Folsom City Council
July 12, 2022

07/12/2022 Item No.11.

The City's 22,000 acre-foot entitlement is based on a pre-1914 appropriative right from the South Fork of the American River established by the Natoma Water Company ('Natoma") in 1851. Natoma's original pre-1914 water right established a maximum diversion rate"to fill a Canal Eight feet wide and poir feei deep with a current running Ten miles per hour." This correlates to a diversion rate of 60 cubic feet per r""ond and a maximum allocation of 32,000 afa. This right is held with Golden State Water Company pursuant to a co-tenancy agreement. The City's 5,000 acre-foot entitlement is also based on Natomais pre-1914 appropriative right from the South Fork of the American River. In Novembet 7994, the City eiecuted a contract with Southern California Water Company-Folsom Division ("SCWC") under which in" City acquired the right to lease 5,000 afa (of SCWC's remaining 10,000 afa under the original Natoma purchase) for an indefinite period. This right is held with Golden State Water Company pursuant to a co-tenancy agreement. This water right was also formally recognized in the settlement agreement between Reclamation and the City. As authorized by Public Law No. 101-5i4, the City was a subcontractor under Sacramento County Water Agency's (SCWA) CVP water-service contract for 7,000 afa. In 20l6,the United States, the City and SCWA completed an assignment of this portion of SCWA's CVP water-service contract from SCWA to the City.

Under the agreements with Reclamation for 22,000 afa and 5,000 afa, Reclamation delivers this entire water supply without reduction on a permanent basis. Under the agreement with Reclamation for 7,000 afa of CVP water, this water supply faces possible reductions pursuant to Reclamation's Municipal and Industrial Water Shortage Policy. In 1994, the City entered into an agreement with Golden State Water Company (f/Va Southern California Water Company, herein "GSWC") to acquire the right to divert up to 5,000 acre feet of pre-1914 water rights annually (the "GSWC Agreement"), subject to the terms and conditions of that agreement. Under the GSWC Agreement, the City is required to pay for the entire 5,000 acre-feet annual water supply regardless of whether the City is able to divert and use that quantity of water. The City has been using the supplies provided in the GSWC Agreement to serve the existing portion of the City known as the "East Area." The cost of water under the GSWC Agreement has, in the past, been paid for by East Area landowners and water customers.

Source of Water for the Folsom PIan Area, The City has determined that its Water Systems Optimization Review Program and implementation of metered rates will provide additional water supplies in an estimated amount of 6,450 acre-feet per year, which is in addition to the present and forecasted demands of the City's existing water users. The City intends to use a portion of this 6,450 acre-feet per year of available water to meet present and future water demand in the East Area in order to make the 5,000 acre-feet per year of GSWC Agreement water supply available for use in the Folsom Plan Area, on the terms and cbnditions of that Agreement. To meet this intent, the City has converted the East Area water supply from the GSWC Agreement to the less expensive CVP water service contract. The City would meet the additional build-out water demand of the Folsom Plan Area with approximately 600 acre- feet per year of water produced by the Water Systems Optimization Review Program that is in excess of the water demand in the East Area. The water made available under the GSWC Agreement and Water Systems Optimization Review Program will be sufficient to supply the projected water demand in the Folsom Plan Area. Pursuant to the provisions of Sections 860 et seq. of the State Code of Civil Procedure and Government Code Sections 53511 and 53589.5, the City filed a complaint in the Superior Court of the State for the County of Sacramento to validate the agreement. The Superior Court determined that the agreement: (a) is lawful, valid, enforceable and in the best interests of the City and all persons in any way interested therein and (b) is consistent with all applicable laws and obligations, including the Measure W water supply requirement.

The City's Community Facilities District No. 2013-1 (Water Facilities and Supply) (the "Water CFD") was formed by the City in 2014. The cost of the GSWC Agreement water will initially be paid for by the Folsom Plan Area through special taxes collected for the Water CFD on certain property in the F-olsom Plan Area, including the Improvement Area. When a building permit has been issued and a 50

07/12/2022 Item No.11.
customer billing account has been established, the developed parcel is no longer subject to the lely of the special tax for the Water CFD and thereafter pays for water through water rates.

Water Conservation. The City adopted Ordinance I 1 18, Chapter 13.26 of the Folsom Municipal Code ("FMC"), Water Conservation. Chapter 13.26 establishes a five stage water conservation program with conservation goals and water use restrictions. The City Manager is authorized to implement and enforce whatever conservation measures are deemed necessary to achieve the water reduction requirements of the declared conservation stage.

Water Supply Infrastructure. Existing water infrastructure and pipelines run to the north side of US Route 50. For the first phase of infrastructure, the developers of the Folsom Plan Area constructed improvements to connect this water supply and extend water infrastructure pipelines to serve the initial phases of development in the Folsom Plan Area (the "Phase 1 Water Facilities"). In the next phase, the Folsom Plan Area developers will be required to construct improvements at the existing City water treatment plant to include a water booster pump station and construct a new water pipeline transmission main from the water treatment plant site into the Folsom Plan Area along with two storage tanks and a pump station improvement to serve the area-wide development with potable water. In order for each individual parcel to access that water supply, the developers of those parcels will need to extend infrastructure to their sites.

The Phase 1 Water Facilities were completed in August 2018. The City estimates that the Phase 1 Water Facilities have the capacity to deliver a sustained maximum day demand of up to 2 million gallons of water. The Phase 2 Water Facilities (which include the new water pipeline transmission main, a booster pump station and a storage tank) are required to be constructed to provide expanded water transmission conveyance capabilities to deliver water from the water treatment plant to the Folsom Plan Area.

During initial planning of water infrastructure needs, the City estimated that the Phase I Water Facilities would have capacity to serve approximately 2,800 dwelling units in the Folsom Plan Area.

Based on actual water usage within the Folsom Plan Area and a study prepared by Peterson Brustad, Inc' in April 2019, the City currently estimates that water usage within the Folsom Plan Area will exceed the PhaJe I Water Facility capacity when approximately 2,800 to 3,300 dwelling units within the Folsom Plan Area have been occupied. The City continues to evaluate water usage and needs within the Folsom Plan Area. The City reserves the right to restrict new building permits within the Folsom Plan Area if the City determines that the new construction would cause residential water usage to exceed the capacity of the Phase 1 Water Facilities.

As of May 31, 2022, for the Folsom Plan Area, final maps had been approved and recorded for approximately 3,056 dwelling units, 2,262 building permits had been issued, and 1,435 certificates of o""upuncy had been issued. There is an additional final map that has been approved by the City and recorded for 174 additional dwelling units. There are also currently nine additional final maps submitted to the City for review with approximately 993 dwelling units. It is anticipated that five of these final maps will be recorded by September 2022, with the four remaining final maps expected to be recorded by the first quarter of 2023. During summer 2021 as a result of high levels of construction activity, the maximum day water demand exceeded 2 million gallons for several days with no service interruption to the water system. Developers within the Folsom Plan Area have made various arrangements for alternative water sources during the next two years to alleviate usage of the Phase 1 Water Facilities and in response to drought aoncerns. See "PROPOSED PROPERTY DEVELOPMENT - Development Entitlements - Drought Conditions and Construction Water (Jsage" for more information. Based on curyent development plans and discussions with the developers within the Folsom Plan Area, and subject to variations due to water usage for construction within the Folsom Plan Area, the City estimates that the 51

07/12/2022 Item No.11.

Phase 1 Water Facilities will reach their maximum day capacity in the summer of 2024. An increase in residential water demand, an event impacting the capacity of the Phase 1 Water Facilities, or other factors that increase water demand or decrease capacity could cause the City to reevaluate this estimated date and could adversely impact the ability of the City to issue building permits if the City expects demand to exceed capacity before the Phase 2Water Facilities are complete.

In February 2018, the first round of developers within the Folsom Plan Area began conducting alignment studies for the Phase 2 Water Facilities and, as of December 13,2018, developers within the Foisom Plan Area engaged Hydroscience Engineers for the design of the Phase 2 Water Facilities. The City has commenced review of the construction documents for the Phase 2 Water Facilities and anticipates completing its review in slmmer 2022. ECIC, who is expected to be involved with the bidding and construction of the Phase 2 Water Facilities, has informed the City and the Developer that bidding for the construction work of the Phase 2 Water Facilities is expected to occur in summer 2022 and that the construction is expected to commence by fall 2022 and be completed 18 months thereafter or by summer 2024, intime to meet the expected demands from projected growth within the Folsom Plan Area. If the Phase 2 Water Facilities are completed by summer 2024, the projected timing of development described in this Official Statement should not be affected. [However, the Developer is not ."rponiibl" for construction of the Phase 2 Water Facilities] and there can be no assurance that the construction of the Phase 2 Water Facilities will be completed as planned. Additionally, increased residential or construction water usage amounts or a reduction in the capacity of the current water facilities could cause the City to restrict the continued development of the Folsom Plan Area, including within the Improvement Area. See "CERTAIN RISKS TO BONDHOLDERS - Failure to Develop." Based on a preliminary analysis prepared by ECIC and its consultants, the Phase 2 Watet Facilities were projected, as of April 2022, to cost approximately $29 million but may cost more depending on the cost of supplies, the cost of labor and other factors at the time construction commences.

ECIC has requested that the Phase 2 Water Facilities be funded through bonds issued for CFD 18 and certain pay-go proceeds from CFD I7 and CFD l8 special taxes. Based on cost projections as of April 2022,ECIC expected the sources of revenues from CFD l7 and CFD 18 to be sufficient to fund the Phase 2 Water Facilities costs. See "FOLSOM PLAN AREA - Folsom Plan Area Development" for a discussion of certain development and investment that has already occurred within the Folsom Plan Area and additional future development and investment that is anticipated as the Folsom Plan Area continues to be developed.

In addition to the Phase 2 Water Facilities, the City anticipates that an additional water tank and pump station improvement will be needed to accommodate the increased development once there are apprbximately 1,600 occupied dwelling units in zones 4,5 and 6 of the Folsom Plan Area (the"Zone 4 Wut"r Facilities"). These zones are east of Placerville Road (and east of the District) and generally constitute the areas covered by CFD 20, CFD 2I and CFD 22. The Zone 4 Water Facilities and the Phase 2 Water Facilities are separate water improvements, and, if needed, the Phase 2 Watet Facilities can be constructed and completed separately from the Zone 4 Water Facilities, thereby allowing development to continue in the Folsom Plan Area generally, including within the Improvement Area.

According to estimates from ECIC as of April 2022, the Zone 4 Water Facilities are projected to cost approximitely $10 million but may cost more depending on the cost of supplies, the cost of labor and other factors at the time construction commences. To the extent CFD 18 bond proceeds are available, the developers within the Folsom Plan Area anticipate using proceeds from CFD 18 bonds to finance the Zone 4 Water Facilities. [The Developer is not responsible for construction of the Zone 4 Water Facilities], and there can be no assurance that the construction of the Zone 4 Water Facilities will be completed as planned. However, if the Zone 4 Water Facilities are constructed as planned, neither the City nor the Developer expects that the need for a Zone 4 Water Facilities will adversely impact the 52

07/12/2022 Item No.11.
timeline or cost estimates for development of the Improvement Area otherwise described in this Official Statement.
ll/astewater Treatment. The Sacramento Regional County Sanitation District has an existing wastewater treatment plant with its ongoing and permitted improvement projects projected to accommodate all wastewater from development in the Folsom Plan Area. Existing sewer transmission mains are capable of conveying wastewater from the Folsom Plan Area and initial development sites (including the Improvement Area) to the existing treatment plant.

Flood Zones. According to the Federal Emergency Management Agency flood map, the Improvement Area is in Zone X, which consists of areas determined to be outside of the 500-year flood plain.

Fire Zones. The Improvement Area is located within an area identified as a moderate ftrehazatd severity zone. More information regarding Fire Hazard Severity Zones can be found at the California Department of Forestry and Fire Protection website athttps:l/ftap.fire.ca.gov, though such website is not incbrporated herein by reference. The development within the Improvement Area is subject to mitigation measures set forth in a fuel modification plan approved by the City Fire Department. The mitigation measures include, among others, limitations on the type of vegetation that may be planted within fuel modification zones established in open space areas along certain portions of the perimeter of the Improvement Area, minimum setback of structures and irrigation requirements of the fuel modification zones. Maintenance of such zones is expected to initially be the responsibility of the property owners but upon build-out of the Improvement Area and dedication of the open space to the City will be maintained by the City from funds provided through CFD 18. Homeowner's insurance is expected to be available to property owners within the Improvement Area, and the coverage provided by such insurance typically insures against fire damage, although there is no assurance that homeowners within the Improvement Area will purchase or maintain such insurance'
Drought Conditions and Construction Water (Jsage.In response to drought conditions in 2021, the City imposed a mandatory 20Yo reduction in water use on its water customers. In addition, use of City water for construction purposes required City approval. At the time, the City allowed construction within the Folsom Plan Area to proceed, including the use of City water. However, prolonged drought conditions in 2022 could result in mandatory reductions in water usage that may adversely impact the ability of the developers within the Improvement Area to develop the Improvement Area in the timeline described in this Offrcial Statement.

To help alleviate the demand on the current water facilities, certain developers within the Folsom Plan Area have made affangements to obtain construction water from the El Dorado Irrigation District ("EID"), an alternative water provider that has existing facilities adjacent to the Folsom Plan Area. For instance, Lennar has previously received construction water from EID for its Russell Ranch project in CFD 20. Such arangements augment, but do not replace, the need for and the use of City water, which is currently provided through the Phase 1 Water Facilities. Due to such alternative arrangements for construction water and the amount of development that has already occurred in the Folsom Plan Area, the City anticipates that the demand for construction water will likely be lower in summer 2022 than it has been in some of the recent past years.

Affordabte Housing. [The City and the Developer entered into an Inclusionary Housing Agreement for the Improvement Area, which is recorded in the official records of the County of Sacramento and provides for the Developer's compliance with the Crty's inclusionary housing requirement by payment of an in-lieu fee to the City.l
53

07/12/2022 Item No.11.

Utilities. All typical urban utility services for finished lots will be extended to the lots. These utilities include electric power, natural gas, telephone, cable television, water, refuse, and sanitary sewer and storm water facilities. The City provides water, sewer, refuse and storm water facilities, and police and fire services. Pacific Gas & Electric provides natural gas and the Sacramento Municipal Utility District (SMUD) provides electric service. Comcast provides cable service.

Specific Plan Infrastructure Fee Credits and Improvements. The SPIF is administered by the City for the purposes of collecting impact fees for plan area wide improvements for the construction of roadways, water, sewer, drainage, dry utilities, recycled water and habitat mitigation in the Folsom Plan Area. The purpose of the SPIF is to require each landowner to pay its fair share of Folsom Plan Area area-wide improvements and to be reimbursed for any amount expended in excess of a landowner's fair share requirement. Under the terms of the SPIF Ordinance adopted by the City, property owners in the Folsom Plan Area will be eligible to enter into an agreement with the City and receive future reimbursements (that are convertible to fee credits for use within the owner's property) in exchange for the construction of eligible SPIF improvements. Based on the amount of improvements eligible for SPIF reimbursement, all of the properties within the Improvement Area are anticipated to fully cover their SPIF obligations through the conversion of these SPIF reimbursements to SPIF fee credits. After applying the SPIF reimbursements as SPIF fee credits to all properties in the Improvement Area, all amounts expended in excess of the project's SPIF obligation are expected to be reimbursed from the City as other SPIF fees are collected in the Folsom Plan Area.

Within the Folsom Plan Area, initial development will be required to pay a "SPIF Set-Aside" component to address initial water and sewer facility costs. This is a loan of SPIF collections to help the cash flow for the initial water and sewer costs. It will be repaid or equalized to all properties through the SPIF program as well as through CFD 18. The SPIF Set-Aside will apply to the first 2,500 Folsom Plan Area dwelling units that would be subject to the SPIF. A portion of the SPIF will be required to be paid regardless of whether a developer/property owner has advance-funded eligible SPIF infrastructure and has executed a Fee Reimbursement Agreement through the City. An exception to this rule is that a property owner who constructs certain water or sewer infrastructure for which the SPIF Set-Aside is being collected may take a credit against the SPIF Set-Aside.

In addition, in August 2020, the City approved an ordinance amending certain provisions of the SPIF ordinance to include a new SPIF - Offsite Water Set-Aside. This new SPIF - Offsite Water Set- Aside will be payable at the building permit stage and will not be eligible to be offset by fee credits.

Property Ownership
The information in this section has been provided by the Developer. The District and the Underwriter believe this information to be reliable, but can give no assurances that it is accurate or complete. There may be material adverse changes in this information after the date of this Official Statement.

Information in this section is included because it may be considered relevant to some investors to an informed evaluation and analysis of the taxable property within the Improvement Area and any existing or future improvements thereon as security for the Bonds. The information contained in this section does not guarantee that property ownership will not change or that the current or any subsequent property owners will pay the Special Tax when due. In fact, as described herein, ownership of much of the taxable property in the Improvement Area will change prior to development thereof. The Special Tax will constitute a lien on parcels subiect to taxation within the Improvement Area and not a personal indebtedness of the owners of property within the Improvement Area. There is no assurance that the present property owners or any subsequent 54

07/12/2022 Item No.11.
owners will have the abitity to pay the Special Taxes or that, even if they have the abilityo they will choose to pay the Special Taxes. An owner may elect to not pay the Special Taxes when due and cannot be legally compelled to do so. Neither the District nor any Bond Owner will have the ability at any time to seek payment directly from the owners of property within the Improvement Area of the Special Tax or the principal or interest on the Local Obligations, or the ability to control who becomes a subsequent owner of any property within the Improvement Area.

Toll West lnc., dlbla Toll Brothers West Inc., a Delaware corporation (previously defined as the "Developer"), is the owner and developer of the property within the Improvement Area. The Developer is a subsidiary of Toll Brothers, Inc., a Delaware corporation ("TBI"). TBI is a publicly traded company whose common stock is listed on the New York Stock Exchange under the symbol "TOL." TBI was incorporated in 1986, began doing business through predecessor entities in 1967 and became a public company in 1986. Through its subsidiaries, the company designs, builds, markets, sells, and affanges financing for any array of luxury residential single-family detached home, attached home, master-planned resort-style golf, and urban low-, mid-, and high-rise communities.

The company caters to luxury first-time, move-up, empty-nester, active-adult and second-home buyers in the United States ("Traditional Home Building Product"), as well as urban and suburban renters under the brand names Toll Brothers Apartment Living@ and Toll Brothers Campus Living@. The company also designs, builds, markets, and sells urban low-, mid-, and high-rise condominiums through Toll Brothers City Living@ ("City Living"). At October 31,2021, the company operated in 24 states, and in the District of Columbia. In the five years ended October 37,2021, the company delivered 42,005 homes from 835 communities, including 9,986 homes from 497 communities in fiscal2027. At October 31,2021, the company had 995 communities in various stages of planning, development or operations containing approximately 80,900 home sites that were owned or controlled through options.

TBI is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files annual and quarterly reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information, including its Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, are available to the public via the SEC's website at www.sec.gov. All documents filed by TBI pursuant to the requirements of the Exchange Act after the date of this Official Statement will be available for inspection in the same manner as described above. Copies of TBI's Annual Report and related financial statements are also available from TBI's website at www.tollbrothers.com.

The foregoing website addresses and references to filings with the Securities and Exchange Commission (the "SEC") are given for reference and convenience only, and the information on such websites and onfile with the SEC does not form a part of this Official Statement and is not incorporated by reference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. The Developer and TBI are not 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 Bonds. The information contained on suchwebsites may be incomplete or inaccurate and has not been reviewed by the City, the District or the Underwriter.

Development Plan and Status of Development
Unless otherwise indicated, the information provided in this section has been provided by the Developer and has been included because it may be considered relevant to an informed evaluation and analysis of the Bonds and the fmprovement Area. No assurance can be given' however, that the proposed development of the property within the Improvement Area will occur in 55

07/12/2022 Item No.11.
a timely manner or in the configuration or to the density described herein, or that the Developer' any owners or affiliates thereofo or any other current or subsequent property owners' will or will not retain ownership of its respective property within the Improvement Area. The City' the District and the Underwriter can provide no assurances as to the accuracy of the information in this section. There may be material adverse changes in this information after the date of this Official Statement.

