Agenda packet — Ontario City Council, June 4, 2024 (part 6 of 7)

4150-5658-9391.1
42015-41
The property owners have indicated that there are no registered voters within District No. 65, and you confirmed that in your April 17 certificate. I would appreciate your reviewing your records and confirming that there are still no registered voters encompassed by the parcels, or in the alternative, if there are registered voters, the number of persons registered to vote in District No. 65. I would appreciate a response to this request by Friday, May 3, if possible.

It is OK if the certification date needs to be sooner to provide a response by Friday, May 3, 2024. We would appreciate it if you would please direct the invoice, when available, to the following address: Cruzita O. Torres, Special Districts, City of Ontario, 415 East “B” Street, Ontario, CA 91764.

Please let me know if you have any further questions. My telephone number is (213) 612- 2171 and my e-mail is [email protected]. Thank you for your assistance.

Sincerely,
/s/ Sean J. Baxter
Sean J. Baxter
Project Manager
Enclosure
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Department: Economic Development
Prepared By: Charity Hernandez
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:

THE ACQUISITION BY EMINENT DOMAIN OF A FEE SIMPLE INTEREST IN CERTAIN REAL PROPERTY LOCATED AT 301 NORTH EUCLID AVENUE FOR THE GRANADA

THEATER REVITALIZATION PROJECT

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

PUBLIC HEARINGS
RECOMMENDATION: That the City Council conduct a public hearing and adopt a Resolution of Necessity declaring that the acquisition of a fee simple interest in certain real property located at 301 North Euclid Avenue, more particularly described as Assessor Parcel No. 1048-566-07 (the Property), is necessary for the rehabilitation of the Historic Granada Theater.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the Growth and Evolution of the City's Economy FISCAL IMPACT: If approved, appropriations will be included in the Fiscal Year 2024-25 Proposed Budget to the City Council for approval for acquisition costs. The deposit necessary to file the Resolution of Necessity for prejudgment possession of the Property is approximately $3,295,000.

BACKGROUND & ANALYSIS: The City of Ontario is in the process of revitalizing its historic downtown into an 18-hour day, which means there will be a variety of eateries, retailers, and activities from morning to night. As part of this, the City is also attracting day-time employees and more residents through new mixed-use and apartment development to support the new businesses anticipated to open in Ontario.

The Property, at 301 North Euclid Avenue, consists of one parcel located on the northwest corner of Euclid Avenue and “C” Street in Ontario, California, as shown in Exhibit 1.

The City obtained an appraisal of the Property from Bradford D. Thompson, MAI, AI-GRS, SR/WA, and Scott J. Thompson, MAI, AI-SRS, SR/WA of Thomson & Thompson Real Estate Valuation and Consulting Inc., and made an offer of just compensation to the property owners for the acquisition pursuant to California Government Code section 7267.2.

A litigation guarantee was ordered to determine and confirm the identity of the record owner. Following 2035
a standard public records request and due diligence search for ownership information, a notice of this public hearing was mailed to the affected property owner.

The power of eminent domain is used by the City only as a last resort to obtain interests necessary for projects after 1) negotiations have stalled, or 2) the owner has requested that the City proceed directly to eminent domain for tax or other advantages, or 3) the eminent domain process is necessary to clear title to the property. In this case, an offer of just compensation was made to the owner for the full Fair Market Value, as determined by an independent appraisal. California’s definition of Fair Market Value is one of the most inclusive definitions in the United States and requires the appraiser to consider the highest and best use of the property and to consider the highest price a willing buyer and seller would agree to. The City’s appraisal must use this definition of Fair Market Value.

Here, the property is currently the subject of a quiet title lawsuit, which resulted in the property being placed in receivership. The City’s offer was communicated to both the receiver and the owner. The receiver is in the process of being discharged, and City Staff and legal counsel will continue with efforts to negotiate a voluntary acquisition with the owner.

DESCRIPTION OF PROPERTY TO BE ACQUIRED:The Property affected by the proposed acquisition is located within the City of Ontario, 301 North Euclid Avenue, Ontario, California 91764, and more particularly described as Assessor Parcel Number 1048-556-07.

HEARINGS AND REQUIRED FINDINGS: The recommended actions of the City Council pertain to the acquisition of a fee simple interest in the Property owned by Overland Direct, Inc., a Nevada corporation.

A true and correct of the legal definition, legal description, and map of the Property sought to be acquired is attached to the Resolution of Necessity as Exhibit A.

California eminent domain law provides that a public entity may not commence an eminent domain proceeding until its governing body has adopted a Resolution of Necessity, which resolution may only be adopted after the governing body has given each party with an interest in the affected property or their representatives a reasonable opportunity to appear and be heard on the following matters:

1. The public interest and necessity require the proposed project.

2. The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury.

3. The real property to be acquired is necessary for the project.

4. The offer of just compensation has been made to the property owner.

Since an agreement has not been reached with the property owner, it is necessary to acquire the property by eminent domain to meet critical project deadlines. Pursuant to Section 1245.235 of the California Code of Civil Procedures, a notice of this hearing was sent by first class mail on May 3, 2024, to the record owner, and stated the City’s intent to consider the adoption of a resolution, the right of the property owner to appear and be heard and notice that failure to file a written request to appear may result in a waiver of the right to appear and be heard.

The above four required findings are addressed as follows:

The Public Interest and Necessity Require the Proposed Project Property is improved with a historic commercial/office/theater building known as the Historic Granada Theater, Local Landmark No. 23, designated on January 20, 1998. The building contains 22,000 gross 2036
square feet, has three floors and a small basement area and was built between 1926 and 1927. In its current state, the Property is underutilized and dilapidated. The Theatre is an important element to the future of Downtown Ontario. Given its rich history dating back to the 1920s, and the potential to offer community programming that will support the economic development goals of downtown, the City seeks to acquire a full fee interest in the Property to allow for the rehabilitation and activation of the Historic Granada Theater. Essential public programming in the theater will include activities such as practices and performances by our local symphony, use by our Recreation & Community Services Theater troupe, hosting authors and scholars for lecture series, and hosting library summer reading performers.

The Project is Planned or Located in a Manner That Will be Most Compatible With the Greatest Public Good and the Least Private Injury
The proposed Project will support the City Council’s goals and objectives and implement land use and development goals as stated in the Policy Plan component of the General Plan. The proposed Project is intended to minimize impacts on performing private assets in Historic Downtown Ontario particularly along Euclid Avenue while allowing for joint development opportunities with investment partners. The Property to be acquired is best suited for the Project and will cause the least private injury. To move this Project elsewhere would require significant land use policy changes, cause a greater impact on local property owners, and would effectively be cost prohibitive.

The Real Property to be Acquired is Necessary for the Proposed Project The Property affected by the proposed acquisition is located within the City of Ontario, at 301 North Euclid Avenue, Ontario, CA 91764, Assessors Parcel No. 10480-566-07 (owned by Overland Direct Inc.).

The acquisition is necessary to allow for the Historic Granada Theater Rehabilitation Project, in Ontario, California.

The Offer of Just Compensation Has Been Made
Appraisals were prepared by Bradford D. Thompson, MAI, AI-GRS, SR/WA, and Scott J. Thompson, MAI, AISRS, SR/WA of Thomson & Thompson Real Estate Valuation and Consulting Inc., to establish the Fair Market Value of the fee interest of each Property the City is seeking to acquire. An offer of just compensation was made to the record owners to purchase the fee interest in the Property to be acquired, as established by the approved appraisal and as required by Section 7267.2 of the California Government Code. Although negotiated settlements may still be possible for the fee interests cited above, it would be appropriate to commence the procedures to acquire the necessary interest through eminent domain.

ENVIRONMENTAL ANALYSIS: Pursuant to the State of California Environmental Quality Act Guidelines Section 15183 there has been compliance by the City with the requirements of the California Environmental Quality Act.
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RESOLUTION NO. ________

A RESOLUTION OF NECESSITY OF THE CITY COUNCIL OF THE CITY

OF ONTARIO, CALIFORNIA, FOR THE ACQUISITION BY EMINENT

DOMAIN OF A FEE SIMPLE INTEREST IN CERTAIN REAL PROPERTY LOCATED AT 301 NORTH EUCLID AVENUE, IN ONTARIO, SAN

BERNARDINO COUNTY, CALIFORNIA, MORE PARTICULARLY
DESCRIBED AS APN: 1048-566-07, FOR PUBLIC PURPOSE.

WHEREAS, the City of Ontario (the "City") proposes to acquire, by eminent domain, a fee simple interest in certain real property located at 301 North Euclid Avenue, in the City of Ontario more particularly described as Assessor Parcel Number 1048-566- 07, for the Granada Theater Revitalization Project in the City of Ontario, San Bernardino County, California, pursuant to the authority granted to it by Section 37350.5 of the California Government Code; and
WHEREAS, pursuant to Section 1245.235 of the California Code of Civil Procedure, the City scheduled a public hearing for Tuesday, May 21, 2024, at 6:30 p.m. at the Ontario City Hall, Council Chambers, 303 East “B” Street, Ontario, California, and gave to each person whose property is to be acquired and whose name and address appeared on the last equalized county assessment roll, notice and a reasonable opportunity to appear at said hearing and be heard on the matters referred to in Section 1240.030 of the California Code of Civil Procedure; and WHEREAS, said hearing has been held by the City and each person whose property is to be acquired by eminent domain was afforded an opportunity to be heard on said matters; and
WHEREAS, the City may now adopt a Resolution of Necessity pursuant to Section 1240.040 of the California Code of Civil Procedure.

NOW, THEREFORE, THE CITY DOES HEREBY RESOLVE AND DECLARE AS FOLLOWS:

SECTION 1. Compliance with California Code of Civil Procedure and California Environmental Quality Act. There has been compliance by the City with the requirements of Section 1245.235 of the California Code of Civil Procedure and is found to be categorically exempt pursuant to State Guidelines Section 15331 of the California Environmental Quality Act.

SECTION 2. Public Use. The public use for which the real property interest is being acquired is for the Granada Theater Revitalization Project in the City of Ontario, San Bernardino County, California. Section 37350.5 of the California Government Code authorizes the City to acquire by eminent domain real property necessary for such purposes.

SECTION 3. Description of Property. Attached and marked as Exhibit A is 2038
the legal definition, legal description and map of the interest to be acquired by the City, which describes the general location and extent of the property to be acquired with sufficient detail for reasonable identification.

SECTION 4. Findings. The City hereby finds and determines each of the following:
(a) The public interest and necessity require the proposed project; (b) The proposed project is planned or located in the manner that will be most compatible with the greatest public good and least private injury; (c) The property defined, described and depicted in Exhibit A is necessary for the proposed project;
(d) The offer required by Section 7267.2 of the California Government Code was made.

SECTION 5. Use Not Unreasonably Interfering with Existing Public Use:

Some or all of the real property to be acquired may be subject to easements and rightsof-way appropriated to existing public uses. The legal descriptions of these easements and rights-of-way are on file with the City and describe the general location and extent of the easements and rights-of-way with sufficient detail for reasonable identification. In the event the herein described use or uses will not unreasonably interfere with or impair the continuance of the public use as it now exists or may reasonably be expected to exist in the future, counsel for the City is authorized to acquire the fee interest subject to such existing public use(s) pursuant to Section 1240.510 of the California Code of Civil Procedure.

SECTION 6. More Necessary Public Use. Some or all of the real property to be acquired may be subject to easements and rights-of-way appropriated to existing public uses. To the extent that the herein described use or uses will unreasonably interfere with or impair the continuance of the public use as it now exists or may reasonably be expected to exist in the future, the City finds and determines that the herein described use or uses are more necessary than said existing public use. Counsel for the City is authorized to acquire the real property appropriated to such existing public use(s) pursuant to Section 1240.610 of the California Code of Civil Procedure. Staff is further authorized to make such improvements to the real property being acquired that it determines is reasonably necessary to mitigate any adverse impact upon the existing public use.

SECTION 7. Further Activities. Counsel for the City is hereby authorized to file legal proceedings necessary to acquire the hereinabove described real property in the name of and on behalf of the City by eminent domain, and counsel is authorized to institute and prosecute such legal proceedings as may be required in connection therewith. Legal counsel is further authorized to take such steps as may be authorized and required by law, and to make such security deposits as may be required by order of court, to permit the City to take possession of and use said real property at the earliest 2039
possible time. Counsel is further authorized to correct any errors or to make or agree to non-material changes in the legal description of the real property that are deemed necessary for the conduct of the condemnation action or other proceedings or transaction required to acquire the subject real property.

SECTION 8. Effective Date. This Resolution shall take effect upon adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
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STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held June 4, 2024 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held June 4, 2024. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
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EXHIBIT A
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Schedule A
Liability: S15,000.00 Premium: $420.00

1. Name of assured:

City of Ontario

2. Date ofGuarantee: 9/15/2021

3. This Litigation guarantee is furnished solely for the purposes of facilitating the Filing of an action to:

Receivership purposes

4. The Estate or interest in the land which is covered by this Guarantee is:

A Fee

5. Title to the Estate or interest in the land is vested in:

Overland Direct, Inc.

6. The Land referred to in this Guarantee is described as follows:

Lots 10, 11, and 12, Block 28, Town of Ontario, in the City of Ontario, County of San Bernardino, State of California, as per Map recorded in Book 9, Page 43, ofMaps, in the office ofthe County Recorder of said County.

Parcel No.: 1048-566-07
Also Known as: 301 North Euclid Avenue
Ontario CA 91762
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EXHIBIT “1”
301 NORTH MOUNTAIN AVENUE
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Department: Planning
Prepared By: Thomas Grahn
Staff Member Presenting: Scott Murphy,
Executive Director Community Development
Reviewed By: Kimberly Ruddins, Henry
Noh, Rudy Zeledon
Approved By:

MULTIPLE-FAMILY RESIDENTIAL AND MIXED-USE RESIDENTIAL OBJECTIVE DESIGN AND DEVELOPMENT STANDARDS, FILE NO. PDCA24-001

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

PUBLIC HEARINGS
RECOMMENDATION: That the City Council take the following actions:

A. Consider and waive further reading of an Urgency Ordinance amending the reference document section of the City's Development Code.

B. Consider and adopt a Resolution to implement Objective Development and Design Standards for multiple-family and mixed-use residential development.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods FISCAL IMPACT: There is not a direct fiscal impact associated with this action. The City budgeted $310,000 from the Senate Bill (SB) 2 Grant to develop Objective Development and Design Standards (ODDS). These funds will be reimbursed by the HCD over the project timeline, ensuring full cost recovery through the SB 2 Grant.

BACKGROUND & ANALYSIS:

Background: On September 17, 2019, the City Council authorized the City Manager to submit an application for SB 2, the City of Ontario was eligible for an award of $310,000. These funds were utilized to develop Objective Development and Design Standards (ODDS) for various types of residential projects, including multiple-family and mixed-use development. The purpose of the ODDS is to facilitate housing growth by streamlining processes and enhancing current development standards.
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In October 2019, the Planning Department staff issued a Request for Proposals (RFP) seeking consultant services and solicited proposals from qualified firms specializing in General Plan updates, including the preparation of ODDS. Following the evaluation of the proposals, Staff recommended to the City Council, on May 19, 2022, that PlaceWorks be selected to update the General Plan and develop the ODDS. The ultimate goal of the project was to incorporate the envisioned design standards into the Ontario Development Code (ODC) as a reference document.

Objective Development and Design Standards: The City's SB 2 Planning Grant application drives the development of Objective Development and Design Standards (ODDS). The primary aim of ODDS is to set standards for streamlined ministerial residential projects. All applicable projects under ODDS must adhere to architectural styles from the standards to establish impartial residential development criteria for streamlined approvals. ODDS will cover various residential types, design and development standards for multiple-family and mixed-use areas currently lacking specific standards.

The Urgency Ordinance will incorporate ODDS for multiple-family and mixed-use development types featuring a compliance checklist and style sheet for diverse architectural styles. The checklist outlines minimum design requirements, while style sheets illustrate traditional and modern interpretations. Comprehensive numerical standards for setbacks, building heights, and more are established for mixed-use and detached multiple-family areas, aligning with Housing Element Programs 9.19 and 9.21.

The Urgency Ordinance would be effective immediately and will remain in effect until September 3, 2024 (unless repealed). During this time, Staff will make refinements to the ODDS and will bring the revised ordinance back to the City Council for adoption.

HCD Review: As part of the Housing Element implementation, the City will provide the State Department of Housing and Community Development (HCD) with a copy of the ordinance and the finalized Standards once adopted. This will fulfill the necessary Housing Element policy actions to establish multiple-family and mixed-use standards.

Environmental: The proposed action is exempt from the California Environmental Quality Act (CEQA) as this project meets the required actions of CEQA Guidelines Section 15183 – Projects Consistent with a Community Plan, General Plan, or Zoning, because it involves direction to staff to adopt and implement design standards, which will not cause significant environmental impact and implements a uniformly applied development policy or standard that is consistent with the General Plan Housing Element policy to further regulate multi-family residential development. This determination is predicated on Section 15004 of the CEQA Guidelines, which provides direction to lead agencies on the appropriate timing for environmental review. The project(s) for which the proposed design standards are utilized or are intended for may require the preparation of an environmental.
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RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PDCA24-001 AMENDING THE

REFERENCE DOCUMENT SECTION OF THE ONTARIO DEVELOPMENT

CODE, TO AUTHORIZE OBJECTIVE DEVELOPMENT AND DESIGN

STANDARDS FOR MULTIPLE-FAMILY AND MIXED-USE

DEVELOPMENT, AND FINDING THE ACTION TO BE EXEMPT FROM
CEQA
WHEREAS, for the last several years, the State has enacted housing-related statutes that either limit or prohibit the use of local subjective standards for new development; and
WHEREAS, the City has historically regulated new housing development through a mix of subjective and objective standards to ensure that each project is reasonable and compatible with surrounding uses and City goals and objectives; and WHEREAS, the City's current objective standards on their own are not sufficient to ensure that new housing development is reasonable or compatible; and WHEREAS, as state law has evolved to increasingly limit the City's use of subjective standards, the need for more and more-thoughtful objective standards has become urgent; and
WHEREAS, specifically the approval of multiple-family residential and mixed-use residential development projects in various zoning districts based solely on the default standards currently in the Ontario Development Code, without additional appropriate objective regulations governing project design, site planning, building massing, height, setback, landscape, building type, architectural review, and similar criteria, threatens to adversely impact the character of existing neighborhoods and to negatively impact property values, personal privacy, and fire safety; and
WHEREAS, the City desires now to amend its local regulatory scheme to provide reasonable and appropriate objective standards, in compliance with state law and the City's own adopted housing element; and
WHEREAS, to protect public safety, health, and welfare, the City Council may adopt this resolution as an urgency measure in accordance with Government Code section 36937(b) and the City of Ontario Municipal Code; and
WHEREAS, as part of the implementation of the City's Housing Element Update the City prepared this Development Code Amendment to implement multiple-family residential and mixed-use residential objective development and design standards consistent with the policy program for these standards; and
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WHEREAS, on June 4, 2024, the City Council of the City of Ontario conducted a hearing to consider an Urgency Ordinance amending the reference document section of the City's development code, attached as Appendix A, to authorize objective development and design standards for multiple-family and mixed-use developments, and concluded said hearing on that date; and
WHEREAS, the urgency ordinance will allow the City to respond and impose consistent development standards to address the anticipated increase in housing development project applications. The ODDS adoption by urgency ordinance be followed at the earliest possible time by a non- urgency ordinance that will be considered for adoption by the City Council; and
WHEREAS, the Urgency Ordinance is exempt from CEQA pursuant to the California Environmental Quality Act (Public Resources Code Section 21000, et seq.) ("CEQA"); and WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND RESOLVED by the City Council of the City of Ontario, as follows:

SECTION 1: Environmental Determination and Findings. Adoption of this urgency ordinance has been assessed under CEQA and is deemed exempt based on CEQA Guidelines Section 15183, as it involves the adoption and implementation of Design Standards. This falls under the exemption for Projects Consistent with a Community Plan, General Plan, or Zoning, as it directs staff to adopt standards aligned with the General Plan Housing Element policy for multiple-family residential development. The determination relies on Section 15004, providing guidance on the timing of environmental review. While projects using the Design Standards may need environmental documents, the adoption of Objective Development and Design Standards is exempt from CEQA as it won't significantly impact the environment. Staff recommends City Council acknowledge the exemption, accept the NOE, and instruct staff to file the document under CEQA and the CEQA Guidelines (14 CCR Section 1500, et seq.).

SECTION 2: Concluding Facts and Reasons. Based upon the substantial evidence presented to the City Council during the above-referenced hearing, and upon the specific findings set forth in Sections 1, above, the City Council hereby concludes as follows:

The proposed Urgency Ordinance is consistent with the goals and policies of The Ontario Plan; and, as a matter of law, consistent with the City's General Plan under the principles, goals and policies contained within the Vision, Governance, Policy Plan (general plan), and City Council Priorities components of The Ontario Plan ("TOP"). More specifically, the goals and policies of TOP that are furthered by the proposed Project are as follows:
(1) City Council Goals.
 Invest in the Growth and Evolution of the City's Economy 2049
 Operate in a Businesslike Manner
(2) Vision.

Distinctive Development:
 Commercial and Residential Development
 Development quality that is broadly recognized as distinctive and not exclusively tied to the general suburban character typical of much of Southern California.
(3) Policy Plan (General Plan)
Land Use Element:
 Goal LU-1 Balance. A community that has a spectrum of housing types and price ranges that match the jobs in the City and that make it possible for people to live and work in Ontario and maintain a quality of life.
 LU-1.1 Strategic Growth. We concentrate growth in strategic locations that help create place and identity, maximize available and planned infrastructure, foster the development of transit, and support the expansion of the active and multimodal transportation networks throughout the City.

Housing Element:
 Goal H-2 Housing Supply & Diversity. Diversity of types of quality housing that are affordable to a range of household income levels, accommodate changing demographics, and support and reinforce the economic sustainability of Ontario.
 H-2.5 Housing Design. We require architectural excellence through adherence to City design guidelines, thoughtful site planning, environmentally sustainable practices, and other best practices.
 H-2.6 Infill Development. We support the revitalization of neighborhoods through the construction of higher-density residential developments on underutilized residential and commercial sites.

Community Economics Element:
 Goal CE-1 Complete Community: A complete community that provides for all incomes and stages of life.
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 CE-1.6 Diversity of Housing. We collaborate with residents, housing providers, and the development community to provide housing opportunities for every stage of life; we plan for a variety of housing types and price points to encourage the development of housing supportive of our efforts to attract business in growing sectors of the community while being respectful of existing viable uses.
 Goal CE-2 Placemaking: A City of distinctive neighborhoods, districts, corridors, and centers where people choose to be.
 CE-2.1 Development Projects. We require new development and redevelopment to create unique, high-quality places that add value to the community.
 CE-2.4 Protection of Investment. We require that new
development and redevelopment protect existing investment by providing architecture and urban design of equal or greater quality.

Community Design Element:
 Goal CD-1 Image & Identity: A dynamic, progressive city containing distinct and complete places that foster a positive sense of identity and belonging among residents, visitors, and businesses.
 CD-1.1 City Identity. We take actions that are consistent with the City being a leading urban center in Southern California while recognizing, enhancing, and preserving the character of our existing viable neighborhoods.
 CD-1.2 Place Types. We establish Place Types in urban, mixed use, and transit-oriented areas to foster the City's identity as a premier community and require new development within each Place Type to incorporate prescribed urban
patterns, forms, and placemaking priorities.
 Goal CD-2 Design Quality. A high level of design quality resulting in neighborhoods, public spaces, parks, and streetscapes that are attractive, safe, functional, human-scale, and distinct.  CD-2.1 Quality Building Design and Architecture. We
encourage all development projects to convey visual interest and character through:
 Building volume, massing, and height to provide
context-appropriate scale and proportion;
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 A true architectural style which is carried out in plan, section, and elevation through all aspects of the building and site design and appropriate for its setting; and
 Exterior building materials that are articulated, high quality, durable, and appropriate for the architectural style.
 CD-2.8 Safe Design. We incorporate defensible space design into new and existing developments to ensure the maximum safe travel and visibility on pathways, corridors, and open space and at building entrances and parking areas by avoiding physically and visually isolated spaces, maintaining visibility and accessibility, and using lighting.
 CD-2.9 Landscape Design. We encourage durable,
sustainable, and drought-tolerant landscaping materials and designs that enhance the aesthetics of structures, create and define public and private spaces, and provide shade and environmental benefits.
 CD-2.10 Parking Areas. We require all development, including single-family residential, to minimize the visual impact of surface, structured, and garage parking areas visible from the public realm in an aesthetically pleasing, safe and
environmentally sensitive manner. Examples include:
 Structured parking: facade articulation, screening,
appropriate lighting, and landscaping; and
 Garage parking: providing access to single-family
residential garages through alley access, recessing
garages from the frontage to emphasize front doors or
active living spaces.
 Goal CD-3 Urban, Mixed Use, and Transit-Oriented Place Types:

Vibrant urban environments that are organized around intense buildings, pedestrian and transit areas, public plazas, and linkages between and within developments that are conveniently located, visually appealing and safe during all hours.
 CD-3.4 Context-Aware and Appropriate Design. We require appropriate building and site design that complements existing development, respects the intent and identity of the Place Type, and provides appropriate transitions and connections between adjacent uses to ensure compatibility of scale, maintain an appropriate level of privacy for each use, and minimize potential conflicts.
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 CD-3.5 Active Frontages. We create lively pedestrian
streetscapes by requiring primary building, business, and residential entrances, outdoor dining, and storefronts be located on ground floors adjacent to sidewalks or public spaces and designed to maximize safety, comfort, aesthetics, and the intended functionality (as defined by the Place Type).

SECTION 3: Code Amendment. The REFERENCE section of the Ontario Development Code is hereby amended to read in its entirety as follows:

Reference J – Objective Development & Design Standards.

This section incorporates by reference the Objective Development and Design Standards, or "ODDS," that are adopted and amended by the City Council by resolution. The ODDS are binding requirements and standards.

SECTION 4: Effective Date. This resolution takes effect immediately upon its adoption.

SECTION 5: Severability. If any provision of this resolution or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the resolution that can be given effect without the invalid provision or application, and to this extent, the provisions of this resolution are severable.

The City Council declares that it would have adopted this resolution irrespective of the invalidity of any portion thereof.

SECTION 6: City Council Action. Based upon the findings and conclusions set forth in Sections 1 through 5, above, the City Council hereby APPROVES the proposed Resolution, as depicted in Attachment A (Reference J - Objective Development & Design Standards) of this Resolution.

SECTION 6: Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings have been based are located at the City of Ontario City Hall, 303 East "B" Street, Ontario, California 91764. The custodian for these records is the City Clerk of the City of Ontario.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
2053
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
2054

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO)

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
2055
ATTACHMENT A:

OBJECTIVE DEVELOPMENT AND DESIGN STANDARDS FOR MULTIPLE-FAMILY

AND MIXED-USE DEVELOPMENT
(Ontario Development Code, Reference J)
2056
ORDINANCE NO. ________

AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PDCA24-001

AMENDING THE REFERENCE DOCUMENT SECTION OF THE

ONTARIO DEVELOPMENT CODE, TO AUTHORIZE OBJECTIVE

DEVELOPMENT AND DESIGN STANDARDS FOR MULTIPLE-FAMILY

AND MIXED-USE DEVELOPMENT, AND FINDING THE ACTION TO BE

EXEMPT FROM CEQA
WHEREAS, for the last several years, the State has enacted housing-related statutes that either limit or prohibit the use of local subjective standards for new development; and
WHEREAS, the City has historically regulated new housing development through a mix of subjective and objective standards to ensure that each project is reasonable and compatible with surrounding uses and City goals and objectives; and WHEREAS, the City’s current objective standards on their own are not sufficient to ensure that new housing development is reasonable or compatible; and WHEREAS, as state law has evolved to increasingly limit the City’s use of subjective standards, the need for more and more-thoughtful objective standards has become urgent; and
WHEREAS, specifically the approval of multiple-family residential and mixed-use residential development projects in various zoning districts based solely on the default standards currently in the City’s Development Code, without additional appropriate objective regulations governing project design, site planning, building massing, height, setback, landscape, building type, architectural review, and similar criteria, threatens to adversely impact the character of existing neighborhoods and to negatively impact property values, personal privacy, and fire safety; and WHEREAS, the City desires now to amend its local regulatory scheme to provide reasonable and appropriate objective standards, in compliance with state law and the City’s own adopted housing element; and
WHEREAS, to protect public safety, health, and welfare, the City Council may adopt this ordinance as an urgency measure in accordance with Government Code section 36937(b) and the City of Ontario Municipal Code; and WHEREAS, as part of the implementation of the City’s Housing Element Update the City prepared this Development Code Amendment to implement multiple-family residential and mixed-use residential objective development and design standards consistent with the policy program for these standards; and 2057
WHEREAS, the urgency ordinance will allow the City to respond and impose consistent development standards to address the anticipated increase in housing development project applications. The ODDS adoption by urgency ordinance be followed at the earliest possible time by a non- urgency ordinance that will be considered for approval by the Planning Commission before returning to the City Council for ultimate adoption; and
WHEREAS, on June 4, 2024, the City Council of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date; and WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred; and

NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND ORDAINED by the City Council of the City of Ontario, as follows:

SECTION 1: Incorporation of Recitals. The recitals above are each incorporated by reference and adopted as findings by the City Council.

SECTION 2: Environmental Determination and Findings. Adoption of this urgency ordinance has been assessed under CEQA and is deemed exempt based on CEQA Guidelines Section 15183, as it involves the adoption and implementation of Design Standards. This falls under the exemption for Projects Consistent with a Community Plan, General Plan, or Zoning, as it directs staff to adopt standards aligned with the General Plan Housing Element policy for multiple-family residential development.

The determination relies on Section 15004, providing guidance on the timing of environmental review. While projects using the Design Standards may need environmental documents, the adoption of Objective Development and Design Standards is exempt from CEQA as it won't significantly impact the environment. Staff recommends City Council acknowledge the exemption, accept the NOE, and instruct staff to file the document under CEQA and the CEQA Guidelines (14 CCR Section 1500 et seq.).

SECTION 3: General Plan Consistency. This ordinance is, as a matter of law, consistent with the City's General Plan under the principles, goals and policies contained within the Vision, Governance, Policy Plan (general plan), and City Council Priorities components of The Ontario Plan ("TOP"). More specifically, the goals and policies of TOP that are furthered by the proposed Project are as follows:
(1) City Council Goals.
 Invest in the Growth and Evolution of the City's Economy  Operate in a Businesslike Manner
(2) Vision.

Distinctive Development:
 Commercial and Residential Development
2058
 Development quality that is broadly recognized as distinctive and not exclusively tied to the general suburban character typical of much of Southern California.
(3) Policy Plan (General Plan)
Land Use Element:
 Goal LU-1 Balance. A community that has a spectrum of housing types and price ranges that match the jobs in the City and that make it possible for people to live and work in Ontario and maintain a quality of life.
 LU-1.1 Strategic Growth. We concentrate growth in strategic locations that help create place and identity, maximize available and planned infrastructure, foster the development of transit, and support the expansion of the active and multimodal transportation networks throughout the City.

Community Economics Element:
 Goal CE-1 Complete Community: A complete community that provides for all incomes and stages of life.
 CE-1.6 Diversity of Housing. We collaborate with residents, housing providers, and the development community to
provide housing opportunities for every stage of life; we plan for a variety of housing types and price points to encourage the development of housing supportive of our efforts to attract 2059
business in growing sectors of the community while being respectful of existing viable uses.
 Goal CE-2 Placemaking: A City of distinctive neighborhoods, districts, corridors, and centers where people choose to be.  CE-2.1 Development Projects. We require new development and redevelopment to create unique, high-quality places that add value to the community.
 CE-2.4 Protection of Investment. We require that new
development and redevelopment protect existing investment by providing architecture and urban design of equal or greater quality.

Community Design Element:
 Goal CD-1 Image & Identity: A dynamic, progressive city containing distinct and complete places that foster a positive sense of identity and belonging among residents, visitors, and businesses.  CD-1.1 City Identity. We take actions that are consistent with the City being a leading urban center in Southern California while recognizing, enhancing, and preserving the character of our existing viable neighborhoods.
 CD-1.2 Place Types. We establish Place Types in urban, mixed use, and transit-oriented areas to foster the City's identity as a premier community and require new
development within each Place Type to incorporate
prescribed urban patterns, forms, and placemaking priorities.  Goal CD-2 Design Quality. A high level of design quality resulting in neighborhoods, public spaces, parks, and streetscapes that are attractive, safe, functional, human-scale, and distinct.  CD-2.1 Quality Building Design and Architecture. We
encourage all development projects to convey visual interest and character through:
 Building volume, massing, and height to provide
context-appropriate scale and proportion;
 A true architectural style which is carried out in plan, section, and elevation through all aspects of the
building and site design and appropriate for its setting; and
2060
 Exterior building materials that are articulated, high quality, durable, and appropriate for the architectural style.
 CD-2.8 Safe Design. We incorporate defensible space design into new and existing developments to ensure the maximum safe travel and visibility on pathways, corridors, and open space and at building entrances and parking areas by
avoiding physically and visually isolated spaces, maintaining visibility and accessibility, and using lighting.
 CD-2.9 Landscape Design. We encourage durable,
sustainable, and drought-tolerant landscaping materials and designs that enhance the aesthetics of structures, create and define public and private spaces, and provide shade and environmental benefits.
 CD-2.10 Parking Areas. We require all development,
including single-family residential, to minimize the visual impact of surface, structured, and garage parking areas visible from the public realm in an aesthetically pleasing, safe and environmentally sensitive manner. Examples include:
 Structured parking: facade articulation, screening,
appropriate lighting, and landscaping; and
 Garage parking: providing access to single-family
residential garages through alley access, recessing
garages from the frontage to emphasize front doors or
active living spaces.
 Goal CD-3 Urban, Mixed Use, and Transit-Oriented Place Types:

Vibrant urban environments that are organized around intense buildings, pedestrian and transit areas, public plazas, and linkages between and within developments that are conveniently located, visually appealing and safe during all hours.
 CD-3.4 Context-Aware and Appropriate Design. We require appropriate building and site design that complements
existing development, respects the intent and identity of the Place Type, and provides appropriate transitions and
connections between adjacent uses to ensure compatibility of scale, maintain an appropriate level of privacy for each use, and minimize potential conflicts.
 CD-3.5 Active Frontages. We create lively pedestrian
streetscapes by requiring primary building, business, and residential entrances, outdoor dining, and storefronts be located on ground floors adjacent to sidewalks or public 2061
spaces and designed to maximize safety, comfort, aesthetics, and the intended functionality (as defined by the Place Type).

SECTION 4: Code Amendment. The REFERENCE Section of the Ontario Development Code is hereby amended to read in its entirety as follows:

Reference J – Objective Development & Design Standards.

This section incorporates by reference the Objective Development and Design Standards, or “ODDS,” that are adopted and amended by the City Council by resolution. The ODDS are binding requirements and standards.

SECTION 5: Effective Date. This ordinance takes effect immediately upon its adoption.

SECTION 6: Submittal to HCD. The City Clerk shall submit a copy of this ordinance along with the ODDS and the resolution adopting the ODDS to the Department of Housing and Community Development within 60 days after adoption.

SECTION 7: Severability. If any provision of this ordinance or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this ordinance are severable. The City Council declares that it would have adopted this ordinance irrespective of the invalidity of any portion thereof.

SECTION 8: Publication and Posting. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary thereof to be published at least once, in a newspaper of general circulation in the City of Ontario, California within 15 days following the adoption. The City Clerk shall post a certified copy of this ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.

PASSED, APPROVED, AND ADOPTED this 4th day of June 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
________________________________

SHEILA MAUTZ, CITY CLERK
2062
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
2063

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Urgency Ordinance No. _____ was duly introduced and adopted at the regular meeting of the City Council of the City of Ontario held on the 4th day of June 2024, by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
I hereby certify that the foregoing is the original of Urgency Ordinance No._______ duly passed and adopted by the Ontario City Council at their regular meeting held June 4, 2024, and the entire Ordinance was published on May 10, 2024 in the Inland Valley Daily Bulletin newspaper.
_____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
2064
Department: Financial Services
Prepared By: Jennifer Schaefer
Staff Member Presenting: Armen Harkalyan,
Executive Director of Finance
Reviewed By: Claudia Hernandez, Doreen Nunes
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 29
SUBJECT: A RESOLUTION AUTHORIZING THE ISSUANCE OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES) SPECIAL TAX BONDS, SERIES 2024 AND RELATED MATTERS

CITY OF ONTARIO
Agenda Report
June 4, 2024
SECTION:

ADMINISTRATIVE

REPORTS/DISCUSSION/ACTION
RECOMMENDATION: That the City Council take the following actions:

A. Consider and adopt a Resolution authorizing the issuance of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the "Bonds"), in an aggregate principal amount not-to-exceed $12.5 million, authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement, a Continuing Disclosure Agreement and an Amended and Restated Acquisition and Funding Agreement, authorizing the distribution of an Official Statement and related actions; B. Consider and adopt a Resolution of the City of Ontario making a declaration of official intent to reimburse facilities expenditures with bond proceeds and related actions; C. Authorize the issuance of special tax bonds for public improvements required to facilitate the development of the Countryside Phase 2 South - Facilities project and the Ontario Ranch development;
D. Approve the forms of the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement, an Amended and Restated Acquisition and Funding Agreement, and the Preliminary Official Statement;
E. Authorize a negotiated sale of the special tax bonds to Samuel A. Ramirez & Co., in accordance with the terms of the Bond Purchase Agreement; and F. Authorize the execution of the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement, a deemed final certification in connection with the Preliminary Official Statement, a final Official Statement and other documents in connection with the issuance of the bonds by the City Manager or the other specified authorized officers.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public 2065
Facilities)
Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT: The use of Mello-Roos financing for public facilities in the residential development of the Countryside Phase 2 South - Facilities project in the Ontario Ranch development, is estimated to generate approximately $12.5 million in bond proceeds based on current market interest rates.

