proceedings and shall be paid only upon the successful completion of the proposed reassessment and refunding and from the proceeds of the Refunding Bonds.

PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12th day of :!.l:!.!Y, 2022, by the following vote, to wit:

AYES:

NAYS:

ABSENT:

Hall, Blackburn, Bhat-Patel, Acosta.

None.

Norby.

MATTH�
+y FAVIOLA MEDINA, City Clerk Services Manager
(SEAL)
July 12, 2022 Item #17 Page 9 of 463
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RESOLUTION NO. 2022-177

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,

CALIFORNIA, ADOPTING A REASSESSMENT REPORT, CONFIRMING THE

ORDERING THE REASSESSMENT BY SUMMARY PROCEEDINGS AND

AUTHORIZING AND DIRECTING RELATED ACTIONS
WHEREAS, pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division

11.5 of the California Streets and Highways Code) (the "Act"), the City of Carfsbad (the "City"), a municipal corporation that is duly organized and existing under the Constitution of the State of California and its charter, has previously issued its Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the "2012 Bonds"), which are secured by the unpaid reassessments on the properties within Reassessment District No. 2012-1 of the City (the "2012 Reassessment District"); and WHEREAS, the public interest requires the refunding of the 2012 Bonds, and the City Council of the City (the "City Council") intends to accomplish the refunding through the levy of reassessments and the issuance of refunding bonds upon the security thereof; and WHEREAS, the City desires: (i) to establish a new reassessment district entitled Reassessment District No. 2022-1 (the "Reassessment District"); and (ii) to issue refunding bonds (the "Refunding Bonds") of the Reassessment District pursuant to the Act, the proceeds of which Refunding Bonds will be applied to refund the 2012 Bonds, and, on the date hereof, the City Council is adopting separate resolutions with respect to such matters (described in the following WHEREAS clauses); and WHEREAS, on the date hereof, the City Council is adopting a resolution regarding its intention to levy reassessments and to issue refunding bonds (the "Resolution of Intention to Levy Reassessments"), in and for the Reassessment District, including within the 2012 Reassessment District, and therein directed the making and filing of a reassessment report (the "Report") in writing, all in accordance with and pursuant to the Act; and
WHEREAS, the Report was duly made and filed and duly considered by the City Council with the aid of City staff and found to be sufficient in every particular, and the Report shall stand for all subsequent proceedings under and pursuant to the Resolution of Intention to Levy Reassessments; and, WHEREAS, on the date hereof, the City Council is adopting a resolution approving the issuance of the Refunding Bonds.

Exhibit 2
July 12, 2022 Item #17 Page 10 of 463
\

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. 2.

That the above recitations are true and correct.

The City Council finds, pursuant to Section 9525 of the Act, and based upon the Report, that all of the following conditions are satisfied:
a.Each estimated annual installment of principal and interest on the reassessment for properties within the Reassessment District as set forth in the Report is less than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted as also set forth in the Report, by the same percentage for all subdivisions of land within the Reassessment District; b.The number of years to maturity of all refunding bonds proposed to be issued under the Resolution of Intention to Levy Reassessments is no more than the number of years to the last maturity of the 2012 Bonds; and
c.The principal amount of the reassessment on each subdivision of land within the Reassessment District is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each subdivision of land in the same Reassessment District.

For the purpose of this Section 2, "unpaid" shall not include installments which are posted to the tax roll for fiscal year 2022-23.

3.The City Council finds that the public interest, convenience and necessity require that the reassessment be made.

4.The City Council finds that the Reassessment District benefited by the reassessment and to be reassessed to pay the costs and expenses thereof, and the exterior boundaries thereof, are as shown by the reassessment diagram filed in the office of the City Clerk, which reassessment diagram is made a part hereof by reference thereto.

5.The City Council finds that, pursuant to the findings hereinabove expressed with respect to Section 9525 of the Act, all conditions are deemed satisfied, and the following elements of the Report are hereby finally approved and confirmed without further proceedings, including the conduct of a public hearing under the Act, to wit:

July 12, 2022 Item #17 Page 11 of 463

a.A schedule setting forth the unpaid principal and interest on the 2012 Bonds to be refunded and the total amounts thereof (and assessments being continued); b.An estimate of the total principal amount of the reassessment and of the Refunding Bonds and the maximum interest rate thereon, together with an estimate of cost of the reassessment and of issuing the Refunding Bonds, including expenses incidental thereto;
c.The auditor's record kept pursuant to Section 8682 of the California Streets and Highways Code showing the schedule of principal installments and interest on the 2012 Bonds and the total amounts thereof;
d.The estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number of the reassessment diagram, together with a proposed auditor's record for the reassessment prepared in the manner described in the Section 8682 of the California Streets and Highways Code; and e.A reassessment diagram showing the Reassessment District and the boundaries and dimensions of the subdivisions of land therein and assigning a separate number to each such subdivision of land.

Final adoption and approval of the Report as a whole, the estimate of the costs and expenses, the reassessment diagram and the reassessment, as contained in the Report, as hereinabove determined and ordered, is intended to and shall refer and apply to the Report, or any portion thereof, as amended, modified, revised or corrected by, or pursuant to and in accordance with, any resolution or order, if any, heretofore duly adopted or made by the City Council.

6.The City Council approves, confirms and levies the reassessment, including all costs and expenses thereof. Pursuant to the provisions of the Act, reference is hereby made to the Resolution of Intention to Levy Reassessments for further particulars. The reassessment shall be reduced in the event that City staff determines that to do so is necessary and advisable to further the purposes of this Resolution, and, if such determination is made, City staff is hereby authorized and directed to record said reduced reassessment in the manner set forth in Section 9 hereof, and to take any July 12, 2022 Item #17 Page 12 of 463

further actions required to finalize said reduction, without further action of the City Council.

7.The City Council authorizes and directs the City Clerk or other appropriate officer or officers of the City to carry out the following, including the payment of any and all fees required by law in connection therewith:
a.Deliver the reassessment to the City's Transportation Director, who is its Superintendent of Streets, together with the reassessment diagram, as approved and confirmed by the City Council, with a certificate of such confirmation and of the date thereof, executed by the City Clerk, attached thereto. The Superintendent of Streets shall record each of the reassessments and the reassessment diagram in a suitable book to be kept for that purpose, and append thereto a certificate of the date of such recording, and such recordation shall be and constitute the applicable reassessment roll herein;
b.File and record, respectively, the reassessment diagram and a notice of reassessment in substantially the form specified by Section 3114 of the California Streets and Highways Code and executed by the City Clerk in the office of the County Recorder of the County of San Diego; and
c.Provide a copy of this Resolution to the Auditor-Controller of the County of San Diego at the time of the delivery of the debt service records for the refunding bonds secured by the reassessments.

8.From the date of recording of the notice of reassessment, all persons shall be deemed to have notice of the contents of such reassessment, and each of such reassessments shall thereupon be a lien upon the property against which it is made, and unless sooner discharged such liens shall so continue for the period of ten. (10) years from the date of such recordation, or in the event that bonds are issued to represent the reassessments, then such liens shall continue until the expiration of four (4) years after the due date of the last installment upon such bonds or of the last installment of principal of such bonds.

9.The appropriate officer or officers of the City are hereby authorized to pay any and all fees required by law in connection with the above.

July 12, 2022 Item #17 Page 13 of 463

10.The City Council directs the City Treasurer to keep a record showing the several installments of principal and interest on the reassessments which are to be collected each year during the term of the Refunding Bonds. An annual apportionment of each reassessment, together with annual interest on said reassessment, shall be payable in the same manner and at the same time and in the same installments as the general property taxes and shall be payable and become delinquent at the same time and in the same proportionate amount; provided that any reassessments on possessory interests shall be collected on the unsecured tax roll and shall be payable and become delinquent at the same time as other taxes levied on said unsecured roll. Each year, the annual installments shall be submitted to the County of San Diego Auditor-Controller for purposes of collection, and the County of San Diego Auditor-Controller shall, at the close of the tax collecting period, promptly render to the City Treasurer a detailed report showing the amount of such installments, interest, penalties and percentages so collected.

11.The City Council authorizes directs the City Treasurer: (a) to revise the Report to reduce the applicable reassessments, as confirmed pursuant to Section 7 hereof, if and to the extent necessary so that the aggregate amount thereof does not exceed the initial principal amount of the Refunding Bonds; (b) to amend the reassessment and reassessment diagram to reflect such reductions; and (c) to promptly record the reassessment, together with the reassessment diagram, as so amended, in the office of the person acting as the Superintendent of Streets of the City. Immediately thereafter, a copy of the reassessment diagram, as so amended, shall be filed in the office of the County of San Diego Recorder and a Notice of Reassessment, referring to the reassessment diagram, shall be recorded in the office of the County of San Diego Recorder, all pursuant to the provisions of Division 4.5 of the California Streets and Highways Code.

July 12, 2022 Item #17 Page 14 of 463

PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12th day of !!!!Y, 2022, by the following vote, to wit:

AYES:

NAYS:

ABSENT:

Hall, Blackburn, Bhat-Patel, Acosta.

None.

Norby.
� FAVIOLA MEDINA, City Clerk Services Manager
(SEAL)
July 12, 2022 Item #17 Page 15 of 463
P:k

RESOLUTION NO. 2022-178

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,

CALIFORNIA, AUTHORIZING THE ISSUANCE OF REFUNDING BONDS, AND

APPROVING AND AUTHORIZING RELATED DOCUMENTS AND ACTIONS WHEREAS, pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division

11.5 of the California Streets and Highways Code) (the "Act"), the City of Carlsbad (the "City"), a municipal corporation that is duly organized and existing under the Constitution of the State of California and its charter, has previously issued its Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the "2012 Bonds"), which are secured by the unpaid reassessments on the properties within Reassessment District No. 2012-1 of the City (the "2012 Reassessment District"); and WHEREAS, the public interest requires the refunding of the 2012 Bonds, and the City Council of the City (the "City Council") intends to accomplish the refunding through the levy of reassessments and the issuance of refunding bonds upon the security thereof; and WHEREAS, the City desires: (i) to establish a new reassessment district entitled Reassessment District No. 2022-1 (the "Reassessment District") and to levy reassessments therein, including within the 2012 Reassessment District; and (ii) to issue refunding bonds (the "Refunding Bonds") of the Reassessment District pursuant to the Act, the proceeds of which Refunding Bonds will be applied to refund the 2012 Bonds, and, on the date hereof, the City Council is adopting this Resolution with respect to the matters described in clause (ii) and has adopted a separate resolution (described in the following WHEREAS clause) with respect to the matters described in clause (i); and WHEREAS, on the date hereof, the City Council adopted a resolution regarding its intention to levy reassessments and to issue refunding bonds (the "Resolution· of Intention to Levy Reassessments"), in and for the Reassessment District, and the City Council thereafter conducted proceedings pursuant to the Act; and
WHEREAS, the proceedings under the Act and the Resolution of Intention to Levy Reassessments are now completed, a list of unpaid reassessments (the "List of Unpaid Reassessments") is on file with the City Clerk and the City Council wishes to provide for the issuance of the Refunding Bonds on the security of such unpaid reassessments pursuant to the Act; and WHEREAS, the purpose of the issuance of the Refunding Bonds shall be to refund and redeem the 2012 Bonds; and
Exhibit 3
July 12, 2022 Item #17 Page 16 of 463

WHEREAS, there has been submitted to the City Council an indenture (the "Indenture") providing for the issuance of the Refunding Bonds by the City for the Reassessment District, and the City Council, with the aid of City staff, has reviewed the Indenture and found it to be in proper order, and now desires to approve the Indenture and the issuance of the Refunding Bonds; and WHEREAS, there has been submitted to the City Council an escrow agreement relating to the 2012 Bonds (the "Escrow Agreement"), which will be used to refund and redeem the 2012 Bonds, and the City Council, with the aid of City staff, has reviewed the Escrow Agreement and found it to be in proper order, and now desires to approve the Escrow Agreement; and WHEREAS, the City Council has determined that a negotiated sale of the Refunding Bonds to Stifel, Nicolaus & Company, Incorporated, as Underwriter (the "Underwriter") will result in a lower overall cost to the City than a sale of the Refunding Bonds on sealed proposals to the highest bidder in that a negotiated sale will allow for adequate time to pre-market the Refunding Bonds and for the timing of the sale of the Refunding Bonds to be flexible, thereby maximizing the likely debt service savings to the City; and
WHEREAS, there has been submitted to the City Council a bond purchase agreement with the Underwriter relating to the Refunding Bonds (the "Purchase Agreement"), pursuant to which the Underwriter will purchase the Refunding Bonds, and the City Council, with the aid of City staff, has reviewed the Purchase Agreement and found it to be in proper order, and now desires to approve the Purchase Agreement; and
WHEREAS, there has been prepared by City staff and submitted to the City Council a Preliminary Official Statement relating to the Refunding Bonds (the "Preliminary Official Statement"), and the City Council, with the aid of City staff, has reviewed the Preliminary Official Statement and found it to be in proper order, and now desires to approve the Preliminary Official Statement; and WHEREAS, there has been submitted to the City Council a Continuing Disclosure Agreement relating to the Refunding Bonds (the "Continuing Disclosure Agreement"), and the City Council, with the aid of City staff, has reviewed the Continuing Disclosure Agreement and found it to be in proper order, and now desires to approve the Continuing Disclosure Agreement; and WHEREAS, there has been presented to the City Council a List of Unpaid Reassessments showing the unpaid reassessments upon the security of which the Refunding Bonds shall be issued, and the City Council, with the aid of City staff, has reviewed and considered the List of Unpaid Reassessments; and July 12, 2022 Item #17 Page 17 of 463

WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Refunding Bonds and the levy of the reassessments as contemplated by this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1.That the above recitations are true and correct.

2.The City Council approves the reassessments which remain unpaid as shown on the List of Unpaid Reassessments, which are incorporated herein by this reference. The total amount of the unpaid reassessments is $20,225,000. For a particular description of the lots, pieces and parcels of land bearing the respective reassessment numbers set forth in the List of Unpaid Reassessments, reference is hereby made to the reassessment and to the reassessment diagram, and any amendments thereto approved by the City Council, all as recorded in the office of the Transportation Director, who is the Superintendent of Streets of the City.

3.The City Council authorizes, pursuant to the Act, this Resolution and the Indenture, the issuance of the Refunding Bonds in an aggregate principal amount of not to exceed $20,225,000. The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms, covenants and conditions of the Refunding Bonds will be as provided in the Indenture as finally executed.

4.The City Council authorizes and directs the Mayor, the City Manager, the Assistant City Manager, any Deputy City Manager, or the City Treasurer (each, an "Authorized Officer") or the designee thereof to execute and deliver the various documents and instruments described in this Resolution, provided that no additions or changes shall authorize an aggregate principal amount of Refunding Bonds in excess of $20,225,000, a final maturity date of the Refunding Bonds after September 2, 2035 or a stated interest rate on the Refunding Bonds in excess of 5.00% per annum. The approval of such additions July 12, 2022 Item #17 Page 18 of 463

or changes shall be conclusively evidenced by the execution and delivery of such documents or instruments by an Authorized Officer, upon consultation with Stradling Yocca Carlson & Rauth, a Professional Corporation, the City's bond counsel ("Bond Counsel"), or Fieldman Rolapp & Associates, Inc., the City's municipal advisor (the "Municipal Advisor").

5.The City Council approves the proposed form of Indenture presented to the City Council at this meeting. Each of the Authorized Officers is hereby authorized and directed to cause the same to be completed and executed on behalf of the City, subject to Sections 3 and 4 above.

6.The City Council approves the refunding of the 2012 Bonds with the proceeds of the Refunding Bonds and other available moneys, in accordance with the provisions of the documents pursuant to which such 2012 Bonds were sold and delivered.

7.The City Council approves the proposed form of Escrow Agreement presented to the City Council at this meeting. Each of the Authorized Officers is hereby authorized and directed to cause the same to be completed and executed on behalf of the City. Each of the Authorized Officers is also hereby authorized and directed to cause escrow, prepayment and/or redemption instructions with respect to the 2012 Bonds to be completed and executed on behalf of the City, as necessary.

8.The City Council approves the proposed form of Purchase Agreement presented to the City Council at this meeting. Each of the Authorized Officers is hereby authorized and directed to cause the same to be completed and executed on behalf of the City, subject to Section 4 above.

9.The City Council approves the preparation and distribution of the Preliminary Official Statement in substantially the form presented to the City Council at this meeting. Each of the Authorized Officers is hereby authorized: (i) to sign a certificate pursuant to Rule 1Sc2-12 promulgated under the Securities Exchange Act of 1934 (the "Rule") deeming the Preliminary Official Statement substantially final under the Rule, except for the omission of information as permitted by the Rule; and (ii) to execute, approve and deliver the final Official Statement in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as the officer or officers July 12, 2022 Item #17 Page 19 of 463

executing said document may require or approve, subject to advice from the City Attorney or Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof. The Underwriter is directed to deliver copies of the final Official Statement to all actual initial purchasers of the Refunding Bonds.

10.The City Council approves the proposed form of Continuing Disclosure Agreement presented to the City Council at this meeting. Each of the Authorized Officers is hereby authorized and directed to cause the same to be completed and executed on behalf of the City.

11.The City Council directs, upon the sale of the Refunding Bonds to the Underwriter, the Refunding Bonds to be prepared, authenticated and delivered, all in accordance with the applicable terms of the Indenture, and each of the Authorized Officers is hereby authorized and directed to take such actions as are required under the Indenture or the Purchase Agreement to complete all actions required to evidence the delivery of the Refunding Bonds upon the receipt of the purchase price thereof from the Purchaser.

12.The City Council discloses the good faith estimates of costs related to the Refunding Bonds which are required by Section 5852.1 of the California Government Code in Attachment A hereto and which are available to the public at the meeting at which this Resolution is approved.

13.The City Council approves, confirms and ratifies all actions heretofore taken by the officers and agents of the City with respect to the establishment of the Reassessment District and the sale and issuance of the Refunding Bonds, including but not limited to the distribution of the Preliminary Official Statement, and the proper officers of the City are hereby authorized and directed to do any and all things, take any and all actions and execute any and all certificates, agreements, contracts and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Refunding Bonds in accordance with this Resolution, the Indenture and any certificate, agreement, contract and other document described in the documents herein approved, including but not limited to soliciting bids on a municipal bond insurance policy and/or reserve surety, negotiating the terms of such policy or policies, finalizing, if appropriate, the form of such policy or policies with a July 12, 2022 Item #17 Page 20 of 463

municipal bond insurer and, if it is determined that the policy or policies will result in net savings for the City, paying the insurance premium of such policy or policies from the proceeds of the issuance and sale of the Refunding Bonds.

14.Each of the Authorized Officers is authorized to provide for all services necessary to effect the issuance, sale and delivery of the Refunding Bonds. Such services shall include, but not be limited to, obtaining legal services as approved by the City Attorney, trustee services, verification agent services, consultant services, reassessment engineer services and any other services deemed appropriate by an Authorized Officer. Any one of the Authorized Officers is authorized to pay for the cost of such services, together with other Costs of Issuance (as defined in the Indenture and as otherwise agreed to in writing by an Authorized Officer) from the sale and delivery of Refunding Bond proceeds.

The Authorized Officers are hereby authorized and directed to pay all the fees and other costs of issuance of the Refunding Bonds in accordance with the Purchase Agreement and as otherwise agreed to by the City and the respective parties thereto, including applicable CDIAC fees, verification agent fees and printer fees.

PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 12th day of :!!!!Y, 2022, by the following vote, to wit:

AYES:

NAYS:

ABSENT:

Hall, Blackburn, Bhat-Patel, Acosta.

None.

Norby.
/w FAVIOLA Mi:!!::J;;.,k Services Manager
(SEAL)
July 12, 2022 Item #17 Page 21 of 463

ATTACHMENT A

GOOD FAITH ESTIMATES

The good faith estimates set forth herein are provided with respect to the Refunding Bonds in accordance with Section 5852.1 of the California Government Code. Such good faith estimates have been provided to the City by the City’s Municipal Advisor, after consultation with the Underwriter.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Refunding Bonds to be sold is $16,680,000 (the “Estimated Principal Amount”), which excludes net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for the bonds is higher than the face value of such bonds.

True Interest Cost of the Refunding Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Refunding Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Refunding Bonds, is 3.52%.

Finance Charge of the Refunding Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Refunding Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Refunding Bonds), is $463,243.

July 12, 2022 Item #17 Page 22 of 463

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Refunding Bonds, less the finance charge of the Refunding Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds, is $17,023,384.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Refunding Bonds, plus the finance charge for the Refunding Bonds, as described above, not paid with the proceeds of the Refunding Bonds, calculated to the final maturity of the Refunding Bonds, is $23,027,701.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Refunding Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the sale of the Refunding Bonds being different than the date assumed for purposes of such estimates; (b) the actual principal amount of Refunding Bonds sold being different from the Estimated Principal Amount; (c) the actual amortization of the Refunding Bonds being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of sale of the Refunding Bonds being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the City’s financing plan, delays in the financing, additional legal work or a combination of such factors and additional finance charges, if any, attributable thereto. The actual date of sale of the Refunding Bonds and the actual principal amount of Refunding Bonds sold will be determined by the City based on the timing of the need for proceeds of the Refunding Bonds and other factors. The actual interest rates July 12, 2022 Item #17 Page 23 of 463

borne by the Refunding Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Refunding Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.

July 12, 2022 Item #17 Page 24 of 463

Exhibit 4
$[PAR] CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS

BOND PURCHASE AGREEMENT
[Pricing Date]
City of Carlsbad
1635 Faraday Avenue Carlsbad, California 92008
Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for the City of Carlsbad (the “City”), offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with the City, which, upon acceptance by the City, will be binding upon the City and upon the Underwriter. This offer is made subject to its acceptance by the City prior to 5:00 p.m. California time on the date hereof; and, if not accepted prior thereto, it will be subject to withdrawal by the Underwriter upon notice delivered to the City.

The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (as such term is defined below) pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not and has not been acting as a “municipal advisor” (as such term is defined in Section 15B of the Securities Exchange Act of 1934, as amended) to the City; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters) and the Underwriter has no obligation to the City with respect to the offering contemplated by this Purchase Agreement except the obligations expressly set forth in this Purchase Agreement; (iv) the Underwriter has financial interests that may differ from and be adverse to those of the City; and (v) the City has consulted its own legal, financial and other advisors to the extent that it has deemed appropriate in connection with this transaction.

1. Purchase, Sale and Delivery of the Bonds.
(a)Subject to the terms and conditions and in reliance upon the representations,warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds (the “Bonds”) in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (as such term is hereinafter defined); and they shall bear interest from said date (payable semiannually on March 2 and September 2 in each year, commencing March 2, 2023) at the rates per annum, mature on the July 12, 2022 Item #17 Page 25 of 463

2 dates and in the amounts, and be subject to redemption, all as set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, the Indenture by and between the City and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”), dated as of August 1, 2022 (the “Indenture”), approved by a resolution adopted by the City Council of the City (the “City Council”) on July 12, 2022 (the “Resolution of Issuance”). The Bonds and interest thereon will be payable from unpaid reassessments (the “Reassessments”) levied and collected within the area designated “Reassessment District No. 2022-1” (the “Reassessment District”) formed by the City in accordance with the Improvement Bond Act of 1915, as amended, being Division 10 of the California Streets and Highways Code (the “Bond Law”), and the Refunding Act of 1984 for 1915 Improvement Act Bonds, as amended, being Division 11.5 of the California Streets and Highways Code (the “Refunding Law,” and, together with the Bond Law, the “Act”). Proceeds from the sale of the Bonds will be used, along with other available funds, in accordance with the Indenture and the Act to refund the outstanding City of Carlsbad Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the “Prior Bonds”) heretofore issued by the City on behalf of Reassessment District No. 2012-1. (c) Subsequent to its receipt of a certificate of the City, deeming the Preliminary Official Statement for the Bonds, dated [POS Date] (the “Preliminary Official Statement”), final for purposes of Rule 15c2-12 of the Securities and Exchange Commission (“Rule 15c2-12”), the Underwriter has distributed copies of the Preliminary Official Statement. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute, in connection with its offer and sale of the Bonds, printed and/or electronic forms of: (i) the final Official Statement, dated the date hereof (including all information previously permitted to have been omitted by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the City as evidenced by the execution and delivery of such document by an officer of the Reassessment District) (the “Official Statement”), (ii) the Indenture, (iii) the Continuing Disclosure Agreement (as hereinafter defined), (iv) this Purchase Agreement and (v) all other documents, certificates and written statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement and all information therein. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking Board (the “MSRB”) through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12.

2. Public Offering and Establishment of Issue Price.
(a) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Official Statement and in Exhibit A hereto; and, subject to Section 2(c) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Official Statement. A “bona fide public offering” shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold.

July 12, 2022 Item #17 Page 26 of 463

3 (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel (as such term is hereinafter defined) to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City’s municipal advisor, Fieldman Rolapp & Associates, Inc. (the “Municipal Advisor”), and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor. (c) The City will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto. (d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (e) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has July 12, 2022 Item #17 Page 27 of 463

4 been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public. (2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (f) The City acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds. (g) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party; July 12, 2022 Item #17 Page 28 of 463

5 (2) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); and (3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).

3. Delivery of the Bonds. At 8:00 A.M., Pacific Daylight Time, on [Closing Date], or at such other time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the “Closing Date”), the City will deliver (i) to The Depository Trust Company (“DTC”) or to The Bank of New York Mellon Trust Company, N.A., acting as DTC’s agent, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the City, as provided in the Indenture, and (ii) to the Underwriter, at the offices of Bond Counsel, or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the “Closing”).

4. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that:
(a) The City is a charter city and municipal corporation of the State of California (the “State”), duly organized and validly existing pursuant to the Constitution and laws of the State with full right, power and authority to (i) enter into this Purchase Agreement, (ii) enter into the Indenture, (iii) enter into an Escrow Agreement (2012 Bonds) dated as of August 1, 2022 (the “Escrow Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as “Escrow Agent,” (iv) enter into the Continuing Disclosure Agreement, dated as of August 1, 2022 (the “Continuing Disclosure Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as Dissemination Agent, (v) adopt the Resolution of Issuance, adopt the resolution of the City Council declaring its intention to levy reassessments and to issue refunding bonds upon the security thereof (the “Resolution of Intention”), and the resolution of the City Council adopting the Reassessment Report, confirming and ordering the reassessment pursuant to summary proceedings and directing actions with respect thereto (the “Resolution Confirming Reassessments”), and to take all other actions on the part of the City relating thereto (the Resolution of Issuance, the Resolution of Intention and the Resolution Confirming Reassessments are collectively referred to herein as the “City Resolutions”), (vi) issue, sell and deliver the Bonds as provided in this Purchase Agreement and the Indenture, and (vii) carry out and consummate the transactions on its part contemplated by this Purchase Agreement, the Indenture, the Continuing July 12, 2022 Item #17 Page 29 of 463

6 Disclosure Agreement, the Escrow Agreement and the Official Statement. This Purchase Agreement, the Indenture, the Continuing Disclosure Agreement, the Escrow Agreement, the Bonds and the Official Statement are collectively referred to herein as the “City Documents.” (b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the City Resolutions and the City Documents, and any immaterial compliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the City Documents. (c) By all necessary official action of the City, the City has (i) duly and validly formed the Reassessment District, confirmed the Reassessments described in the Official Statement and taken all actions necessary to cause said Reassessments to constitute liens on the respective parcels to which they were confirmed, and (ii) duly authorized and approved the execution and delivery by the City of, and the performance by the City of the obligations on its part contained in, the City Documents and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the parties thereto, the City Documents will constitute the legally valid and binding obligations of the City enforceable upon the City in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally. The City has complied, and will at the Closing be in compliance in all respects, with the terms of the City Documents applicable to the City. (d) The Reassessments described in the Official Statement have been duly and lawfully confirmed under and pursuant to the provisions of the California Constitution and the Act; and each such Reassessment constitutes a valid and legally binding lien on the parcel of land in the Reassessment District on which such Reassessment was confirmed. The Reassessments are not subject to repeal or reduction by action of the City Council if the effect thereof would interfere with the timely payment of the principal of and interest on the Bonds. Except as disclosed in the Official Statement, as of the Closing Date there will be no outstanding liens for general (ad valorem) taxes or special taxes or assessment liens against the land in the Reassessment District which will be senior to the Reassessment liens.
(e) To the best of the City’s knowledge, the City is not in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or under any indenture, fiscal agent agreement, loan agreement, note, resolution, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the City of its obligations under the City Resolutions or the City Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound. (f) Except for compliance with the blue sky or other states’ securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders July 12, 2022 Item #17 Page 30 of 463

7 of or filings or registrations with any state governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the City Resolutions or the City Documents, have been obtained and are in full force and effect. (g) The City shall not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Underwriter, which consent shall not be unreasonably withheld. Until the date which is twenty-five (25) days after the “end of the underwriting period” (as hereinafter defined), if any event shall occur of which the City is aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. If any such amendment or supplement of the Official Statement shall occur after the Closing Date, the City also shall furnish, or cause to be furnished, such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such amendment or supplement to the Official Statement. As used herein, the term “end of the underwriting period” means the later of such time as (i) the City delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the “end of the underwriting period” shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period.” (h) The Indenture creates a valid pledge of the unpaid Reassessments and the moneys in the Redemption Fund, the Reserve Fund and the Reassessment Fund (and the accounts therein) established pursuant to the Indenture, including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the City will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture. (i) Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body with respect to which the City has been served with process or has received pleadings or equivalent documents is pending or, to the best knowledge of the City, threatened (i) which would materially adversely affect the ability of the City to perform its obligations under the City Resolutions or the City Documents, or (ii) seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or the collection or application of the Reassessments pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the City Resolutions, the City Documents, or any action contemplated by any of said documents, or (iii) in any way contesting the completeness or accuracy of the Preliminary Official Statement or the powers July 12, 2022 Item #17 Page 31 of 463

8 or authority of the City with respect to the Bonds, the City Resolutions, the City Documents, or any action of the City contemplated by any of said documents; nor is there any action pending with respect to which the City has been served with process or has received pleadings or equivalent documents or, to the best knowledge of the City, threatened against the City which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation. (j) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the “Blue Sky” or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the City authorized by the City Council to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (l) The City will apply the proceeds of the Bonds in accordance with the Indenture and as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (other than information in Appendix D as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other than information in Appendix D, as to which no view is expressed), is as of its date and shall be on the Closing Date, true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees that, within seven (7) business days from the date hereof, or, if sooner, upon reasonable written notice from the Underwriter, within sufficient time to accompany any confirmation requesting payment for Bonds from any customer of the Underwriter, the City shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the MSRB. (o) Except as disclosed in the Official Statement, neither the City nor any of its affiliated agencies is, or has been within the last five (5) years, in breach of any reporting obligation that it has undertaken under Rule 15c2-12. (p) The City shall not amend, terminate, repeal or rescind, and will not agree to any amendment, termination, repealing or rescission of any of the City Resolutions or the City Documents without the prior written consent of the Underwriter prior to the Closing Date. (q) The City shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the City as set forth in this Purchase Agreement.

July 12, 2022 Item #17 Page 32 of 463

9 (r) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from personal income taxation of the State or the exclusion from gross income for federal income tax purposes of the interest on the Bonds.

5. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the City Resolutions and the City Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, as bond counsel to the City (“Bond Counsel”), shall be necessary and appropriate; (b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 4(m) hereof, be true, correct and complete in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 4(m) hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement or the ability of the Underwriter to enforce contracts for the sales of the Bonds shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
(1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the holders of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; July 12, 2022 Item #17 Page 33 of 463

10 (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect;
(3) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), the validity or enforceability of the Reassessments or the ability of the City to refund the Prior Bonds as contemplated by the City Resolutions and the City Documents; (4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (x) the City refuses to permit the Official Statement to be supplemented to supply such statement or information or (y) the effect of any such supplement would be to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (5) a declaration of war or an escalation of, or engagement in, military hostilities by the United States or the occurrence of any other local, national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States; (6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or the fixing and maintaining in force of minimum or maximum prices for trading, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission (the “SEC”) or any other governmental authority having jurisdiction; (7) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(8) there shall have been any material adverse change in the affairs of the City; (9) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on July 12, 2022 Item #17 Page 34 of 463

11 interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (10) a stop order, release, regulation, or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of federal securities laws at the Closing Date; and (d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in either printed or electronic format, in each case satisfactory in form and substance to the Underwriter:
(1) The City Resolutions and the City Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that each City Resolution is a true, correct and complete copy of the one duly adopted by the City Council; (2) The Official Statement;
(3) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the City, in the form attached to the Preliminary Official Statement as Appendix C, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that such approving opinion may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion were addressed to them; (4) A supplemental opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that (i) this Purchase Agreement and the Escrow Agreement have been duly authorized, executed and delivered by the City, and, assuming such agreements constitute valid and binding obligations of the respective other parties thereto, constitute the legally valid and binding agreements of the City enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor’s rights or remedies and by general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “REFUNDING PLAN,” “THE BONDS,” “SECURITY FOR THE BONDS,” “CONCLUDING INFORMATION – Tax Matters,” and Appendices B and C thereof (except that no opinion or belief need be expressed as to any financial or statistical data contained in the Preliminary Official Statement and the Official Statement), insofar as it purports to summarize or replicate certain provisions of the Act, the Bonds, the Continuing Disclosure Agreement, the Escrow Agreement and the Indenture and the exclusion from gross income for federal income tax purposes and exemption from State of California personal income taxes of interest on the Bonds present a fair and accurate summary of such provisions; (5) An opinion, dated the Closing Date and addressed to the City with a reliance letter to the Underwriter, of Stradling Yocca Carlson & Rauth, a Professional Corporation, as disclosure counsel to the City (“Disclosure Counsel”), to the effect that without having undertaken to July 12, 2022 Item #17 Page 35 of 463

12 determine independently the accuracy or completeness of the statements contained in the Preliminary Official Statement and the Official Statement, but on the basis of their participation in conferences with representatives of the City, Bond Counsel, counsel to the Underwriter and others, and their examination of certain documents, nothing has come to their attention which has led them to believe that the either the Preliminary Official Statement as of its date or the Official Statement as of its date and as of the Closing Date contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that we express no view with respect to: (i) the expressions of opinion, the assumptions, the projections, estimates and forecasts, the charts, the financial statements or other financial, numerical, economic, demographic or statistical data, assessed or appraised valuations, absorption, or environmental matters contained in the Official Statement, (ii) any CUSIP numbers or information relating thereto, (iii) any information with respect to The Depository Trust Company and its book-entry system, (iv) any information contained in the Appendices to the Official Statement, (v) any information incorporated by reference into the Official Statement, (vi) any information with respect to the Underwriter or underwriting matters with respect to the Bonds, including but not limited to information under the caption “CONCLUDING INFORMATION – Underwriting,” and (vii) any information with respect to the ratings on the Bonds and the rating agency referenced therein, including, but not limited to, information under the caption “CONCLUDING INFORMATION – Rating”). Moreover, in providing such advice and assistance, we provided no independent diligence, and express no view with respect to, the City’s and its affiliated entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12 promulgated under the Securities Act of 1934, as amended. Finally, we advise you that, other than reviewing the various certificates and opinions required by Section 5 of the Purchase Agreement regarding the Preliminary Official Statement or the Official Statement, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Official Statement as of the date hereof ; (6) A letter, dated the Closing Date and addressed to the Underwriter, of Jones Hall, A Professional Law Corporation, counsel to the Underwriter, in form and substance reasonably satisfactory to the Underwriter;
(7) A certificate, dated the Closing Date and signed by an authorized officer of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the City contained in Section 4 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best of their knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds, the City Resolutions and the City Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the City Resolutions and the City Documents at or prior to the Closing Date; and (iv) the representations and warranties of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date, with the same effect as if made on the Closing Date; (8) An opinion, dated the Closing Date and addressed to the Underwriter and the City, of the City Attorney, to the effect that (i) to the best of their knowledge and except as disclosed July 12, 2022 Item #17 Page 36 of 463

13 in the Official Statement, there is no litigation, action, suit, proceeding or investigation at law or in equity as to which the City is or would be a party, before or by any court, governmental agency or body, pending and notice of which has been served on and received by the City or, to the best of their knowledge, threatened against the City, which would materially adversely affect the ability of the City to perform its obligations under the City Resolutions or the City Documents, the issuance, sale and delivery of the Bonds or exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Indenture, or the collection or application of the Reassessments to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the City Resolutions or the City Documents or the accuracy of the Preliminary Official Statement or the Official Statement, or any action of the City contemplated by any of said documents; (ii) the City is a charter city and municipal corporation of the State, duly organized and validly existing pursuant to the Constitution and laws of the State, and the City has full legal right, power and authority to issue the Bonds and to perform all of its obligations under the City Resolutions and the City Documents; (iii) the City has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the levy of the Reassessments, the issuance of the Bonds and the performance by the City of its obligations thereunder or under the Indenture, except that no opinion need be expressed regarding compliance with blue sky or other securities laws or regulations, whatsoever; (iv) the City Council duly and validly adopted the City Resolutions at meetings of the City Council which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the City Resolutions are now in full force and effect and have not been amended; (v) the City has duly authorized, executed and delivered the City Documents and the Bonds and has duly authorized the preparation and delivery of the Official Statement; (vi) the City Documents constitute legal, valid and binding agreements of the City, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought and to the limitations on legal remedies against public agencies in the State of California; and (vii) the Reassessment District has been validly formed, and the Reassessments have been duly and validly authorized in accordance with the provisions of the Act and, except as the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights, by equitable principles and by the exercise of judicial discretion in appropriate cases, a lien to secure payment of the Reassessments has been imposed on all the parcels in the Reassessment District specified in the Official Statement; (9) An opinion of counsel to The Bank of New York Mellon Trust Company, N.A. (“BNY”), dated the date of the Closing, addressed to the City and the Underwriter, to the effect that: (A) BNY is a national banking association duly organized and validly existing under the laws of the jurisdiction of its organization and has the corporate power to execute and deliver the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement, and any other documentation relating to the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement,, and to perform its obligations under the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement; (B) the execution and delivery by BNY of the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement and any other documentation relating thereto, and its performance of its obligations under the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement, have been and are as of the date hereof duly authorized by all necessary corporate action; (C) no approval, authorization or other action by, or filing with, any July 12, 2022 Item #17 Page 37 of 463

14 governmental body or regulatory authority (which has not been obtained) is required in connection with the due execution, delivery and performance by BNY of the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement; (D) the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement have been duly executed and delivered by BNY and each constitutes the valid and legally binding obligations of the BNY enforceable against it in accordance with their respective terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought as a proceeding in equity or at law); and (E) BNY has duly authenticated and delivered the Bonds; (10) A certificate of BNY, dated the Closing Date, addressed to the City and the Underwriter to the following effect: (i) BNY is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement; (ii) the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement have been duly authorized, executed and delivered by BNY and each constitutes the legal, valid and binding obligations of BNY enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors rights, or by the application of equitable principles if equitable remedies are sought; (iii) BNY is duly authorized to accept the obligations created by the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement, and to authenticate the Bonds pursuant to the terms of the Indenture and has so authenticated the Bonds; (iv) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over BNY that has not been obtained is or will be required for the authentication of the Bonds or the consummation by BNY of the other transactions contemplated to be performed by BNY in connection with the authentication of the Bonds and the acceptance and performance of the obligations created by the Indenture, the Escrow Agreement and the Continuing Disclosure Agreement; and (v) BNY has duly authenticated and delivered the Bonds; (11) A certificate of NBS, Reassessment Engineer, dated the date of the Closing, addressed to the City and the Underwriter, to the effect that (i) based upon the information provided to such firm as the Reassessment Engineer to the City in the course of its participation in the preparation of the Preliminary Official Statement and the Official Statement and without having undertaken to determine independently the accuracy or completeness of the statements contained in the Preliminary Official Statement or the Official Statement relating to information not furnished by it, said firm has no reason to believe that the Preliminary Official Statement as of its date omitted, or as the date hereof omits, and the Official Statement as of its date omitted, or as of the date of Closing omits, to state any material fact required to be stated therein or necessary to make the statements therein relating to the Reassessment District, in light of the circumstances under which they were made, not misleading, and (ii) data provided by such firm and presented in the Preliminary Official Statement and the Official Statement, including the information presented in the tables of the Preliminary Official Statement and the Official Statement, are true, correct and accurate; (12) A tax certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel; (13) A report from Lumesis Inc., reasonably satisfactory in form and substance to the Underwriter, summarizing an independent review by such firm of compliance by the City with their respective continuing disclosure obligations pursuant to Rule15c2-12 and setting forth a July 12, 2022 Item #17 Page 38 of 463

15 summary of all such required filings and notices in each of the last five fiscal years and confirming compliance or noting any deficiencies or omissions, as applicable; (14) Evidence that the federal tax information Form 8038-G has been prepared for filing; (15) A verification report, dated the Closing Date, from Causey, Demgen & Moore, certified public accountants, to the effect that amounts on deposit under the Escrow Agreement will be sufficient to pay the principal of and interest on the Prior Bonds that are due and payable on September 2, 2022 and to pay, on said date, the applicable redemption prices of the Prior Bonds that mature subsequent thereto; (16) Evidence that the ratings on the Bonds are as described in the Official Statement, which ratings shall be in effect as of the Closing Date; (17) A defeasance opinion of Bond Counsel, dated the Closing Date and addressed to the Underwriter, to the effect that the Prior Bonds have been legally defeased in accordance with the Indenture, dated as of January 1, 2013, by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee pursuant to which the Prior Bonds were issued (the “Prior Indenture”), and (except as described in the Preliminary Official Statement and the Official Statement) the owners of the Prior Bonds have ceased to be entitled to the pledge of assessments, and all covenants, agreements and other obligations of the City to the owners of the Prior Bonds under the Prior Indenture have ceased, terminated and become void and have been discharged and satisfied; and
(18) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the City’s representations and warranties contained herein and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Official Statement.

