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Century Communities General. The term "Century Communities" is Century Communities of California, LLC, a Delaware limited liability company. Century Communities is a subsidiary of Century Communities, Inc., a Delaware corporation ("Century Parent"). The Century Parent, and its subsidiaries including Century Communities, is engaged in the design, construction, and sale of master planned communities throughout the United States. Founded in 2002, the Century Parent is a Colorado based corporation and is a top-10 national home builder. Offering new homes under the Century Communities and Century Complete brands, the Century Parent is engaged in all aspects of homebuilding — including the acquisition, entitlement, and development of land, along with the construction, innovative marketing and sale of quality homes designed to appeal to a wide range of homebuyers. The Century Parent operates in 17 states across the U.S. and offers title, insurance, and lending services in select markets through its Parkway Title, IHL Home Insurance Agency, and Inspire Home Loan subsidiaries. The Century Parent is a publicly traded company listed on the New York Stock Exchange under the ticker symbol "CCS." The Century Parent is subject to the informational requirements of the Securities Exchange Act of 1934, and in accordance therewith is obligated to file reports, proxy statements, and other information, including financial statements, with the Securities and Exchange Commission (the "SEC"). Such filings set forth, among other things, certain data relative to the consolidated results of operations and financial position of the Century Parent and its subsidiaries (including Century Communities). The SEC maintains an internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including the Century Parent. The address of such internet web site is www.sec.gov. All documents subsequently filed by the Century Parent pursuant to the requirements of the Securities Exchange Act of 1934 after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes. Copies of the Century Parent's annual report, quarterly reports and current reports, including any amendments, are available from the Century Parent's website at www.investors.centurycommunities.com. The foregoing website addresses and references to filings with the SEC are included for reference only, and the information on such websites and on file with the SEC are not a part of this Official Statement and are not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Neither Century Communities nor the Century Parent is obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such websites in evaluating whether to buy, hold or sell the 2026 Bonds. Century Communities Development Plan and Development Status. Century Communities' development plan is to construct single-family detached homes on the lots it owns in Neighborhood J, as shown the tables below as of June 1, 2026. Base sale prices are subject to change, and exclude any lot premiums, buyer selected options and upgrades, and any incentives, selling concessions or price reductions which may be offered.
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Development Plans Neighborhood J (as of June 1, 2026) Floor Plan Square Footage Planned Units Base Sales Prices (1) Plan 1 2,009 22 $612,990 Plan 2 2,148 23 632,990 Plan 3 2,277 24 647,990 Total 69 (1) Base sales prices represent the estimated prices used by Century Communities when underwriting the project and are subject to change when Century Communities begins its sales process. Source: Century Communities Set forth below is the status of home construction and sales within Neighborhood J as of June 1, 2026. Status of Development, Home Construction and Sales Neighborhood J (as of June 1, 2026) Neighborhood Planned Units Building Permits Homes Under Construction (1) Completed Homes Owned Century Communities
Homes Under Contract for Sale (2) Home Closings Plan 1 22 15 9 0 0 2 Plan 2 23 14 8 1 1 3 Plan 3 24 14 7 1 1 3 Totals 69 43 24 2 2 8 (1) Under construction means that a building permit has been issued and vertical home construction is in process. (2) Represents homes under contract with individual homebuyers that have not closed escrow. Source: Century Communities. Century Communities anticipates buildout and final home sales in Neighborhood J by October 31, 2027. Although the information in this Official Statement reflects the current development expectations of Century Communities, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans and at the prices described herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. Century Communities reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation. See “BOND OWNERS’ RISKS – Concentration of Ownership.” Century Communities Financing Plan. Century Communities intends to finance the development of the property in Neighborhood J using internal sources (equity and home sales proceeds). A summary of the costs incurred and anticipated to be incurred for the full buildout of the 69 lots within Neighborhood J is set forth in the following table:
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Century Communities Financing Plan Neighborhood J (as of June 1, 2026) Total Budget Costs Incurred Through June 1, 2026 June 2, 2026, through Buildout Land $10,580,589 $10,580,589 $0 Site Construction 1,520,451 498,440 1,022,011 Direct Construction 11,525,440 6,013,273 5,512,167 Sales and Marketing 482,992 75,605 407,387 Total Projected Costs $24,109,472 $17,167,907 $6,941,565 Source: Century Communities. Although Century Communities expects to have sufficient funds available to complete its development in Improvement Area No. 1 in accordance with the development schedule described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining planned development by Century Communities in Improvement Area No. 1 will be available from Century Communities or any other source when needed. Neither Century Communities, nor any of its related entities, are under any legal obligation of any kind to expend funds for the development of and construction of homes on its property in Improvement Area No. 1 and there is no direct recourse against Century Communities or any of its related entities for nonpayment of ad valorem property taxes or the Facilities Special Taxes. Any contributions by Century Communities to fund the costs of such development are entirely voluntary. If and to the extent that the aforementioned sources are inadequate to pay the costs to complete the planned development by Century Communities within Improvement Area No. 1 and other financing by Century Communities is not put into place, there could be a shortfall in the funds required to complete the planned development by Century Communities in Improvement Area No. 1 or to pay ad valorem property taxes or Facilities Special Taxes related to Century Communities’ property in Improvement Area No. 1, and the remaining portions of such development may not be completed. Many factors beyond Century Communities’ control, or a decision by Century Communities to alter its current plans, may cause the actual sources and uses to differ from the projections. See “BOND OWNERS’ RISKS” herein for a discussion of risk factors. KB General. KB HOME North Bay LLC, a Delaware limited liability company (“KB”) is a wholly-owned subsidiary of KB Home, a Delaware corporation (“Parent KB Entity”), whose principal executive offices are located in Los Angeles, California. Parent KB Entity is a publicly traded company listed on the New York Stock Exchange, under the ticker symbol “KBH.” Founded in 1957, Parent KB Entity constructs and sells homes through its operating divisions under the name KB Home. Parent KB Entity’s ongoing principal operations are in nine states, including California, Arizona, Nevada, Colorado, Texas, Florida, North Carolina, Idaho and Washington within 49 major markets. Parent KB Entity first developed homes in California in 1963. Parent KB Entity’s homebuilding operations offer a variety of homes designed primarily for first-time, move-up and active adult homebuyers, including attached and detached single-family homes, townhomes and condominiums. In 2025, Parent KB Entity announced the reentry into the Atlanta, Georgia market. However, as of November 25, 2025, the company had not acquired land or commenced selling homes in that market.
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Parent KB Entity is subject to the informational requirements of the Exchange Act, and in accordance therewith files reports, proxy statements and other information, including financial statements, with the SEC. Such filings, particularly, Parent KB Entity’s Annual Report on Form 10-K for the fiscal year ended November 30, 2025, as filed with the SEC on January 23, 2026, and Parent KB Entity’s Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2026, as filed with the SEC on April 9, 2026, set forth certain data relative to the consolidated results of operations and financial position of Parent KB Entity and its subsidiaries, including KB, as of such dates. The SEC maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including parent KB Entity. The address of such Internet website is www.sec.gov. All documents subsequently filed by parent KB Entity pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes. Copies of Parent KB Entity’s Annual Report and each of its other quarterly and current reports, including any amendments, are available from Parent KB Entity’s website at www.kbhome.com. The foregoing website addresses and references to filings with the SEC are included for reference only, and the information on such website addresses and on file with the SEC are not a part of this Official Statement and are not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such sites. Neither KB nor any other entity or person is obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes, and investors should not rely on the information and financial statements contained on such internet sites in evaluating whether to buy, hold or sell the 2026 Bonds. KB Development Plan and Development Status. KB’s development plan is to construct single-family detached homes on the 85 lots it owns in Neighborhood C in a neighborhood being marketed as “Aurora at One Lake.” The anticipated product mix for the project in Neighborhood C is reflected in the table below, as of June 1, 2026. Development Plan Neighborhood C – Aurora at One Lake (as of June 1, 2026) Floor Plan Square Footage Planned Units Base Sales Prices (1) Plan 1 2,135 23 $615,990 Plan 2 2,386 24 645,990 Plan 3 2,501 21 657,990 Plan 4 2,566 17 674,990 Total: 85 (1) Base sales prices are subject to change and exclude any lot premiums, options, upgrades, incentives, and any selling concessions or price reductions that may be offered. Actual base sales prices may be lower than estimated. Source: KB As of June 1, 2026, no building permits had been issued and no homes were under construction by KB and no sales had yet occurred in Neighborhood C, as reflected in the table below.
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Status of Development, Home Construction and Sales Neighborhood C – Aurora at One Lake (as of June 1, 2026) Neighborhood Planned Units Building Permits Homes Under Construction(1) Completed Homes Owned KB Homes Under Contract for Sale(2) Home Closings C 85 0 0 0 0 0 Totals 85 0 0 0 0 0 (1) Under construction means that a building permit has been issued and vertical home construction is in process. (2) Represents homes under contract with individual homebuyers that have not closed escrow . Source: KB. KB anticipates its first home closings in Neighborhood C by March 2027 and buildout and final home closings in Neighborhood C by March 2029. Although the information in this Official Statement reflects the current development expectations of KB, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans and at the prices described herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. KB reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation. See “BOND OWNERS’ RISKS – Concentration of Ownership.” KB Financing Plan. To date, KB has financed its land acquisition and various site development and home construction costs related to its property in Neighborhood C in Improvement Area No. 1 through internally generated funds (which may include home sales revenue and funding from its parent company). KB expects to use internally generated funds to complete development of its property in Improvement Area No. 1. However, home sales revenues from KB’s property in Improvement Area No. 1 are not segregated and set aside for completing its development in Improvement Area No. 1. Home sales revenues are swept daily from the divisions for use in operations, to pay down debt and for other corporate purposes and might get diverted to other needs at the discretion of management. As of June 1, 2026, KB estimates that it has spent approximately $14.80 million on land acquisition costs, site improvement costs, direct and indirect home construction costs, permit and impact fees, and sales and marketing costs (exclusive of interest, internal financing repayment, and corporate overhead) related to its development of Neighborhood C in Improvement Area No. 1. As of June 1, 2026, KB expects to spend approximately $31.52 million in additional site improvement costs, direct and indirect home construction costs, permit and impact fees, and sales and marketing costs (exclusive of internal financing repayment, corporate overhead, and other carrying costs) to complete its development in Improvement Area No. 1. KB believes that it will have sufficient funds available to complete its planned development in Improvement Area No. 1 in accordance with the development schedule described in this Official Statement.
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Although KB expects to have sufficient funds available to complete its proposed development in Improvement Area No. 1 commensurate with the development timing described in this Official Statement, there can be no assurance that amounts necessary to fund the remaining planned development by KB within Improvement Area No. 1 will be available to KB when needed. While KB has made such internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither KB nor any other entity or person is under any legal obligation of any kind to expend funds for the development of KB’s property in Improvement Area No. 1, or the payment of ad valorem property taxes or the Special Taxes within Improvement Area No. 1. Any contributions by KB or any other entity or person to fund the costs of such development are entirely voluntary. If and to the extent the aforementioned sources are inadequate to pay the costs to complete the planned development by KB in Improvement Area No. 1, and other financing by KB is not put into place, there could be a shortfall in the funds required to complete the planned development by KB or to pay ad valorem property taxes or Special Taxes related to KB’s property in Improvement Area No. 1, and the remaining portions of such development may not be completed. Many factors beyond KB’s control, or a decision by KB to alter its current plans, may cause the actual sources and uses to differ from the projections. See “BOND OWNERS’ RISKS” herein for a discussion of risk factors. K. Hovnanian General. The term "K. Hovnanian" is K. Hovnanian Homes Northern California, Inc., a California corporation. K. Hovnanian is an indirect, wholly-owned subsidiary of Hovnanian Enterprises, Inc., a Delaware corporation (“Hovnanian”), which is based in Matawan, New Jersey, and has been in the business of developing residential real estate communities in California since 1994. Hovnanian is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”) and in accordance therewith files reports, proxy statements, and other information, including financial statements, with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including Hovnanian. The address of such website is www.sec.gov. All documents subsequently filed by Hovnanian pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in such manner as the SEC prescribes. Copies of Hovnanian’s Annual Report and each of its other quarterly and current reports, including any amendments, are available from Hovnanian’s website at www.khov.com. The foregoing website addresses and references to filings with the SEC are included for reference only, and the information on such websites and on file with the SEC are not a part of this Official Statement and are not incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Neither K. Hovnanian nor Hovnanian is obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such websites in evaluating whether to buy, hold or sell the 2026 Bonds. K. Hovnanian’s Development Plan and Development Status. K. Hovnanian’s development plan is to construct single-family detached homes on the lots it owns in Neighborhood A/B, as shown the tables below as of June 1, 2026. Base sale prices are subject to change, and exclude any lot premiums, buyer selected options and upgrades, and any incentives, selling concessions or price reductions that may be offered.
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Development Plans Neighborhood A/B (as of June 1, 2026) Floor Plan Square Footage Planned Units Base Sale Price(1) Fayetteville II (8714) 2,521 23 $853,990 Seine ESP (8648) 2,530 20 868,990 Water Lily II (8591) 2,588 24 875,990 Total 67 (1) Base sales prices are subject to change and exclude any lot premiums, options, upgrades, incentives, and any selling concessions or price reductions that may be offered. Actual base sales prices may be lower than estimated. Set forth below is the status of home construction and sales within Neighborhood A/B as of June 1, 2026. Status of Development, Home Construction and Sales Neighborhood A/B (as of June 1, 2026) Floor Plan Planned Units Building Permits Issued Homes Under Construction (1) Completed Homes Owned by K. Hovnanian Land Bank or K. Hovnanian Homes Under Contract for Sale (2) Home Closings Fayetteville II (8714) 23 0 0 0 0 0 Seine ESP (8648) 20 0 0 0 0 0 Water Lilly II (8591) 24 0 0 0 0 0 Totals 67 0 0 0 0 0 (1) Under construction means that a building permit has been issued and vertical home construction is in process. K. Hovnanian intends to build three (3) model homes in Neighborhood A/B. (2) Represents homes under contract with individual homebuyers that have not closed escrow. There can be no guarantee that homes in escrow will actually close escrow. K. Hovnanian anticipates buildout and final home sales in Neighborhood A/B by July 2029. Although the information in this Official Statement reflects the current development expectations of K. Hovnanian, no assurance can be given that home construction and sales will be carried out on the schedule and according to the plans and at the prices described herein, or that the home construction and sale plans or base prices set forth above will not change after the date of this Official Statement. K. Hovnanian reserves the right to change its development at any time without notice. Additionally, homes under contract to be sold may not result in closed escrows as sales contracts are subject to cancellation. K. Hovnanian’s Land Bank Agreement. In connection with the acquisition of lots within Improvement Area No. 1, K. Hovnanian entered into a landbank option arrangement (the “Option Agreement”) with DRP CA 4, LLC, a Delaware limited liability company (previously defined as the “K. Hovnanian Land Bank”). As of June 1, 2026, K. Hovnanian had acquired 0 lots within the District from the K. Hovnanian Land Bank. Under the Option Agreement, K. Hovnanian has the option – but not the obligation - to acquire additional lots within the District so long as a minimum cumulative number of lots are acquired on a periodic basis until a final takedown of lots currently anticipated to occur in or before July 2029. Under the Option Agreement, K. Hovnanian
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is responsible for the payment of property and special taxes for the lots owned by the K. Hovnanian Land Bank within the District that accrue during the term of the Option Agreement. Under the Option Agreement, K. Hovnanian has the option to acquire such lots from the K. Hovnanian Land Bank pursuant to a takedown schedule. Neither K. Hovnanian nor the K. Hovnanian Land Bank is under any obligation to develop the property in the District. The failure to timely acquire lots by K. Hovnanian could result in the termination of the Option Agreement by the K. Hovnanian Land Bank. In the event that K. Hovnanian does not exercise its option to acquire lots under the Option Agreement, the K. Hovnanian Land Bank, being an investor only and not a homebuilder, would likely attempt to sell such lots to another merchant builder. The take-down schedule is as follows. As of June 1, 2026, K. Hovnanian had acquired a total of 0 lots under the Option Agreement. As of the date of this Official Statement, K. Hovnanian was in good standing under the Option Agreement and anticipates taking down lots from the K. Hovnanian Land Bank in accordance with the terms and conditions of the Option Agreement. Date Minimum No. of Lots Cumulative Lots Date Minimum No. of Lots Cumulative Lots 10/7/2026 2 2 3/7/2028 2 36 11/7/2026 2 4 4/7/2028 2 38 12/7/2026 2 6 5/7/2028 2 40 1/7/2027 2 8 6/7/2028 2 42 2/7/2027 2 10 7/7/2028 2 44 3/7/2027 2 12 8/7/2028 2 46 4/7/2027 2 14 9/7/2028 2 48 5/7/2027 2 16 10/7/2028 2 50 6/7/2027 2 18 11/7/2028 2 52 7/7/2027 2 20 12/7/2028 2 54 8/7/2027 2 22 1/7/2029 2 56 9/7/2027 2 24 2/7/2029 2 58 10/7/2027 2 26 3/7/2029 2 60 11/7/2027 2 28 4/7/2029 2 62 12/7/2027 2 30 5/7/2029 2 64 1/7/2028 2 32 6/7/2029 2 66 2/7/2028 2 34 7/7/2029 1 67
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K. Hovnanian’s Financing Plan. K. Hovnanian intends to finance the development of the property in Neighborhood A/B using internal sources (equity and home sales proceeds). A summary of the costs incurred and anticipated to be incurred for the full buildout of the 67 lots within Neighborhood A/B is set forth in the following table: K. Hovnanian’s Financing Plan Neighborhood A/B (as of June 1, 2026) Total Budget Costs Incurred Through June 1, 2026 June 2, 2026, through Buildout Land $15,413,656 $2,714,150 $12,699,506 Site Construction/Fees 5,822,260 103,899 5,718,361 Direct Construction 15,707,710 0 15,707,710 Sales and Marketing 1,330,673 44,150 1,286,523 Total Projected Costs $38,274,299 $2,862,199 $35,412,100 Although K. Hovnanian expects to have sufficient funds available to complete its development in Improvement Area No. 1 in accordance with the development schedule described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining planned development by K. Hovnanian in Improvement Area No. 1 will be available from K. Hovnanian or any other source when needed. Neither K. Hovnanian, nor any of its related entities, are under any legal obligation of any kind to expend funds for the development of and construction of homes on its property in Improvement Area No. 1 and there is no direct recourse against K. Hovnanian or any of its related entities for nonpayment of ad valorem property taxes or the Facilities Special Taxes. Any contributions by K. Hovnanian to fund the costs of such development are entirely voluntary. If and to the extent that the aforementioned sources are inadequate to pay the costs to complete the planned development by K. Hovnanian within Improvement Area No. 1 and other financing by K. Hovnanian is not put into place, there could be a shortfall in the funds required to complete the planned development by K. Hovnanian in Improvement Area No. 1 or to pay ad valorem property taxes or Facilities Special Taxes related to K. Hovnanian's property in Improvement Area No. 1, and the remaining portions of such development may not be completed. Many factors beyond K. Hovnanian's control, or a decision by K. Hovnanian to alter its current plans, may cause the actual sources and uses to differ from the projection.