These funds will be used to help fund a portion of the public infrastructure improvements that will serve the project area. The Resolution authorizing the issuance of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024, and related matters, limits the principal amount of the bonds to $12.5 million. The City currently expects the bonds to be sold no later than December 2024; however, such schedule could change based on market volatility and market conditions. Since Mello-Roos bonds are not a direct obligation of the City and are paid from special taxes levied on each taxable parcels in the applicable community facilities district, there is no direct impact to the General Fund from the issuance of Mello-Roos bonds. Annual approval by the City Council will be required to process the special tax levies necessary to fund the ongoing debt service obligations of the Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities).

BACKGROUND & ANALYSIS: The Mello-Roos Community Facilities Act of 1982 provides local government, with the requisite consent and approval from the property owners, the authority to establish community facilities districts for levying special taxes to fund governmental services and finance various kinds of public infrastructure facilities. Under the Mello-Roos Act, the initial steps in the formation of a community facilities district to finance public improvements are adopting a Resolution declaring the City's intention to establish a community facilities district and levy special taxes, a Resolution to issue bonds, and a Resolution of the City of Ontario making a declaration of official intent to reimburse facilities expenditures with bond proceeds and related matters. On September 5, 2017, the City Council, in accordance with the Mello-Roos Act, took the initial steps in the formation of the District with the adoption of Resolution No. 2017-108, declaring the City's intention to establish the District and to authorize the levy of special taxes, and Resolution No. 2017-109 deeming it necessary for the District to incur bonded indebtedness. On October 17, 2017, the City Council adopted Resolution No. 2017-123 forming the District. Based on a successful property owner election held on October 17, 2017, the City Council adopted Ordinance No. 3082 on November 7, 2017, authorizing the levy of special taxes within the District to finance public improvements related to the Countryside Phase 2 South - Facilities project. On June 7, 2022, the City Council initiated change proceedings to amend the Original Rate and Method and increase the maximum bonded indebtedness. On August 2, 2022, the City Council adopted Ordinance No. 3221 amending and restating Ordinance No. 3082 authorizing the levy of special taxes in accordance with the Rate and Method.

The public improvements to be financed by the District are as follows:

Water and Recycled Water System Facilities;
Fiber Optic System Facilities;
Streets and Traffic Circulation System Facilities; and
Storm Drain Facilities.
2066
The Countryside Phase 2 South - Facilities project addresses the residential development of approximately 34.00 gross acres located west of Archibald Avenue, east of the Cucamonga Creek Channel, south of Chino Avenue and generally north of Schaefer Avenue. At build out, the project is projected to include 235 single-family residential units.

The proposed Resolutions references several bond documents and other matters related to the proposed issuance of bonds by City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities). The documents are listed below and are on file with the Records Management Department:

Indenture;
Bond Purchase Agreement;
Continuing Disclosure Agreement;
Amended and Restated Acquisition and Funding Agreement; and Preliminary Official Statement.
2067
4162-2120-2255.3
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES) SPECIAL TAX BONDS, SERIES 2024, IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $12,500,000,

AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE,

A BOND PURCHASE AGREEMENT, A CONTINUING DISCLOSURE

AGREEMENT AND AN AMENDED AND RESTATED ACQUISITION AND

FUNDING AGREEMENT, AUTHORIZING THE DISTRIBUTION OF AN

OFFICIAL STATEMENT IN CONNECTION THEREWITH AND

AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND

CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) has formed City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) under the provisions of the MelloRoos Community Facilities Act of 1982 (the “Act”); WHEREAS, the Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax; WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $12,500,000;
WHEREAS, in order to provide for the authentication and delivery of the Series 2024 Bonds, to establish and declare the terms and conditions upon which the Series 2024 Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District proposes to enter into an Indenture with Zions Bancorporation, National Association, as trustee (the “Trustee”) (such Indenture, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Indenture”);
WHEREAS, Samuel A. Ramirez & Co., Inc. (the “Underwriter”), has presented the Community Facilities District with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series 2024 Bonds from the Community Facilities District (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Purchase Agreement”);
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4162-2120-2255.3
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Series 2024 Bonds, the underwriter thereof must have reasonably determined that the Community Facilities District, as the issuer of the Series 2024 Bonds, has undertaken in a written agreement or contract for the benefit of the holders of the Series 2024 Bonds to provide disclosure of certain financial information and certain listed events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the Community Facilities District desires to enter into a Continuing Disclosure Agreement with the Trustee (such Continuing Disclosure Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Continuing Disclosure Agreement”); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Series 2024 Bonds has been prepared (such Preliminary Official Statement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Preliminary Official Statement”); WHEREAS, the City and Forestar Countryside, L.L.C. (“Forestar”) previously entered into the Acquisition and Funding Agreement, dated as of October 1, 2017 (the “Original Acquisition Agreement”), pursuant to which, in accordance with the terms set forth therein, Forestar is to construct or cause to be constructed certain of the Facilities that, upon satisfaction of the conditions specified therein, the City is to acquire and take title to, and Forestar is to be paid the purchase price of, determined as set forth therein, which purchase price is to be paid from the proceeds of the special tax or bonds of the Community Facilities District;
WHEREAS, Forestar and Lennar Homes of California, LLC (the “Developer”) previously entered into the Assignment and Assumption Agreement, dated as of February 7, 2022, pursuant to which, in accordance with the terms set forth therein, the Developer accepted the assignment of the Original Acquisition Agreement from Forestar and unconditionally assumed all of the obligations, liabilities and responsibilities and agreed to perform all of the obligations of Forestar under the Original Acquisition Agreement;
WHEREAS, the Original Acquisition Agreement provides that the Original Acquisition Agreement may be amended by an instrument in writing executed and delivered by the City and the Developer;
WHEREAS, the City and the Developer desire to amend certain provisions of, and restate, the Original Acquisition Agreement;
WHEREAS, there has been presented to this meeting a form of an Amended and Restated Acquisition and Funding Agreement that so amends and restates the Original Acquisition Agreement (such Amended and Restated Acquisition and Funding 2069
4162-2120-2255.3
Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Amended and Restated Acquisition Agreement”);
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Indenture;
(b) the Purchase Agreement;
(c) the Continuing Disclosure Agreement;
(d) the Preliminary Official Statement; and
(e) the Amended and Restated Acquisition Agreement;
WHEREAS, Kitty Siino & Associates, Inc. has prepared and provided to the Community Facilities District an appraisal report, dated May 6, 2024 (the “Appraisal”), providing an opinion of value of the property in the Community Facilities District, which has been submitted to this meeting;
WHEREAS, Section 5852.1 of the California Government Code requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Series 2024 Bonds, good faith estimates of (a) the true interest cost of the Series 2024 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Series 2024 Bonds, (c) the amount of proceeds of the Series 2024 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 Bonds, and (d) the sum total of all debt service payments on the Series 2024 Bonds calculated to the final maturity of the Series 2024 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Series 2024 Bonds;
WHEREAS, in compliance with Section 5852.1 of the California Government Code, the City Council has obtained from Urban Futures, Inc., as the Community Facilities District’s municipal advisor (the “Municipal Advisor”), the required good faith estimates, which the Municipal Advisor has prepared in consultation with the Underwriter, and such estimates are disclosed and set forth in Exhibit A attached hereto;
WHEREAS, the Community Facilities District desires to proceed to issue and sell the Series 2024 Bonds and to authorize the execution of such documents and the performance of such acts as may be necessary or desirable to effect the offering, sale and issuance of the Series 2024 Bonds; and
WHEREAS, the City Council is the legislative body of the Community Facilities District;
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4162-2120-2255.3
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. Subject to the provisions of Section 3 hereof, the issuance of the Series 2024 Bonds, in an aggregate principal amount of not to exceed $12,500,000, on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, be and the same is hereby authorized and approved. The Series 2024 Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution.

Section 3. The Indenture, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City, the Assistant City Manager of the City, the Executive Director of Finance of the City, the Deputy City Treasurer of the City, and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series 2024 Bonds in excess of $12,500,000, shall not result in a final maturity date of the Series 2024 Bonds later than September 1, 2055, and shall not result in a true interest cost for the Series 2024 Bonds in excess of 6.00%.

Section 4. The Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount) from the principal amount of the Series 2024 Bonds in excess of 1.50% of the aggregate principal amount of the Series 2024 Bonds. The City Council hereby finds and determines that the sale of the Series 2024 Bonds at negotiated sale as contemplated by the Purchase Agreement will result in a lower overall cost. 2071
4162-2120-2255.3
Section 5. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer.

Section 6. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2024 Bonds is hereby authorized and approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, to certify on behalf of the Community Facilities District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).

Section 7. The preparation and delivery of a final Official Statement (the “Official Statement”), and its use in connection with the offering and sale of the Series 2024 Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute the final Official Statement and any amendment or supplement thereto.

Section 8. The Amended and Restated Acquisition Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Amended and Restated Acquisition Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Amended and Restated Acquisition Agreement by such Authorized Officer.

Section 9. Based upon the value of the property within the Community Facilities District reported in the Appraisal and the value-to-lien information for such property set forth in the Preliminary Official Statement, the City Council, for purposes of Section 53345.8 of the Act, hereby finds and determines that the value of the real property that would be subject to the Special Tax to pay debt service on the Series 2024 Bonds will be at least three times the principal amount of the Series 2024 Bonds 2072
4162-2120-2255.3
to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District.

Section 10. If and to the extent that any feature or aspect of the Series 2024 Bond structure, the rate and method of apportionment of the Special Tax, the method of financing the Facilities, the appraisal, the absorption study or other components of the Series 2024 Bond issue approved and authorized hereby is inconsistent or in conflict with any requirement, standard, measure or procedure set forth in the City’s Mello-Roos Community Facilities Act of 1982 Local Goals and Policies, such requirement, standard, measure or procedure is, to the extent necessary to eliminate such inconsistency or conflict, hereby waived, and the City Council hereby finds and determines that benefit inures to the ultimate property owners, the Community Facilities District and/or the City as a result of such waiver.

Section 11. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California Government Code using DocuSign.

Section 12. All actions heretofore taken by the officers, employees and agents of the City with respect to the issuance and sale of the Series 2024 Bonds, or in connection with or related to any of the agreements, documents, certificates or instruments referred to herein, are hereby approved, confirmed and ratified.

Section 13. The Authorized Officers and the officers, employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things and to execute and deliver any and all agreements, documents, certificates or instruments that they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution not inconsistent with the provisions hereof.

Section 14. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
2073
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ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
2074
4162-2120-2255.3

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
2075
4162-2120-2255.3

EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Series 2024 Bonds in accordance with Section 5852.1 of the California Government Code.

Such good faith estimates have been provided to the Community Facilities District by the Municipal Advisor, which the Municipal Advisor has prepared in consultation with the Underwriter.

Principal Amount. The Municipal Advisor has informed the Community Facilities District that, based on the Community Facilities District’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Series 2024 Bonds to be issued and sold is $11,040,000 (the “Estimated Principal Amount”), which does not include approximately $82,906 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. Such Estimated Principal Amount and such estimated net premium amount would produce approximately $1,122,906 of gross proceeds.

True Interest Cost of the Series 2024 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Series 2024 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Series 2024 Bonds, is 5.22%.

Finance Charge of the Series 2024 Bonds. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Series 2024 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2024 Bonds), is $440,600.

Amount of Proceeds to be Received. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Community Facilities District for sale of the Series 2024 Bonds, less the finance charge of the Series 2024 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 Bonds, is $9,944,269.
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Total Payment Amount. The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Community Facilities District will make to pay debt service on the Series 2024 Bonds, plus the finance charge for the Series 2024 Bonds, as described above, not paid with the proceeds of the Series 2024 Bonds, calculated to the final maturity of the Series 2024 Bonds, is $22,069,473, which excludes any reserves (or interest accrued thereon) or capitalized interest funded or paid with proceeds of the Series 2024 Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Series 2024 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Series 2024 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Series 2024 Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series 2024 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Series 2024 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Community Facilities District’s financing plan, or a combination of such factors. The actual date of sale of the Series 2024 Bonds and the actual principal amount of Series 2024 Bonds issued and sold will be determined by the Community Facilities District based on the timing of the need for proceeds of the Series 2024 Bonds and other factors. The actual interest rates borne by the Series 2024 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2024 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Community Facilities District.
2077
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RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, MAKING A DECLARATION OF OFFICIAL INTENT TO

REIMBURSE FACILITIES EXPENDITURES WITH BOND PROCEEDS

AND RELATED ACTIONS
WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) has formed City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) under the provisions of the MelloRoos Community Facilities Act of 1982 (the “Act”); WHEREAS, the Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax; WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”);
WHEREAS, beginning the 60-day period prior to the date hereof, the City has paid or incurred, or expects to pay or incur, costs with respect to the Facilities prior to the issuance of the Series 2024 Bonds in order to finance the Facilities; WHEREAS, the City also may pay or incur certain ‘preliminary expenditures’ in connection with the Facilities, which term includes architectural, engineering, surveying, soil testing, reimbursement bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction, or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction; WHEREAS, in order to reimburse itself for the payment, or pay unpaid costs, of the Facilities, the City anticipates it will issue Series 2024 Bonds in an amount not expected to exceed $12,500,000 for the purpose of financing costs of the Facilities; WHEREAS, proceeds of the Series 2024 Bonds will be allocated to reimbursement expenditures no later than 18 months after the later of (i) the date the cost is paid, or (ii) the date the Facilities (or each component thereof) is placed in service or abandoned (but in no event more than three years after the cost is paid); WHEREAS, Section 1.150-2 of the Treasury Regulations requires the City to declare its reasonable official intent to reimburse prior expenditures for the Facilities with proceeds of indebtedness; and
WHEREAS, the City wishes to declare its official intent to use proceeds of indebtedness (such as the Series 2024 Bonds) to reimburse expenditures of the Facilities paid before its obligations are issued and to finance the Facilities costs on a long-term 2078
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basis with the proceeds of such indebtedness.

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

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. This Resolution is adopted by the City Council solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations. Unless otherwise defined, terms used herein shall have the meaning set forth in the Internal Revenue Code of 1986 and in Section 1.150-2 of the Treasury Regulations. This Resolution does not bind the City to make any expenditure, incur any indebtedness, or proceed with construction of the Facilities.

Section 3. All actions heretofore taken by the officers, employees and agents of the City with respect to the actions set forth above are hereby approved, confirmed and ratified.

Section 4. The officers, employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things that they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution not inconsistent with the provisions hereof.

Section 5. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 4th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
2079
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APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
2080
4153-3207-5343.2

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
2081
4141-9129-0191.2

INDENTURE
by and between

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
and

ZIONS BANCORPORATION, NATIONAL ASSOCIATION,

AS TRUSTEE
Dated as of ______ 1, 2024
Relating to
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South - Facilities)
Special Tax Bonds
2082

TABLE OF CONTENTS
Page
i
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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY
Section 1.01. Definitions................................................................................................................ 3 Section 1.02. Rules of Construction ............................................................................................ 10 Section 1.03. Equal Security ........................................................................................................ 11

ARTICLE II

THE BONDS
Section 2.01. Authorization of Bonds; Special, Limited Obligations .......................................... 12 Section 2.02. Terms of Series 2024 Bonds .................................................................................. 12 Section 2.03. Execution of Bonds ................................................................................................ 13 Section 2.04. Authentication of Bonds ........................................................................................ 13 Section 2.05. Registration Books ................................................................................................. 14 Section 2.06. Transfer and Exchange of Bonds ........................................................................... 14 Section 2.07. Book-Entry System ................................................................................................ 14 Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen .......................................................... 16 Section 2.09. Temporary Bonds................................................................................................... 17

ARTICLE III
ISSUANCE OF SERIES 2024 BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01. Issuance of Series 2024 Bonds .............................................................................. 18 Section 3.02. Application of Proceeds ......................................................................................... 18 Section 3.03. Costs of Issuance Fund .......................................................................................... 18 Section 3.04. Improvement Fund ................................................................................................. 19 Section 3.05. Conditions for the Issuance of Additional Bonds .................................................. 23 Section 3.06. Procedure for the Issuance of Additional Bonds ................................................... 24 Section 3.07. Additional Bonds ................................................................................................... 25

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01. Redemption of Series 2024 Bonds ......................................................................... 26 Section 4.02. Notice of Redemption ............................................................................................ 28 Section 4.03. Selection of Bonds for Redemption ....................................................................... 28 2083

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Section 4.04. Partial Redemption of Bonds ................................................................................. 29 Section 4.05. Effect of Notice of Redemption ............................................................................. 29

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01. Pledge ..................................................................................................................... 30 Section 5.02. Special Tax Fund ................................................................................................... 30 Section 5.03. Bond Fund .............................................................................................................. 31 Section 5.04. Reserve Fund ......................................................................................................... 32 Section 5.05. Redemption Fund ................................................................................................... 33 Section 5.06. Rebate Fund ........................................................................................................... 33 Section 5.07. Administrative Expense Fund ................................................................................ 33 Section 5.08. Investment of Moneys............................................................................................ 34

ARTICLE VI

COVENANTS
Section 6.01. Collection of Special Tax Revenues ...................................................................... 36 Section 6.02. Foreclosure ............................................................................................................. 36 Section 6.03. Compliance with Act ............................................................................................. 37 Section 6.04. Punctual Payment................................................................................................... 37 Section 6.05. Extension of Payment of Bonds ............................................................................. 37 Section 6.06. Against Encumbrances; Defense of Pledge ........................................................... 37 Section 6.07. Tax Covenants ....................................................................................................... 37 Section 6.08. Non-Cash Payments of Special Tax ...................................................................... 38 Section 6.09. Reduction in Special Tax ....................................................................................... 38 Section 6.10. Continuing Disclosure ........................................................................................... 38 Section 6.11. Accounting Records ............................................................................................... 38 Section 6.12. State Reporting....................................................................................................... 38 Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission ................................................................................................... 39 Section 6.14. Further Assurances ................................................................................................. 39 2084

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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default ................................................................................................... 40 Section 7.02. Foreclosure ............................................................................................................. 40 Section 7.03. Other Remedies ...................................................................................................... 40 Section 7.04. Remedies Not Exclusive ........................................................................................ 41 Section 7.05. Application of Net Special Tax Revenues After Default ....................................... 41 Section 7.06. Power of Trustee to Enforce .................................................................................. 42 Section 7.07. Owners’ Direction of Proceedings ......................................................................... 42 Section 7.08. Limitation on Owners’ Right to Sue ...................................................................... 42 Section 7.09. Absolute Obligation ............................................................................................... 42 Section 7.10. Termination of Proceedings ................................................................................... 43 Section 7.11. No Waiver of Default ............................................................................................. 43

ARTICLE VIII

TRUSTEE
Section 8.01. Duties and Liabilities of Trustee ............................................................................ 44 Section 8.02. Qualifications; Removal and Resignation; Successors .......................................... 44 Section 8.03. Liability of Trustee ................................................................................................ 45 Section 8.04. Right to Rely on Documents and Opinions ........................................................... 47 Section 8.05. Accounting Records and Financial Statements...................................................... 48 Section 8.06. Preservation and Inspection of Documents............................................................ 48 Section 8.07. Compensation and Indemnification ....................................................................... 48

ARTICLE IX

SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures ........................................................................................ 50 Section 9.02. Effect of Supplemental Indenture .......................................................................... 51 Section 9.03. Endorsement of Bonds; Preparation of New Bonds .............................................. 51 Section 9.04. Amendment of Particular Bonds ............................................................................ 51 2085

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4141-9129-0191.2

ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture ......................................................................................... 52 Section 10.02. Bonds Deemed To Have Been Paid ..................................................................... 52 Section 10.03. Unclaimed Moneys .............................................................................................. 53

ARTICLE XI

MISCELLANEOUS
Section 11.01. Successor Is Deemed Included in All References to Predecessor ....................... 54 Section 11.02. Limitation of Rights ............................................................................................. 54 Section 11.03. Destruction of Bonds ........................................................................................... 54 Section 11.04. Severability of Invalid Provisions ........................................................................ 54 Section 11.05. Notices ................................................................................................................. 54 Section 11.06. Evidence of Rights of Owners ............................................................................. 55 Section 11.07. Disqualified Bonds............................................................................................... 56 Section 11.08. Money Held for Particular Bonds ........................................................................ 56 Section 11.09. Funds and Accounts ............................................................................................. 56 Section 11.10. Business Days ...................................................................................................... 56 Section 11.11. Waiver of Personal Liability ................................................................................ 56 Section 11.12. Conflict with Act.................................................................................................. 57 Section 11.13. Conclusive Evidence of Regularity ..................................................................... 57 Section 11.14. Governing Laws ................................................................................................... 57 Section 11.15. Electronic Signature ............................................................................................. 57 Section 11.16. Execution in Several Counterparts ....................................................................... 57 EXHIBIT A PERMITTED INVESTMENTS ....................................................................... A-1 EXHIBIT B FORM OF SERIES 2024 BOND ..................................................................... B-1 2086
4141-9129-0191.2

INDENTURE
THIS INDENTURE (this “Indenture”), dated as of ______ 1, 2024, is by and between CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and ZIONS BANCORPORATION, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the City Council of the City of Ontario has formed the Community Facilities District under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”); WHEREAS, the Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax;
WHEREAS, in order to provide funds to finance a portion of the Facilities, the Community Facilities District desires to provide for the issuance of its City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $__________; WHEREAS, the Community Facilities District desires to provide for the issuance of additional bonds (the “Additional Bonds”) for refunding purposes payable from the Special Tax on a parity with the Series 2024 Bonds, provided that said issuance is in accordance with the Act and this Indenture (the Series 2024 Bonds and any such Additional Bonds being collectively referred to as the “Bonds”);
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District has authorized the execution and delivery of this Indenture; and WHEREAS, the Community Facilities District has determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Community Facilities District, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special, limited obligations of the Community Facilities District, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture has been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the 2087
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Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Community Facilities District does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows:
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ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; EQUAL SECURITY
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any certificate, opinion or other document herein or therein mentioned, have the meanings herein specified. “Accounts” means the accounts from time to time established pursuant to this Indenture in any of the Funds established and maintained by the Trustee pursuant hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311 et seq. of the California Government Code.
“Additional Bonds” means Bonds other than Series 2024 Bonds issued hereunder in accordance with the provisions of Sections 3.05 and 3.06. “Administrative Expense Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.07.
“Administrative Expenses” means any reasonably necessary or appropriate expenses incurred in the administration of the Community Facilities District and the Bonds, including (a) the administrative and legal costs of levying and collecting the Special Tax (including costs incurred in connection with any appeals relating thereto and litigation expenses incurred in connection with the collection of such Special Tax), (b) the fees, costs and indemnifications due the Trustee, (c) the costs incurred with on-going disclosure in connection with the Bonds, (d) the costs incurred in connection with the disclosure of the Special Tax to property owners and potential purchasers of property, (e) the amounts required to calculate and pay arbitrage rebate payments to the federal government, and (f) an allocable share of the salaries of the City staff providing services on behalf of the Community Facilities District directly related to the foregoing and an allocable share of City general administrative overhead related thereto.
“Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.
“Annual Debt Service” means, for each Bond Year, the sum of (a) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the principal of the Outstanding Bonds due in such Bond Year (including by reason of mandatory sinking fund redemptions).
“Authorized Denominations” means (a) with respect to the Series 2024 Bonds, $5,000 and any integral multiple thereof, and (b) with respect to each Series of Additional Bonds, the 2089
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authorized denominations for such Series of Additional Bonds specified in the Supplemental Indenture pursuant to which such Additional Bonds are issued. “Authorized Representative” means, with respect to the Community Facilities District, the Mayor of the City, the City Manager of the City, the Assistant City Manager of the City, the Executive Director of Finance of the City and the Deputy City Treasurer of the City, and any other Person designated as an Authorized Representative of the Community Facilities District in a Written Certificate of the Community Facilities District submitted to the Trustee. “Average Annual Debt Service” means the average of the Annual Debt Service for all Bond Years, including the Bond Year in which the calculation is made. “Beneficial Owners” means those Persons for which the Participants have caused the Depository to hold Book-Entry Bonds.
“Bond Counsel” means a firm of nationally recognized bond counsel selected by the Community Facilities District.
“Bond Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.03.
“Bond Year” means the twelve-month period beginning on September 2 in each year and extending to the next succeeding September 1, both dates inclusive, except that the first Bond Year shall begin on the Closing Date and end on September 1, 2024. “Bonds” means the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds issued hereunder, and includes the Series 2024 Bonds and any Additional Bonds.
“Book-Entry Bonds” means the Bonds of a Series registered in the name of the Depository, or the Nominee thereof, as the registered owner thereof pursuant to the terms and provisions of Section 2.07.
“Business Day” means a day that is not (a) a Saturday, Sunday or legal holiday in the State, (b) a day on which banking institutions in the State, or in any state in which the Office of the Trustee is located, are required or authorized by law (including executive order) to close, or (c) a day on which the New York Stock Exchange is closed.
“Cede & Co.” means Cede & Co., the nominee of DTC, and any successor nominee of DTC with respect to a Series of Book-Entry Bonds.
“Circulation System Facility” has the meaning ascribed to the term “Circulation System Segment” in the NMC Acquisition Agreement.
“City” means the City of Ontario, a general law city organized and existing under the laws of the State, and its successors.
“City Council” means the City Council of the City.
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“City Facilities Account” means the Account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “City Park Account” means the Account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “Closing Date” means the date upon which the Series 2024 Bonds are delivered to the Original Purchaser, being _________, 2024.
“Code” means the Internal Revenue Code of 1986.
“Community Facilities District” means City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), a community facilities district organized and existing under the laws of the State, and its successors. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of ______ 1, 2024, by and between the Community Facilities District and Zions Bancorporation, National Association, as Trustee, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Corresponding Bond Year” means, with respect to any Fiscal Year, the Bond Year that commences in such Fiscal Year.
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the Community Facilities District relating to the authorization, issuance, sale and delivery of the Bonds, including printing expenses, rating agency fees, filing and recording fees, initial fees, expenses and charges of the Trustee and its counsel, including the Trustee’s first annual administrative fee, fees, charges and disbursements of attorneys, municipal advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds, any premium for a bond insurance policy securing payment of the Bonds, and any other cost, charge or fee in connection with the original issuance of the Bonds. “Costs of Issuance Fund” means the Fund by that name established and held by the Trustee pursuant to Section 3.03.
“County” means the County of San Bernardino, a county and political subdivision of the State organized and existing under the laws of the State, and any successor thereto. “County Assessor” means the Assessor of the County.
“County Auditor” means the Auditor-Controller of the County. “Defeasance Securities” means (a) non-callable direct obligations of the United States of America (“United States Treasury Obligations”), and (b) evidences of ownership of proportionate interests in future interest and principal payments on United States Treasury Obligations held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying 2091
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United States Treasury Obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
“Depository” means DTC, and its successors as securities depository for any Series of Book-Entry Bonds, including any such successor appointed pursuant to Section 2.07. “DTC” means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York.
“Electronic Means” means e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.
“Event of Default” means any event specified in Section 7.01. “Facilities” means the public facilities authorized to be financed by the Community Facilities District, as described in the Resolution of Formation. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve-month period hereafter selected and designated as the official fiscal year period of the Community Facilities District. “Funds” means the separate funds from time to time established and maintained by the Trustee pursuant hereto.
“Improvement Fund” means the Fund by that name established and held by the Trustee pursuant to Section 3.04.
“Indenture” means this Indenture, dated as of ______ 1, 2024, by and between the Community Facilities District and Zions Bancorporation, National Association, as Trustee, as originally executed and as it may be amended, supplemented or otherwise modified from time to time by any Supplemental Indenture.
“Independent Consultant” means any consultant or firm of such consultants selected by the Community Facilities District and who, or each of whom (a) is generally recognized to be qualified in the financial consulting field, (b) is in fact independent and not under the control of the Community Facilities District, the City, NMC Builders, Lennar or any Affiliate thereof, (c) does not have any substantial interest, direct or indirect (i) with or in the Community Facilities District, the City, NMC Builders, Lennar or any Affiliate thereof, (ii) with or in any owner of real property in the Community Facilities District, or (iii) in any real property in the Community Facilities District, and (d) is not connected with the Community Facilities District, the City, NMC Builders, Lennar or any Affiliate thereof as an officer or employee thereof, but who may be regularly retained to make reports to the Community Facilities District or the City. “Interest Account” means the Account by that name within the Bond Fund established and held by the Trustee pursuant to Section 5.03.
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“Interest Payment Dates” means March 1 and September 1 of each year, commencing March 1, 2025.
“Lennar” means Lennar Homes of California, LLC, a limited liability company organized and existing under the laws of the State, and any successor thereto. “Lennar Acquisition Account” means the Account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “Lennar Acquisition Agreement” means the Amend and Restated Acquisition and Funding Agreement, dated as of ________ 1, 2024, by and between the City and Lennar, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Lennar Facilities” has the meaning ascribed to the term “Facilities” in the Lennar Acquisition Agreement.
“Lennar Payment Request” has the meaning ascribed to the term “Payment Request” in the Lennar Acquisition Agreement.
“Letter of Representations” means the Letter of Representations from the Community Facilities District to the Depository, in which the Community Facilities District makes certain representations with respect to issues of its securities for deposit by the Depository. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year in which the calculation is made. “Moody’s” means Moody’s Investors Service, Inc., a corporation duly organized and existing under the laws of the State of Delaware, and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Community Facilities District. “Net Special Tax Revenues” means Special Tax Revenues, less amounts required to pay Administrative Expenses.
“NMC Acquisition Account” means the Account by that name within the Improvement Fund established and held by the Trustee pursuant to Section 3.04. “NMC Acquisition Agreement” means the Amended and Restated Acquisition and Funding Agreement, dated as of November 1, 2022, by and between the City and NMC Builders, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“NMC Builders” means NMC Builders, LLC, a limited liability company organized and existing under the laws of the State of California, and any successor thereto. 2093
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“NMC Facilities” has the meaning ascribed to the term “Facilities” in the NMC Acquisition Agreement.
“NMC Payment Request” has the meaning ascribed to the term “Payment Request” in the NMC Acquisition Agreement.
“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.07.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Community Facilities District by the Trustee in writing; provided, however, that with respect to presentation of Bonds for payment or for registration of transfer and exchange, such term shall mean the office or agency of the Trustee at which, at any particular time, its corporate trust agency business shall be conducted, which other office or agency shall be specified to the Community Facilities District by the Trustee in writing. “Ordinance” means any ordinance adopted by the City Council levying the Special Tax. “Original Purchaser” means the original purchaser of the Series 2024 Bonds from the Community Facilities District.
“Outstanding” means, when used as of any particular time with reference to Bonds, subject to the provisions of Section 11.07, all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation, (b) Bonds with respect to which all liability of the Community Facilities District shall have been discharged in accordance with Section 10.01, and (c) Bonds in lieu of which other Bonds shall have been authenticated and delivered by the Trustee, or that have been paid without surrender thereof, pursuant to Section 2.08. “Owner” means, with respect to a Bond, the Person in whose name such Bond is registered on the Registration Books.
“Participant” means any entity that is recognized as a participant by DTC in the book-entry system of maintaining records with respect to Book-Entry Bonds. “Participating Underwriter” has the meaning ascribed to such term in the Continuing Disclosure Agreement.
“Permitted Investments” is defined in Exhibit A hereto. “Person” means an individual, corporation, limited liability company, firm, association, partnership, trust or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.
“Principal Account” means the Account by that name within the Bond Fund established and held by the Trustee pursuant to Section 5.03.
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“Rate and Method” means the rate and method of apportionment of the Special Tax approved by the qualified electors of the Community Facilities District. “Rebate Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.06.
“Rebate Requirement” has the meaning ascribed to such term in the Tax Certificate. “Record Date” means, with respect to interest payable on any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date, whether or not such day is a Business Day.
“Redemption Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.05.
“Redemption Price” means the aggregate amount of principal of and premium, if any, on the Bonds upon the redemption thereof pursuant hereto.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Reserve Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.04.
“Reserve Requirement” means, as of the date of any calculation, the least of (a) “10% of the proceeds of the issue,” within the meaning of Section 148 of the Code, with respect to the Bonds (excluding from such calculation Bonds refunded with the proceeds of subsequently issued Bonds), (b) Maximum Annual Debt Service, and (c) 125% of Average Annual Debt Service. “Resolution of Formation” means Resolution No. 2017-123, adopted by the City Council on October 17, 2017, as originally adopted and as it may be amended, supplemented or otherwise modified from time to time.
“S&P” means S&P Global Ratings, a business unit of Standard and Poor’s Financial Services, LLC, and its successors and assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Community Facilities District.
“Series” means the initial series of Bonds executed, authenticated and delivered on the date of initial issuance of the Bonds and designated pursuant to this Indenture as the Series 2024 Bonds, and any Additional Bonds issued pursuant to a Supplemental Indenture and identified as a separate Series of Bonds.
“Series 2024 Bonds” means the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024, issued hereunder. “Services” has the meaning ascribed to such term in the Rate and Method. 2095
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“Special Tax” means the special tax described and defined in the Rate and Method as “Special Tax” approved by the qualified electors to be levied within the Community Facilities District pursuant to the Act and the Rate and Method.
“Special Tax Fund” means the Fund by that name established and held by the Trustee pursuant to Section 5.02.
“Special Tax Revenues” means the proceeds of the Special Tax received by or on behalf of the Community Facilities District, other than proceeds of the Special Tax levied to pay the costs of Services received by or on behalf of the Community Facilities District, including any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Tax, which shall be limited to the amount of said lien and interest and penalties thereon.
“State” means the State of California.
“Supplemental Indenture” means any supplemental indenture modifying or amending this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means the Tax Certificate executed by the Community Facilities District at the time of issuance of the Series 2024 Bonds relating to the requirements of Section 148 of the Code, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Trustee” means Zions Bancorporation, National Association, a national banking association organized and existing under the laws of the United States of America, or any successor thereto as Trustee hereunder substituted in its place as provided herein. “Verification Report” means, with respect to the deemed payment of Bonds pursuant to clause (ii) of Section 10.02(a), a report of a nationally recognized certified public accountant, or firm of such accountants, verifying that the Defeasance Securities and cash, if any, deposited in connection with such deemed payment satisfy the requirements of clause (ii) of Section 10.02(a). “Written Certificate” and “Written Request” of the Community Facilities District mean, respectively, a written certificate or written request signed in the name of the Community Facilities District by an Authorized Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

Section 1.02. Rules of Construction. (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. (b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
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(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(g) All references herein to designated “Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Articles, Sections, Exhibits, subsections, paragraphs, clauses, and other subdivisions of this Indenture. (h) The words “hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Indenture and not solely to the particular portion hereof in which any such word is used.
(i) Any reference to a Person, or a Person in a specified capacity, shall be construed to include such Person’s successors or such Person’s successors in such capacity, as the case may be.

Section 1.03. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Community Facilities District, the Trustee and the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the principal of, premium, if any, and interest on all Bonds that may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Community Facilities District shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. 2097
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ARTICLE II

THE BONDS
Section 2.01. Authorization of Bonds; Special, Limited Obligations. (a) The Community Facilities District hereby authorizes the issuance of the Bonds under and subject to the terms of this Indenture, the Act and other applicable laws of the State. The Bonds may consist of one or more Series of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to the provisions and conditions contained herein. The Bonds shall be designated generally as the “City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds,” each Series thereof to bear such additional designation as may be necessary or appropriate to distinguish such Series from every other Series of Bonds.
(b) The Bonds shall be special, limited obligations of the Community Facilities District, payable, as provided herein, solely from Net Special Tax Revenues and the other assets pledged therefor hereunder. Neither the faith and credit nor the taxing power of the Community Facilities District (except to the limited extent set forth herein), the City or the State, or any political subdivision thereof, is pledged to the payment of the Bonds.

Section 2.02. Terms of Series 2024 Bonds. (a) The Series 2024 Bonds shall be designated “City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024.” The aggregate principal amount of Series 2024 Bonds that may be issued and Outstanding under this Indenture shall not exceed $__________, except as may be otherwise provided in Section 2.08.
(b) The Series 2024 Bonds shall be issued in fully registered form without coupons in Authorized Denominations, so long as no Series 2024 Bond shall have more than one maturity date. The Series 2024 Bonds shall be dated as of the Closing Date, shall be in the aggregate principal amount of $__________, shall mature on September 1 of each year, shall bear interest at the rates per annum (calculated on the basis of a 360-day year comprised of twelve 30-day months) and shall be in the principal amounts as follows:

Maturity Date
(September 1)
Principal
Amount
Interest
Rate
$ %
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(c) Interest on the Series 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2024 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest thereon shall be payable from such Interest Payment Date, (ii) a Series 2024 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (iii) interest on any Series 2024 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Interest shall be paid by check of the Trustee mailed by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2024 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest on any Series 2024 Bond that is not punctually paid or duly provided for on any Interest Payment Date shall, if and to the extent that amounts subsequently become available therefor, be paid on a payment date established by the Trustee to the Person in whose name the ownership of such Series 2024 Bond is registered on the Registration Books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest, notice of which shall be given to such Owner not less than ten days prior to such special record date.
(d) The principal of the Series 2024 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2024 Bonds shall be subject to redemption as provided in Article IV. (f) The Series 2024 Bonds shall be in substantially the form set forth in Exhibit B hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.

Section 2.03. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Community Facilities District with the manual or facsimile signature of the Mayor of the City attested by the manual or facsimile signature of the City Clerk of the City. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of such officers who shall have signed or attested any of the Bonds shall cease to be such officers before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Community Facilities District, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Community Facilities District as though those who signed and attested the same had continued to be such officers, and also any Bonds may be signed and attested on behalf of the Community Facilities District by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the City although at the nominal date of such Bonds any such Person shall not have been such officer of the City.

Section 2.04. Authentication of Bonds. Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form as that set forth in Exhibit B hereto for the Series 2024 Bonds, manually executed by the Trustee, shall be valid or obligatory for any 2099
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purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.05. Registration Books. The Trustee shall keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which shall be open to inspection during regular business hours and upon reasonable notice by the Community Facilities District. Upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such records, the ownership of the Bonds.