Development Planz
The planned development within the Improvement Area includes a gated residential adult active community for residents age 55+ years known as Regency at Folsom Ranch, which is expected to contain 919 residential units at completion, including 751 single-story/single-family detached units and 168 single-story/multi-family paired units otherwise known as duets. Regency at Folsom Ranch is expected to include five separate product lines of homes known as Sequoia, Redwood, Mendocino, Shasta, and Tahoe, on lots ranging from approximately 3,440 square feet to approximately 6,175 square feet, with homes ranging from approximately 1,400 square feet to approximately 2,450 square feet, and with three separate floor plans for each product line.

Planned amenities include an 18,000 square foot clubhouse with access to onsite food and beverage services, an indoor pool, an outdoor pool and spa, a fitness center, a barbeque pavilion, event lawns, pickleball and bocce ball courts, gathering areas, two dog parks, and access to miles of outdoor trails and biking paths.

Below is a summary of the anticipated product types planned within the Improvement Area, Tabte ll
City of Folsom
Communities Facilities District No. 23 (Folsom Ranch)
Improvement Area No. 3
Summary of Product Types
Product Line
Living Area
(square feet)
Estimated
Base Price(l)
Expected
UnitsPlan
Sequoia
Redwood
Mendocino
Shasta
Crystal
Hartley
Whitmore
Redding
Cresthaven
Trinity
Covelo
Julian
Newman
Caldwell
Lockwood
Whitney
Carmichael
Glenbrook
Petaluma
1,398
1,420
1,446
Stories Bedrooms Bathrooms Garage Size
2 2
2 2
2 2
2 2
2 2
2 2
5-3.5

2.5 2.5

2.5 2.5

2.5 2.
2-3
2 z-5
2-3
2 2
2 2-3
2-3
,
2 2
2 2
2 2
2 2
2 2
2 $583,995
$593,995
$598,995
$654,99s
$659,995
$678,995
$692,99s
$697,995
$708,995
$74s,995
$760,995
s770,995
$840,995
$845,995
$855,995
Total
56 56
56 57
57 58
563
542
596
t,
1,
l,
2 2
2 1,815
1,876
1,925
2,012
2,128
2,148
66 66
66 69
70 70
57 57
58 Tahoe
(r) Base sales prices are as of June 16,2022, and are subject to change at any time by the Developer. Base sales prices are exclusive of any premiums, options, upgrades, incentives, and any selling concessions or price reductions currently being offered.

Source: The Developer.
2,316
2,356
2,441

2.5 2.5

2.5 919
56

07/12/2022 Item No.11.

The Developer is actively marketing the homes within the Improvement Area to individual homeowners and, as of June 16,2022, had sold (but not closed) 155 homes. The Developer anticipates delivering the first 12 homes to individual homebuyers by the end of July 2022, with 47 closings anticipated for August 2022,48 closings anticipated for September 2022 and 48 closings anticipated for October 2022. The Developer expects the final home closings within the Improvement Area to occur in September 2026. Below is a summary of the Developer's anticipated timing for its sale and delivery of finished homes.

Table 12
City of Folsom
Communities Facilities District No.23 (Folsom Ranch)
Improvement Area No.3
Expected Delivery of Finished Homes by Sales Year
Product Line Zoning 2022 2023 2024 2025 2026
Sequoia
Redwood
Mendocino
Shasta
Tahoe
TOTAL
MLD

SF/SFHD

SF/SFHD

SF/SFHD

SF/SFHD
6 t7
23 48
48 48
48 48
240
48 48
48 48
48 240
48 48
48 48
48 240
24 28
48 48
28 176
Source: The Developer
The map below reflects the lot mix, the zoning of development and the overall layout of development within the Improvement Area.

City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No.3
Master PIan
rtoErcYAttsoM ulcf,
Ia(ffY! Mdf 6nmodv)
llurlroilE lrloti.r llon lxHbl
TOL' IROIHEIS AT FOISOM IAI{CI{
ISGff
(ld!il ldEAdiCn6ur[r,
ToIIBrolhers
lgFqr!tH
rt
:.:
57

07/12/2022 Item No.11.

Status of Developmentz
As of June 16, 2022, all of the taxable residential property within the Improvement Area was owned by the Developer and was in various stages development, including partially-improved lots, improved lots, homes under construction and completed model homes. As of June 16, 2022, the Developer had completed the construction of 15 model homes (three within each product line) that were open to the public and had sold to individual homebuyers (but not closed) 155 production homes. Homes under contract may not result in closed escrows as sales contracts are subject to cancellation. As of June 16, 2022, final maps authorizing the subdivision of a portion of the property within the Improvement Area into 443 residential lots had been recorded, and tentative maps had been approved for the remaining 476 proposed residential lots. The Developer expects to receive final map approval for an additional 100 residential lots by December 2022 and final map approval for the remaining 376 residential lots between 2023 and mid-2025. The only remaining discretionary entitlement within the Improvement Area is the recordation of small lot final maps for the remainin g 47 6 tentative map units.

As of June 16, 2022, the amenities being constructed within the Improvement Area were approximately 30% complete and anticipated to be completed by March 2023. The Developer is in the process of completing the required backbone improvements for the Improvement Area, which it anticipates completing by fall 2023 .

The following table summarizes, as of June 16, 2022, the development status of the residential lots and homes proposed to be constructed within each of the five product lines within the Improvement Area.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
58

07/12/2022 Item No.11.

Table 13
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
Improvement Area No.3
Development Status as of June 1612022
Product Line Land Use
Typical Lot Size
(square feet)
3,440
4,200
4,750
5,225
6,175
Homes
Under
Construction
Homes
Completed
But Not
Closed(1)
t6
Homes
Under
Contract{2)
20 39
3l
3l
34 Building
Permits
Issued
22 6t
40 42
36 Finished Lots
(Without
Vertical
Home
Construction)
42 l9
36 26
26 Partially
Improved
Lots
104
100
122
l4t
110
Undeveloped
Lots
Total
Proposed
Units(3)
168
172
198
209
172
Homes
CIosed
Sequoia
Redwood
Mendocino
Shasta
Tahoe
TOTAL
MLD

SF/SFHD

SF/SFHD

SF/SFHD

SF/SFHD
l8
50 37
39 JJ
0 0
0 0
0 0
0 0
0 0
4 J
3 J
J
155 0 20t t49 577 0 919
(r) Includes 15 model homes and one production home, none ofwhich have been released for sale. (2) Homes under contract may not result in closed escrows as sales contracts are subject to cancellation by the homebuyers.

Home Construction)," (v) "Partially Improved Lots" and (vi) "Undeveloped Lots." Source: The Developer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
177
59

07/12/2022 Item No.11.
lBackbone and Offiite Infrastructure. The Developer is in the process of completing certain required backbone infrastructure and offsite improvements serving the Improvement Area. Backbone infrastructure includes the following: (i) construction of the Mangini Parkway bridge, which has been completed; (ii) construction of the Regency Parkway bridge, which is expected to commence inlate 2022 and be completed by summer 2023; and (iii) construction of a hydromodification basin, the Mangini Parkway phase 2 roadway and utilities, and the Oak Avenue roadway and utilities, which commenced in spring 2022 and are expected to be completed by December 2022. Landscaping of the Mangini Parkway and Oak Avenue roadways is expected to commence after completion of the roadways and take approximately four months to complete. The Developer anticipates completing the backbone improvements by the end of 2023. Offsite improvements, which include primary access roads and curbs, gutters, sidewalks and streetlights are substantially complete and expected to be completed by December 2022.1
lSubdivision Improvements. The in-tract subdivision improvements within the Improvement Area have been completed for 342 units, and the Developer anticipates completing the remaining in-tract subdivision improvements by the end of 2024. Remaining in-tract subdivision improvements for development of the Improvement Area includes, among other things, water and sewer hookups, underground utilities, streets, street lighting, soundwalls and landscaping improvements. As of May 31, 2022, the total remaining subdivision improvements in the Improvement Area are estimated at approximately $40 million, including all design, construction staking, plan check, inspection, habitat mitigation and other project related soft costs.l
COVD-19Impact
The planned development within the Improvement Area is subject to disruption due to the COVID-l9 pandemic and related public health and governmental authorities' orders and actions, which could have a material adverse effect on the Developer's ability to complete its proposed development within the Improvement Area and sell completed homes in the time frames and budgets, and at the sales prices, described in this Official Statement. The Developer has largely continued, with certain modifications, their development, home construction and sales activities in the Improvement Area to date, including taking steps at the model home sites, sales offices and jobsites, as applicable, to limit the spread of the COVID-l9 outbreak and implementing certain changes to the home sales process in an effortto mitigate the spread of COVID-19. The Developer has provided the option of touring homes virtually online, by appointment, or currently, in person. However, in the event that the Developer believes it is advisable to, or are required to, implement additional measures in response to a resurgence of COVID-I9 or other public health risks, they may experience further negative impacts on their businesses and operations.

The Developer has experienced increases in certain construction costs, supply chain delays, labor shortages, and increased cycle time for construction projects generally. However, the Developer has not experienced any significant development delays resulting from work stoppages, reduced attendance of workers, or the ability to obtain necessary inspections and approvals for homes, which may be attributed, directly or indirectly, to the COVID-l9 pandemic. While the cost increases and delays may have been and may continue to be intermittently affected by COVID-l9, the majority of cost increases and delays can be affributable to production backlogs due to prior shutdowns or shelter in place orders, the strength of the housing market and the result of vendors not anticipating the scale of the demand for housing materials.

The COVID-19 outbreak is ongoing and, among other things, the ultimate geographic spread of the virus, the emergence and spread of new strains or variants of COVID-19, the duration and severity of the outbreak, the availability and acceptance of effective vaccines, adequate testing and treatments and the 60

07/12/2022 Item No.11.
prevalence of widespread immunity to COVID- 1 9, and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to address its impact remain uncertain. The ultimate effects of COVID-l9 on the Improvement Area, the Developer's operations and financial condition, homebuyers' willingness and ability to pay the Special Tax when due, and the real estate market and United States economy in general are unknown. Such effects, if and as they arise, could have a material adverse effect on the ability to complete the development within the Improvement Area and/or sell homes or lots as planned, and no assurance can be provided that the Developer will be able to (a) complete in whole or in any patt, or within any particular time, their construction of homes within the Improvement Area; (b) avoid additional material increases in development costs or delays resulting from work stoppages, reduced attendance of workers, shortages or delays in the delivery of building materials, andlor delays in obtaining necessary inspections and approvals; or (c) sell homes, and close home sales or not experience purchase contract cancellations, due in each case to public health or governmental restrictions, further spread of COVID-L9, an economic downturn driven by the pandemic, or otherwise.

See "CERTAIN RISKS TO BONDHOLDERS-Potential Impact of Global Health Crises or Concerns" herein.

Development Plan of Finance
To date, the Developer has financed its land acquisition and various site development and homebuilding costs related to its property in the Improvement Area through internally generated funds.

As of May 3I,2022, the Developer had expended approximately $111.5 million on its project in the Improvement Area, including land acquisition costs, site development costs, permits and fees, direct and indirect home construction costs, and marketing and sales costs and expenses (exclusive of corporate overhead and other carry costs). The Developer expects to incur approximately $478.8 million on remaining site development costs, permits and fees, direct and indirect home construction costs, and marketing and sales costs and expenses (exclusive ofcorporate overhead and other carry costs) related to its project in the Improvement Area. The Developer expects to use internal funding (which may include homes sales revenue and funding from its parent company) and proceeds from the sale of the Local Obligations to complete its development and home construction within the Improvement Area and believes that it will have sufficient funds available to complete its planned development as described in this Official Statement.
[As of May 31,2022, the Developer estimates that it had incurred total grading and backbone and off-site infrastructure development costs of approximately $47 million for the Improvement Area. As of that same date, the Developer's remaining grading and backbone and off-site infrastructure for development costs for the Improvement Area were estimated at approximately $50 million. The remaining backbone and off-site infrastructure work is expected to continue and ultimately be completed by the end of 2023.l
[As of May 31,2022, the Developer had incurred total site development costs of approximately $71.4 million for the development of the Improvement Area. As of that same date, the Developer's remaining development costs for the Improvement Area, excluding home construction costs, were estimated at $101.8 million. The remaining site development work is expected to continue and ultimately be completed by the end of 2024.1
' The following table describes the Developer's estimated total site development costs for the Improvement Area, excluding home construction costs. The table also describes, as of May 3I, 2022, the site development costs spent, the remaining site development costs and the estimated time for completion. 6t

07/12/2022 Item No.11.

Table 14
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
fmprovement Area No.3
Site Development Costs and Estimated Completion Dates
Est. Total
Site Costs
Completed
Costs Through
llay 31,2022
Remaining Site
Costs
Estimated
Completion Date
Soft Costs
Phase I Common
Phase2&3Common
MLD Common
Phase I Intract
Phase 2 Intract
MLD Intract
Phase lC Intract
Mangini Parkway Phase I
Mangini Parkway Phase 2
Mangini Parkway Phase 3
E. Bidwell Parkway
Oak Avenue
Phase I Entries
Phase 2 Entry
MLD Entry
Rec. Center Phase I
Rec. Amenity Phase 2
$ 13,968,1 l3 $
22,599,109
tQ,704,356
8,602,681
20,700,135
22,433,015
7,894,012
9,455,216
8,301,906
13,1 15,589
s99,039
4,259,619
4,786,219
3,250,000
2,600,000
650,000
1,8,174,644
1,100,000
8,497,419 $
20,588,471
90r,51r
265,318
18,409,722
248,222
1,395,142
7,368,465
2,991,404
4,015,418
10,573
2,562,006
4, I 10,851
5,470,694
2,010,638
9,802,845
8,337,363
2,290,413
22,433,015
7,645,790
8,060,074
933,441
10,t24,185
s99,039
244,200
4,77s,646
687,994
2,600,000
650,000
14,063,793
1,100,000
December 2024
December 2022
August 2023
August 2023
December 2022
November 2024
Febrcary 2024
August 2023
December 2022
November 2023
November 2023
October 2022
November 2023
September 2022
December 2023
September 2023
April2023
October 2024
Total Costs $ 173,193,653 $ 7t.364.s22 $ 10r.829.130
Source: The Developer.

Although the Developer expects to have sfficient funds available to complete its planned development in the Improvement Area as described in this Official Statement, there can be no assurance that amounts necessary to finance the remaining development and home construction costs will be available from the Developer or any other source when needed. While the Developer 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 the Developer, nor any of its related entities are under any legal obligation of any kind to expend funds or obtain loans for land acquisition or the development of and construction of homes on its property in the Improvement Area. Any contributions by the Developer to fund the costs of such development or home construction are entirely voluntary.

If and to the extent that internal funding, including but not limited to home sales revenues, are inadequate to pay the costs to complete the planned development by the Developer within the Improvement Area and other financing by the Developer is not put into place, there could be a shortfall in the funds required to complete the planned development by the Developer of its property in the Improvement Area.

IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
62

07/12/2022 Item No.11.

CERTAIN RISKS TO BONDHOLDERS
This section provides a general overview of certain risk factors which should be considered, in addition to the other matters set forth in this Official Statement, in evaluating an investment in the Bonds.

This section is not meant to be a comprehensive or definitive discussion of the risks associated with an investment in the Bonds, and the order in which this information is presented does not necessarily reflect the relative importance of various risks. Potential investors in the Bonds are advised to consider the following factors, among others, and to review this entire Official Statement to obtain information essential to the making of an informed investment decision. Any one or more of the risk factors discussed below, among others, could lead to a decrease in the market value and/or in the marketability of the Bonds. There can be no assurance that other risk factors not discussed herein will not become material in the future.

Levy of the Special Tax
The principal source of payment of debt service on the Local Obligations, from which funds for the payment of the Bonds are derived, is the proceeds of the annual levy and collection of the Special Tax against property in the Improvement Area. The annual levy of the Special Tax is subject to the Maximum Special Tax rates authorized within the Improvement Area. The levies cannot be made at higher rates even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available moneys, will not be sufficient to pay debt service on the Local Obligations. Other funds which might be available include funds derived from the payment of delinquent Special Tax and funds derived from the tax sale or foreclosure and sale of related Taxable Property on which levies of the Special Tax are delinquent.

The levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular Taxable Property and the amount of the levy of the Special Tax against such parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of such parcels and the proportionate share of debt service on the Local Obligations, and certainly not a direct relationship.

The Special Tax levied in any particular tax year on a Taxable Property is based upon the revenue needs and application of the Amended Rate and Method of Apportionment. Application of the Amended Rate and Method of Apportionment will, in turn, be dependent upon certain development factors with respect to each Taxable Property by comparison with similar development factors with respect to the other Taxable Property in the Improvement Area. Thus, in addition to annual variations of the revenue needs from the Special Tax, the following are some of the factors which might cause the levy of the Special Tax on any particular Taxable Property to vary from the Special Tax that might otherwise be expected:

Reduction in the number of Taxable Property for such reasons as acquisition of Taxable Property by the federal government or an agency thereof, asserting immunity (however, see "Exempt Properties" below) from taxation, thereby resulting in an increased tax burden on the remaining Taxable Propefiy.
a
a Failure of the related owners of Taxable Property to pay the Special Tax and delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, thereby resulting in an increased tax burden on the remaining parcels, subject to the related Maximum Special Tax.
63

07/12/2022 Item No.11.

Collection of Special Tax
In order for the District to pay debt service on the Local Obligations, from which funds for the payment of the Bonds are derived, it is necessary that the Special Tax levied against land in the Improvement Area be paid in a timely manner. The District has established the Local Obligations Reserve Account under the Local Obligations Indenture in the amount of the Required Bond Reserve to pay debt service on the Local Obligations, in the event that a portion of the Special Taxes for the Local Obligations are not paid on time.

The Local Obligations Indenture provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described below and in the Mello-Roos Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes. Pursuant to these procedures, iftaxes 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.

Pursuant to the Mello-Roos Act, in the event of any delinquency in the payment of the Special Tax, the District may order the institution of a Superior Court action to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not mandatory. However, the District has covenanted that it will annually on or before September 1 of each year review the public records of the County of Sacramento relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if it determines on the basis of such review that the amount so collected is deficient by more than 5oh of the total amount of the Special Tax levied in such Fiscal Year, it will within 60 days thereafter institute foreclosure proceedings as authorized by the Mello- Roos Act in order to enforce the lien of the delinquent installments of the Special Tax against each lot or parcel of land in the Improvement Area, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; pleyiidgd, that irrespective of the foregoing if the District determines on the basis of such review that property owned by any single property owner in the Improvement Area is delinquent by four missed payments with respect to the Special Tax due and payable by such property owner by such delinquency date, then the District will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided herein against such property owner; provided further, that any actions taken to enforce delinquent Special Tax liens shall be taken only consistent with Sections 53356.1through 53356.7, both inclusive, of the Mello-Roos Act; and provided fuither that the Dishict is not obligated under the Local Obligations Indenture to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Year in which the District has received one hundred percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan.

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the District of the proceeds of sale if the Local Obligations Reserve Account with respect to the Local Obligations is depleted. See "SECURITY AND SOURCES OF PAYMENT FOR TI{E BONDS- Covenant for Foreclosure."
The District may be unable to make full or timely payment of debt service on the Local Obligations if property owners in the Improvement Area fail to pay installments of the Special Tax when due, if the Local Obligations Reserve Account is depleted, or if the District is unable to sell related foreclosed parcels for amounts sufficient to cover the delinquent installments of the Special Tax. 64

07/12/2022 Item No.11.