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BOND OWNERS’ RISKS The purchase of the 2026 Bonds described in this Official Statement involves a degree of risk that may not be appropriate for some investors. The following includes a discussion of some of the risks which should be considered before making an investment decision. This discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the 2026 Bonds. Risks of Real Estate Secured Investments Generally The 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 Improvement Area No. 1, the supply of or demand for competitive properties in such area, and the market value of 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 restrictions relating to threatened and endangered species), (iii) natural disasters (including, without limitation, earthquakes, wildfires and floods), which may result in uninsured losses, or natural disasters elsewhere in the country or other parts of the world affecting supply of building materials that may cause delays in construction, and (iv) the impacts of a public health emergency on construction and sales activity, the national and regional economy and financial circumstances of property owners in Improvement Area No. 1. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in Improvement Area No. 1 to pay their Facilities Special Taxes when due, and could induce or exacerbate the risks described herein. See “– Value to Lien Ratios,” “– Levy and Collection of the Facilities Special Tax,” “– Property Tax Delinquencies,” and “– Bankruptcy Delays” below. Limited Obligation of the City to Pay Debt Service The City has no obligation to pay principal of and interest on the 2026 Bonds if Facilities Special Tax collections are delinquent or insufficient, other than from amounts, if any, on deposit in the 2024 Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcels for Facilities Special Tax delinquencies. The City is not obligated to advance funds to pay Debt Service on the 2026 Bonds. See “SECURITY FOR THE BONDS – Limited Obligation.” If Special Tax Revenues are insufficient to pay debt service on the 2026 Bonds, the District’s ability to increase Facilities Special Tax rates is limited as described under “SECURITY FOR THE BONDS – Facilities Special Taxes” and the Fiscal Agent may be compelled to draw upon moneys in the 2024 Reserve Fund, resulting in a rapid depletion of such fund. See “SECURITY FOR THE BONDS – 2024 Reserve Fund.” Potential Early Redemption of Bonds from Facilities Special Tax Prepayments The property owner of any parcel of taxable property within Improvement Area No. 1 is permitted to prepay up to 75% of the Facilities Special Tax obligation applicable to that parcel at any time. Any such payments will result in a mandatory redemption of Bonds from Facilities Special Tax prepayments on the next Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of any such Facilities Special Tax prepayment. Any resulting redemption of 2026 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such 2026 Bonds. See “THE 2026 BONDS – Redemption.”
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Concentration of Property Ownership Failure of any significant owner of taxable property within Improvement Area No. 1, such as the Master Developer, the Merchant Builders and any future merchant builder, to pay the annual Facilities Special Taxes when due could result in the rapid, total depletion of the 2024 Reserve Fund prior to replenishment from the resale of the property upon a foreclosure or otherwise or prior to delinquency redemption after a foreclosure sale, if any. In that event, there could be a default in payments of the principal of and interest on the 2026 Bonds. Further development of property in Improvement Area No. 1 may not occur as currently proposed or at all. See “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS” herein for information regarding property ownership and the status of development in Improvement Area No. 1. See also “– Depletion of 2024 Reserve Fund” below. Levy and Collection of the Facilities Special Tax General. The principal source of payment of principal of and interest on the 2026 Bonds is the proceeds of the annual levy and collection of the Facilities Special Tax against property within Improvement Area No. 1. Limitation on Maximum Facilities Special Tax Rate. The annual levy of the Facilities Special Tax is subject to the maximum annual Facilities Special Tax rate authorized in the Amended Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Facilities Special Tax, together with other available funds, will not be sufficient to pay Debt Service on the 2026 Bonds. No Relationship Between Property Value and Facilities Special Tax Levy. Because the Facilities Special Tax formula set forth in the Amended Rate and Method is not based on property value, the levy of the Facilities Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Facilities Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of Debt Service on the 2026 Bonds, and certainly not a direct relationship. Factors that Could Lead to Facilities Special Tax Deficiencies. The following are some of the factors that might cause the levy of the Facilities Special Tax on any particular parcel of Taxable Property to vary from the Facilities Special Tax that might otherwise be expected: Transfers to Governmental Entities. The number of parcels of Taxable Property could be reduced through the acquisition of Taxable Property by a governmental entity and failure of the government to pay the Facilities Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation, thereby resulting in an increased tax burden on the remaining taxed parcels. See “– Exempt Properties” below. Property Tax Delinquencies. Failure of the owners of Taxable Property to pay property taxes (and, consequently, the Facilities Special Tax), or delays in the collection of or inability to collect the Facilities Special Tax by tax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Facilities Special Taxes. See “– Property Tax Delinquencies” below. Delays Following Facilities Special Tax Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement generally provides that the Facilities Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the
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special covenant for foreclosure described in “SECURITY FOR THE BONDS – Covenant to Foreclose” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County. If sales or foreclosures of property are necessary, there could be a delay in payments to owners of the 2026 Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the District of the proceeds of sale if the 2024 Reserve Fund is depleted. See “SECURITY FOR THE BONDS – Covenant to Foreclose.” The ability of the City to collect interest and penalties specified by State law and to foreclose against properties having delinquent Facilities Special Tax installments may be limited in certain respects with regard to properties in which a federal governmental agency has or obtains an interest. See “– FDIC/Federal Government Interests in Properties” below. Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Facilities Special Taxes or the timing of enforcement of Facilities Special Taxes. 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 the court concludes the ability to pay such taxes or assessments is materially affected by reason of such service. Property Tax Delinquencies General. Delinquencies in the payment of property taxes and, consequently, the Facilities Special Taxes, can occur because the owners of delinquent parcels may not have received property tax bills from the County in a timely manner, including situations in which the County initially sent property tax bills to the property developer or merchant builder at a time when the parcels in question had already been sold to individual homeowners. Delinquencies can also reflect economic difficulties and duress by the property owner. Numerous future delinquencies by the owners of Taxable Property in Improvement Area No. 1 in the payment of property taxes (and, consequently, the Facilities Special Taxes, which are collected on the ordinary property tax bills) when due could result in a deficiency in Facilities Special Tax revenues necessary to pay Debt Service on the 2026 Bonds, which could in turn result in the depletion of the 2024 Reserve Fund, prior to reimbursement from the resale of foreclosed property or payment of the delinquent Facilities Special Tax. See “SECURITY FOR THE BONDS – 2024 Reserve Fund,” and “THE DISTRICT AND IMPROVEMENT AREA NO. 1 – Potential Consequences of Facilities Special Tax Delinquencies.” Measures to Mitigate Consequences of Continuing Delinquencies. The City intends to take certain actions designed to mitigate the impact of future delinquencies, including: enforcing the lien of the Facilities Special Taxes through collection procedures that will include foreclosure actions under certain circumstances (see “SECURITY FOR THE BONDS – Covenant to Foreclose”); and increasing the levy of Facilities Special Taxes against non-delinquent property owners in Improvement Area No. 1, to the extent permitted under the Amended Rate and Method and the Act and to the extent the Facilities Special Taxes are not already being levied at the maximum Facilities Special Tax rate. See “THE DISTRICT AND IMPROVEMENT AREA NO. 1 – Potential Consequences of Facilities Special Tax Delinquencies.”
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Limitations on Increases in Facilities Special Tax Levy. If property owners are delinquent in the payment of the Facilities Special Tax, the City may not increase Facilities Special Tax levies to make up for delinquencies for prior fiscal years above the maximum annual Facilities Special Tax rates specified in the Amended Rate and Method. In addition, the City’s ability to increase Facilities Special Tax levies on residential property to make up for delinquencies for prior Fiscal Years is limited by Section 53321(d) of the Act, which provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the 2026 Bonds. Future Property Development Continuing development of the parcels in Improvement Area No. 1 may be adversely affected by changes in general or local economic conditions, fluctuations in or a deterioration of the real estate market, increased construction costs, development, financing and marketing capabilities of the developer, water or electricity shortages, discovery on the undeveloped property of any plants or animals in their habitat that have been listed as endangered species, changes in laws, and other factors outside the control of the owners of land in Improvement Area No. 1. The timing of development in Improvement Area No. 1 may also be affected by the conditions of approval for development. Development in Improvement Area No. 1 may also be affected by development in surrounding areas, which may compete with the property in Improvement Area No. 1. Value to Lien Ratios Appraised value-to-lien ratios have traditionally been used in land-secured bond issues as a measure of the “collateral” supporting the willingness of property owners to pay their special taxes and assessments (and, in effect, their general property taxes as well). The value-to-lien ratio is mathematically a fraction, the numerator of which is the value of the property as measured by assessed values or appraised values (in this case, the appraised value of taxable property within Improvement Area No. 1 as of the June 1, 2026, date of value of the Appraisal) and the denominator of which is the “lien” of the allocable share of assessment or special tax bonds. A value to lien ratio should not, however, be viewed as a guarantee for credit-worthiness. Land values are sensitive to economic cycles. A downturn of the economy or other market factors may depress land values and lower the value-to-lien ratios. Although judicial foreclosure proceedings can be initiated rapidly, the process can take several years to complete, and the bankruptcy courts may impede the foreclosure action. No assurance can be given that, should a parcel with delinquent Facilities Special Taxes be foreclosed upon and sold for the amount of the delinquency, any bid will be received for such property or, if a bid is received, that such bid will be sufficient to pay all delinquent Facilities Special Taxes. Finally, local agencies may form overlapping community facilities districts or assessment districts. Local agencies typically do not coordinate their bond issuances. Debt issuance by another entity could dilute value to lien ratios.
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Risks Related to Homeowners with High Loan to Value Ratios Any future decline in home values in Improvement Area No. 1 could result in property owner unwillingness or inability to pay mortgage payments, as well as ad valorem property taxes and Facilities Special Taxes, when due. Under such circumstances, bankruptcies are likely to increase. Bankruptcy by homeowners with delinquent Facilities Special Taxes would delay the commencement and completion of foreclosure proceedings to collect delinquent Facilities Special Taxes. It is possible that laws could be enacted in the future to assist homeowners in default in the payment of mortgages and property taxes. It is further possible that federal laws could be enacted that would adversely impact the ability of the City to foreclose on parcels with delinquent Facilities Special Taxes. No assurance can be given that any such laws will be enacted, or if enacted will be effective in assisting affected homeowners. Payment of Facilities Special Tax is not a Personal Obligation of the Property Owners An owner of Taxable Property is not personally obligated to pay the Facilities Special Taxes. Rather, the Facilities Special Taxes are an obligation running only against the parcels of Taxable Property. If, after a default in the payment of the Facilities Special Tax and a foreclosure sale by the City, the resulting proceeds are insufficient, taking into account other obligations also constituting a lien against the affected parcels of Taxable Property, the City has no recourse against the owner. Appraised Values The Appraisal set forth in APPENDIX I estimates the market value of the Taxable Property within Improvement Area No. 1. This market value is merely the opinion of the Appraiser as of the date of value set forth in the Appraisal, and is subject to the assumptions and limiting conditions stated in the Appraisal. The City has not sought an updated opinion of value by the Appraiser subsequent to the date of value of the Appraisal, or an opinion of the value of the Taxable Property by any other appraiser. A different opinion of value might be rendered by a different appraiser. The opinion of value assumes a sale by a willing seller to a willing buyer, each having similar information and neither being forced by other circumstances to sell or to buy. Consequently, the opinion is of limited use in predicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have the benefit of full information. In addition, the opinion of value is made as of the date of value set forth in the Appraisal, based upon facts and circumstances existing as of the date of value. Differing facts and circumstances may lead to differing opinions of value. The appraised value is not evidence of future value because future facts and circumstances may differ significantly from the facts and circumstances at the time the Appraisal was prepared. No assurance can be given that any of the Taxable Property in Improvement Area No. 1 could be sold for the estimated market value contained in the Appraisal if that property should become delinquent in the payment of Facilities Special Taxes and be foreclosed upon. Property Values The value of Taxable Property within Improvement Area No. 1 is a critical factor in determining the investment quality of the 2026 Bonds. If a property owner defaults in the payment
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of the Facilities Special Tax, the City’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Facilities Special Tax. Land values could be adversely affected by economic and other factors beyond the City’s control, such as a general economic downturn, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, destruction of property caused by earthquake, flood, landslides, wildfires, or other natural disasters, environmental pollution or contamination, public health emergencies, such as the COVID-19 pandemic, or unfavorable economic conditions. The following is a discussion of specific risk factors that could affect the value of property in Improvement Area No. 1. Prolonged Economic Downturn. Land values are affected by economic conditions and to the extent that an economic downturn is prolonged, property values could decline or remain flat for an indefinite period. Declines in home values in Improvement Area No. 1 could also result in property owner unwillingness or inability to pay mortgage payments, as well as ad valorem property taxes and Special Taxes, when due. Under such circumstances, bankruptcies are likely to increase. Bankruptcy by homeowners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings. Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements. The City, like all northern California communities, is likely to be subject to unpredictable seismic activity, fires, floods or other natural disasters. If there were a severe seismic, flood or fire event or other natural disaster in the City, there could be substantial damage to and interference with the City. Seismic Activity. The City is located along the eastern edge of the seismically active Coast Ranges of California. Active faults near the City include the Green Valley and Cordelia faults. Most large earthquakes in the Bay Area have occurred along the major faults including the San Andreas, Hayward, and Calaveras faults, which are located 20 to 45 miles west and south of the City. The closest mapped fault to Improvement Area No. 1 is the Vaca fault zone (not considered active), located within approximately 500 feet of the northwest corner of the project site. The closest active fault displaying surface expression is the Green Valley fault, located approximately 8 miles west of Improvement Area No. 1. The maximum magnitude earthquake (the “Mmax”) assumed for the Green Valley fault in this region is 6.8. The Mmax is the maximum earthquake believed possible for the fault. Flooding Hazards. The District is located in an area of minimal flooding according to FEMA. In particular, Improvement Area No. 1 is located in an area designated by FEMA as being within Zone X, with a 0.02% chance of flooding in any given year. Wildfire Hazards. Significant portions of the foothill watershed areas surrounding the City are threatened with wildfire risk, and these areas present a dangerous combination of factors. “Fire Hazard Severity Zones” are those lands where severe burning conditions prevail (chaparral and heavy woodland, steep slopes, poor access, winds). In the City, this includes the hilly areas to the west and northwest, the Cement Hill
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area, the hills above Green Valley and the hills above Interstate 80 and 680 just south of Cordelia. Improvement Area No. 1 is not within a Fire Hazard Severity Zone. Drought. With respect to droughts specifically, California has a history of suffering periodic drought conditions. Most recently, on May 10, 2021, the governor proclaimed a State of Emergency for 41 of the State’s 58 counties (including Solano County), citing above-average temperatures and dry conditions. In April 2022, the governor extended the State of Emergency to all counties in the State and asked all Californians to voluntarily reduce water usage by 15%. While some drought-related water restrictions were eased in May 2023, no assurance can be given that drought conditions will not continue in future years or, subside only to return in the future, potentially impacting the development of property in Improvement Area No. 1, the value of Taxable Property within Improvement Area No. 1, or economic activity within Improvement Area No. 1. Legal Requirements. Other events that may affect the value of Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Hazardous Substances. One of the most serious risks in terms of the potential reduction in the value of Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of Taxable Property may be required by law to remedy conditions of the parcel 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 California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. The property values set forth in this Official Statement do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel. Although the City is not aware that the owner or operator of any of the Taxable Property has such a current liability with respect to any of the Taxable Property, it is possible that such liabilities do currently exist and that the City is not aware of them. Further, it is possible that liabilities may arise in the future with respect to any of the Taxable Property resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but that may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of Taxable Property that is realizable upon a delinquency.