Section 2.06. Transfer and Exchange of Bonds. (a) Any Bond may be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such Person’s duly authorized attorney, upon surrender of such Bond to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds shall be so surrendered for transfer, the Community Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series and maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. (b) The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of the same Series and maturity of other Authorized Denominations.

The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. (c) The Trustee shall not be obligated to make any transfer or exchange of Bonds of a Series pursuant to this Section during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

Section 2.07. Book-Entry System. (a) Prior to the issuance of a Series of Bonds, the Community Facilities District may provide that such Series of Bonds shall initially be issued as Book-Entry Bonds, and in such event, the Bonds of such Series for each maturity date shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial issuance, the ownership of each such Bond of such Series shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository. The Series 2024 Bonds shall initially be issued as Book-Entry Bonds.

Payment of principal of, and interest and premium, if any, on, any Book-Entry Bond registered in the name of the Nominee shall be made on the applicable payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address that is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book-Entry Bonds, the Community Facilities District and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of 2100
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which such a Participant holds an interest in such Book-Entry Bonds. Without limiting the immediately preceding sentence, the Community Facilities District and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book-Entry Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Bonds of a maturity to be redeemed in the event such Book-Entry Bonds are redeemed in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book-Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The Community Facilities District and the Trustee may treat and consider the Person in whose name each Book-Entry Bond is registered in the Registration Books as the absolute Owner of such Book-Entry Bond for the purpose of payment of principal of, and premium, if any, and interest on such Bond, for the purpose of selecting any Bonds, or portions thereof, to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Book-Entry Bond, for the purpose of registering transfers with respect to such Book-Entry Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the Community Facilities District and the Trustee shall not be affected by any notice to the contrary. (d) In the event of a redemption of all or a portion of a Book-Entry Bond, the Depository, in its discretion (i) may request the Trustee to authenticate and deliver a new BookEntry Bond, or (ii) if the Depository is the sole Owner of such Book-Entry Bond, shall make an appropriate notation on the Book-Entry Bond indicating the date and amounts of the reduction in principal thereof resulting from such redemption, except in the case of final payment, in which case such Book-Entry Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal of, and premium, if any, and interest on the Book-Entry Bonds only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State) the respective Owner, as shown in the Registration Books, or such Owner’s respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book-Entry Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Bond. Upon delivery by the Depository to the Owners, the Community Facilities District and the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository.
(f) In order to qualify the Book-Entry Bonds for the Depository’s book-entry system, the Community Facilities District shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Community Facilities District or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Bonds other than the Owners, as shown 2101
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on the Registration Books. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the Community Facilities District, the Community Facilities District and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book-Entry Bonds for the Depository’s bookentry program. (g) In the event the Community Facilities District determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts.

In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Community Facilities District shall discontinue the Book-Entry system with the Depository. If the Community Facilities District determines to replace the Depository with another qualified securities depository, the Community Facilities District shall prepare or direct the preparation of a new single, separate, fully registered Bond of the appropriate Series for each maturity date of such Book-Entry Bonds, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Community Facilities District fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of Sections 2.06, 2.08 and 2.09. Whenever the Depository requests the Community Facilities District to do so, the Community Facilities District shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Bonds to any Participant having Book-Entry Bonds credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, if the Depository is the sole Owner of the Bonds of a Series, so long as any Book-Entry Bond of such Series is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Bond and all notices with respect to such Book-Entry Bond shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository.
(i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Community Facilities District or the Trustee, with respect to any consent or other action to be taken by Owners of Book-Entry Bonds, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible.

Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Community Facilities District, at the expense of the Owner of said Bond, shall 2102
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execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Community Facilities District. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity reasonably satisfactory to the Trustee shall be given, the Community Facilities District, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of the same Series and maturity in a like aggregate principal amount in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been selected for redemption, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Community Facilities District may require payment by the Owner of a sum not exceeding the actual cost of preparing the replacement Bond delivered thereto under this Section and the expenses incurred by the Community Facilities District and the Trustee in connection therewith. Any Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Community Facilities District whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds of such Series secured by this Indenture.

Section 2.09. Temporary Bonds. The Bonds of a Series may be issued in temporary form exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds may be printed, lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the Community Facilities District, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Community Facilities District and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Community Facilities District issues temporary Bonds of a Series it shall execute and deliver definitive Bonds of such Series as promptly thereafter as practicable, and thereupon the temporary Bonds of such Series may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series and maturities in Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled to the same benefits under this Indenture as definitive Bonds of such Series authenticated and delivered hereunder. 2103
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ARTICLE III
ISSUANCE OF SERIES 2024 BONDS; APPLICATION OF PROCEEDS; ADDITIONAL BONDS
Section 3.01. Issuance of Series 2024 Bonds. The Community Facilities District may at any time execute the Series 2024 Bonds and deliver the same to the Trustee. The Trustee shall authenticate the Series 2024 Bonds and deliver the Series 2024 Bonds to the Original Purchaser upon receipt of a Written Request of the Community Facilities District and upon receipt of the purchase price therefor.

Section 3.02. Application of Proceeds. (a) On the Closing Date, the proceeds of the sale of the Series 2024 Bonds received by the Trustee, $_________, shall be deposited by the Trustee as follows:
(i) the Trustee shall deposit the amount of $_______ in the Costs of Issuance Fund;
(ii) the Trustee shall deposit the amount of $_______ in the Reserve Fund, which is equal to the Reserve Requirement;
(iii) the Trustee shall deposit the amount of $_________ in the Lennar Acquisition Account;
(iv) the Trustee shall deposit the amount of $_________ in the NMC Acquisition Account;
(v) the Trustee shall deposit the amount of $_________ in the City Park Account; and
(vi) the Trustee shall deposit the amount of $_________ in the City Facilities Account.
(b) [On the Closing Date, the amount transferred by the Community Facilities District to the Trustee, $_______, which consists of amounts of the Special Tax collected by the Community Facilities District, shall be deposited by the Trustee as follows:
(i) the Trustee shall deposit the amount of $_______ in the Administrative Expense Fund;
(ii) the Trustee shall deposit the amount of $_______ in the Special Tax Fund; and
(iii) the Trustee shall deposit the amount of $_______ in the Lennar Acquisition Account.]
Section 3.03. Costs of Issuance Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Costs of Issuance Fund.” On the Closing Date, the Trustee shall 2104
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deposit in the Costs of Issuance Fund the amount required to be deposited therein pursuant to Section 3.02. There shall additionally be deposited in the Cost of Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. (b) The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from time to time to pay the Costs of Issuance upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is a proper charge against the Costs of Issuance Fund, and (v) that payment of such amount has not been the subject of a prior disbursement from the Costs of Issuance Fund, in each case together with a statement or invoice for each amount requested thereunder. On the last Business Day that is no later than six months after the Closing Date, the Trustee shall transfer any amount remaining in the Costs of Issuance Fund to the NMC Acquisition Account, and, upon making such transfer, the Costs of Issuance Fund shall be closed.
(c) If the Costs of Issuance Fund has been closed in accordance with the provisions hereof, the Costs of Issuance Fund shall be reopened and reestablished by the Trustee in connection with the issuance of any Additional Bonds, if so provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued.

Section 3.04. Improvement Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Improvement Fund.” Within the Improvement Fund, the Trustee shall establish and maintain a separate Account designated the “Lennar Acquisition Account,” a separate Account designated the “ NMC Acquisition Account,” a separate Account designated the “City Facilities Account,” and a separate Account designated the “City Park Account.” On the Closing Date, the Trustee shall deposit in each of the Accounts within the Improvement Fund the amount, if any, required to be deposited therein pursuant to Section 3.02. There shall additionally be deposited in each of the Accounts within the Improvement Fund (i) the portion, if any, of the proceeds of the sale of any Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued, and (ii) amounts received by the Trustee when accompanied by a Written Request of the Community Facilities District that such amounts are to be deposited in such Account, which amounts may include Special Tax Revenues collected and received by the Community Facilities District prior to the Closing Date.
(b) The moneys in the Lennar Acquisition Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Lennar Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the Lennar Facilities and is a proper charge against the Lennar Acquisition Account, (v) that payment of such costs has not been the subject of a prior disbursement from any of the Accounts within the Improvement Fund, and (vi) whether or not such costs of the Lennar Facilities are to be paid pursuant to a Lennar Payment Request submitted in accordance with the Lennar Acquisition Agreement, in each case together with a statement or invoice for each amount requested thereunder. If costs of the Lennar 2105
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Facilities are to be paid pursuant to a Lennar Payment Request submitted in accordance with the Lennar Acquisition Agreement, a duplicate original of the signed and approved Lennar Payment Request relating to such costs of the Lennar Facilities, together with all exhibits and attachments thereto, must accompany such Written Request of the Community Facilities District.

Upon the submission of a Written Certificate of the Community Facilities District stating (i) that the portion of the Lennar Facilities to be financed from the Lennar Acquisition Account has been completed and that all costs of such Lennar Facilities have been paid, or (ii) that such portion of the Lennar Facilities has been substantially completed and that all remaining costs of such portion of the Lennar Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall transfer all of the amount remaining in the Lennar Acquisition Account (less any such retention) to the NMC Acquisition Account. (c) The moneys in the NMC Acquisition Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the NMC Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the NMC Facilities and is a proper charge against the NMC Acquisition Account, (v) that payment of such costs has not been the subject of a prior disbursement from any of the Accounts within the Improvement Fund or from any other fund or account established with respect to a community facilities district formed by the City Council and from which costs of NMC Facilities are authorized to be paid, and (vi) whether or not such costs of the NMC Facilities are to be paid pursuant to a NMC Payment Request submitted in accordance with the NMC Acquisition Agreement, in each case together with a statement or invoice for each amount requested thereunder. If costs of the NMC Facilities are to be paid pursuant to a NMC Payment Request submitted in accordance with the NMC Acquisition Agreement, a duplicate original of the signed and approved NMC Payment Request relating to such costs of the NMC Facilities, together with all exhibits and attachments thereto, must accompany such Written Request of the Community Facilities District.

If, on the date the Community Facilities District submits to the Trustee a Written Request of the Community Facilities District to pay costs of the NMC Facilities, there are insufficient moneys in the NMC Acquisition Account to pay such costs in full, the amount remaining unpaid shall be paid as and to the extent that moneys are subsequently deposited in the NMC Acquisition Account, but only after the payment in full of all amounts that the Community Facilities District, by a Written Request of the Community Facilities District, previously directed the Trustee to pay from the NMC Acquisition Account.

If the NMC Payment Request submitted to the Trustee pursuant to this subsection requests that the costs of the NMC Facilities to be paid thereunder be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached to such NMC Payment Request as Attachment B, the Trustee shall, as and when amounts become available in the NMC Acquisition Account to pay all or a portion of such costs, pay from the NMC Acquisition Account such costs or portion thereof to such Person or Persons. If the NMC Payment Request submitted to the Trustee pursuant to this subsection indicates that the costs of the NMC Facilities to be paid thereunder be paid to the Person or Persons, in the amounts, to be set forth in Purchase Price Payment Instructions to be submitted to the Trustee as and when amounts become available in the 2106
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NMC Acquisition Account to pay all or a portion of such costs, the Trustee shall, as and when such amounts become available, notify NMC Builders in writing of (i) the number or other designation of the NMC Payment Request pursuant to which such payment of such costs is requested to be made, (ii) the amount available in the NMC Acquisition Account to pay such costs or portion thereof, and (iii) the name of the Community Facilities District, and, upon submission to the Trustee by NMC Builders of completed and signed Purchase Price Payment Instructions in the form attached to such NMC Payment Request as Attachment B, the Trustee shall pay from the NMC Acquisition Account such costs or portion thereof to the Person or Persons, in the amounts, set forth in such Purchase Price Payment Instructions.

If, on the date the Community Facilities District submits to the Trustee a Written Request of the Community Facilities District to pay 85% of the costs of a Circulation System Facility, there are insufficient moneys in the NMC Acquisition Account to pay such portion of such costs in full, the amount remaining unpaid shall be paid as and to the extent that moneys are subsequently deposited in the NMC Acquisition Account, but only after the payment in full of all amounts that the Community Facilities District, by a Written Request of the Community Facilities District, previously directed the Trustee to pay from the NMC Acquisition Account.

If the NMC Payment Request submitted to the Trustee pursuant to this subsection requests that 85% of the costs of a Circulation System Facility to be paid thereunder be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached to such NMC Payment Request as Attachment B, the Trustee shall, as and when amounts become available in the NMC Acquisition Account to pay all or a portion of such costs, pay from the NMC Acquisition Account such costs or portion thereof to such Person or Persons. If the NMC Payment Request submitted to the Trustee pursuant to this subsection indicates that 85% of the costs of a Circulation System Facility to be paid thereunder be paid to the Person or Persons, in the amounts, to be set forth in Purchase Price Payment Instructions to be submitted to the Trustee as and when amounts become available in the NMC Acquisition Account to pay all or a portion of such costs, the Trustee shall, as and when such amounts become available, notify NMC Builders in writing of (i) the number or other designation of the NMC Payment Request pursuant to which such payment of such costs is requested to be made, (ii) the amount available in the NMC Acquisition Account to pay such costs or portion thereof, and (iii) the name of the Community Facilities District, and, upon submission to the Trustee by NMC Builders of completed and signed Purchase Price Payment Instructions in the form attached to such NMC Payment Request as Attachment B, the Trustee shall pay from the NMC Acquisition Account such costs or portion thereof to the Person or Persons, in the amounts, set forth in such Purchase Price Payment Instructions.

Upon the submission of a Written Certificate of the Community Facilities District stating (i) that the portion of the NMC Facilities to be financed from the NMC Acquisition Account has been completed and that all costs of such NMC Facilities have been paid, or (ii) that such portion of the NMC Facilities has been substantially completed and that all remaining costs of such portion of the NMC Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall (A) if the amount remaining in the NMC Acquisition Account (less any such retention) is equal to or greater than $25,000, transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Redemption Fund, to be applied to the redemption of Bonds as directed by the Community Facilities District, and (B) after making the transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of 2107
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the amount remaining in the NMC Acquisition Account (less any such retention) to the Interest Account, to be applied to the payment of interest on the Bonds. (d) The moneys in the City Facilities Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the Facilities and is a proper charge against the City Facilities Account, and (v) that payment of such costs has not been the subject of a prior disbursement from any of the Accounts within the Improvement Fund, in each case together with a statement or invoice for each amount requested thereunder.

Upon the submission of a Written Certificate of the Community Facilities District stating (i) that the portion of the Facilities to be financed from the City Facilities Account has been completed and that all costs of such Facilities have been paid, or (ii) that such portion of the Facilities has been substantially completed and that all remaining costs of such portion of the Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall (A) if the amount remaining in the City Facilities Account (less any such retention) is equal to or greater than $25,000, transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Redemption Fund, to be applied to the redemption of Bonds as directed by the Community Facilities District, and (B) after making the transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of the amount remaining in the City Facilities Account (less any such retention) to the Interest Account, to be applied to the payment of interest on the Bonds.
(e) The moneys in the City Park Account shall be used and withdrawn by the Trustee from time to time to pay the costs of the Facilities upon submission of a Written Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred, (iv) that such payment is for costs of the Facilities and is a proper charge against the City Park Account, and (v) that payment of such costs has not been the subject of a prior disbursement from any of the Accounts within the Improvement Fund, in each case together with a statement or invoice for each amount requested thereunder.

Upon the submission of a Written Certificate of the Community Facilities District stating (i) that the portion of the Facilities to be financed from the City Park Account has been completed and that all costs of such Facilities have been paid, or (ii) that such portion of the Facilities has been substantially completed and that all remaining costs of such portion of the Facilities have been determined and specifying the amount to be retained therefor, the Trustee shall (A) if the amount remaining in the City Park Account (less any such retention) is equal to or greater than $25,000, transfer the portion of such amount equal to the largest integral multiple of $5,000 that is not greater than such amount to the Redemption Fund, to be applied to the redemption of Bonds as directed by the Community Facilities District, and (B) after making the transfer, if any, required to be made pursuant to the preceding clause (A), transfer all of the amount remaining in the City Park Account (less any such retention) to the Interest Account, to be applied to the payment of interest on the Bonds.
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Section 3.05. Conditions for the Issuance of Additional Bonds. The Community Facilities District may at any time issue one or more Series of Additional Bonds payable from Net Special Tax Revenues as provided herein on a parity with all other Bonds theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) upon the issuance of such Additional Bonds, no Event of Default shall have occurred and be continuing hereunder;
(b) the issuance of such Additional Bonds shall have been authorized under and pursuant to this Indenture and the Act and shall have been provided for by a Supplemental Indenture, which shall specify the following:
(i) the purposes for which the proceeds of such Additional Bonds are to be applied, which purposes may only include one or more of (A) providing funds to refund any Bonds previously issued hereunder, (B) providing funds to pay Costs of Issuance incurred in connection with the issuance of such Additional Bonds, and (C) providing funds to make any deposit to the Reserve Fund required pursuant to paragraph (viii) below;
(ii) the designation of such Series of Additional Bonds, the aggregate principal amount of the Additional Bonds of such Series, and the principal amount of, and the interest rate to be borne by, each maturity of such Additional Bonds;
(iii) that such Additional Bonds shall be payable as to interest on the Interest Payment Dates, except that the first installment of interest may be payable on either March 1 or September 1 and shall be for a period of not longer than twelve months;
(iv) the date, the maturity date or dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that each such maturity date and date on which a mandatory sinking fund redemption is to be made shall be a September 1 and, provided, further, that serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates;
(v) the Authorized Denominations of such Additional Bonds; (vi) the redemption premiums and terms, if any, for such Additional Bonds;
(vii) the form of such Additional Bonds;
(viii) the amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in the Reserve Fund; provided, however, that the amount 2109
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on deposit in the Reserve Fund at the time that such Additional Bonds become Outstanding shall be at least equal to the Reserve Requirement; and (ix) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof;
(c) The Community Facilities District shall have received a certificate from an Independent Consultant certifying that Annual Debt Service in each Bond Year, calculated for all Bonds that will be Outstanding after the issuance of such Additional Bonds, will be less than or equal to Annual Debt Service in such Bond Year, calculated for all Bonds that are Outstanding immediately prior to the issuance of such Additional Bonds.

Nothing contained herein shall limit the issuance of any special tax bonds payable from the Special Tax if, after the issuance and delivery of such special tax bonds, none of the Bonds theretofore issued hereunder will be Outstanding.

Section 3.06. Procedure for the Issuance of Additional Bonds. At any time after the sale of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the Community Facilities District for issuance hereunder and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) a certified copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds;
(b) a Written Request of the Community Facilities District as to the delivery of such Additional Bonds;
(c) a Written Certificate of the Community Facilities District stating that the conditions precedent to the issuance of such Additional Bonds specified in Section 3.05 have been satisfied;
(d) an opinion of Bond Counsel substantially to the effect that (i) this Indenture, as modified and amended by all Supplemental Indentures theretofore, or thereupon being, entered into has been duly authorized, executed and delivered by, and constitutes the valid and binding obligation of, the Community Facilities District, (ii) such Additional Bonds constitute valid and binding special, limited obligations of the Community Facilities District, and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect the exclusion of interest on the Bonds Outstanding prior to the issuance of such Additional Bonds from gross income for federal income tax purposes;
(e) the proceeds of the sale of such Additional Bonds; and (f) such further documents or money as are required by the provisions hereof or by the provisions of the Supplemental Indenture pursuant to which such Additional Bonds are issued.
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Section 3.07. Additional Bonds. The Community Facilities District shall not incur any obligations payable from Net Special Tax Revenues on a parity with the Bonds, except as provided in Sections 3.05 and 3.06.
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ARTICLE IV

REDEMPTION OF BONDS
Section 4.01. Redemption of Series 2024 Bonds. (a) Optional Redemption. The Series 2024 Bonds maturing on and after September 1, 20__, shall be subject to optional redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date on or after September 1, 20__ from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Series 2024 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 1, 20__ and March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest
Payment Date thereafter
100
The Community Facilities District shall give the Trustee written notice of its intention to redeem Series 2024 Bonds pursuant to this subsection not less than 45 days prior to the applicable redemption date, unless a later date is agreed to by the Trustee. (b) Mandatory Redemption from Special Tax Prepayments. The Series 2024 Bonds shall be subject to mandatory redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date, from and to the extent of Special Tax prepayments required to be applied thereto pursuant to Section 5.02(a) and any amount required to be applied thereto pursuant to Section 5.04(c), at the following respective Redemption Prices (expressed as percentages of the principal amount of the Series 2024 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
March 1, 20__ through March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest
Payment Date thereafter
100
(c) Mandatory Sinking Fund Redemption. The Series 2024 Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__, at a Redemption Price equal to the principal amount of the Series 2024 Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:
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Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
$
(Maturity)
If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2024 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the Community Facilities District in a Written Certificate of the Community Facilities District submitted to the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Series 2024 Bonds maturing on September 1, 20__ redeemed pursuant to Section

4.01(a). If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(b), the principal amount of the Series 2024 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced by the aggregate principal amount of the Series 2024 Bonds maturing on September 1, 20__ so redeemed pursuant to Section 4.01(b), such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis in amounts of $5,000 or integral multiples thereof, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Community Facilities District.

The Series 2024 Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__, at a Redemption Price equal to the principal amount of the Series 2024 Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
$
(Maturity)
If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed pursuant to Section 4.01(a), the principal amount of the Series 2024 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced, by $5,000 or an integral multiple thereof, as designated by the Community Facilities District in a Written Certificate of the Community Facilities District submitted to the Trustee; provided, however, that the aggregate amount of such reductions shall not exceed the aggregate amount of the Series 2024 Bonds maturing on September 1, 20__ redeemed pursuant to Section

4.01(a). If some but not all of the Series 2024 Bonds maturing on September 1, 20__ are redeemed 2113
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pursuant to Section 4.01(b), the principal amount of the Series 2024 Bonds maturing on September 1, 20__ to be redeemed pursuant to Section 4.01(c) on any subsequent September 1 shall be reduced by the aggregate principal amount of the Series 2024 Bonds maturing on September 1, 20__ so redeemed pursuant to Section 4.01(b), such reduction to be allocated among redemption dates as nearly as practicable on a pro rata basis in amounts of $5,000 or integral multiples thereof, as determined by the Trustee, notice of which determination shall be given by the Trustee to the Community Facilities District.

Section 4.02. Notice of Redemption. The Trustee on behalf and at the expense of the Community Facilities District shall mail (by first-class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books and to the Original Purchaser, at least 30 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, if any, the Bond numbers and the maturity or maturities of the Bonds to be redeemed (except in the event of redemption of all of the Bonds of such maturity or maturities in whole), and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption. With respect to any notice of any optional redemption of Bonds, unless at the time such notice is given the Bonds to be redeemed shall be deemed to have been paid within the meaning of Section 10.02, such notice shall state that such redemption is conditional upon receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys that, together with other available amounts held by the Trustee, are sufficient to pay the Redemption Price of, and accrued interest on, the Bonds to be redeemed, and that if such moneys shall not have been so received said notice shall be of no force and effect and the Community Facilities District shall not be required to redeem such Bonds. In the event a notice of redemption of Bonds contains such a condition and such moneys are not so received, the redemption of Bonds as described in the conditional notice of redemption shall not be made and the Trustee shall, within a reasonable time after the date on which such redemption was to occur, give notice to the Persons and in the manner in which the notice of redemption was given, that such moneys were not so received and that there shall be no redemption of Bonds pursuant to such notice of redemption.

Section 4.03. Selection of Bonds for Redemption. Whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Community Facilities District, (b) with respect to any redemption pursuant to Section 4.01(b) and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner that the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised of the greatest number of separate 2114
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denominations that would result in each such denomination being an Authorized Denomination and each such separate denomination shall be treated as a separate Bond that may be separately redeemed.

Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Community Facilities District shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Community Facilities District, a new Bond or Bonds of the same Series in Authorized Denominations in an aggregate principal amount equal to the unredeemed portion of the Bonds surrendered.

Section 4.05. Effect of Notice of Redemption. (a) Notice of redemption of the Bonds subject to redemption having been mailed as aforesaid, and moneys for the Redemption Price thereof, and the interest thereon to the applicable date fixed for redemption, having been set aside with the Trustee, such Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date. (b) If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.
(c) All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof shall be canceled upon surrender thereof and destroyed. 2115
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ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01. Pledge. Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of this Indenture and the Act, the Community Facilities District hereby pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge shall constitute a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the extent set forth in, and in accordance with, this Indenture, irrespective of whether those parties have notice of the pledge of, lien on and security interest in such assets and without the need for any physical delivery, recordation, filing or further act.

Section 5.02. Special Tax Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Special Tax Fund.” [On the Closing Date, the Trustee shall deposit in the Special Tax Fund the amount required to be deposited therein pursuant to Section 3.02.] As soon as practicable after the receipt by the Community Facilities District of any Special Tax Revenues, but in any event no later than the date ten Business Days after such receipt, the Community Facilities District shall transfer such Special Tax Revenues to the Trustee for deposit in the Special Tax Fund; provided, however, that with respect to any such Special Tax Revenues that represent a Special Tax prepayment (i) said Special Tax prepayment shall be identified as such in a Written Certificate of the Community Facilities District submitted to the Trustee at the time such Special Tax prepayment is transferred to the Trustee, (ii) the portion of such Special Tax prepayment that is to be applied to the Redemption Price of the Bonds shall be identified in such Written Certificate of the Community Facilities District, shall be deposited by the Trustee in the Redemption Fund and shall be applied to the redemption of Bonds pursuant to Section

4.01(b) and the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued, and (iii) the portion of such Special Tax prepayment that is to be applied to the payment of interest on the Bonds to be so redeemed shall be identified in such Written Certificate of the Community Facilities District, shall be deposited by the Trustee in the Interest Account and shall be applied to the payment of such interest. (b) Upon receipt of a Written Request of the Community Facilities District, the Trustee shall withdraw from the Special Tax Fund and transfer to the Administrative Expense Fund the amount specified in such Written Request of the Community Facilities District as the amount necessary to be transferred thereto in order to have sufficient amounts available therein to pay Administrative Expenses.
(c) No later than the Business Day immediately preceding each Interest Payment Date, after having made any requested transfer to the Administrative Expense Fund, the Trustee shall withdraw from the Special Tax Fund Net Special Tax Revenues in an amount sufficient to enable the Trustee to make the following transfers in the following order of priority:
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(i) Interest Account. To the Interest Account, the amount, if any, necessary to cause the amount on deposit in the Interest Account to be equal to the interest due on the Bonds on such Interest Payment Date;
(ii) Principal Account. To the Principal Account, the amount, if any, necessary to cause the amount on deposit in the Principal Account to be equal to the principal, if any, due on the Bonds on such Interest Payment Date, including principal due and payable by reason of mandatory sinking fund redemption of such Bonds; and (iii) Reserve Fund. To the Reserve Fund, the amount, if any, necessary to cause the amount on deposit in the Reserve Fund to be equal to the Reserve Requirement. (d) So long as the City Facilities Account has not been closed pursuant to Section

3.04(d), on each September 2, after having made any requested transfer to the Administrative Expense Fund, the Trustee shall transfer from the Special Tax Fund to the City Facilities Account any amount remaining in the Special Tax Fund; provided, however, that the Community Facilities District may, in a Written Request of the Community Facilities District submitted to the Trustee prior to such September 2, direct the Trustee to retain in the Special Tax Fund all or a portion of such remaining amount.

Section 5.03. Bond Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Bond Fund.” Within the Bond Fund, the Trustee shall establish and maintain a separate Account designated the “Principal Account” and a separate Account designated the “Interest Account.” The Trustee shall deposit in the Interest Account and the Principal Account from time to time the amounts required to be deposited therein pursuant to Section 5.02. There shall additionally be deposited in the Interest Account the portion, if any, of the proceeds of the sale of Additional Bonds required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued.
(b) In the event that, on the Business Day prior to an Interest Payment Date, after the deposit in the Interest Account of the amounts required to be deposited therein pursuant to Section 5.02, amounts in the Interest Account are insufficient to pay the interest on the Bonds due and payable on such Interest Payment Date, the Trustee shall withdraw from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Interest Account.
(c) On each Interest Payment Date, the Trustee shall withdraw from the Interest Account for payment to the Owners of the Bonds the interest on the Bonds then due and payable. (d) In the event that, on the Business Day prior to a September 1 on which principal of the Bonds is due and payable, after the deposit in the Principal Account of the amounts required to be deposited therein pursuant to Section 5.02, including principal due and payable by reason of mandatory sinking fund redemption of the Bonds, amounts in the Principal Account are insufficient to pay such principal, after having withdrawn any amounts from the Reserve Fund required to be withdrawn therefrom on such date pursuant to subsection (b) of this Section, the Trustee shall withdraw from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Principal Account. 2117
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(e) On each September 1 on which principal of the Bonds is due and payable, including principal due and payable by reason of mandatory sinking fund redemption of the Bonds, the Trustee shall withdraw from the Principal Account for payment to the Owners of the Bonds such principal then due and payable.

Section 5.04. Reserve Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Reserve Fund.” On the Closing Date, the Trustee shall deposit in the Reserve Fund the amount required to be deposited therein pursuant to Section 3.02. The Trustee shall deposit in the Reserve Fund from time to time the amounts required to be deposited therein pursuant to Section 5.02(c). There shall additionally be deposited in the Reserve Fund, in connection with the issuance of Additional Bonds, the amount required to be deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are issued. (b) Except as otherwise provided in this Section, amounts in the Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of (i) making transfers to the Interest Account in accordance with Section 5.03(b) in the event of any deficiency in the Interest Account of the amount then required for payment of the interest on the Bonds, (ii) making transfers to the Principal Account in accordance with Section 5.03(d) in the event of any deficiency in the Principal Account of the amount then required for payment of the principal of the Bonds, and (iii) redeeming Bonds in accordance with the provisions of this Section. (c) Whenever Bonds are to be optionally redeemed or redeemed from Special Tax prepayments, a proportionate share, determined as provided below, of the amount on deposit in the Reserve Fund shall, on the date on which amounts to redeem such Bonds are deposited in the Redemption Fund or otherwise deposited with the Trustee pursuant to Section 10.02, be transferred by the Trustee from the Reserve Fund to the Redemption Fund or to such deposit held by the Trustee and shall be applied to the redemption of said Bonds; provided, however, that such amount shall be so transferred only if and to the extent that the amount remaining on deposit in the Reserve Fund will be at least equal to the Reserve Requirement (excluding from the calculation thereof said Bonds to be redeemed). Such proportionate share shall be equal to the largest integral multiple of the minimum Authorized Denomination for said Bonds that is not larger than the amount equal to the product of (i) the amount on deposit in the Reserve Fund on the date of such transfer, times (ii) a fraction, the numerator of which is the principal amount of Bonds to be so redeemed and the denominator of which is the principal amount of Bonds to be Outstanding on the day prior to the date on which such Bonds are to be so redeemed. (d) Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay all Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Trustee shall, upon receipt of a Written Request of the Community Facilities District, transfer the amount in the Reserve Fund to the Interest Account, Principal Account and/or Redemption Fund, as applicable, to be applied, on the next succeeding Interest Payment Date to the payment and redemption of all of the Outstanding Bonds.
(e) If, as a result of the scheduled payment of principal of or interest on the Bonds, the Reserve Requirement is reduced, the Trustee shall transfer an amount equal to the amount of such reduction to the Interest Account.
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Section 5.05. Redemption Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Redemption Fund.” The Trustee shall deposit in the Redemption Fund (i) amounts received from the Community Facilities District in connection with the Community Facilities District’s exercise of its rights to optionally redeem Bonds, (ii) the portion of Special Tax prepayments required to be deposited therein pursuant to Section 5.02(a), (iii) amounts required to be transferred to the Redemption Fund from the Improvement Fund (or Accounts therein) pursuant to Section 3.04, (iv) amounts required to be transferred to the Redemption Fund from the Reserve Fund pursuant to Section 5.04(c) or Section 5.04(d), and (v) amounts required to be deposited therein pursuant to any Supplemental Indenture. (b) Amounts in the Redemption Fund shall be disbursed therefrom for the payment of the Redemption Price of Series 2024 Bonds redeemed pursuant to Section 4.01(a) or Section

4.01(b) and for the payment of the Redemption Price of Additional Bonds redeemed under the Supplemental Indenture pursuant to which such Additional Bonds are issued (other than mandatory sinking fund redemptions thereof).

Section 5.06. Rebate Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Rebate Fund.” There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate, as specified in a Written Request of the Community Facilities District. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement, for payment to the United States of America. Notwithstanding defeasance of the Bonds pursuant to Article X or anything to the contrary contained herein, all amounts required to be deposited into or on deposit in the Rebate Fund shall be governed exclusively by this Section and by the Tax Certificate, which is hereby incorporated herein as if fully set forth herein. The Trustee shall be deemed conclusively to have complied with such provisions if it follows the written directions of the Community Facilities District, and shall have no liability or responsibility to enforce compliance by the Community Facilities District with the terms of the Tax Certificate. The Trustee may conclusively rely upon the Community Facilities District’s determinations, calculations and certifications required by the Tax Certificate. The Trustee shall have no responsibility to independently make any calculation or determination or to review the Community Facilities District’s calculations.
(b) Any funds remaining in the Rebate Fund after payment in full of all of the Bonds and after payment of any amounts described in this Section, shall, upon receipt by the Trustee of a Written Request of the Community Facilities District, be withdrawn by the Trustee and remitted to the Community Facilities District.

Section 5.07. Administrative Expense Fund. (a) The Trustee shall establish and maintain a separate Fund designated the “Administrative Expense Fund.” [On the Closing Date, the Trustee shall deposit in the Administrative Expense Fund the amount required to be deposited therein pursuant to Section 3.02.] The Trustee shall deposit in the Administrative Expense Fund the amounts transferred from the Special Tax Fund and required to be deposited therein pursuant to Section 5.02.
(b) The moneys in the Administrative Expense Fund shall be used and withdrawn by the Trustee from time to time to pay the Administrative Expenses upon submission of a Written 2119
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Request of the Community Facilities District stating (i) the Person to whom payment is to be made, (ii) the amount to be paid and instructions for such payment, (iii) the purpose for which the obligation was incurred and that such purpose constitutes an Administrative Expense, (iv) that such payment is a proper charge against the Administrative Expense Fund, and (v) that payment of such amount has not been the subject of a prior disbursement from the Administrative Expense Fund, in each case together with a statement or invoice for each amount requested thereunder.

Section 5.08. Investment of Moneys. (a) Except as otherwise provided herein, all moneys in any of the Funds or Accounts shall be invested by the Trustee solely in Permitted Investments, as directed in a Written Request of the Community Facilities District received by the Trustee no later than two Business Days prior to the making of such investment. Moneys in all such Funds and Accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture; provided, however, that Permitted Investments in which moneys in the Reserve Fund are so invested shall mature no later than the earlier of five years from the date of investment or the final maturity date of the Bonds and, provided, further, that if such Permitted Investments may be redeemed at par so as to be available on each Interest Payment Date, any amount in the Reserve Fund may be invested in such redeemable Permitted Investments maturing on any date on or prior to the final maturity date of the Bonds. Absent a timely Written Request of the Community Facilities District with respect to the investment of moneys in any of the Funds or Accounts, the Trustee shall invest such moneys in Permitted Investments described in paragraph (7) of the definition thereof; provided, however, that any such investment shall be made by the Trustee only if, prior to the date on which such investment is to be made, the Trustee shall have received a Written Request of the Community Facilities District specifying a specific money market fund that satisfies the requirements of said paragraph in which such investment is to be made and, if no such Written Request of the Community Facilities District is so received, the Trustee shall hold such moneys uninvested. (b) Subject to the provisions of Section 5.06, all interest, profits and other income received from the investment of moneys in any Fund or Account (other than the Reserve Fund) shall be retained therein. Subject to the provisions of Section 5.06, all interest, profits or other income received from the investment of moneys in the Reserve Fund shall be transferred to the Interest Account; provided, however, that, notwithstanding the foregoing, any such transfer shall be made from the Reserve Fund only if and to the extent that, after such transfer, the amount on deposit in the Reserve Fund is at least equal to the Reserve Requirement. (c) Permitted Investments acquired as an investment of moneys in any Fund or Account shall be credited to such Fund or Account. For the purpose of determining the amount in any Fund or Account, all Permitted Investments credited to such Fund or Account shall be valued by the Trustee at the market value thereof, such valuation to be performed not less frequently than semiannually on or before each February 15 and August 15. In determining the market value of Permitted Investments, the Trustee may use and rely upon generally recognized pricing information services, including brokers and dealers in securities, available to it. (d) The Trustee may act as principal or agent in the making or disposing of any investment. Upon the Written Request of the Community Facilities District, the Trustee shall sell 2120
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or present for redemption any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the Fund or Account to which such Permitted Investments are credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may commingle moneys in any of the Funds and Accounts. The Trustee, in making or disposing of any investment permitted by this Section, may deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as a principal for its own account but only if such dealing is not in conflict with, contrary to or in violation of any of the Trustee’s fiduciary obligations as Trustee hereunder. (e) The Community Facilities District acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Community Facilities District the right to receive brokerage confirmations of security transactions as they occur, at no additional cost, the Community Facilities District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee shall furnish the Community Facilities District periodic cash transaction statements, which shall include detail for all investment transactions made by the Trustee hereunder.
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ARTICLE VI

COVENANTS
Section 6.01. Collection of Special Tax Revenues. (a) The Community Facilities District shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including the enforcement of delinquent Special Tax payments. (b) Prior to August 1 of each year, the Community Facilities District shall ascertain from the County Assessor the relevant parcels on which the Special Tax is to be levied, taking into account any parcel splits during the preceding and then current year. The Community Facilities District shall effect the levy of the Special Tax each Fiscal Year in accordance with the Ordinance by each August 10, or otherwise such that the computation of the levy is complete before the final date on which the County Auditor will accept the transmission of the Special Tax amounts for the parcels within the Community Facilities District for inclusion on the next real property tax roll. Upon the completion of the computation of the amounts of the levy, the Community Facilities District shall prepare or cause to be prepared, and shall transmit to the County Auditor, such data as the County Auditor requires in order to include the levy of the Special Tax on the next real property tax roll.
(c) The Community Facilities District shall fix and levy the Special Tax within the Community Facilities District in each Fiscal Year in accordance with the Rate and Method and, subject to the limitations in the Rate and Method as to the maximum Special Tax that may be levied on each parcel, in an amount sufficient to yield Special Tax Revenues in the amount required for (i) the payment of principal of and interest on any Outstanding Bonds becoming due and payable during the Corresponding Bond Year, (ii) any necessary replenishment of the Reserve Fund, and (iii) the payment of Administrative Expenses estimated to be paid from such Special Tax Revenues, taking into account the balances in the Funds and Accounts. (d) The Special Tax shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable (or in such other manner as the City Council shall determine, including direct billing of the affected property owners), and have the same priority, become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the ad valorem taxes on real property.