If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 7 and Section 8 hereof shall continue in full force and effect.

6. Conditions of the City’s Obligations. The City’s obligations hereunder are subject to the Underwriter’s performance of its obligations hereunder, and are also subject to the following conditions:
(a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the City executing the certificate referred to in Section 5(d)(7) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any July 12, 2022 Item #17 Page 39 of 463

16 authority for or the validity of the Bonds, the City Resolutions, the City Documents or the existence or powers of the City; and (b) As of the Closing Date, the City shall receive the approving opinion of Bond Counsel referred to in Section 5(d)(3) hereof, dated as of the Closing Date.

7. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein:
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the City) all expenses incident to the performance of the City’s obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to DTC, the cost of preparation, printing, distribution and delivery of the Indenture, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter (excluding the fees and disbursements of the Underwriter’s counsel); and the fees and disbursements of the Trustee and Escrow Agent for the Bonds and the refunding of the Prior Bonds and Bond Counsel, Disclosure Counsel, and any accountants, engineers or any other experts or consultants the City has retained in connection with the Bonds; and for expenses (included in the expense component of the Underwriter’s discount) incurred by the Underwriter on behalf of the City’s employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees; and (b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of obtaining CUSIP numbers, the cost of preparation of any “blue sky” or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any “blue sky” or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses.

8. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at 1635 Faraday Avenue, Carlsbad, California 92008, Attention: Finance Director; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Sara Brown.

9. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof.

10. Survival of Representations and Warranties. The representations and warranties of the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.

July 12, 2022 Item #17 Page 40 of 463

17 11. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.

12. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City.

13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California.

[Signature Page Follows on Next Page]
July 12, 2022 Item #17 Page 41 of 463

S-1

14. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.

Very truly yours,

STIFEL, NICOLAUS & COMPANY, INCORPORATED
By:

Its: Managing Director
The foregoing is hereby agreed to and accepted as of the date first above written:

CITY OF CARLSBAD
By: Authorized Officer
Time of Execution: _____________ California time
July 12, 2022 Item #17 Page 42 of 463

A-1

EXHIBIT A

MATURITY SCHEDULE
Maturity (September 2) Principal Amount Interest Rate Yield Price 10% Test Satisfied* 10% Test Not Satisfied Subject to Hold-The-Offering-Price Rule

T: Term Bond. C: Priced to optional redemption date of September 2, 20__, at ___%. * At the time of execution of this Purchase Agreement and assuming orders are confirmed immediately after the execution of this Purchase Agreement.

PURCHASE PRICE
The purchase price of the Bonds shall be $_______, which is the principal amount thereof ($[PAR].00) plus original issue premium of $_______ and less Underwriter’s discount of $_______.

REDEMPTION
Optional Redemption
The Bonds are subject to optional redemption prior to their stated maturity dates on September 2, 20__ or any Interest Payment Date thereafter, as selected by the City pursuant to a written notice delivered to the Trustee, from any source of funds other than prepayment of Reassessments, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Mandatory Redemption from Reassessment Prepayments
The Bonds will be subject to mandatory redemption, in whole or in part as selected by the Treasurer pursuant to Section 8768 of the California Streets and Highways Code, and pursuant to a written notice delivered to the Trustee, on any Interest Payment Date, from and to the extent of any July 12, 2022 Item #17 Page 43 of 463

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prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 2, 20__ through March 2, 20__ 103% September 2, 20__ through March 2, 20__ 102 September 2, 20__ through March 2, 20__ 101
September 2, 20__ and thereafter 100 Sinking Fund Redemption of Bonds The Bonds maturing on September 2, 20__ are subject to mandatory sinking fund redemption prior to maturity, in part, on September 2, 20__, and on each September 2 thereafter, from sinking fund payments, at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Payment Dates
(September 2) Amount

(Maturity) In the event of any prior redemption of the Bonds maturing on September 2, 20__ as described under the subcaptions “—Mandatory Redemption from Reassessment Prepayments” and “—Optional Redemption,” the foregoing sinking fund payments will be reduced as proportionately as possible in increments of $5,000 and the City will provide the Trustee with a revised sinking fund schedule giving effect to the redemption so completed.

July 12, 2022 Item #17 Page 44 of 463

B-1

EXHIBIT B

FORM OF ISSUE PRICE CERTIFICATE
$[PAR] CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS FORM OF ISSUE PRICE CERTIFICATE The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Bond Purchase Agreement. On [Pricing Date] (the “Sale Date”), Stifel and the Issuer executed a Bond Purchase Agreement (the “Purchase Agreement”) in connection with the sale of the Bonds. Stifel has not modified the Purchase Agreement since its execution on the Sale Date.

2. Price.
(a) As of the date of this Certificate, for each [Maturity] [[of the General Rule Maturities] of the Bonds, the first price at which at least 10% of each such Maturity of the Bonds was sold to the Public (the “10% Test”) was the respective price for such Maturity listed in Schedule A attached hereto. (b) [Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. (c) As set forth in the Bond Purchase Agreement, Stifel has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.] (d) [** With respect to each of the General Rule Maturities of the Bonds:
(1) As of the date of this Certificate, Stifel has not sold at least 10% of the Bonds of these Maturities at any single price.

July 12, 2022 Item #17 Page 45 of 463

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(2) As of the date of this Certificate, Stifel reasonably expects that the first sale to the Public of Bonds of these Maturities will be at or below the respective price or prices listed on the attached Schedule A as the “Reasonably Expected Sale Prices for Undersold Maturities.” (3) Stifel will provide actual sales information (substantially similar to the information contained on Schedule B) as to the price at which the first 10% of each such Maturity (i.e., the Undersold Maturity or Maturities) is sold to the Public. (4) On the date the 10% Test is satisfied with respect to all Maturities of the Bonds, Stifel will execute a supplemental certificate substantially in the form attached hereto as Schedule C with respect to any remaining Maturities for which the 10% Test has not been satisfied as of the Closing Date.**]

2. Defined Terms.
(a) “General Rule Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.” (b) “Hold-the-Offering-Price Maturities” means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) “Holding Period” means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Stifel has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) “Issuer” means the City of Carlsbad.
(e) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) “Underwriter” means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

3. Reserve Fund. The funding of the Reserve Fund under the Indenture, and as provided in the Tax Certificate, is reasonably required, was a vital factor in marketing the Bonds, facilitated the July 12, 2022 Item #17 Page 46 of 463

B-3
marketing of the Bonds at an interest rate comparable to that of bonds and other tax-exempt obligations of a similar type, and is not in excess of the amount necessary for such purpose.

4. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Managing Director By: Director Dated: [Closing Date]
July 12, 2022 Item #17 Page 47 of 463

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SCHEDULE A TO
ISSUE PRICE CERTIFICATE [Schedules to be updated at pricing in the event there are Hold-the-Offering-Price-Maturities] Actual Sales Information as of Closing Date Maturity/CUSIP Coupon Date Sold Time Sold Par Amount Sale Price

[**Reasonably Expected Sales Prices for Undersold Maturities as of Closing Date Maturity/CUSIP Coupon Par Amount Offering Prices

**]

July 12, 2022 Item #17 Page 48 of 463

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[**SCHEDULE B TO ISSUE PRICE CERTIFICATE
Actual Sales for Undersold Maturities as of the Closing Date Maturity/CUSIP Date Sold Time Sold Par Amount Sale Price

**]
July 12, 2022 Item #17 Page 49 of 463

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[**SCHEDULE C
TO ISSUE PRICE CERTIFICATE SUPPLEMENTAL ISSUE PRICE CERTIFICATE OF UNDERWRITER $[PAR] CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS The undersigned, Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

1. Issue Price.
(a) Stifel sold at least 10% of the _______ Maturities of the Bonds to the Public at the price or prices shown on the Issue Price Certificate dated as of the Closing Date (the “10% Test”). With respect to each of the ______ Maturities of the Bonds, Stifel had not satisfied the 10% Test as of the Closing Date (the “Undersold Maturities”). (b) As of the date of this Supplemental Certificate, Stifel has satisfied the 10% Test with respect to the Undersold Maturities. The first price or prices at which at least 10% of each such Undersold Maturity was sold to the Public are the respective prices listed on Exhibit A attached hereto.

2. Defined Terms.
(a) “Issuer” means the City of Carlsbad.
(b) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) “Underwriter” means (1) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (2) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (1) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

July 12, 2022 Item #17 Page 50 of 463

B-7

3. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY, INCORPORATED
By: [Title] By:
[Title] Dated:

July 12, 2022 Item #17 Page 51 of 463

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EXHIBIT A
TO SUPPLEMENTAL ISSUE PRICE CERTIFICATE**]

July 12, 2022 Item #17 Page 52 of 463

Exhibit 5
1 CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered by the City of Carlsbad (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A., as dissemination agent (the “Dissemination Agent”), in connection with the issuance of the City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds in the aggregate principal amount of $_____ (the “Bonds”). The Bonds are being issued pursuant to a Resolution adopted by the City Council of the Issuer on July 12, 2022 and an Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Issuer and Dissemination Agent hereby covenant and agree as follows:

Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

Section 2. Definitions. In addition to the definitions set forth in the Indenture which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Dissemination Agent” shall mean The Bank of New York Mellon Trust Company, N.A., or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation.
“EMMA” shall mean the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/ . “Financial Obligation” shall mean a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) guarantee of (A) or (B). The term “Financial Obligation” does not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
“Fiscal Year” shall mean the one-year period ending on the last day of June of each year, or any other period selected as the Issuer’s fiscal year. In the event of a change in the Issuer’s Fiscal Year, the Issuer shall give notice of such change in the same manner as for a Listed Event under Section 5(b). “Listed Events” shall mean any of the events listed in Section 5(a). “Official Statement” shall mean the Official Statement of the Issuer dated July __, 2022 delivered in connection with the issuance of the Bonds. “Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated.

July 12, 2022 Item #17 Page 53 of 463

2 “Rule” shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Section 3. Provision of Annual Reports.
(a) The Issuer shall, or shall cause the Dissemination Agent to, annually not later than each April 1 after the end of the Issuer’s Fiscal Year, commencing with the report for Fiscal Year 2022, provide to EMMA, in an electronic format as prescribed by the Municipal Securities Rulemaking Board, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). The 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 4 of this Disclosure Agreement; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report. If the Issuer’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). (b) If the Issuer is unable to provide to EMMA or the Dissemination Agent an Annual Report by the date required in subsection (a), the Issuer shall file a notice on EMMA, in an electronic format as prescribed by the Municipal Securities Rulemaking Board. (c) The Dissemination Agent shall:
(i) confirm the electronic filing requirements of the Municipal Securities Rulemaking Board for the Annual Report; and
(ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided to EMMA.

Section 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or incorporate by reference the following:
(a) The audited financial statements of the Issuer for the most recent Fiscal Year of the Issuer then ended. If the audited financial statements are being prepared and are not available by the time that the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain any available unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements of the Issuer shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Issuer modifies the basis upon which its financial statements are prepared, the Issuer shall provide a notice of such modification to EMMA, including a reference to the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis.

July 12, 2022 Item #17 Page 54 of 463

3 (b) The following information regarding the Bonds:
(i) Principal amount of Bonds outstanding;
(ii) Balance in the Prepayment Account of Redemption Fund; (ii) Balance in the Redemption Fund;
(iv) Balance in the Reserve Fund and a statement of the Reserve Requirement; (v) Information in Table 6 of the Official Statement for the Bonds regarding the annual special assessment installments, amount collected, delinquent amount and percent delinquent for the most recent Fiscal Year and the amount and percent remaining delinquent for any prior Fiscal Year; and (vii) Status of foreclosure proceedings and summary of results of foreclosure sales, if available, or a statement that no such proceedings are pending. (c) In addition to any of the information expressly required to be provided under paragraphs (a) and (b) of this Section, the Issuer shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to EMMA 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 Issuer shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, in a timely manner not more than ten (10) business days after the event:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determination of taxability or Notices of Proposed Issue (IRS Form 5701-TEB);

6. tender offers;
July 12, 2022 Item #17 Page 55 of 463

4 7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings of the Issuer. Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer; and

10. default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation of the Issuer, any of which reflect financial difficulties. (b) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not more than ten (10) Business Days after the event:

1. unless described in Section 5(a)(5), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds;

2. modifications to the rights of Bondholders;

3. optional, unscheduled or contingent Bond calls;

4. release, substitution or sale of property securing repayment of the Bonds;

5. non-payment related defaults;

6. the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;

7. appointment of a successor or additional trustee or the change of the name of a trustee; and

5 Dissemination Agent is other than the Issuer, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with EMMA in a timely manner not more than ten (10) Business Days after the event. (d) If the Issuer determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and if the Dissemination Agent is other than the Issuer, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence.
(e) The Issuer hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the Issuer and, if the Dissemination Agent is other than the Issuer, the Dissemination Agent shall not be responsible for determining whether the Issuer’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.

Section 6. Termination of Reporting Obligation. The Issuer’s and the Dissemination Agent’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).

Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee. The initial Dissemination Agent shall be The Bank of New York Mellon Trust Company, N.A.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations, upon satisfaction of the following conditions:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), 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 with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 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 holders of the Bonds in the manner provided in the Indenture; or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

6 containing the amended operating data or financial information 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.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual 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 information in order to provide information to investors to enable them to evaluate the ability of the Issuer to 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 EMMA in the same manner as for a Listed Event under Section 5(b).

Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer 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 Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the Issuer or the Dissemination Agent to comply with any provision of this Disclosure Agreement, any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer 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 Indenture or any Supplemental Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with this Disclosure Agreement shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Article VII of the Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall have only the duties that are specifically set forth in this Disclosure Agreement, and the Issuer agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

7 Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Issuer hereunder and shall not be deemed to be acting in any fiduciary capacity for the Issuer, beneficial owners or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon and directions from the Issuer or an opinion of nationally recognized bond counsel. Neither the Trustee nor the Dissemination Agent shall have any liability to any party for any monetary damages or other financial liability of any kind whatsoever related to or arising from any breach of this Disclosure Agreement. No person shall have any right to commence any action against the Trustee or Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Any company succeeding to all or substantially all of the Dissemination Agent’s corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act.

Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 13. Notices. Any notice or communication required or permitted hereunder shall be given in writing, sent by: (a) personal delivery delivered by a representative of the party giving such notice; (b) overnight delivery by recognized overnight courier; (c) United States mail, postage prepaid, registered or certified mail; or (d) facsimile, addressed as follows:

If to the Issuer:

City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008-7314 If to the Dissemination Agent:

The Bank of New York Mellon Trust Company, N.A. 333 South Hope Street, Suite 2525 Los Angeles, California 90071 Attention: Corporate Trust Department or to such other address or to the attention of such other person as hereinafter shall be designated in writing by the applicable party sent in accordance herewith. Any such notice or communication shall be deemed to have been delivered either at the time of personal delivery actually received by the addressee or a representative of the addressee at the address provided above or, if delivered on a business day in the case of delivery service or certified or registered mail, as of the earlier of the date delivered or the date 72 hours following the date deposited in the United States mail at the address provided herein, or if by telecopier, upon electronic confirmation of good receipt by the receiving telecopier.

Section 14. Future Determination of Obligated Persons. In the event that the Securities Exchange Commission amends, clarifies or supplements the Rule in such a manner that requires any landowner within the Issuer to be an obligated person as defined in the Rule, nothing contained herein shall be construed to require the Issuer to meet the continuing disclosure requirements of the Rule with respect to such obligated person and nothing in this Disclosure Agreement shall be deemed to obligate July 12, 2022 Item #17 Page 59 of 463

8 the Issuer to disclose information concerning any owner of land within the Issuer except as required as part of the information required to be disclosed by the Issuer pursuant to Section 4 and Section 5 hereof.

Dated: August __, 2022 CITY OF CARLSBAD
By: City Manager

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Dissemination Agent
By: Its:

July 12, 2022 Item #17 Page 60 of 463

Exhibit 6

ESCROW AGREEMENT (2012 BONDS)
THIS ESCROW AGREEMENT (2012 BONDS), dated as of August 1, 2022 (this “Agreement”), by and between the City of Carlsbad (the “City”) and The Bank of New York Mellon Trust Company. N.A., as escrow agent (the “Escrow Agent”) and as 2012 Trustee (as such term is defined herein), is entered into in accordance with a resolution of the City adopted on July 12, 2022 and an Indenture, dated as of January 1, 2013 (the “2012 Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2012 Trustee”). This Agreement is entered into to refund all of the outstanding City of Carlsbad Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (collectively, the “2012 Bonds”).

RECITALS
A. Pursuant to the 2012 Indenture, the City has previously issued the 2012 Bonds in the initial aggregate principal amount of $31,300,000, of which $21,780,000 is currently outstanding.

B. The 2012 Bonds are payable from the unpaid reassessments on the properties within Reassessment District 2012-1 of the City (the “2012 Reassessment District”).

C. The City has determined to issue its City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds (the “2022 Bonds”), a portion of the proceeds of which, together with other moneys as described in Section 1, will be applied to pay on September 2, 2022 (the “Redemption Date”) the principal of the 2012 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium.

D. [REVISE IF NO INVESTMENT] The City will irrevocably deposit moneys with the Escrow Agent, which moneys will be used to purchase the securities that are described on Schedule A (the “Federal Securities”) (as permitted by, in the manner prescribed by and all in accordance with the 2012 Indenture). Such Federal Securities satisfy the criteria set forth in Section 901(c) of the 2012 Indenture, and the principal of and interest on such Federal Securities when paid will provide money which will be fully sufficient to pay and discharge the 2012 Bonds.

AGREEMENT
SECTION 1. Deposit of Moneys. The City will cause The Bank of New York Mellon Trust Company, N.A., as trustee for the 2022 Bonds, to transfer a portion of the proceeds of the 2022 Bonds in the amount of $[__] on the date of issuance of the 2022 Bonds to the Escrow Agent for deposit in the Escrow Fund established hereunder. In addition, on the date of issuance of the 2022 Bonds, the City will cause the 2012 Trustee to transfer $[__] held in the [Interest Account] established under the 2012 Indenture to the Escrow Agent for deposit in the Escrow Fund.

The Escrow Agent will hold such amounts in an irrevocable escrow separate and apart from other moneys of the City and the Escrow Agent in a fund hereby created and established to be known as the “Escrow Fund” and to be applied solely as provided in this Agreement. The City represents that the sum of the amounts set forth above are at least equal to an amount that is sufficient to purchase the Federal Securities listed on Schedule A, and to hold $[__] uninvested as cash.

July 12, 2022 Item #17 Page 61 of 463

2 SECTION 2. Investment of Moneys. The Escrow Agent acknowledges receipt of the moneys described in Section 1 and agrees immediately to invest such moneys in the Federal Securities listed on Schedule A and to deposit such Federal Securities in the Escrow Fund. Each of the 2012 Trustee and the Escrow Agent shall be entitled to rely upon the conclusion of the report delivered by Causey Demgen & Moore P.C. (the “Verification Agent”) in connection herewith that the Federal Securities listed on Schedule A mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay, on the Redemption Date, the principal of the 2012 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium.

SECTION 3. Investment of Any Remaining Moneys. At the written direction of the City, together with an unqualified opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, to the effect that reinvestment is permitted under the legal documents in effect with respect to the 2012 Bonds and will not have an adverse effect on the tax status of the 2012 Bonds, the Escrow Agent shall reinvest any other amount of principal and interest, or any portion thereof, received from the Federal Securities prior to the date on which such payment is required for the purposes set forth herein, in noncallable Federal Securities maturing not later than the date on which such payment or portion thereof is required for the purposes set forth in Section 5, as directed in such written direction of the City as verified in a report prepared by an Independent Financial Consultant (as such term is defined in the 2012 Indenture) to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay, on the Redemption Date, the principal of the 2012 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium, and accompanied by a certificate of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions confirming the accuracy of the calculations establishing the sufficiency of such deposit. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section which is not required for the purposes set forth in Section 5, as verified in the letter of the Verification Agent originally obtained by the City with respect to the refunding of the 2012 Bonds or in any other report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions, shall be paid to the City promptly upon the receipt of such interest income by the Escrow Agent and written direction by the City. The determination of the City as to whether an accountant qualifies under this Agreement shall be conclusive. The Escrow Agent may conclusively reply upon the written instructions of the City as to both the suitability and legality of any investments directed hereunder, and upon any such opinion, letter and report, and shall have no responsibility or liability with respect thereto.

SECTION 4. Substitution of Securities. Upon the written request of the City, and subject to the conditions and limitations that are set forth herein, the Escrow Agent shall sell, redeem or otherwise dispose of all or a portion of the Federal Securities (as so directed by the City), provided that there are substituted therefor from the proceeds of the Federal Securities other Federal Securities, but only after the City has obtained and delivered to the Escrow Agent: (i) an unqualified opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, to the effect that the substitution of securities is permitted under the legal documents in effect with respect to the 2012 Bonds and will not have an adverse effect on the tax status of the 2012 Bonds; (ii) a report by an Independent Financial Consultant (as such term is defined in the 2012 Indenture) to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay, on the Redemption Date, the principal July 12, 2022 Item #17 Page 62 of 463

3 of the 2012 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium; and (iii) a certificate of an independent certified public accountant or a firm of independent certified public accountants confirming the accuracy of the calculations establishing the sufficiency of such deposit. The Escrow Agent shall not be liable or responsible for any loss resulting from any reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof, and may conclusively reply upon the written instructions of the City as to both the suitability and legality of any substituted investments directed hereunder, and upon any such opinion and report, and shall have no responsibility or liability with respect thereto.

SECTION 5. Payment of 2012 Bonds.
(a) Payment. From the maturing principal of the Federal Securities and the investment income and other earnings thereon and other moneys on deposit in the Escrow Fund, the Escrow Agent shall transfer funds to the 2012 Trustee in an amount sufficient to enable the 2012 Trustee to pay, on the Redemption Date, the principal of the 2012 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium, all as indicated on Schedule A.
(b) Irrevocable Instructions to Provide Notice. The notices required to be mailed pursuant to Sections 302 and 901 of the 2012 Indenture are substantially in the forms attached hereto as Exhibits A and B. The City hereby irrevocably instructs the 2012 Trustee to mail: (i) a notice of redemption of the 2012 Bonds maturing after the Redemption Date substantially in the form attached hereto as Exhibit A at least 30 days prior to the Redemption Date to the parties described in and otherwise in accordance with Section 302 of the 2012 Indenture (including The Depository Trust Company and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”), maintained on the Internet at http://emma.msrb.org/); and (ii) a notice of defeasance of the 2012 Bonds in the form attached hereto as Exhibit B on the date of issuance of the 2022 Bonds to the parties described in and otherwise in accordance with Section 901 of the 2012 Indenture (including EMMA), as required to provide for the payment and redemption of the 2012 Bonds in accordance with this Section. The sole remedy for the 2012 Trustee’s failure to post such notices on EMMA shall be an action in mandamus by the holders of the 2012 Bonds for specific performance or similar remedy to compel performance. (c) Unclaimed Moneys. Any moneys in the Escrow Fund which remain unclaimed after the Redemption Date shall be repaid (without liability for interest) by the Escrow Agent to the City. (d) Priority of Payments. The owners of the 2012 Bonds shall have a first and exclusive lien on all moneys and securities in the Escrow Fund until such moneys and such securities are used and applied as provided in this Agreement. (e) Termination of Obligation. As provided in the 2012 Indenture, upon the deposit of moneys with the Escrow Agent in the Escrow Fund as set forth in Section 1 and the purchase of the Federal Securities as provided in Section 2, the owners of the 2012 Bonds will cease to be entitled to the pledge of Reassessments (as such term is defined in the 2012 Indenture) and other amounts under the 2012 Indenture, and all covenants, agreements and other obligations of the City to the owners of such 2012 Bonds under the 2012 Indenture will thereupon cease, terminate and become void and be discharged and satisfied except as set forth in the 2012 Indenture.

July 12, 2022 Item #17 Page 63 of 463

4 SECTION 6. Application of Certain Terms of the 2012 Indenture. All of the terms of the 2012 Indenture relating to the making of payments of principal of and interest on the 2012 Bonds and relating to the exchange or transfer of the 2012 Bonds are incorporated in this Agreement as if set forth in full herein. The procedures set forth in Sections 702 and 703 of the 2012 Indenture relating to the resignation and removal of the 2012 Trustee are hereby made applicable to the Escrow Agreement and incorporated in this Agreement as if set forth in full herein naming the Escrow Agent in place of the 2012 Trustee and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.

SECTION 7. Performance of Duties. The Escrow Agent agrees to perform only the duties that are set forth herein and shall have no responsibility to take any action or omit to take any action that is not set forth herein.

SECTION 8. Escrow Agent’s Authority to Make Investments. Except as provided in Section 2 hereof, the Escrow Agent shall have no power or duty to invest any funds that are held hereunder or to sell, transfer or otherwise dispose of the moneys or Federal Securities that are held hereunder.

SECTION 9. Indemnity. The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Escrow Agent at any time (whether or not also indemnified against the same by the City or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the enforcement of any provision of this Agreement (including without limitation enforcement of the City’s obligations under this Section 9), the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the retention of the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the City shall not be required to indemnify the Escrow Agent against the Escrow Agent’s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent’s respective employees. In no event shall the City or the Escrow Agent be liable to any person by reason of the transactions that are contemplated hereby other than to each other as set forth in this Section. The indemnities that are contained in this Section shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.

SECTION 10. Responsibilities of Escrow Agent. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or securities deposited therein, the retention of the Federal Securities or the proceeds thereof, the sufficiency of the cash on deposit in the Escrow Fund and the Federal Securities to pay the 2012 Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Agent that is made in good faith in the conduct of its duties. The recitals of fact that are contained herein shall be taken as the statements of the City, and the Escrow Agent assumes no responsibility for the July 12, 2022 Item #17 Page 64 of 463

5 correctness thereof. The Escrow Agent makes no representation as to the sufficiency of the proceeds deposited into the Escrow Fund or from the investment thereof to accomplish the refunding of the 2012 Bonds or to the validity of this Agreement as to the City and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence or willful misconduct, and the duties and obligations of the Escrow Agent shall be determined solely by the express provisions of this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion or advice of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an officer of the City. The Escrow Agent shall incur no liability for losses arising from any investment made pursuant to this Agreement. The Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.

The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

The Escrow Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Escrow Agent, or another method or system specified by the Escrow Agent as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Escrow Agent an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Escrow Agent Instructions using Electronic Means and the Escrow Agent in its discretion elects to act upon such Instructions, the Escrow Agent’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Escrow Agent cannot determine the identity of the actual sender of such Instructions and that the Escrow Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Escrow Agent have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Escrow Agent and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such Instructions July 12, 2022 Item #17 Page 65 of 463

6 notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Escrow Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Agent immediately upon learning of any compromise or unauthorized use of the security procedures.

The Escrow Agent shall furnish the City with periodic cash transaction statements which include detail for all investment transactions effected by the Escrow Agent or brokers selected by the City, provided that the Escrow Agent is not obligated to provide an accounting for any fund or account that: (a) has a balance of $0.00; and (b) has not had any activity since the last reporting date. Upon the City’s election, such statements will be delivered via the Escrow Agent’s online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.

If the Escrow Agent learns that the Department of the Treasury or the Bureau of Public Debt will not, for any reason, accept a subscription of securities that is to be submitted pursuant to this Agreement, the Escrow Agent shall promptly request alternative written investment instructions from the City with respect to escrowed funds which were to be invested in securities. The Escrow Agent shall follow such instructions and, upon the maturity of any such alternative investment, the Escrow Agent shall hold funds uninvested and without liability for interest until receipt of further written instructions from the City. In the absence of investment instructions from the City, the Escrow Agent shall not be responsible for the investment of such funds or interest thereon. The Escrow Agent may conclusively rely upon the City’s selection of an alternative investment as a determination of the alternative investment’s legality and suitability and shall not be liable for any losses related to the alternative investments or for compliance with any yield restriction applicable thereto.

In no event shall the Escrow Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits) even if the Escrow Agent has been advised of the likelihood of such damages and regardless of the form of such action. The Escrow Agent shall not be liable for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

SECTION 11. Amendments. This Agreement is made for the benefit of the City and the owners from time to time of the 2012 Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such owners, the Escrow Agent and the City; provided, however, that the City and the Escrow Agent may, without the consent of, or notice to, such owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall not materially adversely affect the rights of such owners and as shall not be inconsistent with the terms and July 12, 2022 Item #17 Page 66 of 463

7 provisions of this Agreement or the 2012 Indenture, for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Agent for the benefit of the owners of the 2012 Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Agent; and (iii) to include under this Agreement additional funds. The Escrow Agent shall be entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the owners of the various 2012 Bonds or that any instrument that is executed hereunder complies with the conditions and provisions of this Section.

SECTION 12. Notice to Rating Agencies. In the event that this Agreement or any provision thereof is severed, amended or revoked, the Escrow Agent, upon written instructions from the City, shall provide written notice in the form provided by the City of such severance, amendment or revocation to the rating agencies then rating the 2012 Bonds.

SECTION 13. Term. This Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: (i) the date upon which the 2012 Bonds have been paid in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on deposit with the Escrow Agent pursuant to Section 5(c) of this Agreement. Funds remaining in the Escrow Fund after payment in full of the 2012 Bonds shall be transferred to the City.

SECTION 14. Compensation. The City agrees to pay the Escrow Agent its reasonable fees and expenses as previously agreed to by the Escrow Agent and the City, and any other reasonable fees and expenses of the Escrow Agent; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien or assert any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services that are rendered or expenses incurred by the Escrow Agent under this Agreement.

SECTION 15. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void, shall be deemed separate from the remaining covenants and agreements contained herein and shall in no way affect the validity of the remaining provisions of this Agreement.

SECTION 16. Counterparts; Electronic Delivery of Signatures. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Signatures appearing on any counterpart of this Agreement may be delivered by facsimile transmission or by electronic delivery in PDF format, which transmission or delivery shall be deemed delivery of an originally executed document.

SECTION 17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA.

SECTION 18. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the office of the Escrow Agent are authorized by law to remain closed, such payment may be made or act performed or right exercised July 12, 2022 Item #17 Page 67 of 463

8 on the next succeeding day which is not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement, and no interest shall accrue for the period from and after such nominal date.

SECTION 19. Assignment. This Agreement shall not be assigned by the Escrow Agent or any successor thereto without the prior written consent of the City; provided, however, that no such consent shall be required with respect to an assignment effected pursuant to Section 20.

SECTION 20. Reorganization of Escrow Agent. Notwithstanding anything to the contrary contained in this Agreement, any company into which the Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which the Escrow Agent is a party, or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Escrow Agent without execution or filing of any paper or any paper or further act, if such company is eligible to serve as Escrow Agent.

SECTION 21. Insufficient Funds. If at any time the Escrow Agent has actual knowledge that the moneys and investments in the Escrow Fund, including the anticipated proceeds thereof and earnings thereon, will not be sufficient to make all payments required by this Agreement, the Escrow Agent shall notify the City in writing of the amount thereof and the reason therefor to the extent known to it. The Escrow Agent shall have no responsibility regarding any such deficiency.

SECTION 22. Notices. Any notice to or demand upon the Escrow Agent may be served or presented, and such demand may be made, at the principal corporate trust office of the Escrow Agent at 333 South Hope Street, Suite 2525, Los Angeles, California 90071, Attention: Corporate Trust, Reference: City of Carlsbad 2012 Reassessment District Bonds. Any notice to or demand upon the City shall be deemed to have been sufficiently given or served for all purposes by being sent by facsimile or other electronic transmission, overnight mail or courier or mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the City 1635 Faraday Avenue, Carlsbad, California 92008-7314, Attention: Administrative Services Director (or such other address as may have been filed in writing by the City with the Escrow Agent).

SECTION 23. OFAC Compliance. The City covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government (including the Office of Foreign Assets Control of the United States Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”). The City further covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Agreement: (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions; (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (iii) in any other manner that will result in a violation of Sanctions by any person.
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July 12, 2022 Item #17 Page 68 of 463

S-1 4884-9245-3665v4/022062-0036
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.

CITY OF CARLSBAD
By: City Manager

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Agent and 2012 Trustee
By: Authorized Officer

July 12, 2022 Item #17 Page 69 of 463

Schedule A-1 4884-9245-3665v4/022062-0036

SCHEDULE A

FEDERAL SECURITIES
Moneys deposited in the Escrow Fund shall be invested as follows:

Security Maturity Principal Amount Interest Rate
[__] September 2, 2022 $[21,780,000] [__]%

The escrow requirements for the 2012 Bonds are as follows:

Period Ending Principal Paid
Principal
Redeemed Interest Total
September 2, 2022 $1,235,000.00 $20,545,000.00 $[__] $[__] July 12, 2022 Item #17 Page 70 of 463

Exhibit A-1

EXHIBIT A

NOTICE OF FULL OPTIONAL REDEMPTION CITY OF CARLSBAD
REASSESSMENT DISTRICT NO. 2012-1 LIMITED OBLIGATION REFUNDING BONDS BASE CUSIP 142579
NOTICE IS HEREBY GIVEN to the owners of the above-captioned obligations (the “2012 Bonds”), which were issued pursuant to an Indenture, dated as of January 1, 2013 (the “2012 Indenture”), by and between the City of Carlsbad (the “City”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2012 Trustee”), that the outstanding 2012 Bonds in the aggregate principal amount of $20,545,000 have been called for redemption on September 2, 2022 (the “Redemption Date”). The 2012 Bonds were originally issued on January 30, 2013 and are described in the following table.

Principal Payment Date (September 2) CUSIP®† (142579) Principal Amount Interest Rate Redemption Price 2023 GM7 $ 1,280,000 3.550% 100%
2024 GN5 1,325,000 3.700 100 2025 GP0 1,375,000 3.800 100 2026 GQ8 1,425,000 3.900 100 2027 GR6 1,480,000 4.000 100 2028 GS4 1,545,000 4.000 100 2029 GT2 1,605,000 4.125 100 2030 GU9 1,670,000 4.125 100 2031 GV7 1,740,000 4.125 100 2032 GW5 1,810,000 4.250 100 2035 GX3 5,290,000 5.000 100 TOTAL $20,545,000 The 2012 Bonds will be payable on the Redemption Date at a redemption price of 100% of the principal amount thereof plus accrued interest thereon to such date (the “Redemption Price”). The Redemption Price of the 2012 Bonds will become due and payable on the Redemption Date. Interest on the 2012 Bonds will cease to accrue and be payable from and after the Redemption Date, such 2012 Bonds will be surrendered to the 2012 Trustee and will no longer be entitled to any lien, benefit or security under the 2012 Indenture and the owners thereof will have no rights in respect thereof except to receive payment of the Redemption Price on the Redemption Date.

To receive payment on the Redemption Date, owners of the 2012 Bonds are required to present and surrender said 2012 Bonds on or before the Redemption Date at the address of the 2012 Trustee set forth below:

† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. Neither the City nor its agents or counsel assume responsibility for the accuracy of such numbers.

July 12, 2022 Item #17 Page 71 of 463

Exhibit A-2

REQUIREMENT INFORMATION
First Class/Registered/Certified/Express/By Hand BNY Mellon Corp Trust Attn: Transfers/Redemption 2001 Bryan Street 10th Floor
Dallas, TX 75201
Additional information regarding the foregoing actions may be obtained from The Bank of New York Mellon Trust Company, N.A., Corporate Trust Department, Bondholder Relations, telephone number (800) 254-2826.

A form W-9 must be submitted with the 2012 Bonds being refunded. Failure to provide a completed form W-9 will result in backup withholding pursuant to law. Under the Tax Cuts and Jobs Act, 24% will be withheld if the tax identification number is not properly certified.

If the owner of any 2012 Bond fails to deliver such 2012 Bond to the 2012 Trustee on the Redemption Date, such 2012 Bond shall nevertheless be deemed redeemed on the Redemption Date and the owner of such 2012 Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the 2012 Trustee for such payment.

Note: The City and the 2012 Trustee shall not be responsible for the selection or use of the CUSIP numbers selected or listed, nor is any representation made as to their correctness in this notice or as printed on any 2012 Bond. They are included solely for the convenience of the holders.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as 2012 Trustee August 2, 2022
July 12, 2022 Item #17 Page 72 of 463

Exhibit B-1

EXHIBIT B

NOTICE OF DEFEASANCE
CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2012-1

LIMITED OBLIGATION REFUNDING BONDS
BASE CUSIP 142579
NOTICE IS HEREBY GIVEN to the owners of the above-captioned obligations (the “2012 Bonds”) pursuant to an Indenture, dated as of January 1, 2013 (the “2012 Indenture”), by and between the City of Carlsbad (the “City”) and The Bank of New York Mellon Trust Company, N.A., as escrow agent and trustee (the “2012 Trustee”), that the City has deposited with the 2012 Trustee, or an escrow agent acting on its behalf, [cash] in an amount that is sufficient to pay on September 2, 2022 the principal of all outstanding 2012 Bonds, plus accrued interest with respect thereto to such date. The 2012 Bonds were originally issued on January 30, 2013 and are described in the following table.