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There can be no assurance that the discovery, release or classification of additional hazardous substances will not affect the value of Taxable Property in Improvement Area No. 1. Mortgage Interest Rates. Future increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the residential units in Improvement Area No. 1 described herein. With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive. With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for or the ability to achieve the sales prices of the planned for-sale homes within Improvement Area No. 1 as described herein. Other Factors. Other factors that could adversely affect property values in Improvement Area No. 1 include, among others, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, and destruction of property caused by man-made disasters. Other Possible Claims Upon the Value of Taxable Property While the Facilities Special Taxes are secured by the Taxable Property, the security only extends to the value of such Taxable Property that is not subject to priority and parity liens and similar claims. The tables in the sections entitled “THE DISTRICT AND IMPROVEMENT AREA NO. 1 – Direct and Overlapping Governmental Obligations” and “– Estimated Tax Burden on Single-Family Homes” show the presently outstanding amount of governmental obligations, the tax or assessment for which is or may become an obligation of one or more of the parcels of Taxable Property. The tables do not specifically identify which of the governmental obligations are secured by liens on one or more of the parcels of Taxable Property. In addition, other governmental obligations may be authorized and undertaken or issued in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels of Taxable Property and may be secured by a lien on a parity with the lien of the Facilities Special Tax securing the 2026 Bonds. In general, as long as the Facilities Special Tax is collected on the County tax roll, the Facilities Special Tax and all other taxes, assessments and charges also collected on the tax roll are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of Facilities Special Taxes securing the 2026 Bonds, the Facilities Special Tax will be subordinate only to existing prior governmental liens, if any. Otherwise, in the event of such foreclosure proceedings, the Facilities Special Taxes will generally be on a parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro-rata basis. Although the Facilities Special Taxes will generally have priority over non-governmental liens on a parcel of Taxable Property, regardless of whether the non-governmental
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liens were in existence at the time of the levy of the Facilities Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy Delays” below. Exempt Properties Certain properties are exempt from the Facilities Special Tax in accordance with the Amended Rate and Method and the Act, which provides that properties or entities of the state, federal or local government are exempt from the Facilities Special Tax; provided, however, that property within Improvement Area No. 1 acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Facilities Special Tax, will continue to be subject to the Facilities Special Tax. See “SECURITY FOR THE BONDS – Amended Rate and Method.” In addition, although the Act provides that if property subject to the Facilities Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Facilities Special Tax with respect to that property is to be treated as if it were a special assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Facilities Special Tax. For ordinances levying special taxes that are adopted after January 1, 2020, Section 53340(c) of the Act also provides that: “a property receiving a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code shall be exempt from the special tax unless debt is outstanding and the property was subject to the special tax prior to receiving the exemption, in which case the property shall remain subject to the special tax and the special tax shall be enforceable against the property. However, whether or not the resolution of formation that authorized creation of the district specified conditions under which the obligation to pay a special tax may be prepaid and permanently satisfied, the legislative body of the local agency that created the district may, by resolution, specify additional or different conditions under which the property receiving the welfare exemption may prepay and satisfy the obligation to pay the special tax. The conditions may be specified only if the legislative body of the local agency that created the district finds and determines that the prepayment arrangement will not, in and of itself, adversely affect the ability of the district to make scheduled payments on debt as such payments become due.” Because the Ordinance levying the Facilities Special Taxes within Improvement Area No. 1 was adopted after January 1, 2020, the foregoing is applicable to Improvement Area No. 1. See “SECURITY FOR THE BONDS – Amended Rate and Method" and APPENDIX B for a discussion of the treatment of welfare exemption property. The Act further provides that no other properties or entities are exempt from the Facilities Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax. FDIC/Federal Government Interests in Properties General. The ability of the City to foreclose the lien of delinquent unpaid Facilities Special Tax installments may be limited with regard to properties in which the FDIC, the Federal National Mortgage Association, the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.
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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 interest. The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding.” This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Facilities Special Taxes but does not pay taxes and assessments levied on the parcel (including Facilities Special Taxes), 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 Facilities Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Facilities Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, 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 subject to the Facilities Special Taxes, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the 2026 Bonds are outstanding. FDIC. In the event that any financial institution making any loan which is secured by real property within Improvement Area No. 1 is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the City to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Facilities Special Taxes may be limited. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that property 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 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 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
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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 it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC’s federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from Mello-Roos special taxes. The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Facilities Special Taxes on a parcel within Improvement Area No. 1 in which the FDIC has or obtains an interest, although prohibiting the lien of the Facilities Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the 2024 Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the 2026 Bonds. Depletion of 2024 Reserve Fund The 2024 Reserve Fund is to be maintained at an amount equal to the 2024 Reserve Requirement for the 2026 Bonds, the 2024 Bonds and any additional 2024-Related Parity Bonds issued in the future. See “SECURITY FOR THE BONDS – 2024 Reserve Fund.” The 2024 Reserve Fund will be used to pay principal of and interest on the 2026 Bonds, the 2024 Bonds and any other 2024-Related Parity Bonds issued in the future if insufficient funds are available from the proceeds of the levy and collection of the Facilities Special Tax against property within Improvement Area No. 1 of the District. If the 2024 Reserve Fund is depleted, it can be replenished from the proceeds of the levy and collection of the Facilities Special Taxes that exceed the amounts to be paid to the owners of the 2026 Bonds, the 2024 Bonds and any other 2024-Related Parity Bonds issued in the future under the Fiscal Agent Agreement. However, because the Facilities Special Tax levy is limited to the maximum annual Facilities Special Tax rates, it is possible that no replenishment would be possible if the Facilities Special Tax proceeds, together with other available funds, remain insufficient to pay all such amounts. Thus, it is possible that the 2024 Reserve Fund will be depleted and not be replenished by the levy and collection of the Facilities Special Taxes. Bankruptcy Delays The payment of the Facilities Special Tax and the ability of the City to foreclose the lien of a delinquent unpaid Facilities Special Tax, as discussed in “SECURITY FOR THE BONDS,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the 2026 Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the Facilities Special Taxes to become extinguished, bankruptcy of a property owner or any other person claiming an interest in the
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property could result in a delay in superior court foreclosure proceedings and could result in the possibility of Facilities Special Tax installments not being paid in part or in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the 2026 Bonds. In addition, the amount of any lien on property securing the payment of delinquent Facilities Special Taxes could be reduced if the value of the property were determined by the bankruptcy court to have become less than the amount of the lien, and the amount of the delinquent Facilities Special Taxes in excess of the reduced lien could then be treated as an unsecured claim by the court. Any such stay of the enforcement of the lien for the Facilities Special Tax, or any such delay or non-payment, would increase the likelihood of a delay or default in payment of the principal of and interest on the 2026 Bonds and the possibility of delinquent Facilities Special Taxes not being paid in full. The chances are increased that the 2024 Reserve Fund could be fully depleted during any such delay in obtaining payment of delinquent Facilities Special Taxes. As a result, sufficient moneys would not be available in the 2024 Reserve Fund to make up shortfalls resulting from delinquent payments of the Facilities Special Tax and thereby to pay principal of and interest on the 2026 Bonds, the 2024 Bonds and any other 2024-Related Parity Bonds issued in the future on a timely basis. Cyber Security The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the District, or the administration of the 2026 Bonds. The City is also reliant on other entities and service providers in connection with the administration of the 2026 Bonds, including without limitation the County tax collector for the levy and collection of Facilities Special Taxes, the Fiscal Agent, and the Dissemination Agent. No assurance can be given that the City, the District and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners. Disclosure to Future Purchasers The City has recorded a notice of the Facilities Special Tax lien in the Office of the County Recorder. 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 special tax obligation in the purchase of a parcel of land or a home in Improvement Area No. 1 or the lending of money secured by property in Improvement Area No. 1. The Act and the Goals and Policies of the City require the subdivider of a subdivision (or its agent or representative) to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b 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 special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with these requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Facilities Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Facilities Special Tax when due.
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Public Health Emergencies In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. Pandemic diseases arising in the future could have significant adverse health and financial impacts throughout the world, leading to loss of jobs and personal financial hardships, and/or actions by federal, State and local governmental authorities to contain or mitigate the effects of an outbreak. Taxpayer assistance measures may include deferral of due dates of property taxes, which was an assistance program during the COVID-19 pandemic, and with or without a deferral some taxpayers affected by a public health emergency may be unable to make their property and Facilities Special Tax payments. No assurance can be given that the property tax payment dates will not be deferred in the future, which may cause a delay in the receipt of Facilities Special Taxes. In addition, home values may be affected by a reduction in demand stemming from personal finances, or general widespread economic circumstances resulting from pandemic diseases. No Acceleration Provisions The 2026 Bonds do not contain a provision allowing for their acceleration in the event of a payment default or other default under the terms of the 2026 Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a Bondholder is given the right for the equal benefit and protection of all Bond owners similarly situated to pursue certain remedies. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT.” So long as the 2026 Bonds are in book-entry form, DTC will be the sole Bondholder and will be entitled to exercise all rights and remedies of Bond holders. Loss of Tax Exemption As discussed under the caption “LEGAL MATTERS – Tax Exemption,” interest on the 2026 Bonds might become includable in gross income for purposes of federal income taxation retroactive to the date the 2026 Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability. As a result, if interest on the 2026 Bonds were to become includable in gross income for purposes of federal income taxation, the 2026 Bonds would continue to remain outstanding until maturity unless earlier redeemed pursuant to optional or mandatory redemption or redemption upon prepayment of the Facilities Special Taxes. See “THE 2026 BONDS – Redemption.” IRS Audit of Tax-Exempt Bond Issues The Internal Revenue Service (the “IRS”) has a program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2026 Bonds will be selected for audit by the IRS. It is also possible that the market value of such 2026 Bonds might be affected as a result of such an audit of such 2026 Bonds (or by an audit of similar bonds or securities). Impact of Legislative Proposals, Clarifications of the Code and Court Decisions on Tax Exemption Future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2026 Bonds to be subject, directly or indirectly, to federal
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income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bondowners from realizing the full current benefit of the tax status of such interest. Voter Initiatives Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996, and Proposition 26, which was approved on November 2, 2010. Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the 2026 Bonds. Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges. On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes (“special taxes”) require a two-thirds vote. The Facilities Special Taxes and the 2026 Bonds were each authorized by not less than a two-thirds vote of the landowners within Improvement Area No. 1 of the District who constituted the qualified electors at the time of such voted authorization. The City believes, therefore, that issuance of the 2026 Bonds does not require the conduct of further proceedings under the Act, Proposition 218 or Proposition 26. Like their antecedents, Proposition 218 and Proposition 26 are likely to undergo both judicial and legislative scrutiny before the impact on the City and its obligations can be determined. Certain provisions of Proposition 218 and Proposition 26 may be examined by the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted. For example, in August 2014, the California Court of Appeal, Fourth Appellate District, Division One (the “Court”), issued its opinion in City of San Diego v. Melvin Shapiro, et al. (“Shapiro”) invalidating an election held by the City of San Diego to authorize the levying of special taxes on hotels city-wide pursuant to a city charter ordinance creating a convention center facilities district which specifically defined the electorate to consist solely of (1) the owners of real property in the city on which a hotel is located, and (2) the lessees of real property owned by a governmental entity on which a hotel is located. The court held that such landowners and lessees are neither “qualified electors” of the city for purposes of Articles XIII A, Section 4 of the California
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Constitution, nor a proper “electorate” under Article XIIIC, Section 2(d) of the California Constitution. The court specifically noted that the decision did not require the Court to consider the distinct question of whether landowner voting to impose special taxes under Section 53326(b) of the Act (which was the nature of the voter approval through which the District and Improvement Area No. 1 were formed) violates the California Constitution in districts that lack sufficient registered voters to conduct an election among registered voters. Accordingly, Shapiro should have no effect on the levy of the Facilities Special Taxes by the City because the District had no registered voters at the time of its formation. The City cannot predict the ultimate outcome or effect of any such judicial scrutiny, legislative actions, or future initiatives. These initiatives, and any future initiatives, may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the 2026 Bonds. No Ratings – Limited Secondary Market for Bonds The City has not applied to have the 2026 Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future. There can be no guarantee that there will be a secondary market for the 2026 Bonds or, if a secondary market exists, that any 2026 Bonds can be sold for any particular price. Although the City has committed to provide certain financial and operating information, there can be no assurance that such information will be available to Bondowners on a timely basis. 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 2026 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. No assurance can be given that the market price for the 2026 Bonds will not be affected by the introduction or enactment of any future legislation (including without limitation amendments to the Tax Code), or changes in interpretation of the Tax Code, or any action of the IRS, including but not limited to the publication of proposed or final regulations, the issuance of rulings, the selection of the 2026 Bonds for audit examination, or the course or result of any IRS audit or examination of the 2026 Bonds or obligations that present similar tax issues as the 2026 Bonds.
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LEGAL MATTERS Legal Opinions The legal opinion of Jones Hall LLP, San Mateo, California, Bond Counsel, approving the validity of the 2026 Bonds will be made available to purchasers at the time of original delivery and is attached in substantially final form as APPENDIX H. Jones Hall LLP, San Mateo, California, has also served as Disclosure Counsel to the City. Richards, Watson and Gershon, San Francisco, California, will pass upon certain legal matters for the City. Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, is serving as counsel to the Underwriter. Cox, Castle Nicholson, San Francisco, California, is serving as counsel to One Lake Holding LLC, the Master Developer. Tax Exemption Federal Tax Status. In the opinion of Jones Hall LLP, San Mateo, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals; however, such interest on the 2026 Bonds may be taken into account for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2026 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2026 Bonds. Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2026 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2026 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "bond premium" for purposes of federal income taxes and State of California personal income taxes. Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2026 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2026 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2026 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2026 Bonds who purchase the 2026 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2026 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2026 Bonds with original issue
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discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such 2026 Bonds is sold to the public. Under the Tax Code, bond premium is amortized on an annual basis over the term of the 2026 Bond (said term being the shorter of the 2026 Bond's maturity date or its call date). The amount of bond premium amortized each year reduces the adjusted basis of the owner of the 2026 Bond for purposes of determining taxable gain or loss upon disposition. The amount of bond premium on a 2026 Bond is amortized each year over the term to maturity of the 2026 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized bond premium is not deductible for federal income tax purposes. Owners of premium 2026 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2026 Bonds. California Tax Status. In the further opinion of Bond Counsel, interest on the 2026 Bonds is exempt from California personal income taxes. Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2026 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2026 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2026 Bonds, or as to the consequences of owning or receiving interest on the 2026 Bonds, as of any future date. Prospective purchasers of the 2026 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Owners of the 2026 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2026 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2026 Bonds, the ownership, sale or disposition of the 2026 Bonds, or the amount, accrual or receipt of interest on the 2026 Bonds. No Litigation At the time of delivery of the 2026 Bonds, the City will certify that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the City has been served with process or threatened, which: • in any way questions the powers of the City Council or the City or the District, or • in any way questions the validity of any proceeding taken by the City Council in connection with the issuance of the 2026 Bonds, or
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• wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the purchase contract with respect to the 2026 Bonds, or • which, in any way, could adversely affect the validity or enforceability of the resolutions of the City Council adopted in connection with the formation of the District and Improvement Area No. 1 or the issuance of the 2026 Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Certificate or the purchase contract with respect to the 2026 Bonds, or • to the knowledge of the City, in any way questions the exclusion from gross income of the recipients thereof of the interest on the 2026 Bonds for federal income tax purposes, or • in any other way questions the status of the 2026 Bonds under State tax laws or regulations. CONTINUING DISCLOSURE The City. The City will covenant for the benefit of owners of the 2026 Bonds to provide certain financial information and operating data relating to Improvement Area No. 1 and the 2026 Bonds by not later than nine months after the end of the City's fiscal year (currently March 31 based on the City’s fiscal year end of June 30) (the “Annual Report”), commencing March 31, 2027, and to provide notices of the occurrence of certain listed events. These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events is set forth in “APPENDIX E – FORM OF CITY CONTINUING DISCLOSURE CERTIFICATE.” The City previously entered into numerous disclosure undertakings under the Rule in connection with the issuance of long-term obligations. The City has not failed to comply in all material aspects with any previous undertakings with regard to the Rule in the past five years. Any failure by the City to comply with the provisions of its undertaking will not constitute a default under the Fiscal Agent Agreement (although owners of the 2026 Bonds will have any remedy available at law or in equity as provided in the undertaking). Nevertheless, a failure to comply must be reported in accordance with the Rule. Such a failure may adversely affect the transferability and liquidity of the 2026 Bonds. To ensure compliance with its continuing disclosure undertakings under the Rule in the future, the City has appointed the City’s Finance Director to coordinate the preparation and filing of annual disclosure reports in accordance with the City’s disclosure undertakings and has adopted policies and procedures related thereto. The City has also engaged Willdan Financial Services to serve as its dissemination agent and assist the City in complying with its continuing disclosure undertakings. Master Developer. The Master Developer will covenant in a continuing disclosure certificate, the form of which is set forth in APPENDIX F to this Official Statement (the “Master Developer Continuing Disclosure Certificate”), for the benefit of holders and beneficial owners of the 2026 Bonds, to provide certain information relating to itself and the status of its property within Improvement Area No. 1 on a semi-annual basis, beginning on October 31, 2026, and to provide notices of the occurrence of certain enumerated events. See APPENDIX F.