Section 6.02. Foreclosure. Pursuant to Section 53356.1 of the Act, the Community Facilities District hereby covenants with and for the benefit of the Owners that it will determine or cause to be determined, no later than August 15 of each year, whether or not any owners of property within the Community Facilities District are delinquent in the payment of the Special Tax levied thereon and, if such delinquencies exist, the Community Facilities District will order and cause to be commenced no later than October 1, and thereafter diligently prosecute, an action in the superior court to foreclose the lien of the Special Tax or installment thereof not paid when due; provided, however, that the Community Facilities District shall not be required to order the commencement of foreclosure proceedings if (a) the total Special Tax delinquency in the Community Facilities District for such Fiscal Year is less than 5% of the total amount of the Special Tax levied in such Fiscal Year, and (b) the amount then on deposit in the Reserve Fund 2122
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is equal to the Reserve Requirement. Notwithstanding the foregoing, if the Community Facilities District determines that any single parcel in the Community Facilities District is delinquent in excess of $7,500 in the payment of the Special Tax, then the Community Facilities District shall diligently institute, prosecute and pursue foreclosure proceedings against such parcel.

Section 6.03. Compliance with Act. The Community Facilities District shall comply with all applicable provisions of the Act.

Section 6.04. Punctual Payment. The Community Facilities District shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Net Special Tax Revenues and other assets pledged for such payment as provided in this Indenture and received by the Community Facilities District or the Trustee.

Section 6.05. Extension of Payment of Bonds. The Community Facilities District shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon that shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the Community Facilities District to issue Bonds for the purpose of refunding any Outstanding Bonds in accordance with the provisions hereof, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

Section 6.06. Against Encumbrances; Defense of Pledge. The Community Facilities District shall not create, or permit the creation of, any pledge of, lien on, security interest in or charge or other encumbrance upon the assets pledged under this Indenture, except as permitted hereby. The Community Facilities District shall at all times, to the extent permitted by law, defend, preserve and protect said pledge of such assets, and the lien thereon and security interest therein created hereby, against all claims and demands of all Persons whomsoever.

Section 6.07. Tax Covenants. (a) The Community Facilities District shall not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Series 2024 Bonds under Section 103 of the Code. Without limiting the generality of the foregoing, the Community Facilities District shall comply with the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein. This covenant shall survive payment in full or defeasance of the Series 2024 Bonds.
(b) In the event that at any time the Community Facilities District is of the opinion that for purposes of this Section it is necessary or helpful to restrict or limit the yield on the investment of any moneys in any of the Funds or Accounts, the Community Facilities District shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions.
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(c) Notwithstanding any provisions of this Section, if the Community Facilities District shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified action required under this Section is no longer required or that some further or different action is required to maintain the exclusion from federal income tax of interest on the Series 2024 Bonds, the Trustee may conclusively rely on such opinion in complying with the requirements of this Section and of the Tax Certificate, and the covenants hereunder shall be deemed to be modified to that extent.

Section 6.08. Non-Cash Payments of Special Tax. The Community Facilities District shall not authorize owners of taxable parcels within the Community Facilities District to satisfy Special Tax obligations by the tender of Bonds unless the Community Facilities District shall have first obtained a report of an Independent Consultant certifying that doing so would not result in the Community Facilities District having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

Section 6.09. Reduction in Special Tax. The Community Facilities District shall not initiate proceedings under the Act to modify the Rate and Method if such modification would adversely affect the security for the Bonds. If an initiative is adopted that purports to modify the Rate and Method in a manner that would adversely affect the security for the Bonds, the Community Facilities District shall, to the extent permitted by law, commence and pursue reasonable legal actions to prevent the modification of the Rate and Method in a manner that would adversely affect the security for the Bonds.

Section 6.10. Continuing Disclosure. Each of the Community Facilities District and the Trustee shall comply with and carry out all of the provisions of the Continuing Disclosure Agreement applicable to it. Notwithstanding any other provision of this Indenture, failure of the Community Facilities District or the Trustee to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Series 2024 Bonds, and upon receipt of indemnification reasonably satisfactory to the Trustee, shall) or any Owner or Beneficial Owner of the Series 2024 Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

Section 6.11. Accounting Records. The Community Facilities District shall keep or cause to be kept appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Special Tax, which records shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions.

Section 6.12. State Reporting. If at any time principal or interest due on any scheduled payment date for the Bonds is not paid, or if funds are withdrawn from the Reserve Fund to pay principal of or interest on the Bonds, the Trustee shall notify the Community Facilities District in writing of such failure or withdrawal, and the Community Facilities District shall notify the California Debt and Investment Advisory Commission of such failure or withdrawal within ten days of the failure to make such payment or the date of such withdrawal. 2124
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Section 6.13. Annual Reports to the California Debt and Investment Advisory Commission. Not later than October 30 of each year, commencing October 30, 2025 and continuing until the October 30 following the final maturity of the Bonds, the Community Facilities District shall supply to the California Debt and Investment Advisory Commission the information required to be provided thereto pursuant to Section 53359.5(b) of the Act. Such information shall be made available to any Owner upon written request to the Community Facilities District accompanied by a fee determined by the Community Facilities District to pay the costs of the Community Facilities District in connection therewith. The Community Facilities District shall in no event be liable to any Owner or any other person or entity in connection with any error in any such information.

Section 6.14. Further Assurances. The Community Facilities District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the rights and benefits provided in this Indenture.
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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default. The following events shall be Events of Default:
(a) failure to pay any installment of principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise;
(b) failure to pay any installment of interest on any Bonds when and as the same shall become due and payable;
(c) failure by the Community Facilities District to observe and perform any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such failure shall have continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Community Facilities District by the Trustee, or to the Community Facilities District and the Trustee by the Owners of not less than 5% in aggregate principal amount of the Bonds at the time Outstanding; provided, however, that, if in the reasonable opinion of the Community Facilities District the failure stated in the notice can be corrected, but not within such 30 day period, such failure shall not constitute an Event of Default if corrective action is instituted by the Community Facilities District within such 30 day period and the Community Facilities District shall thereafter diligently and in good faith cure such failure in a reasonable period of time, provided, further, that, unless otherwise consented to by the Trustee, such period of time shall not exceed 180 days; or (d) the commencement by the Community Facilities District of a voluntary case under Title 11 of the United States Code or any substitute or successor statute.

Section 7.02. Foreclosure. If an Event of Default shall occur under Section 7.01(a) or Section 7.01(b) then, and in each and every such case during the continuance of such Event of Default, the Trustee may, or at the written direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding, and upon being indemnified to its satisfaction therefor, shall, commence foreclosure against any parcels of land in the Community Facilities District delinquent in the payment of the Special Tax, as provided in Section 53356.1 of the Act; provided, however, that the Trustee shall not be required to pursue a foreclosure action against any such parcel if the Trustee would be required to take title to, or an ownership interest in, such parcel in connection with or as a result of such foreclosure action.

Section 7.03. Other Remedies. If an Event of Default shall have occurred and be continuing, the Trustee shall have the right:
(a) by mandamus, suit, action or proceeding, to compel the Community Facilities District and its officers, agents or employees to perform each and every term, provision and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Community Facilities District and the fulfillment of all duties imposed upon it by this Indenture and the Act; 2126
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(b) by suit, action or proceeding in equity, to enjoin any acts or things that are unlawful, or the violation of any of the rights of the Trustee or the Owners; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the Community Facilities District and its officers and employees to account as if it and they were the trustees of an express trust.

Section 7.04. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.

Section 7.05. Application of Net Special Tax Revenues After Default. If an Event of Default shall occur and be continuing, all Net Special Tax Revenues and any other funds thereafter received by the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order:
(a) to the payment of any expenses incurred by the Trustee necessary in the opinion of the Trustee to protect the interests of the Owners and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture;
(b) to the payment of the principal and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows:

First: to the payment to the Persons entitled thereto of all installments of interest on the Bonds then due in the order of the maturity of such installments and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and
Second: to the payment to the Persons entitled thereto of all installments of principal of the Bonds then due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference; (c) any remaining funds shall be transferred by the Trustee to the Special Tax Fund.
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Section 7.06. Power of Trustee to Enforce. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture.

Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.

Section 7.07. Owners’ Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder; provided, however, that such direction shall not be otherwise than in accordance with the provisions of this Indenture, the Act and other applicable law and, provided, further, that the Trustee shall have the right to decline to follow any such direction that in the opinion of the Trustee would be unjustly prejudicial to Owners not parties to such direction.

Section 7.08. Limitation on Owners’ Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Act or any other applicable law with respect to such Bond, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name, (c) such Owner or said Owners shall have tendered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request, and (d) the Trustee shall have refused or omitted to comply with such request for a period of 60 days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder or under law; it being understood and intended that no one or more Owners shall have any right in any manner whatever by such Owner’s or Owners’ action to affect, disturb or prejudice the security of this Indenture or the rights of any other Owners, or to enforce any right under the Bonds, this Indenture, the Act or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner herein provided and for the benefit and protection of all Owners, subject to the provisions of this Indenture.

Section 7.09. Absolute Obligation. Nothing in this Indenture or the Bonds contained shall affect or impair the obligation of the Community Facilities District, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners as the 2128
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same become due, as herein provided, but only out of the Net Special Tax Revenues and other assets pledged therefor hereunder, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

Section 7.10. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Owners, then in every such case the Community Facilities District, the Trustee and the Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Community Facilities District, the Trustee and the Owners shall continue as though no such proceedings had been taken.

Section 7.11. No Waiver of Default. No delay or omission of the Trustee or of any Owner to exercise any right or power arising upon the occurrence of any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default or an acquiescence therein, and every power and remedy given by this Indenture to the Trustee or to the Owners may be exercised from time to time and as often as may be deemed expedient.
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ARTICLE VIII

TRUSTEE
Section 8.01. Duties and Liabilities of Trustee. The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default that may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default that has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

Section 8.02. Qualifications; Removal and Resignation; Successors. (a) The Trustee initially a party hereto and any successor thereto shall at all times be a trust company, national banking association or bank having trust powers in good standing in or incorporated under the laws of the United States or any state thereof, that is (or if such trust company, national banking association or bank is a member of a bank holding company system, its parent bank holding company is) (i) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, or (ii) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets. If such trust company, national banking association or bank publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this subsection the combined capital and surplus of such trust company, national banking association or bank shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) The Community Facilities District may, by an instrument in writing, upon at least 30 days’ notice to the Trustee, remove the Trustee initially a party hereto and any successor thereto unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee initially a party hereto and any successor thereto if (i) at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing), or (ii) the Trustee shall cease to be eligible in accordance with subsection (a) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee.
(c) The Trustee may at any time resign by giving written notice of such resignation by first-class mail, postage prepaid, to the Community Facilities District, and to the Owners at the respective addresses shown on the Registration Books. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of subsection (a) of this Section, the Trustee shall resign immediately in the manner and with the effect specified in this Section. (d) Upon removal or resignation of the Trustee, the Community Facilities District shall promptly appoint a successor Trustee by an instrument in writing. Any removal or 2130
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resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee; provided, however, that any successor Trustee shall be qualified as provided in subsection (a) of this Section. If no qualified successor Trustee shall have been appointed and have accepted appointment within 45 days following notice of removal or notice of resignation as aforesaid, the removed or resigning Trustee or any Owner (on behalf of such Owner and all other Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice, if any, as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Community Facilities District and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Community Facilities District or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the successor Trustee shall, within 15 days after such acceptance, mail, by first-class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to the Owners at the addresses shown on the Registration Books.
(e) Any trust company, national banking association or bank into which the Trustee may be merged or converted or with which it may be consolidated or any trust company, national banking association or bank resulting from any merger, conversion or consolidation to which it shall be a party or any trust company, national banking association or bank to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such trust company, national banking association or bank shall be eligible under subsection (a) of this Section, shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 8.03. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Community Facilities District, and the Trustee shall not assume responsibility for the correctness of the same or incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Bonds, or in respect of the security afforded by this Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds for value, the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee, or the 2131
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application of any moneys paid to the Community Facilities District or others in accordance with this Indenture.
(c) The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. (d) No provision of this Indenture or any other document related hereto shall require the Trustee to risk or advance its own funds.
(e) The Trustee may execute any of its powers or duties hereunder through attorneys, agents or receivers and shall not be answerable for the actions of such attorneys, agents or receivers if selected by it with reasonable care.
(f) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(g) The immunities and protections extended to the Trustee also extend to its directors, officers, employees and agents.
(h) Before taking action under Article VII, under this Article or upon the direction of the Owners, the Trustee may require indemnity reasonably satisfactory to the Trustee be furnished to it to protect it against all fees and expenses, including those of its attorneys and advisors, and protect it against all liability it may incur. (i) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (j) The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in aggregate principal amount of the Bonds then Outstanding. (k) The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds. (l) The Trustee shall not be liable for the failure to take any action required to be taken by it hereunder if and to the extent that the Trustee’s taking such action is prevented by reason of an act of God, terrorism, war, riot, strike, fire, flood, earthquake, epidemic or other, similar occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care.
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(m) The Trustee shall not be deemed to have knowledge of an Event of Default hereunder unless it has actual knowledge thereof.
(n) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.
(o) The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys that shall be released or withdrawn in accordance with the provisions hereof.

Section 8.04. Right to Rely on Documents and Opinions. (a) The Trustee shall be protected in acting upon any notice, resolution, request, requisition, facsimile, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Each statement of facts contained in a Written Request of the Community Facilities District or a Written Certificate of the Community Facilities District shall be sufficient evidence to the Trustee of the facts so stated and the Trustee shall have no duty to confirm the accuracy of such facts. (b) The Trustee shall have the right to accept and act upon a Written Request of the Community Facilities District delivered using Electronic Means. If the Community Facilities District elects to deliver a Written Request of the Community Facilities District to the Trustee using Electronic Means and the Trustee acts upon such Written Request, the Trustee’s understanding of such Written Request shall be deemed controlling. The Community Facilities District understands and agrees that the Trustee cannot determine the identity of the actual sender of such Written Request and that the Trustee shall conclusively presume that Written Requests of the Community Facilities District that purport to have been sent by an Authorized Representative of the Community Facilities District have been sent by such Authorized Representative. The Community Facilities District shall be responsible for ensuring that only Authorized Representatives transmit such Written Requests of the Community Facilities District to the Trustee and that the Community Facilities District is solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt thereof by the Community Facilities District. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Written Requests of the Community Facilities District delivered using Electronic Means notwithstanding such directions conflict or are inconsistent with a subsequent written Written Requests of the Community Facilities District. The Community Facilities District agrees (i) to assume all risks arising out of the use of Electronic Means to submit Written Requests of the Community Facilities District to the Trustee, including the risk of the Trustee acting on unauthorized Written Requests of the Community Facilities District, and the risk of interception and misuse by third parties, (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Written Requests of the Community Facilities District to the Trustee and that there may be more secure methods of transmitting Written Requests of the Community Facilities District than the method selected by the Community Facilities District, (iii) that the security procedures, if any, to be followed in connection with its transmission of Written Requests of the Community Facilities District provide to it a commercially reasonable degree of protection in light of its particular needs and 2133
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circumstances, and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures. Notwithstanding the foregoing, the provisions of this subsection, and the Trustee’s actions pursuant hereto, are subject to the Trustee’s standard of care and limitations on liability set forth in Sections 8.03 and 8.04; provided, however, that the Trustee’s reliance on a Written Request of the Community Facilities District that purports to have been sent by an Authorized Representative of the Community Facilities District delivered in accordance with this Section using Electronic Means shall not, in and of itself, be construed as negligence.
(c) Whenever in the administration of the duties imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Community Facilities District, and such Written Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Written Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
(d) The Trustee may consult with counsel, who may be counsel to the Community Facilities District, with regard to legal questions, including with respect to compliance herewith of amendments hereto, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Section 8.05. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with prudent corporate trust industry standards, in which accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds, the Special Tax Revenues received by it and all Funds and Accounts established by it pursuant to this Indenture. Such books of record and account shall be available for inspection by the Community Facilities District during regular business hours and upon reasonable notice and under reasonable circumstances as agreed to by the Trustee. The Trustee shall deliver to the Community Facilities District a monthly accounting of the Funds and Accounts; provided, however, that the Trustee shall not be obligated to deliver an accounting for any Fund or Account that (a) has a balance of zero, and (b) has not had any activity since the last reporting date.

Section 8.06. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during business hours and upon reasonable notice to the inspection of the Community Facilities District, the Owners and their agents and representatives duly authorized in writing.

Section 8.07. Compensation and Indemnification. The Community Facilities District shall pay to the Trustee from time to time from Special Tax Revenues all reasonable compensation pursuant to a pre-approved fee letter for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees pursuant to a pre-approved fee letter and other disbursements pursuant to a pre-approved fee letter and those of its attorneys, 2134
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agents and employees, incurred in and about the performance of their powers and duties under this Indenture. The Community Facilities District shall, to the extent permitted by law, from Special Tax Revenues, indemnify and save the Trustee and its officers, directors and employees harmless against any costs, suits, judgments, damages, liabilities, claims, expenses, including legal fees and expenses, and liabilities that it may incur in the exercise and performance of its powers and duties hereunder, including the enforcement of any remedies and the defense of any suit, and that are not due to its negligence or its willful misconduct. The duty of the Community Facilities District to indemnify the Trustee shall survive the resignation or removal of the Trustee and the discharge and satisfaction of this Indenture.
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ARTICLE IX

SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures. (a) This Indenture and the rights and obligations of the Community Facilities District, the Trustee and the Owners hereunder may be amended, supplemented or otherwise modified from time to time and at any time by a Supplemental Indenture, which the Community Facilities District and the Trustee may enter into when there are submitted to the Trustee the written consents of the Owners of a majority of the aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 11.07. No such modification or amendment shall (i) extend the fixed maturity of any Bond, reduce the amount of principal thereof or the rate of interest thereon, extend the time of payment thereof or alter the redemption provisions thereof, without the prior written consent of the Owner of each Bond so affected, (ii) permit any pledge of, or the creation of any lien on, security interest in or charge or other encumbrance upon the assets pledged under this Indenture prior to or on a parity with the pledge contained in, and the lien and security interest created by, this Indenture or deprive the Owners of the pledge contained in, and the lien and security interest created by, this Indenture, except as expressly provided in this Indenture, without the prior written consents of the Owners of all Bonds then Outstanding, or (iii) modify or amend this Section without the prior written consents of the Owners of all Bonds then Outstanding.
(b) This Indenture and the rights and obligations of the Community Facilities District, the Trustee and the Owners hereunder may also be amended, supplemented or otherwise modified from time to time and at any time by a Supplemental Indenture, which the Community Facilities District and the Trustee may enter into without the consent of any Owners for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Community Facilities District in this Indenture contained, other covenants and agreements thereafter to be observed, to pledge or assign additional security for the Bonds (or any portion thereof), or to surrender any right or power herein reserved to or conferred upon the Community Facilities District;
(ii) to make such provisions for the purpose of curing any ambiguity, inconsistency or omission, or of curing or correcting any defective provision contained in this Indenture, provided that such modification or amendment does not materially adversely affect the rights or interests of the Owners hereunder; (iii) to provide for the issuance of one or more Series of Additional Bonds, and to provide the terms and conditions under which such Series of Additional Bonds may be issued, subject to and in accordance with the provisions of Article III; (iv) to permit the qualification of this Indenture under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect; 2136
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(v) to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America; and (vi) in any other respect whatsoever as the Community Facilities District may deem necessary or desirable, provided that such modification or amendment does not materially adversely affect the rights or interests of the Owners hereunder. (c) Promptly after the execution by the Community Facilities District and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Community Facilities District), by first-class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.

Section 9.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Community Facilities District, the Trustee and the Owners shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 9.03. Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the effective date of any Supplemental Indenture pursuant to this Article may and, if the Community Facilities District so determines, shall bear a notation by endorsement or otherwise in form approved by the Community Facilities District and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date and presentation of such Bond for such purpose at the Office of the Trustee a suitable notation shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Community Facilities District and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Community Facilities District and authenticated by the Trustee and, in that case, upon demand of the Owner of any Bond Outstanding at the time of such effective date, and presentation of such Bond for such purpose at the Office of the Trustee, such a new Bond in equal principal amount of the same Series, interest rate and maturity shall be exchanged for such Owner’s Bond so surrendered.

Section 9.04. Amendment of Particular Bonds. The provisions of this Article shall not prevent any Owner from accepting any amendment, supplement or other modification as to any particular Bond owned by it, provided that due notation thereof is made on such Bond. 2137
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ARTICLE X

DEFEASANCE
Section 10.01. Discharge of Indenture. (a) If the Community Facilities District shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets pledged therefor hereunder, and all agreements, covenants and other obligations of the Community Facilities District hereunder shall thereupon cease, terminate and become void and this Indenture shall be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community Facilities District all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District all money or securities held by it pursuant hereto that are not required for the payment of the principal of and interest and premium, if any, on the Bonds.
(b) Subject to the provisions of subsection (a) of this Section, if the Community Facilities District shall pay or cause to be paid to the Owner of an Outstanding Bond the principal thereof and the interest and premium, if any, thereon at the times and in the manner stipulated herein and therein, such Owner shall cease to be entitled to the pledge of the Net Special Tax Revenues and the other assets pledged therefor hereunder and all agreements, covenants and other obligations of the Community Facilities District hereunder shall thereupon cease, terminate and become void and this Indenture shall be discharged and satisfied as to such Bond.
(c) Notwithstanding the discharge and satisfaction of this Indenture or the discharge and satisfaction of this Indenture in respect of any Bond, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, non-presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall remain in effect and shall be binding upon the Trustee and the Owner of such Bond, and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of and interest and premium, if any, on such Bond, and to pay to the Owner of such Bond the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the discharge and satisfaction of this Indenture, the obligation of the Community Facilities District to indemnify the Trustee pursuant to Section 8.07 shall remain in effect and be binding upon the Community Facilities District.

Section 10.02. Bonds Deemed To Have Been Paid. (a) If moneys shall have been set aside and held by the Trustee for the payment or redemption of any Bond and the payment of the interest thereon to the maturity or redemption date thereof, such Bond shall be deemed to have been paid within the meaning and with the effect provided in Section 10.01. Any Outstanding Bond shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in Section 10.01 if (i) in case such Bond is to be redeemed on any date prior to its maturity date, the Community Facilities District shall have 2138
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given to the Trustee in form satisfactory to it irrevocable instructions to mail, on a date in accordance with the provisions of Section 4.02, notice of redemption of such Bond on said redemption date, said notice to be given in accordance with Section 4.02, (ii) there shall have been deposited with the Trustee either (A) money in an amount that shall be sufficient, or (B) Defeasance Securities, the principal of and the interest on which when due, and without any reinvestment thereof, together with the money, if any, deposited therewith, will provide moneys that shall be sufficient to pay when due the interest to become due on such Bond on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and premium, if any, on such Bond, and (iii) in the event such Bond is not by its terms subject to redemption within the next succeeding 60 days, the Community Facilities District shall have given the Trustee, in form satisfactory to it, irrevocable instructions to mail as soon as practicable, a notice to the Owner of such Bond that the deposit required by clause (ii) above has been made with the Trustee and that such Bond is deemed to have been paid in accordance with this Section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and premium, if any, on such Bond. (b) No Bond shall be deemed to have been paid pursuant to clause (ii) of subsection (a) of this Section unless the Community Facilities District shall have caused to be delivered to the Community Facilities District and the Trustee (i) an executed copy of a Verification Report with respect to such deemed payment, addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, (ii) a copy of the escrow agreement entered into in connection with the deposit pursuant to clause (ii)(B) of subsection (a) of this Section resulting in such deemed payment, which escrow agreement shall be in form and in substance acceptable to the Community Facilities District and which escrow agreement shall provide that no substitution of Defeasance Securities shall be permitted except with other Defeasance Securities and upon delivery of a new Verification Report, and no reinvestment of Defeasance Securities shall be permitted except as contemplated by the original Verification Report or upon delivery of a new Verification Report, and (iii) a copy of an opinion of Bond Counsel, dated the date of such deemed payment and addressed to the Community Facilities District and the Trustee, in form and in substance acceptable to the Community Facilities District, to the effect that such Bond has been paid within the meaning and with the effect expressed in this Indenture, all agreements, covenants and other obligations of the Community Facilities District hereunder have ceased, terminated and become void and the Indenture has been discharged and satisfied as to such Bonds.

Section 10.03. Unclaimed Moneys. Any moneys held by the Trustee in trust for the payment of the principal of, or premium or interest on, any Bond that remain unclaimed for two years after the date when such principal, premium or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, shall be repaid by the Trustee to the Community Facilities District as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owner of such Bond shall look only to the Community Facilities District for the payment of such principal, premium or interest. The Trustee shall hold any such moneys uninvested.
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ARTICLE XI

MISCELLANEOUS
Section 11.01. Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture either the Community Facilities District or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained required hereby to be performed by or on behalf of the Community Facilities District or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 11.02. Limitation of Rights. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Trustee, the Community Facilities District and the Owners, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Trustee, the Community Facilities District and the Owners.

Section 11.03. Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Community Facilities District of any Bonds, the Trustee shall, in lieu of such cancellation and delivery, destroy such Bonds.

Section 11.04. Severability of Invalid Provisions. If any term or provision of this Indenture or the Bonds, or the application of the term or provision to any Person or circumstance is, to any extent, held to be invalid or unenforceable in any jurisdiction, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain between the parties as contained herein, the remainder of this Indenture or the Bonds, as applicable, or the application of the term or provision to Persons or circumstances other than those as to which the term or provision is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability, and each remaining term or provision of this Indenture and the Bonds shall be valid and will be enforced to the fullest extent permitted by law.

Section 11.05. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the Community Facilities District:

City of Ontario Community Facilities District
No. 35 (Countryside Phase 2 South - Facilities)
c/o City of Ontario
303 East “B” Street
Ontario, California 91764
Attention: Executive Director of Finance
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If to the Trustee:

Zions Bancorporation, National Association
550 South Hope Street, Suite 2875
Los Angeles, California 90071
Attention: Corporate Trust Services
If to NMC Builders:

NMC Builders, LLC
c/o SC Ontario Development Corporation
1156 North Mountain Avenue
Upland, California 91786
Attention: Administrative Member
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section.

Section 11.06. Evidence of Rights of Owners. (a) Any request, consent or other instrument required or permitted by this Indenture to be signed and executed by Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Owners in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Community Facilities District if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent or other instrument acknowledged to such notary public or such officer the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
(c) The ownership of Bonds shall be proved by the Registration Books. (d) Any request, consent or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Community Facilities District in accordance therewith or reliance thereon. 2141
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Section 11.07. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds that are actually known by the Trustee to be owned or held by or for the account of the Community Facilities District, or by any other obligor on the Bonds, or by any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Community Facilities District or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination; provided, however, that if 100% of the Bonds are so owned or held, such Bonds shall be deemed to be Outstanding. Bonds so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Community Facilities District or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Community Facilities District shall specify in a Written Certificate of the Community Facilities District submitted to the Trustee those Bonds, if any, that are, as of the date of such Written Certificate, owned or held by or for the account of the Community Facilities District.

Section 11.08. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owner entitled thereto, subject, however, to the provisions of Section 10.03, but without any liability for interest thereon.

Section 11.09. Funds and Accounts. Any Fund or Account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account, but all such records with respect to all such Funds and Accounts shall at all times be maintained in accordance with prudent corporate trust industry standards, and with due regard for the requirements hereof and for the protection of the security of the Bonds and the rights of every Owner thereof. The Trustee may establish any such additional Funds or Accounts as it deems necessary to perform its obligations hereunder.

Section 11.10. Business Days. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the nominal date provided in this Indenture and, unless otherwise specifically provided in this Indenture, no interest shall accrue for the period from and after such nominal date.

Section 11.11. Waiver of Personal Liability. No member, officer, agent or employee of the Community Facilities District or the City shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof, but nothing herein contained shall 2142
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relieve any such member, officer, agent or employee from the performance of any official duty provided by any applicable provision of law or by this Indenture.

Section 11.12. Conflict with Act. In the event of any conflict between any provision of this Indenture and any provision of the Act, the provision of the Act shall prevail over the provision of this Indenture.

Section 11.13. Conclusive Evidence of Regularity. Bonds issued pursuant to this Indenture shall constitute evidence of the regularity of all proceedings under the Act relative to their issuance and to the levy of the Special Tax.

Section 11.14. Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State.

Section 11.15. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Indenture may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Indenture using an electronic signature, it is signing, adopting and accepting this Indenture and that signing this Indenture using an electronic signature is the legal equivalent of having placed its handwritten signature on this Indenture on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Indenture in a usable format.

Section 11.16. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 2143
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IN WITNESS WHEREOF, the Community Facilities District has caused this Indenture to be signed in its name by its representative thereunto duly authorized, and the Trustee, in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.

CITY OF ONTARIO COMMUNITY
FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH -

FACILITIES)
By:

Scott Ochoa,
City Manager of the City of Ontario

ZIONS BANCORPORATION,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Joni D’Amico,
Senior Vice President,
Zions Bank Division
[Signature Page to Indenture]
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EXHIBIT A

PERMITTED INVESTMENTS
“Permitted Investments” means the following:
(1) (a) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated.
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:
- Federal Home Loan Mortgage Corporation (FHLMC)
Senior debt obligations and participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts)
- Farm Credit System (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives)
Consolidated system wide bonds and notes
- Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
- Federal National Mortgage Association (FNMA)
Senior debt obligations
Mortgage-backed securities (excluded are
stripped mortgage securities which are purchased
at prices exceeding their principal amounts)
(4) Unsecured certificates of deposit, time deposits or other bank deposit products, and bankers’ acceptances (having maturities of not more than 365 days) of any bank, the short-term obligations of which are rated “A-1+” or better by S&P and “Prime1” by Moody’s. 2145
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(5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation, in banks which have capital and surplus of at least $15 million.
(6) Commercial paper (having original maturities of not more than 270 days) rated at the time of purchase “A-1+” by S&P and “Prime-1” by Moody’s. (7) Money market mutual funds rated “AAm” or “AAm-G” by S&P, or better and, if rated by Moody’s, rated “Aa2” or better, including a fund for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee provide transfer agency, custodial, investment advisory or other management services, and, subject to the prior written consent of S&P and Moody’s, the investment pool maintained by the county in which the Community Facilities District is located or other investment pools, in either case so long as such pool is rated in one of the two highest rating categories by S&P and Moody’s.
(8) State Obligations, which means
(a) Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated at least “A3” by Moody’s and at least “A-” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated.
(b) Direct, general short-term obligations of any state agency or subdivision or agency thereof described in (a) above and rated “A-1+” by S&P and “MIG-1” by Moody’s.
(c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state or state agency in (a) above and rated “AA-” or better by S&P and “Aa3” or better by Moody’s.
(9) Pre-refunded municipal obligations rated “AA+” by S&P and “Aaa” by Moody’s meeting the following requirements:
(a) the municipal obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions;
(b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
(c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of 2146
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independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification Report”);
(d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification Report; and
(f) the cash or the United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.
(10) Repurchase agreements:

A. With (i) any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least “A-” by S&P and “Aa3” by Moody’s; (ii) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “A-” by S&P and “Aa3” Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (iii) any other entity rated at least “A-” by S&P and “A3” by Moody’s (each, an “Eligible Provider”), provided that:
a. The (i) permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers), and (ii) collateral levels must be at least 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMAs and 104% of the total principal when the collateral type is FNMA and FHLMC (“Eligible Collateral”);
b. The Trustee or a third party acting solely as agent therefor or for the Community Facilities District (the “Custodian”) has possession of the collateral or the collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);
c. The collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee and the Community Facilities District setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral;
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d. The repurchase agreement shall state, and an opinion of counsel shall be rendered at the time such collateral is delivered that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; and e. The repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or S&P is withdrawn or suspended or falls below “A-” by S&P or “A3” by Moody’s, as appropriate, the provider must, notify the Trustee and the Community Facilities District within five days of receipt of such notice. Within ten days of receipt of such notice, the provider shall either (i) post Eligible Collateral, or (ii) assign the agreement to an Eligible Provider. If the provider does not perform a remedy within ten business days, the provider shall, at the direction of the Trustee or the Community Facilities District repurchase all collateral and terminate the repurchase agreement, with no penalty or premium to the Trustee or the Community Facilities District. (11) Investment agreements with a domestic or foreign bank or corporation the long-term debt of which, or, in the case of a guaranteed corporation the long-term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least “AA-” by S&P and “Aa3” by Moody’s (each, an “Eligible Provider”); provided, that, by the terms of the investment agreement:
(a) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service on the Bonds;
(b) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days’ prior notice; the Trustee and the Community Facilities District hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid;
(c) the provider shall send monthly reports to the Trustee and the Community Facilities District setting forth the balance the Community Facilities District or the Trustee has invested with the provider and the amounts and dates of interest accrued and paid by the provider;
(d) the investment agreement shall state that it is an unconditional and general obligation of the provider, and is not subordinated to any other obligation of, the provider thereof or, if the provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the provider to make payments thereunder ranks pari passu with the obligations of the provider to its other depositors and its other unsecured and unsubordinated creditors; (e) the Trustee and the Community Facilities District shall receive an opinion of domestic counsel to the provider that such investment agreement is 2148
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legal, valid and binding and enforceable against the provider in accordance with its terms;
(f) the Trustee and the Community Facilities District shall receive an opinion of foreign counsel to the provider (if applicable) that (i) the investment agreement has been duly authorized, executed and delivered by the provider and constitutes the legal, valid and binding obligation of the provider, enforceable against the provider in accordance with its terms, (ii) the choice of law of the state set forth in the investment agreement is valid under that country’s laws and a court in such country would uphold such choice of law, and (iii) any judgment rendered by a court in the United States would be recognized and enforceable in such country;
(g) the investment agreement shall provide that if during its term (i) the provider’s rating by either S&P or Moody’s falls below “AA-” or “Aa3”, respectively, the provider shall, at its option, within ten days of receipt of publication of such downgrade, either (A) post Eligible Collateral with the Trustee, the Community Facilities District or a third party acting solely as agent therefor (the “Custodian”) free and clear of any third party liens or claims, (B) assign the agreement to an Eligible Provider, or (C) repay the principal of and accrued but unpaid interest on the investment, and (ii) the provider’s rating by either S&P or Moody’s falls below “A-” or “A3”, respectively, the provider must, at the direction of the Trustee or the Community Facilities District, within ten days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the Trustee or the Community Facilities District;
(h) in the event the provider is required to collateralize, permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMAs and 104% of the total principal when the collateral type is FNMA and FHLMC (“Eligible Collateral”). In addition, the collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee and the Community Facilities District setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the collateral; (i) the investment agreement shall state, and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement, at the time such collateral is delivered, that the Custodian has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof; and 2149
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(j) the investment agreement must provide that if during its term (i) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the Trustee or the Community Facilities District, be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee or the Community Facilities District, as appropriate, and (ii) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc. (“event of insolvency”), the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Trustee or the Community Facilities District, as appropriate. 2150
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EXHIBIT B
FORM OF SERIES 2024 BOND
No. _____ $____________

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BOND, SERIES 2024

INTEREST RATE MATURITY DATE DATED DATE CUSIP
_____% September 1, 20__ _______, 2024 __________
REGISTERED OWNER:

PRINCIPAL AMOUNT:

City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”), for value received, hereby promises to pay, solely from the sources hereinafter described, to the Registered Owner identified above or registered assigns (the “Registered Owner”), on the Maturity Date identified above or on any earlier redemption date, the Principal Amount identified above in lawful money of the United States of America; and to pay interest thereon at the Interest Rate identified above in like lawful money from the date hereof payable semiannually on March 1 and September 1 in each year, commencing March 1, 2025 (the “Interest Payment Dates”), until payment of such Principal Amount in full.

This Bond is one of a series of a duly authorized issue of bonds approved by the qualified electors of the Community Facilities District, pursuant to the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311 et seq. of the California Government Code (the “Act”), and issued for the purpose of financing certain public facilities, and is one of the series of bonds designated “City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024” (the “Series 2024 Bonds”) in the aggregate principal amount of $__________. The Series 2024 Bonds are issued pursuant to the Indenture, dated as of ______ 1, 2024 (the “Indenture”), by and between the Community Facilities District and Zions Bancorporation, National Association, as trustee (said entity or any successor thereto as trustee under the Indenture, the “Trustee”), and this reference incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional bonds (“Additional Bonds”) may be issued by the Community Facilities District on a parity with the Series 2024 Bonds. The Series 2024 Bonds and any Additional Bonds are collectively referred to as the “Bonds.” The Indenture is 2151
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entered into, and this Bond is issued under, the Act and the laws of the State of California.

Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture.

Interest on the Series 2024 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (a) a Series 2024 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest thereon shall be payable from such Interest Payment Date, (b) a Series 2024 Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Closing Date, or (c) interest on any Series 2024 Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has previously been paid or duly provided for. Interest shall be paid in lawful money of the United States on each Interest Payment Date. Interest shall be paid by check of the Trustee mailed by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Series 2024 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest on any Series 2024 Bond that is not punctually paid or duly provided for on any Interest Payment Date shall, if and to the extent that amounts subsequently become available therefor, be paid on a payment date established by the Trustee to the Person in whose name the ownership of such Series 2024 Bond is registered on the Registration Books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest, notice of which shall be given to such Owner not less than ten days prior to such special record date. The principal of the Series 2024 Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.