Concentration of Ownership
As of June 16, 2022, the Taxable Property in the Improvement Area was entirely owned by the Developer, and consequently, the Special Tax within the Improvement Area will be paid by the Developer until the land is developed and sold. See "PROPOSED PROPERTY DEVELOPMENT- Property Ownership."
The Developer is in the process of building and selling completed homes to individual homeowners. No assurance can be given that the property sales will close when anticipated. See "PROPOSED PROPERTY DEVELOPMENT-Property Ownership." Generally, the risk of delinquency or nonpayment of Special Taxes at levels which do not permit the timely payment of principal of and interest on the Bonds is inversely comelated to the diversity of ownership of Taxable Property within the Improvement Area. The fact that a substantial portion of the property providing the ultimate security for the payment of Local Obligations is controlled by a single owner means that timely payment of the respective Special Tax and, therefore, the Bonds, will depend initially upon the willingness and ability of such owner to pay the Special Tax when due. The only assets of the Developer that constitute security for the Local Obligations are its real property holdings located within the Improvement Area.

There can be no assurance that the remaining undeveloped property will be fully developed and that property ownership will be further diversified as a result. See "CERTAIN RISKS TO BONDHOLDERS-Failure to Develop. "
Payment of the Special Tax is Not a Personal Obligation of a Property Owner A PROPERTY OWNER IS NOT PERSONALLY OBLIGATED TO PAY TI{E SPECIAL TAX.

RATHE& TI{E SPECIAL TAXES ARE OBLIGATIONS ONLY AGAINST THE PROPERTY. IF THE

VALUE OF THE PARCELS OF PROPERTY IS NOT SUFFICIENT, TAKING INTO ACCOTINT OTHER OBLIGATIONS ALSO PAYABLE TIfiREBY, TO FULLY DISCI{ARGE TI{E SPECIAL TAX, TIIE DISTRICT WILL HAVE NO RECOURSE AGAINST TTM PROPERTY OWNER.

Potential Early Redemption of Bonds from Prepaid Special Taxes Property owners within the Improvement Area are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping special assessment district or community facilities district. Such payments will result in a redemption of the Bonds on the Interest Payment Date for which timely notice may be given under the Trust Agreement following the receipt of the prepayment. The resulting redemption of Bonds purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See "TIfi BoNDs-Redemption Provisions-Extraordinary Redemptionfrom Prepayment of Special Taxes." Special Tax Delinquencies
The Special Taxes are billed to the properties within the Improvement Area on the ad valorem property tax bills sent to owners of such properties. Such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments. In each year the County includes the Improvement Area in the Teeter Plan, the County will be obligated to pay the District l00Yo of the amount of the Special Taxes actually levied in the Improvement Area, regardless of any delinquencies. However, the County is required to terminate the Teeter Plan if two- thirds of the participants so petition the Board of Supervisors and may discontinue the Teeter Plan as to the Improvement Area if the delinquency rate in the Improvement Area exceeds 3o%. Moreover, the County determines annually whether to include a particular district in the Teeter Plan. See "-Teeter 65

07/12/2022 Item No.11.

Plan Termination" and "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-The Teeter Plan." Significant delinquencies in the payment of annual Special Tax installments, or delays in the prosecution of foreclosure proceedings to collect such Special Taxes, could result in a default in the payment of the debt service on the Bonds. $ss "-Bznkruptcy" and "-FDIC/Federal Government Interests in Properties" below, for a discussion of the limitations on the District's ability to foreclose on the lien of the Special Taxes in certain circumstances and the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes.

Teeter Plan Termination
The County has implemented its Teeter Plan as an alternate procedure for the distribution of certain property tax and assessment levies on the secured roll. The County determines annually which special taxes and assessment levies to include in the Teeter Plan. Pursuant to its Teeter Plan, once the County determines to include special taxes and assessment levies in the Teeter Plan, the County provides the local agency and taxing area with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County's Teeter Plan may help protect Owners from the risk of delinquencies in the payment of Special Taxes. However, the County is entitled, and under certain circumstances could be required, to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. In addition, the County may decide not to include certain special taxes and assessment levies, including the Improvement Area, in the Teeter Plan in any fiscal year. Any termination of the Teeter Plan with respect to the Improvement Area would eliminate such protection from delinquent Special Taxes. See "SECURITY AND SOURCES OF PAYMENT FOR TFIE BONDS-The Teeter Plan."
Land Values
If a property owner defaults in the payment of the Special Tax, from which funds for the payment of the Bonds are derived, the District's only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. The value of taxable properly in the Improvement Area is therefore an important consideration in evaluating the security for the Bonds.

Land values could be adversely affected by economic factors beyond the District's control, such as relocation of employers out of the area, stricter land use regulations, the absence of water, or destruction of property caused by, among other eventualities, earthquake, flood or other natural disaster, or by environmental pollution or contamination.

Appraisal Risks
The Appraiser has estimated the market value of the property in the Improvement Area on the basis of certain assumptions which the Appraiser believes to be reasonable under the circumstances. See the Appraisal included in APPENDIX G hereto. However, certain of the assumptions made by the Appraiser may prove to be untrue.

Although the District believes that the Appraiser's methodology and assumptions are reasonable under the circumstances, the Appraiser's aggregate value conclusions are expressions of professional opinion only. No assurance can be given that the aggregate values of property in the Improvement Area are equal to or greater than the Appraiser's estimated values, nor can any assurance be given that such aggregate values will not decline during the period of time the Bonds are Outstanding. The values of the property in the Improvement Area can be adversely affected by a variety of factors, including, but not limited to, the occuffence of one or more of the special risk events discussed herein. A decline in the value of a parcel in the Improvement Area could lower the ability or willingness of the owner of such 66

07/12/2022 Item No.11.
parcel to pay Special Taxes when due and would decrease the amount recoverable at a foreclosure sale of such parcel.

See "THE IMPROVEMENT AREA-Property Values" for a further discussion of estimated property values in the Improvement Area.

Exempt Properties
Certain properties within the Improvement Area are or may become exempt from the Special Tax in accordance with the Amended Rate and Method of Apportionment. In addition, the Mello-Roos Act provides that properties or entities of the state, federal or local government are exempt from Special Tax; provided, however, that property acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. In addition, the Mello-Roos Act provides that if property subject to Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay Special Tax with respect to that property is to be treated as if it were a special assessment. Further, properties receiving a welfare exemption under subsection (g) of Section 214 of the California Revenue and Taxation Code are exempt from the Special Tax unless debt is outstanding and the property was subject to the Special Tax prior to receiving the exemption. Neither the District or the Developer are aware of any property within the Improvement Area currently receiving a welfare exemption. The constitutionality and operation of these provisions of the Mello-Roos Act have not been tested.

In particular, insofar as the Mello-Roos Act requires payment of a special tax by a federal entity acquiring property within the community facilities district, it may be unconstitutional. If for any reason properly within the Improvement Area becomes exempt from taxation, then, subject to the Amended Rate and Method of Apportionment, including the limitation on the maximum special tax rates set out in the Amended Rate and Method of Apportionment, the special tax will be reallocated to the remaining taxable properties within the Improvement Area. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the timely payment of the Special Tax. Moreover, if a substantial portion of land within the Improvement Area becomes exempt from the Special Tax because of public ownership, or otherwise, the maximum rate that could be levied upon the remaining property might not be sufficient to pay principal of and interest on the related Local Obligations and could adversely affect the ability of the District to pay principal of and interest on the Bonds when due.

Maximum Special Tax
Within the limits of the Special Tax, the District may adjust the Special Tax on all property in the Improvement Area to provide an amount required to pay interest on, principal of, Minimum Sinking Fund Payments for and redemption premiums, if any, on the Local Obligations, and the amount, if any, necessary to cure delinquencies and replenish the Local Obligations Reserve Account to an amount equal to the Required Bond Reserve, and to pay all current Expenses.

Although the Maximum Special Tax is designed to provide Special Tax revenues on an annual basis, there is no assurance that the Maximum Special Tax on the property in the Improvement Area will be sufficient to pay the amounts required to be paid by the Local Obligations Indenture at all times, from which funds for the payment of the Bonds are derived. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Special Tax Authorization" and APPENDIX A-"AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX." 67

07/12/2022 Item No.11.

Under the Amended Rate and Method of Apportionment, the Facilities Special Tax levied in any fiscal year against any Assessor's Parcel (as defined in the Amended Rate and Method of Apportionment) of Developed Properly classified as Residential Property may not be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Improvement Area by more than 10% above the amount that would have been levied against such Assessor's Parcel in that fiscal year had there never been any such delinquencies or defaults. Pursuant to the Amended Rate and Method of Apportionment, property is considered "Residential Property" once a building permit could be issued for the purposes of constructing one or more Residential Units, including either single family detached homes or multi-family attached properties, such as apartments, and property is considered "Developed Property" if a building permit for new construction was issued prior to June 30 of the previous fiscal year.

No Acceleration Provision
The Local Obligations Indenture does not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms thereof.

Loss of Tax Exemption
As discussed under "TAX MATTERS," interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of issuance, as a result of acts or omissions of the District subsequent to the issuance of the Bonds in violation of the District's covenants with respect to the Bonds. Should interest become includable in gross income, the Bonds are not subject to redemption by reason thereof and will remain outstanding until maturity or unless earlier redeemed pursuant to optional or mandatory redemption.

Parity Taxes and Special Assessments
The ability or willingness of a property owner in the Improvement Area to pay the Special Tax, from which funds for the payment of the Bonds are derived, could be affected by the existence of other taxes and assessments imposed upon the properly either currently existing or imposed in the future. The assessments and any penalties thereon constitute a lien against the lots and parcels of land on which they have been levied until they are paid. Such lien is on parity with all special taxes and special assessments levied by other agencies and is co-equal to and independent of the lien for general property taxes and other special assessments regardless of when they are imposed upon the same property. The Special Tax has priority over all existing and future private liens imposed on the property. In addition, other public agencies whose boundaries overlap those of the Improvement Area could, with or in some circumstances without the consent of the owners of the land in the Improvement Area, impose additional taxes or assessment liens on the property in the Improvement Area in order to finance public improvements to be located inside or outside of the Improvement Area.

Although the District has covenanted not to impose additional special taxes or assessments on property within the Improvement Area except in accordance with the Local Obligations Indenture, the Authority and the District have no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion ofthe property in the Improvement Area. The imposition of additional liens on panty with the assessments could reduce the ability or willingness of the owners of parcels in the Improvement Area to pay the Special Tax and increases the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes or the principal of and interest on the Local Obligations when due. As described under "FOLSOM PLAN AREA-Public Facilities Financing Plan," and "TFIE IMPROVEMENT AREA-Overlapping Debt" the City plans to issue additional obligations secured by special taxes from time to time to finance backbone 68

07/12/2022 Item No.11.
infrastructure and public improvements within the Folsom Plan Area and the boundaries of the Improvement Area. For example, CFD 18 authorized the issuance of up to $200,000,000 in obligations.

The special taxes securing such additional obligations would be payable on parity with the Special Taxes, and the City currently anticipates that an initial series of CFD 18 bonds in an estimated amount between $25 million to $30 million will be issued in the fourth quarter of 2022 to help finance at least a portion of the required Phase 2 Water Facilities. In addition, property owners may choose to participate in a residential PACE program (a mechanism for financing energy efficiency and renewable energy improvements on private property), consenting to assessments on their parcels that would be on a parlty with the Special Taxes.

Future Private Indebtedness
At the present time, the Improvement Area included properties that are undergoing development or are developed. In order to develop any improvements on that undeveloped land, the properly owners will need to construct private improvements, the cost of which may increase the private debt for which the land in the Improvement Area or other land or collateral owned by the property owners is security over that contemplated by the Local Obligations, and such increased debt could reduce the ability or desire of the property owners to pay the Special Tax secured by the land in the Improvement Area. It should be noted however, that the lien of any private financing secured by the land within the Improvement Area would be subordinate to the lien of the Special Tax.

Disclosures to Future Purchasers
The District has recorded notice of the Special Tax Lien in the Office of the County Recorder of the County of Sacramento. 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, a home or a commercial or industrial facility in the Improvement Area or the lending of money thereon. The Mello-Roos Act requires the subdivider (or its agent or representative) ofa subdivision to notiff 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. State Civil Code Section ll02.6b 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 notifii the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence ofthe Sp-cial Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax, from which funds for the payment of the Bonds are derived, when due.

Bankruptcy
The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax, as discussed in "SECURITY AND SOURCES OF PAYMENT FOR Tfm BONDS," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State relating tojudicial foreclosure. In addition, the prosecution ofa foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, rcorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise ofjudicial discretion in appropriate cases. 69

07/12/2022 Item No.11.

Although bankruptcy proceedings would not cause the lien of the Special Tax to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings. The federal bankruptcy laws provide for an automatic stay of foreclosure and sale oftax sale proceedings, thereby delaying such proceedings perhaps for an extended period. Any such delays would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds and the possibility of delinquent tax installments not being paid in full. To the extent that property in the Improvement Area continues to be owned by a limited number of property owners, the chances are increased that the Local Obligations Reserve Fund could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in the Local Obligations Reserve Account to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Local Obligations on a timely basis. The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax could be delayed by bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting rights of creditors generally or by the laws of the State relating to judicial foreclosure. Further, should remedies be exercised under the federal bankruptcy laws against parcels in the Improvement Area, payment of the Special Tax may be subordinated to bankruptcy law priorities.

Thus, certain claims may have priority over the Special Tax in a bankruptcy proceeding even though they would not outside of a bankruptcy proceeding.

FDIC/Federal Government Interests in Properties
The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC"), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.

Under the Supremacy Clause of the United States Constitution, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the Improvement Area but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessmdnts. Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent 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 parity with the Special Taxes and preserve the federal government's mortgage interest. In Rust v. Johnson,597 F.2d I74 (1979), 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 enttty, 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.

Neither the Authority nor the District have 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 Special Taxes within the Improvement Area, and therefore expresses no view concerning the likelihood that the risks desuibed above will materialize while the Bonds are outstanding.

In the event that any financial institution making any loan which is secured by real property within the Improvement Area is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, then the ability of the Authority to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. 70

07/12/2022 Item No.11.

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 properly value. According to the Policy Statement, tne pntb *ilt puy its property tax obligations when they become due and payable and will pay claims for delinquent prodrry taxes as promptly as is consistent with sound business practice and the orderly administrati,on bf 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 undeistate 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 uny property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect befoie the-property became owned by the FDIC), the FDIC will pay those claims' The Policy Statement further p.ouiair that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's conient. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent.

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquir"r itr fee interest in the propetty, 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 Mello- Roos Aci uttd u special tax formula which determines the special tax due each year are specifically identified in the folicy 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. According to information available from the Sacramento County assessment roll, the FDIC does not currently own any of the property in the Improvement Area.

The Authority and the District are unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within the Improvement Area in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC io be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at foreclosure sale. Such an outcome could cause a draw on the reserve uc"ourrt foi the Local Obligations and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the Local Obligations and the Bonds.

Zoning and Land Use Decisions
The Special Taxes, from which funds for the payment of the Bonds are derived, are to be levied annually based upon the land use categories in effect for the property. Decisions made by the City Councii, which has control over zoning and land use decisions for property in the City, will affect the prospective use of the propeffy and, therefore, the tax base for the Special Tax. The Amended Rate and Method of Apportionment does not permit land use changes to reduce the tax base to below the Special Tax Requirement.

Ballot Initiatives and Measures
From time to time constitutional initiatives or other initiative measures may be adopted by State voters or voters of the City. For example, Measure W, adopted by City residents in Novembet 2004, required, among other things, that residents north of State Highway 50 not bear the cost for infrastructure and public facilities serving the Folsom Plan Area. The adoption of any such initiative in the future might place limitations on the ability of the State or any political subdivisions thereof, including the Authority 7l

07/12/2022 Item No.11.
or the City, to increase revenues or to increase appropriations, the ability of the landowners to complete their developments, or the ability of the District to collect the Special Tax.

Shapiro v. San Diego
On August 7, 2014, the California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in Shapiro v. San Diego City Council,777 Cal. Rptr. 2d 631,96 Cal. App. 4th 904 (2002). The case involved a Convention Center Facilities District (the "CCFD") established by the City of San Diego, much like a community facilities district established under the provisions of the Mello- Roos Act. The CCFD is comprised of all of the real property in all of the City of San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties.

At the election to authorize such special tax, the electorate was limited to owners of hotel properties and lessees of certain of such hotel properties. Thus, the election was a landowner election limited to owners and lessees of properties on which the special tax would be levied, and not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was based on Section 53326(c) of the Mello-Roos Ac! which generally provides that, if a special tax will not be apportioned in any taxyear on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax.

The Court held that the CCFD special tax election was invalid under the Califomia Constitution because Article XIII A, Section 4 thereof and Article XIII C, Section 2 thereof require that the electors in such an election be the registered voters within the district.

In the case of the CCFD, at the time of the election there were many, many registered voters within the CCFD (viz, all of the registered voters in the City of San Diego). There were no registered voters within the Improvement Area at the time of the election to authorize the Special Tax. In City of San Diego, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Mello-Roos Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court's holding does not apply to the Special Tax election in the Improvement Area. Moreover, Section 5334I of the Mello-Roos Act provides that any "action or proceeding to attack, review, set aside, void or annul the levy of a special tax...shall be commenced within 30 days after the special tax is approved by the voters." The Special Tax with respect to the Improvement Area was approved by the voters on May 26,2020. Based on Section 53341 of the Mello- Roos Act and its analysis of existing laws, regulations, rulings and court decisions, the District does not believe that a challenge to the Special Tax may now be brought.

Recent Changes to Federal Income Tax Law
H.R. 1 of the 115th U.S. Congress was enacted into law on December 22,2017 (the "Tax Act").

The Tax Act makes significant changes to many aspects of the Code. The District, the City, the Authority and the Developer cannot predict the effect that the Tax Act may have on the cost of home ownership, the price of homes in the Improvement Area, the rate at which homes in the Improvement Area are sold to individual homeowners by the Developer, the ability or willingness of homeowners to pay Special Tax or property taxes on Taxable Property within the Improvement Area, or the values contained in this Official Statement or in the Appraisal.

Risks of Real Estate Secured fnvestments Generally
The owners of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of Improvement Area, the supply of or 72

07/12/2022 Item No.11.
demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure, including as a result of tax reform; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species andhazardous materials) and fiscal policies; (iii) increased construction costs, workforce shortages, supply chain disruptions or other similar factors affecting the development, financing or marketing capabilities of the Developer; (iv) federal, state and local regulaiions, including environmental, land use, zoning and building requirements; and (v) natural disasters (including, without limitation, earthquakes, fires and floods), which may result in uninsured losses. There can be no assurance that land development operations within the Improvement Area will not be adversely affected by these risks.

No assurance can be given that the Developer or any other current or future homeowners within the Improvement Area will pay the Special Tax in the future or that they will be able to pay such Special Tax on a timely basis. gse (c- Bankruptcy" below, for a discussion of certain limitations on the District's ability to pursue judicial proceedings with respect to delinquent parcels. Further, many homes within the Improvement Area will have a higher-than-average price point as compared to other homes in the region, which may impact the absorption of the residential units within the Improvement Area.

Current Challenges to the Ilomebuilding Industry
The pace of homebuilding in the Improvement Area may be adversely affected by a variety of factors, including changes in economic conditions, interest rates, water shortages, and other similar factors, and recently including workforce shortages and supply chain disruptions. For example, obtaining garage doors and window shortages have recently been challenging for home builders generally' Additionally, some California municipalities have been experiencing a supply chain disruption for the electrical transformers needed for new development, having been advised in some cases of up to a2-yeat delay for new orders. The Developer is not currently aware of any anticipated electrical transformer supply chain disruptions for the development within the Improvement Area. However, no assurance can Ue given that supply chain disruptions for the materials needed to complete development within the Improvement Area will not occur.

Failure to Develop
Land development operations are subject to comprehensive federal, State and local regulations.

Approval is required from various agencies in connection with the layout and design of developments, the nuture and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. It is possible that the approvals necessary to complete development of all taxable property within the Improvement Area are not obtained on a timely basis or that litigation could be filed regarding approvals. Failure to obtain any such agency approval or satisff any such government requirement or any litigation concerning such agency approval or government requirement could adversely affect land development operations. In addition, current and future governmental restrictions, including, but not limited to, governmental policies restricting or controlling development within the Improvement Area, could be enacted, and future land use initiatives approved by the voters in the City could add more restrictions and requirements on development within the Improvement Area, which restrictions may increase the cost to develop the Improvement Area. One such governmental restriction is the requirement to install rooftop photovoltaic solar systems for residential buildings under three stories constructed starting in2020. Costs associated with the installation of solar to the homebuilders may reduce the willingness of homebuilders to construct homes and increased costs of those homes may decrease the willingness of homeowners to buy such homes. 73

07/12/2022 Item No.11.