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The Master Developer is not an obligated person as defined under the Rule. The obligations of the Master Developer under the Master Developer Continuing Disclosure Certificate will terminate when the property owned by the Master Developer is no longer responsible for payment of 15% or more of the Facilities Special Taxes or Master Developer owns ____ or fewer existing or planned single-family lots within Improvement Area No. 1. The Master Developer is in compliance with its prior continuing disclosure undertakings. [PLEASE CONFIRM] Lennar Homes. Lennar Homes will covenant in a continuing disclosure certificate, the form of which is set forth in APPENDIX G to this Official Statement (the “Merchant Builder Continuing Disclosure Certificate”), for the benefit of holders and beneficial owners of the 2026 Bonds, to provide certain information relating to itself and the status of the property it owns within Improvement Area No. 1 on a semi-annual basis, beginning on October 31, 2026, and to provide notices of the occurrence of certain enumerated events. See APPENDIX G. Lennar Homes is not an obligated person as defined under the Rule. The obligations of Lennar Homes under its Merchant Builder Continuing Disclosure Certificate will terminate when Lennar Homes owns or has an option to purchase 50 or fewer existing or planned single-family lots within Improvement Area No. 1. [PLEASE UPDATE] Other than as disclosed in this Official Statement, in the last five years, Lennar Homes has not failed to comply in any material respects with its previous continuing disclosure undertakings, specifically regarding its requirement to provide developer periodic reports or to provide notice of occurrence of enumerated events. However, (i) in connection with the $16,780,000 California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Series 2020B, Lennar Homes inadvertently failed to file the initial semi-annual report by the due date of May 1, 2021, but filed a curative report on May 21, 2021; and (ii) in connection with the $5,795,000 City of Rancho Cordova Grantline 208 Community Facilities District No. 2018-1 Special Tax Bonds, Series 2021B, Lennar Homes inadvertently failed to file the initial annual report by the due date of April 1, 2022, but filed a curative report on September 21, 2022. [ADDITIONAL MERCHANT BUILDING CONTINUING DISCLOSURE REQUIREMENTS TO BE DISCUSSED] NO RATING The City has not obtained a credit rating on the 2026 Bonds. Nothing should be assumed from any credit rating that the City may obtain for other purposes. Prospective purchasers of the 2026 Bonds are required to make independent determinations as to the credit quality of the 2026 Bonds and their appropriateness as an investment. UNDERWRITING The 2026 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), at a purchase price of $________ (which represents the aggregate principal amount of the 2026 Bonds ($________), plus original issue premium of $________, less an Underwriter's discount of $________).
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The purchase agreement relating to the 2026 Bonds provides that the Underwriter will purchase all of the 2026 Bonds, if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase agreement. The Underwriter may offer and sell the 2026 Bonds to certain dealers and others at prices lower than the offering prices stated on the inside cover page hereof. The offering prices may be changed from time to time by the Underwriter. PROFESSIONAL FEES In connection with the issuance of the 2026 Bonds, fees or compensation payable to certain professionals are contingent upon the issuance and delivery of the 2026 Bonds. Those professionals include the Underwriter, Stradling Yocca Carlson & Rauth LLP, as Underwriter’s Counsel, PFM Financial Advisors LLC, as municipal advisor, Goodwin Consulting Group, Inc., as special tax consultant, and The Bank of New York Mellon Trust Company, N.A., as Fiscal Agent.
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EXECUTION The execution and delivery of the Official Statement by the City have been duly authorized by the City Council, acting as the legislative body of the District. CITY OF FAIRFIELD By: John Furtado, Director of Finance
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APPENDIX A GENERAL INFORMATION ABOUT THE CITY OF FAIRFIELD AND SOLANO COUNTY The following information concerning the City of Fairfield (the "City") and Solano County (the “County”) are included only for the purpose of supplying general information regarding the community. The 2026 Bonds are not a debt of the City, the County, the State of California (the “State”) or any of its political subdivisions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor. General The City, which comprises approximately 37 square miles, is located in the County approximately 44 miles northeast of San Francisco and 42 miles west of Sacramento. The City is served by Interstate 80, the major freeway link between San Francisco and Sacramento, as well as Highway 12, a connecting freeway from Interstate 80 to Napa Valley. Historically, the City's economy has been based upon agriculture and related industries; the City has served as a commerce center for agriculture in its region for over 100 years. In recent years, the City has transformed its economic base as a result of significant residential, industrial and commercial building activity occurring over the past several years. The City has been proactive in providing commercial/industrial development opportunities, and has formed several assessment districts to finance public improvements required by new projects. This rapid expansion in manufacturing, logistics, warehousing and distribution has led to substantial growth in population and employment. Another major contributor to the City’s economy is Travis Air Force Base, the largest employer of both the City and the County. As of September 30, 2024 (the date of Travis Air Force Base’s latest economic impact report), the partnership between Travis Air Force Base and the County generated 13,336 indirect jobs, totaling an estimated annual dollar value of $1,487,354,041. Travis Air Force Base also awarded more than $211 million worth of contracts to local businesses for work on construction, operations and maintenance of base infrastructure projects. Municipal Government The City was incorporated in 1892 and operates under a council/manager form of government. All municipal departments operate under the supervision of the City Manager. The City Council consists of a Mayor elected at large for a four-year term and four other Council members elected at large for overlapping four-year terms.
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Population The Fairfield area experienced significant growth over the 1980's. The population of the City was 58,099 as of the 1980 census. By January 1, 1990 the population of the City was estimated to be 77,211, a percentage increase of approximately 33% over this ten-year period. Further growth occurred during the 1990's, when the population grew another 25% over this ten-year period. From 2000 to 2010, the population continued to expand, increasing by approximately 9.5% over that period. Population estimates for calendar years 1980, 1990, 2000, 2010, and the past five years in the City, the County, and the State are shown in the following table. CITY OF FAIRFIELD, COUNTY OF SOLANO AND STATE OF CALIFORNIA Population Estimates Calendar Years 1980, 1990, 2000, 2010, and 2020 through 2025 Year City of Fairfield Solano County State of California 1980 58,099 235,203 23,668,562 1990 77,211 339,471 29,758,213 2000 96,178 394,930 33,873,086 2010 105,321 413,344 37,253,956 2020 120,447 453,491 39,538,223 2021 120,114 450,518 39,369,530 2022 119,254 447,671 39,179,680 2023 119,854 447,411 39,228,444 2024 120,609 449,966 39,420,663 2025 120,720 449,839 39,529,101 Source: State Department of Finance estimates.
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Employment and Industry The unemployment rate in the Solano County was 5.5 percent in January 2026, up from a revised 5.2 percent in December 2025, and above the year-ago estimate of 5.4 percent. This compares with an unadjusted unemployment rate of 5.5 percent for California and 4.7 percent for the nation during the same period. The table below shows the Vallejo-Fairfield Metropolitan Statistical Area’s labor patterns during 2020 through 2024. VALLEJO-FAIRFIELD METROPOLITAN STATISTICAL AREA (SOLANO COUNTY) Civilian Labor Force, Employment and Unemployment (Annual Averages) (March 2024 Benchmark) 2020 2021 2022 2023 2024 Civilian Labor Force (1) 209,900 208,200 209,700 214,000 216,300 Employment 190,200 193,200 201,000 204,600 205,600 Unemployment 19,700 15,000 8,700 9,400 10,800 Unemployment Rate 9.4% 7.2% 4.1% 4.4% 5.0% Wage and Salary Employment: (2) Agriculture 1,500 1,600 1,600 1,500 1,400 Mining and Logging 400 300 300 300 200 Construction 11,100 11,600 12,100 11,800 11,100 Manufacturing 10,900 10,900 11,200 11,200 11,400 Wholesale Trade 4,100 4,000 4,100 4,200 4,100 Retail Trade 16,700 17,500 17,600 17,500 17,300 Trans., Warehousing, Utilities 4,900 5,300 6,000 6,400 7,100 Information 800 800 900 900 900 Finance and Insurance 3,400 3,200 3,000 2,800 2,900 Professional and Business Services 9,700 10,400 10,900 11,100 11,100 Educational and Health Services 27,900 27,600 28,500 29,900 31,200 Leisure and Hospitality 12,300 13,600 15,500 16,000 15,600 Other Services 4,000 4,200 4,700 4,900 4,900 Federal Government 3,600 3,600 3,400 3,300 3,400 State Government 5,400 5,200 5,200 5,000 4,900 Local Government 14,400 14,100 14,800 15,500 16,200 Total all Industries (3) 132,800 135,500 141,500 144,100 145,700 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Totals may not add due to rounding. Source: State of California Employment Development Department.
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Largest Employers Employment in the City area traditionally is centered around food processing, financial and service employees and the public sector. The following table lists some of the largest employers located within the City. CITY OF FAIRFIELD Largest Employers June 30, 2025 Employer Name Type Jobs Travis Air Force Base Military Base 13,414 County of Solano Government 2,633 Fairfield-Suisun Unified School District Education 2,213 Northbay Medical Center Hospital 1,969 Solano Community College Education 750 Partnership Health Plan Healthcare Group 561 City of Fairfield Government 553 Jelly Belly Candy Co. Candy & Confections 489 Sutter Regional Medical Foundation Insurance 475 Westamerica Bancorporation Banking 418 Source: City of Fairfield Annual Comprehensive Financial Report for fiscal year ended June 30, 2025.
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Major Employers The table below lists the major employers in the County as of April 2026, listed alphabetically. Solano County Major Employers (Listed Alphabetically) April 2026 Employer Name Location Industry Aerospace Medical Travis AFB Medical Centers California Medical Facility Vacaville Hospitals Collins Aerospace Fairfield Aircraft Components-Manufacturers Duravent Inc Vacaville Ventilating Equipment (whls) Flatiron Construction Corp Benicia General Contractors Guittard Chocolate Co Fairfield Chocolate & Cocoa-Manufacturers Jelly Belly Candy Co Fairfield Candy & Confectionery-Manufacturers Meyer Corp US Vallejo Exporters (whls) Northbay Healthcare Green Vly Fairfield Health Services Northbay Medical Ctr Fairfield Hospitals Northbay Vacavalley Hospital Vacaville Hospitals Primal Pet Foods Inc Fairfield Pet Shops Quick Lane Fairfield Tire-Dealers-Retail Six Flags Discovery Kingdom Vallejo Amusement & Theme Parks Solano County Fairfield General Government Support Solano County Sheriff Fairfield Civil Enforcement Solano County Special Edu Fairfield Schools Sutter Solano Medical Ctr Vallejo Hospitals Touro University California Vallejo University-College Dept/Facility/Office Travis Air Force Base Travis AFB Military Bases USDA Forest Svc Vallejo Federal Government-Land/Mineral/Wildlife/Fore Valero Benicia Refinery Benicia Crude Oil-Petroleum Refineries Vallejo City Manager's Office Vallejo City Government-Executive Offices Walmart Neighborhood Market Vacaville Grocers-Retail Walmart Supercenter Dixon Department Stores Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2026 1st Edition.
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Effective Buying Income "Effective Buying Income" is defined as personal income less personal tax and nontax payments, a number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as "disposable personal income." The following table summarizes the total effective buying income for the City, the County, the State and the United States for the calendar years 2022 through 2026. EFFECTIVE BUYING INCOME For Calendar Years 2022 Through 2026 Year and Area Total Effective Buying Income (000s omitted) Median Household Effective Buying Income 2022 City of Fairfield $4,177,793 $83,809 County of Solano 16,095,586 81,515 California 1,452,426,153 77,058 United States 11,208,582,541 64,448 2023 City of Fairfield $4,041,044 $81,551 County of Solano 16,044,120 81,403 California 1,461,799,662 77,175 United States 11,454,846,397 65,326 2024 City of Fairfield $4,182,467 $85,615 County of Solano 16,238,988 83,539 California 1,510,708,521 80,973 United States 11,987,185,826 67,876 2025 City of Fairfield $4,245,900 $84,469 County of Solano 16,525,335 83,205 California 1,557,429,767 82,725 United States 12,525,577,707 69,687 2026 City of Fairfield $4,830,845 $93,715 County of Solano 18,935,275 92,659 California 1,730,654,738 90,403 United States 13,932,177,817 75,433 _______________________ Source: Claritas, LLC.
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Commercial Activity A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following table. Total taxable transactions in the City during the first three quarters of calendar year 2025 were reported to be $1,941,594,331, a 3.63% increase over the total taxable transactions of $1,873,636,114 reported during the comparable quarters of calendar year 2024. CITY OF FAIRFIELD Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions ($000s) Retail Stores Total All Outlets Number of Permits Taxable Transactions Number of Permits Taxable Transactions 2020 1,786 $1,263,571 2,876 $1,909,404 2021 1,680 1,569,006 2,711 2,320,891 2022 1,724 1,666,031 2,792 2,584,908 2023 1,626 1,654,581 2,662 2,527,456 2024 1,601 1,639,755 2,639 2,541,792 Source: State Department of Tax and Fee Administration. Total taxable sales during the first three quarters of calendar year 2025 in the County were reported to be $7,578,324,176, a 1.00% increase over the total taxable sales of $7,503,138,398 reported during the comparable quarters of calendar year 2024. SOLANO COUNTY Taxable Retail Sales Number of Permits and Valuation of Taxable Transactions ($000s) Retail Stores Total All Outlets Number of Permits Taxable Transactions Number of Permits Taxable Transactions 2020 6,996 $5,511,263 11,553 $8,259,715 2021 6,598 6,414,957 11,000 9,733,516 2022 6,709 6,680,984 11,253 10,432,958 2023 6,430 6,602,488 10,898 10,393,076 2024 6,265 6,551,365 10,744 10,546,879 Source: State Department of Tax and Fee Administration.
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APPENDIX B AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5)
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APPENDIX C SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT
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APPENDIX D DTC AND THE BOOK-ENTRY ONLY SYSTEM The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2026 Bonds, payment of principal, interest and other payments on the 2026 Bonds (herein, the “Securities”) to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Securities and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Neither the issuer of the Securities (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Securities (the “Agent”) takes any responsibility for the information contained in this Appendix. No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Securities, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Securities, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Securities, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. 1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities 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 Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. 2. 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
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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. The information contained on this Internet site is not incorporated herein by reference. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“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 Securities 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 Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities 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 Securities 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 Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities 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. 5. 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 Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities 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. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as
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possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities 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 Issuer or Agent, 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, Agent, or Issuer, 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 Issuer or Agent, 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. 9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
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APPENDIX E FORM OF CITY CONTINUING DISCLOSURE CERTIFICATE CONTINUING DISCLOSURE CERTIFICATE $________________ IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Fairfield (the “City”) in connection with the issuance of the bonds captioned above (the “2026 Bonds”). The 2026 Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of December 1, 2024 (the “Master Fiscal Agent Agreement”), as supplemented by a First Supplement to Fiscal Agent Agreement dated August 1, 2026 (as supplemented the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”). The City hereby covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the 2026 Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: “Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means the date that is nine months after the end of the City 's fiscal year (currently March 31 based on the City’s fiscal year end of June 30). “Dissemination Agent” means Willdan Financial Services, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. “District” means the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5). “Improvement Area No. 1” means Improvement Area No. 1 of the District. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
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“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule. “Official Statement” means the final Official Statement dated ___________, 2026, executed by the City in connection with the issuance of the 2026 Bonds. “Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the 2026 Bonds required to comply with the Rule in connection with offering of the 2026 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time. Section 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2027, with the report for the 2025-26 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. 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 Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City'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 City does not provide, or cause the Dissemination Agent to provide, an Annual Report by the Annual Report Date as required in subsection (a) above, the Dissemination Agent shall provide a notice to the MSRB, in a timely manner, in an electronic format as prescribed by the MSRB. (c) With respect to each Annual Report, the Dissemination Agent shall: (i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and (ii) if the Dissemination Agent is other than the City, file a report with the City and the Participating Underwriter certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided. Section 4. Content of Annual Reports. The City's Annual Report shall contain or incorporate by reference the following documents and information: (a) The City's audited financial statements for the most recently completed fiscal year, prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply
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to governmental entities from time to time by the Governmental Accounting Standards Board, together with the following statement: THE CITY'S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S INTERPRETATION OF RULE 15c2-12. NO FUNDS OR ASSETS OF THE CITY OR THE DISTRICT, OTHER THAN SPECIAL TAX REVENUES FROM IMPROVEMENT AREA NO. 1 OF THE DISTRICT, ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE 2026 BONDS, AND NEITHER THE CITY NOR THE DISTRICT IS OBLIGATED TO ADVANCE AVAILABLE FUNDS TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE CITY OR THE DISTRICT IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE 2026 BONDS. (b) To the extent not included in the audited financial statements, the following information: (i) The principal amount of the 2026 Bonds outstanding, the balance in the 2024 Reserve Fund (along with a statement of the 2024 Reserve Requirement) as of the September 30 next preceding the Annual Report Date, and the issuance date and principal amount of any additional bonds or obligations issued under the Fiscal Agent Agreement on a parity with the 2026 Bonds. (ii) The total dollar amount of delinquencies, if any, in Improvement Area No. 1 as of August 1 of the prior calendar year and, if the total delinquencies within Improvement Area No. 1 as of August 1 in the prior calendar year exceed 5% of the Facilities Special Tax for the previous fiscal year, delinquency information for each parcel with a Facilities Special Tax delinquency, including the amounts of delinquencies, number of unpaid installments of Facilities Special Taxes, length of delinquency and status of any foreclosure of each such parcel. (iii) The amount of prepayments of the Special Tax for the prior Fiscal Year. (iv) Total assessed value (per the Solano County Assessor’s records) of all parcels currently subject to the Special Tax within Improvement Area No. 1. (v) An updated table in substantially the form of the table in the Official Statement entitled “Table 2 Fiscal Year 2026-27 Maximum Facilities Special Tax Revenues and Value-to-Lien Ratios,” showing the Facilities Special Tax levy for the then-current Fiscal Year, and substituting assessed values shown on the Solano County Assessor's last equalized tax roll prior to the September next preceding the Annual Report Date for appraised values. (vi) Any changes to the Amended Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 set forth in Appendix B to the Official Statement. (vii) A description of the number of building permits issued with respect to Improvement Area No. 1 as of the previous June 30. (viii) A copy of the most recent annual information required to be filed by the City with the California Debt and Investment Advisory Commission pursuant to the Act and
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relating generally to outstanding Community Facilities District bond amounts, fund balances, assessed values, special tax delinquencies and foreclosure information. (c) In addition to any of the information expressly required to be provided under paragraph (b) above, the City 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. (d) 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 City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference. Section 5. Reporting of Listed Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds: (1) Principal and interest payment delinquencies. (2) Non-payment related defaults, if material. (3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the 2026 Bonds, or other material events affecting the tax status of the 2026 Bonds. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers. (9) Defeasances. (10) Release, substitution, or sale of property securing repayment of the securities, if material. (11) Rating changes. (12) Bankruptcy, insolvency, receivership or similar event of the obligated person. (13) The consummation of a merger, consolidation, or acquisition involving the obligated person, or the sale of all or substantially all of the assets of the
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obligated person (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, if material. (14) Appointment of a successor or additional Fiscal Agent or the change of name of the Fiscal Agent, if material. (15) Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material. (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person any of which reflect financial difficulties. (b) Upon the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Fiscal Agent Agreement. (c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier "material" with respect to certain notices, determinations or other events affecting the tax status of the 2026 Bonds. The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States 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 City, or if such jurisdiction has been assumed by leaving the existing governing 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 City. (e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The
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term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule. Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. Section 7. Termination of Reporting Obligation. The City's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2026 Bonds. If such termination occurs prior to the final maturity of the 2026 Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(b). Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent will be Willdan Financial Services. Any Dissemination Agent may resign by providing 30 days’ prior written notice to the City. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (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 2026 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 2026 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 2026 Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of the Fiscal Agent or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2026 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. 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
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on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City 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 filed in the same manner as for a Listed Event under Section 5(b). Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate 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 Certificate. If the City 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 Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2026 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, 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 Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Property Owner, the Fiscal Agent, the Bond owners or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2026 Bonds. Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the 2026 Bonds, and shall create no rights in any other person or entity.