The Bonds are special, limited obligations of the Community Facilities District, payable, as provided in the Indenture, solely from Net Special Tax Revenues and the other assets pledged therefor thereunder. Neither the faith and credit nor the taxing power of the Community Facilities District (except to the limited extent set forth in the Indenture), the City of Ontario or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Pursuant to and as more particularly provided in the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act, the Community Facilities District pledges to the Owners, and grants thereto a lien on and a security interest in, all of the Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. Said pledge constitutes a first lien on and security interest in such assets, which shall immediately attach to such assets and be effective, binding and enforceable against the Community Facilities District, its successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the extent set forth in, and in accordance with, the Indenture, irrespective of whether those parties have notice of the pledge of, lien on and security interest in such assets and without the need for any physical delivery, recordation, filing or further act.

The Series 2024 Bonds are subject to redemption on the dates, at the Redemption Prices and pursuant to the terms set forth in the Indenture. Notice of redemption of any Series 2024 Bond or any portion thereof shall be given as provided in the Indenture. 2152
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The Series 2024 Bonds are issuable as fully registered Bonds without coupons in Authorized Denominations ($5,000 and any integral multiple thereof).

Any Series 2024 Bond may be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such Person’s duly authorized attorney, upon surrender of such Series 2024 Bond to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Series 2024 Bond or Series 2024 Bonds shall be so surrendered for transfer, the Community Facilities District shall execute and the Trustee shall authenticate and shall deliver a new Series 2024 Bond or Series 2024 Bonds of the same maturity in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The Series 2024 Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Series 2024 Bonds of the same maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Indenture and the rights and obligations of the Community Facilities District, the Owners and the Trustee may be modified or amended in the manner, to the extent, and upon the terms provided in the Indenture.

The Indenture contains provisions permitting the Community Facilities District to make provision for the payment of the principal of and the interest and premium, if any, on any of the Bonds so that such Bonds shall no longer be deemed to be Outstanding under the terms of the Indenture.

Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY

TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
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IN WITNESS WHEREOF, the Community Facilities District has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of the Mayor of the City of Ontario, attested by the manual or facsimile signature of the City Clerk of the City of Ontario, all as of the Dated Date identified above.

CITY OF ONTARIO COMMUNITY
FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH -

FACILITIES)
By:

Mayor of the City of Ontario
ATTEST:

City Clerk
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CERTIFICATE OF AUTHENTICATION
This is one of the Series 2024 Bonds described in the within-mentioned Indenture and registered on the Registration Books.

Date: _________, 2024

ZIONS BANCORPORATION,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Authorized Officer
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ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto __________________________________, whose address and social security or other tax identifying number is ____________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) ______________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

Signature Guaranteed:

Note: Signature guarantee shall be made by a guarantor
institution participating in the Securities Transfer
Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.

Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within Bond in every particular without alteration or
enlargement or any change whatsoever.
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$_______

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

BOND PURCHASE AGREEMENT
________, 2024
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South - Facilities)
303 East “B” Street
Ontario, California 91764
Ladies and Gentlemen:

Samuel A. Ramirez & Co., Inc., 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 “Purchase Agreement”) with City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”), which upon acceptance will be binding upon the Underwriter and the Community Facilities District. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Community Facilities District satisfying all of the obligations imposed upon them under this Purchase Agreement. This offer is made subject to the Community Facilities District’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 11:59 p.m., local time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Community Facilities District at any time prior to the acceptance hereof by the Community Facilities District. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Indenture, dated as of _______ 1, 2024 (the “Indenture”), by and between the Community Facilities District and Zions Bancorporation, National Association, as trustee (the “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 Community Facilities District and the Community Facilities District hereby agrees to sell to the Underwriter all (but not less than all) of the $______ aggregate principal amount of the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “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 thereof, [plus/less] net original issue [premium/discount] of $_______ and less an Underwriter’s discount of $_______). 2157
2 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 subject to Section 4 hereof, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds will be offered and sold to certain dealers at prices lower than such initial offering prices.

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 Net Special Tax Revenues as provided in the Indenture, the Preliminary Official Statement (as hereinafter defined), and the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Community Facilities District Act”). The issuance of the Bonds has been duly authorized by the City Council of the City of Ontario (the “City”), as the legislative body for the Community Facilities District, pursuant to a resolution (the “Community Facilities District Resolution of Issuance”) adopted on ________, 2024.

The net proceeds of the Bonds will be used to (i) provide financing for certain public facilities and costs with respect thereto related to the development within the Community Facilities District, (ii) fund a reserve fund with respect to the Bonds, and (iii) pay the costs of issuance with respect to the Bonds.

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

The Community Facilities District 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 Community Facilities District 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 the agent or fiduciary of, or a municipal or financial advisor of, the Community Facilities District and has not assumed any advisory or fiduciary responsibility to the Community Facilities District with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided or is currently providing other services to the Community Facilities District on other matters), (iv) the Underwriter has financial interests that differ from those of the Community Facilities District, (v) the only obligations the Underwriter has to the Community Facilities District with respect to the transaction contemplated hereby are expressly set forth in this Purchase Agreement, except as otherwise provided by applicable rules and regulations of the Securities and Exchange Commission or the rules of the MSRB (as defined below) or other law, and (vi) the Community Facilities District has consulted its own legal, financial, accounting, tax, and other advisors to the extent they have deemed appropriate in connection with this transaction. The Community Facilities District acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board (“MSRB”). The Community Facilities District acknowledges and represents that it has engaged Urban Futures, Inc. as its municipal advisor (as 2158
3 defined in Securities and Exchange Commission Rule 15Ba1) and will rely solely on the financial advice of Urban Futures, Inc. with respect to the Bonds.

B. Pursuant to the authorization of the Community Facilities District, the Underwriter has distributed copies of the Preliminary Official Statement dated _______, 2024, 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 Community Facilities District hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Community Facilities District agrees to execute a final official statement relating to the Bonds (the “Official Statement”) which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Orrick Herrington & Sutcliffe LLP, Bond Counsel (“Bond Counsel”), Best Best & Krieger LLP, Disclosure Counsel (“Disclosure Counsel”), and the Underwriter, and to provide copies thereof to the Underwriter as set forth herein. The Community Facilities District hereby authorizes and requires 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 Community Facilities District further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Indenture, the Continuing Disclosure Agreement executed by the Community Facilities District in connection with the Bonds (the “Continuing Disclosure Agreement”), this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the Community Facilities District 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 15c2-12(b)(5) (the “Rule”), the Community Facilities District will undertake pursuant to the Continuing Disclosure Agreement, in the form attached as an appendix to the Official Statement, 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 Community Facilities District may otherwise agree, the Community Facilities District will deliver to the Underwriter, at the offices of Bond Counsel in Los Angeles, California, or at such other location as may be mutually agreed upon by the Underwriter and the Community Facilities District, the documents hereinafter mentioned; and the Community Facilities District will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”), the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the Community Facilities District and authenticated by the Trustee in the manner provided for in the Indenture and the Community Facilities District Act at 8:00 a.m.

California time, on [Closing Date] (the “Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) 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. Representations, Warranties and Covenants of the Community Facilities District.

The Community Facilities District represents, warrants and covenants to the Underwriter on behalf of itself and the City that:
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4 A. The City is duly organized and validly existing as a general law city under the Constitution and laws of the State of California and has duly authorized the formation of the Community Facilities District and the incurring of bonded indebtedness thereby pursuant to resolutions duly adopted by the City Council (collectively, the “Community Facilities District Formation Resolutions” and, together with the Community Facilities District Resolution of Issuance, the “Community Facilities District Resolutions”) and the Community Facilities District Act. The City Council, as the legislative body of the City and the Community Facilities District, has duly adopted the Community Facilities District Formation Resolutions and an ordinance of the City Council levying the Special Tax within the Community Facilities District (the “Ordinance”), and has caused to be recorded in the real property records of the County of San Bernardino, a notice of special tax lien, and any required amendments thereof (collectively, the “Notice of Special Tax Lien” and, together with the Community Facilities District Formation Resolutions and the Ordinance, the “Formation Documents”), and has duly adopted the Community Facilities District Resolution of Issuance. Each of its Formation Documents remains in full force and effect as of the date hereof and has not been amended or rescinded. The Community Facilities District is duly organized and validly existing as a Community Facilities District under the laws of the State of California. The Community Facilities District has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under this Purchase Agreement, the Continuing Disclosure Agreement and the Indenture, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver the Bonds as provided herein; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Indenture, the Bonds, the Continuing Disclosure Agreement, this Purchase Agreement, the Amended and Restated Acquisition and Funding Agreement dated as of _______, 2024 (the “Lennar Acquisition Agreement”), by and between the City and Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”), the Amended and Restated Acquisition and Funding Agreement, dated as of November 1, 2022, by and between the City and NMC Builders (the “NMC Builders Acquisition Agreement” and together with the Lennar Acquisition Agreement, the “Acquisition Agreements”) and the Official Statement.

This Purchase Agreement, the Indenture, the Bonds, the Continuing Disclosure Agreement, and the Acquisition Agreements are collectively referred to herein as the “Community Facilities District Documents.”
B. The Community Facilities District and the City, as applicable, have each complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the Community Facilities District Documents, and any immaterial noncompliance by the Community Facilities District and the City, if any, will not impair the ability of the Community Facilities District and the City, as applicable, to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the Community Facilities District will continue to comply with the covenants of the Community Facilities District contained in the Community Facilities District Documents.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the Community Facilities District and the Bonds (other than statements pertaining to the book-entry system, as to which no view is expressed), is true and correct in all material respects and 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 2160
5 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.

D. Up to and including 25 days after the End of the Underwriting Period (as defined below), the Community Facilities District will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not affect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Community Facilities District 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 written notice delivered to the Community Facilities District 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. Except as described in the Preliminary Official Statement, the Community Facilities District is not, 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 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 of its obligations under the Community Facilities District Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, 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 which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement.

F. Except as may be required under the “blue sky” or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Community Facilities District of its obligations under the Community Facilities District Documents, and the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, have been or will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.

G. The Community Facilities District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement. 2161
6 H. The Bonds are payable from the Net Special Tax Revenues of the Community Facilities District, as set forth in the Indenture, the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Special Tax within the Community Facilities District will be fixed and levied in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the Bonds when due and payable, all as provided in the Indenture. The Community Facilities District has covenanted to cause the Special Tax to be levied and collected at the same time and in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine.

I. The Indenture creates a valid pledge of, first lien upon and security interest in, the Net Special Tax Revenues of the Community Facilities District, and in the moneys in the Special Tax Fund, the Bond Fund, and the Reserve Fund established pursuant to the Indenture, on the terms and conditions set forth in the Indenture.

J. Except as disclosed in the Preliminary Official Statement, there are, to the best of the Community Facilities District’s knowledge, no entities with outstanding assessment liens against any of the properties within the Community Facilities District or which are senior to or on a parity with the Special Tax of the Community Facilities District referred to in paragraph (H) hereof.

K. The information contained in the Preliminary Official Statement and in the Official Statement (other than statements therein pertaining to the DTC and its book-entry system, as to which no view is expressed) is true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

L. The Preliminary Official Statement was deemed final by a duly authorized officer of the Community Facilities District prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of the Rule. The Community Facilities District 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 Community Facilities District shall cause a final printed form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with paragraph (b)(4) of the Rule and Rules G-12, G-15, G-32 and G-36 of the MSRB.

M. At the time of acceptance hereof there is and as of the Closing 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 City or the Community Facilities District) or to the best knowledge of the Community Facilities District or the City threatened, in which any such Action:
(i) in any way questions the existence of the Community Facilities District or the titles of the officers of the Community Facilities District to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Tax 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 Community Facilities District Documents or the consummation of the transactions on the part of the Community Facilities District contemplated thereby; (iii) contests the exemption of interest on the Bonds from federal or State income taxation or contests the powers of the Community Facilities District which may result in any 2162
7 material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the 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 omitted 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 basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.

N. Any certificate signed on behalf of the Community Facilities District by any officer or employee of the Community Facilities District authorized to do so shall be deemed a representation and warranty by the Community Facilities District to the Underwriter on behalf of itself and the Community Facilities District as to the statements made therein.

O. At or prior to the Closing, the Community Facilities District will have duly authorized, executed and delivered the Continuing Disclosure Agreement in substantially the form attached as an appendix to the Official Statement. Based upon a review of its previous undertakings, and except as disclosed in the Preliminary Official Statement, the City and the City Entities (as defined in the Preliminary Official Statement) have not failed to comply in all material respects with any previous undertakings with regard to the Rule to provide annual reports or notices of enumerated events in the last five years. The Community Facilities District has not previously entered into any undertaking pursuant to the Rule.

P. The Community Facilities District will apply the proceeds of the Bonds in accordance with the Indenture and as described in the Preliminary Official Statement and Official Statement.

Q. 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 Community Facilities District will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture.

R. Between the date of this Purchase Agreement and the date of Closing, the Community Facilities District will not offer or issue any bonds, notes or other obligations for borrowed money not previously disclosed to the Underwriter.

S. The City, on behalf of the Community Facilities District, has adopted local debt policies in accordance with Section 8855(i) of the California Government Code.

The Community Facilities District 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 Community Facilities District 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 Community 2163
8 Facilities District to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

The execution and delivery of this Purchase Agreement by the Community Facilities District shall constitute a representation by the Community Facilities District to the Underwriter that the representations and warranties contained in this Section 2 with respect to the Community Facilities District are true as of the date hereof.

3. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Community Facilities District contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the Community Facilities District made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of their obligations to be performed hereunder at or prior to the Closing Date, and in reliance upon the representations and covenants of Lennar Homes contained in the certificate(s) delivered as of the Closing Date, and to the following additional conditions:

A. At the Closing Date, the Community Facilities District Resolutions, the Community Facilities District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the 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.

B. At the Closing Date, except as described in the Preliminary Official Statement, the City 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 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 City is a party or is otherwise subject or bound, and 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 City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance of the conditions precedent to be performed by the City hereunder.

C. At the Closing Date, except as described in the Preliminary Official Statement, the Community Facilities District 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 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 Bonds, the Community Facilities District Resolutions, the Indenture, and any other instruments contemplated 2164
9 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 which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Indenture, the Bonds or the performance of the conditions precedent to be performed by the Community Facilities District hereunder.

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 or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall not have been materially adversely affected, in the reasonable judgment of the Underwriter (evidenced by a written notice to the Community Facilities District terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:

1. Legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department 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 of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission (“SEC”), or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, 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; 2165
10 3. A general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction;

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 Community Facilities District, its property, income, securities (or interest thereon), the validity or enforceability of the Special Tax, or the ability of the Community Facilities District to construct or acquire the improvements as contemplated by the Formation Documents, the Community Facilities District Documents or the Official Statement or the right of any owner of the property within the Community Facilities District to develop such property in the manner described in the Official Statement, or the ability of the Community Facilities District to issue the Bonds as contemplated by the Indenture and 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, or obligations of the general character of the 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;

7. There shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war, (2) any other calamity or crisis in the financial markets of the United States or elsewhere, or (3) the sovereign debt rating of the United States is downgraded by any major credit rating agency or a payment default occurs on United States Treasury obligations;

8. Except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the City or Community Facilities District shall have occurred;

9. Any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the Community Facilities District refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds;
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11 10. A general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force;

11. A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;

12. Any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order;

13. A decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Securities, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Securities, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act;

14. Any proceeding shall have been commenced or be threatened in writing by the Securities and Exchange Commission against the City or the Community Facilities District; or

15. The commencement of any Action.

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 Community Facilities District by an authorized officer;

2. The Indenture, duly executed and delivered by the Community Facilities District and the Trustee;

3. The Community Facilities District Resolutions and the other Formation Documents, and the Community Facilities District Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that the Community Facilities District Resolutions and the Ordinance are true, correct and complete copies of the ones duly adopted by the City Council;

4. The Continuing Disclosure Agreement executed and delivered by the Community Facilities District and the Trustee, as dissemination agent, and the Continuing Disclosure Certificate dated the Closing Date of Lennar Homes (the “Developer Continuing Disclosure Certificate”), in each case substantially in the respective forms attached as appendixes to the Official Statement;

5. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Community Facilities District, of Bond Counsel, to the effect that the 2167
12 Bonds are the valid, legal and binding obligations of the Community Facilities District and that the interest thereon is excluded from gross income for federal income tax purposes and exempt from personal income taxes of the State of California, in substantially the form included as an appendix to the Official Statement, together with a letter of Bond Counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that such opinion addressed to the Community Facilities District may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion was addressed to it;

6. A supplemental opinion or opinions of Bond Counsel dated the Closing Date and addressed to the Underwriter to the effect that:
(i) this Purchase Agreement and the Continuing Disclosure Agreement have been duly executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery by the other parties thereto, constitute the valid and binding obligations of the Community Facilities District, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases and by limitations on legal remedies against public agencies in the State;
(ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended;
(iii) the statements contained in the Official Statement under the captions “THE SERIES 2024 BONDS” (except information relating to DTC and its book-entry system and information under the caption “Debt Service Schedule,” as to which no opinion is expressed), “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 BONDS,” (except information under the captions “Special Tax” and “Amended and Restated Rate and Method of Apportionment” as to which no opinion is expressed), “TAX MATTERS,” and Appendix F - “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” excluding any material that may be treated as included under such captions by cross-reference or reference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Indenture and certain matters addressed in Bond Counsel’s final approving opinion, are accurate in all material respects.

7. A letter, dated the Closing Date and addressed to the Underwriter and the Community Facilities District, of Disclosure Counsel, to the effect that no facts have come to the attention of the attorneys in such firm rending legal services in connection with the Bonds that cause them to believe that the Preliminary Official Statement as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date or as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statement made therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any appendices, CUSIP numbers, financial, accounting, statistical, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, any determinations regarding valuation, real estate, and environmental matters, or any basis therefor; information about the Underwriter, underwriting; statements relating to the treatment of the Bonds or the interest, discount or premium related thereto for tax purposes under the laws of any 2168
13 jurisdiction and statements contained in the Official Statement under the caption “TAX MATTERS” and any information about the Depository Trust Company or the book-entry system);

8. 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 and warranties made by the Community Facilities District 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 the statements and information therein not misleading in any material respect; (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under this Purchase Agreement, the Community Facilities District Resolutions, the Community Facilities District Documents and the Official Statement at or prior to the Closing Date; and (iv) all information in the Official Statement relating to the Community Facilities District (other than information therein provided by the Special Tax Consultant) is true and correct in all material respects as of the date of the Official Statement and as of the Closing Date;

9. An opinion of Issuer’s Counsel dated the date of Closing and addressed to the Underwriter, the Trustee and the City, substantially in the form attached hereto as Exhibit D;

10. A certificate dated the Closing Date from Kitty Siino & Associates, Inc., as appraiser (the “Appraiser”), addressed to the Community Facilities District and the Underwriter substantially to the effect that (i) the assumptions made in the appraisal of the taxable properties within the Community Facilities District, dated May 6, 2024 (the “Appraisal Report”), prepared by the Appraiser are reasonable; the Appraisal Report fairly and accurately described, as of the stated date of value, the market values of the properties in the Community Facilities District that are subject to the Special Tax, (ii) the Appraiser is not aware of any event or act which occurred since the date of value of the Appraisal Report which, in its opinion, would materially and adversely affect the conclusions as to the market value of the appraised property in the Community Facilities District, (iii) the Appraiser consents to the reproduction of the Appraisal Report as an appendix to the Preliminary Official Statement and the final Official Statement, each with respect to the Bonds, and to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement, (iv) the Appraisal Report complies with the Appraisal Standards for Land-Secured Financings issued by the California Debt and Investment Advisory Commission dated July, 2004, (v) a true and correct copy of the Appraisal Report is attached as an appendix to the Preliminary Official Statement and the Official Statement; and (vi) neither the Appraisal Report nor the information in the Preliminary Official Statement or the Official Statement referring to it contains any untrue statement of a material fact or omits 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;

11. A certificate dated the Closing Date from Goodwin Consulting Group, Inc. addressed to the Community Facilities District and the Underwriter to the effect that:
(i) the Special Tax, if levied and collected in the maximum amounts permitted pursuant to the Amended and Restated Rate and Method of Apportionment of Special Tax of the Community Facilities District, as of the Closing Date, would generate at least 110% of the annual debt service 2169
14 payable with respect to the related issue of Bonds, net of estimated Administrative Expenses, based on such assumptions and qualifications as shall be acceptable to the Underwriter; (ii) the statements in the Preliminary Official Statement and the Official Statement provided by Goodwin Consulting Group, Inc. concerning the Special Tax in the Community Facilities District and all information supplied by it for use in the Official Statement were as of the date of the Preliminary Official Statement, the date of the Official Statement and are as of the Closing Date true and correct, 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; (iii) all information supplied by Goodwin Consulting Group, Inc. to the Appraiser is true and correct as of the date of the Preliminary Official Statement and the date of the Official Statement and as of the Closing Date, based on such assumptions as may have been supplied by it; and (iv) the information contained in the Appraisal Report with respect to taxes and tax rates applicable, and projected to be applicable, to the property in the Community Facilities District is consistent with such information provided by Goodwin Consulting Group, Inc. to the Appraiser, which information so provided was based on information obtained by Goodwin Consulting Group, Inc. from the Community Facilities District, Lennar Homes, and the City;

12. Certified copies of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution of the Indenture and the authentication of the Bonds;

13. A certificate of the Trustee, addressed to the Underwriter, 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 has full power and authority to perform its duties under the Indenture and the Continuing Disclosure Agreement; (ii) the Trustee is duly authorized to execute and deliver the Indenture and the Continuing Disclosure Agreement, to accept the obligations created by the Indenture and the Continuing Disclosure Agreement and to authenticate the Bonds pursuant to the terms of the Indenture; (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 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 acceptance and performance of the obligations created by the Indenture; and (iv) to the best of its knowledge, compliance with the terms of the Indenture will not conflict with, or result in a violation or breach of, or constitute a default under, any material agreement or material 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;

14. An opinion of counsel to the Trustee dated the Closing Date, addressed to the Underwriter, and the Community Facilities District to the effect that (i) the Trustee is a national banking association duly organized and validly existing under the laws of the jurisdiction of its organization and has the corporate power to execute and deliver the Indenture, the Continuing Disclosure Agreement, and any other documentation relating to the Indenture, (ii) the execution and delivery by the Trustee of the Indenture, the Continuing Disclosure Agreement, and any other documentation relating to the Indenture, and its performance of its obligations under the Indenture, have been and are as of the date hereof duly authorized by all necessary corporate action, (iii) the Indenture and the Continuing Disclosure Agreement have been duly executed and delivered and constitute the valid and legally binding obligations of the Trustee enforceable against it in accordance with their terms except as such enforceability may be limited by applicable bankruptcy, 2170
15 insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought as a proceeding in equity or at law), and (iv) the Bonds have been duly authenticated and delivered by the Trustee;

15. A certificate of the Community Facilities District 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;

16. From counsel to Lennar Homes, (i) a negative assurance letter of such counsel, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, and (ii) an opinion letter of such counsel, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, to the effect that the Developer Continuing Disclosure Certificate has been duly authorized, executed and delivered by Lennar Homes;

17. A Letter of Representations from Lennar Homes dated the date of printing the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B;

18. A Closing Certificate from Lennar Homes dated the Closing Date, substantially in the form attached hereto as Exhibit C, or as such Closing Certificate may be modified with the approval of the Underwriter and Disclosure Counsel;

19. A certificate dated the Closing Date from Empire Economics, Inc. addressed to the Community Facilities District and the Underwriter to the effect that the statements in the Official Statement provided by Empire Economics, Inc. and all information supplied by it for use in the Official Statement were as of the date of the Official Statement and are as of the Closing Date true and correct, 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;

20. An opinion of Kutak Rock LLP, counsel to the Underwriter, dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;

21. A certificate of Urban Futures, Inc., the City’s municipal advisor (the “Municipal Advisor”) to the effect that the Municipal Advisor has participated in the preparation of the Preliminary Official Statement and the Official Statement and nothing has come to the attention of the Municipal Advisor which would lead it to believe that the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omits to state a fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and

22. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations and warranties of the Community Facilities District contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Community Facilities District at or prior to the Closing of all agreements then to be performed and all conditions then to be 2171
16 satisfied by the Community Facilities District in connection with the transactions contemplated hereby and by the Indenture and the Official Statement.

If the Community Facilities District 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 Community Facilities District nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the Community Facilities District set forth in Section 5 hereof shall continue in full force and effect.

4. Establishment of Issue Price.

A. The Underwriter agrees to assist the Community Facilities District in establishing the issue price of the Bonds and shall execute and deliver to the Community Facilities District 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 E, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Community Facilities District and Bond Counsel (as defined herein), 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 Community Facilities District under this section to establish the issue price of the Bonds may be taken on behalf of the Community Facilities District by the Municipal Advisor and any notice or report to be provided to the Community Facilities District may be provided to the Community Facilities District’s Municipal Advisor.

B. Except as otherwise set forth in Exhibit A attached hereto, the Community Facilities District will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Community Facilities District the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Community Facilities District 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 (as defined herein) 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, provided that the Underwriter’s reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Community Facilities District or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. For clarity, and notwithstanding any other condition to Closing set forth in this Purchase Agreement, the sale of 10% of each maturity of the Bonds to the public prior to the Closing Date shall not be a condition to Closing.

C. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto. Exhibit A also sets forth, as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Community Facilities District and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Community Facilities District to treat the initial offering price to the public of each such maturity as 2172
17 of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Community Facilities District promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

D. The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(a)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter, (b) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(c) to acknowledge that, unless otherwise advised by the dealer or brokerdealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing has occurred, until either all Bonds of that maturity 2173
18 allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that the reporting obligation after the date of the Closing may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

E. The Community Facilities District acknowledges that, in making the representations set forth in this subsection, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-theoffering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Community Facilities District further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing the issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule if applicable to the Bonds.

F. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party;
(2) “underwriter” means (A) any person that agrees pursuant to a written contract with the Community Facilities District (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); (3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership 2174
19 (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.

5. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein:

A. The Underwriter shall be under no obligation to pay, and the Community Facilities District shall pay or cause to be paid (out of any legally available funds of the Community Facilities District) all expenses incident to the performance of the Community Facilities District’s obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to DTC, the cost of preparation, printing, distributing and delivering of the Indenture, the Preliminary Official Statement, the Official Statement, any amendment or supplement to the Preliminary Official Statement or the Official Statement and this Purchase Agreement, and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Trustee, Bond Counsel, Disclosure Counsel and any financial advisors, special tax consultants, appraisers, accountants, engineers or any other experts or consultants the City or the Community Facilities District may have retained in connection with the Bonds; and
B. The Community Facilities District shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any “blue sky” or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel, meals, transportation and lodging (but not entertainment expenses), and any advertising expenses in connection with the public offering of the Bonds.

6. Notices. Any notice or other communication to be given to the Community Facilities District or the Community Facilities District under this Purchase Agreement may be given by delivering the same in writing to the City of Ontario, 303 East “B” Street, Ontario, California 91764, Attention: City Manager; 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 Samuel A. Ramirez & Co., Inc., 633 W. 5th, Suite 2693, Los Angeles, California 90071, Attention: Public Finance.

7. Parties In Interest. This Purchase Agreement is made solely for the benefit of the Community Facilities District 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.

8. Survival of Representations and Warranties. The representations and warranties of the Community Facilities District under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered 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 Community Facilities District and regardless of delivery of and payment for the Bonds. 2175
20 9. 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.

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

11. No Prior Agreements. 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 Community Facilities District.

12. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.
2176
S-1

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

Very truly yours,
SAMUEL A. RAMIREZ & CO., INC.

By:

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

CITY OF ONTARIO COMMUNITY
FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH -

FACILITIES)
By:

Authorized Officer
Time of Execution: _____________ California time
2177
A-1

EXHIBIT A

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOffering-Price
Rule
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
20__
(T)
20__
(T)
20__
(T)
20__
(T)
(T) Term Bond.
(C) Priced to optional redemption date of September 1, 20__, at [par]. * At the time of execution of this Purchase Agreement and assuming orders are confirmed immediately after the execution of this Purchase Agreement.

2178
A-2

REDEMPTION PROVISIONS
Optional Redemption. The Bonds maturing on and after September 1, 2032, shall be subject to optional redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date on or after September 1, 2031 from any source of available funds, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 1, 2031 and March 1, 2032 103%
September 1, 2032 and March 1, 2033 102
September 1, 2033 and March 1, 2034 101
September 1, 2034 and any Interest Payment Date
thereafter
100
Mandatory Redemption from Special Tax Prepayments. The Bonds shall be subject to mandatory redemption, in whole, or in part in Authorized Denominations, on any Interest Payment Date, from and to the extent of Special Tax prepayments required to be applied thereto pursuant to the Indenture and any amount required to be applied thereto pursuant to the Indenture, at the following respective Redemption Prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:

Redemption Dates Redemption Price
September 1, 2031 and March 1, 2032 103%
September 1, 2032 and March 1, 2033 102
September 1, 2033 and March 1, 2034 101
September 1, 2034 and any Interest Payment Date
thereafter
100
Mandatory Sinking Fund Redemption. The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__ at a Redemption Price equal to the principal amount of the Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed

The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__ at a Redemption Price equal to the principal amount of the Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:
2179
A-3
Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__ at a Redemption Price equal to the principal amount of the Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
The Bonds maturing September 1, 20__ shall be subject to mandatory sinking fund redemption, in part, on September 1 in each year, commencing September 1, 20__ at a Redemption Price equal to the principal amount of the Bonds maturing September 1, 20__ to be redeemed, without premium, plus accrued interest thereon to the date of redemption, in the aggregate respective principal amounts in the respective years as follows:

Sinking Fund
Redemption Date
(September 1)
Principal Amount
to be
Redeemed
2180

B-1

EXHIBIT B

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

LETTER OF REPRESENTATIONS OF

LENNAR HOMES OF CALIFORNIA, LLC
[POS Date]
City of Ontario Community Facilities District
No. 35 (Countryside Phase 2 South - Facilities)
303 East B Street
Ontario, California 91764
Samuel A. Ramirez & Co., Inc.
633 W. 5th, Suite 2693
Los Angeles, California 90071
Ladies and Gentlemen:

Reference is made to the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”). This Letter of Representations of Lennar Homes of California, LLC (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 3(F)(17) of the Bond Purchase Agreement.

Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Lennar Homes of California, LLC, a California limited liability company (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is duly organized and validly existing under the laws of the State of California and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop its property in the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within the Community Facilities District is held in the name of the Developer (herein, the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with 2181

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respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Developer’s current expectation is that the Developer shall remain the party responsible for the construction and sale of homes within the Property. Except as disclosed in the Preliminary Official Statement, the Developer has not entered into an agreement for development or management of the Property by any other entity, except such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.

3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned,1 is pending against any current Affiliate2 (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer or any such Affiliate (a) to restrain or enjoin the collection of the special tax levied on the Property by the Community Facilities District (the “Special Tax”) or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the reserve fund established under the Indenture (herein, the “Reserve Fund”)), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) to materially adversely affect the ability of the Developer to perform its obligations under the Continuing Disclosure Certificate (as hereinafter defined), (d) in any way contesting or affecting the validity of the Special Tax, or (e) which is reasonably likely to materially and adversely affect the Developer’s ability to develop and sell the Property as described 1 “Actual Knowledge of the Undersigned” means, as of the date of this Letter of Representations, the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Affiliates as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations.

Individuals who are no longer employees of the Developer and its Affiliates have not been contacted. The Developer further notes that Lennar Corporation, a Delaware corporation (“Lennar Corporation”), completed a merger with CalAtlantic Group, Inc., a Delaware corporation (now CalAtlantic Group, LLC, herein “CalAtlantic”) in February, 2018, pursuant to which CalAtlantic merged with and into Lennar Corporation, with Lennar Corporation being the surviving entity. Separate and apart from Lennar Corporation’s due diligence efforts for purposes of completing the acquisition of CalAtlantic, individuals who were employees and officers of CalAtlantic and its subsidiaries prior to the merger have not been consulted or contacted and documents entered into by CalAtlantic and its subsidiaries or related to their properties and projects have not been reviewed. 2 “Affiliate” means, with respect to the Developer, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property and ability to pay its Special Taxes on the Property (to the extent the responsibility of the Developer) prior to delinquency, or (b) such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Taxes on the Property (to the extent the responsibility of the Develop) prior to delinquency. “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Due to the merger, and for purposes hereof, the term Affiliate shall exclude CalAtlantic and its direct and indirect subsidiaries.
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in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the sections of the Preliminary Official Statement captioned “PROPERTY OWNERSHIP AND THE DEVELOPMENT” and “CONTINUING DISCLOSURE – Developer Continuing Disclosure Certificate” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of the Developer or its Affiliates, that are secured by an interest in the Property. Neither the Developer nor, to the Actual Knowledge of the Undersigned, any of its Affiliates is currently in material default on any loans, lines of credit or other obligation related to the development of the Property or any other project which default is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

6. To the Actual Knowledge of the Undersigned, other than as disclosed in the Preliminary Official Statement, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District, to challenge the adoption of the ordinance of the Community Facilities District levying Special Tax within the Community Facilities District, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Amended and Restated Rate and Method of Apportionment of Special Tax pursuant to which Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected or (c) an action or suit to enforce the obligations of the City and/or 2183

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the Community Facilities District under the Community Facilities District Resolutions, the Ordinance, the Indenture, or any other agreements among the Developer, an Affiliate, the City and/or the Community Facilities District or to which the Developer or an Affiliate is a party or beneficiary.

8. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement.

9. The Developer intends to comply with the provision of the Mello-Roos Community Facilities Act of 1982, as amended relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof.

10. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

11. The Developer agrees to execute at Closing the Continuing Disclosure Certificate, substantially in the form attached as Appendix H to the Preliminary Official Statement (the “Continuing Disclosure Certificate”), with such additional changes as may be agreed to by the Developer and the Underwriter. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not aware of any material failures by it or any entity under managerial control of the Developer to comply in all material respects with previous continuing disclosure undertakings in a written certificate or agreement executed by it or an entity under the managerial control of the Developer to provide periodic continuing disclosure reports or notices of material events respecting securities offerings in California within the past five years.

12. To the Actual Knowledge of the Undersigned, execution and delivery of the Continuing Disclosure Certificate, and the performance by the Developer of its obligations under the Continuing Disclosure Certificate, will not conflict with or constitute a breach of or default under any loans, lines of credit, agreements, or other contractual or financial obligations of the Developer, or any applicable law, regulation, judgment or decree.

13. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliate of the Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation which is reasonably likely to have a materially adverse impact on the ability of the Developer to develop the Property as described in the Preliminary Official Statement, to perform its obligations under the Continuing Disclosure Certificate, or to pay the Special Tax or ad valorem tax obligations with respect to the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.
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14. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Affiliates have been delinquent at one time or another in the payment of ad valorem property taxes, special assessments or special taxes. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property included within the boundaries of a community facilities district or an assessment district in California that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the delinquent Developer or such Affiliate in a court of law.

15. The Developer has not filed for the reassessment of the assessed value of any portions of the Property, other than in connection with the sale of homes to individual homebuyers.

16. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Developer, its Affiliates or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Developer’s development of the Property as described in the Preliminary Official Statement, the performance of its obligations under the Continuing Disclosure Certificate, or the payment of the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

17. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” the Developer presently anticipates that it will have sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Tax levied against the Property (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the Community Facilities District will be required to resort to a draw on the Reserve Fund for payment of principal of or interest on the Bonds due to the Developer’s nonpayment of Special Tax. However, neither the Developer nor any of its Affiliates are obligated to make any additional capital contribution or loan to the Developer at any time, and the Developer reserves the right to change its development plans and financing plans for the Property at any time without notice.

18. An appraisal of the taxable properties within the Community Facilities District, dated May 6, 2024 (the “Appraisal Report”), was prepared by Kitty Siino & Associates, Inc. (the “Appraiser”). The Appraisal Report estimates the market value of the taxable properties within the Community Facilities District as of April 1, 2024 (the “Date of Value”). To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

19. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 4 herein (and subject to the limitations and exclusions set forth in Paragraph 4), the Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City, the Community Facilities District, and their officials and employees, and each Person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended 2185

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(each, an “Indemnified Party” and, collectively, the “Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject under any statute or at law or in equity and shall reimburse any such Indemnified Party for any reasonable legal or other expense incurred by it in connection with investigating any such claim against it and defending any such action, insofar as and solely to the extent such losses, claims, damages, liabilities or actions, or legal or other expenses, arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission of a material fact by the Developer in the above-referenced information in the Preliminary Official Statement, as of its date, necessary to make the statements made by the Developer contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Developer may otherwise have to any Indemnified Party, provided that in no event shall the Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party.

If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Indemnified Party in respect of which indemnification may be sought pursuant to the above paragraph, such Indemnified Party shall promptly notify the Developer in writing; provided that the failure to notify the Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced by such failure; and provided, further, that the failure to notify the Developer shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under the above paragraph unless such liability was also conditioned upon such notice. If any such proceeding shall be brought or asserted against an Indemnified Party and it shall have notified the Developer thereof, the Developer shall retain counsel reasonably satisfactory to the Indemnified Party and approved thereby to represent the Indemnified Party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Developer and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include the Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Developer shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Developer agrees to indemnify each Indemnified Party from and against any loss or liability by reason of such settlement or judgment as set forth above. If the Developer shall, after receiving notice of the indemnification obligation of the Developer and within a period of time necessary to preserve any and all defenses to any claim asserted, fails to assume the defense or to retain counsel for that purpose satisfactory to the Indemnified Party, the Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle the claim or other matter on behalf of, for the account of and 2186

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at the risk of, the Developer. The Developer shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is a party and indemnification could have been sought hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

20. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur of which the undersigned has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 4 hereof (and subject to the limitations and exclusions contained in Paragraph 4 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.

21. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit C to the Bond Purchase Agreement. If any event related to or affecting the Developer, its Affiliates, or the ownership, development, or sale of the Property occurs, as a result of which it is necessary to modify the Closing Certificate, the Developer agrees to deliver a new Closing Certificate revised to reflect such event.

22. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have had the opportunity to discuss with counsel to the Developer the meaning of the contents of this Letter of Representations. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Developer and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Developer under such securities laws. [Remainder of Page Intentionally Left Blank; Signature Page Follows]

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The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Letter of Representations. Any liability arising from or relating to this Letter of Representations may only be asserted against the Developer.

LENNAR HOMES OF CALIFORNIA,
LLC, a California limited liability company
By: ________________________________
Name: ______________________________
Title: _______________________________
[EXECUTION PAGE OF LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC]
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EXHIBIT A
To

LETTER OF REPRESENTATIONS

OF LENNAR HOMES OF CALIFORNIA, LLC

DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT
See attached.
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EXHIBIT C

FORM OF CLOSING CERTIFICATE
$_______

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

CLOSING CERTIFICATE OF

LENNAR HOMES OF CALIFORNIA, LLC
[Closing Date]
City of Ontario Community Facilities District
No. 35 (Countryside Phase 2 South - Facilities)
303 East B Street
Ontario, California 91764
Attn: City Manager
Samuel A. Ramirez & Co., Inc.
633 W. 5th, Suite 2693
Los Angeles, California 90071
Ladies and Gentlemen:

Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [BPA Date] (the “Bond Purchase Agreement”), entered into in connection therewith. This Closing Certificate of Lennar Homes of California, LLC (the “Closing Certificate”) is delivered pursuant to Section 3(F)(18) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of Lennar Homes of California, LLC (the “Letter of Representations”), dated [POS Date], delivered by Lennar Homes of California, LLC, a California limited liability company (the “Developer”).

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer has received the final Official Statement dated [BPA Date] relating to the Bonds (the “Official Statement”). To the Actual Knowledge of the Undersigned, each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be 2190
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references to the Official Statement and all references to the Continuing Disclosure Certificate herein shall be deemed to be references to the Continuing Disclosure Certificate as executed by the Developer in connection with the sale of the Bonds.

2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) relating to the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of its Affiliates), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.

3. For the period through 25 days after the “End of the Underwriting Period” as defined in the Bond Purchase Agreement (provided the Developer may assume the End of the Underwriting Period is the Closing Date (as defined in the Bond Purchase Agreement), unless it receives written notice from the Underwriter that the End of the Underwriting Period is later than the Closing Date), if any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of its Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) not misleading in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations), in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

4. The Developer has duly authorized the execution and delivery of the Continuing Disclosure Certificate and is duly authorized to perform the obligation on its part to be performed thereunder, and the Continuing Disclosure Certificate constitutes the legal, valid and binding obligation of the Developer, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and other similar laws affecting the rights of creditors and certain equitable, legal or statutory principles affecting enforcement of contractual rights generally, regardless of whether such enforcement is considered in a proceeding of law or equity.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] 2191
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The undersigned has executed this Closing Certificate solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Closing Certificate. Any liability arising from or relating to this Closing Certificate may only be asserted against the Developer.

LENNAR HOMES OF CALIFORNIA,
LLC, a California limited liability company
By: ________________________________
Name: ______________________________
Title: _______________________________
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EXHIBIT D
FORM OF ISSUER’S COUNSEL OPINION
[Closing Date]
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South – Facilities)
303 East “B” Street
Ontario, California 91764
Samuel A. Ramirez & Co., Inc., as
Underwriter
633 West Fifth Street, Suite 2693
Los Angeles, California 90071
Zions Bancorporation,
National Association, as Trustee
550 South Hope Street, Suite 2875
Los Angeles, California 90071
ISSUER’S COUNSEL OPINION
Re: $_______ City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 Ladies and Gentlemen:

We have acted as issuer’s counsel (“Issuer’s Counsel”) to the City of Ontario (the “City”) and the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South – Facilities) (the “Community Facilities District”), in connection with the issuance of the $__________ City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South – Facilities) Special Tax Bonds, Series 2024 (the “Bonds”). In such capacity, we have been asked to render this opinion in connection with Section 3(F)(9) of that certain Bond Purchase Agreement, dated [BPA Date] (the “Bond Purchase Agreement”), by and between Samuel A. Ramirez & Co., Inc., as underwriter, and the Community Facilities District relating to the Bonds. All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Bond Purchase Agreement.

In rendering this opinion, we have examined and relied upon originals or copies of the following documents upon which we are relying, without further inquiry or investigation (although we advise you that we have no actual knowledge to the contrary of any matters related thereto): (i) the Community Facilities District Resolution of Issuance, (ii) Resolution No. 2017-108, adopted by the City Council of the City (the “City Council”) on September 5, 2017 (the “Resolution of Intention”), (iii) Resolution No. 2017-109, adopted by the City Council on September 5, 2017 (the “Resolution to Incur Indebtedness”), (iv) Resolution No. 2017-123, adopted by the City Council on October 17, 2017 (the “Resolution of Formation”), (v) Resolution No. 2017-124, adopted by the City 2193
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Council on October 17, 2017 (the “Resolution Deeming it Necessary to Incur Indebtedness”), (vi) Resolution No. 2017-125, adopted by the City Council on October 17, 2017 (the “Resolution Calling Election”), (vii) Resolution No. 2017-126, adopted by the City Council on October 17, 2017 (the “Resolution Declaring Results”), (viii) Ordinance No. 3082, adopted by the City Council on November 7, 2017 (the “Ordinance”), (ix) Resolution No. 2022-048, adopted by the City Council on June 7, 2022 (the “Resolution of Consideration to Change Rate and Method of Apportionment”), (x) Resolution No. 2022-049, adopted by the City Council on June 7, 2022 (the “Resolution of Intention to Increase Maximum Debt Amount”), (xi) Resolution No. 2022-120, adopted by the City Council on July 19, 2022 (the “Resolution Deeming it Necessary to Increase the Maximum Aggregate Amount of Bonded Indebtedness”), (xii) Resolution No. 2022-121, adopted by the City Council on July 19, 2022 (the “Resolution Calling Special Election Relating to Debt Increase”), (xiii) Resolution No. 2022-118, adopted by the City Council on July 19, 2022 (the “Resolution Calling Special Election for Proposed Changes to the Rate and Method of Apportionment”), (xiv) Resolution No. 2022-122, adopted by the City Council on July 19, 2022 (the “Resolution Declaring Results of Special Election Relating to Debt Increase”), (xv) Resolution No. 2022-119, adopted by the City Council on July 19, 2022 (the “Resolution of Change Declaring Results of Special Election”), (xvi) Ordinance No. 3221, adopted by the City Council on August 2, 2022 (the “Ordinance Amending and Restating Ordinance No. 3082”, and, together with the Resolution of Intention, the Resolution to Incur Indebtedness, the Resolution of Formation, the Resolution Deeming it Necessary to Incur Indebtedness, the Resolution Calling Election, and the Resolution Declaring Results, Resolution of Consideration to Change Rate and Method of Apportionment, Resolution of Intention to Increase Maximum Debt Amount, Resolution Deeming it Necessary to Increase the Maximum Aggregate Amount of Bonded Indebtedness, Resolution Calling Special Election Relating to Debt Increase, Resolution Calling Special Election for Proposed Changes to the Rate and Method of Apportionment, Resolution Declaring Results of Special Election Relating to Debt Increase, Resolution of Change Declaring Results of Special Election, the “Formation Documents”), (xvii) the Community Facilities District Documents, and (xviii) the Official Statement, relating to the Bonds, and we have made such other investigations of law and facts as we have deemed necessary to render the following opinions.

In rendering this opinion, we have assumed, without independent investigation, that all documents submitted to or reviewed by us are accurate and complete and, if not originals, are true and correct copies of originals and the accuracy of the statements and representations contained in such documents. As to questions of fact material to this opinion letter, we have relied upon representations and information supplied to us by the City and the Community Facilities District and their respective officers, employees, and representatives and upon representations and certificates of various public officials. In addition, we have assumed the authority of and due execution by each of the parties to the documents other than the City and the Community Facilities District. In the course of our representation, nothing has come to our attention that caused us to believe that any of the factual representations upon which we have relied are not true, but we have made no other factual investigations.

When used herein, the phrase “current actual knowledge” means knowledge as we have obtained from (i) the incumbency and signature certificate of the Community Facilities District, (ii) the representations and warranties contained in each closing certificate of the City or the Community Facilities District, (iii) knowledge of facts or other information currently known to lawyers in our firm who have performed legal services for the City or the Community Facilities District, and (iv) a litigation search in California State and federal court conducted on ___________, 20___. 2194
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Based on the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. The City is a municipal corporation and general law city, duly organized and validly existing pursuant to the Constitution and laws of the State of California (the “State”).

2. The Community Facilities District is duly organized and validly existing as a community facilities district under the Constitution and laws of the State.

3. The Community Facilities District Resolution of Issuance and the Formation Documents have been duly adopted at meetings of the City Council, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Community Facilities District Resolution of Issuance and the Formation Documents are in full force and effect and have not, other than as described in the Official Statement, been modified, amended, rescinded or repealed since the respective dates of their adoption.

4. The Community Facilities District Documents and the Official Statement have been duly authorized, executed and delivered by the Community Facilities District and 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, reorganization, 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 or seeks to restrain or to enjoin the development of property within the Community Facilities District.

5. Except as may be stated in the Official Statement, to our current actual knowledge, 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 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 Bonds 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 Community Facilities District would have a material adverse effect upon the financial condition or the revenues of the City or Community Facilities District, questions the right of the Community Facilities District to use the Special Tax levied within the Community Facilities District for the repayment of the 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 Community Facilities District for the repayment of the Bonds.

6. To our current actual knowledge, the execution and delivery of the Bonds and the Community Facilities District Documents, and compliance with the provisions of each, will not conflict with or constitute a breach of or default under any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument of which the Community Facilities District is a party or is otherwise subject or bound, a consequence of 2195
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which could be to materially and adversely affect the ability of the Community Facilities District to perform its obligations under the Bonds or the Community Facilities District Documents.

7. All approvals, consents, authorization, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the ability of the Community Facilities District, to perform its obligations under the Bonds or the Community Facilities District Documents, have been obtained or made, as the case may be, and are in full force and effect.

The opinions set forth above are subject to the following additional qualifications:
(a) We express no opinion with respect to the laws of any state or jurisdiction other than California and the United States regarding the enforceability of any transaction mentioned herein or the interpretation, authorization, execution, validity, enforceability or effect of any of the documents mentioned herein; provided further that we express no opinion with respect to California or federal tax and securities law. (b) As Issuer’s Counsel in this matter, we have not rendered financial advice to the Community Facilities District and do not represent by this opinion, or otherwise, that we reviewed or made any assessment about, nor do we express any opinion about, the ability of the Community Facilities District to pay debt service or amounts due under the Indenture, and accordingly, we offer no opinion whatsoever regarding such financial feasibility or ability to repay the Bonds.
(c) We express no opinion with respect to any indemnification, contribution, lien priority or choice of law provisions contained in the foregoing documents. (d) General principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law; and limitations imposed by bankruptcy, insolvency, fraudulent conveyance, receivership, conservatorship, reorganization, arrangement, liquidation, moratorium or other similar laws affecting the enforcement of creditors’ rights in general heretofore or hereafter enacted, as such laws may be applied in the event of bankruptcy, insolvency, reorganization, arrangement, receivership, conservatorship, liquidation, readjustment of debt or other similar proceedings of, or moratorium or similar occurrence affecting municipal corporations in the State.

No attorney-client relationship exists between you and us (other than the City and Community Facilities District). This opinion is solely for the benefit of the addressees in connection with the transactions covered by the first paragraph of this letter and may not be relied upon or used by, circulated, quoted or referred to, nor may copies hereof be delivered to, any other person or for any other purpose without our prior written approval; provided, however, copies of this opinion may be included in the closing transcripts for the transactions connected with the issuance of the Bonds.

This opinion letter speaks only as of its date, and we disclaim any obligation to update this opinion letter for events occurring or coming to our attention after the date hereof. The opinions herein are limited to the matters expressly set forth herein, and no opinion is to be implied or may be inferred beyond the matters expressly so stated.
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We bring to your attention the fact that our conclusions are an expression of professional judgment and are not a guarantee of a result.

Respectfully submitted,
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EXHIBIT E
$______

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, Samuel A. Ramirez & Co., Inc. (“Ramirez”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

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

2. Price. As of the date of this Certificate, for each Maturity of the Bonds, the first price at which at least 10% of each such Maturity of the Bonds was sold to the Public was the respective price for such Maturity listed in Schedule A attached hereto.

3. Defined Terms.
(a) “Issuer” means the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities).
(b) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) “Underwriter” means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

4. Reserve Fund. The funding of the Reserve Fund under the Indenture, and as provided in the Tax Certificate, is reasonably required, was a vital factor in marketing the Bonds, facilitated the marketing of the Bonds at an interest rate comparable to that of bonds and other tax-exempt obligations of a similar type, and is not in excess of the amount necessary for such purpose. 2198
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5. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Ramirez’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate of the Issuer dated [Closing Date] and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

SAMUEL A. RAMIREZ & CO., INC.

By:

Dated: [Closing Date]
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SCHEDULE A
TO

ISSUE PRICE CERTIFICATE
[TO BE ATTACHED]
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CONTINUING DISCLOSURE AGREEMENT
by and between

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
and

ZIONS BANCORPORATION, NATIONAL ASSOCIATION,

AS TRUSTEE
Dated as of ______ 1, 2024
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South - Facilities)
Special Tax Bonds, Series 2024
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CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this “Disclosure Agreement”), dated as of ______ 1, 2024, is by and between CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and ZIONS BANCORPORATION, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as Trustee (the “Trustee”).

W I T N E S S E T H :

WHEREAS, the Community Facilities District has issued its City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of $__________, pursuant to the Indenture, dated as of ______ 1, 2024 (the “Indenture”), by and between the Community Facilities District and the Trustee; and
WHEREAS, this Disclosure Agreement is being executed and delivered by the Community Facilities District and the Trustee for the benefit of the owners and beneficial owners of the Series 2024 Bonds and in order to assist the underwriter of the Series 2024 Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5); NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Disclosure Agreement have the meanings herein specified.

Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture.
“Annual Report” means any Annual Report provided by the Community Facilities District pursuant to, and as described in, Sections 2 and 3 hereof. “Annual Report Date” means the date in each year that is the first day of the month following the ninth month after the end of the Community Facilities District’s fiscal year, which date, as of the date of this Disclosure Agreement, is April 1. “Community Facilities District” means City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), a community facilities district organized and existing under the laws of the State, and its successors. “Disclosure Representative” means the Deputy City Treasurer of the City, or his or her designee, or such other person as the Community Facilities District shall designate in writing to the Trustee from time to time.
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“Dissemination Agent” means the Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Community Facilities District and which has filed with the Trustee a written acceptance of such designation. “Financial Obligation” means (a) a debt obligation of the Community Facilities District, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation of the Community Facilities District, or (c) a guarantee of (i) a debt obligation of the Community Facilities District, or (ii) a derivative instrument described in clause (b), above; provided, however, that the term “Financial Obligation” shall not include “municipal securities” (as such term is defined in the Securities Exchange Act of 1934, as amended) as to which a “final official statement” (as such term is defined in the Rule) has been provided to the MSRB consistent with the Rule. “Indenture” means the Indenture, dated as of ______ 1, 2024, by and between the Community Facilities District and Zions Bancorporation, National Association, as Trustee, as originally executed and as it may be modified or amended from time to time in accordance with its terms.
“Listed Events” means any of the events listed in subsection (a) or subsection (b) of Section 4 hereof.
“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. 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. “Participating Underwriter” means the original underwriter of the Series 2024 Bonds required to comply with the Rule in connection with the offering of the Series 2024 Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Trustee” means Zions Bancorporation, National Association, as Trustee under the Indenture, or any successor thereto as Trustee thereunder substituted in its place as provided therein.

Section 2. Provision of Annual Reports. (a) The Community Facilities District shall, or shall cause the Dissemination Agent to, provide to the MSRB an Annual Report that is consistent with the requirements of Section 3 hereof, not later than the Annual Report Date, commencing with the report for the 2023-24 Fiscal Year. The Annual Report may include by reference other information as provided in Section 3 hereof; provided, however, that the audited financial statements of the Community Facilities District, if any, 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 they are not available by that date. If the Community Facilities District’s fiscal year changes, it shall, or it shall instruct the Dissemination Agent to, give notice of such change in a filing with the MSRB.
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(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 Community Facilities District shall provide the Annual Report to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). If by such date, the Trustee has not received a copy of the Annual Report, the Trustee shall contact the Community Facilities District and the Dissemination Agent to determine if the Community Facilities District is in compliance with the first sentence of this subsection (b).
(c) If the Trustee is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection (a) of this Section, the Trustee shall, in a timely manner, send a notice to the MSRB in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall:
(i) provide each Annual Report received by it to the MSRB, as provided herein; and
(ii) file a report with the Community Facilities District and (if the Dissemination Agent is not the Trustee) the Trustee certifying that such Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided to the MSRB.

Section 3. Content of Annual Reports. The Community Facilities District’s Annual Report shall contain or incorporate by reference the following:
(a) The Community Facilities 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 Community Facilities 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 2 hereof, the Annual Report shall contain unaudited financial statements, in a format similar to that used for the Community Facilities District’s audited financial statements, and the audited financial statements, if any, shall be filed in the same manner as the Annual Report when they become available. (b) The following information:
(i) The principal amount of Series 2024 Bonds Outstanding as of the December 31 next preceding the Annual Report Date;
(ii) The principal amount of Additional Bonds, if any, Outstanding as of the December 31 next preceding the Annual Report Date; (iii) The balance in (A) the Lennar Acquisition Account, and (B) the NMC Acquisition Account, as of the December 31 next preceding the Annual Report Date;
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(iv) The balance in the Reserve Fund, and a statement of the Reserve Requirement, as of the December 31 next preceding the Annual Report Date; (v) The total assessed value of all parcels within the Community Facilities District on which the Special Tax is levied, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value-toBonded debt ratios therefor, either by individual parcel or by categories (e.g., “below 3:1,” “3:1 to 4:1,” etc.);
(vi) The Special Tax delinquency rate for all parcels within the Community Facilities District, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, the number of parcels within the Community Facilities District delinquent in payment of the Special Tax 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 Community Facilities District; provided, however, that parcels with aggregate delinquencies of $2,000 or less (excluding penalties and interest) may be grouped together and such information may be provided by category; (vii) The status of foreclosure proceedings and a summary of the results of any foreclosure sales as of the December 31 next preceding the Annual Report Date;
(viii) The identity of any property owner representing more than 5% of the Special Tax levy delinquent in payment of the Special Tax as of the December 31 next preceding the Annual Report Date;
(ix) A land ownership summary listing property owners responsible for more than 5% of the annual Special Tax, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date; and
(x) A description of any changes to the Rate and Method approved by, or submitted for approval to, the qualified electors of the Community Facilities District during the period from the date of filing the prior year’s Annual Report to the date of filing such Annual Report.

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 Community Facilities District or related public entities that have been made available to the public on the MSRB’s website. The Community Facilities District shall clearly identify each such other document so included by reference.

Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the 2205
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occurrence of any of the following events with respect to the Series 2024 Bonds in a timely manner not later than ten business days after the occurrence of the event:
(i) Principal and interest payment delinquencies.
(ii) 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 or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB).
(vi) Tender offers.
(vii) Defeasances.
(viii) Rating changes.
(ix) Bankruptcy, insolvency, receivership or similar event of the Community Facilities District.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation, any of which reflect financial difficulties.

For purposes of the event identified in paragraph (ix) of this subsection, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Community Facilities District 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 Community Facilities District, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Community Facilities District.
(b) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2024 Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:
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(i) Unless described in paragraph (v) of subsection (a) of this Section, material notices or determinations by the Internal Revenue Service with respect to the tax status of the Series 2024 Bonds or other material events affecting the tax status of the Series 2024 Bonds.
(ii) Modifications to rights of holders of the Series 2024 Bonds. (iii) Series 2024 Bond calls.
(iv) Release, substitution, or sale of property securing repayment of the Series 2024 Bonds.
(v) Non-payment related defaults.
(vi) The consummation of a merger, consolidation, or acquisition involving the Community Facilities District or the sale of all or substantially all of the assets of the Community Facilities District 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.
(vii) Appointment of a successor or additional Trustee or the change of name of a Trustee.
(viii) Incurrence of a Financial Obligation, or agreement to covenants, events of default, remedies, priority rights or other similar terms of a Financial Obligation, any of which affect holders of the Series 2024 Bonds. (c) The Trustee shall, within one business day of obtaining actual knowledge of the occurrence of any of the Listed Events, contact the Disclosure Representative and inform such person of the event. The Trustee shall have no responsibility for determining the materiality of any such event, or whether any such event reflects financial difficulties. (d) Whenever the Community Facilities District obtains knowledge of the occurrence of a Listed Event described in subsection (b) of this Section, the Community Facilities District shall determine if such event would be material under applicable Federal securities law. (e) Whenever the Community Facilities District obtains knowledge of the occurrence 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 law, the Community Facilities District shall, or shall cause the Dissemination Agent to, file a notice of the occurrence of such Listed Event with the MSRB, within ten business days of such occurrence.
(f) Notwithstanding the foregoing, notice of Listed Events described in paragraph (iii) of subsection (b) of this Section need not be given any earlier than the notice (if any) of the underlying event is given to holders of affected Series 2024 Bonds pursuant to the Indenture. 2207
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Section 5. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

Section 6. Termination of Reporting Obligation. The Community Facilities District’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2024 Bonds. If such termination occurs prior to the final maturity of the Series 2024 Bonds, the Community Facilities District shall give, or cause to be given, notice of such termination in a filing with the MSRB.

Section 7. Dissemination Agent. The Community Facilities District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days’ written notice to the Community Facilities District. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Community Facilities District and the Trustee may amend this Disclosure Agreement (and the Trustee shall agree to any amendment so requested by the Community Facilities District, so long as such amendment does not adversely affect the rights or materially increase the obligations of the Trustee), and any provision of this Disclosure Agreement 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 2 hereof, Section 3 hereof or subsection (a) or (b) of Section 4 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 Series 2024 Bonds, or the 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 Series 2024 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 Series 2024 Bonds in the manner provided in the Indenture for amendments to the Indenture 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 Series 2024 Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Community Facilities District shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Community 2208
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Facilities District. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Community Facilities District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Agreement, in addition to that which is required by this Disclosure Agreement. If the Community Facilities District chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Agreement, the Community Facilities District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported.

Section 10. Default. In the event of a failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of Outstanding Series 2024 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee), or any Owner or Beneficial Owner of the Series 2024 Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Community Facilities District, the Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent.

Article VIII of the Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. Neither the Trustee nor the Dissemination Agent shall 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 Agreement and shall be reimbursed for its reasonable expenses (including attorneys’ fees and expenses) incurred by it in the exercise or performance of its powers and duties hereunder. The Dissemination Agent (if other than the Trustee or the Trustee in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement. To the extent permitted by law, the Community Facilities District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities that any such Person may incur in the exercise or performance of the Dissemination Agent’s powers and duties hereunder, including the costs and expenses (including 2209
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attorneys’ fees and expenses) of defending against any claim of liability, and that are not due to such Person’s negligence or its willful misconduct. The obligations of the Community Facilities District under this Section shall survive resignation or removal of the Dissemination Agent and the termination of this Disclosure Agreement.

Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Community Facilities District, the Trustee, the Dissemination Agent, the Participating Underwriter and the Owners and Beneficial Owners from time to time of the Series 2024 Bonds, and shall create no rights in any other person or entity.

Section 13. Governing Laws. This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of California.

Section 14. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Disclosure Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Disclosure Agreement using an electronic signature, it is signing, adopting and accepting this Disclosure Agreement and that signing this Disclosure Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Disclosure Agreement on paper.

Each party acknowledges that it is being provided with an electronic or paper copy of this Disclosure Agreement in a usable format.

Section 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written.

CITY OF ONTARIO COMMUNITY
FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH -

FACILITIES)
By:

Scott Ochoa,
City Manager of the City of Ontario

ZIONS BANCORPORATION,

NATIONAL ASSOCIATION, AS

TRUSTEE
By:

Joni D’Amico,
Senior Vice President,
Zions Bank Division
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A-1
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EXHIBIT A

NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)
Name of Issue: City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024
Date of Issuance: __________, 2024
NOTICE IS HEREBY GIVEN that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of ______ 1, 2024, by and between the Community Facilities District and Zions Bancorporation, National Association, as Trustee. [The Community Facilities District anticipates that such Annual Report will be filed by ____________.] Dated: ____________
Zions Bancorporation, National
Association, as Trustee, on behalf of
City of Ontario Community
Facilities District No. 35
(Countryside Phase 2 South -
Facilities)
cc: City of Ontario
Community Facilities District
No. 35 (Countryside Phase 2 South - Facilities)
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AMENDED AND RESTATED

ACQUISITION AND FUNDING AGREEMENT
by and between

CITY OF ONTARIO
and

LENNAR HOMES OF CALIFORNIA, LLC
Dated as of June 1, 2024
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South - Facilities)
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TABLE OF CONTENTS
Page
i
4151-5139-2591.4
ARTICLE I DEFINITIONS ................................................................................................. 3 Section 1.1. Definitions...................................................................................................... 3 Section 1.2. Rules of Construction .................................................................................... 7 ARTICLE II ACQUISITION OF FACILITIES ................................................................... 9 Section 2.1. Acquisition of Facilities; Limited Source of Payments ................................. 9 Section 2.2. Segment Review; Payment Requests ............................................................. 9 Section 2.3. Payment of Purchase Price........................................................................... 11 ARTICLE III CONSTRUCTION OF FACILITIES ............................................................ 12 Section 3.1. Preparation and Approval of Plans and Specifications ................................ 12 Section 3.2. Duty of the Developer to Construct ............................................................. 12 Section 3.3. Public Works Requirements ........................................................................ 12 Section 3.4. Bonding Requirements................................................................................. 13 Section 3.5. Inspection; Completion of Construction ...................................................... 14 Section 3.6. Maintenance of Facilities; Warranties ......................................................... 14 Section 3.7. Insurance Requirements ............................................................................... 14 Section 3.8. Ownership of Facilities ................................................................................ 16 ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION.................................................................................... 17 Section 4.1. Representations and Warranties of the Developer ....................................... 17 Section 4.2. Covenants of the Developer ......................................................................... 18 Section 4.3. Covenants of the City................................................................................... 19 Section 4.4. Indemnification ............................................................................................ 19 ARTICLE V EVENTS OF DEFAULT AND REMEDIES; FORCE MAJEURE .............. 21 Section 5.1. Developer Events of Default ........................................................................ 21 Section 5.2. Remedies for Developer Events of Default ................................................. 22 Section 5.3. City Events of Default ................................................................................. 23 Section 5.4. Remedies for City Events of Default ........................................................... 23 Section 5.5. Force Majeure .............................................................................................. 24 ARTICLE VI MISCELLANEOUS ...................................................................................... 26 Section 6.1. Developer as Independent Contractor .......................................................... 26 2214

TABLE OF CONTENTS
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Page
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Section 6.2. Other Agreements ........................................................................................ 26 Section 6.3. Binding on Successors and Assigns ............................................................. 26 Section 6.4. Amendments ................................................................................................ 26 Section 6.5. Waivers ........................................................................................................ 26 Section 6.6. Third-Party Beneficiaries ............................................................................. 26 Section 6.7. Notices ......................................................................................................... 27 Section 6.8. Attorneys’ Fees ............................................................................................ 27 Section 6.9. Severability .................................................................................................. 27 Section 6.10. Governing Law .......................................................................................... 27 Section 6.11. Jurisdiction and Venue ............................................................................... 27 Section 6.12. Electronic Signature ................................................................................... 28 Section 6.13. Counterparts ............................................................................................... 28 Section 6.14. Effective Date ............................................................................................ 28 EXHIBIT A FACILITIES ................................................................................................ A-1 EXHIBIT B FORM OF PAYMENT REQUEST ............................................................. B-1 EXHIBIT C DEVELOPER’S ESTIMATED ACTUAL COSTS OF SEGMENTS ........ C-1 2215
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AMENDED AND RESTATED ACQUISITION AND FUNDING AGREEMENT

THIS AMENDED AND RESTATED ACQUISITION AND FUNDING
AGREEMENT (this “Acquisition Agreement”), dated as of June 1, 2024, is by and between the CITY OF ONTARIO, a general law city organized and existing under the laws of the State of California (the “City”), and LENNAR HOMES OF CALIFORNIA, LLC, a limited liability company organized and existing under the laws of the State of California (the “Developer”).

W I T N E S S E T H:

WHEREAS, certain real property within the boundaries of the City located generally south of State Route 60 is commonly known as the New Model Colony; WHEREAS, the City has approved a General Plan Amendment for the New Model Colony, which has been supplemented by certain water, recycled water and sewer master plans (as so supplemented, the “General Plan Amendment”) and has certified an Environmental Impact Report and adopted a Mitigated Negative Declaration in connection with the General Plan Amendment (together, the “Environmental Impact Report”); WHEREAS, the City has specified in the General Plan Amendment and the Environmental Impact Report the major backbone transportation, water, sewer, storm drainage, parks, public safety infrastructure and fiber optic systems required to serve the New Model Colony;
WHEREAS, the New Model Colony is now commonly referred to as Ontario Ranch; WHEREAS, the Developer is developing certain of the property within Ontario Ranch (the “Property”);
WHEREAS, certain of such major backbone infrastructure is required to serve the Property;
WHEREAS, in order to provide a mechanism to fund, in a timely manner, the costs of certain of such major backbone infrastructure required to serve Ontario Ranch (the “Facilities”) so that such development may occur, the City and Forestar Countryside, L.L.C. (“Forestar”) entered into the Acquisition Agreement and Funding Agreement, dated as of October 1, 2017 (the “Original Acquisition Agreement”);
WHEREAS, in order to provide such a mechanism, the City has, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), established City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”), the boundaries of which include the Property; WHEREAS, Forestar and the Developer previously entered into the Assignment and Assumption Agreement, dated as of February 7, 2022, pursuant to which, in accordance with the terms set forth therein, the Developer accepted the assignment of the Original Acquisition Agreement from Forestar and unconditionally assumed all of the obligations, liabilities and 2216
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responsibilities and agreed to perform all of the obligations of Forestar under the Original Acquisition Agreement;
WHEREAS, the City and the Developer desire to amend certain provisions of, and restate, the Original Acquisition Agreement;
WHEREAS, Section 6.4 of the Original Acquisition Agreement provides that the Original Acquisition Agreement may be amended by an instrument in writing executed and delivered by the City and the Developer;
WHEREAS, pursuant to the Act, the proceedings of the City Council of the City and an election held within the Community Facilities District, the Community Facilities District is authorized to levy a special tax (the “Special Tax”) within the Community Facilities District and issue special tax bonds (the “Bonds”) secured by the Special Tax in order to finance certain of the Facilities;
WHEREAS, the Special Tax has been levied by the Community Facilities District and it is anticipated that, from time to time, Bonds will be issued by the Community Facilities District; WHEREAS, it is anticipated that, in accordance with the terms set forth in this Acquisition Agreement, the Developer will construct or cause to be constructed certain of the Facilities, that, upon satisfaction of the conditions specified herein, the City will acquire such Facilities and take title thereto and that the Developer will be paid the purchase price thereof, determined as set forth herein, from certain proceeds of the Special Tax, if any, and certain proceeds of the Bonds;
WHEREAS, Section 53313.5 of the Act provides that a community facilities district may only finance the purchase of facilities whose construction has been completed, as determined by the legislative body, before the resolution of formation to establish the community facilities district is adopted pursuant to Section 53325.1 of the Act, except that a community facilities district may finance the purchase of facilities completed after the adoption of the resolution of formation if the facility was constructed as if it had been constructed under the direction and supervision, or under the authority of, the local agency; and WHEREAS, the Facilities are to be acquired by the City pursuant to this Acquisition Agreement pursuant to the Act and, specifically, pursuant to the provisions of Sections 53313.5 thereof;
NOW, THEREFORE, the Original Acquisition Agreement is hereby amended and restated to read in full as follows:
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ARTICLE I

DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires (a) the terms defined in this Section shall, for all purposes of this Acquisition Agreement, have the meanings herein ascribed thereto, and (b) capitalized undefined terms used herein that are defined in the Indenture shall have the respective meanings ascribed thereto in the Indenture. “Acceptable Title” means title to land, or an easement therein, delivered free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether any such item is recorded or unrecorded, except those non-monetary items that are reasonably determined by the City not to interfere with the intended use of such land or easement and therefore are not required to be cleared from title.
“Acceptance Date” means (a) with respect to a Segment, the date on which such Segment is accepted by the City pursuant to Section 2.2(e) hereof, and (b) with respect to a Component, the date on which the last Segment that is part of such Component is accepted by the City pursuant to Section 2.2(e) hereof.
“Acquisition Agreement” means this Amended and Restated Acquisition and Funding Agreement, dated as of June 1, 2024, by and between the City and the Developer, as originally executed or as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Act” means the Mello-Roos Community Facilities Act of 1982, constituting Section 53311 et seq. of the California Government Code.
“Actual Cost” means, with respect to a Segment, as the description thereof is reflected in the then current Plans therefor, an amount equal to the sum of (a) the Developer’s actual, reasonable cost of constructing such Segment (including grading for such construction), including labor, material and equipment costs and professional services directly related to materials testing, (b) the Developer’s actual, reasonable cost of designing and preparing the Plans for such Segment, including engineering services provided in connection with designing and preparing such Plans, (c) the Developer’s actual, reasonable cost of any performance and maintenance bonds and insurance, including title insurance, required hereby for such Segment, (d) the Developer’s actual, reasonable cost of any real property or interest therein, other than any such real property or interest therein to be conveyed with a Circulation System Segment, which real property or interest therein is either necessary for the construction of such Segment (e.g., temporary construction easements, haul roads, etc.) or is required to be conveyed with such Segment in order to convey Acceptable Title thereto to the City or its designee, (e) the Developer’s actual, reasonable cost of environmental evaluations required in the City’s reasonable determination specifically for such Segment, (f) the amount of any fees actually paid by the Developer to governmental agencies in order to obtain permits, licenses or other necessary governmental approvals and reviews for such Segment, including City plan check, processing and inspection fees for such Segment, (g) the Developer’s actual, reasonable cost for construction management services for such Segment, which cost shall not exceed 5% of the cost of constructing such Segment, as determined pursuant to clause (a) of this definition, and (h) the 2218
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Developer’s actual, reasonable cost for professional services directly related to the construction of such Segment, including engineering, inspection, construction staking and similar professional services, all as specified in a Payment Request that has been reviewed and approved by the City Engineer; provided, however, that (i) no item of cost relating to a Segment shall be included in more than one category of cost specified in clauses (a) through (h) of this definition, (ii) except with respect to items of cost for construction management services specified in clause (g) that are provided by the Developer or an Affiliate thereof rather than a third party, each item of cost shall include only amounts actually paid by the Developer to third parties, other than Affiliates of the Developer, and shall not include overhead or other internal expenses of the Developer, and (iii) the aggregate cost of items specified in clauses (e) through (h) shall not exceed 30% of the cost of constructing such Segment, as determined pursuant to clause (a) of this definition. “Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise. “Bonds” means bonds, notes or other obligations of the Community Facilities District payable from the Special Tax and issued under the Indenture. “Circulation System Segments” means Segment Nos. ST-1 through ST-6 inclusive. “City” means the City of Ontario, a general law city organized and existing under the laws of the State, and its successors.
“City Council” means the City Council of the City.
“City Engineer” means the City Engineer of the City.
“City Event of Default” means any event or circumstance specified in Section 5.3 hereof.
“Community Facilities District” means City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), a community facilities district organized and existing under the laws of the State, and its successors. “Complete” means, with respect to a Segment, that the construction of such Segment (including all ancillary, non-essential items included in such Segment) by the Developer is, in the reasonable judgment of the City Engineer, in all respects complete. “Components” means the related groups of Segments identified as such and described in Exhibit A hereto; each Component is comprised of the Segments listed thereunder in Exhibit A. “Conditions of Approval” means, with respect to any portion of the Property, the conditions of approval of all land use entitlements approved by the City for such portion of the 2219
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Property and the conditions of any Development Agreement, subdivision improvement agreement or other agreement between the Developer and the City relating to such portion of the Property, which conditions the Developer must satisfy or cause to be satisfied in order to develop such portion of the Property.
“Construction Agreement” means the First Amended and Restated Agreement for Financing and Construction of Limited Infrastructure Improvements to Serve an Easterly Portion of the New Model Colony, made as of August 21, 2012, by and between the City and NMC Builders, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Developer” means Lennar Homes of California, LLC, a limited liability company organized and existing under the laws of the State of California, and its successors and assigns. “Developer Acquisition Account” means the account by that name within the Improvement Fund established and held by the Trustee pursuant to the Indenture, into which the Net Proceeds of the Special Tax collected prior to the issuance of Bonds and Net Proceeds of Bonds available to pay the Purchase Prices of the Segments purchased by the City pursuant hereto are to be deposited.
“Developer Event of Default” means any event or circumstance specified in Section 5.1 hereof.
“Developer Representative” means the person or persons designated as such in a certificate signed by the Developer and delivered to the City, which certificate shall contain an original or specimen signature of each person so designated. “Development Agreement” means a statutory development agreement between the City and the Developer, entered into pursuant to California Government Code Section 65864 et seq., relating to the development of a portion of the Property. “DIF Program Costs” has the meaning ascribed thereto in the definition of “Program Costs” or “DIF Program Costs” in the Construction Agreement. “Effective Date” means [June 4], 2024.
“Facilities” means the facilities that are described on Exhibit A hereto. “General Prevailing Wage Rates” means those rates as determined by the Director of the Department of Industrial Relations of the State of California. “Hazardous Material” means any hazardous or toxic substance, material or waste that is regulated by any local governmental authority, the State or the United States Government, including any material or substance that is (a) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321), (b) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (c) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, 2220
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Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., (d) petroleum, or (e) asbestos.
“Improvement Fund” means the fund or account established under the Indenture, howsoever denominated, into the accounts established within which the Net Proceeds of Bonds are to be deposited.
“Indenture” means the indenture, trust agreement, fiscal agent agreement or similar instrument, howsoever denominated, pursuant to which Bonds of the Community Facilities District are issued, as originally executed and as it may be amended, supplemented or otherwise modified in accordance with its terms.
“Member” means a member of NMC Builders.
“Memorandum of Agreement” means the Amended and Restated Memorandum of Agreement, dated as of November 1, 2022, by and between the City and NMC Builders, as originally executed and as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms.
“Net Proceeds” means (a) the proceeds, if any, of the Special Tax received prior to the initial issuance of Bonds and remaining after the payment or setting aside of, or provision for, administrative expenses of the Community Facilities District, and (b) the proceeds of Bonds remaining after the payment or setting aside of, or provision for (i) the underwriter’s discount for such Bonds, (ii) the costs of issuance of such Bonds, including the costs of formation of the Community Facilities District, (iii) any required reserve fund deposit for such Bonds, (iv) capitalized interest on such Bonds, and (v) pre-funded administrative expenses of the Community Facilities District.
“NMC Acquisition Account” means the account by that name within the Improvement Fund established and held by the Trustee pursuant to the Indenture. “NMC Builders” means NMC Builders, LLC, a limited liability company organized and existing under the laws of the State of California, and its successors and assigns. “Original Acquisition Agreement” means the Acquisition and Funding Agreement, dated as of October 1, 2017, by and between the City and Forestar Countryside, L.L.C. “Payment Request” means the document to be provided by the Developer to substantiate the Purchase Price of one or more Segments, which shall be substantially in the form of Exhibit B attached hereto.
“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Plans” means the plans and specifications for the Facilities prepared or to be prepared by or on behalf of the Developer pursuant to Section 3.1 hereof. 2221
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“Property” means the real property located within the boundaries of the Community Facilities District.
“Purchase Price” means, with respect to a Segment, subject to the provisions of Section 2.3 hereof, the Actual Cost of such Segment.
“Rate and Method” means the rate and method of apportionment of the Special Tax approved by the qualified electors of the Community Facilities District. “Related Property” means, with respect to a Segment, the property on, in or over which such Segment is located, which property, or an easement thereon or other interest therein, is dedicated or otherwise conveyed to the City as provided in Section 2.2(d) hereof. “Segments” means the discrete portions of the Components identified as such and described in Exhibit A hereto as Segments; provided, however, that each such Segment described therein shall constitute a Segment for purposes of this Acquisition Agreement only if such Segment was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders.
“Special Tax” means the special tax approved by the qualified electors of the Community Facilities District to be levied therein.
“State” means the State of California.
“Substantially Complete” means, with respect to a Circulation System Segment, that the construction of such Circulation System Segment by the Developer has, in the reasonable judgment of the City Engineer, reached a stage of completion sufficient to allow such Circulation System Segment to be utilized for the purpose for which it is intended and that only the construction of ancillary, non-essential items remains incomplete; provided, however, that a Circulation System Segment shall not be deemed to be Substantially Complete if, in the reasonable judgment of the City Engineer, the cost to complete the construction of such ancillary, non-essential items would exceed 15% of the Purchase Price of such Circulation System Segment.
“Trustee” means the commercial bank or trust company initially designated as trustee under the Indenture, and any successor thereto thereunder substituted in its place as provided therein.