Moreover, there can be no assurance that the means and incentive to conduct land development operations within the Improvement Area will not be adversely affected by a deterioration of the real estate market or economic conditions generally, future local, State and federal governmental policies relating to real estate development, the income tax treatment of real property ownership, acts of war or terrorism, or other factors.

A portion of the Taxable Property in the Improvement Area is presently being developed.

Undeveloped property is less valuable per acre than developed property, especially if there are no plans to develop such property or if there are severe restrictions on the development of such property, and therefore provides less security to the owners of the Bonds should it be necessary for the District to foreclose due to the nonpayment of the Special Taxes. Delays in any propefiy owner's ability to obtain discretionary approvals (including any delays caused by litigation) would in turn delay the construction of improvements and development of the Taxable Property within the Improvement Area. Furthermore, an inability to develop the land within the Improvement Area as currently proposed would result in slower rates of diversification of properly ownership within the Improvement Area. Concentration of ownership increases the risk of a failure to collect suffrcient Special Taxes to pay debt service on the Bonds, all other things being equal. The timely payment of Special Taxes levied on undeveloped property depends primarily upon the ability and willingness of owners of such properly to pay such taxes when due.

Certain infrastructure improvements are required before development in the Improvement Area can progress intract. The Phase 2 water infrastructure described under the heading "PROPOSED PROPERTY DEVELOPMENT-Development Entitlements-Water Supply" is anticipated to be needed before approximately 2,500 to 3,300 homes are occupied in the Folsom Plan Area. A slowdown in or cessation of the development of land within the Improvement Area could reduce the ability and willingness of such owners to make Special Tax payments, and could greatly reduce the value of such property in the event it has to be foreclosed upon to collect delinquent special taxes, See '(-S4nlffupfsy" above for a discussion of certain limitations on the ability of the District to pursue judicial foreclosure proceedings with respect to taxpayers with delinquent Special Taxes.

No Independent Review of Valuation or Viability of Completed Projects Properly within the Improvement Area is comprised of separate and distinct projects as described above. Payment of Special Taxes are inherently dependent upon the development within the Improvement Area, and, with respect to residential properties, the ability of the buyers of completed homes to pay. The Authorrty, the District, and the Underwriter have not reviewed any business plan for continued ownership, development and/or operation of the property within the Improvement Area.

Similarly, the Authority, the District and the Underwriter have not conducted any independent evaluation of the existing or projected economic viability or profitability of any of the plans for development, including review andlor evaluation of financial statements of any owner or developer of any parcel subject to the Special Tax. The information contained herein regarding the proposed development and the owners of the parcels within the Improvement Area has been supplied by such owners and the Underwriter has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of such information.

In the event an owner or developer experiences financial difficulties, including difficulties resulting from construction or operation of the development within the Improvement Area, the value of the affected parcel within the Improvement Area may decline andlor such owner or developer may elect to refrain from payment of future Special Taxes for such parcel. See also "-Failure to Develop." 74

07/12/2022 Item No.11.

Potential Impact of Gtobal Health Crises or Concerns
The ability or willingness of property owners to develop property in the Improvement Area, the speed at which property o*ni.r develop property in the Improvement Area, the ability or willingness of property owners to seliproperty in the Improvement Area, the speed at which property owners are ablg sef property in the Impioviment Area, the ability or willingness of property owners to pay the Special Tax on property in the Improvement Area when due, the value of the property in the Improvement Area, or the *ifity of tn" District to collect delinquent Special Taxes through judicial foreclosure could be adversely afiected by a global, national or localized outbreak of an infectious disease, such as COVID-19, a new strain of
"o.onuuirrrr,
or by the fear of such an outbreak. The construction industry in the United States relies heavily on international trade for myriad construction materials. A global, national or localized outbreak could impact the availability of workers in countries producing construction materials, potentially resulting in supply chain shutdowns, which may result in substantial construction delays and project cost overruns.

The spread of COVID-19 and the response to its spread has altered the behavior of businesses and people in a manner that has had and is continuing to have a negative impact on global and local ""ono*i"s,
and which has resulted in a volatile stock market response and a general disruption of financial markets in the United States and globally. In response to CoVID-19, California instituted a statewide stay-at-home order and many California counties issued similar orders. While many COVID 19 restrictions in California and its various counties have ceased or been eased, the same or additional restrictions could be reinstituted if the outbreak again worsens, due to the currently increasing spread of any variant of COVID-|9, or otherwise, or another similar event occurs. Essential services, including housing construction, were generally exempt from the orders and continued during the pandemic.

Howevir, the economic and financial impacts of the stay-at-home orders and the economic downturn related to COVID-i9 are predicted to last for multiple years. Executive and legislative efforts have also been made during the COVID-l9 pandemic and may be made again in the future that either require or allow county tax collectors to cancel or waive penalties, costs and other charges associated with the delinquent payment of property taxes and the Special Tax upon a showing of property owner hardship "u.rr"i
by the COVID-L9 pandemic or related or similar stay-at-home orders. These efforts may affect a property owner's willingness to pay the Special Taxes before they are delinquent.

These events and other factors resulting from such an outbreak, particularly if prolonged, could result in, or increase the likelihood of, the occurrence of certain of the other potential adverse effects described in this Official Statement, including those relating to declines in the value of property, the failure to complete the development of property, the inability to sell, lease and/or operate properly, the inability or unwillingness to pay the Special Tax, and delays in (or insufficient funds received from) the collecti,on of delinquent Special Taxes through judicial foreclosure. A future outbreak of COVID-19 or another infectious dir"u.e or the threat of any such outbreak could have similar or additional adverse effects. The Authority cannot predict the ultimate effects of the COVID-l9 outbreak or any future outbreak or potential future outbreak ofan infectious disease, or whether any such effects would have a material adverse effect on the ability to develop the Improvement Area as planned, the ability or willingness of property owners to pay Special Taxes when due, or the ability of the Authority to pay debt service on the Bonds when due.

Geologic, Topographic and Climatic Conditions
The value of the property in the Improvement Area in the future can be adversely affected by a variety of additional faitori, particularly those which may affect infrastructure and other public improvements and private improvements on propefi and the continued habitability and enjoyment of such private improviments. Such additional factors include, without limitation, geologic conditions such 75

07/12/2022 Item No.11.
as earthquakes, topographic conditions such as earth movements, landslides and floods and climatic conditions such as droughts and wildfire.

The occurrence of seismic activity in the Improvement Area could result in substantial damage to properties in the Improvement Area which, in turn, could substantially reduce the value of such properties and could affect the ability or willingness of the property owners to pay the Special Tax on their propefty.

The Improvement Area is not located in any existing special study zone delineated by the Chief of the Division of Mines and Geology of the State of California as an area of known active faults and is not otherwise known to be located within an area of any significant seismic activity. However, it may be expected that one or more of such conditions may occur and may result in damage to improvements of varying seriousness, that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the value of the property may decline.

In recent years, wildfires have caused extensive damage throughout the State. In some instances, entire neighborhoods have been destroyed. Several ofthe fires that occurred in recent years damaged or destroyed properly in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. In general, property damage due to wildfire could result in a significant decrease in the market value of property in the Improvement Area and in the ability or willingness of property owners to pay Special Taxes.

The Improvement Area is located within an area identified as a moderate ftre hazard severity zone. More information regarding Fire Hazard Severity Zones can be found at the California Department of Forestry and Fire Protection website athttps:llfrap.fire.ca.gov, though such website is not incorporated herein by reference. The development within the Improvement Area is subject to mitigation measures set forth in a fuel modification plan approved by the City Fire Department. The mitigation measures include, among others, limitations on the type of vegetation that may be planted within fuel modification zones established in open space areas along certain portions of the perimeter of the Improvement Area, minimum setback of structures and inigation requirements of the fuel modification zones. Maintenance of such zones is expected to initially be the responsibility of the properly owners but upon build-out of the Improvement Area and dedication of the open space to the City will be maintained by the City from funds provided through CFD 18. Homeowner's insurance is expected to be available to property owners within the Improvement Area, and the coverage provided by such insurance typically insures against fire damage, although there is no assurance that homeowners within the Improvement Area will purchase or maintain such insurance.

In the event of a wildfire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the Improvement Area. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the Improvement Area could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Folsom Dam, located on the American River within the jurisdictional boundaries of the City, was built in 1955 by the United States Army Corps of Engineers and is owned by the United States Bureau of Reclamation. An auxiliary spillway to enable the dam to more easily release water as it nears capacity was completed by the Army Corps of Engineers in October 2017. The City, together with the County and other local agencies, have established a hazard mitigation plan in the event of a dam failure. Geologic, topographic and climatic conditions, if severe, could result in damage to the dam which could further 76

07/12/2022 Item No.11.
cause damage to the sumounding region and may limit water supply for the City and the Improvement Area.

Endangered Species
During recent years, there has been an increase in activity at the State of California and federal level related to the possible listing of certain plant and animal species found in California as endangered species. An increase in the number of endangered species is expected to curtail development in a number of areas. The property within the Improvement Area contains protected habitat and species, including but not limited to Swainson's hawk and tri-colored blackbird foraging habitats and wetlands regulated by state and federal agencies. Foraging habitat mitigation credits have been satisfied by the Developer for all backbone projects and all Improvement Area project phases. At present, the property within the Improvement Area is not known to be inhabited by any other plant or animal species listed as threatened or endangered under either the State or federal endangered species acts or which either the Califomia Fish and Game Commission or the United States Fish and Wildlife Service has proposed for addition to the respective endangered species list. Notwithstanding this fact, new species are proposed to be added to the State and federal protected lists on a regular basis. Any action by the State or federal governments to protect species located on or adjacent to undeveloped property could negatively affect the developer's ability to complete development as planned. This, in turn, could reduce the likelihood of timely payment of the Special Tax, from which funds for the payment of the Bonds is derived, and would likely reduce the value of the land and the potential revenues available at a foreclosure sale for delinquent Special Taxes. See "CERTAIN RISKS TO BONDHOLDERS-Land Values."
Hazardous Substances
While governmental taxes, assessments, and charges are a common claim against the value of a parcel, other less common claims may be relevant. One of the most serious in terms of the potential reduction in the value of a parcel in the Improvement Area is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions 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 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 properly 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 parcels in the Improvement Area be affected by ahazardous 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.

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 financial and legal liability of a property owner to develop the affected parcel or other parcels, as well as the value of the property that is realizable upon a delinquency and foreclosure.

The appraised value of property in the Improvement Area does not take into account the possible reduction in marketability and value of any of the parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. While the District is not aware that the owner (or operator) of any of parcels has such a current liability with respect to any of the parcels, it is possible that such liabilities do currently exist and that the District is not aware of them.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel ofa substance presently classified as hazardous but 77

07/12/2022 Item No.11.
which 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 wh[h 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 a parcel within the Improvement Area that is realizable upon a delinquency.

Naturally Occurring Asbestos
California Air Resource Board ("CARB") adopted the Airborne Toxic Control Measure ("ATCM") for Construction, Grading, Quarrying and Surface Mining Operations. This statewide regulation is applicable to grading or any other projects disturbing soil in areas of California where asbestos may exist, as determined by the California Geological Survey ("CGS"). The ATCM applies to any size construction project although there are additional notification requirements for projects that exceed one acre. Areas and parcels moderately likely to contain naturally occurring asbestos are located in the eastern parts of Sacramento County, including in the City.

Natural weathering or human disturbance can break the asbestiform minerals down to microscopic fibers, which are easily suspended in air. There is no health threat if asbestos fibers in soil remain undisturbed and do not become airborne. When inhaled, these thin fibers irritate tissues and resist the body's natural defenses. Asbestos causes cancers of the lung (such as mesothelioma) and the lining of internal organs, asbestosis, and other diseases that inhibit lung function. Scientists consider certain types of asbestos fibers (i.e., tremolite fibers and similarly structured amphibole asbestos particles) that are frequently identified in the City to be more potent than other types in causing mesothelioma.

The EIR for the Folsom Plan Area required all new development to undertake a site investigation to determine the presence of naturally occurring asbestos and, if necessary, prepare and implement an asbestos dust control plan. The Developer has undertaken an asbestos dust control plan with respect to development within the Improvement Area and the costs of development in this Official Statement reflect the costs associated with asbestos mitigation.

The health concerns associated with the presence of naturally occurring asbestos in the Improvement Area may adversely affect the marketability of property in the area.

LEGAL MATTERS
The validity of the Bonds, the Local Obligations and certain other legal matters are subject to the approving legal opinion of Onick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority ("Bond Counsel"). Bond Counsel has not undertaken any responsibility for the accuracy, completeness or fairness of this Official Statement and expresses no opinion as to the matters set forth herein. Certain legal matters will be passed upon for the District and the Authority by the City Attorney. Certain legal matters relating to the Local Obligations will be passed upon by Orrick, Henington & Sutcliffe LLP, as bond counsel to the District. The fees of Bond Counsel and Disclosure Counsel are contingent upon the issuance ofthe Bonds.

TAX MATTERS
In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, the accuracy of certain representations and compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt 78

07/12/2022 Item No.11.
from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. Bond Counsel expresses no opinion regarding any other tax consequences related to the ownership or disposition of, or the amount, accrual, or receipt of interest on, the Bonds. A complete copy of the proposed form of opinion of Bond Counsel is set forth as APPENDIX E hereto.

To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes and exempt from State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Beneficial Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of Beneficial Owners who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public.

Bonds purchased, whether at original issuance or otherwise, for an amount higher than their principal amount payable at maturity (or, in some cases, at their earlier call date) ("Premium Bonds") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, the amount of tax-exempt interest received, and a Beneficial Owner's basis in a Premium Bond, will be reduced by the amount of amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances.

The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The Authority, the City and the District have made certain representations and covenanted to comply with certain restrictions, conditions and requirements designed to ensure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel's attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds.

Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events or matters.

Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the Bonds may 79

07/12/2022 Item No.11.
otherwise affect a Beneficial Owner's federal, state or local tax liability. The nature and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner or the Beneficial Owner's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences.

Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, in whole or in part, 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 or clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding the potential impact of any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel's judgment as to the proper treatment of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service ("IRS") or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Authority, the City or the District, or about the effect of future changes in the Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Authority, the City and the District have covenanted, however, to comply with the requirements of the Code.

Bond Counsel's engagement with respect to the Bonds ends with the issuance of the Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the Authority, the City, the District or the Beneficial Owners regarding the tax-exempt status of the Bonds in the event of an audit examination by the IRS. Under current procedures, Beneficial Owners would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the Authority, the City or the District legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the Bonds, and may cause the Authority, the City, the District or the Beneficial Owners to incur significant expense.

Payments on the Bonds generally will be subject to U.S. information reporting and possibly to "backup withholding." IJnder Section 3406 of the Code and applicable U.S. Treasury Regulations issued thereunder, a non-corporate Beneficial Owner of Bonds may be subject to backup withholding with respect to "reportable payments," which include interest paid on the Bonds and the gross proceeds of a sale, exchange, redemption, retirement or other disposition of the Bonds. The payor will be required to deduct and withhold the prescribed amounts if (i) the payee fails to furnish a U.S. taxpayer identification number ("TIN") to the payor in the manner required, (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect, (iii) there has been a "notified payee underreporting" described in Section 3a06(c) ofthe Code or (iv) the payee fails to certiff under penalty ofperjury thatthe payee is not subject to withholding under Section 3a06(a)(1)(C) of the Code. Amounts withheld under the backup withholding rules may be refunded or credited against a Beneficial Owner's federal income tax liability, if any, provided that the required information is timely furnished to the IRS. Certain Beneficial Owners (including among others, corporations and certain tax-exempt organizations) are not subject to backup withholding. The failure to comply with the backup withholding rules may result in the imposition of penalties by the IRS.
80

07/12/2022 Item No.11.

NO LITIGATION
At the time of delivery of and payment for the Bonds and the Local Obligations, the Authority and/or the District, as applicable, will certit, that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court or regulatory agency, public board or body pending or threatened against the Authority or the District affecting their existence, or the titles of their respective officers, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the Local Obligations, the application of the proceeds thereof in accordance with the Trust Agreement, or the collection or levy of the Special Taxes to pay the principal of and interest on the Local Obligations, or in any way contesting or affecting the validity or enforceability of the Local Obligations and the Bonds, the Trust Agreement, the Local Obligations Indenture, the Bond Purchase Contract entered into among the Authority, the District and the Underwriter or any other applicable agreements or any action of the Authority or the District contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the Authority or the District or their authority with respect to the Bonds or the Local Obligations or any action of the Authority or the District contemplated by any of said documents, nor, to the knowledge of the Authority, is there any basis therefor.

NO RATING
The Authority has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. The absence of a rating may significantly adversely affect the ability of the owner of Bonds to sell such Bonds.

MUNICIPAL ADVISOR
The District has retained Fieldman, Rolapp & Associates, Inc. as municipal advisor (the "Municipal Advisor") with respect to the issuance of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement.

Compensation of the Municipal Advisor relating to the issuance of the Bonds is contingent upon the issuance of the Bonds.

UNDERWRITING
The Bonds are being purchased by Piper Sandler & Co. (the "Underwriter") pursuant to a Bond Purchase Contract (the "Purchase Contract"), by and among the Authority, the District and the Underwriter. Pursuant to the Purchase Contract, the Underwriter has agreed to purchase all of the Bonds from the Authority at a purchase price of $ being the aggregate principal amount of the Bonds of $ fplus/less] [anl a net] original issue [premium/discount] of $- and less an Underwriter's discount of $ The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside front cover page hereof.

CONTIIYUING DISCLOSURE
The District
The District has covenanted for the benefit of the Owners to provide certain financial information and operating data relating to the Bonds by not later than nine months following the end of the District's 81

07/12/2022 Item No.11.
fiscal year (which fiscal year currently ends June 30) commencing with the report for the 202I-22 Fiscal Year (the "Annual Repoft"), which is due April 1, 2023, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed with EMMA, and the first Annual Report may include the filing of or reference to this Official Statement. The specific nature of the information to be contained in the Annual Report or the notices of enumerated EVENTS iS CONtAiNCd WithiN APPENDIX D-"FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS." These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(bX5).

The District is committed to complete and accurate continuing disclosure in accordance with its continuing disclosure obligations under the federal securities laws, including rules and regulations promulgated by the SEC and the MSRB, as those rules may be amended from time to time. However, during the past five years, there was a specific instance where complete and accurate disclosure was not achieved by the City or its related agencies when a notice of listed event for a ratings upgrade on October 12, 2018, was not timely filed for certain of the Folsom Public Financing Authority's water revenue bonds. The description of this instance of non-compliance in this Official Statement is not an acknowledgement that any such non-compliance was material. Further, the City made a remedial filing to address this instance of non-compliance and has policies and procedures in place in order to achieve compliance with its continuing disclosure undertakings.

The Developer
Pursuant to a Continuing Disclosure Certificate to be executed by the Developer in connection with the issuance of the Bonds, the Developer will covenant for the benefit of the Bondholders to provide certain information relating to the Developer and its development within the Improvement Area no later than March 3l and September 30 in each year, commencing March 31,2023 (the "Disclosure Reports"), and to provide notices of the occurrence of certain enumerated events until the obligation to so provide such information, data and notices is otherwise terminated in accordance with the provisions of such Continuing Disclosure Certificate. A form of the Continuing Disclosure Certificate for the Developer is included in APPENDIX D-"FORMS OF CONTINUING DISCLOSURE LINDERTAKINGS." The Disclosure Reports are to be filed with EMMA.

The Authority and the District have not considered, or reached any conclusion as to, whether or not the Developer is an obligated person under the Rule. The Authority takes no responsibility for the form or content or for the adequacy of the Developer's Continuing Disclosure Certificate for its intended purpose.