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Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument. Dated: _______________, 2026 CITY OF FAIRFIELD By: John Furtado, Director of Finance AGREED AND ACCEPTED: WILLDAN FINANCIAL SERVICES, as Dissemination Agent By: Name: Title:
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APPENDIX F FORM OF MASTER DEVELOPER DISCLOSURE CERTIFICATE CONTINUING DISCLOSURE CERTIFICATE (Master Developer) $___________________ IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A This Continuing Disclosure Certificate (Master Developer) (this “Disclosure Certificate”) is executed and delivered by One Lake Holding LLC, a Delaware limited liability company (the “Property Owner”), in connection with the issuance by the City of Fairfield (the “City”) of the bonds captioned above (the “Bonds”) for and on behalf of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (the “District”) with respect to its Improvement Area No. 1. The Bonds are being issued under a Fiscal Agent Agreement dated as of December 1, 2024 (the “Master Fiscal Agent Agreement”), as supplemented by a First Supplement to Fiscal Agent Agreement dated August 1, 2026 (as supplemented the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”). The Property Owner covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Property Owner for the benefit of the holders and beneficial owners of the Bonds. Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined herein, the following capitalized terms shall have the following meanings: “Affiliate” means any person presently directly (or indirectly through one or more intermediaries) under managerial control of the Property Owner or a Major Owner, as applicable, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property or to the ability of the Property Owner or a Major Owner, as applicable, to pay the Special Taxes levied on the Property prior to delinquency). “Assumption Agreement” means an undertaking of a Major Owner, for the benefit of the holders and beneficial owners of the Bonds, whereby such Major Owner agrees to provide semi-annual reports and notices of significant events with respect to the portion of the property in Improvement Area No. 1 owned by such Major Owner and, at the option of the Property Owner or such Major Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 12 hereof. If such Major Owner is a Master Developer, the Assumption Agreement shall require such Major Owner to enter into a disclosure certificate containing terms substantially similar to this Disclosure Certificate (as modified for such Major Owner’s development and financing plans with respect to the property in Improvement Area No. 1 acquired by the Major Owner). If such Major Owner is a Merchant Builder, the Assumption Agreement shall require such Major Owner to enter into a disclosure certificate containing terms
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substantially similar to the continuing disclosure certificate attached as Appendix G to the Official Statement (as modified for such Major Owner’s development and financing plans with respect to the property in Improvement Area No. 1 acquired by the Major Owner). “Dissemination Agent” means the Property Owner or an entity experienced in providing dissemination agent services such as those required under this Disclosure Certificate designated by the Property Owner to serve as the Dissemination Agent hereunder and who has accepted such obligation in writing, and for which the Property Owner has filed with the City and the Participating Underwriter notice of such designation and acceptance. “Improvement Area No. 1” means Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5). “Official Statement” means the final Official Statement dated ___________, 2026, executed by the City in connection with the issuance of the Bonds. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “Major Owner” means, as of any date of calculation, an owner of land in Improvement Area No. 1 who is, along with one or more Affiliates, responsible in the aggregate for 15% or more of the Special Taxes actually levied or to be levied at any time during the then-current or next fiscal year. If property is sold to a Merchant Builder that enters into a land bank arrangement, and the land bank would constitute a Major Owner, the Assumption Agreement may be entered into with the Merchant Builder so long as the Merchant Builder reports on the land owned by the land bank during the term of the Merchant Builder’s option agreement with the land bank. [change to lot count?] “Master Developer” means an owner of land, or an entity under option with a land bank, in Improvement Area No. 1 intending to pursue entitlements and land development activities but not develop its property as residences for sale to individual homeowners. “Merchant Builder” means an owner of land in Improvement Area No. 1 intending to develop its property as residences for sale to individual homeowners. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information. “Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Bonds. “Property” means (i) the property owned by the Property Owner in Improvement Area No. 1, and (ii) the property in Improvement Area No. 1 that the Property Owner sold to a Major Owner who has not assumed the undertakings of this Disclosure Certificate under Section 7(b) with respect to such property. “Report Date” means (a) October 31 of each year, and (b) April 30 of each year. “Semi-Annual Report” means any Semi-Annual Report provided by the Property Owner pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Special Taxes” means the Facilities Special Taxes levied by the City on the Property.
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Section 3. Provision of Semi-Annual Reports. (a) Until such obligations are terminated pursuant to Section 7 herein, the Property Owner shall, or upon written direction of the Property Owner the Dissemination Agent shall, not later than the Report Date, commencing April 30, 2027, provide to the MSRB, in an electronic format as prescribed by the MSRB, a Semi-Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate with a copy to the Participating Underwriter and the City. Not later than 15 calendar days prior to the Report Date, the Property Owner shall provide the Semi-Annual Report to the Dissemination Agent (if different from the Property Owner). The Property Owner shall provide a written certification with (or included as a part of) each Semi-Annual Report furnished to the Dissemination Agent (if different from the Property Owner), the Participating Underwriter and the City to the effect that such Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by it under this Disclosure Certificate. The Dissemination Agent, the Participating Underwriter and the City may conclusively rely upon such certification of the Property Owner and shall have no duty or obligation to review the Semi-Annual Report. The Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may incorporate by reference other information as provided in Section 4 of this Disclosure Certificate. (b) If the Dissemination Agent is not the Property Owner and it does not receive a Semi-Annual Report by 15 calendar days prior to the Report Date, the Dissemination Agent shall send a reminder notice to the Property Owner that the Semi-Annual Report has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Property Owner to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 7 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). If the Property Owner does not provide, or cause the Dissemination Agent to provide, a Semi-Annual Report to the MSRB by the Report Date as required in subsection (a) above, the Dissemination Agent shall, in a timely manner, provide a notice to the MSRB, in an electronic format as prescribed by the MSRB, with a copy to the City and the Participating Underwriter. (c) The Dissemination Agent shall: (i) determine prior to each Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of continuing disclosure reports; and (ii) to the extent the Semi-Annual Report has been furnished to it, file a report with the Property Owner (if the Dissemination Agent is other than the Property Owner), the City and the Participating Underwriter certifying that the Semi-Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided. Section 4. Content of Semi-Annual Reports. Each Semi-Annual Report shall contain or incorporate by reference the information set forth in Exhibit A, any or all of which may be included by specific reference to other documents, including official statements of debt issues of the Property Owner or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Property Owner shall clearly identify each such other document so included by reference. In addition to any of the information expressly required to be provided in Exhibit A, each Semi-Annual Report shall include such further information, if any, as may be necessary to make
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the specifically required statements, in the light of the circumstances under which they are made, not misleading. Section 5. Reporting of Significant Events. (a) Until such obligations are terminated pursuant to Section 7 herein, the Property Owner shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to itself or the Property, if material: (i) bankruptcy or insolvency proceedings commenced by or against the Property Owner and, if known, any bankruptcy or insolvency proceedings commenced by or against any Affiliate of the Property Owner; (ii) failure to pay any taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property prior to the delinquency date, to the extent such failure is not promptly cured upon discovery thereof; (iii) filing of a lawsuit against the Property Owner or, if known, an Affiliate of the Property Owner, seeking damages which, if successful, could have a material and adverse impact on the Property Owner’s ability to pay Special Taxes prior to delinquency or to sell or develop the Property; (iv) material damage to or destruction of any of the infrastructure improvements on the Property not yet accepted by the City; and (v) any payment default or other material default by the Property Owner or any Affiliate that continues to exist beyond any applicable notice and cure periods on any loan with respect to the development of infrastructure improvements required for the development of the One Lake Project. (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable Federal securities law. (c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Property Owner shall, or shall cause the Dissemination Agent to, within 10 business days file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, with a copy to the City and the Participating Underwriter. Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
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Section 7. Duration of Reporting Obligation. (a) All of the Property Owner’s obligations hereunder shall commence on the date hereof and shall terminate (except as provided in Section 12) on the earliest to occur of the following: (i) upon the legal defeasance, prior redemption or payment in full of all the Bonds, or (ii) at such time as the Property is no longer responsible for payment of 15% or more of the Special Taxes, or (iii) at such time as the Property consists of 150 or fewer existing or planned single-family lots, or (iv) the date on which all of the Special Taxes attributable to the Property are paid in full. The Property Owner shall give notice of the termination of its obligations under this Disclosure Certificate in the same manner as for a Listed Event under Section 5. (b) If a portion of the Property is conveyed to a person or entity that, upon such conveyance, will be a Major Owner, the obligations of the Property Owner hereunder with respect to the property conveyed to such Major Owner may be assumed by such Major Owner and the Property Owner’s obligations hereunder with respect to the property conveyed will be terminated. In order to effect such assumption, such Major Owner shall enter into an Assumption Agreement. However, a Major Owner shall not be required to enter into an Assumption Agreement if such Major Owner is already a party to a continuing disclosure certificate in form and substance similar to this Disclosure Certificate or the continuing disclosure certificate attached as Appendix G to the Official Statement, and under which the property conveyed to such Major Owner will become subject to future semi-annual reports. Section 8. Dissemination Agent. The Property Owner may, from time to time, with the written consent of the City, appoint or engage a Dissemination Agent to assist the Property Owner in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with the written consent of the City, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be The Property Owner. The Dissemination Agent may resign by providing 30 days’ written notice to the City, the Property Owner, and the Participating Underwriter. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Property Owner may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied (provided, however, that the Dissemination Agent shall not be obligated under any such amendment that modifies or increases its duties or obligations hereunder without its written consent thereto): (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, or change in law;
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(b) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement with the consent of holders, 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. Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Semi-Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Property Owner chooses to include any information in any Semi-Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Property Owner shall have no obligation under this Disclosure Certificate to update such information or include it in any future Semi-Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Certificate, the Participating Underwriter, the City, and 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 Property Owner to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Property Owner to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Property Owner agrees to indemnify and save the Dissemination Agent, 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 reasonable costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding any loss, expense and liabilities due to the Dissemination Agent’s negligence or willful misconduct or failure to perform its duties hereunder. If the Dissemination Agent is not the Property Owner, the Dissemination Agent shall be paid compensation for its services provided hereunder from the Administrative Expense Fund established under the Fiscal Agent Agreement in accordance with the Dissemination Agent’s schedule of fees as amended from time to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable 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 hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Property Owner, the Participating Underwriter, the Bond owners, or any other party. The obligations of the Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
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Section 13. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given by regular, overnight, or electronic mail as follows: To the issuer: City of Fairfield 1000 Webster Street Fairfield, CA 94533 Fax: (707) 728-7621 [email protected] To the Participating Underwriter: Stifel, Nicolaus & Company, Incorporated One Montgomery Street, Suite 3700 San Francisco, CA 94104 [email protected] To the Property Owner: One Lake Holding LLC 2121 N. California Blvd., Suite 1010 Walnut Creek, CA 94596 Attention: Dan Aguilar [email protected] [email protected] Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Property Owner (its successors and assigns), 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. All obligations of the Property Owner hereunder shall be assumed by any legal successor to the obligations of the Property Owner as a result of a sale, merger, consolidation or other reorganization. Section 15. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument. Date: ______________________ ONE LAKE HOLDING LLC, a Delaware limited liability company By: Name: _____________________________ Title: Co-President
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EXHIBIT A SEMI-ANNUAL REPORT [APRIL 30, ____ / OCTOBER 31, _____] $_______ IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A This Semi-Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate (Master Developer) (the “Disclosure Certificate”) dated as of _________, 2026, executed by the undersigned (the “Property Owner”) in connection with the issuance by the City of Fairfield (the “City”) of the bonds captioned above (the “Bonds”) for Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (the “District”). Capitalized terms used in this Semi-Annual Report but not otherwise defined have the meanings given to them in the Disclosure Certificate. I. Property Ownership and Development The information in this section is provided as of ____________________ (this date must be not more than 60 days before the Report Date of this Semi-Annual Report). The information provided in this section shall cover the Property and all property owned by an Affiliate and by a Major Owner that has not entered into a continuing disclosure undertaking. A. Description of the Property in substance and form similar to such information in the Official Statement. ________________________________________________________________________ ________________________________________________________________________ B. Updated information regarding land development and infrastructure construction activities with respect to the Property described in the Official Statement or the Semi-Annual Report last filed in accordance with the Disclosure Certificate: ________________________________________________________________________ ________________________________________________________________________ C. A summary of any material changes to the description of land use or development entitlements for the Property described in the Official Statement or the Semi-Annual Report last filed in accordance with the Disclosure Certificate: ________________________________________________________________________ ________________________________________________________________________
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D. Status of any land purchase contracts with regard to all or any portion of the Property, whether acquisition of land in Improvement Area No. 1 by the Property Owner or sales of land to Merchant Builders or other property owners (other than individual homeowners). ________________________________________________________________________ ________________________________________________________________________ II. Legal and Financial Status of Property Owner Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any material change in the legal structure of the Property Owner or the financial condition and financing plan of the Property Owner that would materially and adversely interfere with its ability to complete its development plan described in the Official Statement. To the extent that the ownership of the Property Owner has changed, describe all material terms of the new ownership structure. ________________________________________________________________________ ________________________________________________________________________ III. Change in Development or Financing Plans Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any development plans or financing plans relating to the Property that are materially different from the proposed development and financing plan described in the Official Statement. ________________________________________________________________________ ________________________________________________________________________ IV. Change in Relationship with Merchant Builders To the extent a relationship (including a contractual relationship) exists between the Property Owner and a Merchant Builder, describe any material change in such relationship. To the extent that a new Merchant Builder has been engaged to carry out home construction, marketing and sales activity in Improvement Area No. 1, fully describe all material terms of the relationship between the Property Owner and any such new Merchant Builder. ________________________________________________________________________ ________________________________________________________________________ V. Official Statement Updates Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any other material changes in the information relating to the Property Owner or the Property contained in the Official Statement under the caption “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS” (other than under the subcaptions “– Lennar Homes,” “– Lennar Homes Land Bank Arrangement” and “– Other Merchant Builders”). ________________________________________________________________________ ________________________________________________________________________
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VI. Status of Tax Payments Describe status of payment of taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property owned by the Property Owner and its Affiliates. ________________________________________________________________________ ________________________________________________________________________ VII. Other Material Information In addition to any of the information expressly required above, 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. ________________________________________________________________________ ________________________________________________________________________ Certification On behalf of the Property Owner, the undersigned officer or representative, based on actual knowledge after reasonable inquiry of employees of Property Owner and its affiliates, hereby certifies that this Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by the Property Owner under the Disclosure Certificate. ANY OTHER STATEMENTS REGARDING THE PROPERTY OWNER, THE DEVELOPMENT OF THE PROPERTY, THE PROPERTY OWNER’S FINANCING PLAN OR FINANCIAL CONDITION, OTHER THAN STATEMENTS MADE BY THE PROPERTY OWNER IN AN OFFICIAL RELEASE, OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD, ARE NOT AUTHORIZED BY THE PROPERTY OWNER. THE PROPERTY OWNER IS NOT RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENTS. THE PROPERTY OWNER HAS NO OBLIGATION TO UPDATE THIS SEMI-ANNUAL REPORT OTHER THAN AS EXPRESSLY PROVIDED IN THE DISCLOSURE CERTIFICATE. Dated: ONE LAKE HOLDING LLC, a Delaware limited liability company By: Name: _____________________________ Title: Co-President
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APPENDIX G FORM OF MERCHANT BUILDER DISCLOSURE CERTIFICATE CONTINUING DISCLOSURE CERTIFICATE (Merchant Builder) $___________________ IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A This Continuing Disclosure Certificate (Merchant Builder) (this “Disclosure Certificate”) is executed and delivered by _________ (the “Property Owner”), in connection with the issuance by the City of Fairfield (the “City”) of the bonds captioned above (the “Bonds”) for and on behalf of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (the “District”) with respect to its Improvement Area No. 1. The Bonds are being issued under a Fiscal Agent Agreement dated as of December 1, 2024 (the “Master Fiscal Agent Agreement”), as supplemented by a First Supplement to Fiscal Agent Agreement dated August 1, 2026 (as supplemented the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”). The Property Owner covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Property Owner for the benefit of the holders and beneficial owners of the Bonds. Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined herein, the following capitalized terms shall have the following meanings: “Affiliate” means any person presently directly (or indirectly through one or more intermediaries) under managerial control of the Property Owner or a Major Owner, as applicable, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property or to the ability of the Property Owner or a Major Owner, as applicable, to pay the Special Taxes levied on the Property prior to delinquency). [The Land Bank is not an Affiliate of the Property Owner.] “Assumption Agreement” means an undertaking of a Major Owner, for the benefit of the holders and beneficial owners of the Bonds, containing terms substantially similar to this Disclosure Certificate (as modified for such Major Owner’s development and financing plans with respect to the property in Improvement Area No. 1 acquired by the Major Owner), whereby such Major Owner agrees to provide semi-annual reports and notices of significant events, setting forth the information described in sections 4 and 5 hereof, respectively, with respect to the portion of the property in Improvement Area No. 1 owned by such Major Owner and, at the option of the
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Property Owner or such Major Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 12 hereof. “Dissemination Agent” means the Property Owner or an entity experienced in providing dissemination agent services such as those required under this Disclosure Certificate designated by the Property Owner to serve as the Dissemination Agent hereunder and who has accepted such obligation in writing, and for which the Property Owner has filed with the City and the Participating Underwriter notice of such designation and acceptance. “Improvement Area No. 1” means Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5). [“Land Bank” means __________, a ______, together with its successors and assigns.] “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “Major Owner” means, as of any date of calculation, an owner of land in Improvement Area No. 1 who, along with one or more Affiliates, responsible in the aggregate for 15% or more of the Special Taxes actually levied or to be levied at any time during the then-current or next fiscal year. [change to lot count?] “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information. “Official Statement” means the final Official Statement dated ___________, 2026, executed by the City in connection with the issuance of the Bonds. [“Option Agreement” means that certain Option and Development Agreement dated _________, 20__, between the Land Bank, and the Property Owner, as amended from time to time.] “Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Bonds. “Property” means (i) the property owned by the Property Owner in Improvement Area No. 1, [(ii) the property owned by the Land Bank within the boundaries of Improvement Area No. 1 and under option to be purchased by the Property Owner or any Affiliate thereof pursuant to the Option Agreement, and (iii) the property in Improvement Area No. 1 that was formerly owned by the Property Owner or the Land Bank but with respect to which the Property Owner’s obligations under this Disclosure Certificate have not been assumed the undertakings of this Disclosure Certificate under Section 7(b) with respect to such property. “Report Date” means (a) October 31 of each year, and (b) April 30 of each year. “Semi-Annual Report” means any Semi-Annual Report provided by the Property Owner pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Special Taxes” means the Facilities Special Taxes levied by the City on the Property.