Principal Payment Date (September 2) CUSIP®† (142579) Principal Amount Interest Rate 2022 GL9 $ 1,235,000 3.375%
2023 GM7 1,280,000 3.550 2024 GN5 1,325,000 3.700 2025 GP0 1,375,000 3.800 2026 GQ8 1,425,000 3.900 2027 GR6 1,480,000 4.000 2028 GS4 1,545,000 4.000 2029 GT2 1,605,000 4.125 2030 GU9 1,670,000 4.125 2031 GV7 1,740,000 4.125 2032 GW5 1,810,000 4.250 2035 GX3 5,290,000 5.000 TOTAL $21,780,000 In accordance with the 2012 Indenture: (i) the owners of the 2012 Bonds have ceased to be entitled to the pledge of Reassessments (as such term is defined in the 2012 Indenture) and other amounts under the 2012 Indenture, and all covenants, agreements and other obligations of the City to the owners of such 2012 Bonds under the 2012 Indenture have ceased, terminated and become void and been discharged and satisfied except as set forth in the 2012 Indenture; (ii) all obligations of the City under the 2012 Indenture with respect to such 2012 Bonds have ceased and terminated, except as set forth in the 2012 Indenture; and (ii) all obligations of the City under the Continuing Disclosure Agreement, dated January 30, 2013, by and between the City and The Bank of New York Mellon Trust Company, N.A., as dissemination agent, relating to the 2012 Bonds, have been terminated as of the date hereof.

July 12, 2022 Item #17 Page 73 of 463

Exhibit B-2
The City and the 2012 Trustee shall not be responsible for, and no representation is made as to the correctness of the CUSIP number either as printed on any 2012 Bond or as contained herein and any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the 2012 Bonds.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as 2012 Trustee August __, 2022

July 12, 2022 Item #17 Page 74 of 463

Exhibit 7
566122.1\22675.0002

INDENTURE
By and Between

CITY OF CARLSBAD
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee

Relating to
$_____ CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS

Dated as of August 1, 2022
July 12, 2022 Item #17 Page 75 of 463

Table of Contents Page
i

ARTICLE I DEFINITIONS
Section 101. Definitions ................................................................................................................. 1 Section 102. Interpretation ............................................................................................................ 11 Section 103. Equality of Bonds; Pledge of Reassessments; No Obligation to Cure Deficiency ................................................................................................................ 11

ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS
Section 201. Authorization and Designation of Bonds ................................................................. 11 Section 202. Type and Nature of Bonds; Limited Liability.......................................................... 11 Section 203. Authorization and Purpose of Bonds ....................................................................... 12 Section 204. Terms of Bonds ........................................................................................................ 12 Section 205. Execution and Authentication .................................................................................. 14 Section 206. Book-Entry System .................................................................................................. 14 Section 207. Representation Letter ............................................................................................... 15 Section 208. Payments to the Nominee ........................................................................................ 15 Section 209. Initial Depository and Nominee ............................................................................... 16 Section 210. Transfers Outside of Book-Entry System ................................................................ 16 Section 211. Registration, Exchange or Transfer ......................................................................... 16 Section 212. Bond Register .......................................................................................................... 16 Section 213. Mutilated, Lost, Destroyed or Stolen Bonds ............................................................ 17 Section 214. Refunding of Bonds ................................................................................................. 17

ARTICLE III REDEMPTION OF BONDS
Section 301. Provisions for the Redemption of Bonds ................................................................. 17 Section 302. Notice of Redemption .............................................................................................. 18 Section 303. Partial Redemption of Bonds ................................................................................... 19 Section 304. Effect of Notice and Availability of Redemption Money ........................................ 19 ARTICLE IV CREATION OF FUNDS AND ACCOUNTS; APPLICATION OF PROCEEDS AND ASSESSMENTS Section 401. Funds and Accounts ................................................................................................. 20 Section 402. Application of Proceeds of the Sale of Bonds ......................................................... 20 Section 403. Costs of Issuance Fund ............................................................................................ 21 Section 404. Reassessment Fund .................................................................................................. 21 Section 405. Redemption Fund ..................................................................................................... 21 Section 406. Reserve Fund ........................................................................................................... 22 Section 407. Rebate Fund ............................................................................................................. 24 July 12, 2022 Item #17 Page 76 of 463

Table of Contents (continued) Page
ii
Section 408. Investments .............................................................................................................. 25

ARTICLE V COVENANTS AND WARRANTY
Section 501. Warranty .................................................................................................................. 27 Section 502. Covenants................................................................................................................. 27 Section 503. Continuing Disclosure ............................................................................................. 29

ARTICLE VI AMENDMENTS TO AGREEMENT
Section 601. Amendments Not Requiring Bondowner Consent .................................................. 29 Section 602. Amendments Requiring Bondowner Consent ......................................................... 30 Section 603. Notation of Bonds; Delivery of Amended Bonds .................................................... 31

ARTICLE VII TRUSTEE
Section 701. Trustee ..................................................................................................................... 31 Section 702. Removal of Trustee .................................................................................................. 32 Section 703. Resignation of Trustee ............................................................................................. 33 Section 704. Liability of Trustee .................................................................................................. 33 Section 705. Interested Transactions ............................................................................................ 37 Section 706. Agents ...................................................................................................................... 37 ARTICLE VIII EVENTS OF DEFAULT; REMEDIES
Section 801. Event of Default ....................................................................................................... 37 Section 802. Remedies .................................................................................................................. 37 Section 803. Application of Funds Upon an Event of Default ..................................................... 38

ARTICLE IX

DEFEASANCE
Section 901. Defeasance ............................................................................................................... 38

ARTICLE X MISCELLANEOUS
Section 1001. Cancellation of Bonds .............................................................................................. 39 July 12, 2022 Item #17 Page 77 of 463

Table of Contents (continued) Page
iii
Section 1002. Execution of Documents and Proof of Ownership .................................................. 39 Section 1003. Unclaimed Moneys .................................................................................................. 40 Section 1004. Provisions Constitute Contract; Successors ............................................................. 40 Section 1005. Further Assurances; Incontestability........................................................................ 41 Section 1006. Severability .............................................................................................................. 41 Section 1007. General Authorization .............................................................................................. 41 Section 1008. Liberal Construction ................................................................................................ 41 Section 1009. Notice ....................................................................................................................... 41 Section 1010. Action on Next Business Day .................................................................................. 42 Section 1011. Applicable Law ........................................................................................................ 42 Section 1012. OFAC ....................................................................................................................... 42 Section 1013. Execution in Counterparts; Electronic Delivery of Signatures ................................ 42 EXHIBIT A Form of Bond ........................................................................................................ A-1 July 12, 2022 Item #17 Page 78 of 463

1 INDENTURE
This Indenture, dated as of August 1, 2022 (this “Indenture”), is made and entered into by the City of Carlsbad (the “City”), a chartered city and municipal corporation, duly established and existing under the Constitution and laws of the State of California (the “State”), and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), in connection with City of Carlsbad Reassessment District No. 2022-1 (the “Reassessment District”).

RECITALS
A. Pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the California Streets and Highways Code) (the “1984 Act”), the City has previously issued its Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the “2012 Bonds”).

B. The outstanding 2012 Bonds are secured by the unpaid reassessments on the properties within Reassessment District 2012-1 of the City (the “2012 Reassessment District”).

C. The public interest requires the refunding of the 2012 Bonds and the City intends to accomplish the refunding through the levy of reassessments and the issuance of refunding bonds upon the security thereof.

D. The City desires: (i) to establish a new reassessment district entitled Reassessment District 2022-1 and to levy reassessments therein, including within the 2012 Assessment District; and (ii) to issue refunding bonds (the “Bonds”) of the Reassessment District pursuant to the Act, the proceeds of which Bonds shall be applied to refund the 2012 Bonds.

E. The City Council has taken proceedings under the 1984 Act for the formation of the Reassessment District and has confirmed a reassessment, which reassessment and a related diagram were recorded with the Superintendent of Streets, and a notice of reassessment, as prescribed in Section 3114 of the California Streets and Highways Code, has been recorded with the County Recorder of the County of San Diego, whereupon the assessment attached as a lien upon the property assessed within the Reassessment District as provided in Section 3115 of the California Streets and Highways Code.

In consideration of the mutual covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows:

ARTICLE I DEFINITIONS
Section 101. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings:
“Act” means, collectively, the 1915 Act and the 1984 Act. “Administrative Expense Fund” means the City of Carlsbad Reassessment District No. 2022-1 Administrative Expense Fund established and held by the City pursuant to Section 401.

July 12, 2022 Item #17 Page 79 of 463

2 “Administrative Expense Requirement” means an amount, not in excess of the aggregate maximum annual assessment for Administrative Expenses permitted to be levied within the Reassessment District as set forth in the Reassessment Report, to be specified each year by the Treasurer to be used for Administrative Expenses. “Administrative Expenses” means the ordinary and necessary fees and expenses for determination of the Reassessment and administering the levy and collection of the Reassessment and servicing, calling and redeeming the Bonds, including any or all of the following: the fees and expenses of the Trustee (including any fees or expenses of its counsel), the expenses of the City in carrying out its duties hereunder (including, but not limited to, annual audits and costs incurred in the levying and collection of the Reassessment) including the fees and expenses of its counsel and all other costs and expenses of the City or the Trustee (including any indemnified amounts) incurred in connection with the discharge of their respective duties hereunder and the issuance and administration of the Bonds and, in the case of the City, in any way related to the administration of the Reassessment District. “Authorized Investments” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
(1) (A) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”); (B) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America; (C) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America; or (D) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated; (2) Federal Housing Administration debentures;
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:
- Federal Home Loan Mortgage Corporation (FHLMC): Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) and senior debt obligations; - Federal Farm Credit Banks: Consolidated system-wide bonds and notes; - Federal Home Loan Banks (FHL Banks): Consolidated debt obligations; and - Federal National Mortgage Association (FNMA): Senior debt obligations and mortgage-backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts); July 12, 2022 Item #17 Page 80 of 463

3 (4) Unsecured certificates of deposit, time deposits, bank deposits, demand deposits and bankers’ acceptances (having maturities of not more than 30 days) of any bank (including the Trustee and any affiliate) the short-term obligations of which are rated “A-1” or better by Standard & Poor’s, including interest-bearing money market accounts, trust funds, trust accounts, overnight bank deposits, interest-bearing deposits, other deposit products, certificates of deposit, including those placed by a third party pursuant to an agreement between the Trustee and the City, or bankers acceptances of depository institutions, including the Trustee or any of its affiliates; (5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC) in banks (including the Trustee and any affiliate) which have capital and surplus of at least $5 million; (6) Commercial paper (having original maturities of not more than 270 days rated at the time of purchase “A-1” or “A-1+” by Standard & Poor’s and “Prime-1” by Moody’s; (7) Money market funds rated “AAm” or “AAm-G” or better by Standard & Poor’s, including such funds for which the Trustee, its affiliates or subsidiaries provide investment advisory or other management services or for which the Trustee or an affiliate of the Trustee serves as investment administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding the fact that: (i) the Trustee or an affiliate of the Trustee receives fees from funds for services rendered; (ii) the Trustee collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds; and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee;
(8) “State Obligations,” which means:
(A) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A3” by Moody’s and “A-” by Standard & Poor’s, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated; (B) Direct general short-term obligations of any state agency or subdivision or agency thereof described in (A) above and rated “A-1+” by Standard & Poor’s and “Prime-l” by Moody’s; and (C) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (A) above and rated “AA-” or better by Standard & Poor’s and “Aa3” or better by Moody’s; (9) Pre-refunded municipal obligations rated by Standard & Poor’s and by Moody’s not lower than United States Treasury Obligations meeting the following requirements:
(A) the municipal obligations are: (1) not subject to redemption prior to maturity; or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; July 12, 2022 Item #17 Page 81 of 463

4 (B) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(C) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);
(D) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; (E) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (F) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent; (10) Repurchase agreements with: (1) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least “A” by Standard & Poor’s and Moody’s; (2) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A” by Standard & Poor’s and Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated “A” or better by Standard & Poor’s and Moody’s, provided that:
(A) The market value of the collateral is maintained at levels equal to 102% of the amount of cash transferred by the Trustee to the provider of the repurchase agreement plus accrued interest with the collateral being valued weekly and marked-to-market at one current market price plus accrued interest;
(B) The Trustee or a third party acting solely as agent therefor or for the City (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);
(C) The repurchase agreement shall state and an opinion of counsel shall be rendered at the time that such collateral is delivered that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means that the Holder of the Collateral is in possession); and (D) The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or Standard & Poor’s is withdrawn or suspended or falls below “A” by Standard & Poor’s or “A3” by Moody’s, as appropriate, the provider must, at the direction of the City or the Trustee, within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the City or the Trustee; July 12, 2022 Item #17 Page 82 of 463

5 (11) Investment agreements with a domestic or foreign bank or corporation the long-term debt of which or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA-” by Standard & Poor’s and “Aa3” by Moody’s; provided that, by the terms of the investment agreement:
(A) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is for the Costs of Issuance Fund, construction draws) on the Bonds; (B) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the City and the Trustee hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; (C) the investment agreement shall state that is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof, or, in the case of a bank, that the obligation of the bank to make payments under the agreement ranks pari passu with the obligations of the bank to its other depositors and its other unsecured and unsubordinated creditors; (D) the City and the Trustee receives the opinion of domestic counsel (which opinion shall be addressed to the City and the Trustee) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the City; (E) the investment agreement shall provide that if during its term:
(1) the provider’s rating by either Standard & Poor’s or Moody’s falls below “AA-” or “Aa3”, respectively, the provider shall, at its option, within 10 days of receipt of publication of such downgrade, either: (i) collateralize the investment agreement by delivering or transferring in accordance with applicable state and federal laws (other than by means of entries on the provider’s books) to the Holder of the Collateral collateral free and clear of any third-party liens or claims the market value of which collateral is maintained at levels and upon such conditions as would be acceptable to Standard & Poor’s and Moody’s to maintain an “A” rating in an “A” rated structured financing (with a market value approach); or (ii) repay the principal of and accrued but unpaid interest on the investment; and (2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below “A-” or “A3”, respectively, the provider must, at the direction of the City or the Trustee, within 10 days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the City or Trustee; (F) the investment agreement shall state and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time that such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all July 12, 2022 Item #17 Page 83 of 463

6 proceeds thereof (in the case of bearer securities, this means that the Holder of the Collateral is in possession; and (G) the investment agreement must provide that if during its term:
(1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the City or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate; and
(2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the City or Trustee, as appropriate; and (12) The State of California Local Agency Investment Fund; provided that the Trustee may restrict investments in such fund to the extent necessary to keep moneys available for the purposes of this Indenture.

In the case of any Authorized Investment, the Trustee shall be entitled to conclusively rely upon any direction of the City as a deemed certification that such investment constitutes an Authorized Investment and is a legal investment under the laws of the State of California and this Indenture. “Authorized Representative of the City” means the Mayor, the City Manager, the Assistant City Manager, any Deputy City Manager, the City Treasurer or any other person or persons designated by the Mayor, the City Manager, the Assistant City Manager, any Deputy City Manager, or the City Treasurer by a Written Certificate. “Beneficial Owner” means, with respect to a Bond, the person whose name is recorded as the beneficial owner thereof or a portion thereof by a Participant on the records of such Participant, or such person’s subrogee.
“Bond Counsel” means an attorney or a firm of attorneys, selected by the City, of nationally recognized standing in matters pertaining to the tax treatment of interest on bonds issued by states and their political subdivisions. “Bond Register” means the books which the Trustee shall keep or cause to be kept pursuant to Section 212, on which the registration and transfer of the Bonds shall be recorded. “Bond Year” means the one year period or shorter period ending each year on September 2, or such other date as may be specified by the City in the Tax Certificate. “Bondowner” or “Owner” means the person or persons in whose name or names any Bond is registered as shown on the Bond Register.
“Bonds” means the City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds issued pursuant to the Resolution of Issuance and this Indenture.

July 12, 2022 Item #17 Page 84 of 463

7 “Business Day” means any day of the year in New York, New York or Los Angeles, California other than a Saturday or a Sunday, or a day on which banking institutions in any city in which the Corporate Trust Office of the Trustee is located are authorized or obligated by law or executive order to be closed. “City” means the City of Carlsbad, California and any successor thereto. “City Clerk” means the City Clerk of the City and his or her designee. “City Council” means the City Council of the City of Carlsbad. “Closing Date” means the date of delivery of the Bonds by the City and payment therefor by the original purchaser thereof. “Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Continuing Disclosure Agreement” means that certain Continuing Disclosure Agreement, dated the Closing Date, by and between the City and The Bank of New York Mellon Trust Company, N.A., as dissemination agent, together with any amendments thereto. “Corporate Trust Office” means the corporate trust office of the Trustee in Los Angeles, California as specified in Section 1009, or such other addresses may be specified in writing by the Trustee; provided, however, that for purposes of the transfer, registration, exchange, payment and surrender of Bonds, “Corporate Trust Office” means the office or agency of the Trustee at which, at any time, its corporate trust agency business shall be conducted or such other office or address as may be specified in writing by the Trustee.
“Costs of Issuance” means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including the acceptance and initial annual fees and expenses of the Trustee, legal fees and expenses, costs of printing the Bonds and the preliminary and final official statements for the Bonds, fees of financial consultants and all other related fees and expenses, as set forth in a Written Certificate of the City. “Costs of Issuance Fund” means the City of Carlsbad Reassessment District No. 2022-1 Costs of Issuance Fund established and held by the Trustee pursuant to Section 401 hereof. “County” means the County of San Diego.
“Depository” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York, and its successors as securities depository for the Bonds, including any such successor appointed pursuant to Section 210 hereof. “Escrow Agent” means The Bank of New York Mellon Trust Company, N.A., as escrow agent with respect to the defeasance of the 2012 Bonds under the provisions of the Escrow Agreement. “Escrow Agreement” means that certain Escrow Agreement (2012 Bonds), dated as of August 1, 2022, by and between the City and the Escrow Agent, relating to 2012 Bonds.

July 12, 2022 Item #17 Page 85 of 463

8 “Escrow Fund” means the fund by that name established under the Escrow Agreement. “Federal Securities” means, subject to applicable law, United States Treasury notes, bonds, bills or certificates of indebtedness, including United States Treasury Obligations, State and Local Government Series or other direct obligations issued by the United States Treasury for which the faith and credit of the United States are pledged for the payment of principal and interest; and obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority or other federal agencies or United States Government-sponsored enterprises. “Fiscal Year” means the twelve-month period terminating on June 30 of each year, or any other annual accounting period hereafter selected and designated by the City as its Fiscal Year in accordance with applicable law. “Indenture” means this Indenture, as amended or supplemented pursuant to the terms hereof. “Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the City and who, or each of whom: (1) is in fact independent and not under the domination of the City; (2) does not have any substantial interest, direct or indirect, with the City or with any owner of real property within the Reassessment District; and (3) is not connected with the City as a member, officer or employee of the City, but who may be regularly retained to make annual or other reports to the City. “Interest Payment Date” means each March 2 and September 2 of each year, commencing ____ 2, 202__.
“Moody’s” means Moody’s Investors Service, its successors and assigns. “1915 Act” means the Improvement Bond Act of 1915, being Division 10 (commencing with Section 8500) of the California Streets and Highways Code. “1984 Act” means the Refunding Improvement Act of 1984 for 1915 Improvement Act Bonds, being Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code. “Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 206 hereof. “Nonpurpose Investment” means Authorized Investments described as Nonpurpose Investments in the Tax Certificate. “Notice of Reassessment” means the Notice of Reassessment recorded in the Office of the County Recorder of the County of San Diego on [August 1], 2022, as Document No. 2022-____. “Outstanding Bonds” or “Outstanding” means all Bonds theretofore issued by the City, except: (1) Bonds theretofore canceled or surrendered for cancellation; (2) Bonds for the payment or redemption of which moneys shall have been deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed July 12, 2022 Item #17 Page 86 of 463

9 prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture; and (3) Bonds defeased pursuant to Section 901. “Participant” means a broker-dealer, bank and other financial institution for which the Depository holds Bonds or interests therein from time to time as securities depository. “Participating Underwriter” has the meaning ascribed thereto in the Continuing Disclosure Agreement. “Person” means any individual, corporation, firm, association, partnership, limited liability company, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. “Reassessment” or “Reassessments” means the special reassessments levied in the Reassessment District in accordance with the 1984 Act and the Resolution of Confirming Reassessments, and the net proceeds derived from any foreclosure proceedings and interest and penalties thereon, but exclusive of any assessments or reassessments levied to pay Administrative Expenses. “Reassessment District” means City of Carlsbad Reassessment District No. 2022-1. “Reassessment Fund” means the City of Carlsbad Reassessment District No. 2022-1 Reassessment Fund established and held by the Trustee pursuant to Section 401 hereof. “Reassessment Installment” means the annual portion of the Reassessment levied to pay the principal of and interest on the Bonds (which does not include assessments levied by the City to pay Administrative Expenses). “Reassessment Report” means the report concerning the Reassessment prepared by NBS, as approved by the City Council on July 12, 2022 and on file with the City Clerk. “Rebate Fund” means the fund by that name established and held by the Trustee pursuant to Section 401 hereof in which there are established the accounts described in Section 401 hereof. “Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code. “Rebate Requirement” has the meaning ascribed to such term in the Tax Certificate. “Record Date” means the fifteenth day of the month preceding an Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the City of Carlsbad Reassessment District No. 2022-1 Redemption Fund established and held by the Trustee pursuant to Section 401 hereof. “Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code. “Representation Letter” means the Blanket Letter of Representations from the City to the Depository as described in Section 207 hereof.

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10 “Reserve Fund” means the City of Carlsbad Reassessment District No. 2022-1 Reserve Fund established and held by the Trustee pursuant to Section 401 hereof. “Reserve Requirement” means, as of the date of any calculation, the least of: (a) 10% of the original aggregate principal amount of the Bonds; (b) maximum annual debt service on the Bonds; and (c) 125% of average annual debt service on the Bonds; provided, however, that the Reserve Requirement shall be adjusted to reflect any amount specified for transfer to the Redemption Fund in a Written Request from the City as described in Section 406 hereof. “Resolution of Confirming Reassessments” means Resolution No. 2022-___, adopted by the City Council of the City on July 12, 2022, confirming and ordering the Reassessments. “Resolution of Issuance” means Resolution No. 2022-___, adopted by the City Council of the City on July 12, 2022, authorizing the issuance of the Bonds and approving the terms and provisions of this Indenture.
“Responsible Officer” means, when used with respect to the Trustee, any managing director, president, vice president, senior associate, associate or other officer of the Trustee within the Corporate Trust Office (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Indenture. “Six-Month Period” means the period of time beginning on the Closing Date of the Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds (and any obligations that refund an issue of the Bonds). “Superintendent of Streets” means the Transportation Director of the City, or his or her designee. “Supplemental Indenture” or “Supplement” means any supplemental agreement amending or supplementing this Indenture. “Tax Certificate” means the Tax Certificate delivered upon the issuance of the Bonds. “Treasurer” means the City Treasurer, or his or her designee. “Trustee” means The Bank of New York Mellon Trust Company, N.A., a national banking association that is duly organized and existing under and by virtue of the laws of the United States of America, or any other bank, national banking association, or trust company which may at any time be substituted in its place as provided in Sections 702 and 703 and any successor thereto. “2012 Bonds” means the City’s Reassessment District No. 2012-1 Limited Obligation Refunding Bonds.
“Written Certificate,” “Written Direction” and “Written Request” of the City mean, respectively, a written certificate, written direction and written request signed in the name of the City by an Authorized Representative of the City. Any such certificate, direction or request may, but need July 12, 2022 Item #17 Page 88 of 463

11 not, be combined in a single instrument with any other instrument, opinion or representation; and the two or more so combined shall be read and construed as a single instrument. “Yield on the Bonds” has the meaning ascribed to such term in the Tax Certificate.

Section 102. Interpretation. Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine or feminine gender is for convenience only and shall be deemed to mean and include the neuter, masculine and feminine genders. Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.

Section 103. Equality of Bonds; Pledge of Reassessments; No Obligation to Cure Deficiency. Pursuant to the Act and this Indenture, the Bonds are equally secured by a first pledge of and shall be equally payable from the Reassessments without priority for number, issue date, date of sale, date of execution or date of delivery, and the payment of the interest on and principal of the Bonds and any premiums upon the redemption thereof are equally secured by a first pledge of and shall be exclusively paid from the Reassessments and moneys on deposit in the Reassessment Fund, Redemption Fund and the Reserve Fund which are hereby set aside for and irrevocably pledged solely for the payment of the Bonds. The Reassessments, the amounts in the foregoing funds, and any interest earned on such funds shall constitute a trust fund held by the Trustee for the benefit of the Owners of the Bonds to be applied to the payment of the interest on, premium, if any, and principal of the Bonds and so long as any of the Bonds remain Outstanding and shall not be used for any other purpose, except as permitted by the Act, this Indenture or any Supplemental Indenture.

Nothing in this Indenture or any Supplemental Indenture shall preclude the redemption prior to maturity of any Bonds subject to call and redemption and payment of said Bonds from proceeds of refunding bonds.

ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS
Section 201. Authorization and Designation of Bonds. The City has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines, that all acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by the Act, and that the City is now authorized, pursuant to each and every requirement of the Act and hereof, to issue the Bonds upon the security of the Reassessments in the aggregate principal amount and in the form and manner provided herein, which Bonds, upon their issuance, shall be entitled to the benefit, protection and security of the provisions hereof.

Section 202. Type and Nature of Bonds; Limited Liability. Notwithstanding anything contained herein, in the Bonds, in the Act or any other provision of law or in any of the resolutions adopted in connection with the proceedings for the formation of the Reassessment District or the proceedings for the Reassessment to the contrary, all Bonds authorized pursuant to this Indenture shall be a special obligation of the City; and the City shall not under any circumstances (including, without limitation, after any installment of principal or interest of any Reassessment levied on any lot July 12, 2022 Item #17 Page 89 of 463

12 or parcel in the Reassessment District becomes delinquent or after the City acquires title to any such lot or parcel, whether through foreclosure or otherwise) be obligated to pay principal, premium, if any, or interest on the Bonds from any source whatsoever other than the Redemption Fund (including any transfers thereto from the Reassessment Fund and the Reserve Fund). Neither the City, the City Council, the officers or employees of the City, any person or entity acting for or on behalf of the City in connection with the issuance of the Bonds or in connection with the formation or operation of the Reassessment District, nor any persons executing the Bonds, shall be liable personally on the Bonds or be subject to any personal liability for the Bonds or any personal liability or accountability whatsoever by reason of or in connection with the issuance of the Bonds or by reason of any act or acts or the failure or omission to take any act or acts (including, without limitation, a negligent act or omission) in connection with or related to the formation or operation of the Reassessment District.

Section 203. Authorization and Purpose of Bonds. The Bonds shall be designated “City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds” and shall be issued by the City under and pursuant to the Act and under and pursuant hereto in the aggregate principal amount equal to the aggregate amount of the unpaid principal portion of the Reassessments (as of the Closing Date, $_____). The designation of each Bond shall include, in addition to their name, such further appropriate particular designation added to or incorporated in the title for the Bonds as the City may determine or as shall be required by the Act; and each Bond shall bear upon its face the designation so determined. The Bonds may contain or have endorsed thereon such other descriptive provisions, specifications and words not inconsistent with the provisions hereof as may be desirable or necessary to comply with custom or the rules of any securities exchange or commission or brokerage board or otherwise as may be determined by the City prior to the delivery thereof.

The primary purpose for which the Bonds are to be issued is to provide funds to refinance the cost of certain improvements heretofore ordered by the City Council.

Section 204. Terms of Bonds.
(a) The Bonds and the Certificate of Authentication with respect thereto shall be substantially in the forms attached hereto as Exhibit A, and such forms are hereby approved and adopted as the form of the Bonds and of the Certificate of Authentication. The Bonds may include such appropriate or necessary insertions, omissions and variations as are permitted or required hereby. Only such of the Bonds as shall bear thereon the Certificate of Authentication in substantially the form approved above, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture; and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered hereunder and is entitled to the benefits of this Indenture. (b) The interest on and principal of and redemption premiums, if any, on the Bonds shall be payable in lawful money of the United States of America at the Office of the Trustee. Interest on the Bonds shall be calculated on the basis of a 360-day year consisting of twelve 30-day months. (c) The Bonds shall be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Bonds shall be dated the Closing Date, mature on September 2 of each year and bear interest at the rates per annum shown below:

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13 Maturity Date (September 2) Principal Amount Interest Rate 20__ $ %

* _____________________ * Term Bond (d) Interest shall be payable on each Bond from the date established in accordance with paragraph (e) below on each Interest Payment Date thereafter until the principal sum of such Bond has been paid; provided, however, that if on the maturity date of any Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full in accordance with the terms of this Indenture, such Bonds shall then cease to bear interest. (e) Each Bond shall bear interest from the Interest Payment Date next preceding its date of authentication and registration, unless: (i) its date of authentication is after a Record Date and on or before the immediately succeeding Interest Payment Date, in which event the Bond shall bear interest from such Interest Payment Date; or (ii) its date of authentication is before the close of business on the first Record Date, in which event the Bond shall bear interest from its dated date; provided that if at the time of authentication of any Bond interest is then in default on the Outstanding Bonds, such Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Bonds. (f) Payment of interest on the Bonds due on or before the maturity or prior redemption thereof shall be made only to the person whose name appears in the Bond Register as the registered owner thereof at the close of business on the Record Date, such interest to be paid by check mailed by first class mail on the Interest Payment Date to such registered owner at such owner’s address as it appears on such books or at such other address as such owner may have filed with the Trustee for that purpose; provided, however, that, in the case of a registered owner of $1,000,000 or more in aggregate principal amount of Bonds, upon written request of such registered owner to the Trustee at July 12, 2022 Item #17 Page 91 of 463

14 least 15 days prior to an Interest Payment Date, such payment may be made by wire transfer to an account within the United States designated by such owner. Payment of the principal of and redemption premiums, if any, on the Bonds shall be made by check only to the person whose name appears in the Bond Register as the registered owner thereof, such principal and redemption premiums, if any, to be paid only on the surrender of the Bonds at the Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity; provided that sinking fund payments shall be paid without presentment or surrender of the Bonds.
(g) The City and the Trustee may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. On behalf of the City pursuant hereto, the Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner shall receive a certificated Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Indenture. (h) From and after the issuance of the Bonds, the findings and determinations of the City Council shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of such Bonds is at issue; and no bona fide purchaser of any of such Bonds shall be required to independently establish the existence of any fact or the performance of any condition or the taking of any proceeding required prior to such issuance or the application of the purchase price paid for such Bonds. The recital contained in the Bonds that the Bonds are issued under and pursuant to the Act and under and pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance and all Bonds shall be incontestable from and after their issuance. Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have been delivered to the purchaser thereof and the purchase price thereof received.

Section 205. Execution and Authentication. The Bonds shall be signed on behalf of the City by the manual or facsimile signature of the Mayor, the City Manager or the Treasurer attested by the manual or facsimile signature of the City Clerk in their respective capacities as officers of the City, and the seal of the City (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or to lost, stolen, destroyed or mutilated Bonds), such Bonds shall nevertheless be valid and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office.

Section 206. Book-Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository. Except as July 12, 2022 Item #17 Page 92 of 463

15 provided in Section 210 hereof, all of the Outstanding Bonds shall be registered in the Bond Register the name of the Nominee.

With respect to Bonds registered in the Bond Register in the name of the Nominee, neither the City nor the Trustee shall have any responsibility or obligation to any Participant or to any Person on behalf of whom such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Bond Register, of any notice with respect to the Bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Bonds are redeemed in part; or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Bond Register, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The City and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Trustee as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever. On behalf of the City pursuant hereto, the Trustee shall pay all principal of, premium, if any, and interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the City’s obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Trustee, shall receive a Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.

Section 207. Representation Letter. In order to qualify the Bonds which the City elects to register in the name of the Nominee for the Depository’s book-entry system, the City is hereby authorized to execute from time to time and deliver to such Depository the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 210 or in any other way impose upon the City or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the Bond Register. In addition to the execution and delivery of the Representation Letter, the Authorized Representatives of the City are hereby authorized to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository’s book-entry program.

Section 208. Payments to the Nominee. Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.

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16 Section 209. Initial Depository and Nominee. The initial Depository hereunder shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York.

Section 210. Transfers Outside of Book-Entry System. In the event that: (i) the Depository determines not to continue to act as securities depository for the Bonds; or (ii) the City determines that the Depository shall no longer so act, then unless the City identifies another qualified securities depository to replace the Depository, the City will discontinue the book-entry system. If the City fails to identify another qualified securities depository to replace the Depository, then the Bonds so designated shall no longer be restricted to being registered in the Bond Register kept by the Trustee in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions hereof.

Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor will provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Section 6045 of the Code. The Trustee shall conclusively rely on the information provided to it and has no responsibility to verify or ensure the accuracy of such information.

Section 211. Registration, Exchange or Transfer. Under the circumstances described in Section 210, but subject to the limitations set forth in the next paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the Corporate Trust Office accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.

Bonds may be exchanged at the Corporate Trust Office for a like aggregate principal amount of Bonds. The Trustee will not charge the Owner for any new Bond issued upon any exchange or transfer, but shall require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. The cost of printing any Bonds and any services rendered or any expenses incurred by the Trustee in connection with any exchange or transfer shall be paid by the City as Administrative Expenses. Whenever any Bond or Bonds shall be surrendered for registration of transfer or exchange, the City shall execute, and the Trustee shall authenticate and deliver, a new Bond for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of Bonds:
(a) 15 days prior to the date established by the Trustee for selection of Bonds for redemption; or (b) with respect to a Bond after such Bond has been selected for redemption.

Section 212. Bond Register. The Trustee will keep or cause to be kept, at its Corporate Trust Office, sufficient books for the registration and transfer of the Bonds which shall at all times during regular business hours upon reasonable prior notice be open to inspection by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds as herein provided.

The City and the Trustee may treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of such Bond for any and all purposes, and the City and the Trustee July 12, 2022 Item #17 Page 94 of 463

17 shall not be affected by any notice to the contrary. The City and the Trustee may rely on the address of the Owner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Trustee of any change in the Owner’s address so that the Bond Register may be revised accordingly.

Section 213. Mutilated, Lost, Destroyed or Stolen Bonds. If a Bond shall become mutilated, the City shall execute, and the Trustee shall authenticate and deliver, a new Bond of like principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee; and, if such evidence is satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the City, at the expense of the Bondowner, shall execute and the Trustee shall authenticate and deliver a new Bond dated as the Trustee shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the City and the Trustee for the preparation, execution, authentication and delivery thereof. Any Bond issued in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds issued hereunder. The Trustee shall not treat both the original Bond and any replacement Bond as being Outstanding Bonds for the purpose of determining the principal amount of Bonds which may be executed, authenticated and delivered or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond to replace a Bond which has been mutilated, lost, destroyed or stolen, and which has matured or is about to mature, the Trustee may make payment with respect to such Bond upon receipt of indemnity satisfactory to it and the City.

Section 214. Refunding of Bonds. The Bonds may be refunded by the City under Divisions 11 or 11.5 of the 1915 Act upon the conditions set forth in proceedings therefor, all as determined by the City Council.

ARTICLE III REDEMPTION OF BONDS
Section 301. Provisions for the Redemption of Bonds.
(a) Mandatory Redemption from Reassessment Prepayments. The Bonds shall be subject to mandatory redemption, in whole or in part as selected by the Treasurer pursuant to Section 8768 of the California Streets and Highways Code, and pursuant to a written notice delivered to the Trustee, on any Interest Payment Date, from and to the extent of any prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

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18 (b) Optional Redemption of Bonds from Other Funds, Excluding Reassessment Prepayments. The Bonds are subject to optional redemption prior to their stated maturity dates on September 2, 20__ or any Interest Payment Date thereafter, as selected by the City pursuant to a written notice delivered to the Trustee, from any source of funds other than prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Prices
September 2, 2029 and March 2, 2030 103% September 2, 2030 and March 2, 2031 102 September 2, 2031 and March 2, 2032 101 September 2, 2032 and thereafter 100 (c) Mandatory Sinking Fund Redemption of Bonds. The Bonds maturing on September 2, 20__ shall be subject to mandatory sinking fund redemption prior to maturity, in part, on September 2, 20__, and on each September 2 thereafter, from sinking fund payments, at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:
20__ Term Bond
Redemption Date
(September 2)
Redemption
Amount
20__ $ 20__ 20__ (maturity)
In the event of any prior redemption of the Bonds maturing on September 2, 20__ pursuant to Sections 301(a) or (b), the foregoing sinking fund payments shall be reduced as proportionately as possible in increments of $5,000 and the City shall provide the Trustee with a revised sinking fund schedule giving effect to the redemption so completed.

Section 302. Notice of Redemption. The City shall be required to give the Trustee written notice of its intention to redeem Bonds under Sections 301(a) or (b) at least forty-five (45) days prior to the date fixed for such redemption, or such lesser number of days as permitted by the Trustee. When Bonds are to be called for redemption under Section 301(a) or (b), subject to timely receipt of notice from the City of its intention to redeem, the Trustee shall give notice, on behalf of the City, of the redemption of such Bonds. Such notice of redemption shall: (a) state the date fixed for redemption and for surrender of the Bonds to be redeemed; (b) state the redemption price; (c) state the place or places where the Bonds are to be surrendered for redemption; (d) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (e) state that such notice of redemption shall be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption; and (f) in the case of a redemption pursuant to Section 301(b) state that the City has the right to rescind such redemption by written notice to the Trustee on or prior to two (2) Business Days prior to the date fixed for redemption. Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond or portion thereof called for redemption, the principal thereof, July 12, 2022 Item #17 Page 96 of 463

19 together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least twenty (20) days but no more than sixty (60) days prior to the redemption date, the Trustee shall mail a copy of such notice, by registered or certified mail, postage prepaid, to the respective Owners of Bonds selected for redemption at their addresses appearing on the Bond Register. The actual receipt by the Owner of any Bond of notice of such redemption shall not be a condition precedent thereto, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties.

The City has the right to rescind any notice of the redemption of Bonds under Section 301(b) by written notice to the Trustee on or prior to two (2) Business Days prior to the date fixed for redemption, in which case such redemption shall be cancelled and annulled and such cancellation shall not constitute an event of default. In addition, any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an event of default. The City and the Trustee have no liability to the Owners or any other party related to or arising from any such rescission or cancellation of redemption. The Trustee shall mail notice of such rescission and/or cancellation of redemption in the same manner as the original notice of redemption was sent under this Section.

Section 303. Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds.