The obligation of the Developer will terminate upon the occurrence of certain events as set forth in the Developer's Continuing Disclosure Certificate, including at such time as the Developer and its Affiliates (as defined in the Continuing Disclosure Agreement), in the aggregate, own less than lI44l ot the residential lots (or land planned to be subdivided into [144] residential lots) within the Improvement Area subject to the Special Tax.

Prior Continuing Disclosure Compliance: [The Developer's division will be responsible for compliance with its obligations under the Developer's Continuing Disclosure Certificate.

The Developer represents that, based on a review of prior continuing disclosure obligations fin Northem California, encompassing the Developer' s divisionl, the Developer has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notices of listed events with respect to community facilities dishict or assessment district bond issues in fNorthern] California within the past five years.l 82

07/12/2022 Item No.11.

MISCELLAIIEOUS
This Official Statement is not to be construed as a contract or agreement among the Authority, the District and the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. The information and expressions of opinion herein are subject to change without notice and neither the delivery of the Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority, the City or the Dishict since the date hereof.

References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of such documents and reports are available for inspection at the office of the Finance Director, City of Folsom, City Hall, 50 Natoma Street, Folsom, California 95630.
83

07/12/2022 Item No.11.

The execution and delivery of the Official Statement by the Authority and the District has been duly authorizedby the Board of Directors of the Authority and the City Council, respectively.

FOLSOM RANCH F'INAIICING AUTIIORITY
Treasurer

CITY OF F'OLSOM COMMUNITY FACILITIES
DrsTRrcT NO. 23 (FOLSOM RANCTI)
City of Folsom Finance Director
Signature Page to Official Statement

07/12/2022 Item No.11.

APPENDIX A
AMEI\DBD RATE, METHOD OF'APPORTIONMENT AND MANNER OF

COLLECTION OF SPECIAL TAX
A-l

07/12/2022 Item No.11.

APPENDIX B

ECONOMIC AND DEMOGRAPHIC INF'ORMATION RELATING TO THE CITY OF FOLSOM B-1

07/12/2022 Item No.11.

APPENDIX C

SUMMARY OF PRINCIPAL DOCUMENTS
c-1 Page 421
07/12/2022 Item No.11.

APPENDIX D
F'ORMS OF CONTINUING DISCLOSI]RE UNDERTAKINGS
DISTRICT CONTII\UING DISCLOSURE CERTIFICATE
THIS DISTRICT CONTINUING DISCLOSIIRE CERTIFICATE (this "Disclosure Certificate"), dated as of 2022, is executed and delivered by the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "District") relative to the Folsom Ranch Financing Authority (the "Authority") in connection with the issuance by the Authority of the Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022 (the "Bonds"). The Bonds are being issued pursuant to a Trust Agreement (the "Trust Agreement"), among the Dishict, the Authority and U.S. Bank Trust Company, National Association (the "Trustee"). The District covenants and agrees as follows.

SECTION 1, Purpose of the Disclosure Certificate. The Disclosure Certificate is being executed and delivered by the Dishict for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(bX5).

SECTION 2. Definitions. In addition to the definitions set forth in the Trust 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 District pursuant to, and as described in, Sections 3 and 4 hereof.
"Annual Report Date" means the date in each year that is nine months after the end of the District's fiscal year, which date, as of the date of this Disclosure Certificate, is April 1. "Dissemination Agent" shall mean NBS, or any successor Dissemination Agent designated in writing by the District and which has filed with the District a wriffen acceptance of such designation. "EMMA System" means the MSRB's Electronic Municipal Market Access system, or such other electronic system designated by the MSRB.
"Financial Obligation" means, for purposes of the Listed Events set out in Section 5(a)(10) and Section 5(bX7), 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 term "Financial Obligation" shall not include Municipal Securities (as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
"Listed Events" means any of the events listed in subsection (a) of Section 5 hereof. "MSRB" means the Municipal Securities Rulemaking Board, or any successor thereto. "Official Statement" means the Official Statement, dated 2022, relating to the Bonds
"Participating Underwriter" means the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

D-1 Page 422
07/12/2022 Item No.11.
"Rule" means Rule 15c2-12(bx5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 7934, as the same may be amended from time to time.

SECTION 3. Provision of Annual Reports.
(u) The District shall, or shall cause the Dissemination Agent to, provide to the MSRB through the EMMA System, in an electronic format and accompanied by identifuing information all as prescribed by the MSRB, an Annual Report which is consistent with the requirements of Section 4 hereof, not later than the Annual Report Date, commencing with the report for the 2021-22 Fiscal Year. 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 hereof; provided, however, that the audited financial statements of the District may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if not available by that date. If the District's fiscal year changes, it shall, or shall instruct the Dissemination Agent to, give notice of such change in the same manner as for a Listed Event under subsection (e) of Section 5 hereof. The first Annual Report may include the filing of or reference to the Official Statement. (b) Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the District shall provide the Annual Report to the Dissemination Agent.
(c) If the Dissemination Agent is other than the District, then not later than fifteen (15) Business Days prior to said date, the District shall provide the Annual Report to the Dissemination Agent.

If the District is unable to provide the Annual Report to the MSRB by the Annual Report Date, the Dishict shall send a notice to the MSRB in substantially the form attached as Exhibit A to the Disclosure Certificate.
(d) The Dissemination Agent shall:
(i) provide any Annual Report received by it to the MSRB, as provided herein; and (ii) file a report with the District certifuing that the Annual Report has been provided pursuant to this Disclosure Certificate and stating the date it was so provided.

SECTION 4. Content of Annual Reports. The District's Annual Report shall contain or incorporate by reference the following:
(a) The District's audited financial statements, if any, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District's audited financial statements, if any, are not available by the time the Annual Report is required to be filed pursuant to subsection (a) of Section 3 hereof, the Annual Report shall contain unaudited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Annual Report when they become available. If the District's financial statement is included or consolidated with the financial statement for the City of Folsom (the "Crty"), then the District shall file the City's audited financial statements as its own. (b) The following information:
(i) The principal amount of Bonds and any bonds secured by Additional Local Obligations (as defined in the Official Statement) Outstanding as of the December 3l next preceding the Annual Report Date along with debt service schedules for the Bonds and any bonds D-2 Page 423
07/12/2022 Item No.11.
secured by Additional Local Obligations (as defined in the Official Statement) Outstanding as of such date;
(ii) The balance in each reserve account for the Local Obligations, and a statement of the required bond reserve amount, as of the December 31 next preceding the Annual Report Date; (iii) The total assessed value of all parcels within the Improvement Area on which the Special Taxes are levied, as shown on the assessment roll of the Sacramento County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value-to-lien ratios therefor based on special tax and assessment debt, either by individual parcel or by categories (e.g., "below 3i1," "3:l to 4:1" etc'); (iv) The Special Tax delinquency rate for the Improvement Area as of the December 31 next preceding the Annual Report Date; the number of parcels within the Improvement Area delinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date; the amount of each delinquency; the length of time delinquent and the date on which foreclosure was commenced, or similar information pertaining to delinquencies deemed appropriate by the District; provided, however, that parcels with aggregate delinquencies of $1,000 or less (excluding penalties and interest) may be grouped together and such information may be provided by category;
(v) The status of foreclosure proceedings and a summary of the results of any foreclosure sales in the Improvement Area as of the December 31 next preceding the Annual Report Date;
(vi) The identity of any property owner, representing more than 5%o of the Special Tax levy, delinquent in payment of special taxes as of the December 31 next preceding the Annual Report Date;
(vii) All tentative and final maps approved and/or recorded within the Improvement Area, describing the gross acres, the planned commercial acres and the number and type of planned residential dwelling units;
(viii) The number of new building permits issued and a description of the purpose of such permits (e.g., new single-family, new multi-family, new commercial, new industrial); (ix) A land ownership summary listing the top ten Special Tax payers for the Improvement Area, as shown on the assessment roll of the Sacramento County Assessor last equalized prior to the December 31 next preceding the Annual Report Date; and (x) For the current Fiscal Year, the amount of the Effective Tax Rate Evaluation Maximum Facilities Special Tax, the Maximum Special Tax, the actual Facilities Special Tax levied within the Improvement Area and the actual Special Tax levied within the Improvement Area, with such amounts reported separately for Developed Property, Small Lot Final Map Property and Large Lot Property; provided, however, that once all Taxable Property within the Improvement Area is Developed Property, the Maximum Special Tax and the actual Facilities Special Tax and the actual Special Tax levied may each be shown on an aggregate basis in the Annual Report. For the purposes of this subparagraph (x), all capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Amended Rate and Method of Apportionment for the Improvement Area.

D-3

07/12/2022 Item No.11.

In addition to any of the information expressly required to be provided under this Section, as set forth above, the District shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

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

SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section, the District shall give notice, or cause notice to be given, not less than ten Business Days after the occurrence of any of the following events with respect to the Bonds:
(D Principal and interest payment delinquencies.
(iD Unscheduled draws on debt service reserves reflecting financial difficulties. (iii) Unscheduled draws on credit enhancements reflecting financial difficulties. (iv) Substitution of credit or liquidity providers, or their failure to perform. (v) 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 Bonds, or other material events affecting the tax-exempt status of the security. (vi) Defeasances.
(vii) Tender offers.
(viii) Bankruptcy, insolvency, receivership or similar event of the obligated person.

Note: For the purposes of the event identified in subparagraph (ix), the event is considered to occur when any of the following occur: the appointment of a receiver, trustee or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of rcorganization, €urangement or liquidation by a court or governmental authority having supervision orjurisdiction over substantially all ofthe assets or business of the obligated person.
(ix) Rating changes.

D-4

07/12/2022 Item No.11.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial Obligation of the District, any of which reflect financial difficulties,
(b) The District shall give notice, or cause notice to be given, not less than ten Business Days after the occurence of any of the following events with respect to the Bonds, if material:
(D Modifications to rights of Bond holders.
(ii) Bond calls.
(iii) Release, substitution or sale of properly securing repayment of the Bonds. (iv) Non-paymentrelateddefaults.
(v) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the 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.
(vi) Appointment of a successor or additional trustee or the change of name of a trustee.
(viD Incurrence of a Financial Obligation of the District, or agreement to covenants, events of default, remedies, priority rights, or similar terms of a Financial Obligation of the District, any of which affect Bondholders.
(c) Whenever the District obtains knowledge of the occuffence of a Listed Event described in subsection (b) above, the District shall determine if such event would be material under applicable federal securities laws.
(d) If the District learns of the occuffence of a Listed Event described in subsection (a) of this Section, or determines that knowledge of a Listed Event described in subsection (b) of this Section would be material under applicable federal securities laws, the Dishict shall notiff the Dissemination Agent thereof in writing and instruct the Dissemination Agent to report the occurrence pursuant to subsection (e) of this Section. If in response to a request under subsection (b) of this Section, the District determines that the Listed Event would not be material under applicable Federal securities law, the District shall so notiff the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (e) ofthis Section. (e) If the Dissemination Agent has been instructed by the District to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occuffence with the MSRB through the EMMA System. Notwithstanding the foregoing, notice of Listed Events described in paragraph (vii) of subsection (a) ofthis Section and paragraph (ii) ofsubsection (b) ofthis Section need not be given under this subsection any earlier than the notice (ifany) ofthe underlying event is given to holders ofaffected Bonds pursuant to the Trust Agreement.

SECTION 6. Termination of Reporting Obligation. The District's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give D-5

07/12/2022 Item No.11.
notice of such termination in the same manner as for a Listed Event under subsection (e) of Section 5 hereof.

SECTION 7. Dissemination Agent. The District 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 such Dissemination Agent, with or without appointing a successor Dissemination Agent.

The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the District pursuant to the Disclosure Certificate.

SECTION 8. Amendmenl Waiver. Notwithstanding any other provision of this Disclosure Certificate, the District 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 subsection (a) of Section 3 hereof, Section 4 hereof or subsections (a) and (b) of Section 5 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver (i) is approved by Owners of the Bonds in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the annual financial information 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 specifuing the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial statements or information, in order to provide information to investors to enable them to evaluate the ability of the District 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 given in the same manner as for a Listed Event under subsection (e) ofSection 5 hereof.

SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District 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 District 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 D-6

07/12/2022 Item No.11.

Certificate, the District 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 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of outstanding Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under the Disclosure Certificate. A default under the Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under the Disclosure Certificate in the event of any failure of the District to comply with the Disclosure Certificate shall be an action to compel performance.

SECTION 11. Duties" Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee under the Trust Agreement. The Dissemination Agent shall not be responsible for the form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Certificate. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnifr 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 obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

SECTION 13. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the District has executed this Disclosure Certificate as of the date first above written.

CITY OF FOLSOM COMM'UNITY
FACILITIES DISTRICT NO. 23

G'OLSOM RANCTT)
By
D-7

07/12/2022 Item No.11.

EXHIBIT A
NOTICE OF FAILURE TO FILE AI\ITUAL REPORT
Folsom Ranch Financing AuthorityName of Issuer:

Name of Issue: Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022
Date of Issuance: 2022
NOTICE IS TIEREBY GIVEN that the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "District") has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate, dated 2022, executed by the District for the benefit of the Holders and Beneficial Owners of the above-referenced bonds. [The Dishict anticipates that the Annual Report will be filed by Dated

CITY OF F'OLSOM COMMUNITY
FACILITIES DISTRICT NO. 23
(FOLSOM RANCTT)
By:

Finance Director of the City of Folsom
l
D-8

07/12/2022 Item No.11.

CONTII\UING DISCLOSURE CERTIF'ICATE - HOME BUILDER
This Continuing Disclosure Certificate - Home Builder (the "Disclosure Certificate") dated as of , 2022, is executed and delivered by Toll West Inc., a Delaware corporation (the "Developer") in connection with the issuance of $ aggregate principal amount of Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022 (the "Bonds"). The Bonds are being issued pursuant to a Trust Agreement, dated as of August I,2022 (the "Trust Agreement"), among the Folsom Ranch Financing Authority (the "Issuer"), the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "District") and U.S. Bank Trust Company, National Association, as hustee (the "Trustee").

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Developer for the benefit of the holders and beneficial owners of the Bonds. The Developer acknowledges that the Issuer and the District have undertaken no responsibility with respect to any reports, notices or disclosures provided or required under this Disclosure Certificate, and has no liability to any person, including any holder or beneficial owner of the Bonds, with respect to this Disclosure Certificate.

SECTION 2. Definitions. In addition to the definitions set forth in the Trust 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:
"Afftliate" shall mean, with respect to the Developer, any person directly (or indirectly through one or more intermediaries) that exercises managerial control over the Developer or that is under managerial control of the Developer, 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 Properly, or to the Developer's ability to pay the applicable Special Tax obligation levied on the Propeffy owned by it when due). "Assumption Agreement" means an agreement containing terms substantially similar to this Disclosure Certificate, whereby a Major Developer agrees to provide Semi-Annual Reports and notices of significant events with respect to the portion of the Property owned by such Major Developer and its Affiliates, and with respect to the improvements or payments necessary to cause the Planned Development Stage to be reached that such Major Developer, or an Affiliate thereof, intends or is obligated (contractually or otherwise) to make or cause to be made. "Bonds" means the $ Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series2022.
"Developer" means Toll West Inc., a Delaware corporation. "Development Plan" means with respect to a Major Developer, the specific improvements such Major Developer intends to make, or cause to be made, in order for the Planned Development Stage to be reached, and the time frame in which such improvements are intended to be made; the Developer's Development Plan, as of the date hereof, is described in the Official Statement under the caption "PROPOSED PROPERTY DEVELOPMENT-Development Plan and Status of Development." "Disclosure Certificate" means this Disclosure Certificate as the same may be amended from time D-9
to time

07/12/2022 Item No.11.
"Dissemination Agent" means initially, the Developer, and any successor Dissemination Agent designated in writing by the Developer and which has filed with the District a written acceptance of such designation.
"District" means City of Folsom Community Facilities District No. 23 (Folsom Ranch), as the same may be modified by the City Council of the City from time to time. "Event of Bankruptcy" means, with respect to a Person, that such Person files a petition or institutes a proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects ofbankruptcy or insolvency, or under any amendment ofsuch act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby such Person asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of such Person's debts or obligations, or offers to such Person's creditors to effect a composition or extension of time to pay such Person's debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of such Person's debts, or for any other similar relief or if any such petition or any such proceedings of the same or similar kind or character is filed or instituted or taken against such Person, or if a receiver of the business or of the property or assets of such Person is appointed by any court, or if such Person makes a general assignment for the benefit of such Person's creditors. "Financing Plan" means, with respect to a Major Developer, the method by which such Major Developer intends to finance its Development Plan, including specific sources of funding for such Development Plan; the Developer's Financing Plan, as of the date hereof is described in the Official Statement under the caption "PROPOSED PROPERTY DEVELOPMENT - Development Plan of Finance."
"Improvement Area" means Improvement Area No. 3 of the Dishict. "Listed Event" means any of the events listed in Section 5 hereof. "Major Developer" means, as of any date of determination, any owner of land (which owns itself or through any Affiliates), who owns [144] or more of the residential lots (or land expected to be subdivided into [44] or more residential lots) in the Improvement Area subject to the Special Tax. "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission as a repository of disclosure information.

Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http : / / emma. msrb. org.
"Official Statement" means the final, executed Official Statement relating to the Bonds. "Participating Underwriter" shall mean Piper Sandler & Co., the original underwriter of the Bonds
"Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a govemment or political subdivision thereof. "Planned Development Stage" means the stage of development to which the Developer intends to develop the Property, as described in the Off,rcial Statement, which is the construction of finished homes.

D-10 Page 431
07/12/2022 Item No.11.
o'Properly" means, as of the date of determination, collectively, the real property within the boundaries of the Improvement Area that (i) is owned by the Developer or any Affiliate thereof and (ii) the Developer or any Affiliate thereof has sold to a Major Developer who has not assumed the obligations under this Disclosure Certificate pursuant to an Assumption Agreement. Property as of any date of determination does not include real property within the boundaries of the Improvement Area that has been conveyed to individual homeowners or any real properly that is the subject of an Assumption Agreement. o'semiannual Report" shall mean any Semiannual Report provided by the Developer on or prior to March 31 and September 30 of each year, commencing with the Semiannual Report due March 31,2023, pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "special Taxes" means the special taxes levied on the Taxable Property within the Improvement Area.
"State" shall mean the State of California.
"Taxable Property" means the real property within the boundaries of the Improvement Area that is not exempt from the Special Taxes authorized to be levied in the Improvement Area. "Trust Agreement" means the Trust Agreement, dated as of August l, 2022, among the Issuer, the District and the Trustee, and as fuither amended and supplemented from time to time. "Trustee" means U.S. Bank Trust Company, National Association, as trustee under the Trust Agreement, or any successor as trustee.

SECTION 3. Provision of Semiannual Reports. So long as the Developer's obligations hereunder have not been terminated pursuant to Section 7, the Developer shall, or shall cause the Dissemination Agent (if the Dissemination Agent is other than the Developer) to, provide to the MSRB a Semiannual Report which is consistent with the requirements of Section 4, not later than March 31 and September 30 of each year, commencing March 3I,2023. If, in any year, March 31 or September 30 falls on a Saturday, Sunday or holiday, such deadline shall be extended to the next following business day.

The Semiannual Report must be submitted in electronic format, accompanied by such identiffing information as is prescribed by the MSRB, and may be submitted as a single document or as separate documents comprising apackage, and may include by reference other information as provided in Sections 4 or 5 hereof.

SECTION 4. Content of Semiannual Reports. The Developer's Semiannual Report shall contain or incorporate by reference the following information:
(a) If information regarding such Major Developer has not previously been included in the Official Statement or a more recently filed Semiannual Report, the Development Plan and Financing Plan of such Major Developer or, if information regarding such Major Developer has previously been included in the Official Statement or a more recently filed Semiannual Report, a description of the progress made in the Development Plan of such Major Developer since the date of such information and a description of any significant changes in such Development Plan and the Financing Plan and the causes or rationale for such changes.
(b) Identification of the conveyance by the Developer of any portion of the Property to an entity that is not an Affiliate of the Developer, the result of which conveyance is to cause such transferee to become a Major Developer.
(c) The number of building permits issued with respect to the Property D-l1 Page 432
07/12/2022 Item No.11.
(d) The number of residential lots within the Property that have not reached the Planned Development Stage and sold (closed escrow) by the Developer since the date of the Official Statement or a more recent Semiannual Report, and, if any such lots were sold to a Major Developer, the identity of the Major Developer.
(e) The number of finished homes within the Property sold and conveyed to individual homeowners by the Developer.
(0 Any material amendments to land use entitlements for the Property, if such amendments would prevent or significantly delay the implementation of the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.