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Section 3. Provision of Semi-Annual Reports. (a) Until such obligations are terminated pursuant to Section 7 herein, the Property Owner shall, or upon written direction of the Property Owner the Dissemination Agent shall, not later than the Report Date, commencing April 30, 2027, provide to the MSRB, in an electronic format as prescribed by the MSRB, a Semi-Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate with a copy to the Participating Underwriter and the City. Not later than 15 calendar days prior to the Report Date, the Property Owner shall provide the Semi-Annual Report to the Dissemination Agent (if different from the Property Owner). The Property Owner shall provide a written certification with (or included as a part of) each Semi-Annual Report furnished to the Dissemination Agent (if different from the Property Owner), the Participating Underwriter and the City to the effect that such Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by it under this Disclosure Certificate. The Dissemination Agent, the Participating Underwriter and the City may conclusively rely upon such certification of the Property Owner and shall have no duty or obligation to review the Semi-Annual Report. The Semi-Annual Report may be submitted as a single document or as separate documents comprising a package, and may incorporate by reference other information as provided in Section 4 of this Disclosure Certificate. (b) If the Dissemination Agent is not the Property Owner and it does not receive a Semi-Annual Report by 15 calendar days prior to the Report Date, the Dissemination Agent shall send a reminder notice to the Property Owner that the Semi-Annual Report has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Property Owner to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 7 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). If the Property Owner does not provide, or cause the Dissemination Agent to provide, a Semi-Annual Report to the MSRB by the Report Date as required in subsection (a) above, the Dissemination Agent shall, in a timely manner, provide a notice to the MSRB, in an electronic format as prescribed by the MSRB, with a copy to the City and the Participating Underwriter. (c) The Dissemination Agent shall: (i) determine prior to each Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of continuing disclosure reports; and (ii) to the extent the Semi-Annual Report has been furnished to it, file a report with the Property Owner (if the Dissemination Agent is other than the Property Owner), the City and the Participating Underwriter certifying that the Semi-Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided. Section 4. Content of Semi-Annual Reports. Each Semi-Annual Report shall contain or incorporate by reference the information set forth in Exhibit A, any or all of which may be included by specific reference to other documents, including official statements of debt issues of the Property Owner or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Property Owner shall clearly identify each such other document so included by reference. In addition to any of the information expressly required to be provided in Exhibit A, each Semi-Annual Report shall include such further information, if any, as may be necessary to make
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the specifically required statements, in the light of the circumstances under which they are made, not misleading. Section 5. Reporting of Significant Events. (a) Until such obligations are terminated pursuant to Section 7 herein, the Property Owner shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to itself or the Property, if material: (i) bankruptcy or insolvency proceedings commenced by or against the Property Owner and, if known, any bankruptcy or insolvency proceedings commenced by or against any Affiliate of the Property Owner; (ii) failure to pay any taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property prior to the delinquency date, to the extent such failure is not promptly cured upon discovery thereof; (iii) filing of a lawsuit against the Property Owner or, if known, an Affiliate of the Property Owner, seeking damages which, if successful, could have a material and adverse impact on the Property Owner’s ability to pay Special Taxes prior to delinquency or to sell or develop the Property; (iv) material damage to or destruction of any of the improvements on the Property; and (v) any payment default or other material default by the Property Owner or any Affiliates that continues to exist beyond any applicable notice and cure periods on any loan with respect to the construction of improvements on the Property. (b) Whenever the Property Owner obtains knowledge of the occurrence of a Listed Event, the Property Owner shall as soon as possible determine if such event would be material under applicable Federal securities law. (c) If the Property Owner determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Property Owner shall, or shall cause the Dissemination Agent to, within 10 business days file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, with a copy to the City and the Participating Underwriter. Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB. Section 7. Duration of Reporting Obligation. (a) All of the Property Owner’s obligations hereunder shall commence on the date hereof and shall terminate (except as provided in Section 12) on the earliest to occur of the following: (i) upon the legal defeasance, prior redemption or payment in full of all the Bonds, or
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(ii) at such time as the Property consists of 50 or fewer existing or planned single-family lots, or (iii) the date on which all of the Special Taxes attributable to the Property have been paid in full. The Property Owner shall give notice of the termination of its obligations under this Disclosure Certificate in the same manner as for a Listed Event under Section 5. (b) If a portion of the Property is conveyed to a person or entity that, upon such conveyance, will be a Major Owner, the obligations of the Property Owner hereunder with respect to the property conveyed to such Major Owner may be assumed by such Major Owner and the Property Owner’s obligations hereunder with respect to the property conveyed will be terminated. In order to effect such assumption, such Major Owner shall enter into an Assumption Agreement in form and substance substantially similar to this Disclosure Certificate. However, a Major Owner shall not be required to enter into an Assumption Agreement if such Major Owner is already a party to a continuing disclosure certificate in form and substance similar to this Disclosure Certificate with respect to the Bonds, and under which the property conveyed to such Major Owner will become subject to future semi-annual reports. If the Property Owner terminates the Option Agreement, and the portion of the Property owned by the Land Bank would cause the Land Bank to be a Major Owner, the Property Owner’s obligations under this Disclosure Certificate with respect to such Property shall terminate only upon the execution of an Assumption Agreement by the Land Bank. The conveyance of any portion of the Property from the Land Bank to the Property shall not require an assumption of obligations under this Section 7(b). Section 8. Dissemination Agent. The Property Owner may, from time to time, with the written consent of the City, appoint or engage a Dissemination Agent to assist the Property Owner in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with the written consent of the City, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be the Property Owner. The Dissemination Agent may resign by providing 30 days’ written notice to the City, the Property Owner, and the Participating Underwriter. Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Property Owner may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied (provided, however, that the Dissemination Agent shall not be obligated under any such amendment that modifies or increases its duties or obligations hereunder without its written consent thereto): (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, or change in law; (b) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement with the consent of holders, 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.
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Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Property Owner from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Semi-Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Property Owner chooses to include any information in any Semi-Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Property Owner shall have no obligation under this Disclosure Certificate to update such information or include it in any future Semi-Annual Report or notice of occurrence of a Listed Event. Section 11. Default. In the event of a failure of the Property Owner to comply with any provision of this Disclosure Certificate, the Participating Underwriter, the City, and 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 Property Owner to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Property Owner to comply with this Disclosure Certificate shall be an action to compel performance. Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Property Owner agrees to indemnify and save the Dissemination Agent, 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 reasonable costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding any loss, expense and liabilities due to the Dissemination Agent’s negligence or willful misconduct or failure to perform its duties hereunder. If the Dissemination Agent is not the Property Owner, the Dissemination Agent shall be paid compensation for its services provided hereunder from the Administrative Expense Fund established under the Fiscal Agent Agreement in accordance with the Dissemination Agent’s schedule of fees as amended from time to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable 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 hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Property Owner, the Participating Underwriter, the Bond owners, or any other party. The obligations of the Property Owner under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
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Section 13. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given by regular, overnight, or electronic mail as follows: To the issuer: City of Fairfield 1000 Webster Street Fairfield, CA 94533 Fax: (707) 728-7621 [email protected] To the Participating Underwriter: Stifel, Nicolaus & Company, Incorporated One Montgomery Street, Suite 3700 San Francisco, CA 94104 [email protected] To the Property Owner: Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent. Section 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Property Owner (its successors and assigns), 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. All obligations of the Property Owner hereunder shall be assumed by any legal successor to the obligations of the Property Owner as a result of a sale, merger, consolidation or other reorganization. Section 15. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument. Date: [PROPERTY OWNER], a ____________ By: Title:
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EXHIBIT A SEMI-ANNUAL REPORT [APRIL 30, ____ / OCTOBER 31, _____] $_______ IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A This Semi-Annual Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate (Merchant Builder) (the “Disclosure Certificate”) dated as of _________, 2026, executed by the undersigned (the “Property Owner”) in connection with the issuance by the City of Fairfield (the “City”) of the bonds captioned above (the “Bonds”) for Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (the “District”). Capitalized terms used in this Semi-Annual Report but not otherwise defined have the meanings given to them in the Disclosure Certificate. I. Property Ownership and Development The information in this section is provided as of ____________________ (this date must be not more than 60 days before the Report Date of this Semi-Annual Report). The information provided in this section shall cover the Property and all property owned by an Affiliate and by a Major Owner that has not entered into a continuing disclosure undertaking. A. Description of the Property in substance and form similar to such information in the Official Statement for the Bonds. ________________________________________________________________________ ________________________________________________________________________ B. Updated information regarding land development and home construction and sales activities with respect to the Property described in the Official Statement for the Bonds or the Semi-Annual Report last filed in accordance with the Disclosure Certificate in the following forms of tables included in the Official Statement:
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Development Plans Neighborhood ___ Floor Plan Square Footage Planned Units Base Sales Prices Neighborhood __ Subtotal Neighborhood __ Subtotal Total Status of Development, Home Construction and Sales Neighborhood __ Neighborhood Planned Units Finished Lots Building Permits Homes Under Construction Completed Homes Owned by Land Bank or Merchant Builder
Homes Under Contract for Sale Home Closings Totals C. Status of building permits and any material changes to the description of land use or development entitlements for the Property described in the Official Statement for the Bonds or the Semi-Annual Report last filed in accordance with the Disclosure Certificate: ________________________________________________________________________ ________________________________________________________________________ D. Status of any land purchase contracts with regard to any property in Improvement Area No. 1 all or any portion of the Property, whether acquisition of land in Improvement Area No. 1 by the Property Owner or an Affiliate or sales of land to other property owners (other than individual homeowners). ________________________________________________________________________ ________________________________________________________________________ II. Legal and Financial Status of Property Owner Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any material change in the legal structure of the Property Owner or the financial condition and financing plan of the Property Owner that would materially and adversely interfere with its ability to complete its development plan described in the Official Statement. To the extent that the ownership of the Property Owner has changed, describe all material terms of the new ownership structure.