Section 304. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 302, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption:
(a) the Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture, anything in this Indenture or in the Bonds to the contrary notwithstanding; (b) upon presentation and surrender thereof at the Corporate Trust Office of the Trustee, the redemption price of such Bonds shall be paid to the Owner thereof; (c) after the redemption date the Bonds or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or portions thereof shall cease to bear further interest; and (d) after the date fixed for redemption no Owner of any of the Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

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20 ARTICLE IV CREATION OF FUNDS AND ACCOUNTS; APPLICATION OF PROCEEDS AND ASSESSMENTS Section 401. Funds and Accounts. There are hereby created and established the following funds and accounts, which funds and accounts the City agrees and covenants to maintain with the Trustee so long as any Bonds are Outstanding hereunder:
(a) the City of Carlsbad Reassessment District No. 2022-1 Costs of Issuance Fund (the “Costs of Issuance Fund”); (b) the City of Carlsbad Reassessment District No. 2022-1 Reassessment Fund (the “Reassessment Fund”); (c) the City of Carlsbad Reassessment District No. 2022-1 Redemption Fund (the “Redemption Fund”), in which there shall be established and created a Principal Account, an Interest Account and a Prepayment Account; (d) the City of Carlsbad Reassessment District No. 2022-1 Reserve Fund (the “Reserve Fund”); and (e) the City of Carlsbad Reassessment District No. 2022-1 Rebate Fund (the “Rebate Fund”).

The City also covenants and agrees to establish with the Treasurer the City of Carlsbad Reassessment District No. 2022-1 Administrative Expense Fund (the “Administrative Expense Fund”).

Except for the Administrative Expense Fund and the Rebate Fund, all moneys in the funds and accounts established hereunder shall be held by the Trustee for the benefit of the Bondowners, shall be accounted for separately and apart from all other accounts, funds, money or other resources of the City held by the Trustee and shall be allocated, applied and disbursed solely to the uses and purposes hereinafter set forth in this Article.

The Trustee may establish such additional funds, accounts or subaccounts of the funds or accounts listed above as it deems necessary or convenient to further its duties pursuant to this Indenture or any Supplemental Indenture and shall establish any additional funds, accounts or subaccounts which the City directs it to establish.

Section 402. Application of Proceeds of the Sale of Bonds. Proceeds of the sale of the Bonds shall be applied as follows:
(a) $_____, an amount that is equal to the initial Reserve Requirement, shall be deposited by the Trustee into the Reserve Fund;
(b) $_____ shall be deposited by the Trustee in the Costs of Issuance Fund; and (c) $_____ shall be transferred by the Trustee to the Escrow Agent for deposit into the Escrow Fund.

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21 The Trustee may create additional accounts and subaccounts in any of the funds created under this Indenture as the Trustee may deem appropriate for the purpose of fulfilling its obligations hereunder.

Section 403. Costs of Issuance Fund. The Trustee shall deposit into the Costs of Issuance Fund the amount specified in Section 402(b) from the proceeds of the sale of the Bonds. The Trustee shall pay the costs of issuing the Bonds from the Costs of Issuance Fund as set forth in Written Request of the City from time to time. Each such written requisition shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts. At the Written Direction of the City or 180 days after the Closing Date, whichever is sooner, the Trustee shall transfer any remaining balance in the Costs of Issuance Fund to the Redemption Fund and the Trustee shall close the Costs of Issuance Fund.

Section 404. Reassessment Fund. Upon receipt of Reassessment Installments, the City shall transfer the Reassessment Installments to the Trustee for deposit to the Reassessment Fund. On or prior to the first day of March and September of each year commencing _____ 1, 20__, the Trustee shall transfer moneys on deposit in the Reassessment Fund in the amounts set forth in the following clauses, as specified and directed in writing by an Authorized Representative of the City, in the following order of priority, to:
(a) the Interest Account of the Redemption Fund, an amount sufficient to make the Interest Payment on the next succeeding Interest Payment Date for the Bonds; (b) the Principal Account of the Redemption Fund, the amount needed to make the payment of principal due on the following September 2 on the Outstanding Bonds, including any mandatory sinking fund payments; (c) the Reserve Fund, the amount needed to restore the Reserve Fund to the Reserve Requirement; and (d) the Rebate Fund, the amount, if any, as specified in a Written Direction of the City.

Any moneys remaining in the Reassessment Fund after the deposits described above shall be transferred by the Trustee to the Prepayment Account of the Redemption Fund. The City shall apply such amounts as a credit against each of the unpaid Reassessments in amounts equal to each parcel’s share or portion thereof, of the total amount of Reassessment.

Upon provision for payment or redemption of all Bonds, and after payment of any amounts due to the Trustee, all moneys remaining in the Reassessment Fund shall be paid to the City.

Section 405. Redemption Fund. The principal of and interest on the Bonds until maturity shall be paid by the Trustee from the Redemption Fund. At the maturity of the Bonds, after all principal and interest then due on any Outstanding Bonds has been paid or provided for, and after payment of any amounts due to the Trustee, any remaining moneys in the Redemption Fund shall be paid to the City. (a) On or prior to the first day of March or September of each year, commencing ______ 1, 202__, the Trustee shall transfer to the Interest Account of the Redemption Fund from the Reassessment Fund an amount such that the balance in the Interest Account one day prior to each July 12, 2022 Item #17 Page 99 of 463

22 Interest Payment Date shall be equal to the installment of interest due on the Bonds on said Interest Payment Date, as calculated by the City. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same becomes due. (b) On or prior to the first day of September of each year, commencing September 1, 202__, the Trustee shall transfer to the Principal Account of the Redemption Fund from the Reassessment Fund an amount such that the balance in the Principal Account one day prior to each September 2 shall be equal to the installment of principal (including mandatory sinking fund payments) due on the Bonds on said September 2. Moneys in the Principal Account shall be used to pay the principal (including mandatory sinking fund payments) of the Bonds as the same become due. (c) Any amounts remaining in the Redemption Fund, other than in the Prepayment Account, on September 15 of each year, after all principal (including mandatory sinking fund payments) and interest payments due on the prior September 2 have been paid, shall be transferred to the Reassessment Fund. (d) Moneys set aside in the Prepayment Account of the Redemption Fund shall be used solely for the purpose of redeeming Bonds and shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds.

Upon receiving any prepayment of a Reassessment, the City shall transfer such prepayment to the Trustee for deposit in the Prepayment Account. The amount so deposited, along with the moneys transferred to the Prepayment Account from the Reserve Fund pursuant to Section 406, shall be used to redeem Bonds pursuant to Section 301(a) on the next Interest Payment Date for which proper notice of redemption of Bonds can be given by the Trustee.

Money received by the Trustee from the City from funds other than the prepayment of Reassessments shall be deposited in the Prepayment Account and used to redeem Bonds as provided in Section 301(b).

If, after all of the Bonds have been redeemed and canceled or paid and canceled, there are moneys remaining in any account of the Redemption Fund, said moneys shall be transferred to the Reassessment Fund.

Section 406. Reserve Fund. The Trustee shall initially deposit into the Reserve Fund the amount specified in Section 402(a) from the proceeds of the sale of the Bonds. Thereafter, the Trustee shall transfer sufficient funds from the Reassessment Fund as provided in Section 404.

Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal (including mandatory sinking fund payments) of and interest on the Bonds when due in the event that the moneys in the Redemption Fund are insufficient therefor. The Trustee shall withdraw moneys as necessary from the Reserve Fund for deposit in the Redemption Fund on or before the first day of March and September of each year.

In the event that a Reassessment is prepaid in whole or in part, the Reassessment being prepaid shall be reduced by the amount transferred from the Reserve Fund to the Prepayment Account of the Redemption Fund pursuant to this paragraph. The amount transferred shall be that July 12, 2022 Item #17 Page 100 of 463

23 portion of the balance then in the Reserve Fund equal to the proportion that the principal amount of the Reassessment being prepaid bears to the total of all principal amounts of Reassessments remaining unpaid as of such date. The City shall notify, or shall cause the Trustee to be notified, in writing, of the amount to be transferred pursuant to the provisions of this paragraph. Notwithstanding any provision of this Indenture, the amount to be transferred from the Reserve Fund may be utilized for redemption of the Bonds pursuant to Section 301(a), provided that in no event will moneys be transferred to accomplish such redemption in an amount that causes the Reserve Fund to drop below the Reserve Requirement as determined immediately subsequent to such redemption.

In the event that moneys comprising the Reserve Fund and the moneys in the Redemption Fund and the Reassessment Fund are sufficient to retire all of the Outstanding Bonds plus accrued interest thereon, such moneys in the Reserve Fund and the Reassessment Fund shall at the Written Direction of the City be transferred to the Redemption Fund for the payment of the Bonds.

All amounts allocable to a particular parcel remaining in the Reserve Fund in the year in which the last Reassessment Installment with respect to such parcel becomes due and payable shall be credited toward said last Reassessment Installment due with respect to such parcel as set forth below:

On or about July 1 of each year, the City shall cause a preliminary calculation to be made of the amount then on deposit in the Reserve Fund anticipated to be transferred to the Redemption Fund on the immediately succeeding September 1 (in the then current calendar year), and the amount anticipated to be remaining on deposit in the Reserve Fund as of such September 1. With respect to such anticipated remainder, the City shall determine the portion thereof anticipated to be available for transfer to the Redemption Fund on September 1 in the next calendar year (as a result of the payment of the principal component of Reassessments in the next calendar year) and shall determine, with respect to those parcels which will be in their final year of Reassessment in the next calendar year, the portion of such amount anticipated to be available for transfer to the Redemption Fund allocable to each such parcel. Such allocation shall be made pro rata, and shall equal the proportion that the principal amount of the Reassessment payable with respect to a particular parcel bears to the total of all principal amounts of Reassessments to be paid in such calendar year. Those parcels which would otherwise be in their final year of Reassessment shall be afforded a credit against the Reassessment that would otherwise have been levied in such year (or a credit in an earlier year if reduction of the Reserve Fund results in funds being available for such purposes at an earlier date), such credit to be based on such parcel’s pro rata portion of the moneys on deposit in the Reserve Fund anticipated to be available for transfer to the Redemption Fund on September 1 of the next calendar year, and such credit may not be in excess of such parcel’s pro rata portion of the Reserve Fund (equal to the proportion that the principal amount of the Reassessment payable with respect to such parcel bears to the total of all principal amounts of Reassessments remaining unpaid as of such date). The City shall then direct the Trustee, pursuant to a Written Request of the City, to transfer from the Reserve Fund to the Redemption Fund the amount specified in such Written Request for such transfer, such transfer to occur on or about September 1 of the next succeeding calendar year (e.g., a report filed during July 2034 will specify the amount to be transferred on September 1, 2034 for payment of debt service of the Bonds on September 2, 2034).

Notwithstanding any provisions herein to the contrary, moneys in the Reserve Fund in excess of the Reserve Requirement shall be withdrawn from the Reserve Fund by the Trustee on each July 12, 2022 Item #17 Page 101 of 463

24 March 1 and September 1 at the Written Direction of the City and shall be transferred to the Reassessment Fund and applied as provided in Section 404.

Section 407. Rebate Fund.
(a) Establishment. The Trustee shall establish a separate fund designated the “Rebate Fund” when required in accordance herewith. Absent an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest with respect to the Bonds will not be adversely affected, the City shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the Bonds shall be governed by this Section and the Tax Certificate for the Bonds, unless and to the extent that the City delivers to the Trustee an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest on the Bonds will not be adversely affected if such requirements are not satisfied. Notwithstanding anything to the contrary herein or in the Tax Certificate, the Trustee: (i) shall be deemed conclusively to have complied with the provisions thereof if it follows all written requests of the City; (ii) shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate; (iii) may rely conclusively on the City’s calculations and determinations and certifications relating to rebate matters; and (iv) shall have no responsibility to independently make any calculations or determinations or to review the City’s calculations or determinations hereunder or thereunder. (i) Computation. Within 55 days of the end of each fifth Bond Year, the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “Rebatable Arbitrage”). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Transfer. Within 55 days of the end of each fifth Bond Year, upon the written request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any Reassessments legally available for such purpose (as specified by the City in the aforesaid written request), if and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein (as calculated by the City), upon written request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Bond Payment Fund. (iii) Payment to the Treasury. The Trustee shall pay, as directed by written request of the City, to the United States Treasury, out of amounts in the Rebate Fund:
(A) Not later than 60 days after the end of: (X) the fifth Bond July 12, 2022 Item #17 Page 102 of 463

25 Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and (B) Not later than 60 days after the payment of all of the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.

In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T (prepared by the City), or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in subsection (a) above being made may be withdrawn by the City and utilized in any manner by the City. (c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the Bonds.

Section 408. Investments. Moneys held in any of the funds and accounts under this Indenture shall be invested at the Written Direction of the City only in Authorized Investments which shall be deemed at all times to be a part of such funds and accounts. In the absence of any written direction stated above, the Trustee shall hold such moneys uninvested. The Trustee shall provide monthly statements or reports of the principal balances and investment earnings thereon in each fund and account maintained by the Trustee hereunder.

Authorized Investments shall be purchased at such prices as may be specified or described in a Written Direction of the City delivered to the Trustee. The Trustee may conclusively rely upon the written instructions of the Authorized Representative as to both the suitability and legality of directed investments and shall have no responsibility or liability with respect thereto. Directions as to the purchase of all Authorized Investments shall be subject to the limitations hereinafter in this Section set forth and such additional limitations or requirements consistent with the foregoing as may be established by the Treasurer.

Moneys in all funds and accounts except for the Reserve Fund shall be invested in Authorized Investments maturing, or with respect to which payments of principal and interest are scheduled or otherwise payable, not later than the date on which the Treasurer has estimated that such moneys will be required by the Trustee for the purposes specified in this Indenture. Moneys in the Reserve Fund shall be invested in Authorized Investments, not less than 50% of which must mature within one year of the date of purchase and all of which must mature within two years of the date of purchase; however, if an Authorized Investment may be redeemed or sold at par on the Business Day prior to each Interest Payment Date, all or a portion of the amount of the Reserve Fund may be invested therein. Authorized Investments purchased under a repurchase agreement may be July 12, 2022 Item #17 Page 103 of 463

26 deemed to mature on the date or dates on which the Trustee may deliver such Authorized Investments for repurchase under such agreement. Ratings of Authorized Investments referred to herein shall be determined at the time of purchase of such Authorized Investments and without regard to rating subcategories. The Trustee shall have no responsibility to monitor the ratings of Authorized Investments after the initial purchase of such Authorized Investments or any responsibility to validate the ratings of Authorized Investments prior to the initial purchase.

All interest, profits and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be retained therein, except as transfers from such funds or accounts are authorized in this Indenture. For investment purposes only, the Trustee may commingle the funds and accounts established hereunder, and administered by the Trustee, but shall account for each separately.

Notwithstanding anything to the contrary contained in this Section, an amount of interest received with respect to any Authorized Investment equal to the amount of accrued interest, if any, paid as part of the purchase price of such Authorized Investment shall be credited to the fund or account for the credit of which such Authorized Investment was acquired.

For the purpose of determining the amount in any fund or account other than the Reserve Fund, all Authorized Investments credited to such fund or account shall be valued at the lower of the cost or the market value thereof, exclusive of accrued interest. Amounts in the Reserve Fund shall be valued at their market value at least semi-annually on or before February 15 and August 15 (or more frequently as may be requested by the Treasurer, but in no event more often than monthly). In making any such valuation, the Trustee may utilize nationally recognized securities valuation or pricing services available to it through its accounting system. The Trustee may rely on such valuations and shall not be responsible for the accuracy thereof.

The Trustee, or any of its affiliates, may act as principal or agent in the making or disposing of any investment or as a sponsor, depository, manager for or advisor to any issuer of Authorized Investments. The Trustee shall sell, or present for redemption, any Authorized Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Authorized Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment, or any other investment made at the direction of the City or otherwise made in accordance with this Indenture.

In the absence of a Written Direction of the City received by Trustee at least two Business Days prior to the maturity of an Authorized Investment, the Trustee shall hold such moneys uninvested.

The Trustee shall be entitled to rely conclusively upon the Written Direction of the City directing investments in Authorized Investments as to the fact that each such investment is permitted by the laws of the State of California and is an Authorized Investment as required by this Indenture, and the Trustee shall not be required to make further investigation with respect thereto. With respect to any restrictions set forth in the list of Authorized Investments which embody legal conclusions (e.g., the existence, validity and perfection of security interests in collateral), the Trustee shall be entitled to rely conclusively on an opinion of counsel or upon a representation of the provider of such Authorized Investment obtained at the City’s expense.

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27 Except as specifically provided in this Indenture, the Trustee shall not be liable to pay interest on any moneys received by it, but shall be liable only to account to the City for earnings derived from funds that have been invested.

The City acknowledges that regulations of the Comptroller of the Currency grant the City the right to receive brokerage confirmation of security transactions to be effected by the Trustee hereunder as they occur. The City specifically waives the right to receive such notification to the extent permitted by applicable law and agrees that it will instead receive periodic cash transaction statements which include detail for the investment transactions effected by the Trustee hereunder; provided, however, that the City retains its right to receive brokerage confirmation on any investment transaction requested by the City.

ARTICLE V COVENANTS AND WARRANTY
Section 501. Warranty. The City shall preserve and protect the security of the Bonds and the rights of the Owners against all claims and demands of all persons.

Section 502. Covenants. So long as any of the Bonds are Outstanding and unpaid, the City makes the following covenants with the Owners under the provisions of the 1915 Act, the 1984 Act and this Indenture (to be performed by the City or its proper officers, agents or employees), which covenants are necessary, convenient and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the City to expend any funds or moneys other than the Reassessments:
(a) Punctual Payment; Covenant Against Encumbrances. The City covenants that it will receive all Reassessment Installments in trust and will, consistent with Section 404 hereof, deposit the Reassessment Installments with the Trustee, and the City shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Reassessment Installments, whether received by the City in trust or deposited with the Trustee, all as herein provided, shall nevertheless be disbursed, allocated and applied solely to the uses and purposes herein set forth, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the City.

The City covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and in accordance with this Indenture to the extent that Reassessments and interest earnings transferred to the Redemption Fund are available therefor. The City further covenants that the payments into the Redemption Fund and the Reserve Fund will be made, all in strict conformity with the terms of the Bonds and this Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplements and of the Bonds issued hereunder. If at any time the total balance in the Redemption Fund, the Reassessment Fund and the Reserve Fund is sufficient to redeem all Outstanding Bonds pursuant to Section 301, the Treasurer may direct the Trustee to effect such redemption on the earliest date on which all Outstanding Bonds may be redeemed.

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28 The City will not mortgage or otherwise encumber, pledge or place any charge upon any of the Reassessments, and will not issue any obligation or security, payable in whole or in part from the unpaid Reassessments other than the Bonds.
(b) Covenant to Levy. The City will cause the Reassessment Installments required to pay the principal of and interest on the Bonds when due to be placed on the tax bills of the owners of the parcels assessed and covenants to levy assessments, as permitted by law, to satisfy the Administrative Expense Requirement.
(c) Foreclosure Proceedings. The City will determine or cause to be determined, not later than August 15 of each Fiscal Year in which Bonds are Outstanding, whether or not any owners of the real property within the Reassessment District are delinquent in the payment of Reassessment Installments. If such delinquencies exist, the City shall order and caused to be commenced an action in the superior court to foreclose the lien of the Reassessment Installment(s) not paid when due, not later than the next following November 1, against any parcel that is subject to delinquencies of $10,000 or more and against any group of parcels under common ownership with aggregate delinquencies of $10,000 or more; provided that during any period in which the amount on deposit in the Reserve Fund is less than the Reserve Requirement, the City shall commence foreclosure proceedings against any parcel that is subject to any amount of delinquency. The City further covenants to diligently prosecute any such foreclosure action to judgment and foreclosure sale. Upon the redemption or sale of the real property responsible for such delinquencies, the City shall first deposit to the Reserve Fund the amount of any delinquency advanced therefrom and then disburse the remaining amount as set forth in the judgment of foreclosure or as required by law. (d) Books and Accounts. The City will keep proper books of record and accounts, separate from all other records and accounts of the City, in which complete and correct entries shall be made of all transactions made by the City hereunder. Such books of record and accounts shall at all times during business hours and upon reasonable prior notice be subject to the inspection of the City or of the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding or their representatives authorized in writing. (e) Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of the interest on the Bonds will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code that are necessary to preserve such exclusion from gross income with respect to the Bonds and specifically covenants, without limiting the generality of the foregoing, as follows:
(i) Private Activity. The City will take no action and refrain from taking any action, and the City will make no use of the proceeds of the Bonds or of any other moneys or property, which would cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code; (ii) Arbitrage. The City will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, which will cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code; (iii) Federal Guarantee. The City will make no use of the proceeds of the Bonds, July 12, 2022 Item #17 Page 106 of 463

29 and the City will not take or omit to take any action, that would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (iv) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code which is necessary to preserve the exclusion of interest on the Bonds pursuant to Section 103(a) of the Code; (v) Hedge Bonds. The City will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, that would cause the Bonds to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest on the Bonds for federal income tax purposes; and (vi) Miscellaneous. The City will not take any action or refrain from taking any action which is inconsistent with its expectations stated in the Tax Certificate executed by the City in connection with the issuance of the Bonds and will comply with the covenants and requirements that are stated therein and incorporated by reference herein.

The foregoing covenants are not applicable to, and nothing that is contained herein shall be deemed to prevent the City from issuing revenue bonds or executing and delivering contracts that are payable on a parity with the Bonds, the interest with respect to which has been determined to be subject to federal income taxation. (f) Collection of the Administrative Expense Requirements. The City covenants that it will collect annually an amount specified by the Treasurer to be the Administrative Expense Requirement to pay for Administrative Expenses.

Section 503. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement.

Notwithstanding any other provision of this Indenture, a failure of the City to comply with the Continuing Disclosure Agreement shall not be considered an event of default hereunder; provided that the Trustee may (and, at the written direction of any Participating Underwriter or the Beneficial Owners of at least 25% aggregate principal amount of the Outstanding Bonds, and upon being indemnified to its reasonable satisfaction, shall) or any Beneficial Owner of Bonds may, take such actions as may be necessary and appropriate to compel such performance.

ARTICLE VI AMENDMENTS TO AGREEMENT
Section 601. Amendments Not Requiring Bondowner Consent. The City may from time to time, and at any time, without notice to or consent of any of the Bondowners, adopt Supplements hereto for any of the following purposes:
(a) to cure any ambiguity or to correct or supplement any provisions herein, provided that such action shall not materially adversely affect the interests of the Beneficial Owners; July 12, 2022 Item #17 Page 107 of 463

30 (b) to add to the covenants and agreements of, and the limitations and the restrictions upon, the City contained in this Indenture, other covenants, agreements, limitations and restrictions to be observed by the City which are not contrary to or inconsistent with this Indenture as theretofore in effect; (c) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Beneficial Owners; or (d) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Beneficial Owners.

Section 602. Amendments Requiring Bondowner Consent. Exclusive of the Supplements described in Section 601, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have the right to consent to and approve such Supplements as shall be deemed necessary or desirable by the City for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting: (a) an extension of the maturity date of the principal, or the payment date of any principal or interest on, any Bond; (b) a reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon; (c) a preference or priority of any Bond or Bonds over any other Bond or Bonds; or (d) a reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such Supplement, without (in each case) the consent of the Owners of all the Bonds then Outstanding.

If at any time the City shall desire to enter into a Supplement, which pursuant to the terms of this Section shall require the consent of the Bondowners, the City shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplement. The Trustee shall, at the expense of the City, forward notice of the proposed Supplement from the City, by first class mail postage prepaid, to all Bondowners and their addresses as they appear in the Bond Register. Such notice as prepared by the City shall briefly set forth the nature of the proposed Supplement and shall state that a copy thereof is on file at the office of the Superintendent of Streets and the Corporate Trust Office of the Trustee for inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplement when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding, which instrument or instruments shall refer to the proposed Supplement described in such notice, and shall specifically consent to and approve the Supplement substantially in the form of the copy referred to in such notice as on file with the Superintendent of Streets and the Trustee, such proposed Supplement, when duly executed by the City, shall thereafter become a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds have consented to the adoption of any Supplement, Bonds which are owned by the City or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the City shall be disregarded and shall be treated as though July 12, 2022 Item #17 Page 108 of 463

31 they were not Outstanding for the purpose of any such determination. The City shall designate to the Trustee those Bonds disqualified by this Section.

Upon the execution and delivery by the City and the Trustee of any Supplement and the receipt of consent to any such Supplement from the Owners of not less than a majority in aggregate principal amount of Bonds Outstanding in instances where such consent is required pursuant to the provisions of this Section, this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the City, the Trustee and all Owners of Bonds then Outstanding shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments.

No Supplement pursuant to either Section 601 or this Section shall modify or amend any of the rights or obligations of the Trustee without its written consent thereto. The Trustee may request an opinion of counsel, at the expense of the City, that any such Supplement pursuant to Sections 601 or 602 complies with the provisions of and all conditions precedent under this Article and is authorized by the terms of this Indenture, and the Trustee may conclusively rely upon such opinion.

Section 603. Notation of Bonds; Delivery of Amended Bonds. After the effective date of any action taken as hereinabove provided, the City may determine that the Bonds may bear a notation, by endorsement in form approved by the City, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of such Owner’s Bond for the purpose at the Corporate Trust Office, a suitable notation as to such action shall be made on such Bonds. If the City shall so determine, new Bonds so modified as, in the opinion of the City, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the Corporate Trust Office without cost to each Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.

ARTICLE VII TRUSTEE
Section 701. Trustee. The Bank of New York Mellon Trust Company, N.A. is hereby appointed Trustee for the City for the purpose of receiving all money which the City is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.

The Trustee is hereby authorized to and shall mail by first-class mail, postage prepaid, or otherwise transfer by wire transfer, as applicable, interest payments to the Bondowners, select Bonds for redemption and maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds when the same are duly presented to it for payment at maturity or upon redemption, to provide for the registration of transfer and exchange of Bonds presented to it for such purposes, to provide for the cancellation of Bonds and to provide for the authentication of Bonds, and shall perform all other duties assigned to or imposed on it as expressly set forth in this Indenture. The Trustee shall keep accurate records of all funds administered by it and all Bonds paid and discharged by it.

The Trustee is hereby authorized to pay the Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds upon payment July 12, 2022 Item #17 Page 109 of 463

32 thereof or upon the surrender thereof by the City pursuant to Section 1001 hereof. The Trustee shall keep accurate records of all Bonds paid and discharged and canceled by it for six years or such longer period as required by applicable law or the policies of the Trustee.

The Trustee shall supply information regarding investments made under Section 408 at the Written Request of the City, including: (a) purchase date; (b) purchase price; (c) any accrued interest paid; (d) face amount; (e) coupon rate; (f) periodicity of interest payments; (g) disposition price; (h) any accrued interest received; and (i) disposition date. In the event that a Nonpurpose Investment is subject to a receipt of bids, the City shall maintain a record of all information establishing fair market value on the date that such investment became a Nonpurpose Investment. Such detailed record keeping is required for the calculation of the Rebate Requirement which shall be performed by the City and, in part, will require a determination of the difference between the actual aggregate earnings of all Nonpurpose Investments and the amount of such earnings assuming a rate of return equal to the Yield on the Bonds.

The City shall from time to time, subject to any agreement between the City and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee for all of its advances and expenditures, including, but not limited to, advances to and fees and expenses of independent accountants, counsel, agents, receivers and engineers or other experts employed by it in the exercise and performance of its powers and duties hereunder, and indemnify, defend and save the Trustee harmless against any and all losses, costs, expenses, damages and liabilities, including reasonable fees and expenses of its attorneys (including the allocated costs and disbursements of in-house counsel, to the extent that such services are not redundant with those provided by outside counsel), not arising from the Trustee’s own negligence or willful misconduct, which it may incur in the exercise and performance of its powers and duties hereunder, including the enforcement of any provision hereunder, which indemnity shall survive discharge of the Bonds, the termination of this Indenture and the resignation or removal of the Trustee. For the avoidance of doubt, the above-described indemnified amounts shall include without limitation any costs or expenses incurred in the enforcement of the obligations of the City under this paragraph.

Any bank, national banking association or trust company into which the Trustee may be merged or converted or with which it may be consolidated, or any bank, national banking association or trust company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, national banking association or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such bank, national banking association or trust company shall be eligible under Section 702, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 702. Removal of Trustee. The City may in the absence of an event of default at any time, in the exercise of its sole discretion, upon thirty (30) days’ prior written notice to the Trustee, remove the Trustee initially appointed, and any successor thereto, and may appoint a successor or successors thereto; provided that any such successor shall be a bank, national banking association or trust company doing business and having a corporate trust office in Los Angeles or San Francisco, California, having a combined capital (exclusive of borrowed capital and surplus) (or whose parent or holding company has a combined capital (exclusive of borrowed capital and surplus) of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state authority. If such bank, national banking association or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining July 12, 2022 Item #17 Page 110 of 463

33 authority above referred to, then for the purposes of this Section the combined capital and surplus shall be as set forth in its most recent report of condition so published. The City shall notify the Bondowners in writing of any such removal of the Trustee and appointment of a successor thereto.

Section 703. Resignation of Trustee. The Trustee may at any time resign by giving written notice to the City. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing; provided, however, that in the event that the City does not appoint a successor Trustee within thirty (30) days following receipt of such notice of resignation, the resigning Trustee may petition an appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the written acceptance of appointment by the successor Trustee, and notice to the Bondowners of the Trustee’s identity and address.

Section 704. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds shall be taken as statements, promises, covenants and agreements of the City, and the Trustee assumes no responsibility for the correctness of the same and makes no representations as to the validity or sufficiency of this Indenture or of the Bonds or the tax status of the interest thereon, and shall incur no responsibility in respect thereof other than in connection with its duties or obligations herein or in the Bonds or in the Certificate of Authentication assigned to or imposed upon the Trustee. The Trustee shall have no duties or obligations other than as specifically set forth herein and no implied duties, covenants or obligations shall be read into this Indenture against the Trustee. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds for value. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

The Trustee shall have no liability or obligation to the Bondowners with respect to the payment of debt service by the City or with respect to the observance or performance by the City of the other conditions, covenants and terms contained in this Indenture, or with respect to the investment of any moneys in any fund or account established, held or maintained by the City pursuant to this Indenture or otherwise; provided, however, that the Trustee shall provide the Bondowners with notice of event of default hereunder known to it and as provided herein. For all purposes hereunder, the Trustee shall not be deemed to have notice or knowledge of any event (including any default or event of default) unless a Responsible Officer of the Trustee has received written notice of such event which references this Indenture, the Bonds or the City. The delivery of reports and other documents and information to the Trustee hereunder is for informational purposes only and the Trustee’s receipt of such documents and information shall not constitute constructive notice of any information contained therein or determinable from information contained therein.

The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.

The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, bond or other paper or documents believed by it to be genuine and to have been signed or presented by the proper party or parties. Each Written Request of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to July 12, 2022 Item #17 Page 111 of 463

34 confirm the accuracy of such facts. The Trustee may consult with counsel, who may be counsel to the City, at the expense of the City, with regard to legal questions, and the opinion or advice of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered hereunder and in accordance therewith.

The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and such person’s title thereto satisfactorily established, if disputed.

Whenever in the administration of its duties under this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by a written certificate of the City, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable.

The Trustee shall have no duty or obligations whatsoever to enforce the collection of Reassessments or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. The Trustee shall have no duty or obligation to monitor the City’s compliance with the Act. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Owners pursuant to this Indenture unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Trustee shall be entitled to interest on all amounts advanced by it at the maximum rate permitted by law.

The Trustee shall have no responsibility, opinion or liability with respect to any information, statement or recital in any official statement or other disclosure material prepared or distributed with respect to the issuance of the Bonds.

All protections extended to the Trustee shall also extend to its officers, directors, employees and agents. The Trustee’s rights to indemnification hereunder and to payment of its fees and expenses shall survive its resignation or removal, the final payment or defeasance of the Bonds and termination of this Indenture.

The Trustee makes no covenant, representation or warranty concerning the current or future tax status of interest on the Bonds.

The Trustee may become an Owner with the same rights it would have if it were not Trustee, may acquire and dispose of other bonds or evidence of indebtedness of the City with the same rights it would have if it were not the Trustee and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to July 12, 2022 Item #17 Page 112 of 463

35 protect the rights of Owners, whether or not such committee shall represent the Owners of the majority in principal amount of the Bonds then Outstanding.

The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, shall not be responsible for the actions or omissions of such attorneys, agents or receivers if appointed by it with reasonable care and shall be entitled to advice of counsel concerning all matters of trust and its duties hereunder.

The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall only perform those duties specifically set forth herein and no implied duties, covenants or obligations whatsoever shall be read into this Indenture. In the event of and during the continuance of an event of default (as specified in Section 801), the Trustee shall exercise such care in performing its duties hereunder as a prudent person would exercise under the circumstances in the conduct of its own affairs. No action by the Trustee shall be construed or deemed to expand the limitations on the scope of the Trustee’s duties. The Trustee shall not be considered in breach of or in default in its obligations hereunder in the event of enforced delay in the performance of such obligations due to unforeseeable causes beyond its control and without its willful misconduct or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the Reassessment District, malicious mischief, condemnation and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.

In accepting the duties of the Trustee hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity, and all persons, including, without limitation, the Owners and the City, having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment, except as otherwise provided herein or where the Trustee has breached its standard of care as described in this Section. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Bonds.

The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, which such majority of the Owners may give, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or in the exercise of any right hereunder. In the event of conflicting instructions hereunder, the Trustee shall have the right to decide the appropriate course of action and be protected in so doing.

The Trustee shall have no responsibility or liability with respect to any information, statement or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed in any respect relating to the Bonds.

The Trustee shall not to be deemed to have knowledge of any event of default hereunder unless it has actual knowledge thereof at its Principal Office.

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36 The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder (collectively, “Electronic Means”); provided, however, that the City shall provide to the Trustee an incumbency certificate listing Authorized Representatives of the City with the authority to provide such Instructions and containing specimen signatures of such Authorized Representatives of the City, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Representative of the City listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Representative of the City. The City shall be responsible for ensuring that only authorized persons transmit such Instructions to the Trustee and the City is solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt thereof. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions, notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.

The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture unless such Owners shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby.

The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.

In no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage (including but not limited to lost profits) even if the Trustee has been advised of the likelihood of such damages and regardless of the form of such action. The Trustee shall not be liable for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental July 12, 2022 Item #17 Page 114 of 463

37 regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

Section 705. Interested Transactions. The Trustee and its officers and employees may acquire and hold Bonds with the same effect as if it were not Trustee. The Trustee, either as principal or agent, may engage in or be interested in any financial or other transaction with the City.

Section 706. Agents. The Trustee may execute any of its trusts or powers or perform its duties through attorneys, agents or receivers and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent or receiver selected by it with reasonable care.

ARTICLE VIII EVENTS OF DEFAULT; REMEDIES
Section 801. Event of Default. Any one or more of the following events shall constitute an “event of default” as such term is used in and for purposes of this Indenture:
(a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or from mandatory redemption;
(b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (c) Default by the City in the observance of any of the other agreements, conditions or covenants on its part in this Indenture or in the Bonds, and the continuation of such default for a period of thirty (30) days after the City shall have been given notice in writing of such default by the Trustee or any Owner, provided that if within thirty (30) days the City has commenced curing the default and diligently pursues elimination thereof, such period shall be extended to permit such default to be eliminated.

The Trustee shall provide prompt notice to the Owners upon receipt of written notice or the actual knowledge of a Responsible Officer of the occurrence of an event of default.

Section 802. Remedies. Following the occurrence and during the continuance of an event of default, the Trustee may pursue any available remedy at law or in equity to enforce the provisions of this Indenture and to enforce any rights of the Trustee hereunder, including:
(a) by mandamus or other suit or proceeding at law or in equity to enforce the rights of the Owners and/or of the Trustee against the City and any of the officers and employees of the City, and to compel the City or any such officers or employees to perform and carry out their duties under the Act and their agreements with the Owners and the Trustee as provided in this Indenture; (b) by suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners and/or of the Trustee; or (c) by a suit in equity to require the City and its members, officers and employees to account as the trustee of an express trust.

July 12, 2022 Item #17 Page 115 of 463

38 If an event of default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners.

No remedy herein conferred upon or reserved to the Trustee or to the Owners 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 Act or any other law.

Section 803. Application of Funds Upon an Event of Default.

If an event of default shall occur and be continuing, the Trustee shall apply all funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (except as otherwise provided in this Indenture) as follows and in the following order:
(1) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds, including the costs and expenses of the Trustee in declaring such event of default, and payment of reasonable fees and expenses of the Trustee (including reasonable fees and disbursements of its counsel and other agents) incurred in and about the performance of its powers and duties under this Indenture, and to the payment of other amounts owing to the Trustee under or pursuant to the terms of this Indenture; (2) To the payment to the persons entitled thereto of all installments of interest then due with respect to any Bond in the order of the maturity of such installment, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and
(3) To the payment to the persons entitled thereto of the unpaid principal with respect to any Bond which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue principal and overdue interest at a rate equal to the rate paid with respect to the Bonds and, if the amount available shall not be sufficient to pay in full all the amounts due with respect to the Bonds on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference.

ARTICLE IX

DEFEASANCE
Section 901. Defeasance. If the City shall pay or cause to be paid, or there shall otherwise be paid, to the Owners of any Outstanding Bonds the interest due thereon and the principal thereof, at the times and in the manner stipulated therein and in this Indenture, then the Owners of such Bonds shall cease to be entitled to the pledge of Reassessments and other amounts hereunder, and all covenants, agreements and other obligations of the City to the Owners of such Bonds under this Indenture shall thereupon cease, terminate and become void and be discharged and satisfied except July 12, 2022 Item #17 Page 116 of 463

39 for the City’s covenant under Section 502(e) hereof. In such event, the Trustee shall execute and deliver to the City all such instruments as may be necessary to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the City after payment of any amounts due the Trustee hereunder all money or securities held by it pursuant to this Indenture which are not required for the payment of the interest due on, and the principal of, such Bonds.

Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest with respect to such Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Reassessment Fund, the Reserve Fund and the Redemption Fund, is fully sufficient to pay the principal of, premium and interest on such Bond as and when the same shall become due and payable; or (c) by depositing with the Trustee, in trust, Federal Securities in such amount as an Independent Financial Consultant or independent certified public accountant shall determine (as confirmed in writing to the Trustee) will, together with the interest to accrue thereon and moneys then on deposit in the Reassessment Fund, the Reserve Fund and the Redemption Fund which is available to pay such Bond, together with the interest to accrue thereon without further investment, be fully sufficient to pay and discharge the principal of, premium, if any, and interest on such Bond as and when the same shall become due and payable; then, notwithstanding that such Bond shall not have been surrendered for payment, all obligations of the City under this Indenture with respect to such Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owner of any Bond not so surrendered and paid, all sums due thereon from funds provided to it by the City and except for the City’s covenant under Section 502(e) hereof. Any funds held by the Trustee at the time of payment or defeasance of all Outstanding Bonds, which are not required for the purpose above mentioned or for payment of amounts due to the Trustee hereunder shall be paid over to the City.

ARTICLE X MISCELLANEOUS
Section 1001. Cancellation of Bonds. All Bonds surrendered to the Trustee for payment upon maturity or for redemption shall upon payment therefor, and any Bond purchased by the City as authorized herein shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds as provided by law and furnish to the City a certificate of destruction.

Section 1002. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor, may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the commercial bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:

July 12, 2022 Item #17 Page 117 of 463

40 (a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any commercial bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of such officer’s or member’s authority. (b) As to any Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute Owner thereof for all purposes, and payment of or on account of the principal of any such Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond and the interest thereon to the extent of the sum or sums to be paid. The Trustee shall not be affected by any notice to the contrary. Nothing contained in this Indenture shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept other evidence of the matters herein stated which the Trustee may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Trustee in pursuance of such request or consent.

Section 1003. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds which remains unclaimed for one year after the Bonds become due and payable, if such money was held by the Trustee at such date, or for one year after the date of deposit of such money if deposited with the Trustee after said date when such Bonds become due and payable, shall be repaid (without liability for interest) by the Trustee to the City, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the City for the payment of such Bonds; provided, however, that, before being required to make any such payment to the City, the Trustee shall, at the written request and the expense of the City, cause to be mailed to the registered Owners of such Bonds, at their addresses as they appear on the Bond Register, a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the City.

Section 1004. Provisions Constitute Contract; Successors. The provisions of this Indenture shall constitute a contract between the City and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California. The City and the Trustee acknowledge and agree that the Bondholders are third party beneficiaries of this Indenture and shall be entitled to enforce the provisions of this Indenture against the City and the Trustee in the same manner as if the Bondholders were parties hereto (subject to the terms of the following paragraph).

Notwithstanding the immediately preceding paragraph, no Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless: (a) such Owner shall have previously given to the City and the Trustee written notice of the occurrence of an event of default; (b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers granted hereunder and to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) July 12, 2022 Item #17 Page 118 of 463

41 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken by the Trustee at the direction of the Bondowners, and the Trustee shall prevail, the Trustee and such Bondowners shall be entitled to receive from the Reassessment District reimbursement for reasonable costs, expenses, outlays and attorneys’ fees (including the allocated costs and disbursements of in-house counsel, to the extent that such services are not redundant with those provided by outside counsel), and should said suit, action or proceeding be abandoned, or be determined adversely to the Trustee, then the City, the Trustee and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.

After the issuance and delivery of the Bonds this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner.

This Indenture shall be binding upon the City and the Trustee and shall inure to the benefit of the City, the Trustee, the Bondholders and their respective successors and assigns.

Section 1005. Further Assurances; Incontestability. The City 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 Indenture, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.

After the sale and delivery of the Bonds by the City, the Bonds shall be incontestable by the City.

Section 1006. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture and the Bonds shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California.

Section 1007. General Authorization. Authorized Representatives of the City are hereby respectively authorized to do and perform from time to time any and all acts and things consistent with this Indenture necessary or appropriate to carry the same into effect.

Section 1008. Liberal Construction. This Indenture shall be liberally construed to the end that its purpose may be effected. No error, irregularity, informality and no neglect or omission herein or in any proceeding had pursuant hereto which does not directly affect the jurisdiction of the City Council shall void or invalidate this Indenture or such proceeding or any part thereof, or any act or determination made pursuant thereto.

Section 1009. Notice. Any notices required to be given to the City with respect to the Bonds for this Indenture shall be mailed, first class, registered or certified mail, postage prepaid, or July 12, 2022 Item #17 Page 119 of 463

42 personally delivered to the Finance Director of the City at 1635 Faraday Avenue, Carlsbad, California 92008-7314; and all notices to the Trustee shall be mailed, first class, registered or certified mail, postage prepaid, or personally delivered to the Trustee at 333 South Hope Street, Suite 2525, Los Angeles, California 90071 Attn: Corporate Trust Department.

Section 1010. Action on Next Business Day. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, is not a Business Day, such payment, with no interest accruing for the period from and after such nominal date, may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided therefor in this Indenture.

Section 1011. Applicable Law. This Indenture shall be governed by and enforced in accordance with the laws of State of California applicable to contracts made and performed in the State of California.

Section 1012. OFAC.
(a) The City covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government (including the Office of Foreign Assets Control of the United States Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”). (b) The City covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Indenture: (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions; (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (iii) in any other manner that will result in a violation of Sanctions by any person.

Section 1013. Execution in Counterparts; Electronic Delivery of Signatures.

This Indenture may be executed in several counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Signatures appearing on any counterpart of this Indenture may be delivered by facsimile transmission or by electronic delivery in PDF format, which transmission or delivery shall be deemed delivery of an originally executed document.

July 12, 2022 Item #17 Page 120 of 463

S-1 NG-U9ZQVMF2/4865-5251-7921v4/022062-0036
IN WITNESS WHEREOF, the City and the Trustee have executed this Indenture, effective the date first written above.

CITY OF CARLSBAD
By: City Manager

ATTEST:

City Clerk Services Manager
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
By: Authorized Officer

July 12, 2022 Item #17 Page 121 of 463

A-1 NG-U9ZQVMF2/4865-5251-7921v4/022062-0036

EXHIBIT A
FORM OF BOND R-__ $__________

UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF SAN DIEGO CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BOND INTEREST RATE MATURITY DATE DATED DATE CUSIP ___% September 2, ____ August __, 2022 REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT:

Under and by virtue of the Refunding Act of 1984 for 1915 Improvement Act Bonds, (Division 11.5, commencing with Section 9500, of the California Streets and Highways Code) (the “Act”) and Resolution No. 2022-___ (the “Resolution of Issuance”) adopted by the City Council of the City of Carlsbad (the “City”) on the July 12, 2022, the City will, out of the redemption fund for the payment of the bonds issued upon the unpaid portion of reassessments more fully described in proceedings taken pursuant to Resolution No. 2022-___ (the “Resolution of Intention”) adopted by the City Council of the City on July 12, 2022, pay to the registered owner stated above, on the maturity date stated above, the principal sum stated above in lawful money of the United States of America, all as provided for in an Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”), and the City. In like manner, the City will pay interest on this bond from the Interest Payment Date (as defined below) next preceding the date on which this bond is authenticated, unless: (i) its date of authentication is after the fifteenth day of the month preceding an Interest Payment Date (the “Record Date”) and on or before the immediately succeeding Interest Payment Date, in which event the bond shall bear interest from such Interest Payment Date; or (ii) its date of authentication is before the close of business on the first Record Date, in which event the bond shall bear interest from its date; provided, however, that if at the time of authentication of this bond, interest is in default, interest on this bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment. Such interest shall be payable on March 2 and September 2 of each year, commencing ____ 2, 202__ (each, an “Interest Payment Date”).

Both the principal hereof and redemption premium hereon, if any, are payable at the Corporate Trust Office of the Trustee, and the interest hereon is payable by check mailed by first class mail, postage prepaid, on the Interest Payment Date to the owner hereof at the owner’s address as it appears on the records of the Trustee or at such address as may have been filed with the Trustee for that purpose, at the close of business on the applicable Record Date; provided, however, that at July 12, 2022 Item #17 Page 122 of 463

A-2
the written request of an owner of at least $1,000,000 in aggregate principal amount of bonds, filed with the Trustee prior to any Record Date, interest on such bonds will be paid to such owner on such succeeding Interest Payment Date by wire transfer of immediately available funds to an account within the United States of America designated in such written request.

This bond will continue to bear interest after maturity at the rate above stated provided that it is presented at maturity and payment hereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay the same. If it is not presented at maturity, interest hereon will run only until maturity.

This bond is issued by the City under the Act and the Indenture for the purpose of providing means for refinancing the improvements described in the aforesaid proceedings; and it is secured by the moneys in the redemption fund and by the unpaid portion of certain reassessments made for the payment of those improvements, and, including principal and interest, is payable exclusively out of said fund.

This bond, or any portion of the principal hereof, may be redeemed and paid in advance of maturity on any Interest Payment Date from and to the extent of the proceeds of prepayment of reassessments in the manner provided in Part 11.1 of the Act and as more particularly set forth in the Indenture at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Prices
September 2, 20__ through March 2, 20__ 103%
September 2, 20__ through March 2, 20__ 102 September 2, 20__ through March 2, 20__ 101 September 2, 20__ and thereafter 100 This bond is also subject to optional redemption prior to its stated maturity date on September 2, 20__ or any Interest Payment Date thereafter, as selected by the City pursuant to a written notice delivered to the Trustee, from any source of funds other than prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Prices
September 2, 2029 and March 2, 2030 103% September 2, 2030 and March 2, 2031 102 September 2, 2031 and March 2, 2032 101 September 2, 2032 and thereafter 100 The Bonds maturing on September 2, 20__ shall be subject to mandatory sinking fund redemption prior to maturity, in part, on September 2, 20__, and on each September 2 thereafter, from sinking fund payments, at a redemption price equal to the principal amount of Bonds to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

July 12, 2022 Item #17 Page 123 of 463

A-3
20__ Term Bond
Redemption Date
(September 2)
Redemption
Amount
20__ $ 20__ 20__ (maturity)

This bond is transferable by the registered owner hereof, in person or by the owner’s attorney duly authorized in writing, at the Corporate Trust Office, subject to the terms and conditions provided in the Indenture, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer a new registered bond for the same aggregate principal amount, will be issued to the transferee in exchange herefor.

The City and the Trustee may treat the owner hereof, as shown on the bond register kept by the Trustee, as the absolute owner for all purposes; and the City and the Trustee shall not be affected by any notice to the contrary.

The Indenture is incorporated by reference herein and by acceptance hereof the registered owner assents to said terms and conditions.

This bond is subject to refunding pursuant to the procedures of the Refunding Act of 1984 for 1915 Improvement Act Bonds.

This bond shall not be entitled to any benefit under the Act or the Indenture or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been manually signed by the Trustee.

THE CITY HAS DECLARED AND DETERMINED IN THE RESOLUTION OF INTENTION THAT, PURSUANT TO SECTION 8769 OF THE IMPROVEMENT BOND ACT OF 1915, IT WILL NOT OBLIGATE ITSELF TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO CURE ANY DEFICIENCY WHICH MAY OCCUR IN THE REDEMPTION FUND.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OF CARLSBAD, THE COUNTY OF SAN DIEGO, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE SOURCES DESCRIBED IN THE INDENTURE.

July 12, 2022 Item #17 Page 124 of 463

A-4
IN WITNESS WHEREOF, the City of Carlsbad has caused this bond to be signed in manual or facsimile form by the Treasurer of said City, attested to by the City Clerk of the City Council of said City, all as of August __, 2022.

CITY OF CARLSBAD
Mayor

ATTEST:

City Clerk Services Manager
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the bonds described in the within-mentioned Indenture, which bond has been authenticated and registered on August __, 2022.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
By: Authorized Signatory

July 12, 2022 Item #17 Page 125 of 463

A-5
[FORM OF LEGAL OPINION]
The attached is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

City Clerk Services Manager
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto TAX I.D. #: the within bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the register of the Trustee with full power of substitution in the premises.

Date:

SIGNATURE GUARANTEED:

Signature(s) must be guaranteed by an eligible guarantor institution NOTE: The signature(s) to 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 and the signature(s) must be guaranteed by an eligible guarantor.

July 12, 2022 Item #17 Page 126 of 463

Exhibit 8
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. PRELIMINARY OFFICIAL STATEMENT DATED JULY __, 2022 NEW ISSUE – BOOK ENTRY ONLY See the caption “RATING” In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.

See the caption “CONCLUDING INFORMATION—Tax Matters.”
$_____* CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS Dated: Date of Delivery Due: September 2, as shown inside cover The City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds (the “Bonds”) are limited obligations of the City of Carlsbad (the “City”) secured by special reassessments to be levied on real property located within City of Carlsbad Reassessment District No. 2022-1 (the “Reassessment District”). The Bonds are being issued: (i) to defease and redeem the City’s Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the “Prior Bonds”); (ii) to fund a Reserve Fund for the Bonds in an amount equal to 50% of the Reserve Requirement for the Bonds, with the remaining Reserve Requirement satisfied by the deposit of a municipal bond reserve insurance policy issued by __ into the Reserve Fund; and (iii) to pay costs of issuance of the Bonds. The proceeds of the Prior Bonds were used to refinance the acquisition, design, and construction of certain public improvements within the Reassessment District.

The Bonds are being issued pursuant to provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the Streets and Highways Code of California) (the “Act”) and an Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Bonds are being issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of ownership interests in the Bonds may be made in $5,000 integral multiples in book-entry form only. Purchasers of the Bonds will not receive certificates representing their beneficial ownership of the Bonds but will receive credit balances on the books of their respective nominees. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described in this Official Statement. Interest on the Bonds will be payable semiannually on March 2 and September 2 of each year, commencing March 2, 2023. Principal of and interest on the Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, who are to remit such payments to the beneficial owners of the Bonds. See the caption “THE BONDS—General” and Appendix D.

The Bonds are special obligations of the City payable solely from revenues derived from installments of Reassessments (as such term is defined in this Official Statement) to be levied on and collected from the owners of parcels within the Reassessment District. Under the provisions of the Act, installments of principal and interest sufficient to meet annual Bond debt service will be levied by the City and billed by the County of San Diego (the “County”) to owners of property within the Reassessment District against which there are unpaid Reassessments. Upon receipt by the City from the County, these annual Reassessment installments are to be paid into the Redemption Fund to be held by the Trustee and used to pay debt service on the Bonds as it becomes due.

Unpaid Reassessments constitute fixed liens on the lots and parcels assessed within the Reassessment District and do not constitute a personal indebtedness of the respective owners of such lots and parcels. Accordingly, in the event of a delinquency, proceedings may be had only against the real property securing the delinquent Reassessment installment. Thus, the value of land within the Reassessment District is a critical factor in determining the investment quality of the Bonds. See the caption “THE REASSESSMENT DISTRICT—Value-to-Reassessment Lien Ratios” and “BONDOWNERS’ RISKS—Land Values”.

The Trustee will establish a Reserve Fund comprised of Bond proceeds in the amount of the Reserve Requirement (as such term is defined in this Official Statement) to provide funds for payment of principal and interest on the Bonds in the event of any delinquent Reassessment installments. The City’s obligation to advance funds to the Redemption Fund as a result of delinquent installments is limited to the balance in the Reserve Fund. The City has covenanted to initiate judicial foreclosure in the event of a delinquency. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings.” The Bonds are subject to optional redemption, mandatory sinking fund redemption and extraordinary mandatory redemption from prepayments of Reassessments. See the caption “THE BONDS—Redemption of Bonds”.

The City has applied to certain municipal bond insurers for a municipal bond insurance policy (the “Policy”) with respect to all or a portion of the Bonds. If the Policy is obtained, it would guarantee the scheduled payment of the principal of and interest on all or a portion of the Bonds. The City will determine whether to purchase the Policy on the sale date of the Bonds. If the City determines to purchase the Policy, the terms of the Policy and information regarding the municipal bond insurer will be included in the final Official Statement. No assurance can be given as to whether the City will purchase the Policy for any portion of the Bonds. See the caption “INTRODUCTION—Application for Bond Insurance.” NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE SPECIAL OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE SOURCES DESCRIBED IN THE INDENTURE.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING, WITHOUT LIMITATION, THE CAPTION “BONDOWNERS’ RISKS,” TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.

The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approval of the valid, legal and binding nature of the Bonds by Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, and certain other conditions. Certain matters will be passed upon for the City by the City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Disclosure Counsel, for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, and for the Trustee by its counsel. It is anticipated that the Bonds will be available for delivery through the facilities of The Depository Trust Company on or about August 2, 2022.

* Preliminary, subject to change.

July 12, 2022 Item #17 Page 127 of 463

Dated: July __, 2022
July 12, 2022 Item #17 Page 128 of 463

$_____* CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS MATURITY SCHEDULE BASE CUSIP† _____
Maturity Date (September 2) Principal Amount Interest Rate Yield Price CUSIP† $ % %
$_____ _____% Term Bond due September 2, 20__ Yield: _____%, Price: _____ CUSIP ___

* Preliminary, subject to change. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

July 12, 2022 Item #17 Page 129 of 463

CITY OF CARLSBAD

ELECTED OFFICIALS
Matt Hall, Mayor Keith Blackburn, Mayor Pro Tem, Councilmember, District 2 Peder Norby, Councilmember, District 1 Priya Bhat-Patel, Councilmember, District 3 Teresa Acosta, Councilmember, District 4 Craig Lindholm, City Treasurer _____________________

CITY OFFICIALS
Scott Chadwick, City Manager Geoff Patnoe, Assistant City Manager Laura Rocha, Deputy City Manager, Administrative Services Cindie McMahon, Assistant City Attorney Tom Frank, Transportation Director/City Engineer Zach Korach, Finance Director _____________

BOND COUNSEL AND DISCLOSURE COUNSEL
Stradling Yocca Carlson & Rauth, a Professional Corporation Newport Beach, California _____________

TRUSTEE
The Bank of New York Mellon Trust Company, N.A. Los Angeles, California _________________

REASSESSMENT ENGINEER
NBS Temecula, California _________________

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc. Irvine, California _________________

VERIFICATION AGENT
Causey Demgen & Moore P.C. Denver, Colorado
July 12, 2022 Item #17 Page 130 of 463

No dealer, broker, salesperson or other person has been authorized by the City, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment hereto, is intended to be filed with and made publicly available through the Electronic Municipal Market Access system of the Municipal Securities Rulemaking Board.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

The information set forth herein which has been obtained by the City from third party sources is believed to be reliable but is not guaranteed as to accuracy or completeness by the City or the Trustee. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City, the landowners within the Reassessment District or any other parties described herein since the date hereof. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith.

A wide variety of other information, including financial information, concerning the City, is available from publications and websites of the City and others. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded. No such information is a part of or incorporated into this Official Statement.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption “THE REASSESSMENT DISTRICT.” The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as set forth in the Continuing Disclosure Agreement, a form of which is attached as Appendix E, the City does not plan to issue any updates or revisions to the forward-looking statements set forth in this Official Statement.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

The City maintains a website and certain social media accounts; however, information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.

July 12, 2022 Item #17 Page 131 of 463

TABLE OF CONTENTS
i
INTRODUCTION ........................................................ 1 General ...................................................................... 1 Forward Looking Statements .................................... 1 The Reassessment District ........................................ 2 Property Values and Value-to-Reassessment Lien Ratios .................................................................... 3 No Additional Bonds ................................................ 3 Application for Bond Insurance ................................ 3 Tax Matters ............................................................... 4 Professionals Involved in the Offering ..................... 4 Continuing Disclosure .............................................. 4 Bondowners’ Risks ................................................... 4 Other Information ..................................................... 4 REFUNDING PLAN .................................................... 5 ESTIMATED SOURCES AND USES OF FUNDS .... 6 THE BONDS ................................................................ 6 General ...................................................................... 6 Redemption of Bonds ............................................... 7 Notice of Redemption ............................................... 8 Registration, Exchange or Transfer .......................... 8 Annual Debt Service ............................................... 10 SECURITY FOR THE BONDS ................................. 10 Limited Obligation .................................................. 10 Reassessment Liens and Installments ..................... 10 Limited Obligation Upon Delinquency ................... 11 Reserve Fund .......................................................... 11 Property Tax Collection Procedures ....................... 13 Covenant to Foreclose and Court Foreclosure Proceedings ......................................................... 14 Priority of Reassessment Lien................................. 15 No Additional Bonds .............................................. 15 Maximum Annual Reassessment for Administrative Costs and Expenses .................... 15 THE REASSESSMENT DISTRICT .......................... 15 Description of the Reassessment District ................ 15 Direct and Overlapping Indebtedness ..................... 17 Value-to-Reassessment Lien Ratios ........................ 18 Delinquencies in the Reassessment District ............ 21 Largest Property Taxpayers .................................... 22 Tax Rates ................................................................ 23 BONDOWNERS’ RISKS .......................................... 23 General .................................................................... 23 Concentration of Ownership ................................... 23 Delinquency Resulting in Ultimate or Temporary Loss on Bonds ..................................................... 24 Non-Cash Payments of Reassessments ................... 24 Limited City Obligation Upon Delinquency ........... 24 Potential Early Redemption of Bonds from Prepayments ........................................................ 25 Bankruptcy and Foreclosure ................................... 25 FDIC/Federal Government Interests in Parcels ...... 26 Natural Disasters ..................................................... 27 Hazardous Substances ............................................. 28 Loss of Tax Exemption ........................................... 29 Tax Cuts and Jobs Act ............................................ 29 Limited Secondary Market ..................................... 29 Future Debt Issuance ............................................... 29 Ballot Initiatives ...................................................... 30 Constitutional Amendment – Articles XIIIC and XIIID.................................................................... 30 Risks of Real Estate Secured Investments Generally .............................................................. 31 Failure to Develop Properties .................................. 31 Endangered Species ................................................. 32 Billing of Taxes ....................................................... 32 Disclosures to Future Purchasers ............................. 33 Land Values ............................................................. 33 Cybersecurity ........................................................... 34 COVID-19 Outbreak ............................................... 34 CONCLUDING INFORMATION .............................. 35 Continuing Disclosure ............................................. 35 Legal Opinion .......................................................... 35 Tax Matters .............................................................. 36 Litigation ................................................................. 37 Financial Interests .................................................... 37 Rating ...................................................................... 38 Municipal Advisor ................................................... 38 Underwriting ............................................................ 38 Miscellaneous .......................................................... 39 APPENDIX A REASSESSMENT DIAGRAM ... A-1 APPENDIX B SUMMARY OF THE INDENTURE ............................... B-1 APPENDIX C OPINION OF BOND COUNSEL .................................... C-1 APPENDIX D BOOK-ENTRY ONLY SYSTEM ..................................... D-1 APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT .... E-1 APPENDIX F INFORMATION CONCERNING THE CITY OF CARLSBAD AND COUNTY OF SAN DIEGO .......................... F-1 July 12, 2022 Item #17 Page 132 of 463

1 $_____*
CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS

INTRODUCTION
General
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the appendices. A full review should be made of the entire Official Statement. The sale and delivery of the Bonds (as such term is defined below) to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined have the meanings which are set forth in Appendix B.

The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices (collectively, the “Official Statement”), is to provide certain information concerning the issuance by the City of Carlsbad (the “City”) of the $_____* City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds (the “Bonds”). The proceeds of the Bonds, together with certain existing funds of the City, will be used: (i) to defease and redeem all of the City’s Reassessment District No. 2012-1 Limited Obligation Refunding Bonds (the “Prior Bonds”), which were originally issued on January 30, 2013 in the aggregate principal amount of $31,300,000 and which are currently outstanding in the aggregate principal amount of $21,780,000; (ii) to fund a Reserve Fund for the Bonds in an amount equal to 50% of the Reserve Requirement (as such term is defined under the caption “SECURITY FOR THE BONDS—Reserve Fund”) for the Bonds, with the remaining Reserve Requirement satisfied by the deposit of a municipal bond reserve insurance policy (the “Reserve Policy”) issued by __ into the Reserve Fund; and (iii) to pay costs of issuance of the Bonds. See the captions “REFUNDING PLAN,” “SECURITY FOR THE BONDS—Reserve Fund” and “ESTIMATED SOURCES AND USES OF FUNDS.” The Bonds are to be issued under the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division 11.5 of the Streets and Highways Code of California (the “Act”), and pursuant to an Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Bonds are secured under the Indenture by a pledge of and lien upon: (a) the special reassessments levied in City of Carlsbad Reassessment District No. 2022-1 (the “Reassessment District”) in accordance with the Act and the Resolution of Confirming Reassessments, and the net proceeds derived from any foreclosure proceedings and interest and penalties thereon, but exclusive of any assessments or reassessments levied to pay Administrative Expenses (collectively, the “Reassessments”); and (b) all moneys on deposit in the Redemption Fund and the Reserve Fund established pursuant to the Indenture. See the caption “SECURITY FOR THE BONDS.” Forward Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the caption “THE REASSESSMENT DISTRICT.”
* Preliminary, subject to change.

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2 THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

The Reassessment District
The Reassessment District includes all of the property within Assessment District No. 2012-1 of the City, which encompasses all of Assessment District No. 2002-01 (Poinsettia Lane East) (“Assessment District No. 2002-01”) and Benefit Area No. 1 (Calavera Hills II) of Assessment District No. 2003-01 (College Boulevard and Cannon Road East) (“Benefit Area No. 1 of Assessment District No. 2003-01” and together with Assessment District No. 2002-01, the “Prior Assessment Districts”, each a “Prior Assessment District”), with the exception of 3 parcels for which all assessments were prepaid. The Reassessment District includes 2,143 parcels, comprised of: (i) 1,505 parcels for single family detached homes; (ii) 501 parcels for multi-family units; (iii) 99 commercial parcels; (iv) 29 industrial parcels; (v) 4 other developed parcels; and (vi) 5 undeveloped parcels.

Assessment District No. 2002-01 is located in the east central portion of the City, southeast of the McClellan-Palomar Airport. Assessment District No. 2002-01 encompasses two master plans: the Bressi Ranch Master Plan and the La Costa Greens portion of the Villages of La Costa Master Plan. The Bressi Ranch Master Plan was intended to create a pedestrian-oriented community consisting of 5 planning areas containing office, industrial and warehouse uses, seven planning areas of single family detached homes, one hundred units of affordable multifamily apartments, a small commercial site housing a gas station/mini-mart, a mixed-use area containing commercial and community facilities, a recreational vehicle storage area, a private school, numerous open space areas, and a large “Village Green.” La Costa Greens is a residential development that was created to take advantage of the natural open space of the area. A pedestrian trail system links individual neighborhoods and many homes have golf course and open space views.

Assessment District No. 2003-01 (College Boulevard and Cannon Road East) is located in the northern portion of the City, primarily along College Boulevard south of State Highway 78. Assessment District No. 2003-01 encompasses a portion of the Calavera Hills II Master Plan, which features 19 residential villages, 1 community park, 2 school sites, 2 community facility sites, 1 recreational vehicle storage facility and large areas of open space corridors. Assessment District No. 2003-01 (College Boulevard and Cannon Road East) is located adjacent to the Lake Calavera Preserve, the largest of 13 City-owned, dedicated and managed nature preserves in the City. The area is popular with hikers, mountain bikers and nature lovers. Many homes in Assessment District No. 2003-01 (College Boulevard and Cannon Road East) have views of the Lake Calavera Preserve. Assessment District No. 2003-01 (College Boulevard and Cannon Road East) also encompasses Benefit Area No. 2, which includes the primarily residential Robertson Ranch East development. Any assessments levied in Benefit Area No. 2 do not constitute security for, and will not be available to pay debt service on, the Bonds.

Proceedings for the formation of the Prior Assessment Districts were taken by the City Council of the City pursuant to the Municipal Improvement Act of 1913, Division 12 of the California Streets and Highways Code (the “1913 Act”) in order to fund certain public capital improvements, including storm drain, sewer, water, recycled water and dry utilities of special benefit to the parcels located within the boundaries of the Prior Assessment Districts. The City Council confirmed on each of those parcels an assessment proportionate to the special benefit received by it from the improvements.

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3 In order to provide the funds with which to construct the improvements benefitting the Prior Assessment Districts, the City issued bonds in 2004 (in an aggregate principal amount of $11,760,000) and 2005 (in an aggregate principal amount of $33,085,000). On January 8, 2013, the City Council took proceedings under the Act and confirmed a reassessment, which reassessment and a related diagram were recorded in the office of the City’s Transportation Director, acting as the Superintendent of Streets, and with the County Recorder of the County of San Diego (the “County”). A notice of reassessment, as prescribed in Section 3114 of the Streets and Highways Code, was recorded with the County Recorder, whereupon the reassessment attached as a lien upon the property assessed within Reassessment District No. 2012-1 of the City as provided in Section 3115 of the Streets and Highways Code.

Pursuant to the Act, the City was authorized to issue refunding bonds for the purpose of redeeming the bonds issued in 2004 and 2005 (as described in the preceding paragraph). The City could issue and sell such refunding bonds without giving notice to or conducting a hearing for the owners of property in the Prior Assessment Districts, and without giving notice to the owners of such bonds, if the City Council makes certain findings required in the Act. On January 8, 2013, the City made such findings and, on January 30, 2013, the City issued the Prior Bonds, the proceeds of which were applied to redeem and defease the original bonds that were issued in 2004 and 2005. The Prior Bonds are secured by the unpaid Reassessments levied within Reassessment District No. 2012-1; and installments of those Reassessments, which are collected each year along with the ad valorem taxes collected by the County, have been used to pay the principal of and interest on the Prior Bonds as the same became due and payable.

Property Values and Value-to-Reassessment Lien Ratios
The aggregate assessed value of the parcels in the Reassessment District with unpaid Reassessments, as shown in the County Assessor’s roll for Fiscal Year 2022 is $2,525,620,016. The ratio of the assessed value of such parcels to the total amount of the unpaid Reassessments is approximately 151.42* to 1 (exclusive of the unpaid Reassessments for Fiscal Year 2022 and overlapping debt described herein). See the caption “THE REASSESSMENT DISTRICT—Value-to-Reassessment Lien Ratios”.

No Additional Bonds
The City is not authorized to issue additional bonds (other than the Bonds or any refunding bonds) secured by the Reassessments.

Application for Bond Insurance
The City has applied to certain municipal bond insurers for a municipal bond insurance policy (the “Policy”) with respect to all or a portion of the Bonds and for the Reserve Policy in the amount of 50% of the Reserve Requirement. If the Policy is obtained, it would guarantee the scheduled payment of the principal of and interest on all or a portion of the Bonds. The City will determine whether to purchase the Policy on the sale date of the Bonds. If the City determines to purchase the Policy, the terms of the Policy and information regarding the municipal bond insurer will be included in the final Official Statement. No assurance can be given as to whether the City will purchase the Policy for any portion of the Bonds.

The Trustee may draw upon the Reserve Policy to pay principal of and interest on all or a portion of the Bonds in the event that cash on deposit in the Reserve Fund has been first been applied to such purposes and there remains no cash in the Reserve Fund. See the caption “SECURITY FOR THE BONDS—Reserve Fund.” * Preliminary, subject to change.

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4 Tax Matters
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, as bond counsel (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California (the “State”) personal income tax. See the caption “CONCLUDING INFORMATION—Tax Matters” and Appendix C.

Professionals Involved in the Offering
The Bank of New York Mellon Trust Company, N.A., Los Angeles, California, will act as Trustee under the Indenture and as the initial Dissemination Agent under the City’s Continuing Disclosure Agreement. The legal proceedings in connection with the issuance and delivery of the Bonds are subject to the approval as to their legality of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel. Certain legal matters will be passed on for the City by the City Attorney, and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California. Other professional services have been performed by NBS, Temecula, California, as Reassessment Engineer.

For information concerning financial or other interest which certain of the above-mentioned professionals, advisors, counsel and agents may have in the offering of the Bonds, see the caption “CONCLUDING INFORMATION—Financial Interests.” Continuing Disclosure
The City has agreed to provide, or cause to be provided, to Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/ (“EMMA”), certain annual financial information and operating data. The City has further agreed to provide notice of certain enumerated events. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. See the caption “CONCLUDING INFORMATION—Continuing Disclosure” herein and Appendix E for a description of the specific nature of the annual reports and notices of enumerated events to be provided by the City.

Bondowners’ Risks
Certain events could affect the timely repayment of the principal of and interest on the Bonds when due. See the caption “BONDOWNERS’ RISKS” for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an investment in the Bonds. The purchase of the Bonds involves risks, and the Bonds are not suitable investments for some types of investors.

Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to change.

Brief descriptions of the Bonds and the Indenture are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the Bonds and the constitution and laws of the State, as well as the proceedings of the City Council July 12, 2022 Item #17 Page 136 of 463

5 of the City, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by reference to the Indenture. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture.

Copies of the Indenture, the Continuing Disclosure Agreement and other documents and information referred to herein are available for inspection and (upon request and payment to the Trustee of a charge for copying, mailing and handling) for delivery from the Trustee.

REFUNDING PLAN
The Prior Bonds, which are currently outstanding in the aggregate principal amount of $21,780,000, were executed and delivered pursuant to an Indenture, dated as of January 1, 2013 (the “2012 Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2012 Trustee”). The Prior Bonds are payable from Reassessments levied within Reassessment District No. 2012-1 of the City.

The City plans to apply a portion of the proceeds of the Bonds, together with City moneys, to defease the outstanding Prior Bonds as of the date of issuance of the Bonds, and to pay and redeem the Prior Bonds in full on September 2, 2022. The Prior Bonds are described in the following table.

Under an Escrow Agreement (2012 Bonds), dated as of August 1, 2022 (the “2012 Escrow Agreement”), by and between the City and the 2012 Trustee, the City will deliver a portion of the proceeds of the Bonds to the 2012 Trustee for deposit in the escrow fund established under the 2012 Escrow Agreement (the “2012 Escrow Fund”). [REVISE IF NO INVESTMENT] The 2012 Trustee will invest a portion of the amounts so deposited in the 2012 Escrow Fund in Federal Securities (as described in the 2012 Escrow Agreement). From the maturing principal of the Federal Securities and related investment income and any uninvested moneys on deposit in the 2012 Escrow Fund, the 2012 Trustee will pay on September 2, 2022 the principal of the Prior Bonds maturing on and after such date, plus interest accrued to such date, without premium (the “Prior Bonds Redemption Price”). † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter nor their agents or counsel assume responsibility for the accuracy of such numbers.

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6 Sufficiency of the deposits in the 2012 Escrow Fund for such purposes will be verified by Causey Demgen & Moore P.C. (the “Verification Agent”), and the Verification Agent will deliver a report on the mathematical accuracy of certain computations based upon certain information and assertions provided to it relating to the adequacy of the moneys deposited in the 2012 Escrow Fund to pay the Prior Bonds Redemption Price. Assuming the accuracy of such computations, as a result of the deposit and application of funds as provided in the 2012 Escrow Agreement, the Prior Bonds will be defeased pursuant to the provisions of the 2012 Indenture as of the date of issuance of the Bonds.

The amounts held by the 2012 Trustee in the 2012 Escrow Fund are pledged solely to the payment of the Prior Bonds and will not be available for the payments on the Bonds.

ESTIMATED SOURCES AND USES OF FUNDS
The Trustee will receive the proceeds from the sale of the Bonds upon delivery of such Bonds to the purchasers thereof. The proceeds of the Bonds will be applied as set forth in the following table:

Sources(1):

Principal Amount $ Plus/Less Net Original Issue Premium/Discount Other Moneys(2) Total Sources $ Uses(1):

Transfer to 2012 Trustee for Deposit in 2012 Escrow Fund $ Deposit in Reserve Fund Costs of Issuance(3) Total Uses $ (1) Amounts rounded to the nearest dollar. Totals may not add due to rounding. (2) Reflects moneys held in funds and accounts established under the 2012 Indenture. (3) Includes Underwriter’s discount and certain legal, municipal advisory, rating agency, Verification Agent, printing and other financing-related costs.

THE BONDS
General
The issuance of the Bonds was authorized by a resolution adopted by the City Council of the City and the Bonds are being issued by the City pursuant to the Act and the Indenture.

The Bonds will be dated their date of delivery and mature on September 2 in the years and in the amounts shown on the inside cover page of this Official Statement. Interest on the Bonds is payable semiannually on March 2 and September 2 of each year until maturity, commencing March 2, 2023. The Bonds are being issued as fully registered bonds, in integral multiples of $5,000.

Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication and registration thereof unless: (i) it is authenticated after a Record Date and on or before the immediately succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date; or (ii) it is authenticated before the close of business on the first Record Date, in which event it shall bear interest from its dated date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the date of original delivery of the Bonds, if no interest has previously been paid or made available for payment on the Outstanding Bonds.

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7 Interest on the Bonds is payable by the Trustee on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Trustee at the close of the Business Day on the Record Date preceding the Interest Payment Date. The Bonds will be held in book-entry form and registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), all interest payments will be made directly to DTC for distribution to the beneficial owners in accordance with DTC’s procedures. See Appendix D.

Redemption of Bonds*
Mandatory Redemption from Reassessment Prepayments. The Bonds will be subject to mandatory redemption, in whole or in part as selected by the Treasurer pursuant to Section 8768 of the California Streets and Highways Code, and pursuant to a written notice delivered to the Trustee, on any Interest Payment Date, from and to the extent of any prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Prices
March 2, 2023 through March 2, 2030 103% September 2, 2030 and March 2, 2031 102 September 2, 2031 and March 2, 2032 101 September 2, 2032 and thereafter 100 Optional Redemption of Bonds from Other Funds, Excluding Reassessment Prepayments. The Bonds are subject to optional redemption prior to their stated maturity dates on September 2, 2029 or any Interest Payment Date thereafter, as selected by the City pursuant to a written notice delivered to the Trustee, from any source of funds other than prepayment of Reassessments, at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

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8 In the event of any prior redemption of the Bonds maturing on September 2, 20__ as described under the subcaptions “—Mandatory Redemption from Reassessment Prepayments” and “—Optional Redemption of Bonds from Other Funds, Excluding Reassessment Prepayments,” the foregoing sinking fund payments will be reduced as proportionately as possible in increments of $5,000 and the City will provide the Trustee with a revised sinking fund schedule giving effect to the redemption so completed.

Notice of Redemption
The City is required to give the Trustee written notice of its intention to optionally redeem Bonds under the Indenture at least 45 days prior to the date fixed for such redemption, or such lesser number of days as permitted by the Trustee. When Bonds are to be called for redemption under the Indenture, subject to timely receipt of notice from the City of its intention to redeem, the Trustee will give notice, on behalf of the City, of the redemption of such Bonds. Such notice of redemption will: (a) state the date fixed for redemption and for surrender of the Bonds to be redeemed; (b) state the redemption price; (c) state the place or places where the Bonds are to be surrendered for redemption; (d) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (e) state that such notice of redemption will be cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption; and (f) in the case of a redemption as described under the caption “—Redemption of Bonds—Optional Redemption of Bonds from Other Funds, Excluding Reassessment Prepayments,” state that the City has the right to rescind such redemption by written notice to the Trustee on or prior to two Business Days prior to the date fixed for redemption. Such notice will further state that on the date fixed for redemption, there will become due and payable on each Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon will cease to accrue and be payable. At least 20 days but no more than 60 days prior to the redemption date, the Trustee will mail a copy of such notice, by registered or certified mail, postage prepaid, to the respective Owners of Bonds selected for redemption at their addresses appearing on the Bond Register. The actual receipt by the Owner of any Bond of notice of such redemption is not a condition precedent thereto, and failure to receive such notice will not affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as provided in the Indenture will be conclusive as against all parties.

The City has the right to rescind any notice of the optional redemption of Bonds by written notice to the Trustee on or prior to two Business Days prior to the date fixed for redemption, in which case such redemption will be cancelled and annulled and such cancellation will not constitute an event of default. In addition, any notice of redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation will not constitute an event of default. The City and the Trustee have no liability to the Owners or any other party related to or arising from any such rescission or cancellation of redemption. The Trustee will mail notice of such rescission and/or cancellation of redemption in the same manner as the original notice of redemption was sent under the Indenture.

Registration, Exchange or Transfer
In the event that: (i) DTC determines not to continue to act as securities depository for the Bonds; or (ii) the City determines that DTC will no longer so act, then unless the City identifies another qualified securities depository to replace DTC, the City will discontinue the book entry system. If the City fails to identify another qualified securities depository to replace DTC, then the Bonds so designated will no longer be restricted to being registered in the Bond Register kept by the Trustee in the name of the Nominee, but will be registered in whatever name or names Persons transferring or exchanging Bonds designate, in accordance with the provisions of the Indenture.

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9 Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor will provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Section 6045 of the Internal Revenue Code of 1986, as amended (the “Code”). The Trustee may conclusively rely on the information provided to it and has no responsibility to verify or ensure the accuracy of such information.

Under the circumstances described above, but subject to the limitations set forth in the next paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the Corporate Trust Office accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.

Bonds may be exchanged at the Corporate Trust Office for a like aggregate principal amount of Bonds. The Trustee will not charge the Owner for any new Bond issued upon any exchange or transfer, but will require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. The cost of printing any Bonds and any services rendered or any expenses incurred by the Trustee in connection with any exchange or transfer will be paid by the City as Administrative Expenses. Whenever any Bond or Bonds are surrendered for registration of transfer or exchange, the City will execute, and the Trustee will authenticate and deliver, a new Bond for a like aggregate principal amount; provided that the Trustee is not required to register transfers or make exchanges of Bonds: (a) 15 days prior to the date established by the Trustee for selection of Bonds for redemption; or (b) with respect to a Bond after such Bond has been selected for redemption.

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10 Annual Debt Service
The table below sets forth the annual debt service on the Bonds based on the maturity schedule and interest rates set forth on the inside cover page of this Official Statement.

TABLE 1 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 LIMITED OBLIGATION REFUNDING BONDS ANNUAL DEBT SERVICE Year Ending September 2 Principal Interest Total
2023 $ $ $ 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Total $ $ $ Source: Underwriter.

SECURITY FOR THE BONDS
Limited Obligation
The obligation of the City to pay the Bonds is not a general obligation of the City, but is a limited obligation payable solely from the Reassessments and from the funds pledged under the Indenture. Neither the faith and credit nor the taxing power of the City, the County or the State or any political subdivision thereof is pledged to the payment of the Bonds. Notwithstanding any other provision of the Indenture, the City is not obligated to advance available surplus funds from the City treasury to cure any deficiency in the Redemption Fund.

Reassessment Liens and Installments
The Bonds are issued upon and secured by and payable solely from the unpaid Reassessments on parcels of property within the Reassessment District, together with accrued interest, and such unpaid Reassessments, together with accrued interest, constitute a fund for the redemption and payment of the principal of the Bonds and related interest and premium, if any. In addition, all of the Bonds are secured by the moneys in the Reassessment Fund, the Redemption Fund and the Reserve Fund created pursuant to the Indenture. Principal of and interest on the Bonds are payable exclusively from the Redemption Fund.

Although the unpaid Reassessments constitute fixed liens on the lots and parcels assessed, they do not constitute a personal indebtedness of the respective owners of such lots and parcels. There can be no assurance July 12, 2022 Item #17 Page 142 of 463

11 as to the ability or the willingness of such owners to pay the unpaid Reassessments and Assessments when due. See the caption “BONDOWNERS’ RISKS.” The unpaid Reassessments will be collected in annual installments, together with interest, on the secured tax roll on which general taxes on real property are collected by the County (the “Reassessment Installments”). The City will include in the annual installments amounts for the payment of administrative expenses in the amount set forth in the Reassessment Report; such amounts are not available to pay debt service on the Bonds. The Reassessment Installments are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general property taxes. The properties upon which the Reassessments are levied are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes. See the caption “—Property Tax Collection Procedures.” The annual Reassessment Installments are to be paid to the City and transferred by the City to the Trustee with instructions to deposit into the Reassessment Fund the balance remaining after the deposit of amounts into the Administrative Expense Fund held by the City to pay administrative expenses. The Trustee is to transfer amounts in the Reassessment Fund into the Redemption Fund held by the Trustee to pay the principal of and interest on the Bonds as they become due.

The Reassessment Installments billed against each of the lots and parcels in the Reassessment District each year represent a pro rata share of the total principal and interest coming due on all of the Bonds that year (other than the Reassessment installments within Reassessment District No. 2012-1 of the City which remain unpaid as of the date of delivery of the Bonds which represented a pro rata share of the total principal and interest coming due on the Prior Bonds in calendar year 2022). The amount billed against each lot or parcel is based on the percentage which the unpaid Reassessment against the property bears to the total of unpaid Reassessments in the Reassessment District. The failure of a property owner to pay an annual Reassessment Installment will not result in an increase in Reassessment Installments against other property in the Reassessment District.

Each property owner has a statutory right to prepay the Reassessment on a parcel in whole or in part on any date. Amounts received as prepaid Reassessments will be deposited in the Prepayment Account of the Redemption Fund and will be used solely for the purpose of redeeming Bonds. See the caption “THE BONDS—Redemption of Bonds—Mandatory Redemption from Reassessment Prepayments.” Limited Obligation Upon Delinquency
THE BONDS ARE LIMITED OBLIGATIONS OF THE CITY AND ARE PAYABLE SOLELY FROM THE REASSESSMENTS AND THE ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. THE CITY HAS DETERMINED NOT TO OBLIGATE ITSELF AND HAS NO LEGAL OR MORAL OBLIGATION TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO PAY BOND DEBT SERVICE IN THE EVENT OF DELINQUENT REASSESSMENT INSTALLMENTS. BONDOWNERS SHOULD NOT RELY UPON THE CITY TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO THE REDEMPTION FUND. NOTWITHSTANDING THE FOREGOING, THE CITY MAY, AT ITS SOLE OPTION AND IN ITS SOLE DISCRETION, ELECT TO ADVANCE SUCH FUNDS.

Reserve Fund
The Indenture provides that a Reserve Fund must be maintained and held by the Trustee in an amount equal to the Reserve Requirement. The term “Reserve Requirement” means, as of the date of any calculation, the least of: (a) 10% of the original aggregate principal amount of the Bonds; (b) maximum annual debt service on the Bonds;; and (c) 125% of average annual debt service on the Bonds; provided, however, that July 12, 2022 Item #17 Page 143 of 463

12 the Reserve Requirement will be adjusted to reflect any amount specified for transfer to the Redemption Fund in a Written Request from the City as described below.

The Reserve Requirement will be satisfied at the time of issuance of the Bonds by the deposit of cash in the amount of 50% of the Reserve Requirement and the deposit of the Reserve Policy in the stated amount of 50% of the Reserve Requirement. The Trustee is entitled to draw upon the Reserve Policy only in the event that all cash in the Reserve Fund is drawn first.

Moneys in the Reserve Fund, and, in the event that such moneys are fully applied, the Reserve Policy, will be used solely for the purpose of paying the principal (including mandatory sinking fund payments) of and interest on the Bonds when due in the event that the moneys in the Redemption Fund are insufficient therefor. The Trustee will withdraw moneys as necessary from the Reserve Fund for deposit in the Redemption Fund on or before the first day of March and September of each year.

In the event that a Reassessment is prepaid in whole or in part, the Reassessment being prepaid will be reduced by the amount transferred from the Reserve Fund to the Prepayment Account of the Redemption Fund pursuant to the Indenture. The amount transferred will be that portion of the balance then in the Reserve Fund equal to the proportion that the principal amount of the Reassessment being prepaid bears to the total of all principal amounts of Reassessments remaining unpaid as of such date. The City will notify, or cause the Trustee to be notified, in writing, of the amount to be transferred pursuant to the foregoing provisions.

Notwithstanding any provision of the Indenture, the amount to be transferred from the Reserve Fund may be utilized for mandatory redemption of the Bonds as described under the caption “THE BONDS—Redemption of Bonds—Mandatory Redemption from Reassessment Prepayments,” provided that in no event will moneys be transferred to accomplish such redemption in an amount that causes the Reserve Fund to drop below the Reserve Requirement as determined immediately subsequent to such redemption.

In the event that moneys comprising the Reserve Fund and the moneys in the Redemption Fund and the Reassessment Fund are sufficient to retire all of the Outstanding Bonds plus accrued interest thereon, such moneys in the Reserve Fund and the Reassessment Fund will at the Written Direction of the City be transferred to the Redemption Fund for the payment of the Bonds.

All amounts allocable to a particular parcel remaining in the Reserve Fund in the year in which the last Reassessment Installment with respect to such parcel becomes due and payable will be credited toward said last Reassessment Installment due with respect to such parcel as set forth below:

On or about July 1 of each year, the City will cause a preliminary calculation to be made of the amount then on deposit in the Reserve Fund anticipated to be transferred to the Redemption Fund on the immediately succeeding September 1 (in the then current calendar year), and the amount anticipated to be remaining on deposit in the Reserve Fund as of such September 1. With respect to such anticipated remainder, the City will determine the portion thereof anticipated to be available for transfer to the Redemption Fund on September 1 in the next calendar year (as a result of the payment of the principal component of Reassessments in the next calendar year) and will determine, with respect to those parcels which will be in their final year of Reassessment in the next calendar year, the portion of such amount anticipated to be available for transfer to the Redemption Fund allocable to each such parcel. Such allocation will be made pro rata, and will equal the proportion that the principal amount of the Reassessment payable with respect to a particular parcel bears to the total of all principal amounts of Reassessments to be paid in such calendar year. Those parcels which would otherwise be in their final year of Reassessment will be afforded a credit against the Reassessment that would otherwise have been levied in such year (or a credit in an earlier year if reduction of the Reserve Fund results in funds being available for such purposes at an earlier date), such credit to be based on such parcel’s pro rata portion of the moneys on deposit in the Reserve Fund anticipated to be available for transfer to the Redemption Fund on September 1 of the next calendar year, and such credit may not be in excess of such parcel’s pro rata portion of the Reserve Fund (equal to the proportion that the principal amount of the Reassessment payable with respect to such parcel bears to the total of all principal amounts of Reassessments July 12, 2022 Item #17 Page 144 of 463

13 remaining unpaid as of such date). The City will then direct the Trustee, pursuant to a Written Request of the City, to transfer from the Reserve Fund to the Redemption Fund the amount specified in such Written Request for such transfer, such transfer to occur on or about September 1 of the next succeeding calendar year.

Notwithstanding any provisions in the Indenture to the contrary, moneys in the Reserve Fund in excess of the Reserve Requirement will be withdrawn from the Reserve Fund by the Trustee on each March 1 and September 1 at the Written Direction of the City and will be transferred to the Reassessment Fund and applied as provided in the Indenture.

THE CITY HAS NO OBLIGATION TO REPLENISH THE RESERVE FUND, OR TO REPLACE THE RESERVE POLICY IN THE EVENT OF A DEFAULT THEREUNDER BY THE PROVIDER THEREOF, EXCEPT TO THE EXTENT THAT DELINQUENT REASSESSMENT INSTALLMENTS ARE PAID OR PROCEEDS FROM FORECLOSURE SALES ARE REALIZED.

Property Tax Collection Procedures
Property in the State which is subject to general taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. Every tax which becomes a lien on secured property has priority over all other liens, arising pursuant to State law, on the secured property, regardless of the time of the creation of other liens.

In accordance with the State Revenue and Taxation Code, the County tax collector collects secured tax levies for each Fiscal Year. Property taxes on the secured roll are due in two installments, on November 1 and February 1. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes are delinquent is declared tax-defaulted on or about June 30. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus costs and a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the tax-defaulted property is subject to sale by the County Treasurer-Tax Collector. The exclusive means of forcing the payment of delinquent taxes with respect to secured property is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent.

In an attempt to mitigate the effects of the COVID-19 pandemic on State property taxpayers, on May 6, 2020, the Governor signed Executive Order N-61-20 (“Order N-61-20”). Under Order N-61-20, certain provisions of the State Revenue and Taxation Code were suspended until May 6, 2021 to the extent that they required a tax collector to impose penalties, costs or interest for the failure to pay secured or unsecured property taxes, or to pay a supplemental bill, before the date that such taxes become delinquent. Such penalties, costs and interest were cancelled under the conditions provided for in Order N-61-20, including if the property is residential real property occupied by the taxpayer or the real property qualifies as a small business under certain State laws, the taxes were not delinquent prior to March 4, 2020, the taxpayer files a claim for relief with the tax collector and the taxpayer demonstrates economic hardship or other circumstances that have arisen due to the COVID-19 pandemic or due to a local, state, or federal governmental response thereto. The City did not receive material amounts of property tax payments (including Reassessments) for Fiscal Years 2020 or 2021 later than usual as a result of Order N-61-20. See the caption “BONDOWNERS’ RISKS—COVID-19 Outbreak.” See the caption “—Covenant to Foreclose and Court Foreclosure Proceedings” for a further discussion of the City’s ability to foreclose on properties for which Reassessment Installments are unpaid. See Tables 2 and 6 under the caption “THE REASSESSMENT DISTRICT” for historical information with respect to assessed valuations and property tax delinquencies in the Reassessment District.

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14 Covenant to Foreclose and Court Foreclosure Proceedings The 1913 Act provides that in the event that any assessment or installment thereof or any interest thereon is not paid when due, the City may order the institution of a court action to foreclose the lien of the unpaid assessment. In such an action, the real property which is subject to the unpaid assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. However, pursuant to the Indenture, the City has covenanted for the benefit of the Bondowners that it will determine or cause to be determined, not later than August 15 of each Fiscal Year in which Bonds are Outstanding, whether or not any owners of the real property within the Reassessment District are delinquent in the payment of Reassessment Installments. If such delinquencies exist, the City will order and caused to be commenced an action in the superior court to foreclose the lien of the Reassessment Installment(s) not paid when due, not later than the next following November 1, against any parcel that is subject to delinquencies of $10,000 or more and against any group of parcels under common ownership with aggregate delinquencies of $10,000 or more; provided that during any period in which the amount on deposit in the Reserve Fund is less than the Reserve Requirement, the City will commence foreclosure proceedings against any parcel that is subject to any amount of delinquency. The City further covenants to diligently prosecute any such foreclosure action to judgment and foreclosure sale. Upon the redemption or sale of the real property responsible for such delinquencies, the City will first deposit to the Reserve Fund the amount of any delinquency advanced therefrom and then disburse the remaining amount as set forth in the judgment of foreclosure or as required by law.

The 1913 Act provides that the court in a foreclosure proceeding has the power to order property securing delinquent Reassessment Installments to be sold for an amount not less than all Reassessment Installments, interest, penalties, costs, fees and other charges that are delinquent at the time the foreclosure action is ordered, and certain other fees and amounts as provided therein (the “Minimum Price”). The court may also include subsequent delinquent Reassessment Installments and all other delinquent amounts.

The City may, at its discretion, but is not required to, become the purchaser of any property sold in a foreclosure proceeding. If the City becomes the purchaser, it will pay into the Redemption Fund an amount that is necessary to satisfy the judgment, less any advances by the City to cover delinquent Reassessment Installments plus simple interest on such net amount, at the interest rates borne by the Bonds, from the dates of delinquency. Unless such property is subsequently resold, the City must transfer to the Redemption Fund any future Reassessment Installments pending redemption. The City may thereupon be reimbursed for any amount advanced from the City to the Redemption Fund to cover such future Reassessment Installments with respect to the property so sold from the proceeds of such sale.

If the property is sold to a purchaser other than the City, the City will deposit the proceeds from the sale of the property into the Redemption Fund. From such amount, the City will reimburse the Reserve Fund the amount, if any, of funds advanced from the Reserve Fund to the Redemption Fund to cover the delinquent Reassessment Installments with respect to the property which is sold. After reimbursement of the Reserve Fund, the City may be reimbursed for any other amounts advanced by the City to the Redemption Fund to cover delinquent Reassessment Installments and interest with respect to the property sold in such proceedings. Any funds in excess of the amount necessary to reimburse the City may be applied by the City to pay interest and penalties, costs, fees and other charges, to the extent that they were included in the sales proceeds.

If the property to be sold fails to sell for the Minimum Price, the City may petition the court to modify the judgment so that the property may be sold at a lesser price or without a Minimum Price. Notice of the hearing on such petition must be given to all Bondowners. In certain circumstances, the court may modify the judgment after the hearing to permit the sale of the property at a price lower than the Minimum Price if the court makes certain determinations, including determinations that a sale of the property at less than the Minimum Price will not result in an ultimate loss to Bondowners or that Bondowners of at least 75% of the principal amount of Bonds outstanding have consented to the petition and certain other circumstances described in the statute exist. Neither the property owner nor any holder of a security interest in the property July 12, 2022 Item #17 Page 146 of 463

15 or defendant in the foreclosure action may purchase the property at the foreclosure sale for less than the Minimum Price.

A period of 120 days must elapse after the date on which notice of levy of the interest in real property is served on the judgment debtor before the sale of such lot or parcel with more than 4 dwelling units can be made. However, pursuant to Streets and Highways Code Section 8832, the 120-day period may be shortened to 20 days for parcels with not more than 4 dwelling units. If the judgment debtor fails to redeem, and if the purchaser at the sale is the judgment creditor (e.g., the City), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the repeal of the one year redemption period has not been tested; and there can be no assurance that, if tested, such legislation will be upheld.

In the event that court foreclosure proceedings are commenced by the City, there may be delays in payments to Owners of the Bonds pending prosecution of the foreclosure proceedings to completion, including the receipt of the City of the proceeds of the foreclosure sale. It is also possible that no qualified bid will be received at the foreclosure sale. See the caption “BONDOWNERS’ RISKS.” Priority of Reassessment Lien
The Reassessments (and any further assessment or reassessment), including each installment thereof and any related interest and penalties, constitute a lien against the lots and parcels of land on which they were imposed until paid. Such lien has priority over all fixed special assessment liens which may thereafter be created against the property, and also has priority over all private liens, including the lien of any mortgage or deed of trust whenever created. Such lien is co-equal to and independent of the lien for general taxes and special taxes. See the caption “THE REASSESSMENT DISTRICT—Direct and Overlapping Indebtedness” and “BONDOWNERS’ RISKS—FDIC/Federal Government Interests in Parcels.” No Additional Bonds
The City is not authorized to issue additional bonds (other than the Bonds or any refunding bonds) secured by the Reassessments.

Maximum Annual Reassessment for Administrative Costs and Expenses The costs associated with administering the Reassessment District will be spread to each parcel in the Reassessment District with unpaid Reassessments on a pro rata basis. Administrative costs for the Reassessment District cannot exceed 5% of the total annual Reassessments per individual Reassessment parcel collected each year.

THE REASSESSMENT DISTRICT
Description of the Reassessment District
The Reassessment District includes all of the property within Assessment District No. 2002-01 and Benefit Area No. 1 of Assessment District No. 2003-01 with the exception of 3 parcels for which assessments were prepaid. The Reassessment District includes 2,143 parcels, comprised of: (i) 1,505 parcels for single family detached homes; (ii) 501 parcels for multi-family units; (iii) 99 commercial parcels; (iv) 29 industrial parcels; (v) 4 other developed parcels; and (vi) 5 undeveloped parcels.

Assessment District No. 2002-01 (Poinsettia Lane East). Assessment District No. 2002-01 is located in the east central portion of the City, southeast of the McClellan-Palomar Airport. Assessment District No. 2002-01 encompasses two master plans: the Bressi Ranch Master Plan and the La Costa Greens portion of the Villages of La Costa Master Plan. The Bressi Ranch Master Plan was intended to create a pedestrian-oriented July 12, 2022 Item #17 Page 147 of 463

16 community consisting of 5 planning areas containing office, industrial and warehouse uses, seven planning areas of single family detached homes, one hundred units of affordable multifamily apartments, a small commercial site housing a gas station/mini-mart, a mixed-use area containing commercial and community facilities, a recreational vehicle storage area, a private school, numerous open space areas and a large “Village Green.” La Costa Greens is a residential development that was created to take advantage of the natural open space of the area. A pedestrian trail system links the individual neighborhoods and many homes have golf course and open space views.

Assessment District No. 2002-01 consists primarily of developed parcels, including 1,424 residential parcels (of which 1,175 are single family detached homes and 249 are multi-family units), 99 commercial parcels, 29 industrial parcels, 4 other parcels∗ and 5 undeveloped parcels. Assessment District No. 2002-01 encompasses approximately 1,233 gross acres. The single family homes range in size from approximately 1,953 square feet in the Avellino community to approximately 6,219 square feet in the Magnolia Estates community. The multi-family units are income-restricted condominium homes ranging from 863 square feet to 2,216 square feet in the Mulberry community at Bressi Ranch.

Benefit Area No. 1 (Calavera Hills II) of Assessment District No. 2003-01 (College Boulevard and Cannon Road East). Assessment District No. 2003-01 (College Boulevard and Cannon Road East) is located in the northern portion of the City, primarily along College Boulevard south of State Highway 78. Assessment District No. 2003-01 encompasses a portion of the Calavera Hills II Master Plan, which features 19 residential villages, 1 community park, 2 school sites, 2 community facility sites, 1 recreational vehicle storage facility and large areas of open space corridors. Assessment District No. 2003-01 (College Boulevard and Cannon Road East) is located adjacent to the Lake Calavera Preserve, the largest of 13 City-owned, dedicated and managed nature preserves in the City. The area is popular with hikers, mountain bikers and nature lovers. Many homes in Assessment District No. 2003-01 (College Boulevard and Cannon Road East) have views of the Lake Calavera Preserve.

Benefit Area No. 1 of Assessment District No. 2003-01 (College Boulevard and Cannon Road East) is fully developed and consists of 582 residential parcels, of which 330 are single family detached homes and 252 are multi-family units. Benefit Area No. 1 of Assessment District No. 2003-01 encompasses approximately 302 gross acres. The single family homes range in size from approximately 1,643 square feet in the Ravinia community to approximately 3,000 square feet in the Montaro community. The multi-family units consist of approximately 46 triplex buildings and 19 six-plex buildings in the Mystic Point community.

Although Assessment District No. 2003-01 (College Boulevard and Cannon Road East) also encompassed Benefit Area No. 2, which includes the primarily residential Robertson Ranch East development, assessments levied in Benefit Area No. 2, when and if levied, do not constitute security for, and will not be available to pay debt service on, the Bonds.

The table below summarizes the assessed values of the property within the Reassessment District for the current and previous four Fiscal Years.

∗ Includes a school, church, mausoleum and an association storage.

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17 TABLE 2 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 SUMMARY OF ASSESSED VALUES(1) Fiscal Year Ended June 30 Land Value Structure Value Total Assessed Value Percentage Change 2018 $ 947,745,088 $1,087,644,276 $2,035,389,364 N/A% 2019 1,011,047,882 1,135,332,592 2,146,380,474 5.45 2020 1,059,007,607 1,221,822,050 2,280,829,657 6.26 2021 1,110,937,009 1,301,499,865 2,412,436,874 5.77 2022 1,174,826,519 1,350,793,497 2,525,620,016 4.69 (1) Per County Assessor secured roll data for each Fiscal Year shown, with a valuation date of January 1 of the prior calendar year. Assessed value does not reflect any changes made to valuation after July of each Fiscal Year as a result of assessment appeals, corrections or any other changes. Source: NBS Direct and Overlapping Indebtedness
The ability of an owner of land within the Reassessment District to pay the Reassessment Installments could be affected by the existence of other taxes and assessments imposed upon the property. Those taxes and assessments that secure the repayment of overlapping debt in the Reassessment District are set forth by Assessment District in Tables 3-A and 3-B (together, the “Debt Report”). The Debt Report does not include the principal amount of the Bonds but does include the principal amount of the Prior Bonds. The Debt Report has been derived from data assembled and reported to the City by California Municipal Statistics Inc. as of June 1, 2022. The Debt Report includes information for all parcels located within the Reassessment District, including those parcels which prepaid their assessments or which had assessments of $0. Neither the City nor the Underwriter has independently verified the information in the Debt Report and they do not guarantee its completeness or accuracy.

Although the Bonds are issued upon and secured by and payable from the unpaid Reassessments on parcels of property within the Reassessment District as a whole, the Reassessment District consists of noncontiguous geographic areas that were originally separate assessment districts. Such separate assessment districts have different overlapping tax and assessment debt. Accordingly, the direct and overlapping debt is shown in separate tables below.

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18 TABLE 3-A CITY OF CARLSBAD ASSESSMENT DISTRICT NO. 2002-01 (POINSETTIA LANE EAST) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 2022 Local Secured Assessed Valuation: $2,131,584,762

Percent Applicable Debt as of 6/1/2022
Metropolitan Water District 0.061% $ 12,210 Mira Costa Community College District 1.296 3,775,304 Palomar Community College District 0.313 2,055,424
Carlsbad Unified School District 5.843 17,131,719
San Marcos Unified School District 1.869 5,115,430
San Marcos Unified School District Community Facilities District No. 4 32.755 4,395,707 City of Carlsbad Poinsettia Lane Assessment District 100.000 14,505,000(1) Total Direct And Overlapping Tax And Assessment Debt $46,990,794 (1) To be refunded from proceeds of the Bonds. Source: California Municipal Statistics, Inc.

TABLE 3-B CITY OF CARLSBAD ASSESSMENT DISTRICT NO. 2003-01 (COLLEGE BOULEVARD AND CANNON ROAD EAST) BENEFIT AREA NO. 1 (CALAVERA HILLS II) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 2022 Local Secured Assessed Valuation: $394,035,254

Percent Applicable Debt as of 6/1/2022
Metropolitan Water District 0.012% $ 2,339
Mira Costa Community College District 0.316 919,732
Carlsbad Unified School District 1.423 4,173,594
City of Carlsbad College Blvd./Cannon Rd. East Assessment District 100.000 6,040,000(1) Total Direct And Overlapping Tax And Assessment Debt $11,135,665 (1) To be refunded from proceeds of the Bonds. Source: California Municipal Statistics, Inc. Value-to-Reassessment Lien Ratios The value of the parcels within the Reassessment District with unpaid Reassessments is significant because in the event of a delinquency in the payment of Reassessment Installments, the Reassessment District may foreclose only against delinquent parcels. In Fiscal Year 2022, the assessed value of the property within the Reassessment District with unpaid Reassessments was $2,525,620,016. Based on Fiscal Year 2022 assessed values, the Reassessment District has an assessed value-to-reassessment lien ratio of 151.42* to 1 (exclusive of overlapping liens shown in Tables 3-A and 3-B).

The table below sets forth the assessed value-to-reassessment lien ratios for the parcels with unpaid Reassessments, excluding the overlapping liens shown in Tables 3-A and 3-B:
* Preliminary, subject to change.

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19 TABLE 4 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 VALUE-TO-REASSESSMENT LIEN RATIOS BY ASSESSED VALUE Estimated Assessed Value to Reassessment Lien Ratio(1) Number of Parcels Total Reassessment* % of Total Reassessment* Total Assessed Value(2) Average Value-to-Reassessment Lien Ratio(3)*

0.00 to 9.99:1(4) 2 $ 135,015 0.81% $ 0 0.00:1 10.00 to 14.99:1 5 44,818 0.27 532,511 11.82:1 15.00 to 19.99:1 2 17,733 0.11 305,108 17.16:1 20.00 to 29.99:1 7 102,810 0.62 2,640,802 25.63:1 Greater than 30:1 2,127 16,379,624 98.20 2,522,141,595 173.56:1 Total 2,143 $16,680,000 100.00% $2,525,620,016 151.42:1 (1) The numerator is the Fiscal Year 2022 assessed value and the denominator equals the estimated Reassessment amount of $16,680,000.* (2) Includes valuations of land and structure. Per County Assessor secured roll data for Fiscal Year 2022, with a January 1 valuation date. Assessed value does not reflect any changes made to valuation after July 2021 as a result of assessment appeals, corrections or any other changes. (3) Excludes the overlapping liens shown in Tables 3-A and 3-B and unpaid Reassessments for Fiscal Year 2022. Reflects average value-to-reassessment lien within each category. (4) These parcels are comprised of a lot owned by Tri-City Healthcare District, a public agency, next to a medical center and a parking lot owned by the Bressi Ranch Community Association and adjoining Pacific Ridge School. Source: NBS * Preliminary, subject to change.

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20 The table below sets forth the Reassessments and assessed property value and value to Reassessment lien by property type.

TABLE 5 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 VALUE-TO-REASSESSMENT LIEN BY PROPERTY TYPE Category
Number of Parcels
Fiscal Year 2022 Assessment Levy(1)
Percentage of Total Levy Land Value(2) Structure Value(2) Total Assessed Value(2) Total Reassessments(3)* Assessed Value-to-Reassessment Lien(3)*
Developed: Single-Family 1,505 $1,338,011 61.58% $ 788,417,778 $ 759,854,214 $1,548,271,992 $ 10,244,609 151.13:1 Multi-Family 501 336,382 15.48 162,680,205 130,595,423 293,275,628 2,307,350 127.10:1 Commercial 99 337,612 15.54 152,458,860 350,994,514 503,453,374 2,795,268 180.11:1 Industrial 29 67,261 3.10 29,314,040 51,406,018 80,720,058 556,062 145.16:1 Other 4 53,055 2.44 19,281,451 57,943,328 77,224,779 440,141 175.45:1 Total Developed: 2,138 $2,132,321 98.13% $1,152,152,334 $1,350,793,497 $2,502,945,831 $16,343,430 153.15:1 Undeveloped: Single-Family 1 $ 1,294 0.06% $ 976,475 $ 0 $ 976,475 $ 10,621 91.94:1 Commercial 0 0 0.00 0 0 0 0 0.00:1 Industrial(4) 4 39,307 1.81 21,697,710 0 21,697,710 325,949 66.57:1 Total Undeveloped: 5 $ 40,601 1.87% $ 22,674,185 $ 0 $ 22,674,185 $ 336,570 67.37:1 Total: 2,143 $2,172,921 100.00% $1,174,826,519 $1,350,793,497 $2,525,620,016 $16,680,000 151.42:1 (1) Represents the combined Fiscal Year 2022 assessment levy of the Prior Assessment Districts. (2) Per County Assessor secured roll data for Fiscal Year 2022, with a January 1 valuation date. Assessed value does not reflect any changes made to valuation after July 2021 as a result of assessment appeals, corrections or any other changes. (3) Excludes the overlapping liens shown in Tables 3-A and 3-B and unpaid Reassessments for Fiscal Year 2022. (4) These parcels are comprised of a 7.02 acre lot owned by Levine Investments Limited Partnership, the largest taxpayer in the Reassessment District, a 2.63 acre lot, a 2.35 acre lot and a 2.96 acre lot. See Table 7 under the caption “—Largest Property Taxpayers.” There is currently no infrastructure on any of the lots. Source: NBS * Preliminary, subject to change. July 12, 2022Item #17 Page 152 of 463

21 Delinquencies in the Reassessment District
As of June 22, 2022, [__] parcels within the Reassessment District with unpaid Reassessments had not paid either their first or second installment of property taxes and [__] additional parcels had not paid their second installment. [__] of the parcels which have not paid either their first or second installment of property taxes are also delinquent in their payment of Fiscal Year 2022 property taxes.

The Board of Supervisors of the County has approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the State Revenue and Taxation Code. As a result of the implementation of the Teeter Plan by the County, the County apportions secured property taxes and assessments on an accrual basis when due (irrespective of actual collections) to participating local political subdivisions for which the County acts as the levying or collecting agency. The City does not participate in the Teeter Plan. As a result, the City is exposed to the risk that delinquencies in the payment of property taxes could reduce the amount of Reassessments received by the City. Conversely, the City will receive penalty and interest revenues charged on delinquent Reassessments. See the caption “BONDOWNERS’ RISKS.” The following table sets forth a history of the assessments levied and delinquencies within Assessment District No. 2012-1.

TABLE 6 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2012-1 REASSESSMENT LEVIES AND DELINQUENCIES Fiscal Year Ended June 30 Amount Levied
Number of Parcels Levied
Amount Delinquent as of June 30
Percentage Delinquent as of June 30
Number of Parcels Delinquent as of June 30
Amount Delinquent as of June 22, 2022(1)
Percentage Delinquent as of June 22, 2022
Number of Parcels Delinquent as of June 22, 2022
2018 $2,169,585 2,019 $ 3,653 0.17% 6 $ 1,146 0.05% 1 2019 2,174,576 2,019 15,519 0.71 10 1,432 0.07 2 2020 2,170,179 2,019 27,792 1.28 22 20,572 0.95 5 2021 2,170,335 2,144 26,912 1.24 18 21,366 0.98 6 2022 2,172,921 2,143 N/A N/A N/A 31,439 1.45 26 (1) The City is not pursuing foreclosure proceedings against any of the delinquent property owners from prior Fiscal Years because no property owner has a delinquency in excess of the foreclosure threshold for Reassessment District No. 2012-1 ($10,000), with the exception of a public entity that is directly billed. Source: NBS July 12, 2022 Item #17 Page 153 of 463

22 Largest Property Taxpayers
As summarized in the table below, no property owner within the Reassessment District currently owns parcels responsible for more than 2.61% of the Reassessment lien, and the ten largest property owners are responsible for approximately 14.42% of the Reassessment lien. See the caption “BONDOWNERS’ RISKS—Concentration of Ownership.”
TABLE 7 CITY OF CARLSBAD REASSESSMENT DISTRICT NO. 2022-1 TOP TEN REASSESSMENT PAYERS (1) Per County Assessor secured roll data for Fiscal Year 2022, with a January 1 valuation date. Assessed value does not reflect any changes made to valuation after July 2021 as a result of assessment appeals, corrections or any other changes. (2) Excludes the overlapping liens shown in Tables 3-A and 3-B and unpaid Reassessments for Fiscal Year 2022. (3) Regency Bressi LLC owns 6 industrial parcels in the Bressi Ranch Village Center. Bressi Ranch Village Center features a mix of shops, services, restaurants and eateries anchored by two markets. Businesses located on these parcels include two grocery stores, a Stater Brothers store (which is separately owned) and a Trader Joe’s, multiple dining and specialty food offerings, including Tommy V’s Urban Kitchen & Bar, Peet’s Coffee & Tea, Board & Brew, Luna Grill, Rubio’s Fresh Mexican Grill, Souplantation Express and shops such as Unleashed by Petco and Perfectly at Home, medical facilities such as Carlsbad Optometry and Gateway Dental, and services including 4G Verizon Wireless, Postal Annex, Premiere Cleaners, Reform Yoga and Twig Hair Lounge. Source: NBS * Preliminary, subject to change.

Owner
Number of Parcels Property Type
Fiscal Year 2022 Assessment Levy
Percentage of Total Levy
Total Assessed Value(1) Total Reassessments
Value-to-Reassessment Lien Ratio(2)*
Levine Investments Limited Partnership 3 Developed Commercial/Vacant Industrial $ 58,293 2.68% $ 198,684,661 $ 483,781 410.69:1 Regency Bressi LLC(3) 6 Developed Commercial 56,646 2.61 49,419,066 469,704 105.21:1 Pacific Ridge School (Private School) 1 Developed Commercial 46,549 2.14 71,043,735 386,499 183.81:1 Stater Brothers Markets / Regency Bressi LLC 1 Developed Commercial 31,339 1.44 16,827,194 260,168 64.68:1 Pivotal 650 California ST LLC 4 Developed Commercial 26,703 1.23 53,654,450 221,264 242.49:1 Rexford Industrial Realty LP 2 Developed Industrial 20,612 0.95 25,222,625 170,940 147.55:1 Bressi Retail LLC 2 Developed Commercial 20,473 0.94 19,188,510 169,785 113.02:1 Sir Campbell Place Inc. 2 Developed Commercial 18,657 0.86 20,477,688 154,702 132.37:1 Carlsbad Hospitality LLC 2 Developed Commercial 17,392 0.80 27,453,655 144,190 190.40:1 Activcare at Bressi Ranch LLC 1 Developed Commercial 16,598 0.76 15,368,137 137,730 111.58:1 Sub-Total Top 10 Reassessment Payers 24 $ 313,263 14.42% $ 497,339,721 2,598,763 191.28:1 All Others 2,119 $1,859,659 85.58% $2,028,280,295 $14,081,237 144.04:1 Total Reassessment Payers 2,143 $2,172,921 100.00% $2,525,620,016 $16,680,000 151.42:1 July 12, 2022Item #17 Page 154 of 463

23 Tax Rates
Property tax rates for single family residences in Assessment District No. 2002-01 range from approximately [__]% to [__]% of assessed values. Property tax rates for single family residences in Benefit Area No. 1 of Assessment District No. 2003-01 range from approximately [__]% to [__]% of assessed values.

BONDOWNERS’ RISKS
There are certain risks associated with the purchase of the Bonds and the following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exhaustive listing of the risks and other considerations which may be relevant to an investment in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. If any risk factor materializes to a sufficient degree, it alone could delay or preclude payment of principal of or interest on the Bonds.

General
In order to pay debt service on the Bonds, it is necessary that unpaid Reassessment Installments on parcels within the City are paid in a timely manner. The Reserve Fund will be used to pay debt service on the Bonds if delinquencies in Reassessment Installments should occur. See the caption “SECURITY FOR THE BONDS—Reserve Fund.” The Reassessments are a lien on the parcels of land and the City has covenanted to institute foreclosure proceedings under certain circumstances against parcels with delinquent Reassessment Installments. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings.” Failure by owners of the parcels to pay Reassessment Installments when due, depletion of the Reserve Fund or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts that are sufficient to cover the delinquent Reassessment Installments for such parcels may result in the inability of the City to make full or punctual payments of debt service on the Bonds, and Bondowners would therefore be adversely affected.

The Improvement Bond Act of 1915, being Division 10 (commencing with Section 8500) of the California Streets and Highways Code (the “1915 Act”), provides that except under certain circumstances property is to be sold upon foreclosure at a Minimum Price. “Minimum Price,” as defined in the 1915 Act, is the amount equal to the delinquent installments of principal or interest of the reassessment or assessment, together with all interest penalties, costs, fees, charges and other amounts more fully detailed in the 1915 Act. A court may authorize a sale at less than the Minimum Price if the court determines that sale at less than the Minimum Price will not result in an ultimate loss to the Bondowners or, under certain circumstances, if owners of 75% or more of the outstanding Bonds consent to such sale. There can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Fund and a delay in payments of debt service on the Bonds. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings.” Unpaid Reassessment Installments do not constitute a personal indebtedness of the owners of the parcels within the Reassessment District. There is no assurance the owners will be able to pay the Reassessment Installments or that they will pay such installments even though financially able to do so.

Concentration of Ownership
Based upon development status and ownership as of the January 1, 2022 lien date, it is estimated that the ten largest property owners within the Reassessment District would be responsible for approximately 14.42% of the Reassessments. See the caption “THE REASSESSMENT DISTRICT—Largest Property Taxpayers.” The level of concentration in the obligation to pay the Reassessments represents a risk to July 12, 2022 Item #17 Page 155 of 463

24 Bondowners. The receipt of the Reassessments is dependent on the willingness and the ability of landowners to pay the Reassessments when due, which could be adversely affected by the landowners’ inability to lease and sell property within the Reassessment District due to commercial downturns, high vacancy rates or downturns in the residential or commercial markets. Failure of the landowners, or any successor, to pay the annual levies of Reassessments when due could result in a default in payments of the principal of, and interest on, the Bonds, when due. The only assets of landowners within the Reassessment District which constitute security for the payment of Reassessments are the landowners’ respective real property holdings located within the Reassessment District and subject to the reassessment. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings.” The concentration of ownership will change over time as the Reassessments levied on property in Benefit Area No. 1 of Assessment District No. 2003-01 cease after September 2, 2034. After September 2, 2034, the Bonds maturing on September 2, 2035 will be secured solely by property in Assessment District No. 2002-01. The ten largest property owners in Assessment District No. 2002-01 are the same as the those shown for the Reassessment District as a whole in Table 7. However, whereas the Reassessments to be levied upon these property owners constitute 14.42% of the total Reassessments to be levied in the Reassessment District in Fiscal Year 2022, such Reassessments constitute 19.70% of the total Reassessments to be levied in Assessment District No. 2002-01 alone.

Delinquency Resulting in Ultimate or Temporary Loss on Bonds If a temporary deficiency of funds with which to pay the principal of or interest on Bonds that have then matured, or the principal and interest on Bonds coming due during the current year, occurs in the Redemption Fund, then unless it appears to the Treasurer that there will be an ultimate loss to the Bondowners, the Treasurer will cause the Trustee to pay the principal of Bonds which have matured as presented and make interest payments on the Bonds when due, as long as there are available funds in the Redemption Fund, in the order of priority and as required by the Indenture. If it appears to the Treasurer that there is a danger of an ultimate loss accruing to the Bondowners for any reason, the Treasurer is required pursuant to the 1915 Act to withhold payment on all matured Bonds and interest on all Bonds and report the facts to the City so that the City may take proper action to equitably protect all Bondowners. See Appendix B.

Non-Cash Payments of Reassessments
The 1915 Act may permit the owner of a parcel that is subject to an unpaid Reassessment Installment to tender any Bond secured by such Reassessment in payment or partial payment of any installment of the Reassessment or interest or penalties thereon which may be due or payable. A Bond so tendered is to be accepted at the par amount thereof and credit is to be given for any interest thereon accrued to the date of the tender. Thus, if Bonds can be purchased at a discount, it may be to the advantage of a property owner to pay amounts due with respect to an assessment by tendering a Bond. Such a practice would decrease the cash flow available to the City to make payments with respect to other Bonds then outstanding and could result in a default in payment on the Bonds.

Limited City Obligation Upon Delinquency
Pursuant to the 1915 Act, the City has elected not to be obligated to advance funds from the City treasury to cover delinquent Reassessment Installments. The only obligation of the City with respect to such delinquencies and the consequent deficiencies in the Redemption Fund is to advance money to the Redemption Fund from the Reserve Fund. The City has no obligation to replenish the Reserve Fund except to the extent that delinquent Reassessment Installments are paid or proceeds from foreclosure sales are realized. There is no assurance that the balance in the Reserve Fund will always be adequate to pay all delinquent Reassessment Installments and if during the period of delinquency there are insufficient funds in the Reserve Fund, a delay may occur in payments to the Bondowners.

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25 Potential Early Redemption of Bonds from Prepayments Property owners within the Reassessment District are permitted to prepay their Reassessment Installments at any time, and certain owners have previously done so. Any additional prepayments of Reassessment Installments which are made after the date of issuance of the Bonds will result in a redemption of Bonds on the succeeding March 2 or September 2. See the caption “THE BONDS—Redemption of Bonds—Mandatory Redemption from Reassessment Prepayments.” The resulting mandatory redemption of Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds.

Bankruptcy and Foreclosure
The payment of Reassessments and the ability of the City to foreclose the lien of delinquent unpaid Reassessment Installments, as discussed under the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the law of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to crowded local court calendars or procedural delays.

Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the interests of owners of the Bonds in at least two ways. First, the payment of property owners’ taxes and the ability of the District to foreclose the lien of delinquent unpaid Reassessment Installments pursuant to its covenant to pursue judicial foreclosure proceedings under the Indenture may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights (including the Soldiers and Sailors Civil Relief Act of 1940, which is discussed below) or by the laws of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed for many reasons, including crowded local court calendars or lengthy procedural delays.

Second, the United States Bankruptcy Code might prevent moneys on deposit in the Redemption Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were brought by or against a landowner and if the court found that any of such landowner had an interest in such moneys within the meaning of Section 541(a)(1) of the United States Bankruptcy Code.

On July 30, 1992, the United States Court of Appeal, Ninth Circuit (the “Ninth Circuit”), issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries (“Glasply”). In that case, the Ninth Circuit held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. Although the court upheld the priority of unpaid taxes imposed before the bankruptcy petition, unpaid taxes imposed after the filing of the bankruptcy petition were declared to be “administrative expenses” of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was able to foreclose on the property and retain all the proceeds of the sale except the amount of the pre-petition taxes.

The Bankruptcy Reform Act of 1994 included a provision which excepts from the United States Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state if such tax comes due after the filing of the petition [by a debtor in bankruptcy court].” This amendment effectively makes the Glasply holding inoperative as it relates to ad valorem real property taxes. However, it is possible that the original rationale of the Glasply ruling could still result in the treatment of post-petition special taxes as “administrative expenses,” rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings.

According to the court’s ruling, as administrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such July 12, 2022 Item #17 Page 157 of 463

26 administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes.

The Act provides that the Reassessments are secured by a continuing lien which is subject to the same lien priority in the case of delinquency as general property taxes. No case law exists with respect to how a bankruptcy court would treat the lien for Reassessments (which are not ad valorem or general property taxes) levied after the filing of a petition in bankruptcy. Glasply is controlling precedent on bankruptcy courts in the State. If the Glasply precedent with respect to general property taxes were applied to the levy of the Reassessments, the amount of Reassessments received from parcels whose owners declare bankruptcy could be reduced.

Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Reassessment Installments or the timing of enforcement thereof. For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of military service to redeem property sold to enforce the collection of a tax or assessment and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if a court concludes that the ability to pay such taxes or assessments is materially affected by reason of such service.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, reorganization, moratorium, insolvency or other similar laws affecting the rights of creditors generally, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.

Although bankruptcy proceedings would not cause the lien of the Reassessments to become extinguished, bankruptcy of a property owner could result in a stay of enforcement or other delay in prosecuting superior court foreclosure proceedings, or adversely affect the ability or willingness of a property owner to pay the Reassessment Installments, and could result in delinquent Reassessment Installments not being paid in full. Where property is encumbered by liens securing mortgage loans, it is highly probable that bankruptcy of a property owner would delay foreclosure for an extended period of time. Such a delay would increase the likelihood of a delay or default in payment of the principal and interest on the Bonds.

FDIC/Federal Government Interests in Parcels
The ability of the City to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Reassessment Installments may be limited in certain respects with regard to parcels in which the Federal Deposit Insurance Corporation (the “FDIC”) or other federal agency or instrumentality has or obtains an interest. Specifically, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Reassessment Installment is not paid, the remedies available to the City may be constrained.

The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that property that is owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property’s value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution’s affairs, unless abandonment of the FDIC’s interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent that the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by July 12, 2022 Item #17 Page 158 of 463

27 the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC’s consent.

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent that it purports to secure the payment of any such amounts. With respect to property in the State that is owned by the FDIC on January 9, 1997 and that was owned by the Resolution Trust Company (the “RTC”) on December 31, 1995, or that became the property of the FDIC through foreclosure of a security interest held by the RTC on that date, the FDIC will continue the RTC’s prior practice of paying special taxes imposed pursuant to the Act if the taxes were imposed prior to the RTC’s acquisition of an interest in the property. All other special taxes may be challenged by the FDIC.

If a parcel with unpaid Reassessments within the Reassessment District is owned by a federal governmental entity, or a private deed of trust secured by a parcel with unpaid Reassessments within the Reassessment District is owned by a federal governmental entity, the ability to foreclose on the parcel to collect delinquent Reassessments may be limited. Federal courts have held that, based on the Supremacy Clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government’s interest. This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel with unpaid Reassessments within the Reassessment District but does not pay taxes and assessments levied on the parcel (including Reassessments), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the City wishes to foreclose on the parcel as a result of delinquent Reassessments, the property cannot be sold at a foreclosure sale unless it can be sold for an amount that is sufficient to pay delinquent taxes and assessments on a parity with the Reassessments and preserve the federal government’s mortgage interest. In Rust v. Johnson, 597 F.2d 174 (1979), the Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.

The City has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels with unpaid Reassessments within the Reassessment District, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.

The City’s remedies may also be limited in the case of delinquent Reassessment Installments with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.

The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to a portion of the parcels in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC to be foreclosed at a judicial foreclosure sale would prevent or delay the foreclosure sale.

Natural Disasters
The Reassessment District, like many California communities, may be subject to unpredictable seismic activity, fires, floods, droughts or other natural disasters.

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28 The City is located in an area of high fire risk. The risk of wildfire is significant for all property within the Reassessment District. In recent years, wildfires have burned hundreds of acres at a time and destroyed dozens of homes and structures in and around the City generally. A 2012 fire within Assessment District No. 2002-01 burned open space areas within Assessment District No. 2002-01 and destroyed several homes in an adjacent area. In addition, in 1996, the Harmony Grove Fire destroyed five structures in the nearby City of San Marcos and damaged 22 others, and in 2014, the Cocos Fire destroyed five structures in the City of San Marcos and damaged 4 others.

Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads and property within the Reassessment District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event.

The most likely potential earthquake risk for property in the Reassessment District is from the Rose Canyon fault. Earthquakes from this source are expected to have a potential for seismic ground shaking with a maximum credible magnitude of 7.0 and a maximum probable magnitude of 6.25. The “maximum credible earthquake” is defined as the maximum earthquake that appears capable of occurring under the presently known tectonic framework, while the “maximum probable earthquake” is the maximum earthquake that is considered likely to occur during a 100-year time interval.

From 2014 to 2017, pursuant to order of the Governor, the State was under a drought state of emergency and mandatory water conservation was required. On October 19, 2021, the Governor declared another Statewide drought state of emergency and requested that all water users voluntarily reduce water use by 15%. The current drought continues and mandatory water conservation, in particular with respect to outdoor landscape irrigation, is expected to be ordered in the near future. There can be no assurance that property values within the Reassessment District will not be negatively affected by the inability to irrigate landscaped areas or other mandatory water conservation measures.

In the event of a severe earthquake, fire, flood, drought or other natural disaster, there may be significant damage to both property and infrastructure in the Reassessment District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Reassessment Installments when due. In addition, the value of land in the Reassessment District could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Reassessment Installments.

Hazardous Substances
While government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. The value of a parcel may be reduced as a result of a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act”, is the most well-known and widely applicable of these laws, but State laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels within the Reassessment District be affected by a hazardous substance, is to reduce the property’s marketability and value by the costs of remedying the condition because the prospective purchaser of such a parcel will, upon becoming the owner of such parcel, become obligated to remedy the condition just as the seller of such a parcel is.

Hazardous substance liabilities may arise in the future with respect to any of the parcels within the Reassessment District resulting from the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future July 12, 2022 Item #17 Page 160 of 463

29 resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise from the method of handling such substance. These possibilities could significantly affect the value of a parcel and could result in substantial delays in completing planned development on parcels that are currently undeveloped.

Loss of Tax Exemption
As discussed under the caption “CONCLUDING INFORMATION—Tax Matters,” interest on the Bonds could cease to be excluded from gross income for purposes of federal income taxation, retroactive to the date that the Bonds were issued, as a result of future acts or omissions of the City. In addition, it is possible that future changes in applicable federal tax laws could cause interest on the Bonds to be included in gross income for federal income taxation or could otherwise reduce the equivalent taxable yield of such interest and thereby reduce the value of the Bonds. The Bonds are not subject to early redemption or a higher rate of interest under such circumstances.

Tax Cuts and Jobs Act
H.R. 1 of the 115th U.S. Congress, known as the “Tax Cuts and Jobs Act,” was enacted into law on December 22, 2017 (the “Tax Act”). The Tax Act makes significant changes to many aspects of the Code. For example, the Tax Act reduces the amount of mortgage interest expense and state and local income tax and property tax expense that individuals may deduct from their gross income for federal income tax purposes.

These changes could increase the cost of home ownership within the Reassessment District and could result in reductions in the market value of properties below current levels. However, the City cannot predict the effect that the Tax Act may have on the cost of home ownership or the price of homes in the Reassessment District, the pace at which homes in the Reassessment District are sold to new buyers or the ability or willingness of homeowners to pay Reassessment Installments or property taxes.

Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the City has committed to provide certain financial and operating information relating to the Reassessment District annually, there can be no assurance that such information will be available to Bondowners on a timely basis. See the caption “CONCLUDING INFORMATION—Continuing Disclosure.” The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.

Future Debt Issuance
The ability of an owner of land within the Reassessment District to pay the Reassessment Installments could be affected by the existence of other taxes and assessments imposed upon taxable parcels. As discussed under the caption “SECURITY FOR THE BONDS—No Additional Bonds,” the City is not authorized to issue additional bonds (other than the Bonds or any refunding bonds) secured by the Reassessments. However, the City and other public agencies whose boundaries overlap those of the Reassessment District could impose additional taxes or assessment liens on the property within the Reassessment District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the Reassessment District through the levy of such additional taxes may be on a parity with the lien of the Reassessments levied by the City. See the caption “THE REASSESSMENT DISTRICT—Direct and Overlapping Indebtedness.”
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30 The imposition of additional liens on a parity with the Reassessment Installments may reduce the ability or willingness of the landowners to pay the Reassessment Installments and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Reassessment Installments.

The City does not have control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the Reassessment District. In addition, the landowners within the Reassessment District may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments could reduce the estimated value-to-lien ratios for property within the Reassessment District described herein.

Ballot Initiatives
From time to time constitutional initiatives or other initiative measures may be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the County or local districts to increase revenues or to increase appropriations, or on the ability of the landowners to complete their developments. On March 6, 1995, in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives.

Constitutional Amendment – Articles XIIIC and XIIID
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.” Article XIIID requires that, beginning July 1, 1997, the proceedings for the levy of any assessment by the City under the 1913 Act (including, if applicable, any increase in such assessment or any supplemental assessment under the 1913 Act) must be conducted in conformity with the provisions of Section 4 of Article XIIID. The City completed its proceedings for the levy of assessments in the Reassessment District on [July 12, 2022] after complying with the procedural requirements of Section 4 of Article XIIID. Under Section 10400 of the 1913 Act, any challenge to the proceedings or the Reassessment must be brought within 30 days after the date the reassessment was levied.

Article XIIIC removes limitations on the initiative power in matters of local taxes, assessments, fees and charges. Article XIIIC does not define the term “assessment,” and it is unclear whether this term is intended to include assessments or reassessments levied under the Act. In the case of the unpaid Reassessments which are pledged as security for payment of the Bonds, the 1915 Act provides a mandatory, statutory duty of the City and the County Auditor to post Reassessment Installments on account of the unpaid Reassessments to the property tax roll of the County each year while any of the Bonds are outstanding in amounts that are equal to the principal of and interest on the Bonds coming due in the succeeding calendar year plus certain administrative costs. Although the matter is not free from doubt, it is unlikely that the initiative power can be used to reduce or repeal the unpaid Reassessments which are pledged as security for payment of the Bonds or otherwise interfere with performance of the mandatory, statutory duty of the City and the County Auditor with respect to the unpaid Reassessments which are pledged as security for payment of the Bonds.

It may be possible, however, for voters or the City Council to reduce the Reassessments in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Reassessments that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Reassessments in amounts greater than the amount necessary for July 12, 2022 Item #17 Page 162 of 463

31 the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Reassessments for Administrative Expenses. However, the City has covenanted in the Indenture to collect annually an amount specified by the Treasurer to be the Administrative Expense Requirement to pay for Administrative Expenses. See Appendix B under the caption “COVENANTS AND WARRANTY— Covenants—Collection of the Administrative Expense Requirements.” The interpretation and application of the Initiative has been and will continue to be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of any future determination.

Risks of Real Estate Secured Investments Generally
Bondowners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation: (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the Reassessment District, the supply of or demand for competitive properties in such area and the market value of comparable residential and commercial property in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, government rules (including, without limitation, zoning laws and laws relating to threatened and endangered species and hazardous materials) and fiscal policies; and (iii) natural disasters (including, without limitation, earthquakes, fires and floods), which may result in uninsured losses.

No assurance can be given that individual property owners will pay Reassessment Installments in the future or that they will be able to pay such Reassessment Installments on a timely basis. See the caption “—Bankruptcy and Foreclosure” for a discussion of certain limitations on the City’s ability to pursue judicial proceedings with respect to delinquent parcels. Moreover, because assessed values do not necessarily indicate fair market values, decreases in fair market values may be even greater than decreases in assessed valuations, which could reduce the amount that can be raised to cover unpaid Reassessment Installments from a judicial foreclosure and sale of a delinquent parcel.

Failure to Develop Properties
As described in Table 5 under the caption “THE REASSESSMENT DISTRICT—Value-to-Reassessment Lien Ratios,” there remain 5 parcels of undeveloped land within the Reassessment District, four of which are industrial parcels totaling 14.96 acres and one of which is a residential parcel. Unimproved or partially improved land is inherently less valuable than land with improvements on it, especially if there are restrictions on development, and provides less security to Bondowners should it be necessary for the City to foreclose on the property due to the nonpayment of Reassessment Installments. Any delays in developing unimproved property, or the decision not to construct improvements on such property, may affect the willingness and ability of the owners of property within the Reassessment District to pay the Reassessment Installments when due.

Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. There is always the possibility that such approvals will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or to satisfy such governmental requirements could adversely affect planned land development. In addition, there is a risk that future governmental restrictions, including, but not limited to, governmental policies restricting or controlling development within the Reassessment District, will be enacted, and a risk that future voter approved land use initiatives could add more restrictions and requirements on development within the Reassessment District.

Moreover, at the onset of the COVID-19 pandemic, certain counties in Northern California (not including the County or other southern California counties) ordered a shutdown of most construction activities, July 12, 2022 Item #17 Page 163 of 463

32 and there can be no assurance that such a shutdown will not be imposed in the County in the future should a surge in COVID-19 infections and deaths occur. See the caption “—COVID-19 Outbreak.” There can also be no assurance that the means and incentive to conduct land development operations within the five remaining undeveloped parcels in the Reassessment District will not be adversely affected by a deterioration of the commercial or residential real estate market and economic conditions or future local, State and federal governmental policies relating to real estate development, the income tax treatment of real property ownership or the national economy.

Land developers may also need financing to complete the development of the five remaining undeveloped parcels within the Reassessment District. No assurance can be given that the required funding will be secured or that proposed developments which are currently contemplated will be partially or fully completed, and it is possible that cost overruns will be incurred that will require additional funding beyond what developers have projected, which may or may not be available.

Endangered Species
In recent years, there has been an increase in activity at the State and federal level related to the possible listing of certain plant and animal species found in the State as endangered or threatened species. An increase in the number of endangered or threatened species is expected to curtail development in a number of areas. At present, none of the unimproved property within the Reassessment District is known to be inhabited by any plant or animal species that any State or federal agency has listed or has proposed for listing on the endangered or threatened species lists. The City is not aware of the current existence of any endangered species within the Reassessment District. Notwithstanding this fact, new species are proposed to be added to the State and federal protected lists on a regular basis. Any action by the State or federal government to protect species located on or adjacent to the property within the Reassessment District could have an adverse effect on the ability of the owners of unimproved property to construct improvements on such property. Any such action could reduce the likelihood of timely payment of the Reassessment Installments which might be levied upon such property and would likely reduce the market value of such property and, therefore, the potential revenues available at foreclosure sales for delinquent Reassessment Installments. See the caption “—Land Values.” Billing of Taxes
The imposition of reassessments on a property can result in a substantially heavier property tax burden being imposed upon properties within a reassessment district than elsewhere in a city or county, and this in turn can lead to problems in the collection of the property taxes. In some property tax districts (although not in the Reassessment District), taxpayers have refused to pay property taxes and have commenced litigation challenging such taxes, the formation of the associated special district and bonds issued by or on behalf of the special district.

Under provisions of the Act, the Reassessment Installments are to be billed to the properties within the Reassessment District that were entered on the assessment roll of the County of San Diego Assessor by January 1 of the previous Fiscal Year. Such Reassessment Installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. These Reassessment Installments payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills may also indicate an unwillingness or inability to make regular property tax payments and Reassessment Installments in the future. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings” for a discussion of the provisions that apply, and the procedures that the City is obligated to follow, in the event of delinquency in the payment of Reassessment Installments.

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33 Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay Reassessment Installments even if the value of the parcel is sufficient may be affected by whether or not the owner was given due notice of the Reassessment authorization at the time that the owner purchased the parcel, was informed of the amount of the Reassessment Installments on the parcel, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Reassessment lien to be recorded in the Office of the Recorder of the County against each parcel. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Reassessment obligation in the purchase of a property within the Reassessment District or lending of money thereon.

State law requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit that is subject to special property taxes of the existence and maximum amount of such taxes using a statutorily prescribed form. Section 1102.6b of the Civil Code of the State requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Reassessment, could adversely affect the willingness and ability of the purchaser or lessor to pay the Reassessment Installments when due.

Land Values
The value of land within the Reassessment District is an important factor in evaluating the investment quality of the Bonds. In the event that a property owner defaults in the payment of a Reassessment Installment, the City’s only remedy is to commence judicial foreclosure proceedings on such property. Prospective purchasers of the Bonds should not assume that the property within the Reassessment District could be sold for the assessed value described herein at a foreclosure sale for delinquent Reassessment Installments or for an amount adequate to pay delinquent Reassessment Installments, because market values in a foreclosure sale may be less than assessed values. Reductions in property values within the Reassessment District due to a downturn in the economy or the real estate market, events such as earthquakes, wildfires, floods or droughts, stricter land use regulations, threatened or endangered species or other events may adversely impact the security underlying the liens. Certain property within the Reassessment District is still undeveloped. See the caption “THE REASSESSMENT DISTRICT—Value-to-Reassessment-Lien Ratios.” No assurance can be given that any bid will be received for a parcel with delinquent Reassessment Installments offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Reassessment Installments. See the caption “SECURITY FOR THE BONDS—Covenant to Foreclose and Court Foreclosure Proceedings.” The City notes that assessed values within the Reassessment District have increased by an average of approximately 5% per annum in the last five years. See Table 2 under the caption “THE REASSESSMENT DISTRICT—Description of the Reassessment District.” However, the assessed values set forth in this Official Statement do not represent market values arrived at through an appraisal process and generally reflect only the sales price of a parcel when acquired by its current owner, adjusted annually by an amount determined by the County Assessor, generally not to exceed an increase of more than 2% per Fiscal Year.

No assurance can be given that current assessed values reflect market values or that a parcel could actually be sold for its assessed value. The actual market value of the property is subject to future events such as a downturn in the economy, occurrences of certain acts of nature and the decisions of various governmental agencies as to land use, all of which could adversely impact the value of the land in the Reassessment District.

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34 Cybersecurity
Municipal agencies, like other business entities, face significant risks relating to the use and application of computer software and hardware. Recently, there have been significant cyber security incidents affecting municipal agencies, including a freeze affecting computer systems of the City of Atlanta, an attack on the City of Baltimore’s 911 system, an attack on the Colorado Department of Transportation’s computers and an attack that resulted in the temporary closure of the Port of Los Angeles’ largest terminal.

The City uses multiple layers of security systems and processes to safeguard against cyber-attacks, all designed based on the National Institutes of Standards & Technology Cybersecurity Framework. The City’s multi-level cyber protection scheme includes firewalls, anti-malware software, identity and access management, intrusion prevention, intrusion detection, log monitoring, zero trust principle and other security measures. The City’s network is also scanned by third party consultants and tools on a regular basis.

To date, the City has not suffered losses from a successful cyber-attack against its networks or systems. However, there can be no assurance that a future attack or attempted attack would not result in disruption of City operations.

COVID-19 Outbreak
The spread of the strains of coronavirus which are collectively called SARS-CoV-2, which cause the disease known as COVID-19 (“COVID-19”), and local, State and federal actions in response to COVID-19, have impacted the City and its residents. In response to the increasing number of COVID-19 infections and fatalities, health officials and experts recommended, and some governments mandated, a variety of responses ranging from travel bans and social distancing practices to complete shutdowns of certain services and facilities. The World Health Organization declared the COVID-19 outbreak to be a pandemic and, on March 4, 2020, as part of the State’s response to address the outbreak, the Governor declared a state of emergency. On March 13, 2020, the President declared a national emergency, freeing up funding for federal assistance to state and local governments. Many school districts across the State temporarily closed some or all school campuses (including schools within the City) in response to local and State directives or guidance.

On March 19, 2020, the Governor issued Executive Order N-33-20, a mandatory Statewide shelter-in-place order applicable to all non-essential services. Certain aspects of the shelter-in-place directives were extended indefinitely until indicators for modifying the stay-at-home order were met. The County also declared a state of emergency in response to the COVID-19 outbreak. On May 4, 2020, the Governor issued an executive order informing local health jurisdictions and industry sectors that they could gradually re-open under new modifications and guidance provided by the State. A phased re-opening of various sectors was underway beginning in mid-2020 in accordance with a four-stage re-opening plan that ended with a full reopening of the economy on June 15, 2021. Although pursuant to the re-opening plan certain restrictions on activities were eased, restrictions were also re-imposed in various jurisdictions as local conditions warranted, and such restrictions may be renewed as the pandemic continues.

On May 6, 2020, the Governor issued Order N-61-20. See the caption “SECURITY FOR THE BONDS—Property Tax Collection Procedures.” Order N-61-20 waived penalties and interest on taxes on property on the secured or unsecured roll through May 6, 2021 under certain conditions, including the following: (i) the property is a residential property occupied by the taxpayer or the property is used for a small business; (ii) the taxes owed were not delinquent as of March 4, 2020; (iii) the taxpayer files for relief in a form prescribed by the tax collector; and (iv) the taxpayer demonstrates economic hardship to the satisfaction of the tax collector. Order N-61-20 did not have a significant effect on the collection of penalties and interest on delinquent Reassessment Installments within Reassessment District No. 2012-1. Historical delinquency information for Reassessment District No. 2012-1 is set forth under the caption “THE REASSESSMENT DISTRICT—Delinquencies in the Reassessment District.”
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35 The effects of the COVID-19 outbreak and governmental actions responsive to it have altered the behavior of businesses and people in a manner that has had significant negative impacts on global and local economies. In addition, financial markets in the United States and globally have experienced significant volatility attributed to COVID-19 concerns. The outbreak resulted in increased pressure on State finances as budgetary resources were directed towards containing the pandemic and tax revenues sharply declined in early 2020. Identified cases of COVID-19 and deaths attributable to the COVID-19 outbreak continue to occur throughout the United States, including the County.

The COVID-19 outbreak is ongoing, and the duration and severity of the outbreak, as well as the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impact, are uncertain. The ultimate impact of COVID-19 on the City and its residents is unknown at this time. However, the pandemic could impact the City and the residents and businesses within the Reassessment in one or more of the following ways, among others: (i) continued extreme fluctuations in financial markets and contraction in available liquidity; (ii) extensive job losses and declines in business activity across important sectors of the economy, which could affect homeowners’ employment and ability to pay Reassessment Installments and thereby increase the delinquency rate in the Reassessment District; (iii) declines in business and consumer confidence that negatively impact economic conditions or cause an economic recession; (iv) the failure of governmental measures to stabilize the financial sector and introduce fiscal stimulus to counteract the economic impact of the pandemic; (v) cancellations of public events; and (vi) disruption of the regional and local economy and potential declines in property values, which could affect homeowners’ willingness to pay Reassessment Installments and thereby increase the delinquency rate in the Reassessment District.

CONCLUDING INFORMATION
Continuing Disclosure
The City has agreed to execute a Continuing Disclosure Agreement (the “Disclosure Agreement”) in connection with the issuance of the Bonds for the benefit of the Underwriter, holders and beneficial owners of the Bonds. Under the Disclosure Agreement, the City has agreed to provide certain financial information and operating data relating to the City by no later than each April 1 following the end of the City’s Fiscal Year (the “Annual Report”) and to provide notices of the occurrence of certain enumerated events (the “Listed Events”). The Annual Reports and notices of the occurrence of Listed Events will be filed on behalf of the City by The Bank of New York Mellon Trust Company, N.A. (the “Dissemination Agent”) on EMMA. The specific nature of the information to be included in the Annual Reports and the notices of Listed Events is set forth in Appendix E. The City has agreed to execute the Disclosure Agreement in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).

It should be noted that the City is required to file certain financial statements with the Annual Report. This requirement has been included in the Disclosure Agreement solely to satisfy the provisions of the Rule. The inclusion of this information does not mean that the Bonds are secured by any resources or property of the City other than the Reassessments and amounts pledged under the Indenture. See the caption “BONDOWNERS’ RISKS—Limited City Obligation Upon Delinquency.” [DISCLOSURE REGARDING PAST COMPLIANCE TO COME].

Legal Opinion
Certain proceedings in connection with the issuance of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Bond Counsel. The opinion of Bond Counsel attesting to the validity of the Bonds will be delivered with each Bond. A form of the opinion to be delivered by Bond Counsel is set forth in Appendix C.

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36 Certain legal matters will be passed upon for the City by the City Attorney and by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Jones Hall, A Professional Law Corporation, San Francisco, California, and for the Trustee by its counsel.

Tax Matters
In the opinion of Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State personal income tax. Bond Counsel notes that, with respect to corporations, interest on the Bonds may be included as an adjustment in the calculation of alternative minimum taxable income, which may affect the alternative minimum tax liability of such corporations.

In the opinion of Bond Counsel, the difference between the issue price of a Bond (the first price at which a substantial amount of the Bond of the same series and maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Bond Owner will increase the Bond Owner’s basis in the Bond. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the owner of the Bond is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations and is exempt from State personal income tax.

The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the District and others and is subject to the condition that the District comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District has covenanted to comply with all such requirements, as applicable.

The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar municipal obligations). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Bonds to the extent that it adversely affects the exclusion from gross income of interest on the Bonds or their market value.

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37 SUBSEQUENT TO THE ISSUANCE OF THE BONDS, THERE MIGHT BE FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE BONDS, INCLUDING THE IMPOSITION OF ADDITIONAL FEDERAL INCOME OR STATE TAXES ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE BONDS, ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. Bond Counsel’s engagement with respect to the Bonds terminates upon their issuance and Bond Counsel disclaims any obligation to update the matters set forth in its opinion. The Indenture, the Installment Purchase Agreement and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) on the Bonds for federal income tax purposes with respect to any Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.

Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the District continues to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of interest (and original issue discount) on the Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.

Should interest (and original issue discount) on the Bonds become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption or an increase in interest rates and will remain outstanding until maturity or until redeemed in accordance with the Indenture.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C.

Litigation
There is no action, suit or proceeding known by the City to be pending at the present time restraining or enjoining the delivery of the Bonds or in any way contesting or affecting the validity of the Bonds, the establishment of the Reassessment District or any proceedings of the City taken with respect to the execution or delivery thereof. A certificate executed by the City will be delivered to the Underwriter with respect to the foregoing matters simultaneously with the delivery of the Bonds.

Financial Interests
The fees being paid to the Underwriter, Municipal Advisor, Bond Counsel, Disclosure Counsel and Underwriter’s Counsel are contingent upon the issuance and delivery of the Bonds. From time to time, Bond Counsel represents the Underwriter on matters unrelated to the Bonds.

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38 Rating
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”), is expected to assign the Bonds the rating of “[__]”.

Future events, including the impacts of the COVID-19 pandemic that is described under the caption “BONDOWNERS’ RISKS—COVID-19 Outbreak,” could have an adverse impact on the rating of the Bonds, and there is no assurance that any credit rating that is given to the Bonds will be maintained for any period of time or that a rating may not be qualified, downgraded, lowered or withdrawn entirely by a rating agency if, in the judgment of such rating agency, circumstances so warrant, nor can there be any assurance that the criteria that is required to achieve a rating on the Bonds will not change during the period that the Bonds remain outstanding. Any such qualification, downgrade, lowering or withdrawal of the rating may have an adverse effect on the market price of the Bonds. The rating reflects only the current views and current rating criteria of S&P (which views and criteria could change at any time), and an explanation of the significance of such rating may be obtained from S&P. Generally, rating agencies base their ratings on information and materials furnished to them (which may include information and material from the City that is not included in this Official Statement) and on investigations, studies and assumptions by the rating agencies.

The City has covenanted in the Disclosure Agreement to file notices of any rating changes on the Bonds with EMMA. See the caption “—Continuing Disclosure” and Appendix E. Notwithstanding such covenant, information relating to rating changes on the Bonds may be publicly available from S&P prior to such information being provided to the City and prior to the date by which the City is obligated to file a notice of rating change. Purchasers of the Bonds are directed to S&P and its websites and official media outlets for the most current rating with respect to the Bonds after the initial execution and delivery thereof.

In providing a rating on the Bonds, S&P may have performed independent calculations of coverage ratios using its own internal formulas and methodology, which may not reflect the provisions of the Indenture. The City makes no representations as to any such calculations, and such calculations should not be construed as a representation by the City as to past or future compliance with any financial covenants, the availability of particular revenues for the payment of debt service or for any other purpose.

Municipal Advisor
The City has retained Fieldman, Rolapp & Associates, Inc., Irvine, California (the “Municipal Advisor”) as municipal advisor in connection with the sale of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained herein.

The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

Underwriting
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) pursuant to a purchase contract, dated the date hereof (the “Purchase Contract”), by and between the City and the Underwriter. The Underwriter will purchase the Bonds from the City at an aggregate purchase price of $_____, representing the principal amount of the Bonds, plus/less $_____ of net original issue premium/discount and less $_____ of Underwriter’s discount.

The Purchase Contract provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Purchase Contract, the approval of certain legal matters by counsel and certain other conditions.

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39 The initial public offering prices stated on the inside front cover of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices.

Miscellaneous
All quotations from, and summaries and explanations of, the Indenture, the Continuing Disclosure Agreement and other statutes and documents contained herein do not purport to be complete, and reference is made to said documents and statutes for full and complete statements of their provisions.

This Official Statement is submitted only in connection with the sale of the Bonds by the City. All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered reliable, are not guaranteed by the City or the Underwriter. The information contained herein should not be construed as representing all conditions affecting the City or the Bonds.

The execution and delivery of this Official Statement have been authorized by the City.

CITY OF CARLSBAD
By: City Manager
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A-1 4886-9813-9169v3/022062-0036

APPENDIX A

REASSESSMENT DIAGRAM

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B-1 4886-9813-9169v3/022062-0036

APPENDIX B

SUMMARY OF THE INDENTURE
The following is a summary of certain provisions of the Indenture that are not described elsewhere.

This summary does not purport to be comprehensive and reference should be made to the Indenture for a full and complete statement of the provisions thereof.
[TO COME FROM BOND COUNSEL].

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C-1 4886-9813-9169v3/022062-0036

APPENDIX C

OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth, a Professional Corporation, Bond Counsel, proposes to render its final approving opinion in substantially the following form:

August __, 2022
City Council City of Carlsbad Carlsbad, California
Re: City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds Ladies and Gentlemen:

We have examined certified copies of proceedings taken by the City of Carlsbad (the “City”) for the issuance of bonds designated “City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds” (the “Bonds”) pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the Streets and Highways Code of California). The Bonds are issued pursuant to the City’s Resolution No. 2022-__ (the “Resolution of Issuance”) and an Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the City and The Bank of New York Mellon Trust Company, N.A. as trustee. We have made no examination of the ownership or use of the property assessed. In rendering this opinion, we have relied upon certain representations of fact and certifications made by or on behalf of the City, the initial purchaser of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.

The Bonds are dated their date of delivery and mature on the dates and in the amounts set forth in the Indenture. The Bonds bear interest payable semiannually on each March 2 and September 2, commencing on ______ 2, 202__, at the rates per annum set forth in the Indenture.

Based upon the foregoing and in reliance thereon and on all matters of fact that we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the opinion that:

1. The City has duly authorized the issuance of the Bonds. The Bonds and the Indenture constitute legal, valid and binding limited obligations of the City enforceable in accordance with their terms, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other laws affecting creditors’ rights generally, by the application of equitable principles, by the exercise of judicial discretion in appropriate cases and by limitations on legal remedies against public agencies in the State of California; provided, however, that we express no opinion with respect to any indemnification, contribution, penalty, choice of law or waiver provisions contained therein.

2. The Bonds are issued upon and secured by the unpaid Reassessments (as such term is defined in the Indenture) in Reassessment District No. 2022-1 of the City, together with interest thereon; said unpaid Reassessments together with interest thereon, constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon; the Bonds are secured by the moneys in the Redemption Fund established under the Indenture and by the unpaid Reassessments; and the Bonds are payable, as to both principal and interest, exclusively out of said Redemption Fund.

3. The Indenture creates a valid pledge of and lien upon the unpaid Reassessments and the interest thereon and the moneys in all funds and accounts established pursuant to the Indenture, other than the July 12, 2022 Item #17 Page 174 of 463

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Administrative Expense Fund and the Rebate Fund, including the investments thereof, subject in all cases to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein.

4. Under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. It should be noted that, with respect to corporations, such interest may be included as an adjustment in the calculation of alternative minimum taxable income, which may affect the alternative minimum tax liability of such corporations.

5. Interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.

6. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of the same series and maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bonds constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Bond Owner will increase the Bond Owner’s basis in the Bond. In the opinion of Bond Counsel, the amount of original issue discount that accrues to the owner of the Bond is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, and is exempt from State personal income tax.

7. The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium, which must be amortized under Section 171 of the Internal Revenue Code of 1986, as amended (the “Code”); such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

The opinions that are expressed herein as to the exclusion from gross income of interest on the Bonds are based upon certain representations of fact and certifications made by the City and are subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such requirements.

Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The opinions that are expressed herein may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. Our engagement with respect to the Bonds terminates on the date of their issuance. The Indenture and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect July 12, 2022 Item #17 Page 175 of 463

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thereto. No opinion is expressed herein as to the effect on the exclusion from gross income of interest (and original issue discount) on the Bonds for federal income tax purposes if any such action is taken or omitted based upon the opinion or advice of counsel other than ourselves. Other than expressly stated herein, we express no other opinion regarding tax consequences with respect to the Bonds.

The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement relating to the Bonds or other offering material relating to the Bonds and expressly disclaim any duty to advise the Owners of the Bonds with respect to matters contained in the Official Statement.

Respectfully submitted,
July 12, 2022 Item #17 Page 176 of 463

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APPENDIX D

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the City and the Underwriter believe to be reliable, but neither the City nor the Underwriter takes any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value, if any, and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com .

Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts July 12, 2022 Item #17 Page 177 of 463

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such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Trustee’s DTC account. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.

The City may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY

ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

July 12, 2022 Item #17 Page 178 of 463

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APPENDIX E

FORM OF CONTINUING DISCLOSURE AGREEMENT
Upon the issuance of the Bonds, the City proposes to enter into a Continuing Disclosure Agreement in substantially the following form:

This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered by the City of Carlsbad (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A., as dissemination agent (the “Dissemination Agent”), in connection with the issuance of the City of Carlsbad Reassessment District No. 2022-1 Limited Obligation Refunding Bonds in the aggregate principal amount of $_____ (the “Bonds”). The Bonds are being issued pursuant to a Resolution adopted by the City Council of the Issuer on July 12, 2022 and a Indenture, dated as of August 1, 2022 (the “Indenture”), by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Issuer and Dissemination Agent hereby covenant and agree as follows:

Section 2. Definitions. In addition to the definitions set forth in the Indenture which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. “Dissemination Agent” shall mean The Bank of New York Mellon Trust Company, N.A., or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. “EMMA” shall mean the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/ . “Financial Obligation” shall mean a: (A) debt obligation; (B) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (C) guarantee of (A) or (B). The term “Financial Obligation” does not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
“Fiscal Year” shall mean the one-year period ending on the last day of June of each year, or any other period selected as the Issuer’s fiscal year. In the event of a change in the District’s Fiscal Year, the District shall give notice of such change in the same manner as for a Listed Event under Section 5(b). “Listed Events” shall mean any of the events listed in Section 5(a). “Official Statement” shall mean the Official Statement of the Issuer dated July __, 2022 delivered in connection with the issuance of the Bonds. “Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated.

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“Rule” shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Section 3. Provision of Annual Reports.
(a) The Issuer shall, or shall cause the Dissemination Agent to, annually not later than each April 1 after the end of the Issuer’s Fiscal Year, commencing with the report for Fiscal Year 2022, provide to EMMA, in an electronic format as prescribed by the Municipal Securities Rulemaking Board, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) Business Days prior to said date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). The 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 4 of this Disclosure Agreement; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report. If the Issuer’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). (b) If the Issuer is unable to provide to EMMA or the Dissemination Agent an Annual Report by the date required in subsection (a), the Issuer shall file a notice on EMMA, in an electronic format as prescribed by the Municipal Securities Rulemaking Board. (c) The Dissemination Agent shall:
(i) confirm the electronic filing requirements of the Municipal Securities Rulemaking Board for the Annual Report; and (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided to EMMA.

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(iv) Balance in the Reserve Fund and a statement of the Reserve Requirement; (v) Information in Table 6 of the Official Statement for the Bonds regarding the annual special assessment installments, amount collected, delinquent amount and percent delinquent for the most recent Fiscal Year and the amount and percent remaining delinquent for any prior Fiscal Year; and (vii) Status of foreclosure proceedings and summary of results of foreclosure sales, if available, or a statement that no such proceedings are pending. (c) In addition to any of the information expressly required to be provided under paragraphs (a) and (b) of this Section, the Issuer shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determination of taxability or Notices of Proposed Issue (IRS Form 5701-TEB);

6. tender offers;

7. defeasances;

8. ratings changes;

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2. modifications to the rights of Bondholders;

3. optional, unscheduled or contingent Bond calls;

4. release, substitution or sale of property securing repayment of the Bonds;

5. non-payment related defaults;

7. appointment of a successor or additional trustee or the change of the name of a trustee; and

8. incurrence of a Financial Obligation of the Issuer, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the Issuer, any of which affect security holders. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event under subsection (b) would be material under applicable federal securities laws, and if the Dissemination Agent is other than the Issuer, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to file a notice of such occurrence with EMMA in a timely manner not more than ten (10) Business Days after the event. (d) If the Issuer determines that the Listed Event under subsection (b) would not be material under applicable federal securities laws and if the Dissemination Agent is other than the Issuer, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence.
(e) The Issuer hereby agrees that the undertaking set forth in this Disclosure Agreement is the responsibility of the Issuer and, if the Dissemination Agent is other than the Issuer, the Dissemination Agent shall not be responsible for determining whether the Issuer’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.

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Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing thirty days written notice to the City and the Trustee. The initial Dissemination Agent shall be The Bank of New York Mellon Trust Company, N.A.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations, upon satisfaction of the following conditions:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), 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 with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the 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 holders of the Bonds in the manner provided in the Indenture; or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information 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.

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Disclosure Agreement shall not be deemed an Event of Default under the Indenture or any Supplemental Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Issuer to comply with this Disclosure Agreement shall be an action to compel performance.

The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as agreed to between the Dissemination Agent and the Issuer from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Issuer hereunder and shall not be deemed to be acting in any fiduciary capacity for the Issuer, beneficial owners or any other party. The Dissemination Agent may rely and shall be protected in acting or refraining from acting upon and directions from the Issuer or an opinion of nationally recognized bond counsel. Neither the Trustee nor the Dissemination Agent shall have any liability to any party for any monetary damages or other financial liability of any kind whatsoever related to or arising from any breach of this Disclosure Agreement. No person shall have any right to commence any action against the Trustee or Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Any company succeeding to all or substantially all of the Dissemination Agent’s corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any paper or any further act.

If to the Issuer:

City of Carlsbad 1635 Faraday Avenue Carlsbad, California 92008-7314 If to the Dissemination Agent:

The Bank of New York Mellon Trust Company, N.A. 333 South Hope Street, Suite 2525 Los Angeles, California 90071 Attention: Corporate Trust Department
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or to such other address or to the attention of such other person as hereinafter shall be designated in writing by the applicable party sent in accordance herewith. Any such notice or communication shall be deemed to have been delivered either at the time of personal delivery actually received by the addressee or a representative of the addressee at the address provided above or, if delivered on a business day in the case of delivery service or certified or registered mail, as of the earlier of the date delivered or the date 72 hours following the date deposited in the United States mail at the address provided herein, or if by telecopier, upon electronic confirmation of good receipt by the receiving telecopier.

Dated: August __, 2022 CITY OF CARLSBAD
By:

City Manager
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Dissemination Agent By: Its:

July 12, 2022 Item #17 Page 185 of 463

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APPENDIX F

INFORMATION CONCERNING THE CITY OF CARLSBAD AND COUNTY OF SAN DIEGO Set forth below is certain demographic information regarding the City of Carlsbad (the “City”), the County of San Diego (the “County”) and the State of California (the “State”). This information is provided for informational purposes and as general background only. The information set forth herein has been obtained from third party sources that are believed to be reliable, but such information is not guaranteed by the City as to accuracy or completeness. Neither the delivery of this Official Statement nor any sale of the securities offered hereby shall under any circumstances create any implication that there has been no change in any information contained in this Appendix since the date of the Official Statement. The Bonds are payable solely from the Reassessment Installments as described in the Official Statement. The information and data within this Appendix is the latest data available; however, the current state of the economy at City, County, State and national levels may not be reflected in the data discussed below because more up-to-date publicly available information is not available to the City. In particular, certain information herein reflects periods prior to the outbreak of COVID-19 and may not reflect current conditions.

General Information
The City is located on the coast of southern California approximately 35 miles north of the City of San Diego and 86 miles south of the City of Los Angeles. It is bordered by two lagoons, Buena Vista and Batiquitos, on the north and south respectively. City limits cover approximately 42 square miles and the City’s estimated population was 115,585 as of January 1, 2022.

Municipal Government
The City, a charter city with the council-manager form of government, was incorporated July 16, 1952. The City’s Mayor is elected at large for a four-year term and four Council members are elected by division for four-year alternating terms at elections held every two years. The city manager, appointed by the City Council, acts as chief executive officer in carrying out City Council policies.

The City provides a full range of services, including police, fire, parks and recreation, library, planning and zoning, building and engineering, various maintenance services and administration. The City provides water and sewer services through the Carlsbad Municipal Water District (“CMWD”), a subsidiary district of the City. Solid waste collection is provided through a franchise arrangement with a local refuse collection service.

The City also operates a housing authority that provides low and moderate income families with housing assistance.

Climate and Topography
The City has mild summers with a mean temperature for the month of July of 73 degrees and moderate winters with an average winter temperature of 58 degrees. The relative humidity is low. Average rainfall, which occurs generally in the period between October and February, is less than 9 inches.

The City is located on the Pacific Ocean, 35 miles north of San Diego at an altitude of sea level to 585 feet above sea level.

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Population
The table below summarizes population of the City, the County and the State for the last five years.

CITY OF CARLSBAD, SAN DIEGO COUNTY AND STATE OF CALIFORNIA Population Year City of Carlsbad San Diego County State of California 2017 113,321 3,303,366 39,352,398 2018 113,994 3,321,118 39,519,535 2019 113,896 3,333,319 39,605,361 2020 114,664 3,331,279 39,648,938 2021 115,680 3,315,404 39,466,855 2022 115,585 3,287,306 39,185,605 Source: California Department of Finance, E-4 Population Estimate for Cities, Counties, and the State, 2011-2022, with 2010 Census Benchmark.

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Employment
The table below summarizes historical employment and unemployment for the County, the State of California and the United States.

SAN DIEGO COUNTY, STATE OF CALIFORNIA AND UNITED STATES Civilian Labor Force, Employment, and Unemployment (Annual Averages) Year Area Labor Force Employment Unemployment Unemployment Rate(1) 2016 San Diego County 1,563,200 1,489,100 74,100 4.7% California 19,012,000 17,965,400 1,046,600 5.5 United States 159,187,000 151,436,000 7,751,000 4.9 2017 San Diego County 1,571,900 1,508,200 63,600 4.0% California 19,173,800 18,246,800 927,000 4.8 United States 160,320,000 153,337,000 6,982,000 4.4 2018 San Diego County 1,579,700 1,526,300 53,400 3.4% California 19,263,900 18,442,400 821,500 4.3 United States 162,075,000 155,761,000 6,314,000 3.9 2019 San Diego County 1,580,100 1,528,300 51,800 3.3% California 19,353,700 18,550,500 803,200 4.2 United States 163,539,000 157,538,000 6,001,000 3.7 2020(2) San Diego County 1,538,400 1,396,500 141,800 9.2% California 18,821,200 16,913,100 1,908,100 10.1 United States 160,742,000 147,795,000 12,947,000 8.1 (1) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures available in this table. (2) Latest available full-year data. Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. 2020 Benchmark.

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The table below summarizes the largest employers operating within the City and their respective number of employees as of June 30, 2021.

CITY OF CARLSBAD Largest Employers
Name of Employer Number of Employees Type of Business/Product ViaSat, Inc. 2,481 Information Technology Legoland California 2,300 Hospitality/Tourism Thermo Fisher Scientific 1,982 Life Sciences Omni La Costa Resort & Spa 1,300 Hospitality/Tourism Carlsbad Unified School District 1,092 Education TaylorMade Golf Company 960 Action Sports City of Carlsbad 748 Municipal Government Nortek Security & Control 637 Information Technology HM Electronics, Inc. 571 Information Technology Gemological Institute of America 555 Research/Education Source: City of Carlsbad Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2021.

The table below summarizes the largest employers operating within the County and their respective number of employees as of June 30, 2021.

SAN DIEGO COUNTY Largest Employers
Name of Employer Number of Employees Type of Business/Product University of California, San Diego 35,802 Education
Sharp Healthcare 19,468 Healthcare County of San Diego 17,954 Regional Government City of San Diego 11,820 Municipal Government General Atomics 6,745 Defense Contractor San Diego State University 6,454 Education Rady Children’s Hospital 5,711 Healthcare San Diego Community College District 5,400 Education Sempra Energy 5,063 Energy YMCA of San Diego County 5,057 Recreational Source: County of San Diego Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2021.

Transportation
Centrally located in southern California, the City is accessible to major transportation resources, within and surrounded by Interstate 5 and State Route 78 and served by Amtrak and Coaster rail lines. The City is approximately 35 miles north of San Diego International Airport and facilities at San Diego harbor.

Within the City, North Coast Transit District (“NCTD”) operates the Breeze, gas-powered buses which provide transportation linking the greater north County area. NCTD buses stop in multiple points within the City, including Carlsbad Village and Plaza Camino Real.

NCTD also operates the Coaster, a commuter train which travels north along the coastline to Oceanside and south to downtown San Diego.

July 12, 2022 Item #17 Page 189 of 463

F-5
In addition, McClellan-Palomar Airport, a small commercial and private airport, is located within the City.

Education
Carlsbad is located near four major universities and two community colleges. Portions of the City are located within two unified school districts, one high school district and one elementary school district.

Utilities
Clean Energy Alliance, a joint powers agency, provides electric power to most of the City. San Diego Gas & Electric also provides electric power and natural gas in the City and to most communities in the County. Telephone service is provided by Cox Communications, Spectrum and SBC Communications Inc. CMWD, a subsidiary district of the City, provides water to approximately 85 percent of the City, an area of approximately 32 square miles. Residents of the City who are not served by CMWD receive water service from the Olivenhain Municipal Water District or the Vallecitos Water District.

Community Facilities and Recreation
The City is a beach community fronted by over six miles of coastline from Buena Vista Lagoon in the north to Batiquitos Lagoon in the south. Throughout the year, residents and tourists enjoy swimming, surfing, fishing, diving, jogging and relaxing at the City’s beaches. The mile-long Carlsbad seawall is a popular location for such activities. The City’s lagoons also include ecosystems that provide bird watching and nature walks as well as water sports such as non-motorized boating.

The City is home to many parks and dog parks, which offer a variety of leisure activities, including softball, volleyball, pickleball and soccer in addition to providing playground equipment and picnic tables. Concerts in City parks have become a summer tradition in the City.

The City is also known for its golf facilities, including its municipal golf course, The Crossings at Carlsbad. The City is also home to two world-class golf resorts and more than 30 golf industry businesses.

Attractions within the City include Legoland California and Sea Life Aquarium. Legoland is a Lego-based resort with over 50 rides, shows and attractions catering to children from ages two to twelve and their families.

The Flower Fields, located at Carlsbad Ranch, is a commercial ranunculus field open to the public with over 50 acres of giant tecolote ranunculus, a garden of miniature roses, Ecke poinsettias and a tractor tour that has been in operation for over 50 years.

Also located within the City is the Museum of Making Music. The museum curates public exhibits that relate to the history of American popular music, the manufacture and retail of musical instruments and the history of the music products industry from 1890s to the present day. The museum’s galleries consist of more than 450 vintage instruments and artifacts on display, hundreds of audio samples of popular music and an area for visitors to interact with a variety of live, hands-on instruments. The museum also organizes public events, performances and lectures whose purpose is to entertain, educate and inform audiences of the benefits and heritage of making music.

The Gemological Institute of America also operates a museum in Carlsbad. The museum introduces visitors to the vast and vibrant world of gems and jewelry. Their exhibits display the science and beauty of gems and are meant to educate, delight and astonish. They feature rotating items from the Gemological Institute of America collection and extraordinary, unique pieces on loan from affiliates in the industry and private collectors.

July 12, 2022 Item #17 Page 190 of 463

Main Office
32605 Temecula Parkway, Suite 100
Temecula, CA 92592
Toll free: 800.676.7516 Fax: 951.296.1998
Regional Office
870 Market Street, Suite 1223
San Francisco, CA 94102
Toll free: 800.434.8349 Fax: 415.391.8439
City of Carlsbad
City of Carlsbad Reassessment District No. 2022-1
Preliminary Reassessment Report
June 24, 2022
Exhibit 9
July 12, 2022 Item #17 Page 191 of 463

TABLE OF CONTENTS

REASSESSMENT 1
SOURCES AND USES OF FUNDS 3
DEBT SERVICE SCHEDULES 4
COMPARISON OF AUDITOR’S RECORDS 15
REASSESSMENT ROLL 168
NAMES AND ADDRESSES OF PROPERTY OWNERS 217
METHOD OF REASSESSMENT 257
MAXIMUM ANNUAL ADMINISTRATIVE ASSESSMENT 258
CERTIFICATIONS 259
REASSESSMENT DIAGRAM 260

July 12, 2022 Item #17 Page 192 of 463

REASSESSMENT
WHEREAS, on ____________, the City Council of the City of Carlsbad (the “City”), pursuant to the provisions of the Refunding Act of 1984 for 1915 Improvement Act Bonds (the “Act”), adopted Resolution No. ________ (the “Resolution of Intention”) declaring its intention to refund the outstanding bonds (the “Prior Bonds”) of Reassessment District No. 2012-1 (the “Assessment District”) and to levy reassessments on the property within the Assessment Districts as security for the refunding bonds;

WHEREAS, the Resolution of Intention directed the undersigned to make and file a report presenting a schedule setting forth the unpaid principal and interest of the Prior Bonds to be refunded and the total amounts thereof, the total estimated principal amount of the reassessment and of the refunding bonds and the maximum interest thereon, together with an estimate of the cost of the reassessment and of issuing the refunding bonds, the auditor’s record showing the schedule of principal installments and interest on all unpaid original assessments and the total amounts thereof, the estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number of the reassessment diagram, together with a proposed auditor’s record for the reassessment, and reassessment diagram showing the Assessment Districts and the boundaries and dimensions of the subdivisions of land within the Assessment Districts. Each subdivision, including separate condominium interest as defined in Section 4125 of the Civil Code, shall be given a separate number upon the reassessment diagram to which reference is hereby made for further particulars;

NOW THEREFORE, the undersigned by virtue of the authorization provided in the Resolution of Intention has prepared this report regarding the reassessment to be levied pursuant to the Act on property within the Assessment Districts to accomplish the refunding of the Prior Bonds and which will be security for the refunding bonds.

The amounts to be paid for said refunding, together with the expenses incidental thereto, and the reassessment balance are set forth herein.

And I do hereby reassess and apportion the total amount of the cost and expenses of said reassessment and refunding upon the several lots, pieces or parcels or portions of lots or subdivisions of land liable therefore and benefited thereby, and hereinafter numbered to correspond with the numbers upon the attached reassessment diagram, upon each thereof, severally and respectively, as more particularly set forth in the reassessment roll attached and by reference made a part hereof.

As required by the Act, a reassessment diagram hereto attached shows the Assessment Districts and also the boundaries and dimensions of the respective subdivisions of land within the Assessment Districts as the same existed at the time of the passage of the Resolution of Intention, each of which subdivisions having been given a separate number upon said reassessment diagram.

Said reassessment is made upon the several subdivisions of land within the Assessment Districts in proportion to the unpaid principal amount of the original assessment recorded as a lien against each said subdivisions of land. The reassessment identification numbers set forth in the reassessment roll and elsewhere herein are the identifying numbers of the parcels of land within the Assessment Districts as they appear on the reassessment diagram.

Each subdivision of land reassessed is described in the reassessment roll by reference to its parcel number as shown on the Assessor’s Maps of the County of San Diego for Fiscal Year 2021/22 and includes all such parcels. For a more particular description of said property, reference is hereby made to the deeds and maps on file and of record in the office of the County Recorder of said County.

1July 12, 2022 Item #17 Page 193 of 463

Notice is hereby given that serial refunding bonds to represent unpaid reassessments and bear interest at the rate of not to exceed twelve percent (12%) per annum, will be issued thereunder in the manner provided by the Act, and the last installment of such refunding bonds shall mature not later than September 2, 2035.

Dated as of June 24, 2022

Sara Mares, Director, NBS

2July 12, 2022 Item #17 Page 194 of 463

SOURCES AND USES OF FUNDS

Assessment District
2002-1
Assessment District
2003-1 2013 Bonds
2013 Bonds (College Boulevard and
(Poinsettia Lane East) Cannon Road East) Total
SOURCES: Bond Proceeds:

Par Amount of Bonds $14,290,000.00 $5,935,000.00 $20,225,000.00 Net Premium 144,231.55 76,498.70 220,730.25
$14,434,231.55 $6,011,498.70 $20,445,730.25

Other Sources of Funds
Prior Reserve Fund $1,615,871.79 $671,112.60 $2,286,984.39 September 2022 DS Payment 1,168,649.38 522,983.13 1,691,632.51 $2,784,521.17 $1,194,095.73 $3,978,616.90

TOTAL SOURCES $17,218,752.72 $7,205,594.43 $24,424,347.15

USES: Refunding Escrow Deposits:

Cash Deposit $0.38 $0.13 $0.51
SLGS Purchases $15,673,649.00 $6,562,983.00 $22,236,632.00 Other Fund Deposits:

Debt Service Reserve Fund 1,071,750.00 445,125.00 1,516,875.00

Delivery Date Expenses: Cost of Issuance $215,498.15 $89,501.85 $305,000.00 Underwriter's Discount 108,389.39 45,016.86 153,406.25 Bond Insurance (80bps) 134,620.05 54,110.33 188,730.38 Surety Premium (4%) 14,290.00 5,935.00 20,225.00
$472,797.59 $194,564.04 $667,361.63

Contingency $555.75 $2,922.26 $3,478.01
TOTAL USES $17,218,752.72 $7,205,594.43 $24,424,347.15

3July 12, 2022 Item #17 Page 195 of 463

DEBT SERVICE SCHEDULES

4July 12, 2022 Item #17 Page 196 of 463

Assessment District No. 2002-01 2013 Bonds
(Poinsettia Lane East)
Refunded Bonds Original Debt Service Schedule
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $309,390.00 $309,390.00
9/2/2023 3.550% $875,000.00 309,390.00 1,184,390.00 $1,493,780.00 3/2/2024 293,858.75 293,858.75
9/2/2024 3.700% 905,000.00 293,858.75 1,198,858.75 1,492,717.50 3/2/2025 277,116.25 277,116.25
9/2/2025 3.800% 940,000.00 277,116.25 1,217,116.25 1,494,232.50 3/2/2026 259,256.25 259,256.25
9/2/2026 3.900% 975,000.00 259,256.25 1,234,256.25 1,493,512.50 3/2/2027 240,243.75 240,243.75
9/2/2027 4.000% 1,015,000.00 240,243.75 1,255,243.75 1,495,487.50 3/2/2028 219,943.75 219,943.75
9/2/2028 4.000% 1,055,000.00 219,943.75 1,274,943.75 1,494,887.50 3/2/2029 198,843.75 198,843.75
9/2/2029 4.125% 1,100,000.00 198,843.75 1,298,843.75 1,497,687.50 3/2/2030 176,156.25 176,156.25
9/2/2030 4.125% 1,140,000.00 176,156.25 1,316,156.25 1,492,312.50 3/2/2031 152,643.75 152,643.75
9/2/2031 4.125% 1,190,000.00 152,643.75 1,342,643.75 1,495,287.50 3/2/2032 128,100.00 128,100.00
9/2/2032 4.250% 1,240,000.00 128,100.00 1,368,100.00 1,496,200.00 3/2/2033 101,750.00 101,750.00
9/2/2033 5.000% 1,290,000.00 101,750.00 1,391,750.00 1,493,500.00 3/2/2034 69,500.00 69,500.00
9/2/2034 5.000% 1,355,000.00 69,500.00 1,424,500.00 1,494,000.00 3/2/2035 35,625.00 35,625.00
9/2/2035 5.000% 1,425,000.00 35,625.00 1,460,625.00 1,496,250.00 Totals $14,505,000.00 $4,924,855.00 $19,429,855.00 $19,429,855.00 5July 12, 2022 Item #17 Page 197 of 463

Assessment District No. 2002-01 2013 Bonds
(Poinsettia Lane East)
Refunded Bonds Actual Debt Service Schedule
Net of all Bond Calls
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $309,390.00 $309,390.00
9/2/2023 3.550% $875,000.00 309,390.00 1,184,390.00 $1,493,780.00 3/2/2024 293,858.75 293,858.75
9/2/2024 3.700% 905,000.00 293,858.75 1,198,858.75 1,492,717.50 3/2/2025 277,116.25 277,116.25
9/2/2025 3.800% 940,000.00 277,116.25 1,217,116.25 1,494,232.50 3/2/2026 259,256.25 259,256.25
9/2/2026 3.900% 975,000.00 259,256.25 1,234,256.25 1,493,512.50 3/2/2027 240,243.75 240,243.75
9/2/2027 4.000% 1,015,000.00 240,243.75 1,255,243.75 1,495,487.50 3/2/2028 219,943.75 219,943.75
9/2/2028 4.000% 1,055,000.00 219,943.75 1,274,943.75 1,494,887.50 3/2/2029 198,843.75 198,843.75
9/2/2029 4.125% 1,100,000.00 198,843.75 1,298,843.75 1,497,687.50 3/2/2030 176,156.25 176,156.25
9/2/2030 4.125% 1,140,000.00 176,156.25 1,316,156.25 1,492,312.50 3/2/2031 152,643.75 152,643.75
9/2/2031 4.125% 1,190,000.00 152,643.75 1,342,643.75 1,495,287.50 3/2/2032 128,100.00 128,100.00
9/2/2032 4.250% 1,240,000.00 128,100.00 1,368,100.00 1,496,200.00 3/2/2033 101,750.00 101,750.00
9/2/2033 5.000% 1,290,000.00 101,750.00 1,391,750.00 1,493,500.00 3/2/2034 69,500.00 69,500.00
9/2/2034 5.000% 1,355,000.00 69,500.00 1,424,500.00 1,494,000.00 3/2/2035 35,625.00 35,625.00
9/2/2035 5.000% 1,425,000.00 35,625.00 1,460,625.00 1,496,250.00 Totals $14,505,000.00 $4,924,855.00 $19,429,855.00 $19,429,855.00 6July 12, 2022 Item #17 Page 198 of 463

Assessment District No. 2002-01 2013 Bonds
(Poinsettia Lane East)
Refunded Parcel's Aggregate Amortization Schedule

Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $309,390.00 $309,390.00
9/2/2023 3.550% $875,000.00 309,390.00 1,184,390.00 $1,493,780.00 3/2/2024 293,858.75 293,858.75
9/2/2024 3.700% 905,000.00 293,858.75 1,198,858.75 1,492,717.50 3/2/2025 277,116.25 277,116.25
9/2/2025 3.800% 940,000.00 277,116.25 1,217,116.25 1,494,232.50 3/2/2026 259,256.25 259,256.25
9/2/2026 3.900% 975,000.00 259,256.25 1,234,256.25 1,493,512.50 3/2/2027 240,243.75 240,243.75
9/2/2027 4.000% 1,015,000.00 240,243.75 1,255,243.75 1,495,487.50 3/2/2028 219,943.75 219,943.75
9/2/2028 4.000% 1,055,000.00 219,943.75 1,274,943.75 1,494,887.50 3/2/2029 198,843.75 198,843.75
9/2/2029 4.125% 1,100,000.00 198,843.75 1,298,843.75 1,497,687.50 3/2/2030 176,156.25 176,156.25
9/2/2030 4.125% 1,140,000.00 176,156.25 1,316,156.25 1,492,312.50 3/2/2031 152,643.75 152,643.75
9/2/2031 4.125% 1,190,000.00 152,643.75 1,342,643.75 1,495,287.50 3/2/2032 128,100.00 128,100.00
9/2/2032 4.250% 1,240,000.00 128,100.00 1,368,100.00 1,496,200.00 3/2/2033 101,750.00 101,750.00
9/2/2033 5.000% 1,290,000.00 101,750.00 1,391,750.00 1,493,500.00 3/2/2034 69,500.00 69,500.00
9/2/2034 5.000% 1,355,000.00 69,500.00 1,424,500.00 1,494,000.00 3/2/2035 35,625.00 35,625.00
9/2/2035 5.000% 1,425,000.00 35,625.00 1,460,625.00 1,496,250.00 Totals $14,505,000.00 $4,924,855.00 $19,429,855.00 $19,429,855.00 7July 12, 2022 Item #17 Page 199 of 463

Assessment District No. 2002-01 2022 Bonds
(Poinsettia Lane East)
Refunding Bonds Original Debt Service Schedule
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $325,491.11 $325,491.11
9/2/2023 3.000% $825,000.00 281,675.00 1,106,675.00 $1,432,166.11 3/2/2024 269,300.00 269,300.00
9/2/2024 4.000% 895,000.00 269,300.00 1,164,300.00 1,433,600.00 3/2/2025 251,400.00 251,400.00
9/2/2025 4.000% 930,000.00 251,400.00 1,181,400.00 1,432,800.00 3/2/2026 232,800.00 232,800.00
9/2/2026 4.000% 970,000.00 232,800.00 1,202,800.00 1,435,600.00 3/2/2027 213,400.00 213,400.00
9/2/2027 4.000% 1,010,000.00 213,400.00 1,223,400.00 1,436,800.00 3/2/2028 193,200.00 193,200.00
9/2/2028 4.000% 1,050,000.00 193,200.00 1,243,200.00 1,436,400.00 3/2/2029 172,200.00 172,200.00
9/2/2029 4.000% 1,095,000.00 172,200.00 1,267,200.00 1,439,400.00 3/2/2030 150,300.00 150,300.00
9/2/2030 4.000% 1,130,000.00 150,300.00 1,280,300.00 1,430,600.00 3/2/2031 127,700.00 127,700.00
9/2/2031 4.000% 1,180,000.00 127,700.00 1,307,700.00 1,435,400.00 3/2/2032 104,100.00 104,100.00
9/2/2032 4.000% 1,225,000.00 104,100.00 1,329,100.00 1,433,200.00 3/2/2033 79,600.00 79,600.00
9/2/2033 4.000% 1,275,000.00 79,600.00 1,354,600.00 1,434,200.00 3/2/2034 54,100.00 54,100.00
9/2/2034 4.000% 1,325,000.00 54,100.00 1,379,100.00 1,433,200.00 3/2/2035 27,600.00 27,600.00
9/2/2035 4.000% 1,380,000.00 27,600.00 1,407,600.00 1,435,200.00 Totals $14,290,000.00 $4,358,566.11 $18,648,566.11 $18,648,566.11 8July 12, 2022 Item #17 Page 200 of 463

Assessment District No. 2002-01
(Poinsettia Lane East)
Comparison of Refunded Parcel's Aggregate Amortization Schedule and Refunding Bonds Payment Refunded Parcel Aggregate Refunding Bonds Savings Date Principal Interest Principal Interest Principal Interest Annual Total 3/2/2023 $309,390.00 $325,491.11 ($16,101.11)
9/2/2023 $875,000.00 309,390.00 $825,000.00 281,675.00 $50,000.00 27,715.00 $61,613.89 3/2/2024 293,858.75 269,300.00 24,558.75
9/2/2024 905,000.00 293,858.75 895,000.00 269,300.00 10,000.00 24,558.75 59,117.50 3/2/2025 277,116.25 251,400.00 25,716.25
9/2/2025 940,000.00 277,116.25 930,000.00 251,400.00 10,000.00 25,716.25 61,432.50 3/2/2026 259,256.25 232,800.00 26,456.25
9/2/2026 975,000.00 259,256.25 970,000.00 232,800.00 5,000.00 26,456.25 57,912.50 3/2/2027 240,243.75 213,400.00 26,843.75
9/2/2027 1,015,000.00 240,243.75 1,010,000.00 213,400.00 5,000.00 26,843.75 58,687.50 3/2/2028 219,943.75 193,200.00 26,743.75
9/2/2028 1,055,000.00 219,943.75 1,050,000.00 193,200.00 5,000.00 26,743.75 58,487.50 3/2/2029 198,843.75 172,200.00 26,643.75
9/2/2029 1,100,000.00 198,843.75 1,095,000.00 172,200.00 5,000.00 26,643.75 58,287.50 3/2/2030 176,156.25 150,300.00 25,856.25
9/2/2030 1,140,000.00 176,156.25 1,130,000.00 150,300.00 10,000.00 25,856.25 61,712.50 3/2/2031 152,643.75 127,700.00 24,943.75
9/2/2031 1,190,000.00 152,643.75 1,180,000.00 127,700.00 10,000.00 24,943.75 59,887.50 3/2/2032 128,100.00 104,100.00 24,000.00
9/2/2032 1,240,000.00 128,100.00 1,225,000.00 104,100.00 15,000.00 24,000.00 63,000.00 3/2/2033 101,750.00 79,600.00 22,150.00
9/2/2033 1,290,000.00 101,750.00 1,275,000.00 79,600.00 15,000.00 22,150.00 59,300.00 3/2/2034 69,500.00 54,100.00 15,400.00
9/2/2034 1,355,000.00 69,500.00 1,325,000.00 54,100.00 30,000.00 15,400.00 60,800.00 3/2/2035 35,625.00 27,600.00 8,025.00
9/2/2032 1,425,000.00 35,625.00 1,380,000.00 27,600.00 45,000.00 8,025.00 61,050.00 Totals $14,505,000.00 $4,924,855.00 $14,290,000.00 $4,358,566.11 $215,000.00 $566,288.89 $781,288.89 9July 12, 2022 Item #17 Page 201 of 463

Assessment District No. 2003-01 2013 Bonds
(College Boulevard and Cannon Road East)
Benefit Area No. 1 (Calaveras Hills II)
Refunded Bonds Original Debt Service Schedule
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $126,401.88 $126,401.88
9/2/2023 3.550% $405,000.00 126,401.88 531,401.88 $657,803.75 3/2/2024 119,213.13 119,213.13
9/2/2024 3.700% 420,000.00 119,213.13 539,213.13 658,426.25 3/2/2025 111,443.13 111,443.13
9/2/2025 3.800% 435,000.00 111,443.13 546,443.13 657,886.25 3/2/2026 103,178.13 103,178.13
9/2/2026 3.900% 450,000.00 103,178.13 553,178.13 656,356.25 3/2/2027 94,403.13 94,403.13
9/2/2027 4.000% 465,000.00 94,403.13 559,403.13 653,806.25 3/2/2028 85,103.13 85,103.13
9/2/2028 4.000% 490,000.00 85,103.13 575,103.13 660,206.25 3/2/2029 75,303.13 75,303.13
9/2/2029 4.125% 505,000.00 75,303.13 580,303.13 655,606.25 3/2/2030 64,887.50 64,887.50
9/2/2030 4.125% 530,000.00 64,887.50 594,887.50 659,775.00 3/2/2031 53,956.25 53,956.25
9/2/2031 4.125% 550,000.00 53,956.25 603,956.25 657,912.50 3/2/2032 42,612.50 42,612.50
9/2/2032 4.250% 570,000.00 42,612.50 612,612.50 655,225.00 3/2/2033 30,500.00 30,500.00
9/2/2033 5.000% 595,000.00 30,500.00 625,500.00 656,000.00 3/2/2034 15,625.00 15,625.00
9/2/2034 5.000% 625,000.00 15,625.00 640,625.00 656,250.00 Totals $6,040,000.00 $1,845,253.75 $7,885,253.75 $7,885,253.75 10July 12, 2022 Item #17 Page 202 of 463

Assessment District No. 2003-01 2013 Bonds
(College Boulevard and Cannon Road East)
Benefit Area No. 1 (Calaveras Hills II)
Refunded Bonds Actual Debt Service Schedule
Net of all Bond Calls
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $126,401.88 $126,401.88
9/2/2023 3.550% $405,000.00 126,401.88 531,401.88 $657,803.75 3/2/2024 119,213.13 119,213.13
9/2/2024 3.700% 420,000.00 119,213.13 539,213.13 658,426.25 3/2/2025 111,443.13 111,443.13
9/2/2025 3.800% 435,000.00 111,443.13 546,443.13 657,886.25 3/2/2026 103,178.13 103,178.13
9/2/2026 3.900% 450,000.00 103,178.13 553,178.13 656,356.25 3/2/2027 94,403.13 94,403.13
9/2/2027 4.000% 465,000.00 94,403.13 559,403.13 653,806.25 3/2/2028 85,103.13 85,103.13
9/2/2028 4.000% 490,000.00 85,103.13 575,103.13 660,206.25 3/2/2029 75,303.13 75,303.13
9/2/2029 4.125% 505,000.00 75,303.13 580,303.13 655,606.25 3/2/2030 64,887.50 64,887.50
9/2/2030 4.125% 530,000.00 64,887.50 594,887.50 659,775.00 3/2/2031 53,956.25 53,956.25
9/2/2031 4.125% 550,000.00 53,956.25 603,956.25 657,912.50 3/2/2032 42,612.50 42,612.50
9/2/2032 4.250% 570,000.00 42,612.50 612,612.50 655,225.00 3/2/2033 30,500.00 30,500.00
9/2/2033 5.000% 595,000.00 30,500.00 625,500.00 656,000.00 3/2/2034 15,625.00 15,625.00
9/2/2034 5.000% 625,000.00 15,625.00 640,625.00 656,250.00 Totals $6,040,000.00 $1,845,253.75 $7,885,253.75 $7,885,253.75 11July 12, 2022 Item #17 Page 203 of 463

Assessment District No. 2003-01 2013 Bonds
(College Boulevard and Cannon Road East)
Benefit Area No. 1 (Calaveras Hills II)
Refunded Parcel's Aggregate Amortization Schedule

Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $126,401.88 $126,401.88
9/2/2023 3.550% $405,000.00 126,401.88 531,401.88 $657,803.75 3/2/2024 119,213.13 119,213.13
9/2/2024 3.700% 420,000.00 119,213.13 539,213.13 658,426.25 3/2/2025 111,443.13 111,443.13
9/2/2025 3.800% 435,000.00 111,443.13 546,443.13 657,886.25 3/2/2026 103,178.13 103,178.13
9/2/2026 3.900% 450,000.00 103,178.13 553,178.13 656,356.25 3/2/2027 94,403.13 94,403.13
9/2/2027 4.000% 465,000.00 94,403.13 559,403.13 653,806.25 3/2/2028 85,103.13 85,103.13
9/2/2028 4.000% 490,000.00 85,103.13 575,103.13 660,206.25 3/2/2029 75,303.13 75,303.13
9/2/2029 4.125% 505,000.00 75,303.13 580,303.13 655,606.25 3/2/2030 64,887.50 64,887.50
9/2/2030 4.125% 530,000.00 64,887.50 594,887.50 659,775.00 3/2/2031 53,956.25 53,956.25
9/2/2031 4.125% 550,000.00 53,956.25 603,956.25 657,912.50 3/2/2032 42,612.50 42,612.50
9/2/2032 4.250% 570,000.00 42,612.50 612,612.50 655,225.00 3/2/2033 30,500.00 30,500.00
9/2/2033 5.000% 595,000.00 30,500.00 625,500.00 656,000.00 3/2/2034 15,625.00 15,625.00
9/2/2034 5.000% 625,000.00 15,625.00 640,625.00 656,250.00 Totals $6,040,000.00 $1,845,253.75 $7,885,253.75 $7,885,253.75 12July 12, 2022 Item #17 Page 204 of 463

Assessment District No. 2003-01 2022 Bonds
(College Boulevard and Cannon Road East)
Benefit Area No. 1 (Calaveras Hills II)
Refunding Bonds Original Debt Service Schedule
Payment Interest Semi-Annual
Date Rate Principal Interest Payment Total
3/2/2023 $134,968.88 $134,968.88
9/2/2023 3.000% $380,000.00 116,800.00 496,800.00 $631,768.89 3/2/2024 111,100.00 111,100.00
9/2/2024 4.000% 415,000.00 111,100.00 526,100.00 637,200.01 3/2/2025 102,800.00 102,800.00
9/2/2025 4.000% 430,000.00 102,800.00 532,800.00 635,600.01 3/2/2026 94,200.00 94,200.00
9/2/2026 4.000% 445,000.00 94,200.00 539,200.00 633,400.01 3/2/2027 85,300.00 85,300.00
9/2/2027 4.000% 460,000.00 85,300.00 545,300.00 630,600.01 3/2/2028 76,100.00 76,100.00
9/2/2028 4.000% 485,000.00 76,100.00 561,100.00 637,200.01 3/2/2029 66,400.00 66,400.00
9/2/2029 4.000% 500,000.00 66,400.00 566,400.00 632,800.01 3/2/2030 56,400.00 56,400.00
9/2/2030 4.000% 525,000.00 56,400.00 581,400.00 637,800.00 3/2/2031 45,900.00 45,900.00
9/2/2031 4.000% 540,000.00 45,900.00 585,900.00 631,800.00 3/2/2032 35,100.00 35,100.00
9/2/2032 4.000% 560,000.00 35,100.00 595,100.00 630,200.00 3/2/2033 23,900.00 23,900.00
9/2/2033 4.000% 585,000.00 23,900.00 608,900.00 632,800.00 3/2/2034 12,200.00 12,200.00
9/2/2034 4.000% 610,000.00 12,200.00 622,200.00 634,400.00 Totals $5,935,000.00 $1,670,568.88 $7,605,568.88 $7,605,568.95 13July 12, 2022 Item #17 Page 205 of 463

Carlsbad City CouncilJuly 12, 2022

Carlsbad City Council
July 12, 2022