The Developer's Semiannual Reports required to be provided under Section 4 hereof must be filed in accordance with Section 3.

SECTION 5. Reporting of Significant Events. Pursuant to the provisions of this Section 5, the Developer shall promptly give, or cause to be given, notice of the occuffence of any of the following events with respect to the Developer:
(a) Any failure of the Developer, or any Affiliate of the Developer owning any Property, to pay prior to delinquency any property taxes or assessments due with respect to the Property (to the extent the responsibility of the Developer or any such Affiliate), to the extent such failure is not promptly cured upon discovery thereof.
(b) Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds that could have a material adverse effect on the Developer's most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning any Property, to pay the Special Taxes with respect to the Property prior to delinquency (to the extent the responsibility of the Developer or any such Affiliate).
(c) The occurrence of an Event of Bankruptcy with respect to the Developer, or any Affiliate owning any Property, that could reasonably be expected to have a material adverse effect on the Developer's most recently disclosed Financing Plan or Development Plan or on the ability of the Developer, or any Affiliate of the Developer owning Property, to pay Special Taxes with respect to the Property prior to delinquency (to the extent the responsibility of the Developer or any such Affiliate). (d) Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on the Property, if such preconditions would prevent or significantly delay the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.
(e) Any previously undisclosed legislative, administrative or judicial challenges to development on the Property, if such challenges would prevent or significantly delay the Developer's Development Plan as described in the Official Statement or a more recently filed Semiannual Report.

Whenever the Developer obtains knowledge of the occulrence of a Listed Event, the Developer shall as soon as possible determine if such event would be material under applicable federal securities laws. If the Developer determines that knowledge of the occuffence of a Listed Event would be material under applicable federal securities laws, the Developer shall promptly file a notice of the occurrence of D-12 Page 433
07/12/2022 Item No.11.
such Listed Event with the MSRB in electronic format, accompanied by such identiffing information as is prescribed by the MSRB.

SECTION 6. Assumption of Obligations. If any portion of the Properly owned by the Developer, or any Affiliate of the Developer, is conveyed such that, upon such conveyance, such new owner will be a Major Developer, the obligations of the Developer under this Disclosure Certificate with respect to the Property transferred by the Developer shall be assumed by such Major Developer pursuant to an Assumption Agreement.

SECTION 7. Termination of Reporting Obligation. All of the Developer's obligations under this Disclosure Certificate shall terminate upon the earliest to occur of (a) the legal defeasance, prior redemption or payment in full of all the Bonds, (b) the date on which (i) the Developer is no longer a Major Developer, or (i) all of the Developer's obligations are assumed under one or more Assumption Agreements entered into pursuant to Section 6 hereof, or (iii) the date on which all Special Taxes levied on the Property owned by the Developer and its Affiliates are paid or prepaid in full. Upon the occurrence of any such termination prior to the final maturity of the Bonds, the Developer shall give notice of such termination in the same manner as for a Listed Event under Section 5 hereof.

SECTION 8. Amendment: Waiver. Notwithstanding any other provision hereof, the Developer may amend provisions of this Disclosure Certificate and any provision hereof may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3, 4 or 5 hereof, it may be made in connection with a change in circumstances that arises from a change in legal requirements, change in law; and
(b) The proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of holders, or (ii) does not, in the opinion of bond counsel approved by the District, materially impair the interests of the holders or beneficial owners of the Bonds.

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

SECTION 10. Dissemination Agent. The Developer 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 such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days' written notice to the Developer. The Developer shall be responsible for paying the fees and expenses of the Dissemination Agent.

SECTION 11. Default. In the event of a failure of the Developer to comply with any provision of this Disclosure Certificate, 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 Developer to comply with its obligations under this Disclosure Certificate. A default under this D-13 Page 434
07/12/2022 Item No.11.

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

SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Developer, the Participating Underwriter, the District and holders and beneficial owners from time to time ofthe Bonds, and shall create no rights in any other Person.

SECTION 13. Notices. Any notices or communications to the Developer and the other parties described herein may be given as set forth in Exhibit A hereto or such other address that shall be specified by the Developer or the other parties described herein from time to time.

SECTION 14. Governing Law. This Disclosure Certificate and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed this Disclosure Certificate as of the day and year written above.

Toll West Inc., a Delaware Corporation
By
D-t4 Page 435
07/12/2022 Item No.11.

E)GIIBIT A TO CONTINUING DISCLOSURE CERTIFICATE - HOME BUILDER Any notices or communications to the Developer or the other parties described in the Continuing Disclosure Certificate - Home Builder may be given.as follows:

To the Developer: Toll West Inc.

To the Issuer:

Attention:

Email:

Phone
To the Dissemination
Agent:

Attention:

Email:

Phone:

To the Participating
Underwriter:

Attention:

Email:

Phone:

D-15 Page 436
07/12/2022 Item No.11.

APPEI\DIXE
PROPOSED F'ORM OF'OPINION OF'BOI\D COUNSEL
Folsom Ranch Financing Authority
Folsom, California
Folsom Ranch Financing Authority
City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3
Special Tax Revenue Bonds. Series 2022
(Final Opinion)
Ladies and Gentlemen:

We have acted as bond counsel to the Folsom Ranch Financing Authority (the "Issuer") in connection with the issuance of $ aggregate principal amount of Folsom Ranch Financing Authority City of Folsom Community Facilities Dishict No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds, Series 2022 (the o'Bonds"), issued pursuant to the provisions of the Marks- Roos Local Bond Pooling Act of 1985 (constituting Article 4, Chapter 5, Division T,Trtle I of the California Government Code) and a trust agreement, dated as of August l, 2022 (the "Trust Agreement"), among the Issuer, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District") and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). The Trust Agreement provides that the Bonds are issued for the stated purpose of enabling the Issuer to acquire certain local obligations to be issued by the Community Facilities District.

Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Trust Agreement.

In such connection, we have reviewed the Trust Agreement; the Tax Certificate, dated the date hereof (the "Tax Certificate"), executed and delivered by the Issuer, the Community Facilities District and the City of Folsom; opinions of counsel to the Issuer, the Community Facilities District and the Trustee; certificates of the Issuer, the Community Facilities District, the Trustee and others; and such other documents, opinions and matters to the extent we deemed necessary to render the opinions set forth herein.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after original delivery of the Bonds on the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after original delivery of the Bonds on the date hereof. Accordingly, this letter speaks only as of its date and is not intended to, and may not, be relied upon or otherwise used in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter. We have assumed the genuineness of all documents and signatures provided to us and the due and legal execution and delivery thereofby, and validity against, any parties other than the Issuer. We have assumed, without undertaking to veriff, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Trust Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or E-1 Page 437
07/12/2022 Item No.11.
events will not cause interest on the Bonds to be included in grpss income for federal income tax purposes.

We call affention to the fact that the rights and obligations under the Bonds, the Trust Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, receivership, reorganization, affangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against governmental entities such as the Issuer and the Community Facilities District in the State of California. We express no opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute or to have the effect of a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-exclusivity of remedies, waiver or severability provisions contained in the foregoing documents, nor do we express any opinion with respect to the state or qualrty of title to or interest in any of the assets described in or as subject to the lien of the Trust Agreement or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such assets. Our services did not include financial or other non-legal advice. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement, dated 2022, or other offering material relating to the Bonds and express no opinion or conclusion with respect thereto.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. The Bonds constitute the valid and binding special, limited obligations of the Issuer

2. The Trust Agreement has been duly executed and delivered by, and constitutes the valid and binding obligation of, the Issuer. The Trust Agreement creates a valid pledge, to secure the payment of the principal of and interest on the Bonds, of the Trust Estate, including the Revenues and any other amounts (including proceeds of the sale of the Bonds) held by the Trustee in the Funds established pursuant to the Trust Agreement (except the Rebate Fund), subject to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth in the Trust Agreement.

3. Interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax. We express no opinion regarding other tax consequences related to the ownership or disposition of; or the amount, accrual or receipt of interest on, the Bonds.

Faithfully yours,
ORzuCK,I{ERRINGTON & SUTCLIFFE LLP
per
E-2

07/12/2022 Item No.11.

APPENDIX F'
DTC AI\ID THE BOOK-ENTRY ONLY SYSTEM
The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payment of principal of, premium, tf any, and interest on the Bonds to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Bonds, and other related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the Authority believes to be reliable, but the Authority does not take responsibility for the completeness or accuracy thereof. The Authority cannot and does not give any assurences that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners either (a) payments of principal, premium, ,f ary, and interest with respect to the Bonds or (b) certificates representing ownership interests in or other confirmation of ownership interests in the Bonds, 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 Official Statement. The current "Rules" applicable to DTC are onfile with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are onfile with DTC.

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

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 La-w, 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 i7A 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. equrty issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

F-1

07/12/2022 Item No.11.

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

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. (or such other DTC nominee) do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

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

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

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

Principal, redemption price, and interest payments with respect to the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority on a payable date in accordance with their respective holdings shown on DTC 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 or its nominee, the Trustee, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest to Cede & Co. (or such F-2

07/12/2022 Item No.11.
other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, bond certificates are required to be printed and delivered.

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

The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Authority deems reliable, but the Authority takes no responsibility for the accuracy thereof.

TTM TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR TTM BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTI{ER NOTICES ONLY TO CEDE & CO., OR ITS SUCCESSOR AS DTC'S PARTNERSHIP NOMINEE. ANY FAILURE OF CEDE & CO., OR ITS SUCCBSSOR AS DTC'S PARTNERSHIP NOMINEE TO ADVISE A}[Y

PARTICIPANT, OR OF ANY PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER OF ANY

NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT TTM VALIDITY OR

SUFFICIENCY OF TFIE PROCEEDINGS RELATING TO TTIE REDEMPTION OF TFIE BONDS CALLED FOR REDEMPTION OR OF ANY OTI#R ACTION PREMISED ON SUCH NOTICE.

F-3

07/12/2022 Item No.11.

APPENDIX G

APPRAISAL
G-1

07/12/2022 Item No.11.

ATTACHMENT 6

07/12/2022 Item No.11.

OH&S DRAFT
6127122
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH) TMPROVEMENT AREA NO. 3
SPECTAL TAX BONDS, SERTES 2022

LOCAL OBLIGATION PURCHASE CONTRACT
[SALE DATE]
City of Folsom
Community Facilities District No. 23
(Folsom Ranch)
City of Folsom, City Hall
50 Natoma Street
Folsom, California 95630
Ladies and Gentlemen
The undersigned Folsom Ranch Financing Authority (the "Authority") offers to enter into this Local Obligation Purchase Contract (the "Local Obligation Purchase Contract") with you, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District"), which, upon acceptance, will be binding upon the Community Facilities District and the Authority; and except as otherwise provided herein, all capitalized terms used herein shall have the meanings attributed to them in the Indenture, dated as of Augustl,2022 (the "Indenture"), between the Community Facilities District and U.S. Bank Trust Company, National Association, as trustee (the "Trustee").

1. Purchase, Sale and Delivery of the Obliealions.
(a) Subject to the terms and conditions and in reliance upon the representations and agreements set forth herein, the Authority hereby agrees to purchase from the Community Facilities District, and the Community Facilities District hereby agrees to sell to the Authority, all (but not less than all) of the $ aggregate principal amount of the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Bonds, Series 2022 (the o'Local Obligations") issued under the Indenture, dated the date of their initial delivery, bearing interest payable on the dates and at the interest rates, and maturing on the dates and in the amounts and subject to the optional, extraordinary and mandatory redemption provisions, as set forth in Exhibit A attached hereto and incorporated herein.

The purchase price for the Local Obligations shall be $[ l, which purchase price shall be paid from the proceeds of sale of the Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special 4t4t-0872-6328

07/12/2022 Item No.11.

Tax Revenue Bonds, Series 2022, issued under the Trust Agreement, dated as of August 1,2022, by and among the Authority, the Community Facilities District and U.S. Bank Trust Company, National Association, as trustee (the "Trust Agreement"), which bonds issued under the Trust Agreement are referred to herein as the "Authority Bonds." The Local Obligations shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in the Indenture. (b) At [8:30] a.m., Califomia time, on [CLOSING DATE], or at such earlier or later time or date as shall be agreed by the Community Facilities District and the Authority (such time and date being herein referred to as the "Closing Date"), the Community Facilities District will deliver to the Authority at the offices of Orrick, Herrington & Sutcliffe LLP, Sacramento, California (or such other location as may be designated by the Authority and approved by the Community Facilities District) the Local Obligations in definitive forms, duly executed by the Community Facilities District and authenticated by the Trustee, and will deliver to the Authority the other documents herein mentioned; and the Authority will accept such delivery and pay the total purchase price of the Local Obligations as set forth in paragraph (a) of this section as provided in the Indenture (such delivery and payment being herein referred to as the "Closing").
2 Reoresentations and Aqreements o the Communitv Facilities District.

The Community Facilities District represents to and agrees with the Authority that:
(a) The Community Facilities District is and will be at the Closing Date duly organized and existing as a community facilities district under and by virtue of the laws of the State of California, with full power and authority to issue the Local Obligations and to carry out and consummate the transactions contemplated by the Local Obligations, this Local Obligation Purchase Contract, the Indenture and the Trust Agreement (collectively, the "Financing Documents"), and the Financing Documents are and will be at the Closing Date valid and binding obligations of the Community Facilities District; (b) When delivered to and paid for by the Authority at the Closing in accordance with the provisions of this Local Obligation Purchase Contract, the Local Obligations will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the Community Facilities District in conformity with, and entitled to the benefit and security of, the Indenture;
(c) By official action of the Community Facilities District, prior to or concurrently with the acceptance hereof, the Community Facilities District has authorized and approved the execution and delivery of the Financing Documents, and authorized and approved the performance by the Community Facilities District of the obligations on its part contained in the Financing Documents and has authorized and approved the consummation by the Community Facilities District of all other transactions contemplated by this Local Obligation Purchase Contract;
(d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the 2 4t4l-0872-6328

07/12/2022 Item No.11.
knowledge of the Community Facilities District, threatened against the Community Facilities District or its properties or operations (i) seeking to restrain or enjoin the issuance, sale, execution or delivery of the Local Obligations, (ii) in any way contesting or affecting the validity or enforceability of any of the Financing Documents, any proceedings of the Community Facilities District taken concerning the issuance or sale of the Local Obligations, the collection of the special tax securing the Local Obligations (the "Special Tax") or the existence or powers of the Community Facilities District relating to the issuance of the Local Obligations or (iii) which, if determined adversely to the Community Facilities District or its interests, would have a material and adverse effect on the consummation of the transactions contemplated by or the validity of the Financing Documents or on the operations of the Community Facilities District with respect to the Local Obligations;
(e) The execution and delivery of the Financing Documents, and the consummation of the transactions therein and herein contemplated, and the fulfillment of or compliance with the terms and conditions thereof and hereol will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Community Facilities District is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Community Facilities District, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Financing Documents or the operations of the Community Facilities District with respect to the Local Obligations; (0 The Community Facilities District is not in breach of or default under any applicable law or administrative regulation of the State of Califomia or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject, which breach or default may have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Financing Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute such a breach or default under any such instrument; (g) All approvals, consents, authorizations, certifications and other orders of any govemmental authority, board, agency or commission having jurisdiction, and all filings with any such entities, which would constitute conditions precedent to or the failure to obtain which would materially adversely affect the performance by the Community Facilities District of its obligations under the Financing Documents have been duly obtained, and no further consent, approval, authorization or other action or filing with or by any governmental or regulatory authority having jurisdiction over the Community Facilities District is or will be required for the issue and sale of the Local Obligations or the consummation by the Community Facilities District of the other transactions described in the Financing Documents; (h) The Special Tax constituting the security for the Local Obligations has been duly and lawfully authorized under and pursuant to the Mello-Roos Community Facilities J
4141-0872-6328

07/12/2022 Item No.11.

District Act of 1982 (the "Act") within Improvement Area No. 3 of the Community Facilities District (the "Improvement Area") and such Special Tax is secured by a valid and legally binding continuing lien on the land subject to the Special Tax as provided in the Act; O The City Council, as legislative body of the Community Facilities District, has authorized and will annually levy and collect the Special Tax, in addition to amounts necessary to pay debt service on the Local Obligations, in an amount suffrcient (subject to any maximum special tax permitted by law) to pay the Expenses arising directly from the administration or enforcement of the Local Obligations.

The execution and delivery of this Local Obligation Purchase Contract by the Community Facilities District shall constitute a representation by the Community Facilities District to the Authority that the representations and agreements contained in this Section 2 are true as of the date hereof; ploviidgd, that as to all matters of law the Community Facilities District is relying on the advice of counsel to the Community Facilities District; and provided further, that no member of the City Council, as legislative body of the Community Facilities District, shall be individually liable for the breach of any representation, warranty or agreement contained herein.

3. Conditions to the Purchase of the Local Obligations by the Authoritv. The obligation of the Authority to accept delivery of and pay for the Local Obligations on the Closing Date shall be subject, at the option of the Authority, to (i) the accuracy in all material respects of the representations and agreements on the part of the Community Facilities District contained herein as of the date hereof and as of the Closing Date, (ii) the accuracy in all material respects of the statements of the officers and other officials of the City for and on behalf of the Community Facilities District made in any certificates or other documents, fumished pursuant to the provisions hereof, and (iii) the performance by the Community Facilities District 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 Financing Documents shall be in full force and effect in the form heretofore submitted to the Authority and there shall have been taken in connection with the issuance of the Local Obligations and with the transactions contemplated thereby and by this Local Obligation Purchase Contract, all such actions as, in the opinion of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), shall be necessary and appropriate; (b) At the Closing Date, the Financing Documents shall not have been amended, modified or supplemented, except as may have been agreed to by the Authority; (c) At or prior to the Closing Date, the Authority and the Trustee shall have received the following documents, in each case satisfactory in form and substance to the Authority:
(1) An executed copy of each of the Financing Documents; (2) An unqualified approving opinion of Bond Counsel, dated the Closing Date and addressed to the Community Facilities District, as to the validity of the Local Obligations;
4t4r-0872-6328
4

07/12/2022 Item No.11.
(3) An opinion of the City Attorney, dated the Closing Date and addressed to the Community Facilities District and the Authority, in substantially the form attached hereto as Exhibit B; and
(4) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Authority or Bond Counsel may reasonably request to evidence compliance by the Community Facilities District with legal requirements, the truth and accvracy, as of the Closing Date, of the representations of the Community Facilities District contained herein, and the due performance or satisfaction by the Community Facilities District at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District.

If the Community Facilities District shall be unable to satisfu the conditions to the Authority's obligations contained in this Local Obligation Purchase Contract, this Local Obligation Purchase Contract shall terminate and neither the Authority nor the Community Facilities District shall have any further obligation hereunder.

4. Expenses. All expenses and costs of the Community Facilities District and the Authority incident to the authorization, issuance and sale of the Local Obligations and the Authority Bonds, including fees and expenses of consultants, the Trustee, the appraiser, Bond Counsel and counsel for the Community Facilities District and the underwriting fees and expenses incurred by the Authority in connection with the sale of the Authority Bonds shall be paid by the Community Facilities District or the City on its behalf, and the Community Facilities District agrees that it will pay such expenses and costs from the proceeds of the Local Obligations.

5. Notices. Any notice or other communication to be given to the Community Facilities District under this Local Obligation Purchase Contract may be given by delivering the same in writing at the Community Facilities District's address set forth above, Attention: Finance Director, and any such notice or other communications required to be given to the Authority may be given by delivering the same in writing to the Authority at 50 Natoma Street, Folsom, California 95630, Attention: Treasurer. The approval of the Authority when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing signed by the Authority and delivered to the Community Facilities District.

6. Parties In Interest: Governing Law. This Local Obligation Purchase Contract is made solely for the benefit of the Community Facilities District, the Authority and the Trustee and no other persons, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. This Local Obligation Purchase Contract shall be governed by the laws of the State of California.

7. Pledge: Assignment. The Community Facilities District hereby approves the pledge and assignment of all the Authority's right, title and interest in the Local Obligations to the Trustee under the Indenture for the benefit of the owners of the Authority Bonds. 5 4t4t-0872-6328

07/12/2022 Item No.11.

8. Limitation on Liability. The Authority shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereby, and shall be under no obligation to purchase the Local Obligations hereunder, except from proceeds of the Authority Bonds available therefor held by the Trustee under, and subject to the conditions set forth in, the Indenture. The Community Facilities District shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereunder, except as otherwise provided in Sections 4 and 5 hereof, or be obligated to make any payments with respect to the Local Obligations, except from amounts pledged to the payment of the Local Obligations (including the Special Tax levied and collected in the Improvement Area) pursuant to the terms thereof. 6 4r4t-0872-6328

07/12/2022 Item No.11.

9. Counterparts. This Local Obligation Purchase Contract may be signed in two or more counterparts; all such counterparts, when signed by all parties, shall constitute but one single agreement.

FOLSOM RANCH FINANCING AUTHORITY
Stacey Tamagni
Treasurer

ACCEPTED AND AGREED TO

CITY OF FOLSOM
COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH)
By
Stacey Tamagni
Finance Director of the City of Folsom
By
7 4t4t-0872-6328

07/12/2022 Item No.11.

Exhibit A
Local Obligations Maturity Schedule and Redemption Provisions Maturitv Schedule
Maturity Date
September 1 Principal Amount Interest Rate
%$
* Term Bonds
Redemption Provisions
Extraordinary Redemption. The Local Obligations are subject to extraordinary redemption by the Community Facilities District prior to their respective maturity dates, as a whole or in part on any interest payment date on or after [September l, 2022f, from funds derived by the Community Facilities District from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (computed upon the principal amount of the Local Obligations or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption, to wit:
103% if redeemed on an interest payment date on or after September I, 201 1 throughMarch l,20ll;
102% if redeemed on an interest payment date on September 1,201-j or March 1,201 1;
l0l% if redeemed on an interest payment date on September l, 201-] or March 1,201 1;and
100% if redeemed on September 1,201 f or any interest payment date thereafter. 4t4t-0872-6328
A-1

07/12/2022 Item No.11.

Optional Redemption. The Local Obligations are subject to optional redemption by the Community Facilities District prior to their respective maturity dates as a whole or in part on any date on or after September 1,201 l, from funds derived by the Community Facilities District from any source other than such Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount or such prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (computed upon the principal amount of the Local Obligations or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on any date on or after September 1,201 I through August 31,201 l;
102% if redeemed on any date from September l, 201 l through August 31, 201 l;
l0l% if redeemed on any date from September l, 201 I through August 31, 201 l;and
rc}% if redeemed on September l, 20f I and any date thereafter.

Mandatory Sinking Fund Account Redemption of the Local Obligations. The Local Obligations maturing on September l, 20[ l, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September I in each of the years 20[ I through 201 l, both years inclusive; and the Local Obligations maturing on September 1,201 f, are subject to mandatory redemption by the Community Facilities District prior to their maturity date in part on September 1 in each of the years 201) through 201--1, both years inclusive, in each case solely from Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount, upon mailed notice as provided in the Indenture, at a redemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption.

Minimum Sinking Fund Account Payments are established for the mandatory redemption and payment of the Local Obligations described in the paragraph above, which payments shall become due during the years ending on the dates and in the amounts as set forth in the following schedules (except that if any of the Local Obligations shall have been optionally redeemed or redeemed from property owner prepayments, the amounts of the Minimum Sinking Fund Account Payments shall be reduced proportionately by the principal amount of all such Local Obligations so redeemed), namely:
4t4t-0872-6328
A-2

07/12/2022 Item No.11.

Local Obligation Maturing September 1.20[ I
Year Minimum
Ending Sinking Fund
September 1 Account Payment
$
* Maturity
Local Obligation Maturing September 1.20[ I
Year
Ending
September I
Minimum
Sinking Fund
Account Pavment
* Maturity
4141-0872-6328
A-3

07/12/2022 Item No.11.

Exhibit B
[Form of City Attorney Opinion]
lcLosING DATEI
Folsom Ranch Financing Authority
Folsom, California
City of Folsom
Community Facilities District No. 23
(Folsom Ranch)
Folsom, California
Piper Sandler & Co.
.

Sacramento, Califorma
U.S. Bank Trust Company, National Association
Los Angeles, California
City of Folsom Community Facilities DistrictNo. 23
(Folsom Ranch) Improvement AreaNo. 3
Special Tax Bonds. Series 2022
Ladies and Gentlemen:

I have served as counsel to the City of Folsom (the "City") in connection with the issuance, sale and delivery of the above-referenced securities (collectively, the "Local Obligations") by the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District"), and this letter is being delivered pursuant to the Local Obligation Purchase Contract dated as of ISALE DATE] (the "Local Obligation Purchase Contract") by and between the Folsom Ranch Financing Authority (the "Authorlty") and the Community Facilities District, and all capitalized terms not otherwise defined herein have the meanings ascribed thereto in the Local Obligation Purchase Contract' As such counsel, I have examined and am familiar with (i) those documents relating to the existence, organization and operation of the Community Facilities District, including Resolution No. 10435, duly adopted by the City on }ilay 26,2020, establishing the Community Facilities District and designating various improvement areas therein, including Improvement Area No. 3 (the "Improvement Area"), and Resolution No. 10768, duly adopted by the City on December 14,2021, whereby the boundaries of the Improvement Area, the rate and method of apportionment and manner of collection of the Special Tax for the Improvement Area and the appropriations limit and maximum bonded indebtedness for the Improvement Area were amended; (ii) Resolution No. t I of the City Council approving the issuance of the Local Obligations, the issuance of the Authority Bonds, the Financing Documents and the Ofhcial Statement (such resolutions referenced in (i) and (ii), together the "Resolutions"); (iii) all necessary documentation of the Community Facilities District relating to the authorization, 4t4t-osi2-6328
B-1

07/12/2022 Item No.11.
execution and delivery of the Local Obligations and all of the Financing Documents; (iv) the Preliminary Official Statement, dated ,2022 (the "Preliminary Official Statement") relating to the Authority Bonds; (v) the Official Statement, dated ISALE DATE], 2022 (the "Official Statement") relating to the Authority Bonds; and (vi) the Continuing Disclosure Certificate of the Community Facilities District, dated the date hereof (the "Continuing Disclosure Certificate") relating to the Authority Bonds.

Based on the foregoing, I am of the opinion that:

1. The Community Facilities District is a community facilities district duly organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), being Chapter 2.5,Part 1, Division 2,Title 5 of the Government Code of the State of California.

2. The Resolutions have been duly adopted at meetings of the City Council, acting as the legislative body of the Community Facilities District, which were called and held pursuant to law and with all public notice required by law and at which a quonrm was present and acting throughout, md the Resolutions are in full force and effect and have not been modified, amended, rescinded or repealed since the date of their respective adoption.

3. The Community Facilities District has the fulI legal right, power and authority to execute, deliver and perform its obligations and duties under the Financing Documents and the Continuing Disclosure Certificate, including the right and power under the Act to execute the Indenture.

4. The Community Facilities District has complied with the provisions of applicable law in all matters relating to the transactions contemplated by the Financing Documents and the Continuing Disclosure Certificate.

5. The Financing Documents; the Continuing Disclosure Certificate; the Letter of Representations of the Community Facilities District, dated [SALE DATE] (the "Community Facilities District Letter of Representations" and, together with the Financing Documents and the Continuing Disclosure Certificate, the "Community Facilities District Documents") and the Official Statement have each been duly and lawfully authorized, executed and delivered by the Community Facilities District, are each in full force and effect and, assuming due authorization, execution and delivery by the other parties thereto, each constitutes alegal, valid and binding agreement of the Community Facilities District enforceable against it in accordance with its terms, subject to laws relating to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting the enforcement of creditors' rights generally and to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of Califomia.

6. The Indenture and the Local Obligations have been duly and validly authorized, sold, executed, authenticated and delivered, as applicable, in accordance with the Act and with the Indenture.

No approval, consent or authorization of any governmental or public B-2
4141-0872-6328
7

07/12/2022 Item No.11.
agency, authority or person is required for the execution and delivery by the Community Facilities District of the Financing Documents or the Continuing Disclosure Certificate or the performance by the Community Facilities District of its respective obligations thereunder.

8. The execution and delivery of the Financing Documents and the Continuing Disclosure Certificate by the Community Facilities District, and compliance with the provisions thereof, will not conflict with or constitute a breach of, or default under, any instrument relating to the organization, existence or operation of the Community Facilities District, or any commitment, agreement or other instrument to which the Community Facilities District is a party or by whichlt or its property is bound or affected, or any ruling, regulation, ordinance, resolution, judgment, order or decree to which the Community Facilities District (or any of its officers in their respective capacities as such) is subject or any provision of the laws of the State of California relating to the Community Facilities District and its affairs.

9. The Local Obligations are valid and binding special tax obligations of the Community Facilities District payable from proceeds of the Special Tax and the other funds provided in the Indenture for such payment and are enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of California, andthe terms of the Act and of the Indenture.

10. Based upon my review of the Preliminary Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement, nothing has come to my attention which would lead me to believe that the Preliminary Official Statement (excluding therefrom the financial statements and the statistical data and the information concerning The Depository Trust Company, the book-entry system and the appendices thereto, as to which no opinion is expressed) as of its date and as of the date of the Local Obligation Purchase Contract contained any untrue statement of a material fact with respect to the Community Facilities District or omitted or omits to state any material fact with respect to the Community Facilities District necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

11. Based upon my review of the Official Statement, and without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement, nothing has come to my attention which would lead me to believe that the Official Statement (excluding therefrom the financial statements and the statistical data and the information concerning The Depository Trust Company, the book-entry system and the appendices thereto, as to which no opinion is expressed) as of its date and the date hereof contained or contains any untrue statement of a material fact with respect to the Community Facilities District or omitted or omits to state any material fact with respect to the Community Facilities District necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 4t4t-0872-6328
B-3

07/12/2022 Item No.11.

12. Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to my knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of their members and officers to their respective offices; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the Local Obligations or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents or under which a determination adverse to the City or the Community Facilities District would have a material adverse effect upon the financial condition or the revsnues of the City or the Community Facilities District, questions the right of the Community Facilities District to use the Special Tax levied within the Improvement Area for the repayment of the Local Obligations or affects in any manner the right or ability of the Community Facilities District to collect or pledge the Special Tax levied within the Improvement Area for the repayment of the Local Obligations.

Very truly yours,
City Attorney
4r4t-0872-6328
B-4

07/12/2022 Item No.11.

ATTACHMENT 7

07/12/2022 Item No.11.

Snadling Yocca Carlson & Rauth
Draft of 6/28/22
$

FOLSOM RANCH FINAIICING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 3

SPECIAL TAX REVENUE BONDS
SERIES 2022

BOND PURCHASE AGREEMENT
_,2022
Folsom Ranch Financing Authority
50 Natoma Street,
Folsom, California 95630
Ladies and Gentlemen
Piper Sandler & Co., as underwriter (the "Underwriter"), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this 'oPurchase Agreement") with the Folsom Ranch Financing Authority (the "Authority"), which upon acceptance will be binding upon the Underwriter and the Authority. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Authority purchasing from the City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Community Facilities District") the Community Facilities District's Improvement Area No. 3 Special Tax Bonds, Series 2022 (the o'special Tax Bonds") in the aggregate principal amount of $ and upon the Authority and the Community Facilities District satisfying all of the obligations imposed upon them under this Purchase Agreement. This offer is made subject to the Authority's acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 8:00 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Authority at any time prior to the acceptance hereof by the Authority. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Trust Agreement, dated as of _ l, 2022 (he "Trust Agreement"), by and among the Authority, U.S. Bank Trust Company National Association, as trustee (the "Trustee") and the Community Facilities District. The Special Tax Bonds are being issued pursuant to an Indenture dated as of _ I, 2022 (the "District Indenture"), by and between the Community Facilities District and U.S. Bank Trust Company National Association, as trustee (the "District Trustee").

1. Purchase. Sale and Delivery of the Bonds.

Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Authority and the AuthorityherebyagreestoselltotheUnderwriterall(butnotlessthanall)ofthe$- aggregate principal amount of the Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 3 Special Tax Revenue Bonds,

07/12/2022 Item No.11.

Series 2022 (the o'Bonds"), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $_ (being 100% of the aggregate principal amount and less an Underwriter's discount ofthereof plus original issue premium of $ $ From the proceeds of the Bonds, the Authority agrees to purchase the Special Tax Bonds from the Community Facilities District pursuant to the terms of the Local Obligation Purchase Contract (the "Locat Obligation Purchase Contract"), dated _, 2022, by and between the Community Facilities District and the Authority.

The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Revenues as provided in the Trust Agreement, the Official Statement (as hereinafter defined), and the Marks-Roos Local Bond Pooling Act of 1985, as amended, being Article 4, Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the "Bond Law"). The issuance of the Bonds has been duly authorizedby the Authority pursuant to Resolution No. _-Folsom Ranch FA (the "Authority Resolution") adopted by the Goveming Board on _, 2022. The net proceeds of the Bonds will be used to purchase the Special Tax Bonds.

The Special Tax Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from Special Tax (as defined in the District Indenture) as provided in the District Indenture.

The Special Tax Bonds are issued under the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter2.5,Part 1, Division2,Title 5 of the Government Code of the State of Califomia (the "Community Facilities District Act"). The issuance of the Special Tax Bonds, the preparation and distribution of the Preliminary Official Statement and the Local Obligation Purchase Contract have been duly authorizedby the City Council of the City of Folsom (the "City Council") acting as the legislative body for the Community Facilities District, pursuant to Resolution No._ (the "Community Facilities District Resolution"). The net proceeds of the Special Tax Bonds will be used, as indicated in the District Indenture, for the following pulposes: (1) finance the acquisition and construction of certain public facilities; (2) fund a debt service reserve account; (3) fund capitalized interestto September I,2022; and (4) pay certain costs of issuance of the Bonds and the Special Tax Bonds.

Prior to the acceptance of this Purchase Agreement by the Authority, the Authority shall have caused to be delivered to the Underwriter: (i) the Letter of Representations of the Community Facilities District (the "District Letter of Representations") in substantially the form set forth in Exhibit B hereto; and (ii) a Letter of Representations (the "Developer Letter of Representations") of Toll West Inc., d/b/a Toll Brothers West Inc., a Delaware corporation ( the "Developer") in substantially the form set forth in Exhibit C hereto.

A. The Authority acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations and agreements made by the Authority herein and by the Community Facilities District in the District Letter of Representations, and the Authority shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notifu the Underwriter if it becomes aware that any representation or agreement made by the Authority herein is incorrect in any material respect. 2

07/12/2022 Item No.11.

The Authority acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm's-length commercial transaction between the Authority and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 158 of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the Authority, the Community Facilities District or the City of Folsom (the o'City") with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is cumently providing other services to the Authority, the Community Facilities District or the City on other matters); and (iv) the Authority, the Community Facilities District and the City have consulted their own legal, financial and other advisors to the extent that they have deemed appropriate.

B. Pursuant to the authorization of the Authority, the Underwriter has distributed copies of the Preliminary Official Statement dated _, 2022, relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein called the "Preliminary Official Statement." By its acceptance of this Purchase Agreement, the Authority hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Authority agrees to execute a final official statement relating to the Bonds (including any supplements and/or amendments thereto, the "Official Statement") which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Orrick Henington & Sutcliffe LLP, the Community Facilities District's and the Authority's Bond Counsel ("Bond Counsel") and Disclosure Counsel ("Disclosure Counsel"), and the Underwriter, and to provide copies thereof to the Underwriter as set forth in Section 3.N hereof. The Authority hereby authorizes the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto.

The Authority further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Trust Agreement, the District Indenture, this Purchase Agreement, the Local Obligation Purchase Contract and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the Authority, the Community Facilities District or the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

C. To assist the Underwriter in complying with Securities and Exchange Commission Rule I5c2-I2(b)(5) (the "Rule"), the Community Facilities District will undertake for and on behalf of the Authority pursuant to the Continuing Disclosure Certificate, in the form attached to the Official Statement as Appendix D (the "Continuing Disclosure Certificate"), to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.

D. Except as the Underwriter and the Authority may otherwise agree, the Authority will deliver to the Underwriter, at the offices of Bond Counsel in Sacramento, California, or at such other location as may be mutually agreed upon by the Underwriter, the Community Facilities District and the Authority, the documents hereinafter mentioned; and the Authority will deliver to the Underwriter through the facilities of The Depository Trust Company ("DTC") in New York, New York, the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the Authority and authenticated by the Trustee in the manner provided for in the Trust Agreement and the Bond Law at 8:00 a.m. Califomia time, or _: 2022 (the "Closing Date"), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in the first aJ

07/12/2022 Item No.11.
paragraph of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be in fully registered book-entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC.

2. Public Offering and Establishment of Issue Price.

A. The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds may be offered and sold to certain dealers at prices lower than such initial offering prices.

B. The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority 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 F, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority 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 Authority under this section to establish the issue price of the Bonds may be taken on behalf of the Authority by Fieldman, Rolapp & Associates, Inc. (the "Municipal Advisor") and any notice or report to be provided to the Authority may be provided to the Municipal Advisor.

C. Except as otherwise set forth in Exhibit A, the Authority will treat the first price at which l\Yo of each maturity of the Bonds (the "107o test") is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSP number within that maturity will be subject to the l0% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of the 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 Authority 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.

D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the "initial offering price"), or at the corresponding yield or yields, set forth in Exhibit A, 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 Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority 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:
4

07/12/2022 Item No.11.

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 Authority when it has sold l0o/o 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.

E. 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 l0%o 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 Authority 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 pa(ry 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 Authority funher 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 coresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds.

F. 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;

2. "underwriter" means: (A) any person that agrees pursuant to a written contract with the Authority (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 50o% 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%;o common 5

07/12/2022 Item No.11.
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 50olo 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.

3. Representations and Covenants of the Authority. The Authority represents and covenants to the Underwriter that:

A. The Authority is a joint exercise of powers authority, duly organized and existing under the Constitution and laws of the State of California (the o'State"), and formed pursuant to Articles I through 4 (commencing with Section 6500) of Chapter 5, Division 7, Title I of the Government Code (the "JPA Act'o), with full right, power and authority: (i) to enter into this Purchase Agreement; (ii) to enter into the Trust Agreement; (iii) to adopt the Authority Resolution authorizing the issuance of the Bonds and entry into this Purchase Agreement and the Trust Agreement and to take all other actions on the part of the Authority relating thereto (the "Authority Proceedings"); (iv) to issue, sell and deliver the Bonds to the Underwriter as provided herein; (v) to purchase the Special Tax Bonds; and (vi) to carry out and consummate the transactions on its part contemplated by this Purchase Agreement, the Trust Agreement and the Official Statement.

The Trust Agreement, the Bonds, the Local Obligation Purchase Contract and this Purchase Agreement are collectively referred to herein as the "Authority Documents." B. By all necessary official action of the Authority, the Authority has duly authorized and approved the execution and delivery by the Authority of, and the performance by the Authority of the obligations on its part contained in, the Authority Documents, and has approved the use by the Underwriter of the Preliminary Official Statement and the Official Statement and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the parties thereto, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable upon the Authority in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors' rights generally. The Authority has complied, and will at the Closing Date be in compliance in all respects, with the terms of the Authority Documents that are applicable to the Authority.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the Authority and the Bonds (other than statements pertaining to the book-entry system, as to which no view is expressed), does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.
6

07/12/2022 Item No.11.

D. Up to and including 25 days after the End of the Underwriting Period (as defined below), the Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term "End of the Underwriting Period" means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be a written notice delivered to the Authority and 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." E. As of the time of acceptance hereof and as of the Closing Date, except as otherwise disclosed in the Official Statement, the Authority is not, and as of the Closing Date, will not be, in breach of or in default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject; and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; which breach, default or event could have an adverse effect on the Authority's ability to perform its obligations under the Authority Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the Authority Documents and compliance by the Authority with the provisions of each of such agreements or instruments does not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority (or any of its officers in their respective capacities as such) is subject, or by which it or any of its properties is bound; nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Documents.

F. At the time of acceptance hereof there is, and as of the Closing Date, there will be no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an "Action") pending (notice of which has been served on the Authority) or to the knowledge of the Authority threatened, in which any such Action: (i) in any way questions the corporate existence of the Authority or the titles of the officers of the Authority to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of Revenues (as defined in the Trust Agreement) or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Authority Documents or the consummation of the transactions on the part of the Authority contemplated thereby; (iii) contests the exclusion of the interest on the Bonds from federal or state income taxation or contests the powers of the Authority which may result in any material adverse change relating to the financial condition of the Authority; or (iv) contests the completeness or accuracy of the 7

07/12/2022 Item No.11.

Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omiffed to state any material fact 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; and, as of the time of acceptance hereof, there is, and as of the Closing Date, there will be no known basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

G. The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter and at the expense of the Underwriter as the Underwriter may reasonably request in order: (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws andregulations of such states and other jurisdictions of the United States as the Underwriter may designate; and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds, provided; however, that the Authority will not be required to execute a special or general consent to service of process or qualiff as a foreign corporation in connection with any such qualification in any jurisdiction.

H. The Authority Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement. The Authority represents that the Bonds, when issued, executed and delivered in accordance with the Trust Agreement and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the Authority, entitled to the benefits of the Trust Agreement. The Trust Agreement creates a valid pledge of the moneys in certain funds and accounts established pursuant to the Trust Agreement, subject in all cases to the provisions of the Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein.

I. The Authority has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the Authority is a bond issuer whose arbitrage certifications may not be relied upon.

J. Any certificate signed by any authorized officer of the Authority and delivered to the Underwriter in connection with the issuance and sale of the Bonds shall be deemed to be a representation and covenant by the Authority to the Underwriter as to the statements made therein.

K.

Trust Agreement.

The Authority will apply the proceeds of the Bonds in accordance with the L. Between the date of this Purchase Agreement and the Closing Date, the Authority will not offer or issue any bonds, notes or other obligations for borowed money not previously disclosed to the Underwriter.

M. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if redeemed prior to maturity, the Authority will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Trust Agreement. 8

07/12/2022 Item No.11.

N. The Preliminary Official Statement was deemed final by a duly authorized officer of the Authority prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (bxl) of the Rule. The Authority hereby covenants and agrees that, within seven (7) business days from the date hereof, or upon reasonable written notice from the Underwriter within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Authority shall cause a final printed form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(a) of the Rule and Rules G-Iz, G-l5, G-32 and G-36 of the Municipal Securities Rulemaking Board.

The Authority hereby approves the preparation and distribution of the Official Statement, consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Bond Counsel, Disclosure Counsel and the Underwriter, from time to time prior to the Closing Date.

The Authority hereby ratifies any prior use of and authorizes the future use by the Underwriter, in connection with the offering and sale of the Bonds, of the Preliminary Official Statement, the Official Statement, this Purchase Agreement and all information contained herein, and all other documents, certificates and written statements furnished by the Authority to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

The execution and delivery of this Purchase Agreement by the Authority shall constitute a representation to the Underwriter that the representations contained in this Section 3 are true as of the date hereof.

4. Conditions to the Obli of the Underwriter. The obligation of the Underwriter to accept delivery of andpay forthe Bonds onthe Closing Date shall be subject, atthe option of the Underwriter, to the accuracy in all material respects of the representations on the part of the Authority contained herein and of the Community Facilities District in the District Letter of Representations, to the accuracy in all material respects of the statements of the officers and other officials of the Authority made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Authority 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 Authority Resolution, the Community Facilities District Resolution, the Authority Documents and this Purchase Agreement, the District Indenture, the Local Obligation Purchase Contracto the Special Tax Bonds, the District Letter of Representations and the Continuing Disclosure Certificate 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 Special Tax Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate. The Trust Agreement, the District Indenture, the Local Obligation Purchase Contract, the Special Tax Bonds, the District Letter of Representations and the Continuing Disclosure Certificate are herein referred to collectively as the "District Documents." B. At the Closing Date, except as was described in the Preliminary Official Statement, the Authority shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of 9

07/12/2022 Item No.11.
the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Authority is a party or is otherwise subject or bound, and the performance by the Authority of its obligations under the Authority Documents, the Authority Resolution and any other instruments contemplated by any of such 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 of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Authority is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the Authority of its obligations under the Authority Documents or the Authority Resolution.

C. At the Closing Date, except as described in the Official Statement, the Community Facilities District shall not be, in any respect material to the transactions referred to in the District Letter of Representations or contemplated therein, in breach of or in default under, any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance by the Community Facilities District of its obligations under the Community Facilities District Resolution, the District Documents, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner that would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Resolution and the District Documents or the performance of the conditions precedent to be performed by the Community Facilities District under the Community Facilities District Resolution and the District Documents.

D. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, true and correct in all material respects and does not, as of the Closing Date or as of the date of any supplement or amendment thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

E. Between the date hereof and the Closing Date, the market price or marketability, at the initial offering prices set forth on the cover page of the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
10

07/12/2022 Item No.11.

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon such interest as would be received by any owners 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 or an order, decree or injunction issued by any court ofcompetentjurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds or the Special Tax Bonds, including any or all underlying alrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Trust Agreement or the District Indenture are not exempt from qualification under or other requirements of the Trust Agreement Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds or the Special Tax Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws as amended and then in effect;

3. A general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by Federal, State of New York or State of California officials authorized to do so;

4. The introduction, proposal or enactment of any amendment to the Federal or California Constitution or any action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Bonds, the Authority or the Community Facilities District, their property, income, securities (or interest thereon), the validity or enforceability of the Special Tax, or the ability of the Authority to purchase any Special Tax Bonds as contemplated by the Official Statement;

5. 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 in the Official Statement, or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact 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;

6. Any national securities exchange, the Comptroller of the Currency, or any other governmental authority, shall impose as to the Bonds, the Special Tax Bonds or obligations of the general character of the Bonds or the Special Tax Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; 11

07/12/2022 Item No.11.

7. There shall have occurred any material outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it impracticable, in the judgment of the Underwriter, following consultation with the Authority, to sell the Bonds;

8. The filing or threat of an Action described Section 3.F hereof or Section M of the District Letter of Representations; or

9. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City or the Authority.

F. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:

1. The Official Statement, executed on behalf of the Authority by its Treasurer or other authorized officer;

2. The Authority Documents, duly executed and delivered by all parties thereto;

3. The Authority Resolution, together with a certificate of the Secretary of the Authority, dated as of the Closing Date, to the effect that such resolution is a true, correct and complete copy of the resolution duly adopted by the Governing Board of the Authority;

4. The Community Facilities District Resolution, together with a certificate dated as of the Closing Date of the City Clerk, acting on behalf of the Community Facilities District to the effect that the Community Facilities District Resolution is a true, correct and complete copy of the one duly adopted by the City Council, acting as the legislative body of the Community Facilities District;

5. The District Documents duly executed and delivered by all parties thereto;

6. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Authority, of Bond Counsel, in substantially the form included as Appendix E to the Official Statement, together with a letter addressed to the Trustee to the effect that such opinion may be relied upon by the Trustee to the same extent as if such opinion was addressed to the Trustee;

7. A supplemental opinion or opinions, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, in substantially the form attached hereto as Exhibit E;

8. A certificate, dated the Closing Date and signed by the Treasurer of the Authority or other authorized officer, to the effect that: (i) the representations of the Authority contained herein 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 knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make t2

07/12/2022 Item No.11.
the statements and information therein not misleading in any material respect; and (iii) the Authority has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Authority Documents and the Authority Resolution at or prior to the Closing Date;

9. A certificate dated the Closing Date and signed by an authorized representative of the Community Facilities District or an authorized designee, on behalf of the Community Facilities District to the effect that: (i) the representations made by the Community Facilities District contained in the District Letter of Representations 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, provided that any references as to the Preliminary Official Statement shall be deemed to be to the Official Statement; (ii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under the District Documents prior to the Closing Date;

10. An opinion of the City Attorney of the City, as counsel to the Authority, dated the date of Closing and addressed to the Underwriter, the Authority, the Community Facilities District, the Trustee and the District Trustee, to the effect that:
(i) The Authority is a public body, corporate and politic, duly organized and validly existing as a joint powers authority under the laws of the State of California; (ii) The Authority has full legal power and lawful authority to enter into the Authority Documents and to carry out the transactions contemplated under the Authority Documents;
(iiD The Authority Resolution was duly adopted at a regular meeting of the governing body of the Authority, which was 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 Authority Resolution is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption;
(iv) The Authority Documents have been duly authorized, executed and delivered by the Authority and constitute the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their terms, subject to bankruptcy, insolvency, rcorganization, moratorium and other similar laws affecting creditors' rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases;
(v) To the best knowledge of such counsel, the execution and delivery of the Authority Documents and the Official Statement and compliance with the provisions thereof under the circumstances contemplated thereby: (a) do not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound; and (b) do not and will not in any material respect or constitute on the part of the Authority a violation, breach of or default under any court order or consent decree to which the Authority is subject;
13

07/12/2022 Item No.11.
(vi) The Authority Documents and the Official Statement have been duly authorized by the Governing Board of the Authority and executed on its behalf by an authorized ofhcer of the Authority;
(viD Except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the Authority) or, to the City Attorney's knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the Authority, or the titles of its members and officers to their respective offices; (b) enjoin or restrain the issuance, sale and delivery of the Bonds, the collection of the Revenues or the pledge thereof; (c) in any way question or affect any of the rights, powers, duties or obligations of the Authority with respect to the Revenues or the moneys and assets pledged or to be pledged to pay the principal of, premium, if any, or interest on the Bonds; (d) in any way question or affect any authority for the issuance of the Bonds, or the validity or enforceability of the Bonds; or (e) in any way question or affect the Authority Documents or the transactions contemplated by the Authority Documents, the Official Statement, or any activity regarding the Bonds;
1 1. An opinion of the City Attorney of the City, dated the date of Closing and addressed to the Underwriter, the Authority, the Community Facilities District, the Trustee and the District Trustee to the effect that:
(i) The Community Facilities District is a community facilities district organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5,Part l, Division 2,Title 5 of the Government Code of the State of California; (ii) The Community Facilities District Resolution has been duly adopted at a meeting of the City Council, acting as the legislative body of the Community Facilities District, which was 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 Community Facilities District Resolution is in full force and effect and has not been modified, amended, rescinded or repealed since the date of its adoption; (iii) The District Documents and the Official Statement have been duly and lawfully authorized, executed and delivered by the Community Facilities District and the District Documents constitute the legal, valid and binding obligations of the Community Facilities District enforceable against the Community Facilities District in accordance with their terms, subject to bankruptcy, insolvency, reotganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of California; (iv) The Community Facilities District has the right and power under the Community Facilities District Act to execute the District Indenture and no other authorization for the execution thereof is required, and the District Indenture is in full force and effect; (v) The Special Tax Bonds are valid and binding special tax obligations of the Community Facilities District payable from proceeds of the Special Tax and the other funds provided in the District Indenture for such payment and are enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other similar laws relating to or affecting creditors' rights, to the application of equitable principles where t4

07/12/2022 Item No.11.
equitable remedies are sought, to the exercise ofjudicial discretion in appropriate cases and to the limitations on legal remedies against community facilities districts in the State of California, and the terms of the Community Facilities District Act and of the District Indenture; (vi) The District Indenture and the Special Tax Bonds have been duly and validly authorized, sold, executed, authenticated and delivered in accordance with the Community Facilities District Act and with the District Indenture; (vii) Except as may be stated in the Official Statement, there rs no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to such counsel's knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of its members and officers to their respective offices; or (b) affect the validity of the District Documents or restrain or enjoin the repayment of the Special Tax Bonds or in any way contest or affect the validity of the District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the District Documents or under which a determination adverse to the City or the Community Facilities District would have a material adverse affect upon the financial condition or the revenues of the City or the Community Facilities District, questions the right of the Community Facilities District to use the Special Tax levied within the Improvement Area for the repayment of the Special Tax Bonds or affects in any manner the right or ability of the Community Facilities District to collect or pledge the Special Tax levied within the Improvement Area for the repayment of the Special Tax Bonds;

12. A transcript of all proceedings relating to the authorization, issuance, sale and delivery of the Bonds and the Special Tax Bonds, including certified copies of the Trust Agreement, the District Indenture and all resolutions of the City and the Authority relating thereto;

13. A certificate dated the Closing Date from NBS addressed to the Authority, the Community Facilities District and the Underwriter to the effect that: (i) the Special Tax (after payment of Priority Administrative Expenses) if collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special Taxes would generate at least 1 l|Yo of the annual debt service payable with respect to the Special Tax Bonds in each year, based on such assumptions and qualifications as shall be acceptable to the Underwriter; and (ii) the statements in the Preliminary Official Statement and the Official Statement provided by NBS concerning the Special Tax and the Rate and Method of Apportionment of the Special Taxes and all information supplied by it for use in the Preliminary Official Statement, as of the date of the Preliminary Official Statement, and in the Official Statement, as of the date of the Official Statement and as of the Closing Date, did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;;

14. Certified copies of the general resolution of the Trustee and District Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee and District Trustee, which resolution authorizes the execution of the Trust Agreement, the District Indenture and the authentication of the Bonds and the Special Tax Bonds;

15. A certificate of the Trustee, addressed to the Underwriter, the Authority and the Community Facilities District dated the Closing Date, to the effect that: (i) the Trustee is authorized to carry out corporate trust powers, and have full power and authority to 15

07/12/2022 Item No.11.
perform their respective duties under the Trust Agreement and the District Indenture; (ii) the Trustee is duly authorized to execute and deliver the Trust Agreement and the District Indenture, to accept the obligations ueated by the Trust Agreement and the District Indenture and to authenticate the Bonds and the Special Tax Bonds pursuant to the terms of the Trust Agreement and the District Indenture, respectively; (iii) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the authentication of the Bonds or the Special Tax Bonds or the consummation by the Trustee of the other transactions contemplated to be performed by the Trustee in connection with the authentication of the Bonds and the Special Tax Bonds and the acceptance and performance of the obligations created by the Trust Agreement and the District Indenture; and (iv) to the best of its knowledge, compliance with the terms of the Trust Agreement and the District Indenture will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, trust agreement, bond, note, resolution or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties;

16. An opinion of counsel to the Trustee, dated the Closing Date, addressed to the Underwriter, the Authority and the Community Facilities District to the effect that the Trustee is a national banking association duly organized and validly existing under the laws of the United States having full power and being qualified to enter into, accept and agree to the provisions of the Trust Agreement and the District Indenture, and that each of such documents has been duly authorized, executed and delivered by the Trustee and, assuming due execution and delivery by the other parties thereto, constitutes the legal, valid and binding obligation of the Trustee enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors' rights in general and except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought;

17. A certificate of the Authority dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;

18. An opinion of Stradling Yocca Carlson & Rauth, counsel to the Underwriter ("Underwriter's Counsel"), dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;

19. A certificate of the Developer dated the Closing Date, substantially in the form attached as Exhibit D hereto;

20. A Continuing disclosure certificate of the Developer (the "Developer Continuing Disclosure Certificate") in the form attached as Appendix D to the Official Statement.

21. An opinion of counsel to the Developer, dated the Closing Date and addressed to the Authority and the Underwriter, in form and substance acceptable to the Underwriter, to the effect that:
t6

07/12/2022 Item No.11.
(D The Developer is a limited liability company validly existing and in good standing under the laws of the State of California, and has full power and authority to enter into the Developer Continuing Disclosure Certificate;
(iD The Developer has duly and validly executed and delivered the Developer Continuing Disclosure Certificate, and the Developer Continuing Disclosure Certificate constitutes the legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms;
(iiD Except as set forth in the Official Statement, there is no litigation pending against the Developer (with service of process to the Developer having been duly given and completed) or overtly threatened against the Developer which would materially and adversely affect the validity or enforceability of the Developer Continuing Disclosure Certificate, the Developer's ability to complete the development of its property as proposed in the Official Statement or to pay the Special Tax; (i") Without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement under the captions, "PROPOSED PROPERTY DEVELOPMENT" and "CONTINUING DISCLOSURE - The Developer" (except that no opinion or belief need to be expressed as to any information relating to The Depository Trust Company, or any information relating to CUSIP numbers, or with respect to any financial, statistical or engineering information, data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, assessed valuations or appraised values, or to any information which is affributable to a source other than Builder, contained in the Official Statement), no facts came to such counsel's attention during the course of their representation of the Developer that would lead them to believe that the information under said captions of the Preliminary Official Statement and the Official Statement relating to the Developer and the Developer's organizations, activities, properties and financial condition, and its proposed development of the property within the Community Facilities District, contained or contains any untrue statement of a material fact or omitted or omits any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

22. hereto as Exhibit G; and
A certificate of the Appraiser, substantially in the form attached

23. Such additional legal opinions, certificates, instruments and other documents as the Undenwiter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations of the Authority contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Authority and the Community Facilities District at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District and the Authority in connection with the transactions contemplated hereby and by the District Indenture, the Trust Agreement, and the Official Statement.

If the Authority shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Authority nor the Underwriter shall be under any further obligation t7

07/12/2022 Item No.11.
hereunder, except that the respective obligations of the Underwriter and the Authority set forth in Section 6 hereofshall continue in full force and effect.

5. Conditions to the Obligations of the Authority
A. The obligations of the Authority shall be subject to the satisfaction of the conditions contained in Section 4 of this Purchase Agreement.

B. If the Authority shall be unable to satisfr the conditions to the obligations of the Authority to purchase, accept delivery of and pay for the Special Tax Bonds contained in the Local Obligation Purchase Contract, or if the obligations of the Authority to purchase, accept delivery of and pay for the Special Tax Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Authority nor the Community Facilities District shall be under any further obligation hereunder, except that the obligations of the Authority set forth in Section 6 hereof shall continue in full force and effect.

6. Expenses. Whether or not the transactions contemplated by this Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the Authority shall pay only from the proceeds of the Bonds, or cause the Community Facilities District to pay out of the proceeds of the Special Tax Bonds or any other legally available funds of the City, the Community Facilities District or the Authority, but only as the Authority and such other party providing such services may agree, all expenses and costs of the Authority incident to the performance of its obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, initial fees of the Trustee, including fees and disbursements of their counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors employed by the Authority, costs of preparation, printing, signing, transportation, delivery and safekeeping of the Bonds and for expenses (included in the expense component of the spread) incurred by the Underwriter on behalf of the Authority's employees which are incidental to implementing this Purchase Agreement, including, but not limited to, meals, transportation, lodging, and entertainment of those employees. The Underwriter shall pay all out-of-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Services Bureau charges, regulatory fees imposed on new securities issuers and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, including fees of its counsel.

7. Notices. Any notice of other communication to be given to the City or the Authority under this Purchase Agreement may be given by delivering the same in writing to the City of Folsom, 50 Natoma Street, Folsom, CA, 95630, Attention: Finance Director; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Piper Sandler & Co,3626 Fair Oaks Blvd., Suite 100, Sacramento, California 95864, Attention: Dennis McGuire.

8. Parties In Interest. This Purchase Agreement is made solely for the benefit of the Authority and Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof.

9. Survival of Representations. The representations of the Authority under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered 18

07/12/2022 Item No.11.
void by reason of the Closing 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 Authority and regardless of delivery of and payment for the Bonds.

10. Execution in Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

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

12. No Prior Aqreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understanding among the parties hereto in relation to the sale of the Bonds by the Authority.

13. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.
t9

07/12/2022 Item No.11.

By
Its:

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

Very truly yours,
PIPER SANDLER & CO.

By
Its: Authorized Officer

FOLSOM RANCH FINANCING

AUTHORITY
Treasurer
s-1