Section 1.2. Rules of Construction. (a) The terms defined herein expressed in the singular shall, unless the context otherwise indicates, include the plural and vice versa. (b) The use herein of the masculine, feminine or neuter gender is for convenience only and shall be deemed and construed to include correlative words of the masculine, feminine or neuter gender, as appropriate.
(c) References herein to a document shall include all amendments, supplements or other modifications to such document, and any replacements, substitutions or novation of, that document.
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(d) Any term defined herein by reference to another document shall continue to have the meaning ascribed thereto whether or not such other document remains in effect. (e) The use herein of the words “including” and “includes,” and words of similar import, shall be deemed to be followed by the phrase “without limitation.” (f) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(g) All references herein to designated “Articles,” “Sections,” “Exhibits,” “subsections,” “paragraphs,” “clauses,” and other subdivisions are to the designated Articles, Sections, Exhibits, subsections, paragraphs, clauses, and other subdivisions of this Acquisition Agreement.
(h) The words “hereof” (except when preceded by a specific Section or Article reference) “herein,” “hereby,” “hereunder,” “hereinabove,” “hereinafter,” and other equivalent words and phrases used herein refer to this Acquisition Agreement and not solely to the particular portion hereof in which any such word is used. (i) Any reference to a Person, or a Person in a specified capacity, shall be construed to include such Person’s successors or such Person’s successors in such capacity, as the case may be.
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ARTICLE II

ACQUISITION OF FACILITIES
Section 2.1. Acquisition of Facilities; Limited Source of Payments. (a) Subject to the terms and conditions hereof, the Developer hereby agrees to sell to the City, and the City hereby agrees to purchase from the Developer, each Segment for the Purchase Price thereof. (b) The Purchase Prices of Segments are to be paid from Net Proceeds of the Special Tax, if any, and Net Proceeds of Bonds deposited in the Developer Acquisition Account.

Notwithstanding anything to the contrary contained herein, the City shall not be obligated to pay the Purchase Price of any Segment except from the Net Proceeds of the Special Tax and the Net Proceeds of the Bonds so deposited in the Developer Acquisition Account. The City makes no warranty, either express or implied, that the Community Facilities District will be able to issue and sell any Bonds or that the Net Proceeds of the Special Tax and the Net Proceeds of the Bonds so deposited in the Developer Acquisition Account and available for the payment of the Purchase Price of the Segments will be sufficient for such purpose. (c) The Net Proceeds of the Special Tax and the Net Proceeds of the Bonds shall be applied to the uses in the priorities set forth in the Memorandum of Agreement. If amounts remain in the Developer Acquisition Account after the Purchase Prices of all of the Segments have been paid, such remaining amounts shall be deposited in the NMC Acquisition Account.

Section 2.2. Segment Review; Payment Requests. (a) When the Developer has concluded that the construction of a Segment by the Developer is in all respects complete, the Developer shall deliver to the City Engineer (i) a Payment Request for such Segment, together with all attachments and exhibits to be included therewith, (ii) a copy of the documents conveying, or that previously conveyed, to the City Acceptable Title to the Related Property of such Segment, as described in subsection (d) of this Section, and (iii) a copy of the Notice of Completion of such Segment that will be filed in accordance with Section 3093 of the California Civil Code, if applicable; provided, however, that, if, during the process of designing a Segment, obtaining bids for construction of a Segment or during construction of a Segment, the Developer determines that, because of changed conditions or circumstances, the actual cost of constructing such Segment may materially exceed the Developer’s originally estimated cost thereof, the Developer shall, in order to facilitate and expedite the City Engineer’s review and verification with respect to such Segment pursuant to subsection (b) of this Section, as soon as practicable, deliver to the City Engineer a written statement describing (i) such changed conditions or circumstances, (ii) the Developer’s original estimated cost of constructing such Segment, (iii) the anticipated effect of such changed conditions or circumstances on the Actual Cost of such Segment, and (iv) an explanation as to why including the increased cost resulting from such changed conditions or circumstances would result in the Actual Cost of such Segment being no greater than the actual, reasonable cost thereof, determined in accordance with the provisions of the definition of Actual Cost set forth herein.
(b) Upon receipt of a completed Payment Request (and accompanying documentation) for a Segment, the City Engineer shall conduct a review in order to confirm that such Segment is Complete and was constructed in accordance with the Plans therefor and to verify and approve the Actual Cost of such Segment specified in such Payment Request. As a 2224
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reference in determining the reasonable cost of constructing such Segment, the City Engineer may use the most recently updated DIF Program Costs of such Segment, which reflect the City Engineer’s determination, as of the date of such update, of the reasonable cost of constructing such Segment, recognizing that, depending on the date of such most recent update, such DIF Program Costs may not reflect the reasonable cost of constructing such Segment at the time it was constructed. The Developer agrees to cooperate with the City Engineer in conducting each such review and to provide the City Engineer with such additional information and documentation as is reasonably necessary for the City Engineer to conclude each such review.

The City agrees to cause the City Engineer to conduct such review without unreasonable delay.

If the City Engineer determines that the Actual Cost specified in such Payment Request as initially submitted exceeds the Developer’s actual, reasonable cost of constructing such Segment, the Developer shall resubmit such Payment Request, with the Actual Cost specified therein modified so as to take into account such determination by the City Engineer. Upon confirmation that such Segment is Complete and has been constructed in accordance with the Plans therefor, and verification and approval of the Actual Cost of such Segment, the City Engineer shall sign the Payment Request, indicating thereon that such Segment is Complete and that the full amount of the Purchase Price of such Segment is eligible for payment, and forward the same to the City. (c) With respect to a Circulation System Segment, if, as a result of the review described in subsection (b) of this Section, the City Engineer (i) determines that such Circulation System Segment, while not Complete, is Substantially Complete, (ii) confirms that such Circulation System Segment has been constructed in accordance with the Plans therefor, and (iii) verifies and approves the Actual Cost of such Circulation System Segment, the City Engineer shall sign the Payment Request, indicating thereon that such Circulation System Segment is Substantially Complete and that an amount equal to 85% of the Actual Cost of such Circulation System Segment is eligible for payment, and forward the same to the City.

When the Developer completes or causes to be completed all work with respect to such Circulation System Segment and concludes that such Circulation System Segment is Complete, the Developer shall deliver to the City Engineer (i) if as-built drawings or similar plans and specifications for such Circulation System Segment have not previously been submitted to the City Engineer, such drawings or plans and specifications, together with a certification of the Developer that such drawings or plans and specifications are true, correct and complete, and (ii) such information and documentation as is reasonably required by the City Engineer in order for the City Engineer to determine whether such Circulation System Segment is Complete. Upon receipt of such information and documentation, the City Engineer shall conduct a review in order to confirm that such Circulation System Segment is Complete. If, as a result of such review, the City Engineer determines that such Circulation System Segment is Complete, the City Engineer shall sign a copy of the original Payment Request therefor, indicating thereon that such Circulation System Segment is Complete and that the full amount of the Purchase Price of such Segment is eligible for payment, and forward the same to the City. (d) Acceptable Title to all property on, in or over which each Segment will be located shall be conveyed to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such easement is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Segment located therein, thereon 2225
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or thereover, and to permit the Developer to perform its obligations as set forth in this Acquisition Agreement.

Upon the request of the City, the Developer shall furnish to the City a title report for such property not previously dedicated or otherwise conveyed to the City or its designee, for review and approval at least 20 calendar days prior to the transfer of Acceptable Title to a Segment to the City or its designee. The City shall approve the title report unless it reveals a matter that, in the reasonable judgment of the City, could materially affect the City’s or its designee’s use and enjoyment of any part of the property or easement covered by the title report. In the event the City does not approve the title report, the City shall not be obligated to accept title to such Segment until such objections to title have been cured to the reasonable satisfaction of the City. (e) Upon (i) the execution by the City Engineer of a Payment Request for a Segment indicating that such Segment is Complete, and (ii) the City’s determination that Acceptable Title to the property on, in or over which each Segment is located has been or is being conveyed to the City, such Segment shall be accepted by the City. The Developer shall transfer to the City, by appropriate instrument in accordance with the Conditions of Approval, title to each Segment accepted by the City pursuant hereto; provided, however, that notwithstanding such transfer, as provided in Section 3.6 hereof, the Developer shall be responsible for the maintenance of such Segment until the Acceptance Date of the Component of which such Segment is a part.

Section 2.3. Payment of Purchase Price. (a) Upon receipt of a reviewed and fully signed Payment Request pursuant to Section 2.2(b) hereof indicating that a Segment is Complete and that the Purchase Price of such Segment is eligible for payment, the City shall, within five business days of the approval and confirmation thereof by the City Engineer, by written request, direct the Trustee to pay from the Developer Acquisition Account such Purchase Price. If the Payment Request for a Segment requests that the Purchase Price requested to be paid pursuant thereto be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached thereto as Attachment B, the City shall direct the Trustee to pay from the Developer Acquisition Account such Purchase Price or portion thereof to such Person or Persons.
(b) Upon receipt of a reviewed and fully signed Payment Request pursuant to Section 2.2(c) hereof indicating that a Circulation System Segment is Substantially Complete and that an amount equal to 85% of the Purchase Price of such Circulation System Segment is eligible for payment, the City shall, within five business days of the approval and confirmation thereof by the City Engineer, by written request, direct the Trustee to pay from the Developer Acquisition Account 85% of the Purchase Price of such Circulation System Segment. If the Payment Request for a Circulation System Segment requests that the 85% of the Purchase Price of such Circulation System Segment requested to be paid pursuant thereto be paid to the Person or Persons, in the amounts, set forth in the completed Purchase Price Payment Instructions attached thereto as Attachment B, the City shall direct the Trustee to pay from the Developer Acquisition Account such 85% of such Purchase Price or portion thereof to such Person or Persons.
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ARTICLE III

CONSTRUCTION OF FACILITIES
Section 3.1. Preparation and Approval of Plans and Specifications. The Developer shall cause Plans to be prepared for the Facilities to be acquired pursuant hereto in accordance with the Conditions of Approval. The Developer shall obtain the written approval of the Plans from all appropriate departments of the City or from any other public agency or public utility from which such approval must be obtained. The Developer shall provide copies of all such Plans to the City Engineer. The Plans for a Segment shall be updated from time to time to reflect changed conditions or circumstances with respect thereto, the Developer shall obtain the written approval of such updated Plans from all appropriate departments of the City and the Developer shall provide copies of all such updated Plans to the City Engineer.

Section 3.2. Duty of the Developer to Construct. The Developer shall construct or cause to be constructed the Segments in accordance with the Conditions of Approval and the approved Plans. The Developer shall perform all of its obligations hereunder and shall conduct or cause to be conducted all operations with respect to the construction of the Segments in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified Persons utilizing commercially reasonable efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. Notwithstanding the foregoing, the Developer shall not be required to construct any Facilities or cause such Facilities to be constructed other than at the time required by, and in accordance with, the Conditions of Approval or to perform any work requiring a contractor’s license, nor shall the Developer be deemed to be performing construction services pursuant to this Acquisition Agreement.

Section 3.3. Public Works Requirements. (a) In order to ensure that the Segments that are acquired by the City pursuant to this Acquisition Agreement are constructed as if they had been constructed under the direction and supervision, or under the authority of, the City, so that they may be acquired pursuant to California Government Code Section 53313.5, the Developer shall comply with or cause to be complied with all of the requirements of this Section for each Segment for which the Developer submits a Payment Request. (b) Notice inviting sealed bids for the construction of each Segment shall be given as required for public works projects in conformance with the California Public Contracts Code. (c) The contract for the construction of each Segment shall be awarded to the responsible bidder submitting the lowest responsive bid for the construction of such Segment. (d) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to pay at least General Prevailing Wage Rates to all workers employed in the execution of the contract, to post a copy of the General Prevailing Wage Rates at the job-site in a conspicuous place available to all employees and applicants for employment, and to otherwise comply with applicable provisions of the California Labor Code, the California Government Code and the California Public Contracts Code relating to public works projects of cities. 2227
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The Developer shall require, and the specifications and bid and contract documents shall require, for all contracts involving in excess of $30,000 or 20 working days, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to comply with the provisions of Section 1777.5 of the California Labor Code with respect to all apprenticeable occupations upon the project.
(e) In performing its obligations under this Acquisition Agreement, the Developer shall comply with, or cause to be complied with, the applicable nondiscrimination and affirmative action provisions of the laws of the United States of America, the State and the City.

In performing its obligations under this Acquisition Agreement, the Developer shall not discriminate in its employment practices against any employee, or applicant for employment, because of such person’s race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status or medical condition. The Developer shall require that any contract for the construction of any Segment subject the contractor thereunder to the provisions of this subsection.
(f) The Developer shall require that each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, provide proof of insurance coverage satisfying the requirements of Section 3.7 hereof throughout the term of the construction of such Segment; provided, however, that, rather than requiring such contractors, subcontractors, vendors, equipment operators and owner operators to provide such insurance, the Developer may provide the same for the benefit of such contractors, subcontractors, vendors, equipment operators and owner operators.
(g) The Developer shall comply, and shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to comply, with such other requirements relating to the construction of the Segments as the City may impose by written notification delivered to the Developer, to the extent legally required as a result of changes in applicable federal, State or City laws.
(h) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to submit certified weekly payroll records to the Developer for inspection by the City, and to furnish certified payroll records to the City promptly upon request.

The Developer shall provide proof to the City, at such intervals and in such form as the City may reasonably require, that the foregoing requirements have been satisfied as to all of the Segments for which a Payment Request is submitted pursuant hereto.

Section 3.4. Bonding Requirements. Prior to the commencement of construction of a Segment, the Developer shall secure, or shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on such Segment to secure, appropriate bonds for the construction and 2228
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completion of construction of such Segment, a faithful performance bond and a bond for the security of laborers and materialmen, each in an amount that is equal to 100% of the contract price for such Segment. If any such bonds for a Segment are provided by such a contractor, subcontractor, vendor, equipment operator or owner operator, the City shall be named as an additional insured on such bonds. Each issuer of any such bond shall be duly authorized to issue such bond in the State. Each such bond shall comply with the provisions of California Government Code Sections 66499.1 and 66499.2.

Section 3.5. Inspection; Completion of Construction. The City shall have primary responsibility for providing inspection of the work of construction of the Segments to ensure that the work of construction is accomplished in accordance with the Plans. The City’s personnel shall have access to the site of the work of construction at all reasonable times for the purpose of accomplishing such inspection. Upon the completion of the construction of a Segment to the satisfaction of the City’s inspectors, the Developer shall notify the City and the City Engineer in writing that the construction of such Segment has been completed in accordance with the Plans.

No later than ten days after receiving notification pursuant to Section 2.2(b) or Section 2.2(c) hereof that a Segment was constructed in accordance with the Plans therefor, the Developer shall forthwith file with the San Bernardino County Recorder a Notice of Completion, in form acceptable to the City Engineer, pursuant to the provisions of Section 3093 of the California Civil Code, if applicable. The Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing thereon the date of filing with said County Recorder.

Section 3.6. Maintenance of Facilities; Warranties. The Developer shall maintain each Segment in good and safe condition until the Acceptance Date of the Component of which such Segment is a part. Prior to the Acceptance Date of the Component of which such Segment is a part, the Developer shall be responsible for maintaining such Segment in proper operating condition, and shall perform such maintenance on such Segment as the City Engineer reasonably determines to be necessary. As of the Acceptance Date of the Component of which a Segment is a part, the Developer shall assign to the City all of the Developer’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third Persons with respect to such Segment. The Developer shall warrant each Segment to be free from construction defects (and shall correct or cause to be corrected any such defects) for a period of one year from the Acceptance Date of the Component of which such Segment is a part, or alternatively, shall provide a bond reasonably acceptable in form and substance to the City and the Developer for such period and such purpose to ensure that such defects that appear within said period will be repaired, replaced or corrected by the Developer, at its own cost and expense, to the reasonable satisfaction of the City. The Developer shall continue to repair, replace or correct any such defects within 30 Days after written notice thereof by the City to the Developer, and shall complete such repairs, replacement or correction as soon as practicable.

Section 3.7. Insurance Requirements. The Developer shall, at all times prior to the final Acceptance Date of all Segments, maintain, deliver to the City and keep in full force and effect, the following insurance policies or, pursuant to Section 3.3(f) hereof, cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to so maintain, deliver and keep the same in full force and effect:
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(a) a protective liability policy providing for not less than the following amounts:

Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
$1,000,000 each accident for
products and completed operations
Property Damage $1,000,000 each accident
Workers’ Compensation Statutory, with a waiver of
subrogation in favor of the City
(b) Automobile Liability Insurance to include all owned, non-owned or nonhired vehicles, including loading and unloading thereof:

Automobile Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
Automobile Property Damage $1,000,000 each accident
Each liability insurance policy shall bear an endorsement or shall have attached a rider whereby it is provided that, in the event of expiration or proposed cancellation of such policy for any reason whatsoever, the City shall be notified by registered mail, return receipt requested, giving a sufficient time before the date thereof to comply with any applicable law or statute, but in no event less than 30 days before expiration or cancellation is effective.

The following statement shall be included on the insurance certificate:

Additional Insured: The insurer agrees that the City, its City Council, and/or all City Council appointed groups, committees, boards and any other City Council appointed body, and/or elective and appointive officers, servants, agents or employees of the City, when acting as such, are additional insureds hereunder, for the acts of the insured, and such insurance shall be primary to any insurance of the City.

The Developer may effect such coverage under blanket insurance policies; provided, however, that (a) such policies are written on a per occurrence basis, (b) such policies comply in all other respects with the provisions of this Section, and (c) the protection afforded the City under any such policy shall be no less than that which would be available under a separate policy relating only to the Segments. All policies of insurance shall be with companies licensed or approved by the California Commissioner of Insurance and rated A-VII or better in the most recent edition of Best’s Insurance Guide and shall be issued and delivered in accordance with State law and regulations.

If the Developer fails to maintain or cause to be maintained any insurance required hereby, the City may, but shall not be obligated to, procure such insurance and recover the amount of the premiums therefor from the Developer or retain such amount from any monies due to the Developer under this Acquisition Agreement. The failure of the City to procure any such 2230
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insurance shall in no way relieve the Developer of any of its obligations under this Acquisition Agreement.

Section 3.8. Ownership of Facilities. Notwithstanding the fact that some or all of the Facilities may be constructed in dedicated street rights-of-way or on property that has been or will be dedicated to the City, the Facilities shall be and remain the property of the Developer until title thereto is conveyed to and accepted by the City as provided herein and in the Conditions of Approval. Such ownership by the Developer shall likewise not be affected by any agreement that the Developer may have entered into or may enter into with the City pursuant to the provisions of the Subdivision Map Act, Section 66410 et seq. of the California Government Code, and the provisions of this Section and the Conditions of Approval shall control. 2231
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION Section 4.1. Representations and Warranties of the Developer. The Developer makes the following representations and warranties for the benefit of the City:
(a) Organization. The Developer represents and warrants that the Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State, is authorized to conduct business and is in good standing under the laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated. (b) Authority. The Developer represents and warrants that the Developer has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered on behalf of the Developer.
(c) Binding Obligation. The Developer represents and warrants that this Acquisition Agreement is a valid and binding obligation of the Developer and is enforceable against the Developer in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general equity principles.
(d) Environmental Matters Relating to Segments. The Developer represents and warrants that none of the Developer, any Affiliate of the Developer, or any subcontractor, agent or employee of the Developer or an Affiliate thereof, has used, generated, manufactured, procured, stored, released, discharged or disposed of (whether accidentally or intentionally) any Hazardous Material on, under or in any Segment or the Related Property of such Segment, or transported (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material.

The Developer represents and warrants that, as of the Acceptance Date of each Segment, there will not be present on, under or in such Segment or the Related Property of such Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, or (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions.

The Developer represents and warrants that neither the Developer nor any Affiliate thereof has received notice of, and, to the best of the Developer’s knowledge, 2232
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there is not, any proceeding or formal inquiry by any governmental authority, body or agency with respect to the presence of Hazardous Materials on, under or in any Segment or the Related Property of such Segment, or any portion thereof, or any structure, fixtures, equipment or other objects thereon, or the migration thereof from or to other property.

Section 4.2. Covenants of the Developer. The Developer makes the following covenants for the benefit of the City:
(a) Completion of Segments. The Developer covenants that it will use its reasonable and diligent efforts to do all things that may be lawfully required of it in order to cause the Segments to be completed in accordance with this Acquisition Agreement and the Conditions of Approval.
(b) Compliance with Laws. The Developer covenants that, while any of the Facilities are owned by the Developer or required pursuant to this Acquisition Agreement to be maintained by the Developer, it will not commit, suffer or permit any of its agents, employees or contractors to commit any act to be done in, upon or to such Facilities in violation in any material respect of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting such Facilities or the Property on, in or over which such Facilities are located. (c) Payment Requests. The Developer covenants that (i) it will not request payment pursuant to this Acquisition Agreement for the acquisition of any improvements that are not part of a Segment, and (ii) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to Payment Requests. (d) Financial Records. Until the Acceptance Date of the last Segment accepted by the City pursuant hereto, the Developer covenants to maintain proper books of record and account for the Facilities and all costs related thereto. The Developer covenants that such accounting books will be maintained in accordance with generally accepted accounting principles and will be available for inspection by the City within a reasonable time after the City submits a written request to the Developer requesting that such books be made available for inspection.
(e) Environmental Matters Relating to Segments. The Developer covenants that none of the Developer, any Affiliate of the Developer or any subcontractor, agent or employee thereof, will use, generate, manufacture, procure, store, release, discharge or dispose of (whether accidentally or intentionally) at any time on or prior to the Acceptance Date of each Segment any Hazardous Material on, under or in such Segment or the Related Property of such Segment, or transport (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material in effect at the time of such use, generation, manufacturing, procurement, storage, release, discharge, disposal or transportation. 2233
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(f) Permits. The Developer covenants that it will obtain all governmental or other permits required to proceed with the construction of the Facilities, and that it will pay all fees relating thereto that are required to be paid, in accordance with the Conditions of Approval.

Section 4.3. Covenants of the City. The City makes the following covenants for the benefit of the Developer:
(a) Completion of Segments. The City covenants that it will use its reasonable and diligent efforts to take all actions that may be lawfully required of it in issuing permits, processing and approving Plans and inspecting the Segments in accordance with this Acquisition Agreement.
(b) Payment Requests. The City covenants that it will diligently follow all procedures set forth in this Acquisition Agreement with respect to Payment Requests. (c) Developer Acquisition Account. The City covenants that, upon the issuance of Bonds, the City will transfer or cause to be transferred any Net Proceeds collected prior to the issuance of Bonds to the Trustee for deposit in the Developer Acquisition Account established under the Indenture.
(d) Accounting. The City covenants to provide the Developer, within 30 days following the Developer’s written request, an accounting of the Developer Acquisition Account, showing the current balance therein and all deposits thereto and disbursements therefrom since the last such accounting. The Developer shall not make more than two such written requests in any calendar year.

Section 4.4. Indemnification. The Developer agrees to protect, indemnify, defend and hold the City and the Community Facilities District, and its respective officers, employees and agents (the “Indemnified Parties”), and each of them, harmless from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorney’s fees and court costs that any Indemnified Party may suffer or that may be sought against or recovered or obtained from any Indemnified Party as a result of or by reason of or arising out of or in consequence of (a) the acquisition, construction, installation or financing of the Facilities, (b) the untruth or inaccuracy of any representation or warranty made by the Developer in this Acquisition Agreement or in any certifications delivered by the Developer pursuant hereto or in connection with the issuance of any Bonds, (c) the release, threatened release, storage, treatment, transportation or disposal (as such terms are defined in applicable law) of any Hazardous Materials on, under, in, from or to any portion of the Property while such portion of the Property is owned by the Developer or an Affiliate thereof, and (d) any act or omission of the Developer, any Affiliate of the Developer or any of their subcontractors, or their respective officers, employees or agents, in connection with the Facilities, including noncompliance with any covenants made by the Developer in this Acquisition Agreement. If the Developer fails to do so, the Indemnified Party shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any fees or costs, to and recover the same from the Developer.
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Upon receipt by an Indemnified Party of notice of any claim, loss, expense, suit, action, decree, judgment or award for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section, such Indemnified Party shall promptly notify the Developer in writing of such claim, loss, expense, suit, action, decree, judgment or award. Neither the Developer nor an Indemnified Party shall, without the other’s written consent, settle, compromise or consent to the entry of judgment with respect to any claim, suit or action for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section.

No indemnification is required to be paid by the Developer for any claim, loss or expense (a) arising from the willful misconduct or negligence of an Indemnified Party, or (b) arising from the use or operation of a Segment after the Acceptance Date of the Component of which such Segment is a part, unless such claim, loss or expense results from the defective or improper design, construction or installation of such Segment.

The provisions of this Section shall survive the termination of this Acquisition Agreement.
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ARTICLE V
EVENTS OF DEFAULT AND REMEDIES; FORCE MAJEURE
Section 5.1. Developer Events of Default. The following shall be Developer Events of Default:
(a) the Developer shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law;
(b) the Developer shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of the Developer, or shall suffer an attachment or levy of execution to be made against its property unless, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof;
(c) except to the extent that the Developer’s obligation to construct or cause to be constructed the Facilities is excused pursuant to Section 5.5 hereof, the Developer shall abandon construction of the Facilities that, as of the time of such abandonment, the Developer is required to construct or cause to be constructed in accordance with the Conditions of Approval (failure for a period of three consecutive months or failure for two periods of two consecutive months to undertake substantial work related to the construction of the Facilities shall constitute a non-exclusive example of such abandonment);
(d) the Developer shall breach any covenant or default in the performance of any obligation under this Acquisition Agreement and such breach or default shall have continued for a period of 60 days after written notice thereof, specifying such breach or default and requiring the same to be remedied, shall have been given to the Developer by the City; provided, however, that, if in the reasonable opinion of the City such breach or default can be corrected, but not within such 60 day period, such breach or default shall not constitute a Developer Event of Default if corrective action is instituted by the Developer within such 60 day period and the Developer thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the City to be appropriate under the circumstances;
(e) any representation or warranty of the Developer set forth herein or in any certifications delivered by the Developer hereunder shall prove to have been false or misleading in any material respect when made or deemed made; (f) the Developer shall transfer any of its rights or obligations under this Acquisition Agreement, without the prior written consent of the City, as provided in Section 6.3 hereof;
(g) the Developer shall have made any material misrepresentation or material omission in any written materials furnished in connection with any preliminary official 2236
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statement, official statement or bond purchase contract that has not been corrected and is used in connection with the sale of any Bonds;
(h) the Developer, any Affiliate thereof or any permitted assign or successorin-interest under this Acquisition Agreement shall at any time bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body that in any way seeks to challenge or overturn the Community Facilities District, the levy of the Special Tax in accordance with the Rate and Method or the validity of the Bonds or the proceedings leading up to their issuance; provided, however, that the Developer, any Affiliate thereof or any permitted assign or successor-in-interest under this Acquisition Agreement that owns any of the Property may bring an action or suit contending that the Special Tax has not been levied in accordance with the methodology contained in the Rate and Method; (i) the Developer shall materially fail to complete the Facilities as contemplated by this Acquisition Agreement and the Conditions of Approval and such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Developer by the City; provided, however, that, if in the reasonable opinion of the City such failure can be corrected, but not within such 60 day period, such failure shall not constitute a Developer Event of Default if corrective action is instituted by the Developer within such 60 day period and the Developer thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the City to be appropriate under the circumstances; or
(j) the Developer, any Affiliate thereof or any permitted assign or successorin-interest under this Acquisition Agreement that owns any of the Property on which the Special Tax has been levied shall fail to pay such Special Tax as and when due and such failure shall have continued for a period of 60 days after written notice thereof, specifying such failure and requiring the same to be remedied, shall have been given to the Developer by the City.

Section 5.2. Remedies for Developer Events of Default. (a) If a Developer Event of Default described in subsection (a), (b) or (h) of Section 5.1 hereof occurs, this Acquisition Agreement shall automatically terminate.
(b) If a Developer Event of Default described in subsection (c), (d), (e), (f), (g), (i) or (j) of Section 5.1 hereof occurs and is continuing, the City may terminate this Acquisition Agreement by delivering a written notice of such termination to the Developer. (c) If a Developer Event of Default occurs and is continuing, the City may pursue any other remedy at law or equity available with respect thereto. (d) If this Acquisition Agreement is terminated pursuant to this Section, the City may, but shall not be obligated to, complete the acquisition, construction and installation of any Segment not theretofore acquired from the Developer pursuant hereto, and the City may use all or any portion of the monies in the Developer Acquisition Account to pay for such acquisition, 2237
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construction and installation. In the event of such termination, the Developer shall have no claim or right to any further payment of the Purchase Price of any Segment.

Section 5.3. City Events of Default. The following shall be City Events of Default:
(a) the City shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law;
(b) the City shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of the City, or shall suffer an attachment or levy of execution to be made against its property, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof;
(c) the City shall breach any covenant or default in the performance of any obligation under this Acquisition Agreement and such breach or default shall have continued for a period of 60 days after written notice thereof, specifying such breach or default and requiring the same to be remedied, shall have been given to the City by the Developer; provided, however, that, if in the reasonable opinion of the Developer such breach or default can be corrected, but not within such 60 day period, such breach or default shall not constitute a City Event of Default if corrective action is instituted by the City within such 60 day period and the City thereafter diligently and in good faith cures such breach or default in a period of time reasonably determined by the Developer to be appropriate under the circumstances;
(d) any representation or warranty of the City set forth herein shall prove to have been false or misleading in any material respect when made; and (e) the City shall transfer any of its respective rights or obligations under this Acquisition Agreement, without the prior written consent of the Developer, as provided in Section 6.3 hereof.

Section 5.4. Remedies for City Events of Default. (a) If a City Event of Default occurs and is continuing, the Developer may terminate this Acquisition Agreement by delivering a written notice of such termination to the City.
(b) If a City Event of Default occurs and is continuing, the Developer may pursue any other remedy at law or equity available with respect thereto; provided, however, that the City shall not be liable in damages to the Developer. In light of the foregoing, the Developer shall not sue for or claim any damages for any alleged breach of, or dispute that arises out of, this Acquisition Agreement.
(c) The Developer understands and acknowledges that the City would not have entered into this Acquisition Agreement if it were to be liable in damages under or with respect to this Acquisition Agreement. Any and all obligations of the City hereunder shall be payable only from amounts on deposit in the Developer Acquisition Account. The City shall have no 2238
24 4151-5139-2591.4
pecuniary liability under this Acquisition Agreement for any act or omission of the City, except as set forth in this Section.

Section 5.5. Force Majeure. (a) Except as may be specifically provided in this Acquisition Agreement, the performance by the City or the Developer of its respective obligations hereunder shall be excused during, and the period of time for performance of its respective obligations hereunder shall be extended for a period of time equal to, any period of delay caused by reason of (i) acts of God or civil commotion, (ii) riots, strikes, picketing or other labor disputes, (iii) shortages of materials or supplies, (iv) damage to work in progress by reason of fire, floods, earthquakes or other casualty, (v) enactment of laws that prevent or preclude compliance by the City or the Developer with a material provision of this Acquisition Agreement, (vi) administrative proceedings challenging the Community Facilities District, any Bonds, this Acquisition Agreement or a Payment Request brought by Persons other than the City or the Developer, or any Affiliate thereof, (vii) litigation, including the pendency thereof, brought by Persons other than the City or the Developer, or any Affiliate thereof, including litigation challenging the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement or a Payment Request, (viii) pendency of initiatives or referenda affecting the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement or a Payment Request, or (ix) any other cause beyond the reasonable control of the City or the Developer, respectively; provided, however that, as to any party (A) the financial inability of such party itself to perform under this Acquisition Agreement, and (B) the negligence or willful misconduct of such party shall not constitute a permitted delay for purposes of this Section and, provided, further, that any action, omission, or failure to approve a Payment Request, or the imposition of additional requirements or restrictions in connection therewith by the City, caused by the Developer’s actual failure to comply with applicable laws or regulations or the provisions of this Acquisition Agreement (other than an actual failure to comply that results from the enactment of laws that prevent or preclude compliance by a party with a material provision of this Acquisition Agreement, administrative proceedings challenging the Community Facilities District, any Bonds, this Acquisition Agreement, a Payment Request, litigation brought by Persons other than a party hereto, or an Affiliate of a party hereto, including litigation challenging the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement, a Payment Request, or initiative or referenda affecting the Community Facilities District, the development of the Property, any Bonds, this Acquisition Agreement, a Payment Request), shall not constitute a permitted delay for the Developer for purposes of this Section. (b) If the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party shall give the other party hereto written notice of the commencement of such permitted delay within 30 days after first gaining knowledge of such permitted delay. (c) If the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party’s performance shall only be excused during, and the period of time for performance of its obligations hereunder shall only be extended for a period of time equal to, the period of time for which the cause of such permitted delay is in effect and is actually causing a delay in performance by such party of its obligations hereunder. 2239
25 4151-5139-2591.4
(d) The City and the Developer shall act diligently and in good faith to avoid foreseeable delays in performance and to remove the cause of any permitted delay under this Section or develop a reasonable alternative means of performance of its respective obligations hereunder.
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ARTICLE VI

MISCELLANEOUS
Section 6.1. Developer as Independent Contractor. Each of the City and the Developer hereby acknowledges and agrees that the Developer, in performing its obligations under this Acquisition Agreement, is acting as an independent contractor and not an agent of the City. The City shall not have any responsibility for payment to any contractor, subcontractor or supplier of the Developer.

Section 6.2. Other Agreements. Nothing contained herein shall be construed as affecting the City’s or the Developer’s respective duty to perform its respective obligations under other agreements, land use regulations or subdivision requirements relating to the development of the Property, which obligations are and shall remain independent of the Developer’s rights and obligations, and the City’s rights and obligations, under this Acquisition Agreement; provided, however, that the Developer shall use its reasonable and diligent efforts to perform each and every covenant to be performed by it under any lien or encumbrance, instrument, declaration, covenant, condition, restriction, license, order or other agreement, the nonperformance of which could reasonably be expected to materially and adversely affect the acquisition, construction and installation of the Segments.

Section 6.3. Binding on Successors and Assigns. Neither this Acquisition Agreement nor the duties and obligations of the Developer hereunder may be assigned to any Person without the written consent of the City, which consent shall not be unreasonably withheld, conditioned or delayed. Neither this Acquisition Agreement nor the duties and obligations of the City hereunder may be assigned to any Person, without the written consent of the Developer, which consent shall not be unreasonably withheld, conditioned or delayed. The agreements and covenants included herein shall be binding on and inure to the benefit of any partners, permitted assigns, and successors-in-interest of the parties hereto.

Section 6.4. Amendments. This Acquisition Agreement may be amended, supplemented or otherwise modified only by an instrument in writing executed and delivered by the City and the Developer.

Section 6.5. Waivers. No waiver of, or consent with respect to, any provision of this Acquisition Agreement by a party hereto shall in any event be effective unless the same shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

Section 6.6. Third-Party Beneficiaries. The Community Facilities District shall be a third-party beneficiary hereof. No other Person shall be deemed to be a third-party beneficiary hereof, and nothing in this Acquisition Agreement, either express or implied, is intended to confer upon any Person, other than the City, the Developer and the Community Facilities District and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Acquisition Agreement.
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Section 6.7. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

City: City of Ontario
303 East “B” Street
Ontario, California 91764
Attention: Executive Director of Finance
Developer: Lennar Homes of California, LLC
4140 Temescal Canyon Road, Suite 410
Corona, California 92883
Attention: Geoffrey Smith, Vice President
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, and (d) if given by any other means, upon delivery at the address specified in this Section.

Section 6.8. Attorneys’ Fees. If any action is instituted to interpret or enforce any of the provisions of this Acquisition Agreement, the party prevailing in such action shall be entitled to recover from the other party thereto reasonable attorney’s fees and costs of such suit (including both prejudgment and post judgment fees and costs) as determined by the court as part of the judgment.

Section 6.9. Severability. If any term or provision of this Acquisition Agreement, or the application of the term or provision to any Person or circumstance is, to any extent, held to be invalid or unenforceable in any jurisdiction, but the extent of such invalidity or unenforceability does not destroy the basis of the bargain between the parties as contained herein, the remainder of this Acquisition Agreement, or the application of the term or provision to Persons or circumstances other than those as to which the term or provision is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability, and each remaining term or provision of this Assignment Agreement shall be valid and will be enforced to the fullest extent permitted by law.

Section 6.10. Governing Law. This Acquisition Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State.

Section 6.11. Jurisdiction and Venue. Each of the City and the Developer (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Acquisition Agreement shall be brought in a state or local court in the County of San Bernardino or in the 2242
28 4151-5139-2591.4
Courts of the United States of America in the district in which said county is located, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding, and (c) waives any objection that it may have to the laying of venue of any suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Each of the City and the Developer agrees that a final and non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 6.12. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Acquisition Agreement may be conducted by electronic means.

Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Acquisition Agreement using an electronic signature, it is signing, adopting and accepting this Acquisition Agreement and that signing this Acquisition Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Acquisition Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Acquisition Agreement in a usable format.

Section 6.13. Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original.

Section 6.14. Effective Date. This Acquisition Agreement has been dated for convenience purposes only. Notwithstanding the stated date of this Acquisition Agreement, this Acquisition Agreement shall be effective on the Effective Date.

IN WITNESS WHEREOF, the parties hereto have executed this Acquisition Agreement as of the day and year first hereinabove written.

CITY OF ONTARIO
By:

Scott Ochoa, City Manager

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company
By:

Geoffrey Smith, Vice President
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EXHIBIT A

FACILITIES
The Facilities consist of the following Components and Segments; provided, however, that each such Segment described below shall constitute a Segment for purposes of this Acquisition Agreement only if such Segment was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders:

Storm Drain System Facilities
No.

DIF Program
Project No. Component Segment
SD-1 SD-48 Chino Avenue
Storm Drain;
From
Cucamonga
Creek Channel to
north of Chino
Avenue - CHINXI-1 in Master
Plan of Drainage
Storm Drain in Chino Avenue from Cucamonga
Creek to north of Chino Avenue
Fiber Optic System Facilities
No.

DIF Program
Project No. Component Segment
FO-1 FO-004 Distribution
Network - Major
Streets Conduit
System
Installation of approximately 1,350 linear feet of
Fiber optic conduit in Chino Avenue from bridge
at the Cucamonga Creek Channel and continuing
East to the transition East of Kinglet Avenue in
Tract 17449
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Water and Recycled Water System Facilities
No.

DIF Program
Project No. Component Segment
WT-1 WT-011 Francis 925’
Zone Distribution
Mains
Approximately 1,303 Linear Feet of 12-inch
Master Planned Water Main in Chino Avenue
from the Eastern Boundary of Tract 18855 to the
connection at Archibald Avenue
Acquisition Cost allocable to Design paid by
NMC Builders is $23,735
WT-2 WT-011 Francis 925’
Zone Distribution
Mains
Approximately 2,303 Linear Feet of 12-inch
Master Planned Water Main in Archibald
Avenue from Chino Avenue to Schaefer Avenue
Acquisition Cost allocable to Design paid by
NMC Builders is $41,951
WT-3 WT-016 NMC Recycled
Water System
Approximately 1,254 Linear Feet of 36 inch and
approximately 33 Linear Feet of 8-inch Master
Planned Recycled Water line in Chino Avenue
(930 Zone) from 55 Feet East of IEUA Recycled
Water line to East Eastern Boundary of Tract
17449
WT-4 WT-016 NMC Recycled
Water System
Approximately 330 Linear Feet of 8-inch Master
Planned Recycled Water line in Chino Avenue
(1050 Zone) from Eastern Boundary of Tract
18855 to Eastern Boundary of Tract 17449
WT-5 WT-016 NMC Recycled
Water System
Approximately 1,979 Linear Feet of 8-inch
Master Planned Recycled Water line in Chino
Avenue (1050 Zone) from West of the bridge at
the Cucamonga Creek to the connection at
Archibald Avenue
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Streets and Traffic Circulation System Facilities
No.

DIF Program
Project No. Component Segment
ST-1 ST-005 Chino Avenue
from Euclid
Avenue to
Milliken Avenue
Approximately 800 Linear feet of Chino Avenue
Improvements on South Side of Chino Avenue
from bridge at the Cucamonga Creek Channel
and continuing East to the transition East of
Kinglet Avenue in Tract 17449
ST-2 ST-120 Chino Avenue
Bridge over the
Cucamonga
Creek Channel
Construction of the remainder of the widening of
the Southern half of the Chino Avenue Bridge
over the Cucamonga Creek Channel
ST-3 Last Lane Last Lane
Improvements on
Chino Avenue -
South Side
Construction of the curb adjacent lane, including
curb, gutter, sidewalk and street lighting on
South side of Chino Avenue from bridge at the
Cucamonga Creek Channel and continuing East
to the transition of Kinglet Avenue in Tract
17449
ST-4 Parkway Parkway
Improvements on
Chino Avenue -
South side
Construction of the landscaped Parkway on the
south side of Chino Avenue from bridge at the
Cucamonga Creek Channel and continuing East
to the transition of Kinglet Avenue in Tract
17449
ST-5 Last Lane Last Lane
Improvements on
Archibald
Avenue - West
side at Dolomite
Avenue
Construction of approximately 428 Linear feet of
curb adjacent lane, including curb, gutter,
sidewalk and street lighting on West side of
Archibald Avenue at Dolomite Avenue
intersection
ST-6 Parkway Parkway
Improvements on
Archibald
Avenue - West
side at Dolomite
Avenue
Construction of approximately 428 Linear feet of
landscaped Parkway on the West side of
Archibald Avenue at Dolomite Avenue
intersection
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EXHIBIT B

FORM OF PAYMENT REQUEST
City of Ontario
Community Facilities District No. 35
(Countryside Phase 2 South - Facilities)
The City of Ontario (the “City”) and Lennar Homes of California, LLC, a California limited liability company (the “Developer”), are parties to the Amended and Restated Acquisition and Funding Agreement, dated as of June 1, 2024 (the “Acquisition Agreement”).

Capitalized undefined terms use herein shall have the meanings ascribed thereto in the Acquisition Agreement. Pursuant to the Acquisition Agreement, the Developer hereby requests confirmation that the Segment described in Attachment A attached hereto (the “Segment”) is [Complete] [Substantially Complete] and hereby further requests approval of the Purchase Price of the Segment. In connection with this Payment Request, the Developer hereby represents and warrants to the City as follows:
(a) The person executing this Payment Request on behalf of the Developer is a Developer Representative, qualified to execute this Payment Request on behalf of the Developer and knowledgeable as to the matters set forth herein. (b) The Developer has submitted or submits herewith to the City Engineer asbuilt drawings or similar plans and specifications for the Segments for which payment is requested, and such drawings or plans and specifications, as applicable, are true, correct and complete; provided, however, that if such Segment is a Circulation System Segment, and certification is being requested that such Segment is Substantially Complete but not Complete, such drawings or plans and specifications need not be submitted to the City Engineer until certification is being requested that such Segment is Complete. (c) Each of the Segments described in Attachment A has been constructed in accordance with the Plans therefor, and in accordance with all applicable City standards and the requirements of the Acquisition Agreement, and the as-built drawings or similar Plans and specifications referenced in paragraph (b) above. (d) The true and correct Actual Cost of each Segment is set forth in Attachment A.
(e) The Developer has submitted or submits herewith to the City Engineer invoices, receipts, worksheets and other evidence of costs that are in sufficient detail to allow the City Engineer to verify the Actual Cost of each Segment for which payment is requested.
(f) There are no liens, rights to lien or attachment upon, or claims affecting the right to receive the payment requested herein that has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or 2247
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4151-5139-2591.4
mechanics’ liens accruing by operation of law. Copies of lien releases for all work for which payment is requested hereunder are attached hereto. (g) No Developer Event of Default has occurred and is continuing. (h) The representations and warranties of the Developer set forth in Section 4.1 of the Acquisition Agreement are true and correct on and as of the date hereof with the same force and effect as if made on and as of the date hereof (except that no certification is made with respect to the representations and warranties contained in subsection (d) of said Section 4.1).
(i) As of the date hereof, there is not present on, under or in the Segment or the Related Property of the Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, or (iv) any types or amounts that do not present a human health risk or hazard to the public. (j) Each of the Segments described in Attachment A was constructed by or on behalf of the Developer singly and not jointly or in conjunction with another Member or NMC Builders.

The Developer hereby declares under penalty of perjury that the above representations and warranties are true and correct.

The Developer hereby requests that the Purchase Price be paid to the Person or Persons, in the amounts, set forth in Attachment B hereto.

Date: _______________

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company
By:

Name:

Title:

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CONFIRMATION AND APPROVAL BY THE CITY ENGINEER
[The City Engineer has (a) confirmed that the Segment described in Attachment A is Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A. Such Segment is Complete and the Purchase Price therefor described in Attachment A is eligible for payment to the Developer pursuant to the Acquisition Agreement.]
[The City Engineer has (a) confirmed that the Segment described in Attachment A, which is a Circulation System Segment, is Substantially Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A. Such Segment is Substantially Complete and $_________, an amount equal to 85% of the Purchase Price therefor described in Attachment A, is eligible for payment to the Developer pursuant to the Acquisition Agreement.] [The City Engineer previously confirmed that the Segment described in Attachment A was Substantially Complete, and previously indicated that $_________, an amount equal to 85% of the Purchase Price therefor described in Attachment A, was eligible for payment to the Developer pursuant to the Acquisition Agreement. The City Engineer has (a) now confirmed that such Segment is Complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the Actual Cost of such Segment described in Attachment A.

Such Segment is Complete and $_____________, an amount equal to the remaining 15% of the Purchase Price therefor described in Attachment A is eligible for payment to the Developer pursuant to the Acquisition Agreement.]
Date: _______________ CITY ENGINEER OF THE CITY OF

ONTARIO
By:
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ATTACHMENT A
Segment Purchase Price
2250
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ATTACHMENT B

PURCHASE PRICE PAYMENT INSTRUCTIONS
The Developer hereby requests that the Purchase Price be paid to the Person or Persons, in the amounts, set forth below:

Payee No. 1: Pay $________/__% of the Purchase Price to ______________ by wire transfer in accordance with the following instructions:
[Insert wire transfer instructions]
Date: ________________ LENNAR HOMES OF CALIFORNIA,
LLC, a California limited liability
company
By:

Name:

Title:
_____________________
Note: If Exhibit A to the Acquisition Agreement indicates that the Segment being acquired includes design costs that have been paid by NMC Builders, the Payment Instructions must include an instruction to pay NMC Builders the portion of the Purchase Price allocable to such design costs.
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EXHIBIT C
DEVELOPER’S ESTIMATED ACTUAL COSTS OF SEGMENTS
(NOT A PART OF ACQUISITION AGREEMENT PROVISIONS)
The following table sets forth the estimated construction costs of the Facilities expected to be financed by the Community Facilities District and acquired by the City from the Developer pursuant to the Acquisition Agreement. The estimated construction costs have been provided by the Developer. Such estimated construction costs are intended to be used solely to facilitate the acquisition process pursuant to the Acquisition Agreement and to assist in confirming the Actual Cost of the respective Segments in accordance with the Acquisition Agreement. The City has not evaluated the reasonableness of the Developer’s estimated construction costs, takes no responsibility for such estimated construction costs and, in confirming the Actual Cost of a Segment pursuant to the Acquisition Agreement, will not be bound by such estimated construction costs.

Storm Drain System Facilities
No. Segment
Developer’s Estimated
Actual Cost
SD-1 Storm Drain in Chino Avenue from Cucamonga
Creek to north of Chino Avenue
$1,492,423
Fiber Optic System Facilities
No. Segment
Developer’s Estimated
Actual Cost
FO-1 Installation of approximately 1,350 linear feet of Fiber optic conduit in Chino Avenue from bridge
at the Cucamonga Creek Channel and continuing
East to the transition East of Kinglet Avenue in
Tract 17449
$48,632
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Water and Recycled Water System Facilities
No. Segment
Developer’s Estimated
Actual Cost
WT-1 Approximately 1,303 Linear Feet of 12-inch
Master Planned Water Main in Chino Avenue
from the Eastern Boundary of Tract 18855 to the
connection at Archibald Avenue
Acquisition Cost allocable to Design paid by
NMC Builders is $23,735
$717,184
WT-2 Approximately 2,303 Linear Feet of 12-inch
Master Planned Water Main in Archibald Avenue
from Chino Avenue to Schaefer Avenue
Acquisition Cost allocable to Design paid by
NMC Builders is $41,951
$619,844
WT-3 Approximately 1,254 Linear Feet of 36 inch and
approximately 33 Linear Feet of 8-inch Master
Planned Recycled Water line in Chino Avenue
(930 Zone) from 55 Feet East of IEUA Recycled
Water line to East Eastern Boundary of Tract
17449
$730,790
WT-4 Approximately 330 Linear Feet of 8-inch Master
Planned Recycled Water line in Chino Avenue
(1050 Zone) from Eastern Boundary of Tract
18855 to Eastern Boundary of Tract 17449
$38,255
WT-5 Approximately 1,979 Linear Feet of 8-inch Master
Planned Recycled Water line in Chino Avenue
(1050 Zone) from West of the bridge at the
Cucamonga Creek to the connection at Archibald
Avenue
$251,706
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Streets and Traffic Circulation System Facilities
No. Segment
Developer’s Estimated
Actual Cost
ST-1 Approximately 800 Linear feet of Chino Avenue
Improvements on South Side of Chino Avenue
from bridge at the Cucamonga Creek Channel and
continuing East to the transition East of Kinglet
Avenue in Tract 17449
$257,450
ST-2 Construction of the remainder of the widening of
the Southern half of the Chino Avenue Bridge over
the Cucamonga Creek Channel
$1,377,878
ST-3 Construction of the curb adjacent lane, including
curb, gutter, sidewalk and street lighting on South
side of Chino Avenue from bridge at the
Cucamonga Creek Channel and continuing East to
the transition of Kinglet Avenue in Tract 17449
$714,285
ST-4 Construction of the landscaped Parkway on the
south side of Chino Avenue from bridge at the
Cucamonga Creek Channel and continuing East to
the transition of Kinglet Avenue in Tract 17449
$202,166
ST-5 Construction of approximately 428 Linear feet of
curb adjacent lane, including curb, gutter, sidewalk
and street lighting on West side of Archibald
Avenue at Dolomite Avenue intersection
$133,249
ST-6 Construction of approximately 428 Linear feet of
landscaped Parkway on the West side of Archibald
Avenue at Dolomite Avenue intersection
$19,650
2254
PRELIMINARY OFFICIAL STATEMENT DATED _________, 2024
NEW ISSUE – BOOK ENTRY-ONLY NO RATING
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, 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 Series 2024 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. In the further opinion of Bond Counsel, interest on the Series 2024 Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. Bond Counsel observes that interest on the Series 2024 Bonds is included in adjusted financial statement income of certain corporations is not excluded from the federal corporate 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 Series 2024 Bonds. See “TAX MATTERS” herein. $11,040,000*

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024
Dated: Date of Delivery Due: September 1, as shown on the inside cover page The City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”) are being issued and delivered by the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “District”) to (i) provide financing for certain authorized facilities and costs with respect thereto related to the development within the District, (ii) fund a reserve fund with respect to the Series 2024 Bonds, and (iii) pay the costs of issuance with respect to the Series 2024 Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” herein. The District has been formed by and is located in the City of Ontario, California (the “City”).

The Series 2024 Bonds are authorized to be issued pursuant to the Mello Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California), and pursuant to an Indenture, dated as of ________ 1, 2024, by and between the District and Zions Bancorporation, National Association, as trustee (the “Trustee”). The Series 2024 Bonds are special, limited obligations of the District and are payable solely from Net Special Tax Revenues (as defined herein), and the other assets pledged therefor under the Indenture, all as further described herein. A Special Tax (as defined herein) is to be levied according to the rate and method of apportionment, as amended, approved by the City Council of the City and the qualified electors within the District. The City Council is the legislative body of the District.

The Series 2024 Bonds are issuable in fully registered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of Series 2024 Bonds may be made in principal amounts of $5,000 and integral multiples thereof. Purchasers of Series 2024 Bonds will not receive certificates representing their beneficial ownership of the Series 2024 Bonds but will receive credit balances on the books of their respective nominees. Interest on the Series 2024 Bonds will be payable on each March 1 and September 1, commencing March 1, 2025. Principal of and interest on the Series 2024 Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who are expected to remit such payments to the beneficial owners of the Series 2024 Bonds. See “THE SERIES 2024 BONDS — General Provisions” and APPENDIX I — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOKENTRY SYSTEM” herein.

The Series 2024 Bonds are subject to optional and mandatory redemption as described under the caption “THE SERIES 2024 BONDS — Redemption.”

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT (EXCEPT TO THE LIMITED EXTENT SET

FORTH IN THE INDENTURE), THE CITY OR THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE SERIES 2024 BONDS. EXCEPT FOR NET SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE SERIES 2024 BONDS. THE SERIES 2024 BONDS ARE NOT GENERAL OR SPECIAL

OBLIGATIONS OF THE CITY BUT ARE SPECIAL, LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM NET

SPECIAL TAX REVENUES AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

The purchase of the Series 2024 Bonds involves certain risks. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of certain risk factors that should be considered, in addition to the other matters set forth herein, in evaluating the investment quality of the Series 2024 Bonds.

This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Series 2024 Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their legality by Orrick, Herrington & Sutcliffe LLP, Los Angeles, California, as Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the City and the District by Best Best & Krieger LLP, Ontario, California, as Issuer’s Counsel, and by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California. It is anticipated that the Series 2024 Bonds will be available for delivery to DTC or its agent in book-entry form on or about ___________, 2024.

RAMIREZ & CO., INC. LOGO
Dated: __________, 2024
*
Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. 2255
$11,040,000*

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

MATURITY SCHEDULE
BASE CUSIP†: ______
Maturity Date
(September 1)
Principal
Amount
Interest
Rate Yield Price CUSIP®(1)
$__________ _____% Term Bonds due __________ 1, 20__ Yield: ______% Price: ___________ CUSIP† No. ___ $__________ _____% Term Bonds due __________ 1, 20__ Yield: ______% Price: ___________ CUSIP† No. ___ $__________ _____% Term Bonds due __________ 1, 20__ Yield: ______% Price: ___________ CUSIP† No. ___ $__________ _____% Term Bonds due __________ 1, 20__ Yield: ______% Price: ___________ CUSIP† No. ___ *
Preliminary, subject to change.
†
CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© 2024 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Underwriter, the City or the District or their agents or counsel assume responsibility for the accuracy of such numbers.
2256

CITY OF ONTARIO

CITY COUNCIL
Paul S. Leon, Mayor
Debra Porada, Mayor Pro Tem
Jim W. Bowman, Council Member
Ruben Valencia, Council Member
Alan D. Wapner, Council Member
STAFF
Scott Ochoa, City Manager
Darlene Sanchez, Assistant City Manager
Armen Harkalyan, Executive Director of Finance
James R. Milhiser, City Treasurer
Sheila Mautz, City Clerk
Best Best & Krieger LLP, City Attorney

BOND COUNSEL
Orrick, Herrington & Sutcliffe LLP
Los Angeles, California

MUNICIPAL ADVISOR
Urban Futures, Inc.

Walnut Creek, California

DISCLOSURE COUNSEL
Best Best & Krieger LLP
Riverside, California

TRUSTEE
Zions Bancorporation, National Association
Los Angeles, California

SPECIAL TAX CONSULTANT
Goodwin Consulting Group, Inc.

Sacramento, California

APPRAISER
Kitty Siino & Associates, Inc.

Tustin, California

PRICE POINT CONSULTANT
Empire Economics, Inc.

Capistrano Beach, California
2257
Except where otherwise indicated, all information contained in this Official Statement has been provided by the City and the District. No dealer, broker, salesperson or other person has been authorized by the City, the District, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Series 2024 Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the District, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2024 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or owners of the Series 2024 Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

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

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

The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District or any other parties described herein since the date hereof. All summaries of the Indenture or other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the District for further information in connection therewith.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE COMMUNITY FACILITIES DISTRICT” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT.”
The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Except as set forth in the District’s Continuing Disclosure Agreement, a form of which is attached hereto as APPENDIX G, neither the District nor the City plans to issue any updates or revisions to the forwardlooking statements set forth in this Official Statement. Lennar Homes of California, LLC, a California limited liability company, has agreed to provide certain continuing disclosure information concerning Lennar Homes of California, LLC and its property within the District in the form attached hereto as APPENDIX H.

A wide variety of other information, including financial information concerning the City, is available from publications and websites of the City and others. No such information is a part of or incorporated into this Official Statement.

IN CONNECTION WITH THE OFFERING OF THE SERIES 2024 BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH SERIES 2024 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE SERIES 2024 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE SERIES 2024 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. 2258

TABLE OF CONTENTS
-iINTRODUCTION ...........................................................1 The District ................................................................1 Security and Sources of Payment for the
Series 2024 Bonds .............................................3 Description of the Series 2024 Bonds........................4 Appraisal Report ........................................................5 Price Point Study .......................................................5 Professionals Involved in the Offering ......................5 Continuing Disclosure ...............................................6 Series 2024 Bond Owners’ Risks ..............................6 Other Information ......................................................6

ESTIMATED SOURCES AND USES OF
FUNDS ...................................................................7 THE SERIES 2024 BONDS ...........................................7 General Provisions .....................................................7 Redemption ................................................................8 Debt Service Schedule ............................................. 11

SECURITY AND SOURCES OF PAYMENT
FOR THE SERIES 2024 BONDS ........................ 11
General .................................................................... 11 Special Tax .............................................................. 12 Amended and Restated Rate and Method of
Apportionment ................................................ 13 Special Tax .............................................................. 16 Collection and Application of the Special
Tax .................................................................. 18 Covenant for Superior Court Foreclosure ................ 19 Special Tax Fund ..................................................... 20 Reserve Fund ........................................................... 20 Investment of Moneys ............................................. 21 No Additional Bonds Except for Refunding
Bonds .............................................................. 21 THE COMMUNITY FACILITIES DISTRICT ............ 22
General Information Regarding the District ............ 22 The Facilities ........................................................... 23 Direct and Overlapping Debt ................................... 24 Property Values ....................................................... 26 Value-to-Lien Ratios ............................................... 27 Delinquency History ................................................ 28

PROPERTY OWNERSHIP AND THE
DEVELOPMENT ................................................. 29 The Developer ......................................................... 29 Lennar Homes’ Development Plan .......................... 29 Lennar Homes’ Financing Plan ............................... 32 SPECIAL RISK FACTORS .......................................... 32 Risks of Real Estate Secured Investments
Generally – Declines in Value ........................ 33 Levy of the Special Tax ........................................... 33 Collection of the Special Tax .................................. 34 Failure to Develop Properties .................................. 34 Concentration of Property Ownership ..................... 35 Exempt Properties.................................................... 36 Constitutional Limitations on Taxation and
Appropriations ................................................ 36 Taxpayer Protection and Government
Accountability Act Initiative ........................... 39 Maximum Special Tax ............................................ 40 Payment of the Special Tax is Not a
Personal Obligation of the Owners ................. 41
Disclosures to Future Purchasers ............................ 41 Parity Taxes and Special Assessments .................... 41 Depletion of Reserve Fund ..................................... 41 Bankruptcy and Legal Delays ................................. 42 FDIC/Federal Government Interests In
Properties ........................................................ 42 Geologic, Topographic and Climatic
Conditions ...................................................... 43 Hazardous Substances ............................................. 44 No Acceleration Provision ...................................... 44 Bonds Are Limited Obligations .............................. 44 Loss of Tax Exemption ........................................... 45 Potential Early Redemption of Bonds from
Special Tax Prepayments ............................... 45 No Teeter Plan ........................................................ 45 Cybersecurity .......................................................... 45 Impact of Economic Conditions on the
Development in the District ........................... 45 Increasing Mortgage Interest Rates ......................... 46 CONTINUING DISCLOSURE .................................... 46 District Continuing Disclosure Agreement ............. 46 Developer Continuing Disclosure Certificate ......... 46 TAX MATTERS .......................................................... 47 ABSENCE OF LITIGATION ...................................... 49 ABSENCE OF RATINGS ............................................ 49 CERTAIN LEGAL MATTERS ................................... 50 UNDERWRITING ....................................................... 50 FINANCIAL INTERESTS ........................................... 50 MUNICIPAL ADVISOR ............................................. 50 ADDITIONAL INFORMATION................................. 50 APPENDIX A – AMENDED AND RESTATED

RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAX .... A-1
APPENDIX B – APPRAISAL REPORT .............. B-1
APPENDIX C – PRICE POINT STUDY .............. C-1

APPENDIX D - FORM OF OPINION OF
BOND COUNSEL ....................................... D-1 APPENDIX E – GENERAL INFORMATION

CONCERNING THE CITY OF
ONTARIO .................................................... E-1 APPENDIX F – SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE ........ F-1
APPENDIX G – FORM OF DISTRICT

CONTINUING DISCLOSURE
AGREEMENT ............................................. G-1 APPENDIX H – FORM OF DEVELOPER

CONTINUING DISCLOSURE
CERTIFICATE ............................................ H-1 APPENDIX I – INFORMATION

CONCERNING THE DEPOSITORY
TRUST COMPANY AND ITS BOOKENTRY SYSTEM ......................................... I-1 2259
[INSERT AREA MAP]
2260
[INSERT AERIAL PHOTO]
2261
1 $11,040,000*

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
SPECIAL TAX BONDS, SERIES 2024

INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2024 Bonds to potential investors is made only by means of the entire Official Statement.

The purpose of this Official Statement, which includes the cover page, the table of contents and the attached appendices, is to provide certain information concerning the issuance of the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 in the aggregate principal amount set forth on the front cover page (the “Series 2024 Bonds”). The proceeds of the Series 2024 Bonds will be used to finance certain public facilities and costs with respect thereto related to the development within the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Special Tax Bonds, Series 2024 (Countryside Phase 2 South - Facilities) (the “District”), to fund a reserve fund for the Series 2024 Bonds (the “Reserve Fund”), and to pay costs of issuance of the Series 2024 Bonds.

The Series 2024 Bonds are being issued pursuant to the Mello Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “Act”), and pursuant to the Indenture, dated as of ________ 1, 2024 (the “Indenture”), by and between the District and Zions Bancorporation, National Association, as trustee (the “Trustee”). The Series 2024 Bonds are secured under the Indenture by a pledge of, constituting a lien on and security interest in, the Net Special Tax Revenues (as defined herein) and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund established pursuant to the Indenture.

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement. The sale and delivery of the Series 2024 Bonds to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Definitions” herein.

The District
The District is located in the southwestern portion of the County of San Bernardino (the “County”), in the southwestern portion of the City of Ontario (the “City”) within an area known as “Ontario Ranch.” The District consists of two neighborhoods known as “Shady Tree” and “Whispering Wind,” within a master planned community known as “Country Lane.” The District is located on the south side of Chino Avenue, west of Archibald Avenue, and just north of Schaefer Avenue. The Shady Tree site consists of approximately 18.723 gross acres, with all lots located within Final Tract Map No. 17449. Whispering Wind site consists of approximately 16.827 gross acres, with all lots located within Final Tract Map 17450.

The property within the District is currently under the ownership of Lennar Homes of California, LLC, a California limited liability company (the “Developer” or “Lennar Homes”), and individual homeowners. Lennar Homes purchased the property within the District for the Shady Tree and Whispering Wind sites from Forestar *
Preliminary, subject to change.
2262
2 Countryside, LLC, a Delaware limited liability company, for $25,154,265 on December 31, 2020. The Developer is developing the District into two neighborhoods consisting of 235 single family detached residential units. The Shady Tree neighborhood is planned for 97 single family homes and the Whispering Wind neighborhood is planned for 138 single family homes. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT — The Developer.”
Country Lane is part of a multiple phase, multiple master-planned community development known as “Ontario Ranch.” Ontario Ranch is a multiple phase, multiple master-planned community development. Ontario Ranch is planned to contain over 3,500 acres. At full buildout, Ontario Ranch is expected to include approximately 24,000 dwelling units, approximately 7.6 million square feet of industrial space, approximately 2.0 million square feet of commercial and retail space and approximately 1.6 million square feet of business park space. While much of Ontario Ranch is raw vacant land, many planned communities within the east side of Ontario Ranch have been completed or are currently under construction.

As mentioned above, the Developer is building and selling homes in the District within two neighborhoods named “Shady Tree” and “Whispering Wind.” At full buildout the District is anticipated to include 235 singlefamily detached dwelling units. As of April 1, 2024, the date of value of the Appraisal (defined herein), the District included 137 completed residential units which had closed escrow to individual homeowners, and the Developer owned 6 completed model units (none of which were in escrow), 12 residential units that were over 95% complete (all of which were in escrow), 44 residential units that were in various stages of construction but less than 95% complete (26 of which were in escrow) and 36 finished lots without any home construction thereon (none of which were in escrow). As of April 1, 2024, building permits had been issued for all 235 units within the District. As of May 6, 2024, a total of 148 residential units had been conveyed to individual homeowners, and the Developer owned 10 completed production units (all of which are in escrow), 6 model units (none of which were in escrow), 35 residential units that were in various stages of construction (24 of which were in escrow) and 36 finished lots without any home construction thereon (none of which were in escrow). Homes under contract may not result in closed escrows as sales contracts are subject to cancellation. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT — Lennar Homes’ Development Plan” and “SPECIAL RISK FACTORS — Increasing Mortgage Interest Rates.”
The District was formed to finance certain services, facilities and costs with respect thereto related to the development within the District. The Act was enacted by the California legislature to provide an alternative method of financing certain capital facilities and services, especially in developing areas of the State of California (the “State”). Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible facilities and services. The legislative body of the local agency which forms a community facilities district acts on behalf of such district as its legislative body. Subject to approval by two thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, on September 5, 2017 the City Council of the City (the “City Council”) adopted the necessary resolutions stating its intent to establish the District, to authorize the levy of a special tax on taxable property within the boundaries of the District based on a rate and method of apportionment, and to have the District incur bonded indebtedness.

Following public hearings conducted pursuant to the provisions of the Act, the City Council adopted resolutions establishing the District and calling a special election to submit the levy of a special tax and the incurring of bonded indebtedness to the qualified voters of the District. On October 17, 2017, at an election held pursuant to the Act, the qualified voter within the District at the time of the election, authorized the District to incur bonded indebtedness in the aggregate principal amount of not to exceed $27,000,000 and approved a rate and method of apportionment of the special tax for the District to pay, among other things, the principal of and interest on the bonds of the District (the “Original Rate and Method”). 2263
3 A Notice of Special Tax Lien was recorded in the office of the Assessor-Recorder-County Clerk’s office of the County of San Bernardino (the “County Assessor”) on October 19, 2017 as Doc# 2017-0432322 (the “Notice of Special Tax Lien”). On November 7, 2017, the City Council adopted Ordinance No. 3082 authorizing the levy of the special tax in accordance with the Original Rate and Method.

On June 7, 2022, the City Council initiated change proceedings to amend the Original Rate and Method and increase the maximum bonded indebtedness to $45,000,000 by adopting the necessary resolutions stating its intention to implement such changes. On July 19, 2022, at an election held pursuant to the Act, Lennar Homes, the qualified voter within the District at the time of the election, authorized the District to modify the Rate and Method (the “Rate and Method”) and authorized an increase to the maximum indebtedness to $45,000,000. On July 20, 2022, recorded Amendment No. 1 to the Notice of Special Tax in the officer of the County Assessor as Doc# 2022-0252284. On August 2, 2022, the City Council adopted Ordinance No. 3221 amending and restating Ordinance No. 3082 authorizing the levy of special taxes in accordance with the Rate and Method.

The Rate and Method provides for a special tax (the “Special Tax”) to be levied for the Special Tax Requirement. Under the Rate and Method, “Special Tax Requirement” is defined to mean for any Fiscal Year that amount required, after taking into account available amounts held in the funds and accounts established under the Indenture, for the District to: (i) pay debt service on all Outstanding Bonds (as defined herein) which is due in the calendar year that commences in such Fiscal Year; (ii) pay periodic costs on the Bonds, including, but not limited to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses (as defined in the Rate and Method); (iv) provide any amounts required to establish or replenish any reserve fund for the Bonds; (v) pay directly for acquisition or construction of Facilities (as defined in the Rate and Method), or the cost of Services (as defined in the Rate and Method), to the extent that the inclusion of such amounts does not increase the Special Tax levy on Final Mapped Property (as defined in the Rate and Method) or Undeveloped Property (as defined in the Rate and Method); (vi) provide an amount equal to Special Tax delinquencies based on the historical delinquency rate for the Special Tax as determined by the CFD Administrator (as defined in the Rate and Method). The Special Tax will be levied against certain property within the District pursuant to the Act, the Ordinance approving the levy of the Special Tax and the Indenture and in accordance with the Rate and Method. Under the Indenture, the portion of the Special Tax levied under the Rate and Method to pay for Services is not pledged to the payment of the Series 2024 Bonds or any Additional Bonds.

Upon the issuance of the Series 2024 Bonds, a principal amount of $33,960,000* will remain authorized but unissued. Pursuant to the Indenture, the District shall not issue additional indebtedness secured by the Net Special Tax Revenues (as such term is defined herein) on a parity with the Series 2024 Bonds except to refund the Series 2024 Bonds in whole or in part, and only in circumstances where the issuance of such Additional Bonds does not result in an increase in the amount of Annual Debt Service on the outstanding Series 2024 Bonds and the Additional Bonds (together, the “Bonds”) in each Bond Year so long as any Bonds are outstanding. Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Tax may be levied on the property within the District. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS — Additional Bonds” and “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments.” Security and Sources of Payment for the Series 2024 Bonds Under the Indenture, the District has pledged to repay the Bonds from Net Special Tax Revenues and any other amounts held in the Special Tax Fund, the Bond Fund and the Reserve Fund. The Indenture defines “Net Special Tax Revenues” to mean Special Tax Revenues less amounts required to pay Administrative Expenses.

The term “Special Tax Revenues” is defined in the Indenture to mean the proceeds of the Special Tax received by or on behalf of the District, other than proceeds of the Special Tax levied to pay the costs of Services received by or on behalf of the District, including any prepayments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Tax, which will be limited to the amount of said lien and interest and penalties thereon. “Services” has the meaning set forth in the Rate and Method. See APPENDIX A — “AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” “Administrative Expenses” is defined in the Indenture to mean any 2264
4 reasonably necessary or appropriate expenses incurred in the administration of the District and the Bonds, including, but not limited to (a) the administrative and legal costs of levying and collecting the Special Tax (including costs incurred in connection with any appeals relating thereto and litigation expenses incurred in connection with the collection of such Special Tax), (b) the fees, costs and indemnification due the Trustee, (c) the costs incurred with on-going disclosure in connection with the Bonds, (d) the costs incurred in connection with the disclosure of the Special Tax to property owners and potential purchasers of property, (e) the amounts required to calculate and pay arbitrage rebate payments to the federal government, and (f) an allocable share of the salaries of the City staff providing services on behalf of the District directly related to the foregoing and an allocable share of City general administrative overhead related thereto. “Special Tax” is defined in the Indenture to mean the special tax described and defined in the Rate and Method as “Special Tax” approved by the qualified electors to be levied within the District pursuant to the Act and the Rate and Method.

Net Special Tax Revenues are the primary security for the repayment of the Bonds. In the event that Net Special Tax Revenues are not paid when due, the only sources of funds available to pay the debt service on the Bonds are the amounts held by the Trustee for such purpose in the Special Tax Fund, the Bond Fund and the Reserve Fund. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 BONDS” herein.

NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT (EXCEPT TO THE LIMITED EXTENT SET FORTH IN THE INDENTURE), THE CITY OR THE

STATE, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET SPECIAL TAX REVENUES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL

OBLIGATIONS OF THE CITY BUT ARE SPECIAL, LIMITED OBLIGATIONS OF THE DISTRICT

PAYABLE SOLELY FROM NET SPECIAL TAX REVENUES AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE AS MORE FULLY DESCRIBED HEREIN.

Description of the Series 2024 Bonds
The Series 2024 Bonds will be issued and delivered as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Series 2024 Bonds (the “Beneficial Owners”) in the denominations of $5,000 and any integral multiple thereof under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Series 2024 Bonds. In the event that the book-entry only system described herein is no longer used with respect to the Series 2024 Bonds, the Series 2024 Bonds will be registered and transferred in accordance with the Indenture. See APPENDIX I — “INFORMATION CONCERNING THE DEPOSITORY TRUST COMPANY AND ITS BOOK-ENTRY SYSTEM” herein.

Ontario City CouncilJune 4, 2024

Ontario City Council
June 4, 2024