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________________________________________________________________________ ________________________________________________________________________ III. Change in Development or Financing Plans Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any development plans or financing plans relating to the Property that are materially different from the proposed development and financing plan described in the Official Statement. ________________________________________________________________________ ________________________________________________________________________ IV. Official Statement Updates Unless such information has previously been included or incorporated by reference in a Semi-Annual Report, describe any other significant changes in the information relating to the Property Owner or the Property contained in the Official Statement under the captions “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS.” ________________________________________________________________________ ________________________________________________________________________ V. Status of Tax Payments Describe status of payment of taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property owned by, or under option to, the Property Owner and its Affiliates. ________________________________________________________________________ ________________________________________________________________________ VI. Other Material Information In addition to any of the information expressly required above, 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. ________________________________________________________________________ ________________________________________________________________________ Certification On behalf of the Property Owner, the undersigned officer or representative, based on actual knowledge after reasonable inquiry of employees of Property Owner and its affiliates, hereby certifies that this Semi-Annual Report constitutes the Semi-Annual Report required to be furnished by the Property Owner under the Disclosure Certificate. ANY OTHER STATEMENTS REGARDING THE PROPERTY OWNER, THE DEVELOPMENT OF THE PROPERTY, THE PROPERTY OWNER’S FINANCING PLAN OR FINANCIAL CONDITION, OTHER THAN STATEMENTS MADE BY THE PROPERTY OWNER
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IN AN OFFICIAL RELEASE, OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD, ARE NOT AUTHORIZED BY THE PROPERTY OWNER. THE PROPERTY OWNER IS NOT RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENTS. THE PROPERTY OWNER HAS NO OBLIGATION TO UPDATE THIS SEMI-ANNUAL REPORT OTHER THAN AS EXPRESSLY PROVIDED IN THE DISCLOSURE CERTIFICATE. Dated: ______________ a ______________ Name: Title:
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APPENDIX H FORM OF OPINION OF BOND COUNSEL
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APPENDIX I APPRAISAL REPORT
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APPENDIX J COMMUNITY FACILITIES DISTRICT BOUNDARY MAP
Stradling Draft Dated June 3, 2026
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$[Par] IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A BOND PURCHASE AGREEMENT [Pricing Date], 2026 City of Fairfield Fairfield, California Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) with the City of Fairfield (the “City”), acting on behalf of City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (the “District”) with respect to Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) (“Improvement Area No. 1”), which, upon acceptance, will be binding upon the City and the Underwriter. This offer is made subject to acceptance by the City on the date hereof, and if not accepted will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City. The City acknowledges and agrees that: (a) the purchase and sale of the Bonds (as such term is defined herein) pursuant to this Purchase Agreement is an arm’s length commercial transaction between the City, on behalf of the District, and the Underwriter, and the only obligations that the Underwriter has to the City with respect to the transaction that is contemplated hereby expressly are set forth in this Purchase Agreement; (b) 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 principal and is not 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; (c) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering that is 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); (d) the Underwriter has financial and other interests that may differ from and be adverse to those of the City; and (e) the City has consulted its own legal, financial, accounting, tax and other advisors to the extent that it has deemed appropriate. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements that are 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 Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) Special Tax Bonds, Series 2026A (the “Bonds”) in the aggregate principal amount specified in Exhibit A. The Bonds shall be dated the Closing Date (as such term is defined herein), and bear
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interest from said date (payable semiannually on March 1 and September 1 of each year, commencing September 1, 2026) at the rates per annum and maturing on the dates and in the amounts and subject to redemption as set forth in Exhibit A. The purchase price for the Bonds shall be the amount specified as such in Exhibit A. (b) The Bonds shall be substantially in the form that is described in, shall be issued and secured under the provisions of, and shall be payable as provided in, the Fiscal Agent Agreement, dated as of December 1, 2024, as supplemented by the First Supplement to Fiscal Agent Agreement dated as of August 1, 2026 (the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as Fiscal Agent (the “Fiscal Agent”), which was approved by a resolution adopted by the City Council of the City (the “City Council”), as the legislative body of the District, on _______, 2026 (the “Resolution of Issuance”). The Bonds and interest thereon will be payable from the proceeds of Special Taxes (as such term is defined in the Fiscal Agent Agreement) that are levied and collected on the taxable land within Improvement Area No. 1 in accordance with Resolution No. 2023-31, adopted by the City Council on February 21, 2023, forming the CFD and Improvement Area No. 1, as amended by Resolution No. 2024-256, adopted by the City Council on October 15, 2024 (collectively, the “Resolution of Formation”) and any ordinance of the City Council of the City levying the Special Taxes, including but not limited to Ordinance No. 2023-05, which was introduced by the City Council February 21, 2023 and adopted by the City Council on March 21, 2023 (collectively, the “Prior Ordinances”), and Ordinance No. 2024-09 (the “2024 Ordinance”), which was introduced by the City Council on October 15, 2024, and adopted by the City Council on November 19, 2024 (the 2024 Ordinance and the Prior Ordinances are collectively referred to as the “Ordinance”). Proceeds of the sale of the Bonds will be used in accordance with the Fiscal Agent Agreement and the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Law”), to acquire certain public improvements, as described in the Resolution of Formation. The Bonds are payable from the Special Tax on a parity with the outstanding Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) Special Tax Bonds, Series 2024A (the “2024 Bonds”). The Ordinance, the Resolution of Issuance, the Resolution of Formation and Resolution No. 2023-32, adopted by the City Council on February 21, 2023 (the “Resolution of Necessity”) are collectively referred to herein as the “District Resolutions.” (c) Subsequent to its receipt of the certificate of the City (in substantially the form that is set forth in Exhibit B) deeming final the Preliminary Official Statement for the Bonds dated _________, 2026, (which Preliminary Official Statement, including the cover page and all appendices thereto, is herein referred to as the “Preliminary Official Statement”), for purposes of Rule 15c2-12 (“Rule 15c2-12”) promulgated by the Securities and Exchange Commission (the “SEC”), the Underwriter 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 the final Official Statement dated the date hereof (including all information that was previously permitted to have been omitted from the Preliminary Official Statement 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 City, the “Official Statement”), the Fiscal Agent Agreement, the Continuing Disclosure Certificate of the City (the “City Disclosure Undertaking”), this Purchase Agreement, any other documents or contracts to which the City or the District is a party and all information contained therein, and all other documents, certificates and statements that are furnished by the City to the Underwriter in connection with the transactions that are contemplated by this Purchase Agreement, in connection
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with the offer and sale of the Bonds by the Underwriter. 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. (d) At 8:00 A.M., California Time, on [Closing Date], 2026, or at such earlier 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 in New York, New York, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers that are assigned to them printed thereon), duly executed by the officers of the City, as provided in the Fiscal Agent Agreement; and (ii) to the Underwriter, at the offices of Jones Hall LLP (“Bond Counsel”), in San Mateo, California, or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents that are mentioned herein; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being referred to as the “Closing”). (e) Except as otherwise disclosed and agreed to by the City, 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; provided, however, that 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, subject to Section 12. The Underwriter shall provide to the City on the Closing Date a certificate in the form that is set forth in Exhibit D stating that the Underwriter made a bona fide public offering of the Bonds at the initial public offering price or prices that are set forth on the inside cover page of the Official Statement and in Exhibit A. 2. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that: (a) The City is duly organized and validly existing as a general law city under the laws of the State of California and has duly authorized the formation of the District and Improvement Area No. 1 within the District pursuant to the Resolution of Formation and the Law. The City Council, as the legislative body of the District, has duly adopted the District Resolutions, and has caused to be recorded in the real property records of the County of Solano at the time and in the form required by the Law a Notice of Special Tax Lien and an Amended and Restated Notice of Special Tax Lien (collectively, the “Notice of Special Tax Lien”) (such District Resolutions and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”). Except to the extent set forth in the Formation Documents, each of the Formation Documents remains in full force and effect as of the date hereof and such Formation Documents have not been amended. The District is duly organized and validly existing as a community facilities district under the laws of the State of California. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under this Purchase Agreement, the Fiscal Agent Agreement and the City Disclosure Undertaking (collectively, the “District Documents”) and to carry out all transactions that are contemplated by each of such agreements; (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of
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Issuance and the Fiscal Agent Agreement as provided herein; and (iii) to carry out, give effect to and consummate the transactions that are contemplated by the Formation Documents, the District Documents and the Official Statement; (b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the District 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 that are 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 that are set forth in the District Documents; (c) The City Council has duly and validly: (i) adopted the District Resolutions; (ii) called, held and conducted in accordance with all requirements of the Law elections within Improvement Area No. 1 to approve the levy of the Special Taxes within Improvement Area No. 1 and the issuance of the Bonds; (iii) recorded the Notice of Special Tax Lien, which established a continuing lien on the land within Improvement Area No. 1 securing the Special Tax; (iv) authorized and approved the execution, delivery and due performance of the Bonds and the District Documents; (v) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement; and (vi) authorized and approved the performance by the City of its obligations that are contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions that are contemplated by, each of the District Documents (including, without limitation, the collection of the Special Taxes), the Bonds and the Official Statement; and at the Closing Date, the Formation Documents will be in full force and effect and the District Documents and the Bonds will constitute the valid, legal and binding obligations of the City and the District and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be 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; (d) To the best of the City’s knowledge, neither the District nor the City is in breach of or default under any applicable law or administrative rule or regulation of the State of California (the “State”) or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court order, administrative decree or order, or under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which the District or 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 District or the City of its obligations under the Bonds, the Formation Documents or the District Documents, and the execution and delivery of the Bonds, the Formation Documents and the District 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 order 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 District or the City, as the case may be, is a party or is otherwise subject or bound; (e) Except for compliance with blue sky or other state securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having
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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 Formation Documents or the District Documents, have been obtained and are in full force and effect; (f) The Special Taxes constituting the security for the Bonds have been duly and lawfully authorized and may be levied under the Law, the State Constitution and the applicable laws of the State, and such Special Taxes, when levied, will constitute valid and legally binding continuing liens on the properties on which they have been levied; (g) Except to the extent that the City determines that such amendment or supplement is required by law, 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. Until the date which is twenty-five (25) days after the “end of the underwriting period” (as such term is defined herein), 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 that is available to it for any supplement to the Official Statement which is 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. 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 that is 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 Fiscal Agent Agreement creates a valid pledge of the Special Taxes and the moneys in the Special Tax Fund, the Bond Fund and the 2024 Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions that are set forth therein. Until such time as moneys have been set aside in an amount that is 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 that are contained in the Fiscal Agent Agreement; (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 is pending, notice of which has been served on and received by the City or, to the best knowledge of the City, threatened: (i) which would materially adversely affect the ability of either the City or the District to perform its obligations under the Bonds, the Formation Documents or the District Documents; (ii) that seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement or the collection or application of the Special Taxes that are 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 Bonds, the Formation Documents, the District Documents or any action
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contemplated by any of said documents; or (iii) in any way contesting the completeness or accuracy of the Preliminary Official Statement or the powers or authority of the City or the District with respect to the Bonds, the Formation Documents, the District Documents or any action of the City or the District contemplated by any of said documents; nor is there any action pending or, to the best knowledge of the City, threatened against the City or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from personal income taxation in the State; (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, that 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 that is signed by any official of the City who is authorized 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 Fiscal Agent Agreement and as described in the Official Statement; (m) The information contained in the Preliminary Official Statement (other than information relating to DTC and its book-entry system and prices and yields for the Bonds or any other information provided by the Underwriter, as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other than information relating to DTC and its book-entry system and prices and yields for the Bonds or any other information provided by the Underwriter, as to which no view is expressed), as of its date and as of the Closing Date shall be, 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 that is 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, the City shall cause a final 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 Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings under Rule 15c2-12; (p) Except as otherwise disclosed in the Preliminary Official Statement, and except as the Amendment to Notice of Special Tax Lien amends and supplements the Notice of Special Tax Lien, the Formation Documents have not been amended, terminated, rescinded or modified;
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(q) The City shall not voluntarily undertake any course of action that is inconsistent with satisfaction of the requirements that are applicable to the City as set forth in this Purchase Agreement; (r) The City shall cooperate with the Underwriter in the qualification of the Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate; and (s) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from state income taxation or the exclusion from gross income for federal income tax purposes of the interest on the Bonds. 3. 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 that are 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 that are 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 Formation Documents and the District 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 Bond Counsel and Stradling Yocca Carlson & Rauth LLP, counsel to the Underwriter, shall be necessary and appropriate; (b) The information that is 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 2(g) 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 2(g) hereof, contain any untrue statement of a material fact or omit to state a material fact that is required to be stated therein or necessary to make the statements therein, in the 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 that are set forth in the Official Statement 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
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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; (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 SEC, 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 from other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or from 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 underwriting arrangements, as contemplated hereby or by the Official Statement or otherwise 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 State Constitution or action by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City or the District, its property, income, securities (or interest thereon), the validity or enforceability of the Special Taxes or the ability of the City to construct or acquire the improvements as contemplated by the Formation Documents, the District Documents or the Official Statement; (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 that is required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (5) the declaration of war or the escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity or crisis relating to the effective operation of the government of, or the financial community or financial markets in, the United States or elsewhere, or the escalation of such calamity or crisis, which, in the judgment of the Underwriter, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner that are contemplated in the Preliminary Official Statement or the Official Statement; (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 minimum or maximum prices for trading shall have been fixed and be in force, 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 SEC or any other governmental authority having jurisdiction that, in the Underwriter’s reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds;
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(7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions that are not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (8) the entry of an order by a court of competent jurisdiction which enjoins or restrains the City from issuing permits, licenses or entitlements within Improvement Area No. 1 or which order, in the reasonable opinion of the Underwriter, otherwise materially and adversely affects the proposed development of property within Improvement Area No. 1; (9) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (10) there shall have been any material adverse change in the affairs of the City that in the Underwriter’s reasonable judgment will materially adversely affect the market for the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (11) 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 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 (12) 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 of 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 the federal securities laws at the Closing Date, including the Securities Act of 1933, the Securities Exchange Act of 1934 and the Trust Indenture Act of 1939, as amended; and (d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter: (1) The Formation Documents and the District Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that each Formation Document is a true, correct and complete copy of the one that was duly adopted by the City Council; (2) The Official Statement, duly executed by the City for and on behalf of the District; (3) An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Bond Counsel, in the form attached to the Preliminary Official Statement as Appendix G, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the City may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it;
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(4) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that: (i) the Purchase Agreement and the City Disclosure Undertaking have been duly authorized, executed and delivered by the City, and, assuming that the Purchase Agreement is duly executed by the Underwriter, such agreements constitute the legally valid and binding obligation of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditors’ rights or remedies and 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 Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “FINANCING PLAN,” “THE 2026 BONDS,” “SECURITY FOR THE BONDS,” “LEGAL MATTERS—Tax Exemption” and in Appendices C and G thereof (except that no opinion or belief need be expressed as to any financial or statistical data contained therein), insofar as it purports to summarize certain provisions of the Law, the Bonds, the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds, presents a fair and accurate summary of such provisions; (iv) the District is a community facilities district that is duly organized and validly existing under and by virtue of the laws of the State; and (v) the execution and delivery by the City of the District Documents, and compliance by the City with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under the Law or the District Resolutions, the consequence of which could be a material and adverse effect on the performance by the City of its obligations under the District Documents; (5) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth LLP, counsel to the Underwriter, in form and substance satisfactory to the Underwriter; (6) A certificate or certificates, 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 in Section 2 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 his or her 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 Formation Documents and the District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; (iii) the City has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied under the Formation Documents and the District Documents at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that: (A) the City is a municipal corporation that is duly organized and validly existing under and by virtue of the laws of the State;
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(B) the District Resolutions were duly adopted at meetings of the City Council that were each 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 District Resolutions are in full force and effect and have not been modified, amended or rescinded as of the Closing Date; (C) the execution and delivery by the City of the District Documents, and compliance by the City with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under any court decree, resolution (other than the District Resolutions) or agreement to which the City is subject to or by which it is bound, the consequence of which could be a material and adverse effect on the performance by the City of its obligations under the District Documents; and (D) except as otherwise disclosed in the Official Statement, there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public board or body, pending of which the City or the District has received service of process or, to the best knowledge of such counsel, threatened against the City or the District: (i) in any way questioning the existence of the City or the District or the titles of the officers thereof to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance of the Bonds or any of the District Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Bonds, or in any way contesting or affecting the validity of the Bonds or the District Documents or the consummation of the transactions that are contemplated thereby or any proceeding of the City or the District taken with respect to any of the foregoing, or explicitly alleging that the interest that is payable on the Bonds is not exempt from taxation or contesting the powers of the City or the District and the authority to pledge the Special Taxes; (iii) that may result in any material adverse change relating to the City or the District that will materially adversely affect the ability to pay the Bonds when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (8) One or more certificates dated the Closing Date from Goodwin Consulting Group, Inc. (the “Special Tax Consultant”) addressed to the City and the Underwriter to the effect that: (i) the amount of the Special Taxes that could be levied in each Fiscal Year on all parcels of Taxable Property (as such term is used in the herein-defined Amended Rate and Method) in Improvement Area No. 1 is at least one hundred ten percent (110%) of the total Annual Debt Service (as such term is defined in the Fiscal Agent Agreement) for each such Fiscal Year on the proposed Bonds and the 2024 Bonds; (ii) the description of the Amended Rate and Method (as such term is defined in the Preliminary Official Statement) set forth under the caption “SECURITY FOR THE BONDS—Amended Rate and Method” is true and correct in all material respects and does not omit any material information and the recitation of the Amended Rate and Method that is appended to the Preliminary Official Statement and the Official Statement as Appendix B is a true, complete and correct recitation of the provisions thereof; and (iii) all information that has been supplied by the Special Tax Consultant for use in the Official Statement is true and correct as of the date of the Official Statement and as of the Closing Date;
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(9) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (10) A certificate of the Fiscal Agent and an opinion of counsel to the Fiscal Agent dated the Closing Date and addressed to the City and the Underwriter to the effect that the Fiscal Agent has authorized the execution and delivery of the Fiscal Agent Agreement and that the Fiscal Agent Agreement is a valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms; (11) A Letter of Representations of One Lake Holding LLC, a Delaware limited liability company (“One Lake Holding”) in connection with the printing of the Preliminary Official Statement, dated the date of Preliminary Official Statement, substantially in the form that is set forth in Exhibit C-1, or as any such Letter of Representation may be modified with the approval of the Underwriter, and a Closing Certificate of One Lake Holding dated the Closing Date, substantially in the form that is set forth in Appendix 1 to Exhibit C-1; (12) A Letter of Representations from each of Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”), Tri Pointe Homes Holdings, a Delaware corporation (“Tri Pointe”), Century Communities of California, LLC, a Delaware limited liability company (“Century Communities”), KB Home North Bay LLC, a Delaware limited liability company (“KB Home”) and K. Hovnanian Homes Northern California, Inc., a California corporation (“K. Hovnanian” and, together with Lennar Homes, Tri Pointe, Century Communities and KB Home, the “Merchant Builders”) dated the date of the Preliminary Official Statement, substantially in the form that is set forth in Exhibit C-2, as applicable (each a “Merchant Builder Letter of Representations”), or as such letters may be modified with the approval of the Underwriter, and a closing certificate of each of the Merchant Builders dated the Closing Date, substantially in the form that is set forth in Appendix 1 to Exhibit C-2 (each a “Merchant Builder Closing Certificate”); (13) A negative assurance letter from counsel to One Lake Holding and each of the Merchant Builders addressed to the Underwriter in form and substance acceptable to the Underwriter; (14) A letter dated the Closing Date from BBG, Inc. (the “Appraiser”) addressed to the Underwriter and the City to the effect that it has prepared the appraisal report (the “Appraisal”) with respect to the property located within Improvement Area No. 1 of the District, and that: (a) the Appraisal that is appended to the Official Statement as Appendix H may be included in the Preliminary Official Statement and the Official Statement; (b) the Appraisal and the information in the Official Statement referring to the Appraisal do not contain any untrue statement of a material fact or omit to state a material fact that is necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and (c) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser’s attention that would materially change the opinions set forth in the Appraisal; (15) An negative assurance letter of Jones Hall LLP, as Disclosure Counsel to the City (“Disclosure Counsel”), dated the Closing Date and addressed to the Underwriter, to the effect that, based on the information made available to it in its role as Disclosure Counsel, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, but on the basis of its
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participation in conferences with the Underwriter, counsel to the Underwriter, the City, the City Attorney, the Special Tax Consultant, PFM Financial Advisors LLC, the City’s municipal advisor (the “Municipal Advisor”), and others, and its examination of certain documents, no information has come to the attention of the attorneys in the firm rendering legal services in connection with the issuance of the Bonds which would lead them to believe that the Preliminary Official Statement as of its date and as of the date of this Purchase Agreement 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 any material fact that is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial, statistical and demographic data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, the engineer’s report, and information regarding DTC and its book-entry only system contained in the Preliminary Official Statement or the Official Statement); (16) A certified copy of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution and delivery of the Fiscal Agent Agreement and the authentication and delivery of the Bonds by the Fiscal Agent; (17) Copies of the preliminary and final notices to the California Debt and Investment Advisory Commission relating to the Bonds; (18) Evidence of the City’s and/or the District’s compliance with or exemption from Section 8855(i) of the California Government Code; (19) Executed copies of the continuing disclosure undertaking of the Master Developer and [each Merchant Builder], dated the Closing Date; (20) A copy of the executed Blanket Issuer Letter of Representations by and between the City and/or the District and The Depository Trust Company relating to the book entry system, or an acknowledgement from The Depository Trust Company that such a letter is on file with The Depository Trust Company; (21) An executed Petition for Change Proceedings or Waiver related to Change Proceedings, as applicable, for each owner of property in Improvement Area No. 1 as of the date of the election regarding the Amended Rate and Method; (22) The certificate required by Section 3.06 of the Fiscal Agent Agreement stating that the requirements for the issuance of the Bonds as Parity Bonds under the Fiscal Agent Agreement have been met; and (23) 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 in the Preliminary Official Statement and the Official Statement, of the City’s representations and warranties 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 and the District in connection with the transactions contemplated hereby and by the Official Statement.
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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 which are 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 Sections 5, 6 and 8 shall continue in full force and effect. 4. Conditions to the Obligations of the City. 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 3(d)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the District 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 3(d)(3) hereof, dated as of the Closing Date. 5. 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 District) all expenses that are 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 the Underwriter, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official Statement, the Official Statement, the Appraisal, and all other agreements and documents that are 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), reimbursement to the Underwriter for any meals and travel for City employees or officers that were paid for by the Underwriter, the fees and disbursements of the Fiscal Agent for the Bonds and Bond Counsel, Disclosure Counsel, the Special Tax Consultant and the Municipal Advisor and any other accountants, engineers or any other experts or consultants that the City has retained in connection with the Bonds and any other expenses that are agreed to by the parties; 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 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 that are incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those which are specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses. 6. 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 1000 Webster Street, Fairfield, California 94533, Attention: City Manager; and any notice or other communication
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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, 36th Floor, San Francisco, California 94104, Attention: Eileen Gallagher. 7. 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. 8. Survival of Representations and Warranties. The representations and warranties of the City 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. 9. 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. 10. 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. 11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California. 12. Establishment of Issue Price. (a) 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 an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit D, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel, 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 Municipal Advisor, identified herein and any notice or report to be provided to the City may be provided to the Municipal Advisor. (b) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public.
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(c) 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, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold-the-Offering-Price Rule Used,” 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 shall promptly advise the City when 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, if that occurs prior to the close of the fifth (5th) business day after the sale date. (d) The Underwriter confirms that any selling group agreement and any retail 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 retail distribution agreement, as applicable, to: (1) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public; and (2) comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that 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 hold-the-offering-price rule, if applicable, as set forth in a selling group agreement and the related pricing wires; and (B) in the event that a retail 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 hold-the-offering-price rule, if applicable, as set forth in the retail 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 retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds. (e) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter 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;
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(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 retail distribution agreement participating in the initial sale of the Bonds to the public); (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: (A) at least 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); and (4) “sale date” means the date of execution of this Purchase Agreement by all parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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13. 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: Authorized Representative CITY OF FAIRFIELD, for and on behalf of City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) By: Authorized Officer
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EXHIBIT A $[Par] IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A MATURITY SCHEDULE Maturity (September 1) Principal Amount Interest Rate Yield Initial Offering Price 10% Test Used Hold-the-Offering-Price Rule Used * Term Bond. † As of the date of the Purchase Agreement, the Underwriter has not sold at least 10% of the maturity. C Priced to first optional redemption date of September 1, 20__ at par. The purchase price of the Bonds shall be $_________, which is the principal amount thereof ($_________) [plus/less] an [original issue premium/discount] of $__________ and less Underwriter’s discount of $____________. REDEMPTION PROVISIONS Optional Redemption. The Bonds maturing on or before September 1, 20__ are not subject to optional redemption prior to their stated maturity. The Bonds maturing on or after September 1, 20__, are subject to redemption, as a whole or in part at the election of the City among maturities on such basis as designated by the City and by lot within a maturity, at the option of the City, on September 1, 20__, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium. Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20__, September 1, 20__, and September 1, 20__ (the “Term Bonds”), are subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following tables:
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Bonds Maturing September 1, 20__ Sinking Fund Redemption Date (September 1) Sinking Payments (maturity) Bonds Maturing September 1, 20__ Sinking Fund Redemption Date (September 1) Sinking Payments (maturity) Bonds Maturing September 1, 20__ Sinking Fund Redemption Date (September 1) Sinking Payments (maturity) Provided, however, if some but not all of the Term Bonds of a given maturity have been redeemed through optional redemption or mandatory prepayment redemption, the total amount of all future Sinking Fund Payments relating to such maturity will be reduced by the aggregate principal amount of Term Bonds of such maturity so redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the City, notice of which will be given by the City to the Fiscal Agent. Redemption from Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the 2024 Reserve Fund will be used to redeem Bonds on the next Interest Payment Date for which notice of redemption can timely be given under the Fiscal Agent Agreement, among series and maturities as provided in the Fiscal Agent Agreement, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:
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Redemption Dates Redemption Price Any Interest Payment Date on or before March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102 September 1, 20__ and March 1, 20__ 101 September 1, 20__ and any Interest Payment Date thereafter 100
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EXHIBIT B IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that he is the City Manager of the City of Fairfield (the “City”), and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that: (1) this certificate is being delivered in connection with the sale and issuance of the Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) Special Tax Bonds, Series 2026A (the “Bonds”) in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”); (2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated the date of this certificate setting forth information concerning the Bonds and the City (the “Preliminary Official Statement”); and (3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term “Permitted Omissions” refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule. ___________, 2026. CITY OF FAIRFIELD, for and on behalf of City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) By: Its: City Manager
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EXHIBIT C-1 IMPROVEMENT AREA NO. 1 OF THE CITY OF FAIRFIELD COMMUNITY FACILITIES DISTRICT NO. 2023-1 (ONE LAKE PLANNING AREA 5) SPECIAL TAX BONDS, SERIES 2026A LETTER OF REPRESENTATIONS OF ONE LAKE HOLDING LLC _________, 2026 City of Fairfield 1000 Webster Street Fairfield, California 94533 City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) 1000 Webster Street Fairfield, California 94533 Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 36th Floor San Francisco, California 94104 Ladies and Gentlemen: Reference is made to the Improvement Area No. 1 of the City of Fairfield Community Facilities District No. 2023-1 (One Lake Planning Area 5) Special Tax Bonds, Series 2026A (the “Bonds”) and to the Bond Purchase Agreement (the “Purchase Agreement”), by and between the City of Fairfield (the “City”) and Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), to be entered into in connection therewith. This Letter of Representations of One Lake Holding LLC (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 3(d)(11) of the Purchase Agreement. Capitalized terms that are used herein and not otherwise defined have the meanings ascribed to them in the Purchase Agreement. The undersigned certifies that the undersigned is familiar with the facts herein and is authorized and qualified to certify the same as an authorized officer or representative of One Lake Holding LLC, a Delaware limited liability company (the “Master Developer”), and the undersigned, on behalf of the Master Developer, further certifies as follows: 1. The Master Developer is validly existing and in good standing as a limited liability company under the laws of the State of Delaware and is registered to transact business as a foreign limited liability company and is in good standing in the State of California, and has all requisite right, power and authority: (i) to execute and deliver this Letter of Representations; (ii) to execute and deliver at Closing and perform its obligations under the Continuing Disclosure Certificate (Property Owner – One Lake Holding LLC) (the “Master Developer Continuing Disclosure Certificate”), to be entered into by the Master Developer; and (iii) to develop its property in Improvement Area No. 1 (the “Improvement Area”) of City of Fairfield Community Facilities District No. 2023-1 (One Lake
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Planning Area 5) (the “Community Facilities District”) as described in the Preliminary Official Statement relating to the Bonds dated the date hereof (the “Preliminary Official Statement”). 2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within the Improvement Area is held in the name of the Master Developer (the “Property”). The undersigned, on behalf of the Master Developer, makes the representations herein with respect to all such Property. The Master Developer’s current expectation is that the Master Developer will attempt to sell the Property to one or more merchant builders over time. 3. To the Actual Knowledge of the Undersigned,1 and except as described in the Preliminary Official Statement, the Master Developer has not failed in any material respect to comply with any previous undertaking by it to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California within the past five years. 4. Except as set forth in the Preliminary 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 is pending against the Master Developer (with proper service of process to the Master Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any current Affiliate2 (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Master Developer or any such Affiliate: (a) to restrain or enjoin the collection of Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the 2024 Reserve Fund of the Special Tax Fund established under the Fiscal Agent Agreement); (b) to restrain or enjoin the execution by the Master Developer of the Master Developer Continuing Disclosure Certificate and performance by the Master Developer of its obligations thereunder; (c) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement; (d) in any way contesting or affecting the validity of the Special Taxes; or (e) which is reasonably likely to materially and adversely affect the Master Developer’s ability to develop and sell the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property prior to delinquency (to the extent the responsibility of the Master Developer). 1 “Actual Knowledge of the Undersigned” means the actual knowledge (as opposed to constructive knowledge) that the individual signing on behalf of the Master Developer currently has as of the date of this Letter of Representations or has obtained through: (i) interviews with such current officers and responsible employees of the Master Developer and its Affiliates as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters that are set forth in this Letter of Representations; and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary in order for the undersigned to obtain knowledge of the matters that are set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Master Developer’s current business and operations. Individuals who are no longer employees of the Master Developer and its Affiliates have not been contacted. 2 “Affiliate” means, with respect to the Master Developer, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Master Developer; and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Improvement Area and an investment decision regarding the Bonds (i.e., information relevant to: (a) the Master Developer’s development plans with respect to the Property and ability to pay its Special Taxes on the Property prior to delinquency (to the extent the responsibility of the Master Developer); or (b) such Person’s assets or funds that would materially affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Taxes on the Property prior to delinquency (to the extent the responsibility of the Master Developer); or (c) such Person’s compliance with continuing disclosure undertakings that would materially affect the Master Developer’s ability to comply with its obligations under the Master Developer Continuing Disclosure Certificate). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
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5. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information that is contained therein solely with respect to the Master Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliates (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates) as set forth under the captions of the Preliminary Official Statement entitled “THE DISTRICT AND IMPROVEMENT AREA NO. 1—Description and Location,” “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS—The One Lake Project,” “—Development Agreement,” “Conditions of Approval,” “—Public Infrastructure Improvements Required for the One Lake Project,” “Improvement Area No. 1 Development Status Summary,” “—Existing and Planned Sales to Merchant Builders,” “—Entitlements,” “—Environmental Matters,” “—Master Developer Financing Plan for Improvement Area No. 1,” and “—The Master Developer,” and “CONTINUING DISCLOSURE—Master Developer” (excluding therefrom in all cases information regarding appraised or assessed values, market value ratios and annual special tax ratios, and information which is identified as having been provided by a source other than the Master Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 6. Except as disclosed in the Preliminary Official Statement, there are no material loans that are outstanding and unpaid, and no material lines of credit of the Master Developer or its Affiliates, which are secured by an interest in the Property. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Master Developer and its Affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond or note to which the Master Developer or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property prior to delinquency (to the extent the responsibility of the Master Developer). 7. To the Actual Knowledge of the Undersigned, the Master Developer is not aware that any of the Property has a current liability with respect to the presence of a substance that is presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable State law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species. 8. The Master Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Master Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District or the designation of the Improvement Area, to challenge the adoption of the District Resolutions, to invalidate the Community Facilities District or the Improvement Area or any of the Bonds or any refunding bonds related thereto, or to invalidate the Special Tax liens imposed under the Law based on recordation of the notices of Special Tax lien relating thereto. The foregoing covenant shall not prevent the Master Developer or any Affiliate in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation: (a) an action
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or suit contending that the Special Tax has not been levied in accordance with the methodologies that are contained in the Amended Rate and Method (as such term is defined in the Fiscal Agent Agreement) pursuant to which the Special Taxes are levied; (b) an action or suit with respect to the application or use of the Special Taxes levied and collected; or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the District Resolutions, the Fiscal Agent Agreement or any other agreements among the Master Developer or an Affiliate, the City and/or the Community Facilities District or to which the Master Developer or an Affiliate is a beneficiary or a party. 9. The Master Developer consents to the issuance of the Bonds. The Master Developer acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement. 10. The Master Developer intends to comply with the provision of the Law relating to the Notice of Special Tax described in California Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof. 11. To the Actual Knowledge of the Undersigned, the Master Developer is able to pay its bills as they become due and no legal proceedings are pending against the Master Developer (with proper service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Master Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation. 12. To the Actual Knowledge of the Undersigned, Affiliates of the Master Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliate of the Master Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Master Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation. 13. To the Actual Knowledge of the Undersigned, during the last five years, neither the Master Developer nor any Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property that is within the boundaries of a community facilities district or an assessment district in the State that: (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing; or (b) resulted in a foreclosure action being commenced in a court of law against the delinquent Master Developer or Affiliate. 14. The Master Developer has not filed for the reassessment of the assessed value of portions of the Property. 15. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Master Developer, its Affiliates or any contractors working on the development of the Property which are reasonably likely to materially and adversely affect the development of the Property as described in the Preliminary Official Statement or the
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payment of the Special Taxes that are due with respect to the Property prior to delinquency (to the extent the responsibility of the Master Developer). 16. Based upon the Master Developer’s current development plans for the Property, including, without limitation, the current budget, and subject to economic conditions and risks that are generally inherent in the development of real property, including, but not limited to, the risks that are described in the Preliminary Official Statement under the captions “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS” and “BOND OWNERS’ RISKS,” the Master Developer presently anticipates that it will have sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Taxes levied against the Property prior to delinquency (to the extent the responsibility of the Master Developer). The Master Developer does not anticipate that the City will be required to resort to a draw on the 2024 Reserve Fund for payment of principal of or interest on the Bonds due to the Master Developer’s nonpayment of Special Taxes. However, neither the Master Developer nor any of its Affiliates are obligated to make any additional capital contribution or loan to the Master Developer at any time, and the Master Developer reserves the right to change its development plan and financing plan for the Property at any time without notice. 17. Solely as to the limited information that is described in Paragraph 5 above concerning the Master Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contract arrangements of the Master Developer and its Affiliates (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates), the Master Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City and the Community Facilities District, and their officials and employees, and each Person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended (each, an “Indemnified Party” and, collectively, the “Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject under any statute or at law or in equity and shall reimburse any such Indemnified Party for any actual reasonable legal or other expense incurred by it in connection with investigating any such claim against it and defending any such action, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement by the Master Developer of a material fact or the omission of a material fact by the Master Developer in the above-referenced information in the Preliminary Official Statement, as of its date, or in any annual or semi-annual report or notice of significant event provided by the Master Developer pursuant to the Master Developer Continuing Disclosure Certificate, as of its date, that is necessary to make the statements made by the Master Developer contained therein, in light of the circumstances under which they were made, not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Master Developer may otherwise have to any Indemnified Party, provided that in no event shall the Master Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Indemnified Party in respect of which indemnification is believed by the Indemnified Party to be owed pursuant to the above paragraph, such Indemnified Party shall promptly notify the Master Developer in writing; provided that the failure to notify the Master Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced by such failure, and then only to
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the extent of such material prejudice. If any such proceeding shall be brought or asserted against an Indemnified Party and it shall have notified the Master Developer thereof, the Master Developer shall retain counsel that is reasonably satisfactory to the Indemnified Party (who may be counsel to the Master Developer) to represent the Indemnified Party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (i) the Master Developer and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Master Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Master Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Master Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them under applicable law, rule or regulation determined by the appointed counsel in his or her professional opinion. It is understood and agreed that the Master Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Master Developer shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Master Developer agrees to indemnify each Indemnified Party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested that the Master Developer reimburse the Indemnified Party for fees and expenses of counsel as contemplated by this paragraph, the Master Developer shall be liable for any settlement of any proceeding effected without its written consent if: (1) such settlement is entered into more than 60 days after receipt by the Master Developer of such request; and (2) the Master Developer shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement (provided that the foregoing shall not be applicable to any failure to reimburse if the Master Developer is disputing such payment in good faith and shall have paid any amounts which are not in dispute). The Master Developer shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and to the extent that indemnification could have been sought hereunder by such Indemnified Party, unless such settlement: (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding and as to which the Master Developer has an obligation to indemnify such Indemnified Party; and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party. 18. The Master Developer agrees to execute a Master Developer Continuing Disclosure Certificate at the time of issuance of the Bonds in substantially the form included in Appendix F to the Preliminary Official Statement. 19. If between the date hereof and the Closing Date any event relating to or affecting the Master Developer, its Affiliates, the proposed development of the Property, ownership of the
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Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliates (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates) shall occur of which the Master Developer has actual knowledge which would cause the information under the captions of the Preliminary Official Statement that are described in Paragraph 5 hereof (and subject to the limitations and exclusions contained in Paragraph 5) to contain an untrue statement of a material fact or to omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Master Developer shall notify the City and the Underwriter. If in the reasonable opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Master Developer shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance that is reasonably satisfactory to counsel to the City and to the Underwriter. 20. The Master Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Appendix 1. 21. An appraisal of the taxable properties within the Improvement Area (the “Appraisal Report”) was prepared by BBG, Inc. (the “Appraiser”). The Appraisal Report estimates the market value of the taxable properties within the Improvement Area as of June 1, 2026 (the “Date of Value”). To the Actual Knowledge of the Undersigned, taken in its entirety, all information that was submitted by, or on behalf of and authorized by, the Master Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow in Appendix 2 attached hereto was true and correct in all material respects as of the Date of Value. 22. On behalf of the Master Developer, I have reviewed the contents of this Letter of Representations and have met with counsel to the Master Developer for the purpose of discussing the meaning of the contents of this Letter of Representations. The Master Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Master Developer and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Master Developer under such securities laws. The undersigned has executed this Letter of Representations solely in the undersigned’s capacity as an officer or representative of the Master Developer and the undersigned will have no personal liability arising from or relating to this Letter of Representations. Any liability that arises from or relates to this Letter of Representations may only be asserted against the Master Developer. ONE LAKE HOLDING LLC, a Delaware limited liability company By: Name: Title: