Agenda packet — Orange City Council, June 9, 2026 (part 2 of 7)

LEGAL REQUIREMENTS
Fees imposed by local governments are not “taxes” within the meaning of Article XIII C, Section 1(e) of the California Constitution (Proposition 26) if they fall within one of seven enumerated exemptions. Of particular relevance to this report are the firs t and fourth exemptions to Proposition 26. The first exemption authorizes local governments to impose fees for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged and which does not exceed the r easonable costs to the local government of conferring the benefit or granting the privilege. The fourth exemption authorizes fees imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property. In the context of Franchise Fees, the California Supreme Court held that local government property means physical land, objects, or equipment that those who pay the charge can either enter or use ( Zolly v. City of Oakland (2022) 13 Cal.5th 780, 807—808).

This report shows different approaches for determining the value of the physical land used by the franchised hauler in furtherance of its operations in the City —namely, encroachment of the public right-of-way—to satisfy the requirements of the fourth exemption to Proposition 26 with respect to a portion of the Franchise Fee.

Encroachment Value
HF&H analyzed what would constitute a reasonable fee that the City could charge for CR&R’s extraordinary use of its public right-of-way. On-street collection requires temporary placement of containers in the public right-of-way. Access to containers afforded to CR&R personnel serves as a temporary encroachment in the public right-of-way, which interferes with normal public uses of that right-of-way, such as on-street parking.

Additionally, HF&H performed an alternative cost analysis to estimate the potential rate and cost impacts if the City were to prohibit customers from placing collection containers in the public right-of-way. This analysis showed that applying on-premise service rates—such as lock rates or scout services, which reflect the added cost of a driver dismounting the vehicle to access and service collection containers —would result in an additional $ 5.2 million in costs and rate impacts . However, this methodology i s not included in our findings and recommendations for determining a reasonable Franchise Fee value.

FINDINGS AND RECOMMENDATIONS
On-street collection requires temporary placement of containers in the public right -of-way.

The access to containers afforded to CR&R personnel serves as a temporary encroachment to on-street parking. HF&H analyzed a reasonable fee that the City could charge for the use of its public right-of-way, based on existing fees for the allowance of the finite use of space in the City’s right-of-way which can be found in the City’s master fee schedule. The existing fee most similar to the encroachment by CR&R to col lect solid waste containers was found to be the Encroachment Renewal Inspection Fee as it involves regular disruption, but the disruption does not require construction, damage to or repair of City property.

In preparing this analysis, the following findings were made. 138

MEMORANDUM
Christopher Cash
May 7, 2026

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Encroachment Renewal Inspection Fee Value – Residential HF&H determined that the City could charge up to $ 2,175,098 for the use of public right-of- way to place containers for the purpose of residential solid waste collection. This amount was determined by using the Renewal Inspection Fee of $52 for each residential account serviced via the public right-of-way within the City. The Renewal Inspection Fee for drop -off boxes, recycling bins, etc. is assumed to cover the use of up to 20 feet of space . Several additional assumptions were employed to calculate the encroachment value of the containers, including:
(1) collection occurs once per week; (2 ) the Renewal Inspection Fee is for one month ; and (3) 24,400 residential accounts are accessed using public roads and are authorized under the Agreement to place containers in the street for collection . To calculate the maximum encroachment value, the $ 52 R enewal Inspection F ee—assumed to be per month —was multiplied by 12 and divided by seven to reach a one-time, once-per-week annual fee of $89.14 per account. The per- account amount ($ 89.14) was then multiplied by the total residential accounts included in the assumptions above ( 24,400), resulting in a R enewal Inspection Fee value of $2,175,098 for solid waste containers. Table 1 below summarizes the calculation of the maximum right-of-way encroachment value with this approach.

Table 1
Renewal Inspection Fee Value
a Renewal Inspection Fee monthly cost $52.00
b=a*12 Renewal Inspection Fee value per account ($/year) $624.00 c=b/7 Renewal Inspection Fee value per account ($/year/1x/week) $89.14 d Total residential accounts 24,400
e=c*d Annual encroachment value $2,175,098
Note: Numbers may not be calculated exactly due to rounding.

Encroachment Renewal Inspection Fee Value – Commercial
HF&H determined that the City could charge up to $198,150 for the use of public right-of-way to place containers for the purpose of commercial solid waste collection. This amount was determined by using the Renewal Inspection Fee of $52 per commercial account serviced via the City’s public right-of-way. Several additional assumptions were employed to calculate the encroachment value, including: (1) container collection occurs once per week; (2 ) the Renewal Inspection Fee is for one month ; and (3) 2,223 commercial accounts are accessed on public roads and are authorized for street collection under the Agreement. To calculate the maximum encroachment value, the $52 Renewal Inspection Fee—assumed to be per month— was multiplied by 12 and divided by seven to reach a one-time, once-per-week annual fee of $89.14 per account. The per- account amount of $89.14 was multiplied by the total commercial accounts above (2,223), resulting in a n encroachment value of $ 198,150 for commercial solid waste containers. Table 2 below summarizes the calculation of the maximum value for this approach.

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MEMORANDUM
Christopher Cash
May 7, 2026

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Table 2
Renewal Inspection Fee Value
a Renewal Inspection Fee monthly cost $52.00
b=a*12 Renewal Inspection Fee value per account ($/year) $624.00 c=b/7 Renewal Inspection Fee value per account ($/year/1x/week) $89.14 d Total commercial accounts 2,223
e=c*d Annual encroachment value $198,150
Note: Numbers may not be calculated exactly due to rounding.

CONCLUSION
The reasonable fee for the use of public right-of-way based on the Encroachment Renewal Inspection Fee value is up to $2,175,098 for residential container placement and up to $198,150 for commercial container placement for a combined amount of $2,373,248.

HF&H has found that the reasonable amount to be collected through a Franchise Fee in exchange for CR&R’s use of the public right-of-way is up to $2,373,248. This amount should be escalated by CPI ( Consumer Price Index, Series ID: CUURS49ASAO, All items in Los Angeles-Long Beach -Anaheim, CA, all urban consumers, not seasonally adjusted (U. S.

Department of Labor, Bureau of Labor Statistics.) to ensure that the amount reflected is adjusted over time and brought into then-current dollars. 140
Agenda Item
Orange City Council
Item #: 3.7. 6/9/2026 File #: 26-0220
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Adoption of four projects into the Capital Improvement Plan; acceptance and appropriation of $1,628,550 in designated grant funding from the California Department of Transportation; and appropriation of $180,950 in local matching funds

2. SUMMARY
The City applied for and received state funding for four highway safety improvement projects:
installation of flashing beacons at four school pedestrian crossings, bike lane striping enhancements, upgrades to existing traffic signal indication heads, and installation of roadway edgelines. To move the projects forward, City Council must accept the funding and approve the related budget appropriations.

3. RECOMMENDED ACTION

1. Adopt the following four projects into the City’s Capital Improvement Plan:
265125 Flashing Beacon Installation at Four School Crossings 265126 HSIP Bike Lane Enhancements
265127 Signal Head Indication Upgrades
265128 Edgeline Striping Installation at Various Locations

2. Accept into the City’sReimbursable Capital Projects (550) revenue budget $1,628,550 in grant funding from the California Department of Transportation to:
550-5703-43201-265125 Flashing Beacon Installation at Four School Crossings $349,740
550-5703-43201-265126 HSIP Bike Lane Enhancements $349,920 550-5703-43201-265127 Signal Head Indication Upgrades $661,320 550-5703-43201-265128 Edgeline Striping Installation at Various Locations $267,570

3. Authorize the appropriation of $1,628,550 into Reimbursable Capital Projects (550):
550-5703-87101-265125 Flashing Beacon Installation at Four School Crossings $349,740
550-5703-87102-265126 HSIP Bike Lane Enhancements $349,920 550-5703-87101-265127 Signal Head Indication Upgrades $661,320 City of Orange Printed on 6/4/2026Page 1 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
550-5703-87102-265128 Edgeline Striping Installation at Various Locations $267,570

4. Authorize the appropriation of $180,950 from the Measure M-Traffic Improvement (263) unreserved fund balance to:
263-5703-87101-265125 Flashing Beacon Installation at Four School Crossings $38,860
263-5703-87102-265126 HSIP Bike Lane Enhancements $38,880 263-5703-87101-265127 Signal Head Indication Upgrades $73,480 263-5703-87102-265128 Edgeline Striping Installation at Various Locations $29,730

4. FISCAL IMPACT
The expense for these projects is $1,809,500 and will be funded through Reimbursable Capital Projects (550) and Measure M-Traffic Improvement (263) respectively:

Flashing Beacon Installation at Four School Crossings
550-5703-87101-265125 $349,740
263-5703-87101-265125 $38,860
HSIP Bike Lane Enhancements
550-5703-87101-265126 $349,920
263-5703-87102-265126 $38,880
Signal Head Indication Upgrades
550-5703-87101-265127 $661,320
263-5703-87102-265126 $73,480
Edgeline Striping Installation at Various Locations
550-5703-87101-265128 $267,570
263-5703-87102-265128 $29,730
Upon approval of this appropriation, the estimated Measure M-Traffic Improvement (263) unreserved fund balance as of June 30, 2026, will be $6.7 million.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

6. DISCUSSION AND BACKGROUND
The City has experienced tremendous success in applying for Highway Safety Improvement Program (HSIP) funds over the past 15 years. In 2024, the California Department of Transportation (Caltrans) issued a call for projects to fund improvements that aim to reduce fatalities and serious injuries on local roadways. In response to this call, staff nominated four projects for consideration in September 2024. All were awarded state funding. A brief description of each project is provided below.

Flashing Beacon Installation at Four School Crossings
Rapid rectangular flashing beacons (RRFBs) will be installed at four pedestrian crossings adjacent to schools. These locations currently have marked crosswalks: two along Shaffer Street, one on Walnut City of Orange Printed on 6/4/2026Page 2 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
schools. These locations currently have marked crosswalks: two along Shaffer Street, one on Walnut Avenue, and one on Rancho Santiago Boulevard. This project will feature, among other things, refurbishing high visibility crosswalk markings, installation of pedestrian activated RRFBs, installation of curb ramps, and related roadway signage. Providing for RRFBs is expected to make the affected school crossings more pedestrian-friendly.

HSIP Bike Lane Enhancements
The proposed project will install Class II (striped, in roadway) bike lanes with green-painted conflict zones along four different roadway segments. The Circulation and Mobility Element of the General Plan guides the development of a connected, citywide network of Class I, II, and III bikeways that facilitates commuter and recreational cycling throughout the community. This project will implement planned Class II bike lanes identified in the General Plan, along portions of Glassell Street, Fletcher Street, Main Street, and Canyon View Avenue. The addition of designated bike lanes and green conflict markings are expected to enhance cyclist visibility and comfort, improve connectivity throughout the city, and strengthen regional bicycle access to neighboring communities.

Signal Head Indication Upgrades
The City completed a Local Roadway Safety Plan (LRSP) in 2023 that evaluated five years of collision data across the City’s roadway network to identify locations where targeted safety improvements could reduce crash risk. Through this analysis, the LRSP identified intersections where enhancements such as enlarging existing 8-inch (diameter) traffic signal indications to 12-inch indications, and installing yellow retroreflective backplates could improve signal visibility for motorists, particularly during nighttime and low-light conditions. As a result, 28 signalized intersections throughout the city were selected for visibility enhancements, including upgrading to larger signal indication heads, installation of yellow retroreflective backplates, or a combination of both treatments.

Edgeline Striping Installation at Various Locations
This project will install striped edgelines (shoulder stripes) along 12 street segments totaling approximately 8.5 miles of roadway within the City. Among other benefits, edgelines can be effective traffic calming features as they tend to narrow the perceived width of the travel lanes. The selected segments consist primarily of two-lane and four-lane undivided roadways, many with wider curbside lanes and on-street parking. The installation of edge lines is expected to better define travel lanes and visually narrow the roadway, which can encourage lower vehicle speeds. Edgelines can be especially beneficial in areas with unmarked curbside parking, as the delineation can encourage more separation between moving and parked vehicles.

This particular cycle of the HSIP funds projects at 90%, with the city required to provide a 10% local match. The total value of the four projects is $1,809,500, of which $1,628,550 is funded through the grant. The local match of $180,950 that the city must provide for can be appropriated from Measure M- Traffic Improvement (263) unreserved fund balance. Project design activities are expected to begin in summer of 2026.

7. ATTACHMENTS
· Attachment 1 - Flashing Beacon Installation at Four School Crossings Vicinity Map · Attachment 2 - HSIP Bike Lane Enhancements Vicinity Map City of Orange Printed on 6/4/2026Page 3 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
· Attachment 3 - Signal Head Indication Upgrades Vicinity Map · Attachment 4 - Edgeline Striping Installation at Various Locations Vicinity Map City of Orange Printed on 6/4/2026Page 4 of 4
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Agenda Item
Orange City Council
Item #: 3.7. 6/9/2026 File #: 26-0220
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

3. RECOMMENDED ACTION

3. Authorize the appropriation of $1,628,550 into Reimbursable Capital Projects (550):
550-5703-87101-265125 Flashing Beacon Installation at Four School Crossings $349,740
550-5703-87102-265126 HSIP Bike Lane Enhancements $349,920 550-5703-87101-265127 Signal Head Indication Upgrades $661,320 City of Orange Printed on 6/4/2026Page 1 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
550-5703-87102-265128 Edgeline Striping Installation at Various Locations $267,570

4. FISCAL IMPACT
The expense for these projects is $1,809,500 and will be funded through Reimbursable Capital Projects (550) and Measure M-Traffic Improvement (263) respectively:

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

Flashing Beacon Installation at Four School Crossings
Rapid rectangular flashing beacons (RRFBs) will be installed at four pedestrian crossings adjacent to schools. These locations currently have marked crosswalks: two along Shaffer Street, one on Walnut City of Orange Printed on 6/4/2026Page 2 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
schools. These locations currently have marked crosswalks: two along Shaffer Street, one on Walnut Avenue, and one on Rancho Santiago Boulevard. This project will feature, among other things, refurbishing high visibility crosswalk markings, installation of pedestrian activated RRFBs, installation of curb ramps, and related roadway signage. Providing for RRFBs is expected to make the affected school crossings more pedestrian-friendly.

7. ATTACHMENTS
· Attachment 1 - Flashing Beacon Installation at Four School Crossings Vicinity Map · Attachment 2 - HSIP Bike Lane Enhancements Vicinity Map City of Orange Printed on 6/4/2026Page 3 of 4
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Item #: 3.7. 6/9/2026 File #: 26-0220
· Attachment 3 - Signal Head Indication Upgrades Vicinity Map · Attachment 4 - Edgeline Striping Installation at Various Locations Vicinity Map City of Orange Printed on 6/4/2026Page 4 of 4
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Agenda Item
Orange City Council
Item #: 3.8. 6/9/2026 File #: 26-0297
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Award of OMNIA Partners Contract to Milliken Services, LLC for carpet and flooring replacement at Fire Stations 3, 7, and 8; and finding of California Environmental Quality Act exemption

2. SUMMARY
The carpet and flooring at Fire Stations 3, 7, and 8 are beyond their useful life and need replacement.

Staff solicited proposals through the OMNIA Partners cooperative purchasing program, Contract No. 2020002150 and recommends awarding the contract to Milliken Services, LLC under OMNIA Partners Contract No. 2020002150.

3. RECOMMENDED ACTION
Approve the contract with Milliken Services, LLC in the total amount of $90,785, representing an original proposal amount of $82,532, plus a 10% contingency of $8,253, for carpet and flooring replacement at Fire Stations 3, 7, and 8; and authorize the Mayor and City Clerk to execute on behalf of the City.

4. FISCAL IMPACT
The expense for this contract is $90,784.12 and will be funded through Developer Impact Fees - Fire Fund (560):
560-3121-83101-263021 Fire Station Repairs $90,785

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
The City of Orange operates several fire stations, including Stations 3, 7, and 8. Flooring at Stations 7 and 8 is original to each facility, having been installed in 1989 and 2006, respectively. Although the flooring at Station 3 was replaced in 2017, recent inspections identified deterioration and trip-and-fall hazards that warrant replacement. Due to age, wear, and continuous operational use, the flooring at all three stations is in poor condition and requires replacement to maintain a safe and functional environment for fire personnel.

Staff solicited proposals through the OMNIA Partners cooperative purchasing program, Contract No.

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Staff solicited proposals through the OMNIA Partners cooperative purchasing program, Contract No. 2020002150. Use of this cooperative purchasing contract satisfies the City's competitive procurement requirements, as the contract was competitively solicited and awarded in accordance with applicable public procurement laws. The proposed work includes removal of the existing flooring, subfloor preparation, and installation of new carpet tile, vinyl tile, wall base cove, and all associated labor and materials.

Construction is anticipated to begin in July 2026 and be completed by September 2026.

7. ENVIRONMENTAL REVIEW
Categorical Exemption: The proposed project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) per State CEQA Guidelines 15301 (Class 1 - Existing Facilities) because the project consists of repairs, maintenance, and minor alterations of existing public facilities, involving negligible or no expansion of existing use and results in no expansion of area beyond that existing at the time of the City’s determination.

8. ATTACHMENTS
· Contract with Milliken Services, LLC
· Milliken Proposals
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Agenda Item
Orange City Council
Item #: 3.8. 6/9/2026 File #: 26-0297
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Award of OMNIA Partners Contract to Milliken Services, LLC for carpet and flooring replacement at Fire Stations 3, 7, and 8; and finding of California Environmental Quality Act exemption.

2. SUMMARY
The carpet and flooring at Fire Stations 3, 7, and 8 are beyond their useful life and need replacement.

4. FISCAL IMPACT
The expense for this contract is $90,784.12 and will be funded through Developer Impact Fees - Fire Fund (560):
560-3121-83101-263021 Fire Station Repairs $90,785

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

Staff solicited proposals through the OMNIA Partners cooperative purchasing program, Contract No.

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Item #: 3.8. 6/9/2026 File #: 26-0297
Staff solicited proposals through the OMNIA Partners cooperative purchasing program, Contract No. 2020002150. Use of this cooperative purchasing contract satisfies the City's competitive procurement requirements, as the contract was competitively solicited and awarded in accordance with applicable public procurement laws. The proposed work includes removal of the existing flooring, subfloor preparation, and installation of new carpet tile, vinyl tile, wall base cove, and all associated labor and materials.

Construction is anticipated to begin in July 2026 and be completed by September 2026.

8. ATTACHMENTS
· Contract with Milliken Services, LLC
· Milliken Proposals
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CONTRACT
[Carpet and Flooring Replacement at Fire Stations 3, 7, and 8 Omnia Partners Contract 2020002150 (SP-4331)]

THIS CONTRACT (the “Contract”) is made and ente red into as of ___ ___________, 2026 (“Effective Date”) by and between the CITY OF ORANGE, a municipal corporation (“City”), and MILLIKEN SERVICES, LLC, a South Carolina limited liability company (“Contractor”), who agree as follows.

ARTICLE 1
Work Performed

a. For and in consideration of the payments and agreements hereinafter mentioned, to be made and performed by City, and under the conditions expressed in the two (2) bonds presented to City with this Contract and incorporated herein by this reference, Contractor hereby agrees to and shall do all the work and furnish all the labor, materials, tools and equipment, except such as are mentioned in the specifications to be furnished by City to Contractor, necessary to complete in good workmanship and substantial manner the work (the “Work”) described in:

(1) The latest edition of the "City of Orange Standard Plans and Specifications" (the “Orange Book”) with the term "Engineer," as used in the Orange Book and in this Contract, to specifically include the City Engineer (or designee);

(2) The "Standard Specifications for Public Works Construction ” (the “Greenbook”), and all amendments thereto, except the definition of “Subcontractor” in Section 1.2 (General – Terms and Definitions) of Part 1 (General Provisions) of the Greenbook, which is hereby amended in its entirety to read as follows: “Subcontractor – An individual, firm, or corporation having a direct contract with the Contractor for the performance of a part of the Work;”

(3) The “City of Orange Standard Special Provisions;”

(4) The Standard Plans; and

(5) Contractor’s Bid Proposal , which is on file with City’s Department of Public Works.

b. Contractor acknowledges that it has received the Plans from City and that a complete copy of the Plans are in its possession and are hereby specifically referred to and by such reference made a part hereof. The Orange Book, Greenbook and City of Orange Standard Special Provisions and Standard Plans are on file with City’s Public Works Director and are hereby specifically referred to and by such reference made a part hereof. Contractor hereby acknowledges that it has read, reviewed and understands the Plans, the Orange Book, the Greenbook, the Special Provisions, the Standard Plans, and the Encroachment Permit as they relate to the Work, all of which documents shall be referred to herein collectively as the “Plans and Specifications.”

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2 c. Contractor acknowledges the provisions of Chapter 8.28 of the Orange Municipal Code which requires, among other things, that Contractor utilize City’s exclusive solid waste hauler for the rental of bins for trash and debris removal and imposes mandatory recycling requirements for self-hauled construction and demolition waste. The terms and conditions set forth in this Contract shall control over any terms and conditions in the Plans and Specifications to the contrary.

d. The Work shall be performed in conformity with the Plans and Specifications and the Bid Proposal and all applicable laws, including any and all applicable federal and state labor laws and standards and applicable prevailing wage requirements and any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment.

e. Unless and until otherwise notified in writing by City’s Public Works Director, City’s Assistant Field Services Manager , Rachael Gomez (“Authorized City Representative”), shall be the person to whom Contractor will report for the performance of the Work hereunder. It is understood that Contractor’s performance hereunder shall be under the direction and supervision of the Authorized City Representative or such other person as City’s Public Works Director may designate from time to time, that Contractor s hall coordinate the Work hereunder with the Authorized City Representative to the extent required by the Authorized City Representative, and that all performances required hereunder by Contractor shall be performed to the satisfaction of the Authorized City Representative or City’s Public Works Director.

f. It is expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and Contractor’s Bid Proposal, then this instrument shall control and nothing herein shall be considered as an acceptance of the said terms of said Bid Proposal conflicting herewith.

ARTICLE 2
Commencement of Work

Contractor shall commence the Work provided for in this Contract within fifteen (15) days of the date of the issuance by City of a Notice to Proceed and diligently prosecute completion of the Work within forty-five (45) calendar days from such date, unless legal extension is granted in accordance with the terms set forth in the Greenbook. Time is of the essence in this Contract.

Contractor shall do all things necessary and incidental to the prosecution of Contractor's Work.

ARTICLE 3
Compensation

a. Contractor agrees to receive and accept an amount not to exceed EIGHTY-TWO THOUSAND FIVE HUNDRED THIRTY -TWO DOLLARS and 00/100 ($ 82,532.00) as compensation for furnishing all materials and doing all the Work contemplated and embraced in this Contract. Said compensation covers (1) all loss or damage arising out of the nature of the Work, from the acts of the elements; (2) any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the Work until its acceptance by City, other than as 158
3 provided below ; (3) all risks of every description connected with the Work; (4) all expenses incurred by or in consequence of the suspension or discontinuance of the Work; and (5) well and faithfully completing the Work, and for the whole thereof, in the manner and according to the Plans and Specifications, and requirements of the Authorized City Representative under them.

Retention amounts shall be withheld from progress payments as required by law unless Contractor provides securities in lieu of retention.

b. In addition to the scheduled Work to be performed by the Contractor, the parties recognize that additional, unforeseen work and services may be required by the Authorized City Representative. In anticipation of such contingencies, the sum of EIGHT THOUSAND TWO HUNDRED FIFTY -THREE DOLLARS and 00/100 ($ 8,253.00) has been added to the total compensation of this Contract. The Authorized City Representative may approve the additional work and the actual costs incurred by the Contractor in performance of additional work or services in accordance with such amount as the Authorized City Representative and the Contractor may agree upon in advance. Said additional work or services and the amount of compensation therefor, up to the amount of the authorized contingency, shall be memorialized in the form of a Contract Amendment approved by the City Manager on a form acceptable to the City Attorney . The Contractor agrees to perform only that work or those services that are specifically requested by the Authorized City Representative. Any and all additional work and services performed under this Contract shall be completed in such sequence as to assure their completion as expeditiously as is consistent with professional skill and care in accordance with a cost estimate or proposal submitted to and approved by the Authorized City Representative prior to the commencement of such Work or services.

c. The total amount of compensation under this Contract, including contingencies, shall not exceed NINETY THOUSAND SEVEN HUNDRED EIGHTY-FIVE DOLLARS and 00/100 ($90,785.00).

ARTICLE 4
Licenses

Contractor represents that it and any subcontractors it may engage, possess any and all licenses which are required under state or federal law to perform the Work contemplated by this Contract and that Contractor and subcontractors shall maintain all appropriate licenses, including a City of Orange business license, at its cost, during the performance of this Contract.

ARTICLE 5
Guarantees

a. Contractor guarantees the construction and installation of all Work included in the Plans and Specifications for which Contractor has been awarded this Contract.

b. Should any of the materials or equipment installed pursuant to this Contract prove defective or should the Work as a whole prove defective, due to faulty equipment, workmanship, materials furnished or methods of installations, or should said Work or any pa rt thereof fail to function properly, as designed, due to any of the above causes within twelve (12) months after the 159
4 date on which said Work is accepted by City, Contractor shall make repairs and furnish such materials and equipment as are necessary to be furnished and installed within fifteen (15) calendar days after the receipt of a demand from City.

c. Said Work will be deemed defective within the meaning of this guarantee in the event that it fails to function as originally intended either by the Plans and Specifications of this Contract or by the manufacturer(s) of the equipment incorporated into the Work.

d. In the event repairs are not made within fifteen (15) calendar days after Contractor's receipt of a demand from City, City shall have the unqualified option to make any needed repairs or replacements itself or by any other contractor. Contractor shall re imburse City, upon demand, for all expenses incurred in restoring said Work to the condition contemplated in this Contract, including the cost of any equipment or materials replaced.

e. It is understood that emergency repairs may, by necessity, be made by City.

Therefore, when defective equipment, materials or workmanship result in emergency repairs by City, Contractor shall reimburse City, upon demand, for all expenses incurred. Emergency repairs will be deemed as those repairs determined by City’s Director of Public Works to be necessary due to an immediate detriment to the health, safety, welfare or convenience of the residents of City.

ARTICLE 6
Water Quality

a. The Santa Ana Regional Water Quality Control Board (“RWQCB”) has issued National Pollutant Discharge Elimination System (“NPDES”) Permit No. R8 -2009-0030 (the “Permit”), which governs storm water and non -storm water discharges resulting from municipal activities performed by City or its contractors. In order to comply with the Permit requirements, the County of Orange has prepared a Drainage Area Management Plan (“DAMP”), containing Model Maintenance Procedures with Best Management Practices (“BMPs”) th at City and its contractors must adhere to. The Model Maintenance Procedures contain pollution prevention and source control techniques to minimize the impact of those activities upon dry -weather urban runoff, storm water runoff, and receiving water quali ty. Examples include: wash water from cleaning of sidewalks or parking lots must be collected and disposed of in the sewer or landscaped areas.

b. The Permit, the DAMP and the Model Maintenance Procedures are on file in the office of City’s Director of Public Works. Contractor hereby acknowledges that it has read, reviewed and understands the Permit, the DAMP and the Model Maintenance Procedures, as they relate to the Work and hereby shall perform the Work in conformance therewith.

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5 ARTICLE 7
Independent Contractor; Contractor not Agent

a. At all times during the term of this Contract, Contractor shall be an independent contractor and not an employee of City. City shall have the right to control Contractor only insofar as the result of Contractor’s services rendered pursuant to this Contrac t. City shall not have the right to control the means by which Contractor accomplishes services rendered pursuant to this Contract. Contractor shall, at its sole cost and expense, furnish all facilities, materials and equipment which may be required for furnishing services pursuant to this Contract. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its subcontractors, agents and employees, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever. Contractor acknowledges that Contractor and any subcontractors, agents or employees employed by Contractor shall not, under an y circumstances, be considered employees of City, and that they shall not be entitled to any of the benefits or rights afforded employees of City, including, but not limited to, sick leave, vacation leave, holiday pay, Public Employees Retirement System be nefits, or health, life, dental, long -term disability or workers' compensation insurance benefits.

b. Except as City may specify in writing, Contractor shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Contractor shall have no authority, express or implied, to bind City to any obligation whatsoever.

ARTICLE 8
Public Work; Prevailing Wage

a. The Work which is the subject of this Contract is a “public work,” as that term is defined in Section 1720 of the California Labor Code, for which prevailing wages must be paid.

To the extent Contractor’s employees will perform any work that falls within any of the classifications for which the Department of Labor Relations of the State of California promulgates prevailing wage determinations, Contractor hereby agrees that Contractor, and any subcontractor under it, shall pay not less than the specified prevailing ra tes of wages to all such workers . The general prevailing wage determinations for crafts can be located on the website of the Department of Industrial Relations ( www.dir.ca.gov/DLSR). Additionally, to perform work under this Contract, Contractor must meet all State registration requirements and criteria, including project compliance monitoring.

b. Attached hereto as Attachment No. 1 and incorporated herein by this reference is a copy of the provisions of Sections 1725.5, 1771, 1771.1, 1771.4, 1775, 1776, 1777.5, 1813 and 1815 of the California Labor Code. Contractor hereby acknowledges that it has read, reviewed and understands those provisions of the Labor Code and shall prosecute and complete the Work under this Contract in strict compliance with all of those terms and provisions.

c. Contractor shall secure the payment of compensation to its employees in accordance with the provisions of Section 3700 of the California Labor Code. Accordingly, and as required by Section 1861 of the California Labor Code, Contractor hereby certifies as follows:
161
6 “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.”

d. Contractor shall indemnify, protect, defend and hold harmless City and its officers, employees, contractors and agents, with counsel reasonably acceptable to City, from and against any and all loss, liability, damage, claim, cost, expense, and/or “increased costs” (including reasonable attorney’s fees, court and litigation costs, and fees of expert witnesses) which result or arise in any way from the noncompliance by Contractor of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state lab or laws (including, without limitation, the requirement to pay state prevailing wages). It is agreed by the parties that, in connection with the construction of the W ork which is the subject of this Contract, Contractor shall bear all risks of payment or non -payment of state prevailing wages. “Increased costs” as used in this paragraph shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time t o time. The foregoing indemnity shall survive termination of this Contract.

ARTICLE 9
Equal Employment Opportunity

During the performance of this Contract, Contractor agrees as follows:

a. Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, mental or physical disability, or any other basis prohibited by applicable law. Contractor shall ensure that applicants are employed and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, mental or physical disability, or any other basis prohibited by applicable law.

Such actions shall include, but not be limited to the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation and selection for training, including apprenticeship. Contractor shall post in conspicuous places, available to employees and applicants for employment, a notice setting forth provisions of this non-discrimination clause.

b. Contractor shall, in all solicitations and advertisements for employees placed by, or on behalf of Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, men tal or physical disability, or any other basis prohibited by applicable law.

c. Contractor shall cause the foregoing paragraphs (a) and (b) to be inserted in all subcontracts for any Work covered by this Contract, provided that the foregoing provisions shall not apply to subcontracts for standard commercial supplies or raw materials.

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7 ARTICLE 10
Conflicts of Interest

Contractor agrees that it shall not make, participate in the making, or in any way attempt to use its position as a contractor to influence any decision of City in which Contractor knows or has reason to know that Contractor, its officers, partners, or employees have a financial interest as defined in Section 87103 of the Government Code. Contractor further agrees that it shall not be eligible to work as the builder for any project for which the design work is part of this Contract.

ARTICLE 11
Indemnity

Contractor shall defend, indemnify and hold harmless City and its officers, officials, agents, and employees from and against:

a. Any and all claims, liabilities, losses, damages, penalties, costs or expenses (including reasonable attorneys' fees and court costs) which City may directly or indirectly sustain or suffer arising from or as a result of the death of any person or any acc ident, injury, loss or damage whatsoever caused to any person or the property of any person which shall occur on or adjacent to the real property which is the subject of this Contract, or in connection with performance of this Contract which may be direc tly or indirectly caused by the acts or omissions of Contractor or its officers, employees, contractors or agents, or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance. Contractor shall not be responsible for (and such indemnity shall not apply to) any willful misconduct, negligence or breach of this Contract by City or its officers, officials, agents, and employees. The foregoing indemnity shall survive termination of this Contract.

b. Any and all claims under workers’ compensation acts and other employee benefit acts with respect to Contractor’s employees or Contractor’s subcontractor’s employees arising out of Contractor’s Work under this Contract, including any and all claims under any law pertaining to Contractor’s status as an independent contractor.

ARTICLE 12
Insurance

a. Contractor shall procure and maintain for the duration of this Contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Work hereunder and the results of that Work by Contractor, its agents, representatives, employees or subcontractors. Any umbrella liability insurance that is provided as part of the general or automobile liability minimums set forth below shall be maintained for the duration of the Contract.

b. Contractor shall maintain the following minimum amount of insurance: the greater of either the limits set forth in (1) through (4), below; or all of the insurance coverage and/or limits carried by or available to Contractor.

163
8 (1) General Liability $2,000,000 per occurrence for bodily injury, personal injury and property damage. If
Commercial General Liability insurance
or other form with a general aggregate
limit is used, either the general aggregate
limit shall apply separately to this
project/location or the general aggregate
limit shall be twice the required
occurrence limit.

(2) Automobile Liability $1,000,000 per accident for bodily injury and property damage.

(3) Workers’ Compensation as required by the State of California.

(4) Employer’s Liability $1,000,000 per accident for bodily injury or disease.

c. Any insurance proceeds in excess of or broader than the minimum required coverage and/or minimum required limits which are applicable to a given loss shall be available to City. No representation is made that the minimum insurance requirements of this Contract are sufficient to cover the obligations of Contractor under this Contract.

d. Any deductibles or self -insured retentions must be declared to and approved by City. At the option of City, either: the insurer shall reduce or eliminate such deductibles or self - insured retentions with respect to City, its officers, officials, agents and employees; or Contractor shall provide a financial guarantee satisfactory to City guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

e. Each policy of general liability and automotive liability insurance shall contain, or be endorsed to contain, the following provisions:

(1) City, its officers, officials, agents, and employees are declared to be additional insureds under the terms of the policy, with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on behalf of Contractor (any auto), and with respect to liability arising out of Work or operations performed by or on behalf of Contractor, including materials, parts or equipment furnished in connection with such Work or operations. A policy endorsement to that effect shall be provided to City along with the certificate of insurance. In lieu of an endorsement, City will accept a copy of the policy(ies) which evid ences that City is an additional insured as a contracting party. The minimum coverage required by Subsection 12.b, above, shall apply to City as an additional insured.

(2) For any claims related to this Contract, Contractor’s insurance coverage shall be primary insurance with respect to City, its officers, officials, agents and employees. Any insurance or self-insurance maintained by City, its officers, officials, agents and employees shall be excess of Contractor’s insurance and shall not contribute with it.

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9 (3) Coverage shall not be canceled, except after thirty (30) days’ prior written notice has been provided to City.

f. Contractor shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Article 12. The endorsements shall be on forms acceptable to City. All certificates and endorsements are to be received and approved by City before the Work commences. However, failure to do so shall not operate as a waiver of these insurance requirements. City reserves the right to require complete, certified copies of all required insurance policies, including endorsements effecting the coverage required by these specifications at any time.

g. All insurance procured and maintained by Contractor shall be issued by insurers admitted to conduct the pertinent line of insurance business in California and having a rating of Grade A or better and Class VII or better by the latest edition of Best Key Rating Guide.

h. Contractor shall immediately notify City if any required insurance lapses or is otherwise modified and cease performance of this Contract unless otherwise directed by City. In such a case, City may procure insurance or self-insure the risk and charge Contractor for such costs and any and all damages resulting therefrom by way of set-off from any sums owed Contractor.

i. Contractor agrees that in the event of loss due to any of the perils for which it has agreed to provide insurance, Contractor shall look solely to its insurance for recovery. Contractor hereby grants to City, on behalf of any insurer providing insurance t o either Contractor or City with respect to the services of Contractor herein, a waiver of any right to subrogation which any such insurer may acquire against City by virtue of the payment of any loss under such insurance.

The Workers’ Compensation pol icy shall be endorsed with a waiver of subrogation in favor of City for all Work performed by Contractor, its employees, agents and subcontractors. Contractor shall obtain any other endorsement that may be necessary to effect this waiver of subrogation.

j. Contractor shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein.

ARTICLE 13
Termination

City, acting through its City Manager or designee, reserves the right to terminate this Contract for any reason by giving five (5) days’ written notice of intent to terminate to Contractor.

Upon receipt of notice, Contractor shall immediately cease work, unless the notice provides otherwise. Should City terminate this Contract, City shall pay Contractor for services satisfactorily provided and all allowable reimbursements incurred to the date of termination in compliance with this Contract, unless such te rmination shall be for cause, in which event City may withhold any disputed compensation. City shall not be liable for any claim of lost profits.

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10 ARTICLE 14
Maintenance and Inspection of Records

In accordance with generally accepted accounting principles, Contractor and its subcontractors shall maintain reasonably full and complete books, documents, papers, accounting records and other information (collectively, the “records”) pertaining to the co sts of and completion of services performed under this Contract. During the term of this Contract and for a period of three (3) years after termination or completion of this Contract, City shall have the right to inspect and/or audit Contractor's records pertaining to the performance of this Contract at Contractor's office. Contractor shall make available all such records for inspection or audit at its offices during normal business hours and upon three (3) days’ notice from City, and copies thereof shall be furnished if requested.

ARTICLE 15
Compliance with Laws

a. Contractor shall be knowledgeable of and comply with all local, state and federal laws pertaining to the subject matter hereof or in any way regulating the activities undertaken by Contractor or any subcontractor hereunder.

b. Contractor represents and warrants that it:

(1) Has complied and shall at all times during the term of this Contract comply, in all respects, with all immigration laws, regulations, statutes, rules, codes, and orders, including, without limitation, the Immigration Reform and Control Act of 1986 (IRCA); and

(2) Has not and will not knowingly employ any individual to perform services under this Contract who is ineligible to work in the United States or under the terms of this Contract; and

(3) Has properly maintained, and shall at all times during the term of this Contract properly maintain, all related employment documentation records including, without limitation, the completion and maintenance of the Form I -9 for each of Contractor’s employees; and

(4) Has responded, and shall at all times during the term of this Contract respond, in a timely fashion to any government inspection requests relating to immigration law compliance and/or Form I -9 compliance and/or worksite enforcement by the Department of Homeland Security, the Department of Labor, or the Social Security Administration.

c. Contractor shall require all subcontractors and/or subconsultants to make the same representations and warranties required by this Article 15 when hired to perform services under this Contract.

d. Contractor shall, upon request of City, provide a list of all employees working under this Contract and shall provide, to the reasonable satisfaction of City, verification that all such 166
11 employees are eligible to work in the United States. All costs associated with such verification shall be borne by Contractor. Once such request has been made, Contractor may not change employees working under this Contract without written notice to City , accompanied by the verification required herein for such employees. Contractor shall require all subcontractors and/or sub-consultants to make the same verification when hired to perform services under this Contract.

e. If Contractor, or a subcontractor or subconsultant, knowingly employs an employee providing Work under this Contract who is not authorized to work in the United States, and/or fails to follow federal laws to determine the status of such employee , such shall constitute a material breach of this Contract and may be cause for immediate termination of this Contract by City.

f. Contractor shall indemnify and hold City, its officials and employees harmless for, of and from any loss, including but not limited to fines, penalties and corrective measures, City may sustain by reason of Contractor’s failure to comply with said laws, rules and regulati ons in connection with the performance of this Contract.

ARTICLE 16
Governing Law and Venue

This Contract shall be construed in accordance with and governed by the laws of the State of California and Contractor shall submit to the juri sdiction of California courts. Venue for any dispute arising under this Contract shall be in Orange County, California.

ARTICLE 17
Integration and Amendment

a. This Contract constitutes the entire agreement of the parties. No other agreement, oral or written, pertaining to the Work to be performed under this Contract shall be of any force or effect unless it is in writing and signed by both parties. Any Work performed which is inconsistent with or in violation of the provisions of this Contract shall not be compensated.

b. Amendments to this Contract must be in writing and signed by both parties. The City Manager is authorized to execute amendments to this Contract up to the amounts specified in Chapter 3.08 of the Orange Municipal Code.

ARTICLE 18
Notice

Except as otherwise provided herein, all notices required under this Contract shall be in writing and delivered personally, by e-mail, or by first class mail, postage prepaid, to each party at the address listed below. Either party may change the notice address by notifying the other party in writing. Notices shall be deemed received upon receipt of same or within three (3) days of deposit in the U.S. Mail, whichever is earlier. Notices sent by e-mail shall be deemed received on the date of the e-mail transmission.

167
12 “CONTRACTOR” “CITY”

Milliken Services, LLC City of Orange
201 Lukken Industrial Drive, West 300 E. Chapman Avenue LaGrange, Georgia 30240 Orange, CA 92866-1591

Attn: Katie Buchanan Attn: Rachael Gomez

Telephone: 706-590-5763 Telephone: 714-744-5588
E-Mail: [email protected] E-Mail: [email protected]

ARTICLE 19
Claim Resolution

City and Contractor agree that the claim resolution process applicable to any claim by Contractor in connection with the Work provided herein shall be subject to the procedures set forth in California Public Contract Code Section 9204, attached hereto as Attachment No. 2, and incorporated herein by this reference.

ARTICLE 20
Counterparts

This Contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures transmitted electronically shall have the same effect as original signatures.

[Remainder of page intentionally left blank; signatures on next page]

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169
13 “CITY”

CONTRACT, BONDS AND INSURANCE
APPROVED BY:

Connor Hyland
Senior Assistant City Attorney

CITY OF ORANGE, a municipal corporation

By:

Daniel R. Slater
Mayor of the City of Orange

ATTEST:

Pamela Coleman, City Clerk

“CONTRACTOR”

MILLIKEN SERVICES, LLC,
a South Carolina limited liability company

[Note: Signature of Managing Member By:
or Person(s) Authorized to bind LLC is Printed Name:
(are) required] Title:

By:

Printed Name:

Title:

√

X
170

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ATTACHMENT NO. 1

CALIFORNIA LABOR CODE
SECTIONS 1725.5, 1771, 1771.1, 1771.4, 1775, 1776, 1777.5, 1813 and 1815

Section 1725.5. Registration of contractors; mandatory registration; qualifications and application; fees; exempt contractors
A contractor shall be registered pursuant to this section to be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any public work contract that is subject to the requirements of this chapter. For the purposes of this section, “contractor” includes a subcontractor as defined by Section 1722.1. (a) To qualify for registration under this section, a contractor shall do all of the following:
(1)(A) Register with the Department of Industrial Relations in the manner prescribed by the department and pay an initial nonrefundable application fee of four hundred dollars ($400) to qualify for registration under this section and an annual renewal fee on or before July 1 of each year thereafter. The annual renewal fee shall be in a uniform amount set by the Director of Industrial Relations, and the initial registration and renewal fees may be adjusted no more than annually by the director to support the costs specified in Section 1771.3. (B) Beginning June 1, 2019, a contractor may register or renew according to this subdivision in annual increments up to three years from the date of registration. Contractors who wish to do so will be required to prepay the applicable nonrefundable application or renewal fees to qualify for the number of years for which they wish to preregister.
(2) Provide evidence, disclosures, or releases as are necessary to establish all of the following:
(A) Workers' compensation coverage that meets the requirements of Division 4 (commencing with Section 3200) and includes sufficient coverage for any worker whom the contractor employs to perform work that is subject to prevailing wage requirements other than a contractor who is separately registered under this section.

Coverage may be evidenced by a current an d valid certificate of workers' compensation insurance or certification of self-insurance required under Section 7125 of the Business and Professions Code. (B) If applicable, the contractor is licensed in accordance with Chapter 9 (commencing with Section 7000) of the Business and Professions Code.
(C) The contractor does not have any delinquent liability to an employee or the state for any assessment of back wages or related damages, interest, fines, or penalties pursuant to any final judgment, order, or determination by a court or any federal, state, or local administrative agency, including a confirmed arbitration award. However, for purposes of this paragraph, the contractor shall not be disqualified for any judgment, order, or determination that is under appeal, provided that the contractor has secured the payment of any amount eventually found due through a bond or other appropriate means. (D) The contractor is not currently debarred under Section 1777.1 or under any other federal or state law providing for the debarment of contractors from public works. (E) The contractor has not bid on a public works contract, been listed in a bid proposal, or engaged in the performance of a contract for public works without being lawfully registered in accordance with this section, within the preceding 12 months or sinc e the effective date of the requirements set forth in subdivision (e), whichever is earlier. If a contractor is found to be in violation of the requirements of this paragraph, the period of disqualification shall be waived if both of the following are true:
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(i) The contractor has not previously been found to be in violation of the requirements of this paragraph within the preceding 12 months.
(ii) The contractor pays an additional nonrefundable penalty registration fee of two thousand dollars ($2,000). (b) Fees received pursuant to this section shall be deposited in the State Public Works Enforcement Fund established by Section 1771.3 and shall be used only for the purposes specified in that section. (c) A contractor who fails to pay the renewal fee required under paragraph (1) of subdivision (a) on or before the expiration of any prior period of registration shall be prohibited from bidding on or engaging in the performance of any contract for public work until once again registered pursuant to this section. If the failure to pay the renewal fee was inadvertent, the contractor may renew its registration retroactively by paying an additional nonrefundable penalty renewal fee equal to the amount of the renewal fee within 90 days of the due date of the renewal fee.
(d) If, after a body awarding a contract accepts the contractor's bid or awards the contract, the work covered by the bid or contract is determined to be a public work to which Section 1771 applies, either as the result of a determination by the director pursuant to Section 1773.5 or a court decision, the requirements of this section shall not apply, subject to the following requirements:
(1) The body that awarded the contract failed, in the bid specification or in the contract documents, to identify as a public work that portion of the work that the determination or decision subsequently classifies as a public work.
(2) Within 20 days following service of notice on the awarding body of a determination by the Director of Industrial Relations pursuant to Section 1773.5 or a decision by a court that the contract was for public work as defined in this chapter, the contractor and any subcontractors are registered under this section or are replaced by a contractor or subcontractors who are registered under this section. (3) The requirements of this section shall apply prospectively only to any subsequent bid, bid proposal, contract, or work performed after the awarding body is served with notice of the determination or decision referred to in paragraph (2).
(e) The requirements of this section shall apply to any bid proposal submitted on or after March 1, 2015, to any contract for public work, as defined in this chapter, executed on or after April 1, 2015, and to any work performed under a contract for public work on or after January 1, 2018, regardless of when the contract for public work was executed.
(f) This section does not apply to work performed on a public works project of twenty -five thousand dollars ($25,000) or less when the project is for construction, alteration, demolition, installation, or repair work or to work performed on a public works project of fifteen thousand dollars ($15,000) or less when the project is for maintenance work.

Section 1771. Payment of general prevailing rate

Except for public works projects of one thousand dollars ($1,000) or less, not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed, and not less than the general pre vailing rate of per diem wages for holiday and overtime work fixed as provided in this chapter, shall be paid to all workers employed on public works.

This section is applicable only to work performed under contract, and is not applicable to work carried out by a public agency with its own forces. This section is applicable to contracts let for maintenance work. 172

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Section 1771.1 . Registration as a contractor or subcontractor required prior to bid submission; exceptions; violations; penalties
(a) A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code , or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code , provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.
(b) Notice of the requirement described in subdivision (a) shall be included in all bid invitations and public works contracts, and a bid shall not be accepted nor any contract or subcontract entered into without proof of the contractor or subcontractor's current registration to perform public work pursuant to Section 1725.5. (c) An inadvertent error in listing a subcontractor who is not registered pursuant to Section 1725.5 in a bid proposal shall not be grounds for filing a bid protest or grounds for considering the bid nonresponsive, provided that any of the following apply:
(1) The subcontractor is registered prior to the bid opening. (2) Within 24 hours after the bid opening, the subcontractor is registered and has paid the penalty registration fee specified in subparagraph (E) of paragraph (2) of subdivision (a) of Section 1725.5. (3) The subcontractor is replaced by another registered subcontractor pursuant to Section 4107 of the Public Contract Code.
(d) Failure by a subcontractor to be registered to perform public work as required by subdivision (a) shall be grounds under Section 4107 of the Public Contract Code for the contractor, with the consent of the awarding authority, to substitute a subcontractor who is registered to perform public work pursuant to Section 1725.5 in place of the unregistered subcontractor.
(e) The department shall maintain on its Internet Web site a list of contractors who are currently registered to perform public work pursuant to Section 1725.5.
(f) A contract entered into with any contractor or subcontractor in violation of subdivision (a) shall be subject to cancellation, provided that a contract for public work shall not be unlawful, void, or voidable solely due to the failure of the awarding body, contractor, or any subcontractor to comply with the requirements of Section 1725.5 or this section.
(g) If the Labor Commissioner or his or her designee determines that a contractor or subcontractor engaged in the performance of any public work contract without having been registered in accordance with this section, the contractor or subcontractor shall forfeit, as a civil penalty to the state, one hundred dollars ($100) for each day of work performed in violation of the registration requirement, not to exceed an aggregate penalty of eight thousand dollars ($8,000) in addition to any penalty registration fee assessed pursuant to clause (ii) of subparagraph (E) of paragraph (2) of subdivision (a) of Section 1725.5. (h)(1) In addition to, or in lieu of, any other penalty or sanction authorized pursuant to this chapter, a higher tiered public works contractor or subcontractor who is found to have entered into a subcontract with an unregistered lower tier subcontractor to perform any public work in violation of the requirements of Section 1725.5 or this section shall be subject to forfeiture, as a civil penalty to the state, of one hundred dollars ($100) 173

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for each day the unregistered lower tier subcontractor performs work in violation of the registration requirement, not to exceed an aggregate penalty of ten thousand dollars ($10,000). (2) The Labor Commissioner shall use the same standards specified in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1775 when determining the severity of the violation and what penalty to assess, and may waive the penalty for a first time violation that was unintentional and did not hinder the Labor Commissioner's ability to monitor and enforce compliance with the requirements of this chapter. (3) A higher tiered public works contractor or subcontractor shall not be liable for penalties assessed pursuant to paragraph (1) if the lower tier subcontractor's performance is in violation of the requirements of Section 1725.5 due to the revocation of a previously approved registration. (4) A subcontractor shall not be liable for any penalties assessed against a higher tiered public works contractor or subcontractor pursuant to paragraph (1). A higher tiered public works contractor or subcontractor may not require a lower tiered subcontractor to indemnify or otherwise be liable for any penalties pursuant to paragraph (1).
(i) The Labor Commissioner or his or her designee shall issue a civil wage and penalty assessment, in accordance with the provisions of Section 1741, upon determination of penalties pursuant to subdivision (g) and subparagraph (B) of paragraph (1) of subdivision (h). Review of a civil wage and penalty assessment issued under this subdivision may be requested in accordance with the provisions of Section 1742 . The regulations of the Director of Industrial Relations, which govern proceedings for review of civil wage and penalty assessments and the withholding of contract payments under Article 1 (commencing with Section 1720) and Article 2 (commencing with Section 1770), shall apply. (j)(1) Where a contractor or subcontractor engages in the performance of any public work contract without having been registered in violation of the requirements of Section 1725.5 or this section, the Labor Commissioner shall issue and serve a stop order prohibiting the use of the unregistered contractor or the unregistered subcontractor on all public works until the unregistered contractor or unregistered subcontractor is registered. The stop order shall not apply to work by registered contractors or subcontractors on the public work.
(2) A stop order may be personally served upon the contractor or subcontractor by either of the following methods:
(A) Manual delivery of the order to the contractor or subcontractor personally. (B) Leaving signed copies of the order with the person who is apparently in charge at the site of the public work and by thereafter mailing copies of the order by first class mail, postage prepaid to the con tractor or subcontractor at one of the following:
(i) The address of the contractor or subcontractor on file with either the Secretary of State or the Contractors' State License Board.
(ii) If the contractor or subcontractor has no address on file with the Secretary of State or the Contractors' State License Board, the address of the site of the public work. (3) The stop order shall be effective immediately upon service and shall be subject to appeal by the party contracting with the unregistered contractor or subcontractor, by the unregistered contractor or subcontractor, or both. The appeal, hearing, and any further review of the hearing decision shall be governed by the procedures, time limits, and other requirements specified in subdivision (a) of Section 238.1. 174

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(4) Any employee of an unregistered contractor or subcontractor who is affected by a work stoppage ordered by the commissioner pursuant to this subdivision shall be paid at his or her regular hourly prevailing wage rate by that employer for any hours the employee would have worked but for the work stoppage, not to exceed 10 days.
(k) Failure of a contractor or subcontractor, owner, director, officer, or managing agent of the contractor or subcontractor to observe a stop order issued and served upon him or her pursuant to subdivision (j) is guilty of a misdemeanor punishable by imprisonment in county jail not exceeding 60 days or by a fine not exceeding ten thousand dollars ($10,000), or both.
(l) This section shall apply to any bid proposal submitted on or after March 1, 2015, and any contract for public work entered into on or after April 1, 2015. This section shall also apply to the performance of any public work, as defined in this chapter, on or after January 1, 2018, regardless of when the contract for public work was entered.
(m) Penalties received pursuant to this section shall be deposited in the State Public Works Enforcement Fund established by Section 1771.3 and shall be used only for the purposes specified in that section. (n) This section shall not apply to work performed on a public works project of twenty -five thousand dollars ($25,000) or less when the project is for construction, alteration, demolition, installation, or repair work or to work performed on a public works project of fifteen thousand dollars ($15,000) or less when the project is for maintenance work.

Section 1771.4. Additional requirements when bidding and awarding public works contracts

(a) All of the following are applicable to all public works projects that are otherwise subject to the requirements of this chapter:
(1) The call for bids and contract documents shall specify that the project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. (2) The awarding body shall post or require the prime contractor to post job site notices, as prescribed by regulation.
(3) Each contractor and subcontractor shall furnish the records specified in Section 1776 directly to the Labor Commissioner, in the following manner:
(A) At least monthly or more frequently if specified in the contract with the awarding body. (B) In a format prescribed by the Labor Commissioner.
(4) If the contractor or subcontractor is not registered pursuant to Section 1725.5 and is performing work on a project for which registration is not required because of subdivision (f) of Section 1725.5, the unregistered contractor or subcontractor is not required to furnish the records specified in Section 1776 directly to the Labor Commissioner but shall retain the records specified in Section 1776 for at least three years after completion of the work.
(5) The department shall undertake those activities it deems necessary to monitor and enforce compliance with prevailing wage requirements.
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(b) The Labor Commissioner may exempt a public works project from compliance with all or part of the requirements of subdivision (a) if either of the following occurs:
(1) The awarding body has enforced an approved labor compliance program, as defined in Section 1771.5, on all public works projects under its authority, except those deemed exempt pursuant to subdivision (a) of Section 1771.5, continuously since December 31, 2011.
(2) The awarding body has entered into a collective bargaining agreement that binds all contractors performing work on the project and that includes a mechanism for resolving disputes about the payment of wages. (c) The requirements of paragraph (1) of subdivision (a) shall only apply to contracts for public works projects awarded on or after January 1, 2015.
(d) The requirements of paragraph (3) of subdivision (a) shall apply to all contracts for public work, whether new or ongoing, on or after January 1, 2016.

Section 1775. Penalties for violations

(a)(1) The contractor and any subcontractor under the contractor shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded, forfeit not more than two hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates as determined by the director for the work or craft in which the worker is employed for any public work done under the contract by the contractor or, except as provided in subdivision (b), by any subcontractor under the contractor.
(2)(A) The amount of the penalty shall be determined by the Labor Commissioner based on consideration of both of the following:
(i) Whether the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and voluntarily corrected when brought to the attention of the contractor or subcontractor.
(ii) Whether the contractor or subcontractor has a prior record of failing to meet its prevailing wage obligations.
(B)(i) The penalty may not be less than forty dollars ($40) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, unless the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and voluntarily corrected when brought to the attention of the contractor or subcontractor. (ii) The penalty may not be less than eighty dollars ($80) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, if the contractor or subcontractor has been assessed penalties within the previous three years for failing to meet its prevailing wage obligations on a separate contract, unless those penalties were subsequently withdrawn or overturned. (iii) The penalty may not be less than one hundred twenty dollars ($120) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, if the Labor Commissioner determines that the violation was willful, as defined in subdivision (c) of Section 1777.1. (C) If the amount due under this section is collected from the contractor or subcontractor, any outstanding wage claim under Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 against that contractor 176

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or subcontractor shall be satisfied before applying that amount to the penalty imposed on that contractor or subcontractor pursuant to this section.
(D) The determination of the Labor Commissioner as to the amount of the penalty shall be reviewable only for abuse of discretion.
(E) The difference between the prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the prevailing wage rate shall be paid to each worker by the contractor or subcontractor, and the body awarding the contract shall cause to be inserted in the contract a stipulation that this section will be complied with. (b) If a worker employed by a subcontractor on a public works project is not paid the general prevailing rate of per diem wages by the subcontractor, the prime contractor of the project is not liable for any penalties under subdivision (a) unless the prime contractor had knowledge of that failure of the subcontractor to pay the specified prevailing rate of wages to those workers or unless the prime contractor fails to comply with all of the following requirements:
(1) The contract executed between the contractor and the subcontractor for the performance of work on the public works project shall include a copy of the provisions of this section and Sections 1771, 1776, 1777.5, 1813, and 1815.
(2) The contractor shall monitor the payment of the specified general prevailing rate of per diem wages by the subcontractor to the employees, by periodic review of the certified payroll records of the subcontractor. (3) Upon becoming aware of the failure of the subcontractor to pay his or her workers the specified prevailing rate of wages, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the public works project. (4) Prior to making final payment to the subcontractor for work performed on the public works project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the specified general prevailing rate of per diem wages to his or her employees on the public works project and any amounts due pursuant to Section 1813. (c) The Division of Labor Standards Enforcement shall notify the contractor on a public works project within 15 days of the receipt by the Division of Labor Standards Enforcement of a complaint of the failure of a subcontractor on that public works project to pay workers the general prevailing rate of per diem wages.

Section 1776. Payroll records; retention; inspection; redacted information; agencies entitled to receive nonredacted copies of certified records; noncompliance penalties; rules

(a) Each contractor and subcontractor shall keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journey man, apprentice, worker, or other employee employed by him or her in connection with the public work. Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(1) The information contained in the payroll record is true and correct. (2) The employer has complied with the requirements of Sections 1771 , 1811, and 1815 for any work performed by his or her employees on the public works project. 177

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(b) The payroll records enumerated under subdivision (a) shall be certified and shall be available for inspection at all reasonable hours at the principal office of the contractor on the following basis:
(1) A certified copy of an employee's payroll record shall be made available for inspection or furnished to the employee or his or her authorized representative on request. (2) A certified copy of all payroll records enumerated in subdivision (a) shall be made available for inspection or furnished upon request to a representative of the body awarding the contract and the Division of Labor Standards Enforcement of the Department of Industrial Relations. (3) A certified copy of all payroll records enumerated in subdivision (a) shall be made available upon request by the public for inspection or for copies thereof. However, a request by the public shall be made through either the body awarding the contract or the Division of Labor Standards Enforcement. If the requested payroll records have not been provided pursuant to paragraph (2), the requesting party shall, prior to being provided the records, reimburse the costs of preparation by the contractor, subcontractors, and the entity through which the request was made. The public may not be given access to the records at the principal office of the contractor.
(c) Unless required to be furnished directly to the Labor Commissioner in accordance with paragraph (3) of subdivision (a) of Section 1771.4, the certified payroll records shall be on forms provided by the Division of Labor Standards Enforcement or shall contain the same information as the forms provided by the division.

The payroll records may consist of printouts of payroll data that are maintained as computer records, if the printouts contain the same information as the forms provided by the division and the printouts are verified in the manner specified in subdivision (a).
(d) A contractor or subcontractor shall file a certified copy of the records enumerated in subdivision (a) with the entity that requested the records within 10 days after receipt of a written request. (e) Except as provided in subdivision (f), any copy of records made available for inspection as copies and furnished upon request to the public or any public agency by the awarding body or the Division of Labor Standards Enforcement shall be marked or obliterated to prevent disclosure of an individual's name, address, and social security number. The name and address of the contractor awarded the contract or the subcontractor performing the contract shall not be marked or obliterated. Any copy of records made available for inspection by, or furnished to, a multiemployer Taft -Hartley trust fund ( 29 U.S.C. Sec. 186(c)(5) ) that requests the records for the purposes of allocating contributions to participants shall be marked or obliterated only to prevent disclosure of an individual's full social security number, but shall provide the last four digits of the social security number. Any copy of records made available for inspection by, or furnished to, a joint labor - management committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) shall be marked or obliterated only to prevent disclosure of an individual's social security number.
(f)(1) Notwithstanding any other provision of law, agencies that are included in the Joint Enforcement Strike Force on the Underground Economy established pursuant to Section 329 of the Unemployment Insurance Code and other law enforcement agencies investigating violations of law shall, upon request, be provided nonredacted copies of certified payroll records. Any copies of records or certified payroll made available for inspection and furnished upon request to the public by an agency included in the Joint Enforcement Strike Force on the Underground Economy or to a law enforcement agency investigating a violation of law shall be marked or redacted to prevent disclosure of an individual's name, address, and social security number. 178

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(2) An employer shall not be liable for damages in a civil action for any reasonable act or omission taken in good faith in compliance with this subdivision.
(g) The contractor shall inform the body awarding the contract of the location of the records enumerated under subdivision (a), including the street address, city, and county, and shall, within five working days, provide a notice of a change of location and address.
(h) The contractor or subcontractor has 10 days in which to comply subsequent to receipt of a written notice requesting the records enumerated in subdivision (a). In the event that the contractor or subcontractor fails to comply within the 10-day period, he or she shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded, forfeit one hundred dollars ($100) for each cal endar day, or portion thereof, for each worker, until strict compliance is effectuated. Upon the request of the Division of Labor Standards Enforcement, these penalties shall be withheld from progress payments then due. A contractor is not subject to a penalty assessment pursuant to this section due to the failure of a subcontractor to comply with this section.
(i) The body awarding the contract shall cause to be inserted in the contract stipulations to effectuate this section.
(j) The director shall adopt rules consistent with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code ) and the Information Practices Act of 1977 (Title 1.8 (commencing with Section 1798) of Part 4 of Division 3 of the Civil Code) governing the release of these records, including the establishment of reasonable fees to be charged for reproducing copies of records required by this section.

Section 1777.5. Employment of registered apprentices; wages; standards; number; apprenticeable craft or trade; exemptions; contributions; compliance program

(a)(1) This chapter does not prevent the employment upon public works of properly registered apprentices who are active participants in an approved apprenticeship program. (2) For purposes of this chapter, “apprenticeship program” means a program under the jurisdiction of the California Apprenticeship Council established pursuant to Section 3070. (b)(1) Every apprentice employed upon public works shall be paid the prevailing rate of per diem wages for apprentices in the trade to which he or she is registered and shall be employed only at the work of the craft or trade to which he or she is registered.
(2) Unless otherwise provided by a collective bargaining agreement, when a contractor requests the dispatch of an apprentice pursuant to this section to perform work on a public works project and requires the apprentice to fill out an application or underg o testing, training, an examination, or other preemployment process as a condition of employment, the apprentice shall be paid for the time spent on the required preemployment activity, including travel time to and from the required activity, if any, at the prevailing rate of per diem wages for apprentices in the trade to which he or she is registered. Unless otherwise provided by a collective bargaining agreement, a contractor is not required to compensate an apprentice for the time spent on preemployment activities if the apprentice is required to take a preemployment drug or alcohol test and he or she fails to pass that test.
(c) Only apprentices, as defined in Section 3077, who are in training under apprenticeship standards that have been approved by the Chief of the Division of Apprenticeship Standards and who are parties to written 179

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apprentice agreements under Chapter 4 (commencing with Section 3070) of Division 3 are eligible to be employed at the apprentice wage rate on public works. The employment and training of each apprentice shall be in accordance with either of the following:
(1) The apprenticeship standards and apprentice agreements under which he or she is training. (2) The rules and regulations of the California Apprenticeship Council. (d) If the contractor to whom the contract is awarded by the state or any political subdivision, in performing any of the work under the contract, employs workers in any apprenticeable craft or trade, the contractor shall employ apprentices in at least the ratio set forth in this section and may apply to any apprenticeship program in the craft or trade that can provide apprentices to the site of the public work for a certificate approving the contractor under the apprenticeship standards for the employment and training of apprentices in the area or industry affected. However, the decision of the apprenticeship program to approve or deny a certificate shall be subject to review by the Administrator of Apprenticeship. The apprenticeship program or programs, upon approving the contractor, shall arrange for the dispatch of apprentices to the contractor. A contractor covered by an apprenticeship program's standards shall not be required to submit any additional application in order to include additional public works contracts under that program. “Apprenticeable craft or trade,” as used in this section, means a craft or trade determined as an apprenticeable occupation in accordance with rules and regulations prescribed by the California Apprenticeship Council. As used in this section, “contractor” includes any subcontractor under a contractor who performs any public works not excluded by subdivision (o).
(e) Before commencing work on a contract for public works, every contractor shall submit contract award information to an applicable apprenticeship program that can supply apprentices to the site of the public work.

The information submitted shall include an estimate of journeyman hours to be performed under the contract, the number of apprentices proposed to be employed, and the approximate dates the apprentices would be employed. A copy of this information shall also be submitted to the awarding body, i f requested by the awarding body. Within 60 days after concluding work on the contract, each contractor and subcontractor shall submit to the awarding body, if requested, and to the apprenticeship program a verified statement of the journeyman and apprentice hours performed on the contract. The information under this subdivision shall be public. The apprenticeship programs shall retain this information for 12 months. (f) The apprenticeship program supplying apprentices to the area of the site of the public work shall ensure equal employment and affirmative action in apprenticeship for women and minorities. (g) The ratio of work performed by apprentices to journeymen employed in a particular craft or trade on the public work may be no higher than the ratio stipulated in the apprenticeship standards under which the apprenticeship program operates if the contractor agrees to be bound by those standards. However, except as otherwise provided in this section, in no case shall the ratio be less than one hour of apprentice work for every five hours of journeyman work.
(h) This ratio of apprentice work to journeyman work shall apply during any day or portion of a day when any journeyman is employed at the jobsite and shall be computed on the basis of the hours worked during the day by journeymen so employed. Any work performed by a journeyman in excess of eight hours per day or 40 hours per week shall not be used to calculate the ratio. The contractor shall employ apprentices for the number of hours computed as above before the end of the contract or, in the case of a s ubcontractor, before the end of the subcontract. However, the contractor shall endeavor, to the greatest extent possible, to employ apprentices during the same time period that the journeymen in the same craft or trade are employed at the jobsite. When an hourly apprenticeship ratio is not feasible for a particular craft or trade, the Administrator 180

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of Apprenticeship, upon application of an apprenticeship program, may order a minimum ratio of not less than one apprentice for each five journeymen in a craft or trade classification. (i) A contractor covered by this section who has agreed to be covered by an apprenticeship program's standards upon the issuance of the approval certificate, or who has been previously approved for an apprenticeship program in the craft or trade, shall employ the number of apprentices or the ratio of apprentices to journeymen stipulated in the applicable apprenticeship standards, but in no event less than the 1 -to-5 ratio required by subdivision (g).
(j) Upon proper showing by a contractor that he or she employs apprentices in a particular craft or trade in the state on all of his or her contracts on an annual average of not less than one hour of apprentice work for every five hours of labor performed by journeymen, the Administrator of Apprenticeship may grant a certificate exempting the contractor from the 1-to-5 hourly ratio, as set forth in this section for that craft or trade. (k) An apprenticeship program has the discretion to grant to a participating contractor or contractor association a certificate, which shall be subject to the approval of the Administrator of Apprenticeship, exempting the contractor from the 1-to-5 ratio set forth in this section when it finds that any one of the following conditions is met:
(1) Unemployment for the previous three-month period in the area exceeds an average of 15 percent. (2) The number of apprentices in training in the area exceeds a ratio of 1 to 5. (3) There is a showing that the apprenticeable craft or trade is replacing at least one-thirtieth of its journeymen annually through apprenticeship training, either on a statewide basis or on a local basis. (4) Assignment of an apprentice to any work performed under a public works contract would create a condition that would jeopardize his or her life or the life, safety, or property of fellow employees or the public at large, or the specific task to which th e apprentice is to be assigned is of a nature that training cannot be provided by a journeyman.
(l) If an exemption is granted pursuant to subdivision (k) to an organization that represents contractors in a specific trade from the 1-to-5 ratio on a local or statewide basis, the member contractors shall not be required to submit individual applications for approval to local joint apprenticeship committees, if they are already covered by the local apprenticeship standards.
(m)(1) A contractor to whom a contract is awarded, who, in performing any of the work under the contract, employs journeymen or apprentices in any apprenticeable craft or trade shall contribute to the California Apprenticeship Council the same amount that the director determines is the prevailing amount of apprenticeship training contributions in the area of the public works site. A contractor may take as a credit for payments to the council any amounts paid by the contractor to an approved apprenticeship program that can supply apprentices to the site of the public works project. The contractor may add the amount of the contributions in computing his or her bid for the contract. (2)(A) At the conclusion of the 2002 -03 fiscal year and each fiscal year thereafter, the California Apprenticeship Council shall distribute training contributions received by the council under this subdivision, less the expenses of the Department of Indust rial Relations for administering this subdivision, by making grants to approved apprenticeship programs for the purpose of training apprentices. The grant funds shall be distributed as follows:
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(i) If there is an approved multiemployer apprenticeship program serving the same craft or trade and geographic area for which the training contributions were made to the council, a grant to that program shall be made.
(ii) If there are two or more approved multiemployer apprenticeship programs serving the same craft or trade and county for which the training contributions were made to the council, the grant shall be divided among those programs based on the number of apprentices from that county registered in each program. (iii) All training contributions not distributed under clauses (i) and (ii) shall be used to defray the future expenses of the Department of Industrial Relations for the administration and enforcement of apprenticeship and preapprenticeship standards and requirements under this code. (B) An apprenticeship program shall only be eligible to receive grant funds pursuant to this subdivision if the apprenticeship program agrees, prior to the receipt of any grant funds, to keep adequate records that document the expenditure of grant funds and to make all records available to the Department of Industrial Relations so that the Department of Industrial Relations is able to verify that grant funds were used s olely for training apprentices. For purposes of this subparagraph, adequate records incl ude, but are not limited to, invoices, receipts, and canceled checks that account for the expenditure of grant funds. This subparagraph shall not be deemed to require an apprenticeship program to provide the Department of Industrial Relations with more documentation than is necessary to verify the appropriate expenditure of grant funds made pursuant to this subdivision.
(C) The Department of Industrial Relations shall verify that grants made pursuant to this subdivision are used solely to fund training apprentices. If an apprenticeship program is unable to demonstrate how grant funds are expended or if an apprenticeship program is found to be using grant funds for purposes other than training apprentices, then the apprenticeship program shall not be eligible to recei ve any future grant pursuant to this subdivision and the Department of Industrial Relations may initiate th e process to rescind the registration of the apprenticeship program.
(3) All training contributions received pursuant to this subdivision shall be deposited in the Apprenticeship Training Contribution Fund, which is hereby created in the State Treasury. Upon appropriation by the Legislature, all moneys in the Apprenticeship Training Contribution Fund shall be used for the purpose of carrying out this subdivision and to pay the expenses of the Department of Industrial Relations. (n) The body awarding the contract shall cause to be inserted in the contract stipulations to effectuate this section. The stipulations shall fix the responsibility of compliance with this section for all apprenticeable occupations with the prime contractor.
(o) This section does not apply to contracts of general contractors or to contracts of specialty contractors not bidding for work through a general or prime contractor when the contracts of general contractors or those specialty contractors involve less than thirty thousand dollars ($30,000). (p) An awarding body that implements an approved labor compliance program in accordance with subdivision (b) of Section 1771.5 may, with the approval of the director, assist in the enforcement of this section under the terms and conditions prescribed by the director.

Section 1813. Forfeiture for violations; contract stipulation; report of violations

The contractor or subcontractor shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded, forfeit twenty- five dollars ($25) for each worker employed in the execution of 182

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the contract by the respective contractor or subcontractor for each calendar day during which the worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of this article. In awarding any contract for public work, the awarding body shall cause to be inserted in the contract a stipulation to this effect. The awarding body shall take cognizance of all violations of this article committed in the course of the executi on of the contract, and shall report them to the Division of Labor Standards Enforcement.

Section 1815. Overtime

Notwithstanding the provisions of Sections 1810 to 1814, inclusive, of this code, and notwithstanding any stipulation inserted in any contract pursuant to the requirements of said sections, work performed by employees of contractors in excess of 8 hours per day, and 40 hours during any one week, shall be permitted upon public work upon compensation for all hours worked in excess of 8 h ours per day at not less than 1 ½ times the basic rate of pay.
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ATTACHMENT NO. 2

CALIFORNIA PUBLIC CONTRACT CODE SECTION 9204

Section 9204. Legislative findings and declarations regarding timely and complete payment of contractors for public works projects; claims process (Eff: January 1, 2017)

(a) The Legislature finds and declares that it is in the best interests of the state and its citizens to ensure that all construction business performed on a public works project in the state that is complete and not in dispute is paid in full and in a timely manner.
(b) Notwithstanding any other law, including, but not limited to, Article 7.1 (commencing with Section 10240) of Chapter 1 of Part 2, Chapter 10 (commencing with Section 19100) of Part 2, and Article 1.5 (commencing with Section 20104) of Chapter 1 of Part 3, this section shall apply to any claim by a contractor in connection with a public works project.
(c) For purposes of this section:
(1) “Claim” means a separate demand by a contractor sent by registered mail or certified mail with return receipt requested, for one or more of the following:
(A) A time extension, including, without limitation, for relief from damages or penalties for delay assessed by a public entity under a contract for a public works project. (B) Payment by the public entity of money or damages arising from work done by, or on behalf of, the contractor pursuant to the contract for a public works project and payment for which is not otherwise expressly provided or to which the claimant is not otherwise entitled. (C) Payment of an amount that is disputed by the public entity. (2) “Contractor” means any type of contractor within the meaning of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code who has entered into a direct contract with a public entity for a public works project.
(3)(A) “Public entity” means, without limitation, except as provided in subparagraph (B), a state agency, department, office, division, bureau, board, or commission, the California State University, the University of California, a city, including a charter city, county, including a charter county, city and county, including a charter city and county, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and f ormed to carry out the purposes of the public agency.
(B) “Public entity” shall not include the following:
(i) The Department of Water Resources as to any project under the jurisdiction of that department. (ii) The Department of Transportation as to any project under the jurisdiction of that department. (iii) The Department of Parks and Recreation as to any project under the jurisdiction of that department. (iv) The Department of Corrections and Rehabilitation with respect to any project under its jurisdiction pursuant to Chapter 11 (commencing with Section 7000) of Title 7 of Part 3 of the Penal Code. 184

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(v) The Military Department as to any project under the jurisdiction of that department. (vi) The Department of General Services as to all other projects. (vii) The High-Speed Rail Authority.
(4) “Public works project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (5) “Subcontractor” means any type of contractor within the meaning of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code who either is in direct contract with a contractor or is a lower tier subcontractor.
(d)(1)(A) Upon receipt of a claim pursuant to this section, the public entity to which the claim applies shall conduct a reasonable review of the claim and, within a period not to exceed 45 days, shall provide the claimant a written statement identifying w hat portion of the claim is disputed and what portion is undisputed. Upon receipt of a claim, a public entity and a contractor may, by mutual agreement, extend the time period provided in this subdivision.
(B) The claimant shall furnish reasonable documentation to support the claim. (C) If the public entity needs approval from its governing body to provide the claimant a written statement identifying the disputed portion and the undisputed portion of the claim, and the governing body does not meet within the 45 days or within the mutu ally agreed to extension of time following receipt of a claim sent by registered mail or certified mail, return receipt requested, the public entity shall have up to three days following the next duly publicly noticed meeting of the governing body after the 45-day period, or extension, expires to provide the claimant a written statement identifying the disputed portion and the undisputed portion. (D) Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the public entity issues its written statement. If the public entity fails to issue a written statement, paragraph (3) shall apply.
(2)(A) If the claimant disputes the public entity’s written response, or if the public entity fails to respond to a claim issued pursuant to this section within the time prescribed, the claimant may demand in writing an informal conference to meet and conf er for settlement of the issues in dispute. Upon receipt of a demand in writing sent by registered mail or certified mail, return receipt requested, the public entity shall schedule a meet and confer conference within 30 days for settlement of the dispute. (B) Within 10 business days following the conclusion of the meet and confer conference, if the claim or any portion of the claim remains in dispute, the public entity shall provide the claimant a written statement identifying the portion of the claim that remains in dispute and the portion that is undisputed. Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the public entity issues its written statement. Any disputed portion of the claim, as identified by the contractor in writing, shall be submitted to nonbinding mediation, with the public entity and the claimant sharing the associated costs equally. The public entity and claimant shall mutually agree to a mediator within 10 business days after the disputed portion of the claim has been identified in writing. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate with regard to the disputed portion of the claim. Each party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the claim remaining in dispute shall be subject to applicable procedures outside this section. 185

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(C) For purposes of this section, mediation includes any nonbinding process, including, but not limited to, neutral evaluation or a dispute review board, in which an independent third party or board assists the parties in dispute resolution through negotiation or by issuance of an evaluation. Any mediation utilized shall conform to the timeframes in this section.
(D) Unless otherwise agreed to by the public entity and the contractor in writing, the mediation conducted pursuant to this section shall excuse any further obligation under Section 20104.4 to mediate after litigation has been commenced.
(E) This section does not preclude a public entity from requiring arbitration of disputes under private arbitration or the Public Works Contract Arbitration Program, if mediation under this section does not resolve the parties’ dispute.
(3) Failure by the public entity to respond to a claim from a contractor within the time periods described in this subdivision or to otherwise meet the time requirements of this section shall result in the claim being deemed rejected in its entirety. A claim that is denied by reason of the public entity’s failure to have responded to a claim, or its failure to otherwise meet the time requirements of this section, shall not constitute an adverse finding with regard to the merits of the claim or the responsibility or qualifications of the claimant. (4) Amounts not paid in a timely manner as required by this section shall bear interest at 7 percent per annum. (5) If a subcontractor or a lower tier subcontractor lacks legal standing to assert a claim against a public entity because privity of contract does not exist, the contractor may present to the public entity a claim on behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing, either on their own behalf or on behalf of a lower tier subcontractor, that the contractor present a claim for work which was performed by the subcontractor or by a lower tier subcontractor on behal f of the subcontractor. The subcontractor requesting that the claim be presented to the public entity shall furnish reasonable documentation to support the claim. Within 45 days of receipt of this written request, the contractor shall notify the subcontrac tor in writing as to whether the contractor presented the claim to the public entity and, if the original contractor did not present the claim, provide the subcontractor with a statement of the reasons for not having done so. (e) The text of this section or a summary of it shall be set forth in the plans or specifications for any public works project that may give rise to a claim under this section. (f) A waiver of the rights granted by this section is void and contrary to public policy, provided, however, that (1) upon receipt of a claim, the parties may mutually agree to waive, in writing, mediation and proceed directly to the commencement of a civi l action or binding arbitration, as applicable; and (2) a public entity may prescribe reasonable change order, claim, and dispute resolution procedures and requirements in addition to the provisions of this section, so long as the contractual provisions do not conflict with or otherwise impair the timeframes and procedures set forth in this section. (g) This section applies to contracts entered into on or after January 1, 2017. (h) Nothing in this section shall impose liability upon a public entity that makes loans or grants available through a competitive application process, for the failure of an awardee to meet its contractual obligations. (i) This section shall remain in effect only until January 1, 2027, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2027, deletes or extends that date. 186
Milliken Services, LLC
Customer Proposal
OMNIA PARTNERS Contract - 2020002150
DIR Number:

Proposal Date: MQ Number:

Project Name: Milliken Sales Rep:

City, State, Zip: Primary Phone:

Project Number: Email:

Seller (company): Project Manager:

Address: Primary Phone:

City, State, Zip: Email:

Customer (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Bill To (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Item Qty
Unit of
Measure Unit Price Total
190.164 SY 33.18$ 6,309.64$

2.000 4-gal. pail 147.22$ 294.44$

177.000 SY 12.00$ 2,124.00$
150.000 SY 5.00$ 750.00$

21.000 SY 42.00$ 882.00$

1,594.000 SF 0.60$ 956.40$

8.000 LNF 6.92$ 55.36$

177.000 SY 1.50$ 265.50$

381.000 LF 1.00$ 381.00$
448.000 LF 9.00$ 4,032.00$
190.164 SY 1.49$ 283.34$

1.000 Each 1,115.80$ 1,115.80$

1.000 Each 150.00$ 150.00$
TOTAL 17,599.48$
Disposal
Transition Strips
Metal Transition Strips - Furnish & Install
Carpet
Install Carpet (renovation) Sq. Yd.

Prices are subject to change based on price increases or modifications if they fall during this timeframe.

Material Handling/Staging
PW-LR-1000561459
If there is a change in materials or scope of work, a new proposal must be issued by Milliken Services, LLC.

Any revisions made to this proposal will invalidate the proposal.

Sales Tax
Other: Millwork Base 4.25" furnish & install
Profit and Overhead
Project Management Fee
Standard Carpet Tile Adhesive (order by pail)
Take Up/Remove Existing Carpet Sq. Yd.

CA Carpet Stewardship Assessment Carpet Tile
[email protected]
714 532 6474637 W Struck Ave
Orange CA 92867
City of Orange
Orange CA 92867
637 W Struck Ave
Furniture Move
Furniture Move (heavy moving) Sq. Yd.

Additional Labor
Material Disposal
Open Market
Other: Demo wall base & prep walls
This proposal is valid for 30 days from the "Proposal Date" posted at the top of this form. 1021000921
Nordic Stories Isograd Dark Dansk 50cm
Becca DobbsFire Station 3
201 W. Lukken Industrial Drive
Milliken Services, LLC

Kirk Wudzke
[email protected]
City of Orange
LaGrange, GA 30240
5/5/2026
714 532 6474
Kirk Wudzke
310 - 504 - 4635
[email protected]
Katie Buchanan
[email protected]
706 590 5763
187
Special Conditions:

Notes:

Seller's Representative
Signature: Date:

Printed Name: Title:

Customer's Representative
Signature: Date:

Printed Name: Title:
4) Site Conditions: Area must be enclosed, a minimum of 65 degrees, and HVAC running for 72 hours prior to install. Area must be clear of equipment and materials from other trades. Subfloor must be structurally sound and suitable for specified flooring.

Scheduling delays and site unprepared may result in additional costs. 2) Pricing for installation is subject to change based upon flooring conditions and preparation requirements. Refer to Special Conditions above (if applicable) for more information.
8) Material prices include freight. Rates do not include special freight services unless specified in quote above. 6) Taxes will be applied unless appropriate tax exempt documentation is received by the customer prior to invoicing. 5/5/2026
Sign and return one copy of this agreement before any work begins. Keep one copy for your records. 1) This quotation is based on preliminary drawings. If actual yardage requirements are different, the price may change. 7) Materials are billed separate from installation, subject to POD at ship-to.

Milliken's contracted terms and conditions with Sourcewell.

All orders placed under Milliken's Sourcewell Contract are subject to 3) Unless stated otherwise in proposal, the following exclusions apply: Major floor prep and leveling; Hoisting; Handling electronic equipment (including but not limited to computers, telephones, and personal belongings); Permits, Payment and performance bonds; Floor and equipment protection; Long-term storage of materials; and asbestos identification, testing, and abatement. If materials are suspected to contain asbestos during work, all work will immediately stop and it is the sole responsibility of the customer to conduct testing and abatement.

Katie Buchanan
706 590 5763
Katie Buchanan
[email protected]
and a tax exempt certificate should be emailed to:

Signed proposal, a copy of your purchase order,
201 Lukken Industrial Drive, West
LaGrange, Georgia 30240
If mailing, please send to:

Milliken Services, LLC
5) Installation schedule to be agreed upon by the customer and Milliken. Disruptions or unplanned changes in owner's schedule may result in additional costs.

Project ManagerKatie Buchanan
9) Pricing is based on PREVAILING WAGE labor rates.

ALL PURCHASE ORDERS MUST BE MADE OUT TO: Milliken Services, LLC 188
Milliken Services, LLC
Customer Proposal
OMNIA PARTNERS Contract - 2020002150
DIR Number:

Proposal Date: MQ Number:

Project Name: Milliken Sales Rep:

City, State, Zip: Primary Phone:

Project Number: Email:

Seller (company): Project Manager:

Address: Primary Phone:

City, State, Zip: Email:

Customer (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Bill To (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Item Qty
Unit of
Measure Unit Price Total
195.247 SY 33.18$ 6,478.30$

2.000 4-gal. pail 147.22$ 294.44$

185.000 SY 12.00$ 2,220.00$
165.000 SY 5.00$ 825.00$

35.000 SY 8.65$ 302.75$

1,661.000 SF 0.60$ 996.60$

16.000 LNF 6.92$ 110.72$

165.000 SY 1.50$ 247.50$

165.000 SY 3.00$ 495.00$

358.000 LF 1.00$ 358.00$
384.000 LF 8.00$ 3,072.00$
195.247 SY 1.49$ 290.92$

1.000 Each 1,070.61$ 1,070.61$
TOTAL 16,761.84$
Disposal
Transition Strips
Metal Transition Strips - Furnish & Install
Carpet
Install Carpet (renovation) Sq. Yd.

Prices are subject to change based on price increases or modifications if they fall during this timeframe.

Material Handling/Staging
PW-LR-1000561459
If there is a change in materials or scope of work, a new proposal must be issued by Milliken Services, LLC.

Any revisions made to this proposal will invalidate the proposal.

Sales Tax
Other: Millwork Base 4.25" furnish & install
Profit and Overhead
Standard Carpet Tile Adhesive (order by pail)
Take Up/Remove Existing Carpet Sq. Yd.

CA Carpet Stewardship Assessment Carpet Tile
Milliken N/XT Material Preparation - Carpet
Milliken N/XT Life Solution
[email protected]
714 532 6474637 W Struck Ave
Orange CA 92867
City of Orange
Orange CA 92867
637 W Struck Ave
Furniture Move
Furniture Move (light moving) Sq. Yd.

Additional Labor
Material Disposal
Open Market
Other: Demo wall base & prep walls
This proposal is valid for 30 days from the "Proposal Date" posted at the top of this form. 1021000921
Nordic Stories Isograd Dark Dansk 50cm
Becca DobbsFire Station 7
201 W. Lukken Industrial Drive
Milliken Services, LLC

Notes:

Seller's Representative
Signature: Date:

Printed Name: Title:

Customer's Representative
Signature: Date:

Milliken's contracted terms and conditions with Sourcewell.

Katie Buchanan
706 590 5763
Katie Buchanan
[email protected]
and a tax exempt certificate should be emailed to:

Signed proposal, a copy of your purchase order,
201 Lukken Industrial Drive, West
LaGrange, Georgia 30240
If mailing, please send to:

Milliken Services, LLC
5) Installation schedule to be agreed upon by the customer and Milliken. Disruptions or unplanned changes in owner's schedule may result in additional costs.

Project ManagerKatie Buchanan
9) Pricing is based on PREVAILING WAGE labor rates.

ALL PURCHASE ORDERS MUST BE MADE OUT TO: Milliken Services, LLC 190
Milliken Services, LLC
Customer Proposal
OMNIA PARTNERS Contract - 2020002150
DIR Number:

Proposal Date: MQ Number:

Project Name: Milliken Sales Rep:

City, State, Zip: Primary Phone:

Project Number: Email:

Seller (company): Project Manager:

Address: Primary Phone:

City, State, Zip: Email:

Customer (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Bill To (company): Contact Person:

Address: Primary Phone:

City, State, Zip: Email:

Item Qty
Unit of
Measure Unit Price Total
322.322 SY 33.18$ 10,694.64$
896.140 SF 5.26$ 4,713.70$

3.000 4-gal. pail 147.22$ 441.66$

1.000 4-gal. pail 150.58$ 150.58$

1.000 1-gal. pail 44.49$ 44.49$

301.000 SY 12.00$ 3,612.00$
278.000 SY 5.00$ 1,390.00$

846.000 SF 4.50$ 3,807.00$
806.000 SF 2.50$ 2,015.00$

806.000 SF 1.73$ 1,394.38$

368.000 SY 12.00$ 4,416.00$

3,556.000 SF 0.60$ 2,133.60$

240.000 LNF 4.00$ 960.00$

24.000 LNF 6.92$ 166.08$

368.000 SY 1.50$ 552.00$

278.000 SY 2.50$ 695.00$

20.000 Each 30.00$ 600.00$
384.000 LF 9.00$ 3,456.00$
720.000 LF 4.00$ 2,880.00$
322.322 SY 1.49$ 480.26$

1.000 Each 3,067.31$ 3,067.31$

1.000 Each 500.00$ 500.00$
TOTAL 48,169.70$
1021000921
Fortified Foundations 5.0 Shenandoah Moose 9x60
Nordic Stories Isograd Dark Dansk 50cm
Becca DobbsFire Station 8
201 W. Lukken Industrial Drive
Milliken Services, LLC

Kirk Wudzke
[email protected]
City of Orange
LaGrange, GA 30240
5/5/2026
714 532 6474
Kirk Wudzke
310 - 504 - 4635
[email protected]
Katie Buchanan
[email protected]
706 590 5763
City of Orange
Orange CA 92867
637 W Struck Ave
Furniture Move
Furniture Move (medium moving) Sq. Yd.

Additional Labor
Material Disposal
Open Market
Other: Ardex skim coat material for prep
[email protected]
714 532 6474637 W Struck Ave
Orange CA 92867
Take Up/Remove Existing Carpet Sq. Yd.

Other: 4' straight base furnish & install
CA Carpet Stewardship Assessment Carpet Tile
LVT/Resilient
Install LVT/Resilient Flooring
Remove LVT/Resilient Flooring
Floor Preparation Labor
Floor Preparation
Milliken N/XT Material Preparation - Carpet
Milliken N/XT Life Solution
PW-LR-1000561459
Sales Tax
Other: Millwork Base 4.25" furnish & install
Profit and Overhead
Project Management Fee
Standard Carpet Tile Adhesive (order by pail)
Standard LVT TPS Adhesive
Standard LVT TPS Adhesive
Carpet
Install Carpet (renovation) Sq. Yd.

Material Handling/Staging
Disposal
Cove Base
4" Cove Base - Furnish & Install
Transition Strips
Vinyl Transition Strips - Furnish & Install
191
Special Conditions:

Notes:
5) Installation schedule to be agreed upon by the customer and Milliken. Disruptions or unplanned changes in owner's schedule may result in additional costs.

This proposal is valid for 30 days from the "Proposal Date" posted at the top of this form. 9) Pricing is based on PREVAILING WAGE labor rates.
8) Material prices include freight. Rates do not include special freight services unless specified in quote above. 6) Taxes will be applied unless appropriate tax exempt documentation is received by the customer prior to invoicing. 1) This quotation is based on preliminary drawings. If actual yardage requirements are different, the price may change. 7) Materials are billed separate from installation, subject to POD at ship-to.

Milliken's contracted terms and conditions with Sourcewell.

If there is a change in materials or scope of work, a new proposal must be issued by Milliken Services, LLC.

Any revisions made to this proposal will invalidate the proposal.

Prices are subject to change based on price increases or modifications if they fall during this timeframe. 192
Seller's Representative
Signature: Date:

Printed Name: Title:

Customer's Representative
Signature: Date:

Printed Name: Title:

ALL PURCHASE ORDERS MUST BE MADE OUT TO: Milliken Services, LLC Project ManagerKatie Buchanan
706 590 5763
Katie Buchanan
[email protected]
and a tax exempt certificate should be emailed to:

Signed proposal, a copy of your purchase order,
201 Lukken Industrial Drive, West
LaGrange, Georgia 30240
If mailing, please send to:

Milliken Services, LLC
5/5/2026
Sign and return one copy of this agreement before any work begins. Keep one copy for your records.

Katie Buchanan
193
Agenda Item
Orange City Council
Item #: 3.9. 6/9/2026 File #: 26-0349
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

1. SUBJECT
Second Reading and adoption of Ordinance No. 05-26 amending Chapter 5.100 of the Orange Municipal Code to eliminate certain restrictions on the retail sale of tobacco and tobacco products and provide clarification on the transferability of Tobacco Retailer Permits

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gutierrez, Gyllenhammer, Slater
NOES: None
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 05-26.

4. ATTACHMENTS
· Ordinance No. 05-26
City of Orange Printed on 6/4/2026Page 1 of 1
powered by Legistar™
194
Agenda Item
Orange City Council
Item #: 3.9. 6/9/2026 File #: 26-0349
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gutierrez, Gyllenhammer, Slater
NOES: None
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 05-26.

4. ATTACHMENTS
· Ordinance No. 05-26
City of Orange Printed on 6/4/2026Page 1 of 1
powered by Legistar™
195
ORDINANCE NO. 05-26

AN ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF ORANGE AMENDING CHAPTER

5.100 OF THE ORANGE MUNICIPAL CODE TO

ELIMINATE CERTAIN RESTRICTIONS ON THE

RETAIL SALE OF TOBACCO AND TOBACCO

PRODUCTS AND PROVIDE CLARIFICATION

ON THE TRANSFERABILITY OF TOBACCO

RETAILER PERMITS
WHEREAS, California Constitution, Article XI, Section 7, authorizes the City of Orange (“City”) to adopt and enforce local police, sanitary, and other ordinances and regulations that are not in conflict with general laws; and
WHEREAS, California Health & Safety Code section 101450 empowers the City Council to take measures necessary to preserve and protect public health, including adopting ordinances, regulations, and orders that are not in conflict with general laws; and WHEREAS, a local tobacco retailer and several tobacco retail advocates provided public comment at a recent City Council meeting regarding the adverse economic impacts of restricting the sale of tobacco products, including electronic smoking devices and related accessories, between the hours of 2:00 a.m. and 6:00 a.m., as well as the resulting impacts on other general merchandise sales, and requested clarification regarding the transferability of a valid Tobacco Retailer Permit to a new proprietor in connection with the sale of a business; and WHEREAS, the City Council finds and determines that removing certain restrictions and clarifying the transferability of a valid Tobacco Retailer Permit to a new proprietor in connection with the sale of a business will help mitigate adverse economic impacts on responsible local tobacco retailers while preserving the City’s regulatory authority and enforcement discretion.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I:

The subject Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) per State CEQA Guidelines (Guidelines) Sections 15060(c)(2) and 15060(c)(3) because the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment, and it is not a "project" as defined in Guideline 15378.

SECTION II:

Sections 5.100.040 of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Tobacco Retailer Permit Applications, is hereby amended to read as follows:
196
2 5.100.040 Tobacco Retailer Permit Applications
A. Permit Required. No person shall engage in tobacco retailing within the City without first obtaining and maintaining a valid tobacco retailer permit for each specific location.

B. Application Procedure.

1. Applications must be submitted on forms provided by the City and include a non- refundable annual fee as set by City Council resolution.

2. Each application shall include, at minimum, the following:
a. Full legal name, date of birth, government-issued identification number, mailing address, phone number, and email for each proprietor;
b. Business name, address, phone number, and hours of operation; c. Disclosure of any prior permit suspensions or revocations under this chapter, including dates and reasons;
d. Proof of a valid state tobacco retailer license from the California Department of Tax and Fee Administration;
e. Any other information deemed necessary by the City Manager for the administration or enforcement purposes;
f. A signed certification by each proprietor under penalty of perjury affirming the accuracy of the information provided and compliance with this chapter.

C. Authority to Adopt Administrative Regulations. The City Manager may adopt and implement additional administrative regulations, consistent with this chapter, to effectively enforce and administer local tobacco control measures. All regulations must be published in advance and filed with the City Clerk's office for public inspection.

D. Change of Information. Permittee shall notify the City in writing of any changes to submitted application information within 10 calendar days. A fee as set by City Council resolution may be imposed for processing such changes.

E. Permit Generally Nontransferable. A Tobacco Retailer Permit issued pursuant to this Chapter shall not automatically transfer or assign to any other person, proprietor, entity, or location except as expressly authorized by this Section. A Tobacco Retailer Permit is revocable regulatory privilege only and does not create a vested right, property interest, or entitlement.

F. Transfer Upon Change in Ownership. An existing Tobacco Retailer Permit may be transferred to a new owner or proprietor of the same business location upon approval by the City, provided that:
197
3 1. The proposed transferee submits a completed transfer application on a form approved by the City as contained in Subsection B prior to the transfer of ownership;

2. The transferee pays all applicable annual fees as established by resolution of the City Council;

3. The business location remains in compliance with all applicable federal, state, and local laws, including this Chapter;

4. No suspension, revocation, unpaid administrative fines, penalties, outstanding violations, or delinquent City obligations exist against the permit or business location at the time of transfer; and

5. The proposed transferee otherwise satisfies all requirements necessary to obtain a Tobacco Retailer Permit under this Chapter.

G. No Expansion of Existing Rights.

1. Approval of a permit transfer shall not authorize:
a. Expansion or intensification of the tobacco retail use; b. Relocation of the business to another site;
c. Modification of any conditions previously imposed upon the permit; or d. Any waiver of applicable buffer, density, zoning, land use, or operational requirements of this Chapter or other applicable law.

H. Arm’s-Length Transactions and Related Transfers.

A transfer application may be considered only where the business remains substantially the same operation at the same approved location and the transfer involves one or more of the following:

1. Sale of the business through a bona fide arm’s-length transaction;

2. Transfer between immediate family members; defined as spouse, domestic partner, parent, child, sibling, grandparent, grandchild or other person related by blood, marriage, or legal guardianship;

3. Transfer between business partners, related entities, corporations, limited liability companies, or successor entities;

4. Change in ownership structure where the business remains substantially the same operation at the same location; or
198
4 5. Internal restructuring, merger, conversion, or reorganization of the same operating business entity; or

6. Succession following the death or incapacity of the proprietor.

I. City Review Authority.

The City Manager, Community Development Director, or designee may approve, conditionally approve, or deny a transfer application if the proposed transfer does not comply with this Chapter or applicable law.

J. Effect of Unauthorized Transfer.

Any attempted transfer, assignment, or operation under a Tobacco Retailer Permit without City approval shall render the permit void and constitute a violation of this Chapter.

K. Continuation of Operations Pending Review.

A timely filed transfer application shall temporarily toll expiration of the existing Tobacco Retailer Permit during administrative review by the City unless the Tobacco Retailer Permit is suspended, revoked, or otherwise rendered invalid by operation of law.

L. Effect of Prior Violations at Location. Permit ineligibility due to prior violations at a location shall continue to apply unless:

1. The location has been transferred to new proprietor(s) in a bona fide Arm’s Length Transaction; and

2. The new proprietor submits clear and convincing evidence of such transfer to the City's satisfaction.

SECTION III:

Section 5.100.060.C of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers –Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.C. Prohibitions and Requirements – Prohibited Products and Activities The following items shall not be sold, distributed, displayed, furnished, administered, exchanged, given away, or possessed with the intent to sell or offered for sale by any tobacco retailer:

1. Drug paraphernalia;

2. Nitrous oxide or any device used to dispense it as defined by state law and the City Code;

3. Cannabis, cannabis products, cannabis accessories, or edible cannabis products as defined in state or federal law;
199
5 4. Controlled substances, including marijuana where applicable, as governed by California Health and Safety Code Sections 11351, 11352, 11359, 11360, 11366, 11378, and 11379 as may be amended from time to time.

5. Flavored tobacco products and tobacco product flavor enhancer, as prohibited under state or federal law;

6. (Reserved).

7. Imitation tobacco products, including, but not limited to, candy cigarettes and bubble gum cigars;

8. Edible tobacco look-alike products, including, but not limited to, snacks packaged or marketed to resemble tobacco products;

9. Disguised vape or electronic smoking devices, including, but not limited to, those made to look like USB drives, pens, markers, phone cases, watches, lipstick, remote keys or other non-tobacco items.

10. Unlawful weapon sales, including, but not limited to, violations of California Penal Code Sections 17235 (switchblade knives over two inches), 20410 (ballistic knives), 21810 (brass knuckles) as may be amended from time to time, and any other applicable local, state or federal laws.

SECTION IV:

Section 5.100.060.H of the Orange Municipal Code, Business Taxes and Regulations – Tobacco Retailers – Prohibitions and Requirements, is hereby amended to read as follows:

5.100.060.H Prohibitions and Requirements - Premises Regulations.

1. The business must maintain a clearly designated front entrance for customers. All non- emergency public access must occur through this entrance.

2. Front entrance doors must remain unlocked during regular business hours, unless temporarily secured for safety or emergency response.

3. (Reserved).

SECTION V:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, 200
6 irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION VI:

The City Clerk is hereby directed to certify the adoption of this Ordinance and cause the same to be published as required by law. This Ordinance shall take effect thirty (30) days from and after the date of its final passage.

ADOPTED this ____ day of ___________________, 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 26th day of May, 2026, and thereafter at the regular meeting of said City Council duly held on the ___ day of ____________, 2026 was duly passed and adopted by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
201
Agenda Item
Orange City Council
Item #: 3.10. 6/9/2026 File #: 26-0350
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

1. SUBJECT
Second Reading and adoption of Ordinance No. 06-26 approving Zone Change No. ZC25-0002 to change the zoning classification from Limited Business Tustin Redevelopment Project Area (C-TR) to Residential Multiple Family (R-3) on a 4.23-acre site located at 2375 N Tustin Street

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gyllenhammer, Slater
NOES: Gutierrez
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 06-26.

4. ATTACHMENTS
· Ordinance No. 06-26
City of Orange Printed on 6/4/2026Page 1 of 1
powered by Legistar™
202
Agenda Item
Orange City Council
Item #: 3.10. 6/9/2026 File #: 26-0350
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gyllenhammer, Slater
NOES: Gutierrez
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 06-26.

4. ATTACHMENTS
· Ordinance No. 06-26
City of Orange Printed on 6/4/2026Page 1 of 1
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203
ORDINANCE NO. 06-26

AN ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF ORANGE APPROVING ZONE
CHANGE NO. ZC25-0002 TO CHANGE THE

ZONING CLASSIFICATION FROM LIMITED

BUSINESS TUSTIN REDEVELOPMENT

PROJECT AREA (C-TR) TO RESIDENTIAL
MULTIPLE FAMILY (R-3) ON A 4.23-ACRE
SITE LOCATED AT 2375 N. TUSTIN STREET
ZONE CHANGE NO. ZC25-0002
APPLICANT: CHAD BROWN, MILIA
HOMES
WHEREAS, the City Council has authority per Orange Municipal Code (“OMC”) Section

17.10.020 and Government Code Section 65850 to adopt ordinances amending the City’s Zoning Ordinance and to approve Zone Changes; and
WHEREAS, the application for Zone Change No. ZC25-0002 was filed by Chad Brown, Melia Homes in accordance with the provisions of the OMC for a proposal to redevelop a vacant commercial site with 71, three-story single-family small lot homes, open space recreation area, guest parking, and related site improvements on a 4.23-acre site located at 2375 N. Tustin Street (“Project”); and
WHEREAS, the application for Zone Change No. ZC25-0002 was processed in the time and manner prescribed by state and local law; and
WHEREAS, applications for Mitigated Negative Declaration No. ENV25-0001, General Plan Amendment No. GPA25-0003, Tentative Tract Map No. TTM25-0001, Major Site Plan Review No. MJSP25-0002, and Administrative Design Review Design Review No. ADR25-0018 were filed concurrently with Zone Change No. ZC25-0002; and WHEREAS, the Planning Commission conducted a duly advertised public hearing on April 6, 2026, considered public comments, and recommended approval of the project by a 4-2 vote to the City Council, including Zone Change No. ZC25-0002; and WHEREAS, the City Council adopted Mitigated Negative Declaration No. ENV25-0001 and associated Mitigation Monitoring and Reporting Program, which was prepared to analyze potential environmental impacts of the Project, including Zone Change No. ZC25-0002 (“Zone Change”); and
WHEREAS, the City Council adopted Resolution No. 11685, adopting Mitigated Negative Declaration No. ENV25-0001, and approving General Plan Amendment No. GPA25- 0003, Tentative Tract Map No. TTM25-0001, Major Site Plan Review No. MJSP25-0002, and 204
2 Administrative Design Review No. ADR25-0018 for a proposal to redevelop a vacant commercial site with 71, three-story single-family small lot homes, open space recreation area, guest parking, and related site improvements on a 4.23-acre site located at 2375 N. Tustin Street (“Project”); and WHEREAS, the City Council conducted a duly advertised public hearing on May 26, 2026, at which time interested persons had an opportunity to testify either in support of or opposition to the project, including Zone Change No. ZC25-0002.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES ORDAIN AS FOLLOWS:

SECTION I:

The existing zoning is depicted on the map attached hereto as Exhibit “A” and incorporated herein by reference. Section 17.06.030 of the Orange Municipal Code is amended in order to change the zoning classification by amending the zoning on the site as depicted on the map attached hereto as Exhibit “B” and incorporated herein by reference.

SECTION II:

1. The proposed Zone Change from Limited Business Tustin Redevelopment Project Area (C-TR) to Residential Multiple Family (R-3) makes the project’s zoning consistent with the Medium Density Residential General Plan (MDR) land use designation established by the project’s General Plan Amendment No. GPA25-0003, as required by law (Government Code Section 65860).

2. Table LU-3 in the General Plan Land Use Element indicates that residential zoning districts, including the R-3 and R-4 zones are compatible with the MDR General Plan land use designation established by the project’s General Plan Amendment No. GPA25-0003.

3. The R-3 zoning and implementation of the Small Lot Subdivision Development Standards allows a small lot residential development use and physical development conditions that are generally compatible with the Residential Multiple Family (R-3(A)) zoning to the north and south and Limited Business Tustin Redevelopment Project Area (C-TR) zoning to the west which accommodates a mix of retail and service commercial uses, and professional offices. The zoning supports the pattern of residential development to the north and south of the site on Tustin Street.

4. The proposed Zone Change furthers the goals and Policy Actions of the General Plan Housing Element and the City’s work toward meeting its Regional Housing Needs Allocation by contributing to the market-rate housing inventory in the community.

SECTION III:

The proposed Zone Change described in Section I is related to the public welfare, is consistent with the accompanying Mitigated Negative Declaration No. EMV25-0001, General Plan Amendment No. GPA25-0003, Tentative Tract Map No. TTM25-0001, Major Site Plan 205
3 Review No. MJSP25-0002, and Administrative Design Review No. ADR25-0018 filed herewith, and furthers the objectives and policies of the General Plan as is more specifically set forth in Resolution No. 11685, which is incorporated by reference as though fully set forth herein.

The proposed Zone Change from Limited Business Tustin Redevelopment Project Area (C-TR) to Residential Multiple Family (R-3) would make the proposed zoning classification consistent with the proposed General Plan land use designation. The Project would meet the Small Lot Subdivision Development Standards for the R-3 zone.

SECTION IV:

Mitigated Negative Declaration (MND) No. ENV25-0001 was prepared to evaluate the physical environmental impacts of the zone change and associated development project, in conformance with the provisions of the California Environmental Quality Act (CEQA) per state CEQA guidelines Section 15070 and the local CEQA Guidelines. No land use impacts have been identified in the MND. The MND finds that the project will have less than significant impacts to the environment, with the implementation of Project Design Features, Plans, Programs, and Policies, relating to Aesthetics, Air Quality, Cultural Resources, Energy, Geology and Soils, Greenhouse Gas Emissions, Hydrology and Water Quality, Noise, and Tribal Cultural Resources, and Mitigation Measures relating to Biological Resources, Noise, and Tribal Cultural Resources.

SECTION V:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION VI:

ADOPTED this day of , 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:
206
4 Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange
Attachments: Exhibits A & B

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 26th day of May, 2026, and thereafter at the regular meeting of said City Council duly held on the ____ day of ________________, 2026 and was duly passed and adopted by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
207

EXHIBIT A
Existing Zoning Map
208

EXHIBIT B
Proposed Zoning Map
209
Agenda Item
Orange City Council
Item #: 3.11. 6/9/2026 File #: 26-0351
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

1. SUBJECT
Second Reading and adoption of Ordinance No. 07-26 amending Title 17 of the Orange Municipal Code to comply with State law regarding Residential Care Facilities (Health and Safety Code Sections 1267.16 and 1500-1569.889)

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gutierrez, Gyllenhammer, Slater
NOES: None
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 07-26.

4. ATTACHMENTS
· Ordinance No. 07-26
City of Orange Printed on 6/4/2026Page 1 of 1
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210
Agenda Item
Orange City Council
Item #: 3.11. 6/9/2026 File #: 26-0351
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Pamela Coleman, City Clerk/City Clerk Services Director

2. SUMMARY
The Introduction and First Reading of the above-entitled Ordinance was approved at a Regular Council Meeting on May 26, 2026.

The Ordinance is now presented for Second Reading by title only, and adoption.

Vote at First Reading: AYES: Bilodeau, Barrios, Dumitru, Tavoularis, Gutierrez, Gyllenhammer, Slater
NOES: None
ABSENT: None

3. RECOMMENDED ACTION
Adopt Ordinance No. 07-26.

4. ATTACHMENTS
· Ordinance No. 07-26
City of Orange Printed on 6/4/2026Page 1 of 1
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211
ORDINANCE NO. 07-26

AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF ORANGE AMENDING TITLE 17 OF THE

ORANGE MUNICIPAL CODE TO COMPLY WITH

STATE LAW REGARDING RESIDENTIAL CARE

FACILITIES (HEALTH AND SAFETY CODE
SECTIONS 1267.16 AND 1500-1569.889)
WHEREAS, the City of Orange 2021-2029 Housing Element was adopted by City Council on October 20, 2023, and the California State Department of Housing and Community Development found the Housing Element in substantial compliance with State Housing Element Law on January 2, 2024; and
WHEREAS, the 2021-2029 Housing Element, Housing Plan Program 4F, states “The City will amend the Orange Municipal Code to be compliant with State law regarding residential care facilities serving seven (7) or more persons in all residential zones, as well as ensure barrier-free housing choices for persons with disabilities.” (Sections 1267.8, 1566.3, 1568.0831 of the California Health and Safety Code); and
WHEREAS, Health and Safety Code Sections 1267.16, 1566.3, 1568.0831 require local governments to treat licensed group homes and residential care facilities with six or fewer residents no differently than other by-right single-family housing uses, and that Local agencies must allow these licensed, residential-care facilities in any area zoned for residential use, and may not require licensed, residential-care facilities for six residents or less to obtain conditional use permits or variances that are not required of other family dwellings; and WHEREAS, the Health and Safety Code provides that Residential Care Facilities operating as single-family residences that provide licensable services to more than six residents may be subject to conditional use or other discretionary approval processes; and WHEREAS, the Health and Safety Code states that for the purpose of all local ordinances, a residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling; and
WHEREAS, the Health and Safety Code provides regulations for family day care home facilities for both small and large, and has updated operation regulations; and WHEREAS, the City of Orange seeks to comply with these statutory provisions by amending the Orange Municipal Code (OMC) to appropriately classify and allow residential care facilities in applicable zoning districts and update family day care facilities consistent with state law; and
212
2 WHEREAS, the Planning Commission having considered the proposed revisions to the OMC at a public hearing held on February 19, 2026, including review of the staff report, and having received public testimony on the item, and adopted Planning Commission Resolution No. 06-26 recommending that the City Council approve the proposed amendments to Title 17, Chapter

17.13 of the Orange Municipal Code; and
WHEREAS, the City Council, having now considered the proposed changes to the OMC at a public hearing held on May 26, 2026, including review of the staff report, and having received public testimony on the item, desires to adopt the Proposed Ordinance.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ORANGE DOES ORDAIN AS FOLLOWS:

SECTION I:

The recitals stated above are true and correct, incorporated herein, and with the public record, form the basis for this Ordinance.

SECTION II:

Section 17.04.022 of the Orange Municipal Code, “Zoning – Definitions – “C” Definitions,” is hereby amended to delete the following definitions:
“Community Care Facility” means any facility, place or building where non-medical care and supervision are provided for seven or more persons (does not include the licensee or members of the licensee's family or persons employed as facility staff). “Convalescent facility” means a use providing bed care and in-patient services for persons requiring regular medical attention, and persons aged or infirm unable to care for themselves, excluding surgical or emergency medical services.
“Convalescent hospital” means a facility providing long-term nursing, dietary and other medical services to convalescents or invalids but not providing surgery or primary treatments such as are customarily provided in a hospital. A convalescent hospital must be licensed by the State as such.

SECTION III:

Section 17.04.023 of the Orange Municipal Code, “Zoning – Definitions – “D” Definitions,” is hereby amended to revise the following definition:
“Day care center” means any facility which provides non-medical care for an individual on less than a 24 hour basis including child day care centers. Day care centers are separate and distinct from Family day care homes, see definition of Family day care homes, small and large. 213
3 Section 17.04.023 of the Orange Municipal Code, “Zoning – Definitions – “D” Definitions,” is hereby amended to delete the following definition:
“Day nurseries” means a facility where children are temporarily cared for in their parents' absence when and if there is provided on the lot or adjacent to the premises a play lot completely fenced, and containing an area of not less than 900 square feet, plus an additional 50 square feet for each child in excess of nine children and subject to all safety precautions as required by the Fire Department and Building Division.

SECTION IV:

Section 17.04.025 of the Orange Municipal Code, “Zoning – Definitions – “F” Definitions,” is hereby amended to revise the following definitions as follows:
“Family” means one or more persons living together as a single housekeeping unit in a dwelling unit. This includes, but is not limited to, licensed residential care facilities serving six or fewer persons, as defined by state law. The term “family” shall not be limited by the presence of non-related individuals or the existence of a legal guardianship or other legal relationship. “Family day care homes, large” means a single-family dwelling with the accessory daytime care of nine to 14 children. Pursuant to California Health and Safety Code §1597.40–1597.46 must be considered a residential use of property provided they meet zoning requirements. “Family Day Care, Small” means a single-family dwelling with the accessory daycare of up to eight children. Pursuant to California Health and Safety Code §1597.40–1597.46 must be considered a residential use of property and is permitted by right.

SECTION V:

Section 17.04.026 of the Orange Municipal Code, “Zoning – Definitions – “G” Definitions,” is hereby amended to revise the following definition as follows:
“Group home” means a residential facility that provides 24-hour care and supervision to children, delivered at least in part by staff employed by the licensee in a structured environment.

The care and supervision provided by a group home shall be nonmedical, except as otherwise permitted by law.

SECTION VI:

Section 17.04.033 of the Orange Municipal Code, “Zoning – Definitions – “N” Definitions,” is hereby amended to delete the following definition as follows:
“Nursing home” means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves. (Ord. 20-82; Ord. 12-95) 214
4 SECTION VII:

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to revise the following definition as follows:
“Residential Care Facility” means any family home, group care facility, or similar facility determined by the department, for 24-hour nonmedical care of persons in need of personal services, supervision, or assistance essential for sustaining the activities of daily living or for the protection of the individual.

Section 17.04.037 of the Orange Municipal Code, “Zoning – Definitions – “R” Definitions,” is hereby amended to delete the following definition as follows:
“Rest home” means an extended or intermediate care facility licensed or approved to provide full-time convalescent or chronic care to individuals who, by reason of advanced age, chronic illness or infirmity, are unable to care for themselves.

SECTION VIII:

Section 17.04.038 of the Orange Municipal Code, “Zoning – Definitions – “S” Definitions,” is hereby amended to add the following definition as follows:
“Skilled Nursing Facility” means a healthcare facility that provides 24-hour skilled nursing care and related services for individuals who require medical or nursing care, or rehabilitation services. These facilities are designed to help patients recover after a hospital stay for an illness or injury, or to provide ongoing care for those with chronic illnesses or disabilities.

Section 17.04.038 of the Orange Municipal Code, “Zoning – Definitions – “S” Definitions,” is hereby amended to delete the following definitions as follows:
“Sanitarium, health” means an institution where patients, other than the mentally disoriented or mentally incompetent, are housed and where medical or post-surgical treatment is provided.
“Sanitarium, mental” means an institution for the recuperation and treatment of the mentally disordered, mentally incompetent or victims of drug addiction.

SECTION IX:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to revise the following as follows:

NN. Large-Family Day Care Homes. Large-family day care homes are subject to the following:
215
5 1. The business shall be operated in a single-family residence on property residentially zoned.

2. The City noise ordinance in Chapter 8.24 shall be complied with at all times.

3. Two enclosed parking spaces shall be maintained for parking purposes only.

4. The facility shall be licensed by the State Department of Social Services.

5. The facility shall comply with State Fire Marshal standards for large-family day care facilities.

6. No signs advertising the business shall be allowed.

7. Compliance with all development standards for single-family residential structures is required.

8. A site plan identifying pedestrian access to and from loading area shall be submitted.

SECTION X:

Title 17, Section 17.13.040 of the Orange Municipal Code is hereby amended to add the following:

KKK. Reserved for Future Section.

LLL. Residential Care Facilities. Residential Care Facilities may occur in residential zones as specified in Table 17.13.030 pursuant to the following:

1. Purpose. The purpose of this section is to bring the Orange Municipal Code into compliance with the California Community Care Facilities Act (Health and Safety Code Sections 1500-1569.889) by clarifying the regulation of Residential Care Facilities. In the event of any inconsistency or conflict between the provisions of this code and state law, the provisions of state law shall prevail and be controlling.

2. Residential Care Facilities that do not provided licensable services. Group homes that operate as single-family residences and that do not provide licensable services shall be considered a residential use of property by a single family.

3. Residential Care Facilities for Six or Fewer Persons. In accordance with Health and Safety Code Section 1566.3 and 1568.0831, a Residential Care Facility that provides licensable services to six or fewer persons shall be considered a residential use of property by a single family. Such housing shall be permitted in all zones that allow residential uses, subject to the same standards and restrictions applicable to other residential dwellings of the same type in the same zone. In addition:
216
6 a. The residents and operators of the facility shall be considered a family for the purposes of any law or zoning ordinance that relates to the residential use of property pursuant to this chapter.
b. A residential care facility that serves six or fewer persons shall not be included within the definition of a boarding house, rooming house, institution, guest home, rest home, community residence, or other similar term that implies that the residential care facility is a business run for profit or differs in any other way from a family dwelling.

4. Residential Care Facilities for Seven or More Persons. A Residential Care Facility that provides licensable services to seven or more persons shall require approval of a conditional use permit, and shall be subject to the applicable zoning, permitting, and conditional use requirements of the underlying zone, consistent with all local and state housing laws.

5. Heath and Safety Requirements. All Residential Care facilities, licensed and un- licensed must comply with applicable code requirements including but not limited to, building code, health and safety code, and fire code.

SECTION XI:

Title 17, Section 17.13.050 of the Orange Municipal Code is hereby amended to delete W.

Family Day Care Home – Large (Seven to 12 Children), and is replaced as follows:

W. Reserved for Future Section.

SECTION XII:

Table 17.13.030, of the Orange Municipal Code, “Zoning – Master Land Use Table – Care Facility,” is hereby amended to be revised to the following:
217
7 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5
R1-6 to
R-15
R1-20 to
R-140 &
R1-R
R2-6 to
R2-8
R-3
R-4
MH
OP
CP/C1
CTR
C2
C3
CR
OTMU-15S
OTMU-15
OTMU-24
NMU-24
UMU
M1
M2
A1
RO
SH
PI
FP-1
FP-2
SG
Care facility—Includes uses that provide for non-24-hour care of children, elderly, or developmentally disabled persons.

Day Care
Center
(incudes
child,
elderly, or
disabled
- - - - - - - C P
*
P
*
P
*
P
*
- C C C C C - - - - - - - - -
Day Care
Center in
conjunction
with a
church or
school or
other similar
institutional
use

C C C C C C C C C C C C - C C C C C C C C - - C - - - 218
8 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5
R1-6 to
R-15
R1-20 to
R-140 &
R1-R
R2-6 to
R2-8
R-3
R-4
MH
OP
CP/C1
CTR
C2
C3
CR
OTMU-15S
OTMU-15
OTMU-24
NMU-24
UMU
M1
M2
A1
RO
SH
PI
FP-1
FP-2
SG
Family Day
Care homes,
small (up to
eight
children)

P P P P P P P P P P
Family Day
Care homes,
large (9-14
children)
P
*
P* P* P* P
*
P
*
P
*
P
*
P* P
*
Housing—Includes all structures permitted as living quarters whether they be for short or long-term occupancy. Includes all uses identified in California Building Code definitions that are preceded with main entry words (key terms) that include one of the following: Dwelling, unit, house, housing, congregate, residence, multi-family, dormitory, home(s), hotel, motel, residential care facility, residential facility, or lodging.

Residential
Care
Facility
(all
unlicensed
facilities, or
P
*
P* P* P* P* P* P* - - - - - - P* P* P* P* P* - - - - - - - - - 219
9 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5
R1-6 to
R-15
R1-20 to
R-140 &
R1-R
R2-6 to
R2-8
R-3
R-4
MH
OP
CP/C1
CTR
C2
C3
CR
OTMU-15S
OTMU-15
OTMU-24
NMU-24
UMU
M1
M2
A1
RO
SH
PI
FP-1
FP-2
SG
licensed
care facility
for 6 or
fewer
persons
Residential
Care
Facility
(licensed
care facility
for 7 or
more
persons

C C C C C C C - - - - - - C C C C C - - - - - - - - -
Congregate
care
(assisted
living)
home health
facility (6 or
fewer
persons)
P
*
P* P* P* P* P* P* - - - - - - - - - P P - - - - - - - - - 220
10 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5
R1-6 to
R-15
R1-20 to
R-140 &
R1-R
R2-6 to
R2-8
R-3
R-4
MH
OP
CP/C1
CTR
C2
C3
CR
OTMU-15S
OTMU-15
OTMU-24
NMU-24
UMU
M1
M2
A1
RO
SH
PI
FP-1
FP-2
SG
Convalesce
nt
Facility,
skilled
nursing
facility
- - - - - - - - - - - - - - - - P P - - - - - - - - -
Convalesce
nt Hospital
- - - - C C - C C C C C - - - - - - - - - - - - - - -
Home for
elderly, or
mentally,
or
physically
disabled
persons
(6 or fewer
persons
P
*
P* P* P* P* P* P* - - - - - - - - - - - - - - - - - - - - 221
11 ZONING RESIDENTIAL COMMERCIAL MIXED USE INDUS
TRIAL

AGRICULTU
RAL
OPEN
SPACE
P
I
OVERL
AY
SAN
D &
GRA
VEL

LAND USE
R1-5
R1-6 to
R-15
R1-20 to
R-140 &
R1-R
R2-6 to
R2-8
R-3
R-4
MH
OP
CP/C1
CTR
C2
C3
CR
OTMU-15S
OTMU-15
OTMU-24
NMU-24
UMU
M1
M2
A1
RO
SH
PI
FP-1
FP-2
SG
Residential
Structure
- - - - - - - - - - - - - - - - - - - - - - - - - C -
Rest Home
Skilled
Nursing
Facility
- - - C C C C C C C - - - - - - - - - - - - - - -
Sanitarium - - - - C C - - - - - - - - - - - - - - C - - - - - - 222
12 SECTION XIII:

Table 17.34.060.A of the Orange Municipal Code, “Zoning – Off-Street Parking and Loading – Required Number of Parking Spaces for Residential Uses,” is hereby amended to read as follows:

Table 17.34.060.A

REQUIRED NUMBER OF PARKING SPACES FOR RESIDENTIAL USES

USE REQUIRED NUMBER OF SPACES
Skilled
nursing
facility
1 space per 4 beds.

Residential
Care Facility
(all
unlicensed
facilities, or
licensed care
facility for 6
or fewer
persons
Residential Care Facilities (all unlicensed facilities, or licensed care facility for 6 or fewer persons) are treated as a residential use as required by state law, and are to be parked at the same parking requirements as a single-family home.

Residential
Care Facility
(7 or more)
1 space per 3 beds or approval of a Conditional Use Permit for an alternate rate based on a Parking Demand Study. An Overflow Parking Plan may be required as part of a conditional use permit.

Independent
living
facility
1 enclosed or covered space per unit, plus 1 space per 10 units for guests.

SECTION XIV:

This ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption), because it can be seen with certainty that there is no possibility that the ordinance may have a significant effect on the environment. The proposed amendments do not significantly increase the potential (in manner or degree) for future development, beyond what is currently permitted by the City of Orange Zoning Code. Therefore, the project would not result in a direct or reasonably foreseeable indirect physical change in the environment.

SECTION XV:

If any section, subdivision, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, 223
13 irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.

SECTION XVI:

ADOPTED this day of , 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was introduced at the regular meeting of the City Council held on the 26th day of May, 2026, and thereafter at the regular meeting of said City Council duly held on the day of , 2026 was duly passed and adopted by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
224
Agenda Item
Orange City Council
Item #: 3.12. 6/9/2026 File #: 26-0277
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Adam Jevec, Chief of Police

1. SUBJECT
Authorize purchase of Police Department uniforms from Galls, LLC.

2. SUMMARY
Purchase of uniforms from Galls, LLC through Cooperative Purchasing Agreement, Master Agreement No. 106-499158, to support uniform needs during Fiscal Year 2026-2027

3. RECOMMENDED ACTION
Approve the purchase of Police Department uniforms from Galls, LLC for $130,000.

4. FISCAL IMPACT
The expense for this purchase is $130,000 and will be funded upon adoption of the proposed Fiscal Year 2026-2027 budget through General Fund (100):
100-4011-53102 Uniforms & Clothing

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

6. DISCUSSION AND BACKGROUND
Police personnel are required to wear uniforms to ensure clear identification as law enforcement officers and to promote public trust and accessibility during emergencies and daily operations. Newly hired officers and select staff are initially issued a collection of uniforms, while worn or damaged items are replaced annually or as needed.

In addition to standard uniforms, specialized units such as Special Weapons and Tactics (SWAT), Motor Officers, K9, and Bicycle Patrol require unit-specific attire to perform their duties safely and effectively.

The Orange Police Department currently procures uniforms and duty gear from Galls, LLC (Galls), a national supplier headquartered in Lexington, Kentucky. Galls maintains a retail location in close proximity to the department, reducing staff travel time for fittings and order pickups. Galls provides a broad range of uniform options, competitive pricing, online ordering, and alteration services.

The proposed purchase leverages a Cooperative Agreement between Galls and the City of Anaheim (Master Agreement No. 106-499158), which offers the most cost-effective pricing available to the City of Orange Printed on 6/4/2026Page 1 of 2
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Item #: 3.12. 6/9/2026 File #: 26-0277
City.

To ensure continuity of uniform supply, the Police Department requests authorization to purchase uniforms from Galls for a total amount of $130,000 for Fiscal Year 2026-2027.

7. ATTACHMENTS
· Galls Master Agreement No. 106-499158
City of Orange Printed on 6/4/2026Page 2 of 2
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226
Agenda Item
Orange City Council
Item #: 3.12. 6/9/2026 File #: 26-0277
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Adam Jevec, Chief of Police

1. SUBJECT
Authorize purchase of Police Department uniforms from Galls, LLC.

2. SUMMARY
Purchase of uniforms from Galls, LLC through Cooperative Purchasing Agreement, Master Agreement No. 106-499158, to support uniform needs during Fiscal Year 2026-2027

3. RECOMMENDED ACTION
Approve the purchase of Police Department uniforms from Galls, LLC for $130,000.

4. FISCAL IMPACT
The expense for this purchase is $130,000 and will be funded upon adoption of the proposed Fiscal Year 2026-2027 budget through General Fund (100):
100-4011-53102 Uniforms & Clothing

5. STRATEGIC PLAN GOALS
Goal 1: Maintain Strong Emergency and Safety Services

To ensure continuity of uniform supply, the Police Department requests authorization to purchase uniforms from Galls for a total amount of $130,000 for Fiscal Year 2026-2027.

7. ATTACHMENTS
· Galls Master Agreement No. 106-499158
City of Orange Printed on 6/4/2026Page 2 of 2
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-
•
·-. __ - .

I
.
• ' •
....
' ''

GALLS, LLC
2789 LONG BEACH BLVD.

LONG BEACH, CA 90806
Contact Name: MELISSA CASTRO
Master Agreement Purchase Order
200 S. Anaheim Blvd.

Purchasing, Suite 620
Anaheim, CA 92805-3820
Phone: 714-765-5110
Fax: 714-765-5288
MA #: 106-499158
Revision #: 1
Attachments: 10
Council Award: 9777; 5/7/24
Vendor ID Code#: VC0000108743
Master Agreement: 106-499158
Begin Date: 05/01/26
Expiration Date: 04/30/27
Supercedes MA: 106 - 498488
Renewal options: Yes

Page 1 ends

Phone: 562-305-6176 Total purchase Not to Exceed: $987,327.30 Email:

FOB:
[email protected]
Destination, Delivery Charges included in price
Payment terms: NET 30 DAYS
Authorized Departments:

POLICE
This agreement documents the general terms, conditions and pricing of the City's purchases of the goods and/or services described below. This Master Agreement does not authorize specific quantities or shipping dates; authorization to ship goods or deliver services will be made by issuing Delivery Order referencing this document. Shipping location, delivery date, items, quantities and prices will be confirmed on the Delivery Orders. All invoices must clearly indicate the relevant, authorizing Deliver Order # they pertain to.

COMMODITIES AND SERVICES COVERED BY THIS MASTER AGREEMENT:

UNIFORMS AND ACCESSORIES: POLICE
Special notes:

PER BID#: 9777 SPECIFICATIONS, TERMS and CONDITIONS.

Per RFB Specifications D., the Police Dept may add, change, or delete items as changes are made in the Police outfitting standard.

THIS IS YEAR TWO OF UP TO FOUR ONE-YEAR OPTIONAL RENEWALS. 2026 3.4 CPI INCREASE (EXCEPTION -AKER INCREASE RANGE 17%-60% DUE TO MFR INCREASE-SUPPORT DOC ATTACHED) Line# cc Description
1 20088 Uniforms and Accessories for Police Personnel (taxable). 2 20088 Services for Police Personnel (non-taxable}.

CONTINUED ON NEXT PAGE

INSTRUCTIONS TO VENDORS
This Purchase Order subject to and governed by all Terms and Conditions printed at the end of this order.

Qty UofM Unit Price

0.00 $0.0000

0.00 $0.0000
(714) 765-4093
[email protected]
229
Special notes:

Master Agreement Purchase Order
200 S. Anaheim Blvd.

Purchasing, Suite 620
Anaheim, CA 92805-3820
Phone: 714-765-5110
Fax: 714-765-5288
MA #: 106-499158
Revision #: 1
Attachments: 10
Council Award: 9777; 5/7/24

Page 2 ends

This Master Agreement ("MA"), along with the City's Standard Terms and Conditions, documents the items, prices and terms and conditions of the City's agreement with the supplier to provide the goods and/or services shown.

Quantities and/or dollars shown are estimates only. The City is under no obligation to purchase any or all of the items or services shown on this Master Agreement.

The City shall be obligated only for the specific quantities of materials or services that are authorized by the issuance of a specific Delivery Order ("DO") referencing this Master Agreement. Delivery Orders will be issued by the requesting department and shall specify the delivery date, location and unique Delivery Order Number.

Prices shown are to remain firm for the first year of this Agreement, unless otherwise specified in the body of this Master Agreement.

The total purchase limit shown for this Master Agreement is inclusive of all taxes. Supplier is not authorized to accept orders, nor provide goods or services in excess of this amount.

All invoices are to be sent to Accounts Payable ONLY, and must reference the specific Delivery Order number applicable to the invoice.

This Master Agreement may be renewable, in accordance with the terms of the applicable bid and/or City Council award.

This order may be terminated by either party, without cause, upon a thirty (30) day written notice.

This purchase order is for the referenced materials, products and/or services only. Departments requesting the goods and services are responsible for contract administration and monitoring compliance with the agreement.

At the City's option, annual increases in these prices may be negotiated, but shall not exceed the change in the Consumer Price Index ("CPI") for the preceeding twelve (12) month period for the Los Angeles, Riverside and Orange County areas.

All terms, conditions, and specifications of the referenced bid apply to this purchase order.

THIS PRICE AGREEMENT IS FOR A PERIOD OF ONE (1) YEAR WITH FOUR (4) OPTIONAL ONE-YEAR RENEWALS.

CONTINUED ON NEXT PAGE

INSTRUCTIONS TO VENDORS
This Purchase Order subject to and governed by all Terms and Conditions printed at the end of this order .

Buyer's Signature:

Esther Robles
[email protected]
(714) 765-4093
230
Master Agreement Purchase Order Page 3
200 S. Anaheim Blvd.

Purchasing, Suite 620
Anaheim, CA 92805-3820
Phone: 714-765-5110
Fax: 714-765-5288
MA #: 106-499158
Revision #: 1
Attachments: 10
Council Award: 9777; 5/7/24

STANDARD TERMS & CONDITIONS

1. TERMS OF ORDER: This order is limited to the terms herein unless expressly agreed in writing by the City's Purchasing Division.

2. ACCEPTANCE: Seller's shipment of goods, commencement of any work, or performance of any services hereunder shall constitute acceptance by Seller of this order and all of its terms and conditions .

No additional terms or conditions stated by Seller in acknowledging or otherwise accepting this order shall be binding upon the City unless specifically accepted in writing by Buyer. No oral agreements shall be binding unless confirmed by a written revision to this purchase order .

3. SELL OR ASSIGN: The supplier shall not sell, assign, or transfer any obligations resulting from this order without the specific written consent of the City's Purchasing Division.

4. MATERIAL SAFETY DATA SHEETS: Supplier shall submit
Material Safety Data Sheets with all orders of hazardous substances.

5. COMPLIANCE WITH LAWS: All goods and services provided shall comply with all current federal, state, and local laws relative thereto. Supplier further agrees to indemnify, defend, and hold the City harmless for any failure to so conform.

6. TAXES: Unless otherwise indicated on the P.O., this order is subject to California Sales Tax, at the current Orange County tax rate. The City is exempt from Federal Excise Tax.

7. WARRANTY: Supplier fully warrants all materials and equipment, including without limitation, any optional equipment purchased by the City under the terms of this order, against poor and inferior quality and workmanship of equipment, labor and materials, for one year after the date of final acceptance by the City, unless otherwise stated herein.

8. LAWS GOVERNING CONTRACT: This order will be
administered and interpreted under the laws of the State of California.

9. BUSINESS LICENSE: Firms providing goods or services to the City of Anaheim must have a current City business license.

10. AUTHORIZED DISTRIBUTOR: Vendor represents that vendor is an authorized distributor of the product ordered. The City reserves the right to cancel this order at any time if it is determined that the vendor is not an authorized distributor of the product ordered .

11. CANCELLATION: Time is of the essence in the performance of this Purchase Order. The City reserves the right to cancel any portion of this order with respect to goods not delivered, or services not performed, on or before the required delivery date.

12. REJECTION OF MATERIALS/SERVICES: All materials and
services furnished shall be as specified and are subject to inspection and approval by the City. The City reserves the right to reject any material or service which does not comply with the specifications and/or terms of this order.

13. F. 0. B. POINT: All orders are to ship F. 0. B. Destination, unless otherwise specified in the P.O.

14. TITLE: Except as otherwise and expressly provided herein, title to and risk of loss on all items shipped by vendor or vendor's agent to the City shall pass to the City upon the City's inspection and acceptance of such items at the City's premises.

15. SHIPPING & HANDLING CHARGES: Shipping, handling,
packing, transportation, and any other fees or charges are not allowed unless specified otherwise herein.

16. PACKING SLIPS: Packing slips specifying quantity, description and purchase order number must be included with each delivery.

17. INVOICES: The purchase order number and department name must appear on all invoices, shipping papers, packages, and correspondence. Unless otherwise specified, the invoice shall contain the following information; purchase order number, item number, description of supplies or services, sizes, quantities, unit prices, extended totals, all applicable taxes, and freight and handling charges, where authorized .

18. PAYMENT: Payment will be made only upon receipt of all materials, services, and invoices which are as specified and in accordance with the terms of this order, unless otherwise stated herein.

19. HOLD HARMLESS AND INDEMNIFICATION: By acceptance of this purchase order, the vendor hereby agrees to indemnify, defend, and hold harmless the City (including its officers and employees) for/ from any and all claims or actions of any kind presented against the City arising out of vendor's (including vendor's employees, representatives, products, and subcontractors) performance under this agreement, excepting only such claims, costs, or liability which may arise out of sole negligence of the City.

20. INSURANCE: Vendors who perform work on City property are required to provide acceptable proof of insurance prior to commencing work . Specific insurance requirements are contained within the body of the purchase order.

21. NEW MATERIALS: Unless a bid specification calls for used, refurbished or recycled materials, all items or materials bid and supplied to the City are to be new, unused products.
10/26/10
231
Agenda Item
Orange City Council
Item #: 3.13. 6/9/2026 File #: 25-0681
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Approval of Final Tract Map for Tract 18163 for the Mabury 22 project located at 6000 E. Mabury Avenue

2. SUMMARY
Tract Map 18163 is a subdivision of 22 single-family homes on the south side of East Mabury Avenue.

3. RECOMMENDED ACTION
Approve Final Map for Tract 18163.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

6. DISCUSSION AND BACKGROUND
On August 25, 2020, the City Council approved Resolution No. 11268 which includes Tentative Tract Map 0050-20 located at 6000 E. Mabury Avenue. The proposed project would involve subdividing and constructing 22 detached single-family dwelling units on approximately 10.9 acres of the approximately 15.4 acre site north of Santiago Creek. It would involve an open space dedication of approximately 4.5 acres along the Santiago Creek corridor on the portion of the site designated as Low Density Residential (LDR). Residential lots would comprise approximately 5.4 acres and the remaining approximately 5.5 acres would be used for infrastructure.

The Final Map for Tract 18163 conforms to the approved Tentative Tract Map. The Final Map also includes dedication of easements for streets, fire access, utility and public trail purposes.

All required fees have been paid, and bonds have been posted to guarantee construction of on-site improvements, and off-site street improvements.

7. ATTACHMENTS
· Site Map
· Tract 18163 Final Map
City of Orange Printed on 6/4/2026Page 1 of 1
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Agenda Item
Orange City Council
Item #: 3.13. 6/9/2026 File #: 25-0681
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Approval of Final Tract Map for Tract 18163 for the Mabury 22 project located at 6000 E. Mabury Avenue

2. SUMMARY
Tract Map 18163 is a subdivision of 22 single-family homes on the south side of East Mabury Avenue.

3. RECOMMENDED ACTION
Approve Final Map for Tract 18163.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

The Final Map for Tract 18163 conforms to the approved Tentative Tract Map. The Final Map also includes dedication of easements for streets, fire access, utility and public trail purposes.

All required fees have been paid, and bonds have been posted to guarantee construction of on-site improvements, and off-site street improvements.

7. ATTACHMENTS
· Site Map
· Tract 18163 Final Map
City of Orange Printed on 6/4/2026Page 1 of 1
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233
(429.5) (431.4)
(427.1)
(407.0)
(402.5)
(401.2)
(DIRT PILES)(385.3)
(ROCK)
(391.0)
(383.3)
(375.4)
(398.8)
(390.9)
(P)
(P)
(P)(P)
(P)(P)(P)(P)
(P)(P)
(P)
(445.7)
(445.9)
(446.7)
(446.9)
(447.6)(451.0)
(447.0)
(447.6)
(448.3)
(449.3)
(448.3)
(432.8)
(433.0)
(434.8)
(436.6)
(431.2)
(433.2)
(433.2)
(432.6)
(431.8)
(427.2)
(427.0)
(431.3) (MABURY AVE.)(BRYCE AVE.)
(430)
(430)
(450)
(440)
(440)
(430)
(400)
(450)
(400)(390)
(400) (380)(390)
(380)(390)
(BLOW-OFF)
(428)
(394)(392)
(380)(374)(374)(376)(378) (380)
(376)(376)
(378)(380)
(386)(386)
(382)
(382)
(382)
(432)
(434)
(434)
(432)
N. YELLOWSTONE BLVDWIND RIVER ROAD
MABURY AVE. (Public)
MABURY
(Private)

YELLOWSTONE BLVDLOT 'E'

LOT 'C'

LOT 'D'

LOT 'C'

LOT 'F'

LOT 'D'

LOT 'C'
(Private)
LASSEN BLVD.

SANTIAGO CREEKHABITAT LIMITS

SANTIAGO CREEKHABITAT LIMITS
(100 YEAR FLOOD PLAIN)
(100 YEAR FLOOD PLAIN)
(100 YEAR FLOOD PLAIN)
AVE. (Public)
LINE OF SIGHT 390'
LINE OF SIGHT 390'

PROPOSED SITE PLAN
PLAN 2PLAN 3
BUILDING TYPE TABLE89 PLAN 15
TRACT 18163
157 Technology Drive(949) 583-1010Irvine, CA 92618I R V I N E , I N C .PLANNINGSURVEYINGENGINEERINGPREPARED BY:PREPARED FOR:MABURY ESTATED.R. HORTON 3,105 SQ. FTCOUNTBUILDING AREA3,838 SQ. FT5,059 SQ. FTLOT1, 4, 8, 11, 1315, 17, 19, 212, 5, 7, 9,1216, 20 ,223, 6, 10, 14, 18 55 55

SANTIAGO CANYON ROAD
E. KATELLA AVE
VILLA PARK RD.

E. COLLINS AVE.SANTIAGO BLVD

CANNONSTSERRANO

AVEMABURYAVEORANGEPARK BLVD

HEWESST

WALNUT STGRAVIERSTPROSPECT

CANNON ST

CHAPMANAVE

MEATSAVE

NICKY WAY
NOTES:(c) The following exceptions apply:1.Corner and reverse corner lots shall have a minimum 10-foot street side yard.2.Wherever a garage opening faces onto a street, a minimum 20-foot side yard shall be provided.3.When the main entrance to a building faces the side lot line, the entrance shall be located at least 10 feet from the property line.4.When there is an existing legal nonconforming side yard setback, such setback shall be recognized as the acceptable side yard buildingsetback for purposes of building additions.(d) Extensions into the required rear yard are permitted subject to the conditions stated in Section 17.14.090(C).(e) Corner or reverse corner lots-extensions within five feet of the rear property line are permitted providing that all requirements for usable openspace are met.(f) Wherever rear lot line abuts and is common to the boundary of a street, alley, or permanent open space, the rear yard setback may be five feet. However, any garage opening onto a street shall be set back a minimum of 20 feet.(k) Adjustment to minimum lot frontage requirements for cul-de-sac and knuckle lots shall be considered part of the discretionary approval of thesubdivision Lot Area in Square FeetMaximum FAR<10,0000.6010,000-39,9990.50>40,0000.40 (u) Floor area ratio (FAR) shall vary according to lot area as follows:
(aa) constructed or lots created pursuant to SB 9, apply the development standards in Table 17.14.060. 234
ROBERT L. WHEELER IVLICENSED LAND SURVEYORSTATE OF CALIFORNIANo. 8639LICENSEDLANDSURVEYORSTATEOFCALIFORNIA AINROFILACFOETATSNo. 8402LICENSEDLANDSURVEYORLILY M. N. SANDBERG AINROFILACFOETATSREGISTEREDPROFESSIONALENGINEERNo. 76381CIVILALAN C. TROUNG 235
236
237
238
239
240
Agenda Item
Orange City Council
Item #: 3.14. 6/9/2026 File #: 26-0281
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Approval of the Fiscal Year 2026-2027 Pavement Management Program budget to incorporate a list of eight arterial streets to be funded by SB 1 (The Road Repair and Accountability Act) and appropriate Road Maintenance and Rehabilitation Account funding

2. SUMMARY
Resolution No. 11694 must be adopted as part of the application package for the Road Maintenance and Rehabilitation Account Funding Program for eight streets throughout the City. To be eligible for fiscal year program apportionments, cities and counties must submit an adopted list of projects to the California Transportation Commission. The total estimated new funding from Senate Bill 1 and Road Maintenance and Rehabilitation Account for Fiscal Year 2063-2027 is approximately $3,947,638.

3. RECOMMENDED ACTION
Adopt Resolution No. 11694. A Resolution of the City Council of the City of Orange approving the 2026-2027 Pavement Management Program budget to incorporate a list of eight streets to be funded by SB 1: the Road Repair and Accountability Act of 2017 and appropriate Road Maintenance and Rehabilitation Account (RMRA) funding.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

6. DISCUSSION AND BACKGROUND
The Road Maintenance and Rehabilitation Account (RMRA) funding program was created on April 28, 2017, when the Governor signed Senate Bill (SB) 1 (Beall, Chapter 5, Statutes of 2017), known as the Road Repair and Accountability Act of 2017. The program addresses basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system.

SB 1 is funded through fuel excise taxes, diesel fuel sales taxes, and vehicle registration fees.

The project list and resolution to establish eligibility for the RMRA Funding Program for Fiscal Year 2026-2027 (FY 27) will be submitted to the California Transportation Commission (CTC).

The exact amount of funding the City will receive for FY 27 is unknown. However, the Public Works Department has identified a list of streets to present to CTC for funding approval. These streets were City of Orange Printed on 6/4/2026Page 1 of 2
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Item #: 3.14. 6/9/2026 File #: 26-0281
Department has identified a list of streets to present to CTC for funding approval. These streets were rated in the Citywide Pavement Management Program with a Pavement Condition Index (PCI) ranging from 48-74 (out of a maximum score of 100) indicating the need for street rehabilitation. The cost estimate for these improvements is approximately $4.8 million. Staff will only select the number of streets that can be funded by the amount of RMRA received.

The scope of rehabilitation consists of American with Disabilities Act compliant access ramps, localized removal and replacement of the existing pavement, asphalt concrete overlay, removal and replacement of failed sections of curb and gutter, driveways, sidewalks, cross gutters, spandrels, and adjustment of manholes and water valve covers to grade.

Because the City is receiving an apportionment of RMRA funds, staff is required to sustain a maintenance of effort (MOE) by spending at least the annual average of FY 2009-10 through FY 2011-12 general fund expenditures for street, road, and highway purposes. The City will be able to meet the MOE requirements going forward.

7. ATTACHMENTS
· Resolution No. 11694
City of Orange Printed on 6/4/2026Page 2 of 2
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Agenda Item
Orange City Council
Item #: 3.14. 6/9/2026 File #: 26-0281
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Christopher Cash, Public Works Director

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 5: Improve Infrastructure, Mobility, and Technology

SB 1 is funded through fuel excise taxes, diesel fuel sales taxes, and vehicle registration fees.

The project list and resolution to establish eligibility for the RMRA Funding Program for Fiscal Year 2026-2027 (FY 27) will be submitted to the California Transportation Commission (CTC).

The exact amount of funding the City will receive for FY 27 is unknown. However, the Public Works Department has identified a list of streets to present to CTC for funding approval. These streets were City of Orange Printed on 6/4/2026Page 1 of 2
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Item #: 3.14. 6/9/2026 File #: 26-0281
Department has identified a list of streets to present to CTC for funding approval. These streets were rated in the Citywide Pavement Management Program with a Pavement Condition Index (PCI) ranging from 48-74 (out of a maximum score of 100) indicating the need for street rehabilitation. The cost estimate for these improvements is approximately $4.8 million. Staff will only select the number of streets that can be funded by the amount of RMRA received.

7. ATTACHMENTS
· Resolution No. 11694
City of Orange Printed on 6/4/2026Page 2 of 2
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RESOLUTION NO. 11694

A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ORANGE APPROVING THE 2026-
2027 PAVEMENT MANAGEMENT PROGRAM

BUDGET TO INCORPORATE A LIST OF EIGHT
STREETS TO BE FUNDED BY SB 1: THE ROAD
REPAIR AND ACCOUNTABILITY ACT OF 2017

AND APPROPRIATE ROAD MAINTENANCE

AND REHABILITATION ACCOUNT (RMRA)

FUNDING

WHEREAS, the City of Orange (the City) is a municipal corporation which exercises governmental functions and powers, and is organized and existing under the laws of the State of California; and

WHEREAS, the City’s local street and road system is critical for farm to market needs, interconnectivity, multimodal needs, and commerce; and

WHEREAS, maintaining and preserving the local street and road system in good condition reduces drive times and traffic congestion, improves bicycle safety, and makes the pedestrian experience safer and more appealing, which leads to reduced vehicle emissions helping the State achieve its air quality and greenhouse gas emissions reductions goals; and

WHEREAS, restoring roads before they fail also reduces construction time which results in less air pollution from heavy equipment and less water pollution from site run-off; and

WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi -modal transportation funding shortfalls stat ewide; and

WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of City of Orange are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and

WHEREAS, the City of Orange must include a list of all projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, in the City of Orange budget, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and

WHEREAS, the City of Orange, will receive and estimated $3,947,638 in RMRA funding in Fiscal Year 2026-2027 from SB 1; and

245
2 WHEREAS, this is the ninth year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and

WHEREAS, the City of Orange Public Works Department used the Citywide Pavement Management Program to find streets rated with a Pavement Condition Index (PCI) ranging from 21 to 73 (out of a maximum score of 100) indicating the need for street rehabilitation to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the communities priorities for transportation investment; and

WHEREAS, the funding from SB 1 will help the City of Orange rehabilitate nine streets.

The scope of rehabilitation in general consists of ADA compliant access ramps, localized removal and replacement of the existing pavement, asphalt concrete overlay, removal and replacement of failed sections of curb and gutter, driveways, sidewalks, cross gutters, spandrels, and adjustment of manholes and water valve covers to grade throughout the City of Orange this year and hundreds of similar projects into the future; and

WHEREAS, the City of Orange Public Works Department will select streets from the project list based on the available funding received; and

WHEREAS, the proposed street rehabilitation will extend the estimate useful life of the road system up to an additional 15 year lifespan; and

WHEREAS, the 2023 California Statewide Local Streets and Roads Needs Assessment found that the City of Orange streets and roads are in “Good” condition, and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into a “Good” condition; and

WHEREAS, the City Council has considered all of facts and circumstances of this project and finds the project to be exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to Section 15301(c) of the CEQA Guidelines as the repair, maintenance, and minor alteration of existing streets involving negligible or no expansion of use beyond that existing at the time of the determination.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange, on the basis of the facts set forth in the agenda report presented to it and any testimony received at the meeting at which this matter was considered, as follows:

1. The City Council finds and determines that the foregoing recitals are true and correct and are incorporated herein by this reference.

2. The City Council finds that the Pavement Management Program projects listed herein are categorically exempt from CEQA under Section 15301(c) of the CEQA Guidelines.

246
3 3. The City Council hereby approves the amendment to the Pavement Management Program budget for fiscal year 2026-2027 to incorporate the following list of projects planned to be funded with RMRA revenues:

Road Maintenance and Rehabilitation Account
FY 26/27 Pavement Rehabilitation List
[Estimated Schedule for All Projects:

Start May 2027; Completion February 2028]

# Street Name From To PCI
1* Walnut Avenue Hewes Street Rancho Santiago Boulevard 48 2 Taft Avenue 600’ w/o Main Street Main Street 55
3*
a* Cambridge Street Taft Avenue Trenton Avenue 57
b* Cambridge Street Trenton Avenue Katella Avenue 65
c Cambridge Street Palm Avenue Sycamore Avenue 74
d Cambridge Street Sycamore Avenue Walnut Avenue 58
4* Meat Avenue Breckenridge Street Santiago Boulevard 62 5 Cannon Street Cliffway Drive Creekside Avenue 65
6 Eckhoff Street Collins Avenue 370’ S Collins Avenue 62 7* La Veta Avenue James Street Esplanade Street 73
8* Rancho Santiago Blvd Orange Grove Avenue 35' s/o Sycamore Avenue 62

* relisted streets

4. The City Council authorizes the appropriation and expenditure of RMRA funds in accordance with this approval project list and directs staff to submit the list to the California Transportation Commission as required by SB 1.

ADOPTED this ____ day of ____________________, 2026

Daniel R. Slater, Mayor, City of Orange

ATTEST:

Pamela Coleman, City Clerk, City of Orange

247
4 APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.

CITY OF ORANGE )

I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 2026 by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange

248
Agenda Item
Orange City Council
Item #: 3.15. 6/9/2026 File #: 26-0357
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Community Facilities District No. 06-1 Del Rio Public Improvements 2026 Special Tax Refunding Bonds

2. SUMMARY
The District proposes to issue 2026 Special Tax Refunding Bonds to refund its outstanding 2015 Special Tax Refunding Bonds (the “2015 Bonds”). Staff recommends adoption of the attached Resolution authorizing the issuance of the 2026 Bonds and approving related financing documents.

The refunding will only proceed if it achieves a minimum net present value savings of 3%, with all savings used to reduce annual special taxes for property owners within the District. Pursuant to the Resolution, the principal amount of the 2026 Bonds will not exceed $20,000,000.

3. RECOMMENDED ACTION
Adopt Resolution No. 11701. A Resolution of the City Council of the City of Orange, acting as the Legislative Body of City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements), authorizing the issuance of its 2026 Special Tax Refunding Bonds and approving certain documents and taking certain other actions in connection therewith.

4. FISCAL IMPACT
The issuance and sale of the 2026 Bonds to refinance the outstanding 2015 Bonds is not a direct obligation of the City. Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof other than the District is pledged to the payment of the 2026 Bonds. The 2026 Bonds are payable solely from Special Taxes levied on properties within the District. The refinancing will only proceed if it generates a minimum net present value savings of 3%.

Any savings achieved through the refinancing will be passed through to property owners within the District through a reduction in the annual Special Tax levy. All issuance costs will be paid from bond proceeds.

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
The City formed Community Facilities District (“CFD” or “District”) 06-1 (Del Rio Public Improvements) on December 12, 2006. Subsequent to a noticed public hearing on December 12, 2006, the City Council adopted resolutions which established the District, authorized the levy of a special tax within the District, determined the necessity to incur bonded indebtedness within the City of Orange Printed on 6/4/2026Page 1 of 3
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Item #: 3.15. 6/9/2026 File #: 26-0357
special tax within the District, determined the necessity to incur bonded indebtedness within the District, and called an election within the District on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit within the District.

On the same date, an election was held within the District at which the landowners eligible to vote approved the issuance of bonds for the District in an amount not to exceed $47,000,000 and approved a rate and method of apportionment of special tax for the District.

The District previously issued its $23,920,000 2015 Special Tax Refunding Bonds (the “2015Bonds”) to refinance certain public facilities which the District was authorized to finance. The proposed 2026 Special Tax Refunding Bonds (the “2026 Bonds”) will be issued to refund the 2015 Bonds to effect debt service savings.

The District is located in the northwestern portion of the City, adjacent to the City of Anaheim, west of Glassell Avenue and north of Lincoln Avenue. A portion of the boundary of the District runs along the bank of the Santa Ana River. The District is part of an area known as the Riverbend community and is fully built out. The District includes approximately 73.64 gross acres, within which there are approximately 43 acres of developed single family residential properties (comprising 597 parcels of taxable property), a 10.5 acre public sports park, six acres of bio-swale area and 13.5 acres of public streets.

The aggregate secured assessed value of the property within the District subject to the Special Tax levy is $391,322,037. Based on the estimated principal amount of the 2026 Bonds ($16,005,000) and including direct and overlapping debt, the value-to-lien ratio for the District is approximately 19.27 to

1. The proposed 2026 Bonds would maintain the same final maturity as the 2015 Bonds listed above. In other words, there will be no extension of the original bond term for the refunding. Final interest rates will be determined if and when the 2026 Bonds are priced.

The 2026 Bonds are expected to qualify for an investment grade rating and bond insurance, which would lead to a lower cost of borrowing. Furthermore, the 2026 Bonds may also qualify for a reserve fund surety policy. With a reserve fund surety policy, the 2026 Bonds would not need to cash fund a debt service reserve (or a portion thereof) as part of the issuance. This would enable the City to downsize the 2026 Bonds.

As established in the Resolution, the 2026 Bonds will only be sold if the District is able to realize at least 3% net present value savings by refunding the 2015 Bonds. The savings generated will be used to reduce the special tax levy on homeowners within the District, estimated to be approximately $257 saving per unit. Interest rates have remained volatile in 2026, and the final savings will be determined when the bonds are priced and sold.

As required under Section 5852.1 of the California Government Code, good faith estimates have been provided to the City by Fieldman Rolapp & Associates, Inc., the Municipal Advisor, in consultation with Stifel, Nicolaus & Company, Incorporated, as underwriter of the 2026 Bonds as Attachment A.

7. ATTACHMENTS
· Attachment 1 - Resolution No. 11701
· Attachment 2 - Bond Indenture
City of Orange Printed on 6/4/2026Page 2 of 3
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Item #: 3.15. 6/9/2026 File #: 26-0357
· Attachment 3 - Bond Purchase Agreement
· Attachment 4 - Preliminary Official Statement
· Attachment 5 - Escrow Agreement
City of Orange Printed on 6/4/2026Page 3 of 3
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251
Agenda Item
Orange City Council
Item #: 3.15. 6/9/2026 File #: 26-0357
TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Trang Nguyen, Finance Director

1. SUBJECT
Community Facilities District No. 06-1 Del Rio Public Improvements 2026 Special Tax Refunding Bonds

5. STRATEGIC PLAN GOALS
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability

6. DISCUSSION AND BACKGROUND
The City formed Community Facilities District (“CFD” or “District”) 06-1 (Del Rio Public Improvements) on December 12, 2006. Subsequent to a noticed public hearing on December 12, 2006, the City Council adopted resolutions which established the District, authorized the levy of a special tax within the District, determined the necessity to incur bonded indebtedness within the City of Orange Printed on 6/4/2026Page 1 of 3
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Item #: 3.15. 6/9/2026 File #: 26-0357
special tax within the District, determined the necessity to incur bonded indebtedness within the District, and called an election within the District on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit within the District.

7. ATTACHMENTS
· Attachment 1 - Resolution No. 11701
· Attachment 2 - Bond Indenture
City of Orange Printed on 6/4/2026Page 2 of 3
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Item #: 3.15. 6/9/2026 File #: 26-0357
· Attachment 3 - Bond Purchase Agreement
· Attachment 4 - Preliminary Official Statement
· Attachment 5 - Escrow Agreement
City of Orange Printed on 6/4/2026Page 3 of 3
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254
RESOLUTION NO.11701

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ORANGE, ACTING AS THE LEGISLATIVE BODY OF

CITY OF ORANGE COMMUNITY FACILITIES DISTRICT
NO. 06-1 (DEL RIO PUBLIC IMPROVEMENTS),
AUTHORIZING THE ISSUANCE OF ITS 2026 SPECIAL

TAX REFUNDING BONDS AND APPROVING CERTAIN

DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS

IN CONNECTION THEREWITH
WHEREAS, the City Council (the “City Council” or the “legislative body of the District”) of the City of Orange (the “City”) has previously undertaken proceedings to establish City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) (the “District”) and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”); and WHEREAS, pursuant to proceedings taken and an election held on December 12, 2006 to authorize the issuance of bonds of the District, the levy of special taxes within the District and the establishment of an appropriations limit for the District, the District was authorized to issue bonds in one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $47,000,000; and
WHEREAS, the District has previously issued its 2015 Special Tax Refunding Bonds in the aggregate principal amount of $23,920,000, of which $18,795,000 is currently outstanding (the “2015 Bonds”), to refinance certain public improvements serving the District; and WHEREAS, in order to benefit taxpayers within the District by lowering the annual special taxes to be levied for debt service, the City Council, acting as the legislative body of the District, now desires to refund and defease the 2015 Bonds maturing on and after October 1, 2026 through the issuance of bonds in an aggregate principal amount not to exceed $20,000,000 designated as the “City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds” (the “2026 Bonds”); and WHEREAS, in order to effect the issuance of the 2026 Bonds, the City Council, acting as the legislative body of the District, desires to approve the forms of and authorize the execution and delivery of: (i) a Bond Indenture (the “Indenture”) with U.S. Bank Trust Company, National Association, as Trustee; (ii) an Escrow Agreement (2015 Bonds) (the “Escrow Agreement”) with U.S. Bank Trust Company, National Association, as escrow agent; (iii) a Preliminary Official Statement for the 2026 Bonds (the “Preliminary Official Statement”), which the Underwriter (as such term is defined herein) will use to market the 2026 Bonds; (iv) a Bond Purchase Agreement (the “Bond Purchase Agreement”) with the Underwriter; and (v) a Continuing Disclosure Agreement of the District relating to the 2026 Bonds (the “Continuing Disclosure Agreement”), all in substantially the forms presented herewith, and to authorize such changes and additions 255
2 thereto as the Authorized Officers (as such term is defined herein) deem necessary or desirable; and
WHEREAS, the City Council, acting in its capacity as the legislative body of the District, finds that the issuance of the 2026 Bonds will achieve debt service savings and will benefit taxpayers within the District, and has determined that it is prudent in the management of the District’s fiscal affairs to issue the 2026 Bonds; and
WHEREAS, the legislative body of the District has determined, in consultation with its municipal advisor, in accordance with Government Code Section 53360.4, that a negotiated sale of the 2026 Bonds to Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement approved as to form by the City Council herein will result in a lower overall cost to the District than a public sale, in that a negotiated sale will allow for the timing of the sale of the 2026 Bonds to be accomplished at a time of the District’s choosing; and
WHEREAS, the aggregate assessed value of the real property in the District that is subject to the special tax to pay debt service on the 2026 Bonds is not less than three times the principal amount of the 2026 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District, which fact is required as a precondition to the issuance of the 2026 Bonds.

NOW, THEREFORE , the City Council of the City of Orange does hereby resolve as follows:

SECTION 1 - RECITALS TRUE AND CORRECT
Each of the above recitals is true and correct and is adopted by the City Council, acting in its capacity as the legislative body of the District.

SECTION 2 – FINDINGS
The City Council, acting in its capacity as the legislative body of the District: (i) finds that the issuance of the 2026 Bonds as described in the Preliminary Official Statement will provide significant public benefits by reducing the total amount of special taxes to be levied for debt service within the District; and (ii) finds and determines that the issuance and sale of the 2026 Bonds are consistent with the District’s financing policy with respect to community facilities district financings adopted pursuant to Government Code Section 53312.7 and currently in effect. In satisfaction of the requirements contained in Government Code Section 53363.2, the City Council hereby determines that:
(a) it is anticipated that the purchase of the 2026 Bonds will occur no later than July 30, 2026 and that the refunding of the 2015 Bonds will occur on October 1, 2026, or as soon thereafter as practicable and permitted by the terms of the 2015 Bonds (subject to change at the discretion of any of the Authorized Officers);
256
3 (b) the 2026 Bonds shall be dated their date of issuance, and be in the denominations, have the maturity dates (which do not exceed the latest maturity date of the 2015 Bonds being refunded), be payable at the place and be in the form specified in the Bond Purchase Agreement to be executed by the District in accordance with Section 6; (c) the 2026 Bonds will bear interest at the minimum rate of 0.05% per annum; (d) the 2015 Bonds shall be payable at the place specified in the Escrow Agreement to be executed by the District in accordance with Section 4; and (e) the designated cost of issuing the 2026 Bonds, as defined by Government Code Section 53363.8, shall include all of the costs specified in Government Code Section 53363.8(a), (b)(2) and (c).

SECTION 3 – AUTHORIZATION OF BONDS; APPROVAL OF INDENTURE If the District is able to realize at least 3% net present value savings by refunding the 2015 Bonds, the issuance of the 2026 Bonds in a principal amount not to exceed $20,000,000 is hereby authorized and approved pursuant to the Act. The 2026 Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District and otherwise shall be substantially in the form set forth in the Indenture on file with the City Clerk of the City. All other provisions of the 2026 Bonds shall be governed by the terms and conditions set forth in the Indenture prepared by Bond Counsel to the District and executed by the Mayor of the City, the City Manager of the City and the Assistant City Manager/Administrative Services Director of the City, or the written designee thereof (each, an “Authorized Officer”). The Indenture is hereby approved substantially in the form on file with the City Clerk of the City. Each Authorized Officer is hereby authorized and directed to execute and deliver the Indenture with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the officer executing the same, said execution being conclusive evidence of such approval. Capitalized terms that are used in this Resolution and not defined have the meaning ascribed to them in the form of the Indenture.

SECTION 4 – APPROVAL OF ESCROW AGREEMENT
The Escrow Agreement is hereby approved substantially in the form on file with the City Clerk of the City. Each Authorized Officer is hereby authorized and directed to execute and deliver the Escrow Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the officer executing the same, said execution being conclusive evidence of such approval.

SECTION 5 – APPROVAL OF PRELIMINARY OFFICIAL STATEMENT
The Preliminary Official Statement is hereby approved in substantially in the form on file with the City Clerk of the City, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to deliver such Preliminary Official Statement to the Underwriter to be used in connection with the offering and sale of the 2026 Bonds. The Authorized 257
4 Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to deem the Preliminary Official Statement “final” pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934 prior to its distribution and to execute and deliver to the Underwriter a final Official Statement substantially in the form of the Preliminary Official Statement, with such changes therein, deletions therefrom and modifications thereto as the Authorized Officer executing the same shall approve (the “Official Statement”). The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the 2026 Bonds and is directed to deliver copies of the Official Statement to the purchasers of the 2026 Bonds. Execution of the Official Statement shall conclusively evidence the District’s approval of the Official Statement.

SECTION 6 – APPROVAL OF BOND PURCHASE AGREEMENT
The Bond Purchase Agreement is hereby approved substantially in the form on file with the City Clerk of the City. Each Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the officer executing the same, said execution being conclusive evidence of such approval; provided, however, that: (i) the principal amount of the 2026 Bonds shall not exceed $20,000,000; (ii) the net present value savings realized by refunding the 2015 Bonds shall not be less than 3%; and (iii) the Underwriter’s discount for the 2026 Bonds shall not exceed 1.00% of the principal amount thereof.

SECTION 7 – APPROVAL OF CONTINUING DISCLOSURE AGREEMENT The Continuing Disclosure Agreement is hereby approved substantially in the form on file with the City Clerk of the City. Each Authorized Officer is hereby authorized and directed to execute and deliver the Continuing Disclosure Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the officer executing the same, said execution being conclusive evidence of such approval.

SECTION 8 – GOOD FAITH ESTIMATES
The good faith estimates of costs related to the 2026 Bonds which are required by California Government Code Section 5852.1 are disclosed in Exhibit A hereto and are available to the public at the meeting at which this Resolution is approved.

SECTION 9 – FINDINGS RELATED TO ASSESSED VALUE
In accordance with the requirements of Government Code Section 53345.8, the City Council hereby determines that the aggregate assessed value of the real property in the District that is subject to the special tax to pay debt service on the 2026 Bonds is not less than three times the principal amount of the 2026 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District. This determination is based on the assessed value of the real property within the District as set forth in the fiscal year 2025-26 County Assessor’s roll. 258
5 SECTION 10 – AUTHORIZATION RELATING TO BOND INSURANCE The City Council hereby authorizes the Authorized Officers: (i) to solicit bids on a municipal bond insurance policy and/or reserve surety policy for the 2026 Bonds; (ii) to negotiate the terms of such policy or policies; (iii) to finalize, if appropriate, the form of such policy or policies with a municipal bond insurer; and (iv) if it is determined that the policy or policies will result in net savings for the District, to pay the insurance premium of such policy or policies from the proceeds of the issuance and sale of the 2026 Bonds. The City Council hereby authorizes such changes to the Indenture and Preliminary Official Statement as are necessary to reflect the purchase of municipal bond insurance and/or a reserve surety.

SECTION 11 – OTHER ACTIONS AUTHORIZED
All actions heretofore taken by officers and agents of the City and the District with respect to the sale and issuance of the 2026 Bonds are hereby approved, confirmed and ratified, and the Authorized Officers and the other officers of the City and the District who are responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the 2026 Bonds in accordance with the provisions of this Resolution, including but not limited to the solicitation and acceptance of bond insurance and/or a reserve surety policy for the 2026 Bonds, the preparation of escrow or redemption instructions with respect to the 2015 Bonds, the approval of the investment of the moneys deposited under the Escrow Agreement in federal securities, State and Local Government Series or other investments as permitted under the Escrow Agreement and the fiscal agent agreement pursuant to which the 2015 Bonds were issued, the retention of a bidding agent with respect to such escrow investments, the retention of a verification agent to verify the sufficiency of the escrow deposit and the fulfillment of all other purposes of the 2026 Bonds as described in the Indenture.

SECTION 12 – EFFECTIVE DATE
This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk of the City shall certify the vote adopting this Resolution.

ADOPTED this 9th day of June 2026.

Daniel R. Slater, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
259
6 APPROVED AS TO FORM:

Nathalie Adourian, City Attorney, City of Orange

STATE OF CALIFORNIA )
CITY OF ORANGE ) ss.

COUNTY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 2026 by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
260
A-1
4930-1555-4972v4/022585-0015

EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the 2026 Bonds in accordance with California Government Code Section 5852.1.

Principal Amount. Based on the District’s financing plan and current market conditions, a good faith estimate of the principal amount of the 2026 Bonds is $16,005,000 (the “Estimated Principal Amount”).

True Interest Cost . Assuming that the 2026 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the true interest cost of the 2026 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 2026 Bonds, is 3.59%.

Finance Charge. Assuming that the 2026 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the finance charge for the 2026 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2026 Bonds), is $468,305.

Amount of Proceeds to be Received. Assuming that the 2026 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the amount of proceeds expected to be received by the District from the 2026 Bonds (including original issue premium), less the finance charge of the 2026 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the 2026 Bonds, is $16,531,951.

Total Payment Amount. Assuming that the 2026 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the total payment amount, which means the sum total of all payments the District will make to pay debt service on the 2026 Bonds, plus the finance charge for the 2026 Bonds, as described above, not paid with the proceeds of the 2026 Bonds, calculated to the final maturity of the 2026 Bonds, is $23,360,437.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2026 Bonds, 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 issuance of the 2026 Bonds being different than the date assumed for purposes of such estimates; (b) the actual principal amount of the 2026 Bonds being different from the Estimated Principal Amount; (c) the actual amortization of the 2026 Bonds being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of issuance of the 2026 Bonds being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the District’s financing plan, delays in the financing, additional legal work or a combination of such factors and additional finance charges, if any, attributable thereto. The actual issuance date and principal amount of the 2026 Bonds will be determined by the District based on the timing of the need for proceeds of the 2026 Bonds and other factors.
261
Stradling Yocca Carlson & Rauth
Draft of 4/28/26

4931-3311-7596/022585-0015

BOND INDENTURE

By and Between

CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1 (DEL RIO PUBLIC

IMPROVEMENTS)

and

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee

Relating to

$_________
COMMUNITY FACILITIES DISTRICT NO. 06-1
(DEL RIO PUBLIC IMPROVEMENTS)
OF THE

CITY OF ORANGE
2026 SPECIAL TAX REFUNDING BONDS

Dated as of July 1, 2026
ATTACHMENT 2
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ARTICLE I

DEFINITIONS
Section 1.1. Defined Terms .............................................................................................................. 1

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds .......................... 12 Section 2.2. Type and Nature of Bonds and Parity Bonds .............................................................. 13 Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes ................................... 13 Section 2.4. Description of Bonds; Interest Rates .......................................................................... 14 Section 2.5. Place and Form of Payment ........................................................................................ 15 Section 2.6. Form of Bonds and Parity Bonds ................................................................................ 16 Section 2.7. Execution and Authentication ..................................................................................... 16 Section 2.8. Bond Register .............................................................................................................. 16 Section 2.9. Registration of Exchange or Transfer ......................................................................... 17 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds ..................................... 17 Section 2.11. Validity of Bonds and Parity Bonds ........................................................................... 18 Section 2.12. Book Entry System ..................................................................................................... 18 Section 2.13. Initial Depository and Nominee .................................................................................. 20

ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds ............................................................... 21 Section 3.2. Deposits to and Disbursements from Special Tax Fund ............................................. 22 Section 3.3. Administrative Expenses Account of the Special Tax Fund ....................................... 23 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 23 Section 3.5. Redemption Account of the Special Tax Fund ........................................................... 24 Section 3.6. Reserve Account of the Special Tax Fund .................................................................. 24 Section 3.7. Rebate Fund ................................................................................................................ 26 Section 3.8. Surplus Fund ............................................................................................................... 28 Section 3.9. Costs of Issuance Fund ............................................................................................... 29 Section 3.10. Investments ................................................................................................................. 29

ARTICLE IV

REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds ................................................................................................. 31 Section 4.2. Selection of Bonds and Parity Bonds for Redemption ............................................... 32 Section 4.3. Notice of Redemption ................................................................................................. 32 Section 4.4. Partial Redemption of Bonds or Parity Bonds ............................................................ 33 Section 4.5. Effect of Notice and Availability of Redemption Money ........................................... 34 263
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ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Security ....................................................................................................................... 34 Section 5.2. Covenants .................................................................................................................... 34

ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent ................... 38 Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent .......................... 39 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds .......................................................................................................................... 40

ARTICLE VII

TRUSTEE
Section 7.1. Trustee ......................................................................................................................... 41 Section 7.2. Removal of Trustee ..................................................................................................... 42 Section 7.3. Resignation of Trustee ................................................................................................ 42 Section 7.4. Liability of Trustee ..................................................................................................... 42 Section 7.5. Merger or Consolidation ............................................................................................. 45 Section 7.6. Rights of Bond Insurer ................................................................................................ 45

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ........................................................................................................ 45 Section 8.2. Remedies of Owners ................................................................................................... 46 Section 8.3. Application of Revenues and Other Funds After Default ........................................... 47 Section 8.4. Power of Trustee to Control Proceedings ................................................................... 47 Section 8.5. Appointment of Receivers .......................................................................................... 48 Section 8.6. Non-Waiver ................................................................................................................. 48 Section 8.7. Limitations on Rights and Remedies of Owners ........................................................ 48 Section 8.8. Termination of Proceedings ........................................................................................ 49 Section 8.9. Control by Bond Insurer Upon Default....................................................................... 49

ARTICLE IX

DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance .................................................................................................................. 49 Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness ................................................................................................................ 51

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds .................................................................... 53 Section 10.2. Execution of Documents and Proof of Ownership ..................................................... 53 264
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Section 10.3. Unclaimed Moneys ..................................................................................................... 54 Section 10.4. Provisions Constitute Contract.................................................................................... 54 Section 10.5. Future Contracts .......................................................................................................... 55 Section 10.6. Further Assurances ...................................................................................................... 55 Section 10.7. Severability ................................................................................................................. 55 Section 10.8. Notices ........................................................................................................................ 55 Section 10.9. Execution in Several Counterparts .............................................................................. 55 Section 10.10. OFAC Compliance ...................................................................................................... 56 Section 10.11. [Insolvency .................................................................................................................. 56 Section 10.12. Special Provisions for Insurer Default ........................................................................ 56 Section 10.13. Bond Insurer As Third Party Beneficiary ................................................................... 56 Section 10.14. Payment Procedure Under the Policy ......................................................................... 56 Section 10.15. Additional Payments ................................................................................................... 58 Section 10.16. Exercise of Rights by Bond Insurer ............................................................................ 58

EXHIBIT A FORM OF 2026 SPECIAL TAX REFUNDING BOND ......................................... A-1

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BOND INDENTURE
THIS BOND INDENTURE, dated as of July 1, 2026 (the “Indenture”), by and between CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1 (DEL RIO PUBLIC IMPROVEMENTS) (the “District”) and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (the “Trustee”), governs the terms of the Bonds and any Parity Bonds issued in accordance herewith from time to time.

RECITALS
A. The City Council of the City of Orange (the “legislative body of the District” or the “The City”), as the legislative body of the District, has previously undertaken proceedings and declared the necessity for the District to issue bonds pursuant to the terms and provisions of the Mello- Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”).

B. Based upon certain resolutions adopted by the legislative body of the District and an election held on December 12, 2006, authorizing the levy of a special tax and the issuance of bonds by the District, the District was authorized to issue bonds for one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $47,000,000.

C. The District previously issued the $23,920,000 City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2015 Special Tax Refunding Bonds (the “2015 Bonds”) for the purpose of refinancing certain public facilities within the District.

D. The legislative body of the District has determined to redeem the outstanding 2015 Bonds through the issuance of its $_________ 2026 Special Tax Refunding Bonds (the “Bonds”).

E. The District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied.

In order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the promises and the mutual covenants contained herein and the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds and any Parity Bonds (as such term is defined herein) which may be issued hereunder from time to time, as follows:

ARTICLE I

DEFINITIONS
Section 1.1. Defined Terms. Unless the context otherwise requires, the following terms shall have the following meanings:
“Account” means any account created pursuant to this Indenture. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code.
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“Administrative Costs” means reasonable charges, fees, costs, losses, liabilities and expenses that the Bond Insurer may pay or incur, including, but not limited to, reasonable fees and expenses of the Bond Insurer’s agents, attorneys, accountants, consultants, appraisers and auditors and reasonable costs of investigations, in connection with the administration (including waivers and consents, if any), enforcement, defense, exercise or preservation of any rights and remedies in respect of this Indenture and any other document executed in connection with the Bonds. “Administrative Expenses” means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Bonds or any Parity Bonds which are not otherwise paid as Costs of Issuance, any costs related to the District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by the City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder.
“Administrative Expenses Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Administrative Expenses Cap” means an amount equal to $_________ for the first Bond Year, increasing by 2% per annum for each subsequent Bond Year, or such lesser amount as may be designated in written instructions from an Authorized Representative of the City. “Alternative Credit Instrument” has the meaning given for such term as provided in Section

3.6 hereof.
“Alternative Penalty Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1.
“Annual Debt Service” means the principal amount of any Outstanding Bonds or Parity Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any Parity Bonds are retired as scheduled.
“Authorized Representative of the City” means the Mayor, the City Manager, the City Treasurer, the Assistant City Manager and the Financial Services Officer of the City or any other officer or employee of the City authorized by the City Council or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer, acting on behalf of the District.
[“Bond Insurer” means ___________, or any successor thereto. “Bond Insurer Policy Payment” has the meaning given for such term as provided in Section

10.15 hereof.
“Bond Insurer Policy Payment Account” has the meaning given for such term as provided in Section 10.14 hereof.
“Bond Insurer Reimbursement Amounts” has the meaning given for such term as provided in Section 10.15 hereof.]
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“Bond Counsel” means an attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. “Bond Register” means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds and any Parity Bonds shall be recorded. “Bondowner” or “Owner” means the person or persons in whose name or names any Bond or Parity Bond is registered on the Bond Register.
“Bonds” means the City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds issued under this Indenture. “Bond Year” means the twelve month period commencing on September 2 of each year and ending on October 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first October 1 which is not more than 12 months after the Delivery Date.
“Business Day” means a day which is not a Saturday or Sunday or a day of the year on which banks or trust companies in New York, New York, Los Angeles, California, or the city where the corporate trust office of the Trustee is located is required or authorized by law, regulation or executive order to close or to remain closed, or a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is not operational. “Certificate of an Authorized Representative” means a written certificate executed by an Authorized Representative of the City.
“City” means the City of Orange, County of Orange, California. “City Council” means the City Council of the City.
“Claim” means any claim or enforcement proceeding in connection with an Insolvency Proceeding.
“Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of the date of this Indenture, by and between the District and the Dissemination Agent named therein, as amended.
“Costs of Issuance” means the costs and expenses incurred in connection with the issuance and sale of the Bonds or any Parity Bonds, including the acceptance and initial annual fees and expenses of the Trustee, legal fees and expenses, costs of printing the Bonds and Parity Bonds and the preliminary and final official statements for the Bonds and Parity Bonds, fees of financial consultants and all other related fees and expenses, as set forth in a Certificate of an Authorized Representative of the City.
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“Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.1. “Delivery Date” means, with respect to the Bonds and each issue of Parity Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof. “Depository” means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II.
“District” means City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) established pursuant to the Act and the Resolution of Formation. “Escrow Agent” means U.S. Bank Trust Company, National Association, as escrow agent under the Escrow Agreement.
“Escrow Agreement” means the Escrow Agreement (2015 Bonds), dated as of the date of this Indenture, by and between the Escrow Agent and the District. “Escrow Fund” means the fund by that name established under the Escrow Agreement. “Event of Default” means an event described in Section 8.1. “Federal Securities” means any of the following, which shall in all circumstances be non- callable: (a) Treasuries; and (b) evidence of ownership of proportionate interests in future interest and principal payments on Treasuries 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 Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated.
“Fiscal Year” means the period beginning on July 1 of each year and ending on June 30 of the following year.
“Governmental Authority” means any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other person with authority to bind a party at law.
“Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom: (a) is in fact independent and not under the domination of the District; (b) does not have any substantial interest, direct or indirect, in the District; and (c) is not connected with the District as a member, officer or employee of the District, but who may be regularly retained to make annual or other reports to the District.
“Indenture” means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article 6.
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“Insolvency Proceeding” means any proceeding by or against the District under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law.
“Insured Bonds” means the Bonds maturing on October 1, 20__ through 20__, inclusive. “Insurer Default” means: (A) the Bond Insurer has failed to make any payment under the Policy when due and owing in accordance with its terms; (B) the Bond Insurer shall: (i) voluntarily commence any proceeding or file any petition seeking relief under the United States Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency or similar law; (ii) consent to the institution of or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition; (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator or similar official for such party or for a substantial part of its property; (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; or (vi) take action for the purpose of effecting any of the foregoing; or (C) any state or federal agency or instrumentality shall order the suspension of payments on the Policy or shall obtain an order or grant approval for the rehabilitation, liquidation, conservation or dissolution of the Bond Insurer (including without limitation under the New York Insurance Law).]
“Interest Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Interest Payment Date” means October 1, 2026 and each April 1 and October 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the following Business Day.
[“Late Payment Rate” means the lesser of: (a) the greater of: (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank, N.A., at its principal office in The City of New York, New York, as its prime or base lending rate (the “Prime Rate”) (any change in such Prime Rate to be effective on the date that such change is announced by JPMorgan Chase Bank, N.A.) plus _%; and (ii) the then-applicable highest rate of interest on the Insured Bonds; and (b) the maximum rate permissible under applicable usury or similar laws limiting interest rates. In the event that JPMorgan Chase Bank, N.A., ceases to announce its Prime Rate, the Prime Rate shall be the prime or base lending rate of such other bank, banking association or trust company as the Bond Insurer, in its sole and absolute discretion, shall designate. Interest at the Late Payment Rate on any amount owing to the Bond Insurer shall be computed on the basis of the actual number of days elapsed in a year of 360 days.]
“Maximum Annual Debt Service” means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond Year: (a) the principal amount of all Outstanding Bonds and Parity Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (b) the interest payable on the aggregate principal amount of all Bonds and Parity Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns. 270

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“Net Taxes” means Special Taxes less amounts set aside to pay Administrative Expenses not to exceed the Administrative Expenses Cap.
“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Article II.
“Ordinance” means Ordinance No. 17-06 adopted by the legislative body of the District on January 9, 2007, providing for the levying of the Special Tax. “Outstanding” or “Outstanding Bonds and Parity Bonds” means all Bonds and Parity Bonds theretofore issued by the District, except: (a) Bonds and Parity Bonds cancelled or surrendered for cancellation in accordance with Section 10.1; (b) Bonds and Parity Bonds for the payment or redemption of which moneys shall have been deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture or any applicable Supplemental Indenture for Parity Bonds; and (c) Bonds and Parity Bonds that have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 or for which a replacement has been issued pursuant to Section 2.10. “Parity Bonds” means all bonds, notes or other similar evidences of indebtedness hereafter issued, payable out of the Net Taxes and which, as provided in this Indenture or any Supplemental Indenture, rank on a parity with the Bonds.
“Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds or Parity Bonds as securities depository. “Permitted Investments” means:
(a) Federal Securities;
(b) Bonds, debentures, notes or other evidence issued or guaranteed by any of the following federal agencies and provided that such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) U.S. Export-Import Bank (Direct obligations or fully guaranteed certificates of beneficial ownership); (ii) Farmers Home Administration (Certificates of beneficial ownership); (iii) Federal Financing Bank; (iv) Federal Housing Administration Debentures; (v) General Services Administration Participation certificates; (vi) Government National Mortgage Association (guaranteed mortgage-backed bonds or guaranteed pass-through obligations); (vii) U.S. Maritime Administration (Guaranteed Title XI financing); and (viii) U.S. Department of Housing and Urban Development (Project Notes, Local Authority Bonds, New Communities Debentures – United States government guaranteed debentures and U.S. Public Housing Notes and Bonds – United States government guaranteed public housing notes and bonds);
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself): (i) Federal Home Loan Bank System (Senior debt obligations); (ii) Federal Home Loan Mortgage Corporation (Participation Certificates and Senior debt obligations); (iii) Federal National Mortgage Association (Mortgage-backed securities and senior debt obligations); (iv) Student Loan Marketing Association 271

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(Senior debt obligations); (v) Resolution Funding Corporation obligations; and (vi) Farm Credit System (Consolidated systemwide bonds and notes);
(d) Money market mutual funds that constitute “Government Funds” under Rule 2a-7 promulgated by the Securities and Exchange Commission and that are registered under the Federal Investment Company Act of 1940 the shares of which are registered under the Federal Securities Act of 1933, and having a rating in the highest investment category granted thereby from Standard & Poor’s or Moody’s, with a minimum of $500 million in assets under management, including funds for which the Trustee or its affiliates receive and retain a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise; (e) Certificates of deposit (including those placed by a third party pursuant to a separate agreement between the District and the Trustee) secured at all times by collateral described in clauses (a) and/or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks of which the short-term obligations are rated A-1 or better and P1 or better by Moody’s or Standard & Poor’s, respectively, which may include the Trustee and its affiliates. The collateral must be held by a third party and the Trustee on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral; (f) Certificates of deposit (including those placed by a third party pursuant to a separate agreement between the District and the Trustee), demand deposits, savings accounts, deposit accounts, time deposits, other deposit products, trust funds, trust accounts, interest bearing deposits, overnight bank deposits, interest-bearing money market accounts, bankers acceptances or money market deposits which are insured by Federal Deposit Insurance Corporation, including BIF and SAIF; or
(g) Investment agreements with domestic or foreign banks, insurance companies other than a life or property casualty insurance company, or corporations the long-term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated in at least the AA category by Standard & Poor’s and Moody’s; provided that, by the terms of the investment agreement:
(i) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service on the Bonds (if the funds invested pursuant to the investment agreement are from the Reserve Account);
(ii) the invested funds are available for withdrawal without penalty or premium, upon not more than seven (7) days’ prior notice; (iii) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof; (iv) the District and the Trustee receive the opinion of domestic counsel (which opinion shall be addressed to the District) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the District; 272

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(v) the investment agreement shall provide that if during its term: (1) the provider’s rating by either Standard & Poor’s or Moody’s falls below AA- or Aa3, respectively, the provider shall, at its option, within ten (10) Business Days after the provider’s receipt of a written request from the Trustee to satisfy the foregoing, either: (I) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws (other than by means of entries on the provider’s books) to the District, the Trustee or a third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims, the market value of which collateral is maintained at one hundred five percent (105%) of securities identified in clauses (a) and (b) of this definition; or (II) assign the investment agreement and all of its obligations thereunder to, or enter into a repurchase agreement or such other agreement with, a financial institution that is mutually acceptable to the provider and the District which is rated either in the first or second highest category by Standard & Poor’s and Moody’s; and (2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below A- or A3, respectively, the provider must, at the direction of the District or the Trustee, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the District or the Trustee; (vi) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event that 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 Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this shall mean that the Holder of the Collateral is in possession of such collateral); and
(vii) the investment agreement shall provide that if during its term: (1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the District or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the District or the Trustee, as appropriate; and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the District or the Trustee, as appropriate;
(h) Commercial paper rated, at the time of purchase, Prime - 1 by Moody’s and A- 1 or better by Standard & Poor’s having original maturity of not more than 180 days issued by a domestic corporation having assets in excess of $500 million; (i) Bonds or notes issued by any state or municipality which are rated by Moody’s or Standard & Poor’s in one of the two highest rating categories assigned by them; (j) Federal funds or bankers acceptances with a maximum term of 270 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating of Prime - 1 or A3 or better by Moody’s and A-1 or better by Standard & Poor’s; (k) Repurchase agreements that satisfy the following criteria:
(i) Repurchase agreements must be between the District or the Trustee and a dealer bank or securities firm which is: (1) A primary dealer on the Federal Reserve reporting dealer list which is rated A or better by two of the following Standard & Poor’s, Moody’s, or Fitch Ratings; 273

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or (2) A domestic bank or a domestic branch of a foreign bank rated A or above by two of the following:

Standard & Poor’s, Moody’s or Fitch Ratings; or (3) Corporations the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, is rated in at least the double A category by Standard & Poor’s and Moody’s; and (ii) The written agreement must include the following: (1) Securities which are acceptable for transfer are: (I) direct obligations of the United States government; or (II) obligations of federal agencies backed by the full faith and credit of the United States of America (or the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; (2) The collateral must be delivered to the Trustee (if the Trustee is not supplying the collateral) or a third party acting as agent for the Trustee (if the Trustee is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities); and (3) (I) The securities must be valued weekly, marked-to-market at current market price plus accrued interest; (II) The value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Trustee to the dealer, bank or security firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred five percent (105%) of the value of the amount of money transferred by the Trustee, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred five percent (105%); provided, however, that if the securities used as collateral are those of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, then the value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Trustee; and (III) A legal opinion must be delivered to the District and the Trustee that the repurchase agreement meets the requirements of California law with respect to the investment of public funds; and (IV) Should the provider’s rating by either Standard & Poor’s or Moody’s be withdrawn or suspended or fall below A- or A3, respectively, the provider must, at the direction of the District or the Trustee (acting at the direction of the District), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the District or the Trustee;
(l) the Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code;
(m) forward delivery agreements or forward purchase and sale agreements with a domestic or foreign bank or corporation the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated at least in the A category by Standard & Poor’s and Moody’s; provided that, by the terms of the agreement; the underlying investment property consists of those investments which are listed in (a), (b), (c) and (h) above; and
(n) the City’s pooled investment fund invested pursuant to the City’s investment policy.
“Person” means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.
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[“Policy” means the Municipal Bond Insurance Policy No. ________ issued by the Bond Insurer that guarantees the scheduled payment of principal of and interest on the Insured Bonds when due.
“Policy Costs” has the meaning given for such term as provided in Section 3.6 hereof.] “Prepayments” means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method.
“Principal Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Principal Office of the Trustee” means the office of the Trustee located in Los Angeles, California (currently 633 West Fifth Street, 24th Floor, Los Angeles, California 90071, Attention:

Global Corporate Trust), or such other office or offices as the Trustee may designate from time to time, or the office of any successor Trustee where it principally conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued; provided, however, that for purposes of the surrender or presentation of Bonds for payment, transfer or exchange, the Principal Office of the Trustee shall be the designated corporate trust operations or agency office of the Trustee.
“Project” means those public facilities described in the Resolution of Formation which were refinanced with the proceeds of the 2015 Bonds, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the District from time to time. “Rate and Method” means the Rate and Method of Apportionment of Special Tax for the District approved by the qualified electors of the District on December 12, 2006 and recorded on December 26, 2006 as Document No. 2006000863536.
“Rating Agency” means Moody’s and Standard & Poor’s, or both, as the context requires. “Rebate Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1.
“Rebate Fund” means the fund by that name established pursuant to Section 3.1 in which there are established the Accounts described in Section 3.1.
“Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code.
“Record Date” means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.
“Redemption Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code. 275

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“Representation Letter” means the Blanket Representation Letter from the District to the Depository as described in Article II.
“Reserve Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Reserve Policy” means Municipal Bond Debt Service Reserve Insurance Policy No. _______ issued by the Bond Insurer for deposit into the Reserve Account. “Reserve Requirement” means, as of the date of calculation: (a) with respect to the Bonds, an amount equal to the least of: (i) Maximum Annual Debt Service with respect to the Bonds; (ii) 125% of average Annual Debt Service on the then-Outstanding Bonds; or (iii) ten percent (10%) of the initial outstanding principal amount of the Bonds; provided that the Reserve Requirement shall never exceed the amount established pursuant to the foregoing calculation at the time of issuance of the Bonds; and (b) with respect to such Parity Bonds, an amount equal to the least of: (i) Maximum Annual Debt Service with respect to such Parity Bonds; (ii) 125% of average Annual Debt Service on such Parity Bonds; or (iii) ten percent (10%) of the initial outstanding principal amount of such Parity Bonds; provided that the Reserve Requirement shall never exceed the amount established pursuant to the foregoing calculation at the time of issuance of such Parity Bonds. “Resolution of Formation” means Resolution No. 10139 adopted by the City Council of the City on December 12, 2006, pursuant to which the City formed the District. “Responsible Officer,” means, when used with respect to the Trustee, any managing director, president, vice president, senior associate, associate or other officer of the Trustee within the Principal Office of the Trustee (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the corporate trust office specified in Section 10.8 because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Indenture.
“Sinking Fund Payment” means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) and any annual sinking fund payment schedule to retire any Parity Bonds that are designated as Term Bonds.
“Six-Month Period” means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds). “Special Tax Fund” means the fund by that name created and established pursuant to Section 3.1.
“Special Taxes” means the taxes authorized to be levied by the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act, the Rate and Method, and the voter approval obtained at the December 12, 2006 special election in the District, including any scheduled payments and any Prepayments thereof, and the net proceeds of the redemption or sale 276

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of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and penalties and interest thereon.
“Standard & Poor’s” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, and its successors and assigns.
“Supplemental Indenture” means any supplemental indenture amending or supplementing this Indenture.
“Surplus Fund” means the fund by that name created and established pursuant to Section 3.1. “Tax Certificate” means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code.
“Tax-Exempt” means, with reference to a Permitted Investment, a Permitted Investment the interest earnings on which are excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code. “Term Bonds” means any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture.
“Treasuries” means non-callable direct obligations of the United States of America, including United States Treasury Notes, Certificates and Bonds and State and Local Government Series. “Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, having a principal corporate trust office in Los Angeles, California, and its successors or assigns, or any other bank, national banking association or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3 and any successor thereto. “Underwriter” means Stifel, Nicolaus & Company, Incorporated, as the underwriter of the Bonds.
“Verification Report” has the meaning given for such term as provided in Section 9.1 hereof. “2015 Bonds” means the City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2015 Special Tax Refunding Bonds issued on March 18, 2015 in the original aggregate principal amount of $23,920,000.

ARTICLE II

GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds. Under and pursuant to the Act, the Bonds in the aggregate principal amount of $_________ shall be issued for the purpose of refunding the outstanding 2015 Bonds, funding a reserve fund for the Bonds and paying Costs of Issuance. The Bonds and any Parity Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other 277

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than amounts in the Administrative Expenses Account of the Special Tax Fund). The aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors of the District in accordance with the Act.

Section 2.2. Type and Nature of Bonds and Parity Bonds. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net Taxes, no other taxes are pledged to the payment of the Bonds or any Parity Bonds. The Bonds and any Parity Bonds are neither general or special obligations of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expenses Account), as more fully described herein. The District’s limited obligation to pay the principal of, premium, if any, and interest on the Bonds and any Parity Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds or any Parity Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and any Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds and any Parity Bonds are not a legal or equitable pledge, charge, lien or encumbrance upon any of the District’s property, or upon any of its income, receipts or revenues except the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, any Parity Bonds and interest thereon. Neither the members of the City Council of the City nor any persons executing the Bonds or any Parity Bonds are liable personally on the Bonds or any Parity Bonds by reason of their issuance.

Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds and any Parity Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.

Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes. Pursuant to the Act and this Indenture, the Bonds and any Parity Bonds shall be equally payable from and secured by a pledge and lien upon the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Reserve Account, which shall only secure the Bonds, and the Administrative Expenses Account), without priority for number, date of the Bonds or Parity Bonds, date of sale, date of execution or date of delivery, and the payment of the interest on and principal of the Bonds and any Parity Bonds and any premiums upon the redemption thereof shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account), which are hereby set aside for the payment of the Bonds and any Parity Bonds. Amounts in the Special Tax Fund (other than the Administrative Expenses Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and any Parity Bonds; and, so long as any of the Bonds and any Parity Bonds or interest thereon remains Outstanding, amounts in the Special Tax Fund shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture. Notwithstanding any provision contained in this Indenture to the contrary, Net Taxes deposited in the Rebate Fund and the Surplus Fund shall 278

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no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate Fund, the Surplus Fund, the Costs of Issuance Fund or the Administrative Expenses Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.

Nothing in this Indenture or any Supplemental Indenture shall preclude: (a) subject to the limitations contained hereunder, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and redemption, and the payment of said Bonds or Parity Bonds from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State of California; or (b) the issuance, subject to the limitations contained herein, of Parity Bonds which shall be payable from Net Taxes.

Section 2.4. Description of Bonds; Interest Rates. The Bonds and any Parity Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Bonds and any Parity Bonds shall be initially issued in the form of a single certificated fully registered bond for each maturity.

The Bonds shall be designated “City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds.” The Bonds shall be dated as of their Delivery Date and shall mature and be payable on October 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on each Interest Payment Date:

Maturity Date
(October 1) Principal Amount Interest Rate

__________

The District and the Trustee may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of 279

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payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the District’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner shall receive a certificated Bond evidencing the obligation of the District to make payments of principal, premium, if any, and interest pursuant to this Indenture.

Interest shall be payable on each Bond and Parity Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of such Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any Bond or Parity Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the Bonds and Parity Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.

Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and Parity Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. Interest on any Bond or Parity Bond shall be payable from the Interest Payment Date next preceding the date of authentication of such Bond or Parity Bond, unless: (a) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (b) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (c) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond or Parity Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond, as applicable; provided, however, that if at the time of authentication of such Bond or Parity Bond, interest is in default, interest on such Bond or Parity Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond or Parity Bond, interest on such Bond or Parity Bond shall be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed on the applicable Interest Payment Date by first class mail, postage prepaid, to such Bondowner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds or of any issue of Parity Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated in writing by such Owner. Notwithstanding the foregoing, as long as the Depository is the Owner of all or part of the Bonds or Parity Bonds, said interest payments shall be made to the Depository in accordance with the procedures of such Depository, which as of the date of this Indenture are by wire transfer in immediately available funds. 280

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Section 2.6. Form of Bonds and Parity Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form set forth in Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication. Each issue of Parity Bonds and the certificate of authentication therefor shall be in the form provided in the Supplemental Indenture for such issue of Parity Bonds.

Until definitive Bonds or Parity Bonds, as applicable, are prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds or Parity Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds or Parity Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds or Parity Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary Bonds or Parity Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without unnecessary delay and thereupon any temporary Bond or Parity Bond may be surrendered to the Trustee at its office, without expense to the Owner, in exchange for a definitive Bond or Parity Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination.

All temporary Bonds or Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.

Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed deputy City Clerk, in their capacity as officers of the City, and the seal of the City (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk of the City. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or Parity Bonds or to lost, stolen, destroyed or mutilated Bonds or Parity Bonds), such Bonds and Parity Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds or Parity Bonds had not ceased to hold such office.

Only the Bonds that bear a certificate of authentication in the form set forth in Exhibit A shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.

Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon reasonable prior written notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register, transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein provided.

The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name appears on the Bond Register as the absolute Owner thereof for any and all purposes, and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may 281

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rely on the address of the Bondowner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Trustee of any change in the Bondowner’s address so that the Bond Register may be revised accordingly.

Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond or Parity Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond or Parity Bond for cancellation at the Principal Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.

The transferor shall also provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.

Bonds or Parity Bonds may be exchanged at the Principal Office of the Trustee for a like aggregate principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity Bond issued upon any exchange or transfer, but shall require the Bondowner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of: (a) Bonds or Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be redeemed; or (b) any Bonds or Parity Bonds chosen for redemption.

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

Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds. If any Bond or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1. If any Bond or Parity Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated, lost, destroyed or stolen, shall 282

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be equally and proportionately entitled to the benefits hereof with all other Bonds and Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or Parity Bond and any replacement Bond or Parity Bond as being Outstanding for the purpose of determining the principal amount of Bonds or Parity Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as one and the same.

Notwithstanding any other provision of this Section, in lieu of delivering a new Bond or Parity Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds or Parity Bonds.

Section 2.11. Validity of Bonds and Parity Bonds. The validity of the authorization and issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any proceedings taken by the District for the refunding of the 2015 Bonds, or by the invalidity, in whole or in part, of any contracts made by the District in connection therewith, and shall not be dependent upon the completion of the refunding of the 2015 Bonds or upon the performance by any Person of such Person’s obligation with respect to the Project, and the recital contained in the Bonds or any Parity Bonds that the same are issued pursuant to the Act and other applicable laws of the State of California shall be conclusive evidence of their validity and of the regularity of their issuance.

Section 2.12. Book Entry System.
(a) Election of Book Entry System. Prior to the issuance of the Bonds and any Parity Bonds, the District may provide that such Bonds and Parity Bonds shall be initially issued as book entry bonds. If the District shall elect to deliver any Bonds or Parity Bonds in book entry form, then the District shall cause the delivery of a separate single fully registered bond (which may be typewritten) for each maturity date of such Bonds or Parity Bonds in an authorized denomination corresponding to that total principal amount of the Bonds or Parity Bonds designated to mature on such date. Upon initial issuance, the ownership of each such Bond or Parity Bond shall be registered in the Bond Register in the name of the Nominee, as nominee of the Depository, and ownership of the Bonds or Parity Bonds, or any portion thereof may not thereafter be transferred except as provided in subsection (e).

With respect to book entry Bonds or Parity Bonds, the District and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such book entry bonds. Without limiting the immediately preceding sentence, the 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 Bond Register, 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 to be redeemed in the event that the District redeems the Bonds or Parity in part; (iv) the payment by the Depository or any Participant or any other person, of any amount of principal of, premium, if any, or interest on book entry bonds; or (v) any consent given or other action taken by the Depository as Bondowner. The District and the Trustee may treat and consider the person in whose name each book entry bond is registered in the Bond Register as the absolute Owner of such book entry bond for the purpose of payment of principal of, premium and interest on such Bond or Parity Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond or Parity Bond, for the purpose of registering transfers with respect to such Bond or Parity Bonds, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the 283

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Bonds or Parity Bonds only to or upon the order of the respective Owner, as shown in the Bond Register, 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 District’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds or Parity Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Bond Register, shall receive a Bond or Parity Bond evidencing the obligation to make payments of principal of, premium, if any, and interest on the Bonds or Parity Bonds. Upon delivery by the Depository to the 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 the Indenture shall refer to such nominee of the Depository. (b) Delivery of Representation Letter. In order to qualify the book entry bonds for the Depository’s book entry system, the District and the Trustee (if required by the Depository) shall execute and deliver to the Depository a Representation Letter. The execution and delivery of a Representation Letter shall not in any way impose upon the District or the Trustee any obligation whatsoever with respect to persons having interests in such book entry bonds other than the Owners, as shown on the Bond Register. By executing a Representation Letter, the Trustee shall agree to take all action necessary at all times so that the Trustee will be in compliance with all representations of the Trustee in such Representation Letter. In addition to the execution and delivery of a Representation Letter, the District and the Trustee shall take such other actions, not inconsistent with the Indenture, as are reasonably necessary to qualify book entry bonds for the Depository’s book entry program. (c) Selection of Depository. In the event that: (i) the Depository determines not to continue to act as securities depository for book entry bonds; or (ii) the District determines that continuation of the book entry system is not in the best interest of the beneficial owners of the Bonds, the Parity Bonds or the District, then the District will discontinue the book entry system with the Depository. If the District determines to replace the Depository with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered bond for each of the maturity dates of such book entry bonds, registered in the name of such successor or substitute qualified securities depository or its Nominee as provided in subsection (e). If the District fails to identify another qualified securities depository to replace the Depository, then the Bonds or Parity Bonds shall no longer be restricted to being registered in such Bond Register in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds or Parity Bonds shall designate, in accordance with the provisions of this Indenture. (d) Payments To Depository. Notwithstanding any other provision of the Indenture to the contrary, so long as all Outstanding Bonds or Parity Bonds are held in book entry form and registered in the name of the Nominee, all payments of principal of, redemption premium, if any, and interest on such Bonds or Parity Bonds and all notices with respect thereto shall be made and given, respectively to the Nominee, as provided in the Representation Letter or as otherwise instructed by the Depository and agreed to by the Trustee notwithstanding any inconsistent provisions herein. (e) Transfer of Bonds to Substitute Depository.
(1) The Bonds shall be initially issued as provided in Section 2.1.

Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of the Depository or its nominee, or of any substitute depository designated pursuant to clause (ii) below (a “Substitute Depository”); provided 284

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that any successor of the Depository or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any Substitute Depository, upon: (I) the resignation of the Depository or its successor (or any Substitute Depository or its successor) from its functions as depository; or (II) a determination by the District that the Depository (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) to any person as provided below, upon: (I) the resignation of the Depository or its successor (or any Substitute Depository or its successor) from its functions as depository; or (II) a determination by the District that the Depository or its successor (or Substitute Depository or its successor) is no longer able to carry out its functions as depository. (2) In the case of any transfer pursuant to clauses (i) or (ii) of subsection (1), upon receipt of all Outstanding Bonds by the Trustee, together with a written request of the District to the Trustee designating the Substitute Depository, a single new Bond, which the District shall prepare or cause to be prepared, shall be issued for each maturity of Bonds then Outstanding, registered in the name of such successor or such Substitute Depository or their Nominees, as the case may be, all as specified in such written request of the District. In the case of any transfer pursuant to clause (iii) of subsection (1), upon receipt of all Outstanding Bonds by the Trustee, together with a written request of the District to the Trustee, new Bonds, which the District shall prepare or cause to be prepared, shall be issued in such denominations and registered in the names of such persons as are requested in such written request of the District, subject to the limitations of Section 2.1; provided that the Trustee shall not be required to deliver such new Bonds within a period of less than sixty (60) days from the date of receipt of such written request from the District.
(3) In the case of a partial redemption or an advance refunding of any Bonds evidencing a portion of the principal maturing in a particular year, the Depository or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee, all in accordance with the Representation Letter. The Trustee shall not be liable for such Depository’s failure to make such notations or errors in making such notations and the records of the Trustee as to the Outstanding principal amount of such Bonds shall be controlling. (4) The District and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the District; and the District and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the Bonds. Neither the District nor the Trustee shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including the Depository or its successor (or Substitute Depository or its successor), except to the Owner of any Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the Bonds.

Section 2.13. Initial Depository and Nominee. The initial Depository under this Article shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York. 285

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ARTICLE III

CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There are hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds Special Tax Fund (the “Special Tax Fund”) (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account and an Administrative Expenses Account). (2) The City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds Rebate Fund (the “Rebate Fund”) (in which there shall be established a Rebate Account and an Alternative Penalty Account). (3) The City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds Costs of Issuance Fund (the “Costs of Issuance Fund”).
(4) The City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds Surplus Fund (the “Surplus Fund”).

The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Trustee and the Trustee shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article 3 and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof. The Trustee may, in its discretion, establish temporary funds or accounts in its books and records to facilitate such transfers.

In connection with the issuance of any Parity Bonds, the Trustee, at the direction of an Authorized Representative of the City, may create new funds, accounts or subaccounts, or may create additional accounts and subaccounts within any of the foregoing funds and accounts for the purpose of separately accounting for the proceeds of the Bonds and any Parity Bonds. (b) The proceeds of the sale of the Bonds received by the Trustee in the amount of $_________ (representing the initial aggregate principal amount of the Bonds of $_________, [plus/less] $_________ of [net original issue premium/discount], less $_________ of Underwriter’s discount and less $_________ paid directly to the Bond Insurer by the Underwriter) shall be received on behalf of the District and deposited and transferred as follows:
(1) $_________ shall be transferred to the Costs of Issuance Fund to pay the Costs of Issuance of the Bonds;
(2) $_________ shall be transferred to the Escrow Agent for deposit in the Escrow Fund.
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(3) $_________ shall be transferred to the Reserve Account, representing 50% of the Reserve Requirement, and will be credited to the Reserve Account as provided in Section 3.6 hereof.

The Trustee shall deposit in the Reserve Account the Reserve Policy, which amount represents 50% of the Reserve Requirement as of the Closing Date of the Bonds and will be credited to the various accounts in the Reserve Account as provided in Section 3.6 hereof. (c) $_________ on deposit in the Fiscal Agent Agreement pursuant to which the 2015 Bonds shall be transferred to the Trustee and received on behalf of the District and shall be transferred to the Escrow Agent for deposit in the Escrow Fund.
(d) $_________ on deposit with the City shall be transferred to the Trustee and received on behalf of the District and transferred to the Escrow Agent for deposit in the Escrow Fund.

The Trustee may, in its discretion, establish temporary funds, accounts or subaccounts in its books and records to facilitate such transfers.

Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for the portion of any Prepayment to be deposited in the Redemption Account as specified in a Certificate of an Authorized Representative, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to:
(1) the Administrative Expenses Account of the Special Tax Fund up to the Administrative Expenses Cap;
(2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Reserve Account of the Special Tax Fund and any reserve account established in connection with the issuance of any Parity Bonds; (6) the Administrative Expenses Account of the Special Tax Fund to the extent that Administrative Expenses exceed or are expected to exceed the Administrative Expenses Cap;
(7) the Rebate Fund; and
(8) the Surplus Fund.
(b) Upon the maturity of all of the Bonds and Parity Bonds and, after all principal and interest then due on the Bonds and Parity Bonds then Outstanding has been paid or provided for and 287

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any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.

Section 3.3. Administrative Expenses Account of the Special Tax Fund. The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expenses Account of the Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the City; provided, however, that, except as set forth in the following sentence, the total amount transferred in a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds and Parity Bonds due in such Bond Year and to restore the Reserve Account and any reserve account established in connection with the issuance of such Parity Bonds to the Reserve Requirement, all as determined by the District. Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expenses Account to the extent necessary to collect delinquent Special Taxes, as directed in writing by an Authorized Representative of the City. Moneys in the Administrative Expenses Account of the Special Tax Fund may be invested in any Permitted Investments as directed in writing by an Authorized Representative of the City and shall be disbursed as directed in a Certificate of an Authorized Representative.

Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of (including any Sinking Fund Payment) and interest due on the Bonds and any Parity Bonds until maturity, other than principal due upon redemption under Sections 4.1(a) and (c), shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively. For the purpose of assuring that the payment of principal of (including any Sinking Fund Payment) and interest on the Bonds and any Parity Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each April 1 and October 1, the Trustee shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Reserve Account and any reserve account established in connection with any Parity Bonds) are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account and any reserve account established in connection with the issuance of any Parity Bonds:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date that remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds and any Parity Bonds as the same become due. (b) To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to October 1 of each year shall equal the principal payment (including any Sinking Fund Payment) due on the Bonds and any Parity Bonds maturing on such October 1 and any principal payment due on a previous October 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal (including any Sinking Fund Payment) of such Bonds and any Parity Bonds as the same become due at maturity. 288

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Section 3.5. Redemption Account of the Special Tax Fund. (a) After making the deposits to the Administrative Expenses Account, the Interest Account and the Principal Account of the Special Tax Fund pursuant to Sections 3.3 and 3.4, or to call Parity Bonds for optional redemption as set forth in any Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expenses Account therein) may be applied to optionally redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the Reserve Account and any reserve account established in connection with the issuance of such Parity Bonds will equal the Reserve Requirement, as determined by the District. (b) Prepayments deposited to the Redemption Account shall be applied on the redemption date established pursuant to Section 4.1(c) for the use of such Prepayments to the payment of the principal of, premium, and interest on the Bonds and Parity Bonds to be redeemed with such Prepayments.
(c) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and Parity Bonds, shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon presentation and surrender (if required) of such Bonds or Parity Bonds and, in the case of an optional redemption or an extraordinary redemption from Prepayments, to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds or Parity Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the District at public or private sale as and when and at such prices as the District may in its discretion determine, but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or an extraordinary redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Sections 4.1(a) or 4.1(c), as applicable, or in the case of Parity Bonds the premium established in any Supplemental Indenture.

Any accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date.

Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The Reserve Policy shall be drawn upon solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on the Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due, and for the purpose of making any required transfer to the Rebate Fund pursuant to Section 3.7 upon written direction from the District. If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall draw upon the Reserve Policy for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund or the Rebate Fund, as applicable, moneys necessary for such purposes. 50% of the Reserve Requirement will initially be satisfied by the Reserve Policy and 50% will initially be satisfied with 289

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the deposit from proceeds of the Bonds pursuant to Section 3.1(b) hereof. Notwithstanding anything in this Indenture to the contrary, for so long as the Bonds remain outstanding, 50% of the Reserve Requirement shall be satisfied with cash, unless the Bond Insurer provides its prior written consent.

The prior written consent of the Bond Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Account, if any. Amounts on deposit in the Reserve Account shall be applied solely to the payment of debt service due on the Bonds.

The following provisions govern the Reserve Policy and the Reserve Account:
(a) The District shall repay the Bond Insurer any draws under the Reserve Policy and pay all related Administrative Costs that the Bond Insurer may pay or incur. Interest shall accrue and be payable on such draws and Administrative Costs from the date of payment by the Bond Insurer at the Late Payment Rate.

Repayment of draws and payment of Administrative Costs and interest accrued thereon at the Late Payment Rate (collectively, the “Policy Costs”) shall commence in the first month following each draw and each such monthly payment shall be in an amount at least equal to 1/12th of the aggregate of Policy Costs related to such draw.

Amounts in respect of Policy Costs paid to the Bond Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Bond Insurer on account of principal due, the coverage under the Reserve Policy will be reinstated by a like amount, subject to the terms of the Reserve Policy.

All cash and investments in the Reserve Account and the Surplus Fund shall be transferred to the Special Tax Fund for payment of the debt service on the Insured Bonds before any drawing may be made on the Reserve Policy or on any alternative credit instrument on deposit in the Reserve Account in lieu of cash (each, an “Alternative Credit Instrument”).

Payment of any Policy Cost shall be made prior to replenishment of any cash amounts. Draws on all Alternative Credit Instruments (including the Reserve Policy) on which there is available coverage shall be made on a pro-rata basis (calculated by reference to the available coverage under each such Alternative Credit Instrument) after applying all available cash and investments in the Reserve Account. Payment of Policy Costs and reimbursement of amounts with respect to other Alternative Credit Instruments shall be made on a pro-rata basis prior to replenishment of any cash drawn from the Reserve Account. For the avoidance of doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable Alternative Credit Instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw.
(b) Draws on the Reserve Policy may only be used to make payments of principal of and interest on the Bonds (and for the avoidance of doubt, not any other obligations of the District, whether issued on parity with the Bonds, or otherwise).
(c) If the District shall fail to pay any Policy Costs in accordance with the requirements of paragraph (a) above, the Bond Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under this Indenture other than: (i) acceleration of the maturity of the Bonds; or (ii) remedies which would adversely affect Bondowners. 290

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(d) In order to secure the District’s payment obligations with respect to the Policy Costs, there is hereby granted and perfected in favor of the Bond Insurer a security interest (subordinate only to that of the Bondowners) in all revenues and collateral pledged as security for the Bonds. (e) The Trustee shall ascertain the necessity for a claim upon the Reserve Policy in accordance with the provisions of paragraph (a) above and shall provide notice to the Bond Insurer in accordance with the terms of the Reserve Policy at least five (5) Business Days prior to each date upon which interest or principal is due on the Bonds. Where deposits are required to be made by the District with the Trustee to the debt service fund for the Bonds more often than semi-annually, the Trustee shall give notice to the Bond Insurer of any failure of the District to make timely payment in full of such deposits within two (2) Business Days of the date due.
(f) The Reserve Policy shall expire on the earlier of the date that the Bonds are no longer outstanding and the final maturity date of the Bonds.

Section 3.7. Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternative Penalty Account therein. All money at any time deposited in the Rebate Account or the Alternative Penalty Account of the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. A separate subaccount of the Rebate Account and the Alternative Penalty Account shall be established for the Bonds and each issue of Parity Bonds the interest on which is excluded from gross income for federal income tax purposes. All amounts on deposit in the Rebate Fund with respect to the Bonds or an issue of Parity Bonds shall be governed by this Section 3.7 and the Tax Certificate for such issue, unless the District obtains an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest payments on the Bonds and Parity Bonds will not be adversely affected if such requirements are not satisfied. (1) Rebate Account. The following requirements shall be satisfied with respect to each subaccount of the Rebate Account:
(i) Annual Computation. Within 55 days of the end of each fifth Bond Year, the District shall calculate or cause to be calculated the amount of rebatable arbitrage for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the “Rebatable Arbitrage”). The District shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Annual Transfer. Within 55 days of the end of each Bond Year for which Rebatable Arbitrage must be calculated as required by the Tax Certificate for each issue, upon the written direction of an Authorized Representative of the City, an amount shall be deposited to each subaccount of the Rebate Account by the Trustee from any funds so designated by the District if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable 291

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Arbitrage so calculated by or on behalf of the District in accordance with subsection (a)(1)(i) with respect to the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable. In the event that immediately following any transfer required by the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit to the credit of the applicable subaccount of the Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from an Authorized Representative of the City, the Trustee shall withdraw the excess from the appropriate subaccount of the Rebate Account and then credit the excess to the Special Tax Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the City, to the United States Treasury, out of amounts in each subaccount of the Rebate Account: (X) not later than 60 days after the end of: (A) the fifth Bond Year for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable; and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year for the Bonds and each issue of Parity Bonds, as applicable; and (Y) not later than 60 days after the payment or redemption of all of the Bonds or an issue of Parity Bonds, as applicable, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.

In the event that, prior to the time that any payment is required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(1) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared and signed by the District, or shall be made in such other manner as provided under the Code. The Trustee may rely conclusively upon the District’s determinations, calculations and certifications required by this Section. The Trustee shall have no responsibility to independently make any calculation or determination or to review the District’s calculations hereunder. (2) Alternative Penalty Account.
(i) Six-Month Computation. If the 1½% Penalty has been elected for the Bonds or an issue of Parity Bonds, within 85 days of each particular Six-Month Period, the District shall determine or cause to be determined whether the 1½% Penalty is payable (and the amount of such penalty) as of the close of the applicable Six-Month Period. The District shall obtain expert advice in making such determinations.
(ii) Six-Month Transfer. Within 85 days of the close of each Six-Month Period, the Trustee, at the written direction of an Authorized Representative of the City, shall deposit an amount in the appropriate subaccounts of the Alternative Penalty Account from any source of funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions or provided to it by the District, if and to the extent required, so that the balance in each subaccount of the Alternative Penalty Account equals the amount of 1½% Penalty due and payable to the United States Treasury determined as provided in subsection (a)(2)(i). In the event that immediately following any transfer provided for in the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit in a subaccount of the Alternative 292

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Penalty Account exceeds the amount required to be on deposit therein to make the payments required by subsection (a)(2)(iii), the Trustee, at the written direction of an Authorized Representative of the City, may withdraw the excess from the applicable subaccount of the Alternative Penalty Account and credit the excess to the Special Tax Fund.
(iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the City, to the United States Treasury, out of amounts in a subaccount of the Alternative Penalty Account, not later than 90 days after the close of each Six-Month Period the 1½% Penalty, if applicable and payable, computed with respect to the Bonds and any issue of Parity Bonds in accordance with Section 148(f)(4) of the Code. In the event that, prior to the time that any payment is required to be made from a subaccount of the Alternative Penalty Account, the amount in such subaccount is not sufficient to make such payment when such payment is due, the District shall calculate the amount of such deficiency and direct the Trustee, in writing, to deposit an amount equal to such deficiency into such subaccount of the Alternative Penalty Account from any funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(2) shall be made to the Internal Revenue Service, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, prepared and signed by the District, or shall be made in such other manner as provided under the Code.
(b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund with respect to the Bonds or an issue of Parity Bonds after redemption and payment of such issue and after making the payments described in subsections (a)(1)(iii) or (a)(2)(iii) (whichever is applicable), may be withdrawn by the Trustee at the written direction of the District and utilized in any manner by the District.
(c) Survival of Defeasance and Final Payment. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance and final payment of the Bonds and any Parity Bonds with respect to which an Account has been created in the Rebate Fund.
(d) Amendment Without Consent of Owners. This Section 3.7 may be deleted or amended in any manner without the consent of the Owners, provided that prior to such event there is delivered to the District and the Trustee an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any issue of Parity Bonds issued on a tax-exempt basis, in addition to any opinions required by the Trustee under Section 6.3 hereof.

Section 3.8. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5,

3.6 and 3.7, as soon as practicable after each October 1, and in any event prior to each November 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative of the City directing that certain amounts be retained in the Special Tax Fund because the District has included such amounts as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b). Moneys deposited in the Surplus Fund will be transferred by the Trustee at the direction of an Authorized Representative of the City: (a) to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund to pay the principal of, including Sinking Fund Payments, premium, if any, and interest on the Bonds and any 293

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Parity Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account of the Special Tax Fund are insufficient therefor; (b) to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement; (c) to the Administrative Expenses Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expenses Account of the Special Tax Fund are insufficient to pay Administrative Expenses; or (d) for any other lawful purpose of the District.

The amounts in the Surplus Fund are not pledged to the repayment of the Bonds or the Parity Bonds and may be used by the District for any lawful purpose. In the event that the District reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds or Parity Bonds, the District will notify the Trustee in a Certificate of an Authorized Representative and the Trustee will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested at the written direction of the District in Permitted Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Code) or in Permitted Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes.

Section 3.9. Costs of Issuance Fund. The moneys in the Costs of Issuance Fund shall be disbursed by the Trustee pursuant to a Certificate of an Authorized Representative of the City, and any balance therein shall be transferred by the Trustee to the Interest Account as directed in writing by an Authorized Representative of the City or 90 days following the issuance of the Bonds, whichever is earlier. The Costs of Issuance Fund shall thereafter be closed.

Section 3.10. Investments. Moneys held in any of the funds, Accounts and subaccounts under this Indenture shall be invested at the written direction of the District in accordance with the limitations set forth below only in Permitted Investments which shall be deemed at all times to be a part of such funds, Accounts and subaccounts. Any loss resulting from such Permitted Investments shall be credited or charged to the fund, Account or subaccount from which such investment was made, and any investment earnings on a fund, Account or subaccount shall be applied as follows:
(i) investment earnings on all amounts deposited in the Costs of Issuance Fund, the Special Tax Fund, the Surplus Fund and the Rebate Fund and each Account therein (other than the Reserve Account of the Special Tax Fund) shall be deposited in those respective funds and Accounts; and (ii) investment earnings on all amounts deposited in the Reserve Account shall be deposited therein to be applied as set forth in Section 3.6. Moneys in the funds, Accounts and subaccounts held under this Indenture may be invested by the Trustee as directed in writing (filed by the District with the Trustee two (2) Business Days in advance of the making of the investment) from time to time, in Permitted Investments subject to the following restrictions:
(a) Moneys in the Costs of Issuance Fund and the Interest Account, the Principal Account and the Redemption Account of the Special Tax Fund shall be invested only in Permitted Investments which will by their terms mature, or in the case of an investment agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds and any Parity Bonds as the same become due. 294

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(b) Moneys in the Reserve Account of the Special Tax Fund may be invested only in Permitted Investments which, taken together, have a weighted average maturity not in excess of five years; provided that such amounts may be invested in an investment agreement to the later of the final maturity of the Bonds or any Parity Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.6; and provided that no such Permitted Investment of amounts in the Reserve Account allocable to the Bonds or an issue of Parity Bonds shall mature later than the respective final maturity date of the Bonds or the issue of Parity Bonds, as applicable.
(c) Moneys in the Rebate Fund shall be invested only in Permitted Investments of the type described in clause (a) of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.7, or in Permitted Investments of the type described in clause (g) of the definition thereof. (d) In the absence of written investment directions from the District, the Trustee shall hold such moneys uninvested.

The Trustee shall sell, or present for redemption, any Permitted Investment as directed in writing by the District whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and Accounts or from such funds and Accounts. For the purpose of determining at any given time the balance in any such funds and Accounts, any such investments constituting a part of such funds and Accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the market value thereof at least semiannually on or before each Interest Payment Date. In making any valuations hereunder, the Trustee may utilize and conclusively rely on, without liability, such generally recognized pricing information services (including brokers and dealers in securities) as may be available to it, including, without limitation, those available through its regular accounting system, and conclusively rely thereon. Notwithstanding anything herein to the contrary, the Trustee shall not be liable for the selection of investments or for investment losses incurred thereon. The Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of the District to provide timely written investment direction. The Trustee may conclusively rely upon the District’s written instructions as to both suitability and legality of the directed investments.

The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment and shall be entitled to its customary fee for such investment, including account maintenance fees. The Trustee may sell, or present for redemption, any Permitted Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Permitted Investment is credited, and, subject to the provisions of Section 7.4, the Trustee shall not be liable or responsible for any loss resulting from such investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. The Trustee may make any and all such investments through its own investment department or that of its affiliates or subsidiaries, and may charge its ordinary and customary fees for such trades, including account maintenance fees.

Ratings of Permitted Investments shall be determined at the time of purchase of such Permitted Investments and without regard to ratings subcategories.

The District acknowledges that, to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such 295

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confirmations to the extent permitted by law. The Trustee will furnish the District periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

Ratings of Permitted Investments referred to herein shall be determined at the time of purchase of such Permitted Investments and without regard to rating subcategories. The Trustee shall have no responsibility to monitor ratings of Permitted Investments after the initial purchase of such Authorized Investments or the responsibility to validate the ratings of Permitted Investments prior to the initial purchase.

ARTICLE IV

REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds.
(a) Optional Redemption. The Bonds with stated maturities on or after October 1, 20__ are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the District in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to redemption, by lot within each maturity in integral multiples of $5,000, on October 1, 20__ or any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium. (b) Mandatory Sinking Fund Redemption. The Term Bonds shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account, on October 1, 20___, and October 1, 20___, in accordance with the schedule of Sinking Fund Payments set forth below. The Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

TERM BONDS MATURING OCTOBER 1, 20___
Redemption Date (October
1) Principal Amount
$
*
___________
* Maturity.

If, during the Fiscal Year immediately preceding one of the redemption dates specified above, the District purchases Bonds, at least 45 days prior to the redemption date the District shall notify the Trustee as to the principal amount purchased and the amount of Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for the Bonds so purchased. All Bonds purchased pursuant to this subsection shall be cancelled pursuant to Section 10.1.
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In the event of a partial optional redemption or extraordinary redemption of the Bonds, each of the remaining Sinking Fund Payments for such Bonds, as described above, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000, as directed by the District. (c) Extraordinary Redemption. The Bonds are subject to extraordinary redemption as a whole, or in part by lot, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to Section 3.5(b), plus amounts transferred from the Reserve Account pursuant to Section 3.6, among maturities as directed in writing by the District, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption Price
Any Interest Payment Date from (and including) October 1, 20__ through (and including) April 1, 20__
___%
October 1, 20__ and April 1, 20__ ___
October 1, 20__ and April 1, 20__ ___
October 1, 20__ and any Interest Payment Date thereafter ___

The District shall notify the Trustee of any extraordinary redemption at least 45 days prior to the Interest Payment Date on which such redemption shall occur.

(d) The redemption provisions for Parity Bonds shall be set forth in a Supplemental Indenture.

Section 4.2. Selection of Bonds and Parity Bonds for Redemption. If less than all of the Bonds or Parity Bonds Outstanding are to be redeemed, the portion of any Bond or Parity Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof; provided, however, that Bonds held by the Depository shall be subject to the procedures and requirements of the Depository. The Trustee shall promptly notify the District in writing of the Bonds or Parity Bonds, or portions thereof, selected for redemption.

Section 4.3. Notice of Redemption. When Bonds or Parity Bonds are due for redemption under Section 4.1 or the terms of a Supplemental Indenture, respectively, subject in the case of optional redemption to its receipt of timely notice from the District of its election to exercise optional redemption, the Trustee shall give notice, in the name of the District, of the redemption of such Bonds or Parity Bonds; provided, however, that a notice of a redemption to be made from other than from Sinking Fund Payments shall be conditioned on there being on deposit on the redemption date sufficient money to pay the redemption price of the Bonds or Parity Bonds to be redeemed. Such notice of redemption shall: (a) specify the CUSIP numbers (if any) and the maturity date or dates of the Bonds or Parity Bonds selected for redemption; (b) state the date fixed for redemption and surrender of the Bonds or Parity Bonds to be redeemed; (c) state the redemption price; (d) state the place or places where the Bonds or Parity Bonds are to be redeemed; (e) in the case of Bonds or Parity Bonds to be redeemed only in part, state the portion of such Bond or Parity Bond that is to be redeemed; (f) state the date of issue of the Bonds or Parity Bonds as originally issued; (g) state the rate of interest borne by each Bond or Parity Bond being redeemed; and (h) state any other descriptive information needed to identify accurately the Bonds or Parity Bonds being redeemed as shall be specified by the Trustee (the Trustee having no duty to state such additional descriptive information). Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond, 297

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Parity Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee shall mail a copy of such notice, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register. The actual receipt by the Owner of any Bond or Parity Bond or the original purchaser of any Bond or Parity Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds or Parity Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties, and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption.

Redemption notices may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.

In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. In addition to providing any notice of redemption to the Bondowners, if the Bonds are held in book-entry form, each further notice of redemption shall be sent not later than the date that notice of redemption is mailed to the Bondowners by registered or certified mail or overnight delivery service to the Depository and by electronic notice to the Municipal Securities Rulemaking Board.

Upon the payment of the redemption price of any Bonds and Parity Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number (if any) identifying, by issue and maturity, the Bonds and Parity Bonds being redeemed with the proceeds of such check or other transfer.

With respect to any notice of optional redemption or extraordinary redemption of Bonds or Parity Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds or Parity 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 Trustee shall not be required to redeem such Bonds or Parity Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.

Section 4.4. Partial Redemption of Bonds or Parity Bonds. Upon surrender by the Owner of a Bond, at the option of such Owner, for mandatory redemption at the Principal Office of the Trustee, payment of such mandatory redemption of the principal amount of a Bond will be paid to such Owner. Upon surrender of any Bond or Parity Bond to be redeemed in part only, the District shall execute and the Trustee shall authenticate and deliver to the Bondowner, at the expense of the District, a new Bond or Bonds or a new Parity Bond or Parity Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity or, in the case of surrender of a Parity Bond, a new Parity Bond or Parity Bonds subject to the foregoing limitations. Such mandatory redemption shall be valid upon payment of the amount thereby required to be paid to such Owner, and the District and the Trustee shall be released and discharged from all liability to the extent of such payment. 298

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Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3, and the amount necessary for the redemption having been made available to the Trustee for that purpose and being available to the Trustee therefor on the date fixed for such redemption:
(a) the Bonds and Parity Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture or in any Supplemental Indenture with respect to any Parity Bonds, anything in this Indenture or in the Bonds or the Parity Bonds to the contrary notwithstanding; (b) upon presentation and surrender thereof at the Principal Office of the Trustee, the redemption price of such Bonds and Parity Bonds shall be paid to the Owners thereof; (c) as of the redemption date, the Bonds or the Parity Bonds, or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or Parity Bonds, or portions thereof, shall cease to bear further interest; and (d) as of the date fixed for redemption, no Owner of any of the Bonds, Parity Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Indenture or any Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.

ARTICLE V

COVENANTS AND WARRANTY
Section 5.1. Security. The District shall preserve and protect the security pledged hereunder to the Bonds and any Parity Bonds against all claims and demands of all persons.

Section 5.2. Covenants. So long as any of the Bonds or Parity Bonds issued hereunder are Outstanding and unpaid, the District makes the following covenants with the Bondowners under the provisions of the Act and this Indenture (to be performed by the District or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and Parity Bonds and tend to make them more marketable; provided, however, that said covenants do not require the District to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will receive all Special Taxes in trust for the Owners and will instruct the Finance Director of the City to deposit all Special Taxes with the Trustee immediately upon their apportionment to the District, and the District shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the District.

The District covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond and Parity Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and the Parity Bonds and in accordance with this Indenture to the extent that Net Taxes and other amounts pledged hereunder are 299

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available therefor, and that the payments into the funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds, any Parity Bonds, this Indenture and any Supplemental Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds and any Parity Bonds issued hereunder.

The District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Net Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Net Taxes superior to or on a parity with the Bonds, other than Parity Bonds.

Nothing herein shall prevent the District from issuing or incurring indebtedness that is payable from a pledge of Net Taxes which is subordinate in all respects to the pledge of Net Taxes to repay the Bonds and the Parity Bonds.
(b) Levy of Special Tax. Beginning in Fiscal Year 2026-27 and continuing so long as any Bonds or Parity Bonds are Outstanding, the legislative body of the District covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for such purpose, to pay: (i) the principal of and interest on the Bonds and any Parity Bonds when due; (ii) the Administrative Expenses; and (iii) any amounts required to replenish the Reserve Account of the Special Tax Fund and any reserve account established in connection with the issuance of such Parity Bonds to the Reserve Requirement. The District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding.
(c) Commence Foreclosure Proceedings. [The District covenants for the benefit of the Owners of the Bonds and any Parity Bonds that it will commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $10,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due and will diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided, however, that the District shall not be required to undertake any such foreclosure proceedings if: (i) the amount of Special Taxes collected by the October 1 for the most recent Fiscal Year was equal to 95% or more of the total Special Tax levied in such Fiscal Year; and (ii) the amount on deposit in the Reserve Account and any reserve account established in connection with the issuance of such Parity Bonds as of October 1 was at least equal to the Reserve Requirement.]
The District or the Trustee is expressly authorized to credit bid at any foreclosure sale, without any requirement that funds be placed in the Special Tax Fund or otherwise be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the Act or such lesser amount as determined in the following paragraph or otherwise under Section 53356.6 of the Act. Notwithstanding anything to the contrary herein, in no event shall the Trustee be required to undertake foreclosure proceedings hereunder.

The District may permit, in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Act, if it determines that such sale is in the interest of the Bond owners. The Bond owners, by their acceptance of the Bonds, hereby consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Act), and release the District, its officers and its agents from any liability in connection therewith.
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The District is hereby expressly authorized to use amounts in the Special Tax Fund to pay costs of foreclosure of delinquent Special Taxes.

The District may forgive all or any portion of the Special Taxes levied or to be levied on any parcel in the District, so long as the District determines that such forgiveness is not expected to adversely affect its obligation to pay principal of and interest on the Bonds hereunder.

The District covenants that it will deposit the net proceeds of any foreclosure to the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal of and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account and any reserve account established in connection with the issuance of any Parity Bonds, if any, up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. (d) Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Net Taxes or other funds in the Special Tax Fund (other than the Administrative Expenses Account therein), or which might impair the security of the Bonds or any Parity Bonds then Outstanding; provided, however, that nothing herein contained shall require the District to make any such payments so long as the District in good faith shall contest the validity of any such claims. (e) Books and Accounts. The District will keep proper books of records and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the Project, the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Trustee, the Owners of not less than 10% of the principal amount of the Bonds or the Owners of not less than 10% of any issue of Parity Bonds then Outstanding or their representatives authorized in writing.
(f) Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The District will take no action and will refrain from taking any action or making any use of the proceeds of the Bonds or any Parity Bonds or of any other moneys or property which would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “private activity bonds” within the meaning of Section 141 of the Code; (2) Arbitrage. The District will make no use of the proceeds of the Bonds or any Parity Bonds or of any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action which will cause the Bonds or any Parity Bonds issued on a tax- exempt basis for federal income tax purposes to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(3) Federal Guaranty. The District will make no use of the proceeds of the Bonds or any Parity Bonds and will not take or omit to take any action that would cause the Bonds or any 301

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Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “federally guaranteed” within the meaning of Section 149(b) of the Code;
(4) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; (5) Hedge Bonds. The District will make no use of the proceeds of the Bonds or any Parity Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the District takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds and any applicable Parity Bonds; (6) Miscellaneous. The District will take no action and will refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed on the Delivery Date by the District in connection with the Bonds and any issue of Parity Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein; (7) Other Tax-Exempt Issues. The District will not use proceeds of other tax-exempt securities to redeem any Bonds or Parity Bonds without first obtaining the written opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis; and (8) Subsequent Opinions. If the District obtains a subsequent opinion of Bond Counsel other than Stradling Yocca Carlson & Rauth LLP (“SYCR”), where such opinion is required in connection with a change or amendment to this Indenture or the procedures set forth in the Tax Certificate, it will obtain an opinion substantially to the effect originally delivered by SYCR that interest on the Bonds and Parity Bonds which are the subject of such change or amendment is excluded from gross income for federal income tax purposes.
(g) Reduction of Maximum Special Taxes. The District hereby finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels that required the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the District hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the District below the levels provided in this Section 5.2(g) would interfere with the timely retirement of the Bonds and Parity Bonds. The District determines it to be necessary in order to preserve the security for the Bonds and Parity Bonds to covenant, and, to the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the District.
(h) Covenants to Defend. The District covenants that, in the event that any initiative is adopted by the qualified electors in the District which purports to reduce the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of the District to levy the Special Taxes for the purposes set forth in Section 5.2(b) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. 302

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(i) Limitation on Right to Tender Bonds. The District hereby covenants that it will not adopt any policy pursuant to Section 53341.1 of the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District shall have first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Special Tax revenues to pay the principal of and interest on the Bonds and Parity Bonds when due.
(j) Continuing Disclosures. The District covenants to comply with the terms of the Continuing Disclosure Agreement and with the terms of any continuing disclosure agreement executed by the District with respect to any Parity Bonds in order to assist the underwriter thereof in complying with Rule 15(c)2-12 adopted by the Securities and Exchange Commission. (k) Further Assurances. The 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 Bonds and any Parity Bonds of the rights and benefits provided in this Indenture.

ARTICLE VI

AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent.

The District may from time to time, and at any time, without notice to or consent of any of the Bondowners, but, with respect to clauses (d), (e) and (f), with the prior written consent of the Bond Insurer so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder, adopt Supplemental Indentures for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder;
(b) to add to the covenants and agreements of and the limitations and the restrictions upon the District contained in this Indenture, other covenants, agreements, limitations and restrictions to be observed by the District which are not contrary to or inconsistent with this Indenture as theretofore in effect or which further secure Bond or Parity Bond payments; (c) to provide for the issuance of any Parity Bonds, and to provide the terms and conditions under which such Parity Bonds may be issued, subject to and in accordance with the provisions of this Indenture;
(d) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds or any Parity Bonds then Outstanding, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder; 303

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(e) subject to the provisions of Section 5.2(g), to modify, alter or amend the Rate and Method in any manner so long as such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than 110% of the principal and interest due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment; or
(f) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondowners, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder.

The District shall send copies of any such amendments or supplements to the Bond Insurer and the rating agencies which have assigned a rating to the Bonds.

Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent.

Exclusive of the Supplemental Indentures described in Section 6.1, and upon receipt of the prior written consent of the Bond Insurer so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder, the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding shall have the right to consent to and approve the adoption by the District of such Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting: (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond or Parity Bond; (b) a reduction in the principal amount of, or redemption premium on, any Bond or Parity Bond or the rate of interest thereon; (c) a preference or priority of any Bond or Parity Bond over any other Bond or Parity Bond; or (d) a reduction in the aggregate principal amount of the Bonds and Parity Bonds the Owners of which are required to consent to such Supplemental Indenture, without the consent of the Insurer (so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder) and the Owners of all Bonds and Parity Bonds then Outstanding; or (e) any effect on the rights and interests of the Bond Insurer hereunder except upon the prior written consent of the Bond Insurer.

If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Bondowners, the District shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture together with the written consent of the Bond Insurer (so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder). The Trustee shall, at the expense of the District, cause notice of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the Principal Office of the Trustee for inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the District substantially in the form of the copy referred to in such notice as on 304

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file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the District, shall thereafter become a part of the proceedings for the issuance of the Bonds and any Parity Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds and Parity Bonds have consented to the adoption of any Supplemental Indenture, Bonds or Parity Bonds that are owned by the District, or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination, except that in determining whether the Trustee shall be protected in relying upon any such demand, request, direction, consent or waiver of a Bondowner, only Bonds which a Responsible Officer of the Trustee actually knows to be owned or held by or for the account of the District, or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination.

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

Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds. After the effective date of any action taken as hereinabove provided, the District may determine that the Bonds or any Parity Bonds may bear a notation, by endorsement in form approved by the District, as to such action, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date and presentation of such Owner’s Bond or Parity Bond for the purpose at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds or Parity Bonds. If the District shall so determine, new Bonds or Parity Bonds so modified as, in the opinion of the District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date such new Bonds or Parity Bonds shall be exchanged at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner of Outstanding Bonds or Parity Bonds, upon surrender of such Outstanding Bonds or Parity Bonds.

In executing, or accepting the additional trusts created by any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of Bond Counsel stating that the execution of such Supplemental Indenture is authorized or permitted by this Indenture and complies with the terms hereof and that all conditions precedent set forth in this Indenture applicable to the adoption of such Supplemental Indenture, if any, have been satisfied. In addition, in connection with the adoption of a Supplemental Indenture pursuant to Section 6.2, the Trustee shall be entitled to receive and to rely upon an opinion or advice of counsel in determining whether such Supplemental Indenture materially adversely affects the interests of Owners of any Bonds or Parity Bonds (which opinion may rely upon such certificates, reports or other statements as such opining counsel may deem necessary). The Trustee may, but shall not be obligated to, enter into any such 305

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Supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

ARTICLE VII

TRUSTEE
Section 7.1. Trustee. U.S. Bank Trust Company, National Association, shall be the Trustee for the Bonds and any Parity Bonds unless and until another Trustee is appointed by the District hereunder. The District may, at any time, appoint a successor Trustee satisfying the requirements of Section 7.2 for the purpose of receiving all money that the District is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.

The Trustee shall and is hereby authorized to mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5, interest payments to the Bondowners, to select Bonds and Parity Bonds for redemption and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds and Parity Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds and Parity Bonds presented to it for such purposes, to provide for the cancellation of Bonds and Parity Bonds and to provide for the authentication of Bonds and Parity Bonds and shall perform all other duties assigned to or imposed on it as provided in this Indenture.

The Trustee shall keep accurate records of all funds administered by it and all Bonds and Parity Bonds paid, discharged and cancelled by it.

The Trustee is hereby authorized to redeem the Bonds and Parity Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds and Parity Bonds upon payment thereof in accordance with the provisions of Section 10.1.

The District shall from time to time, subject to any agreement between the District and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee for all of its advances and expenditures, including, but not limited to, advances to and fees, costs and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties hereunder and indemnify and save the Trustee, its officers, directors, employees and agents, harmless from and against any losses, costs, claims, expenses, judgments, damages, suits and liabilities, including, without limitation, fees and expenses of its attorneys, not arising from its own negligence or willful misconduct, in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (except claims asserted by the District) or liability in connection with the exercise or performance of any of its powers and duties hereunder or under any documents or transactions contemplated or executed in connection herewith. The foregoing obligation of the District to indemnify the Trustee shall survive the removal or resignation of the Trustee or the discharge of the Bonds.

When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it.
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Section 7.2. Removal of Trustee. The District may at any time at its sole discretion, and shall at the direction of a majority of the Owners, remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a 30-day written notice of its decision to remove the Trustee. The District shall appoint a successor or successors thereto, provided that any such successor shall be a bank, national banking association or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $250,000,000, and subject to supervision or examination by federal or state authority. If any bank, national banking association or trust company appointed as a successor publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice being sent by the successor Trustee to the Bondowners of the successor Trustee’s identity and address. The predecessor Trustee shall be and remain entitled to payment in full of the amounts owing to it hereunder.

Section 7.3. Resignation of Trustee. The Trustee may at any time resign by giving written notice to the District and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the registration books at the Principal Office of the Trustee. Upon receiving such notice of resignation, the District shall promptly appoint a successor Trustee satisfying the criteria in Section 7.2 by an instrument in writing. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf of itself and all other Bondowners) may petition any court of competent jurisdiction, at the expense of the District, 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. The Trustee shall be paid in full for any fees and expense owing to it prior to or contemporaneously with the signing of any instrument or agreement to effect the transfer to a successor Trustee.

Section 7.4. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds and any Parity Bonds shall be taken as statements, promises, covenants and agreements of the District, and the Trustee assumes no responsibility for the correctness of the same and makes no representations as to the validity or sufficiency of this Indenture, the Bonds or any Parity Bonds, and shall incur no responsibility in respect thereof, other than in connection with its duties or obligations specifically set forth herein, in the Bonds and any Parity Bonds, or in the certificate of authentication assigned to or imposed upon the Trustee. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds or any Parity Bonds for value. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall not be accountable for the use of any proceeds of the sale of the Bonds delivered hereunder.

The Trustee shall be protected in relying and acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, statement, requisition, report, Bond, Parity Bond, electronic mail, or other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and correct and to have been signed or presented by the proper party or parties, and shall not be obliged to make any investigation into the facts or matters stated therein. The Trustee may consult with counsel, who may be counsel to the District, with regard to legal questions, and the opinion 307

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of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered hereunder in good faith and in accordance therewith.

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

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

The Trustee shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers. The Trustee may refuse to perform any duty or exercise any right or power which would require it to expend its own funds or risk any liability if it shall reasonably believe that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it.

The Trustee shall not be deemed to have knowledge of any default or Event of Default until a Responsible Officer shall have actual knowledge thereof or the Trustee shall have received written notice thereof at the Principal Office of the Trustee.

The Trustee shall not be considered in breach of or in default in its obligations hereunder or liable for any failure in or progress in respect thereto in the event of enforced delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, pandemics, quarantine restrictions, acts of civil or military authority, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the Project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.

The Trustee shall not be liable for action taken or omitted to be taken by it in good faith pursuant to and in accordance with the direction of Owners of Bonds or Parity Bonds in aggregate principal amount of the requisite percentage or the District pursuant to and in accordance with any provision contained in this Indenture that permits such party so to direct the Trustee.

In no event shall the Trustee be responsible or liable for special, punitive, indirect or consequential loss or damages of any kind (including but not limited to loss of profit) irrespective of 308

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whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

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

The 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.

All immunities, indemnifications and releases from liability granted herein to the Trustee will extend to the directors, employees, officers and agents thereof.

The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture unless such Owners shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities (including but not limited to attorneys’ fees and expenses) which may be incurred therein or thereby.

The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
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The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys, agents, custodians or nominees appointed with due care and the Trustee shall not be liable for the acts or omissions of such attorneys, agents, custodians or nominees appointed with due care, and shall be entitled to rely on advice of counsel concerning all matters of trust and its rights and duties hereunder.

The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured) the Trustee shall 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 his own affairs.

The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds.

The Trustee shall not be required to determine the suitability or legality of any investments, and may rely on the investment directions of the District as to both the suitability and legality of the directed investments.

Section 7.5. Merger or Consolidation. Any bank, corporation, association or company into which the Trustee may be merged or converted or with which it may be consolidated or any bank corporation, association or company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, corporation, association or company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

Section 7.6. Rights of Bond Insurer. Notwithstanding anything in this Article to the contrary, the Bond Insurer shall receive prior written notice of any name change of the Trustee or the resignation or removal of the Trustee. Any Trustee must be (A) a national banking association that is supervised by the Office of the Comptroller of the Currency and has at least $250 million of assets, (B) a state-chartered commercial bank that is a member of the Federal Reserve System and has at least $1 billion of assets, or (C) otherwise approved by the Bond Insurer in writing. No removal, resignation or termination of the Trustee shall take effect until a successor, meeting the requirements of this Section or otherwise acceptable to the Bond Insurer (so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder), shall be qualified and appointed.

ARTICLE VIII

EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one or more of the following events shall constitute an “Event of Default”:
(a) default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond or Parity Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; 310

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(b) default in the due and punctual payment of the interest on any Bond or Parity Bond when and as the same shall become due and payable; or
(c) except as described in subsections (a) or (b), default by the District in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture, the Bonds or any Parity Bonds, and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds and Parity Bonds; provided, however, that with the prior written consent of the Bond Insurer, so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder, such default shall not constitute an Event of Default hereunder if the District shall commence to cure such default within said 30-day period and thereafter diligently and in good faith proceed to cure such default within a reasonable period of time not to exceed 90 days after such notice; or
(d) An event of default occurs under any agreement pursuant to which any Parity Bonds or other bonds, loans, certificates, installment or lease payments or similar obligations that are payable and/or secured on a parity or subordinate basis to the Insured Bonds of the District has been incurred or issued and that permits the holder or trustee of such obligations to accelerate such obligations or otherwise exercise rights or remedies that are adverse to the interest of Insured Bondowners or the Bond Insurer, as the Bond Insurer may determine in its sole discretion.

The Trustee agrees to give notice to the Owners as soon as practicable upon the occurrence of an Event of Default under subsections (a) or (b) above and within 30 days of a Responsible Officer’s knowledge of an Event of Default under subsection (c) above.

Section 8.2. Remedies of Owners. Upon the occurrence of an Event of Default, subject to the provisions of Section 8.9, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds and Parity Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture, including:
(a) by mandamus or other suit or proceeding at law or in equity to enforce the Trustee’s rights against the District and any of the members, officers and employees of the District, and to compel the District or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Indenture; (b) by suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or
(c) by a suit in equity to require the District and its members, officers and employees to account as the trustee of an express trust.

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and Parity Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds and Parity Bonds; provided that such request is in accordance with law and the provisions hereof and, in the sole judgment of the Trustee, is not unduly prejudicial to the interest of the Owners of Bonds or Parity Bonds not making such request (the Trustee having no duty to make such determination or judgment). 311

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No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.

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 Owner so affected.

In no event shall the principal of the Bonds or any Parity Bonds be accelerated.

Section 8.3. Application of Revenues and Other Funds After Default. Subject to the provisions of Section 8.9, all amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture relating to the Bonds and Parity Bonds shall be applied by the Trustee in the following order:

First, to the payment or reimbursement of the fees, costs, advances, charges, disbursements and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and Second, upon presentation of the several Bonds and Parity Bonds, to the payment of the whole amount of interest on and principal of the Bonds and Parity Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds and Parity Bonds; provided, however, that in the event that such amounts shall be insufficient to pay the full amount of such interest and principal, then such amounts shall be applied in the following order of priority:
(a) first to the payment of all installments of interest on the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, (b) second, to the payment of all installments of principal, including Sinking Fund Payments, of the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; and
(c) third, to the payment of interest on overdue installments of principal and interest on the Bonds and Parity Bonds on a pro rata basis based on the total amount then due and owing.

Section 8.4. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds and Parity Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds and Parity Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or 312

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otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding that any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds and Parity Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds and Parity Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds and Parity Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds and Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.

Section 8.5. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owners of the Bonds and Parity Bonds under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Net Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

Section 8.6. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds or the Parity Bonds, shall affect or impair the obligation of the District, which is absolute and unconditional, to pay the interest on and principal of the Bonds and Parity Bonds to the respective Owners of the Bonds and Parity Bonds at the respective dates of maturity, as herein provided, out of the Net Taxes and other moneys herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or any Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Bonds or Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or the Owners by the Act or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as the case may be.

Section 8.7. Limitations on Rights and Remedies of Owners. No Owner of any Bond or Parity Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless: (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds and Parity Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request (including but not limited to attorneys’ fees and costs); and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
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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 Bonds and Parity Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds and Parity Bonds shall have any right in any manner whatever by their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds and Parity Bonds.

The right of any Owner of any Bond and Parity Bond to receive payment of the principal of and interest and premium (if any) on such Bond and Parity Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.

Section 8.8. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the District, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

Section 8.9. Control by Bond Insurer Upon Default. Anything in this Indenture to the contrary notwithstanding, so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations thereunder, upon the occurrence and continuance of a default or an Event of Default: (a) the Bond Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Insured Bondowners or the Trustee for the benefit of the Insured Bondowners under this Indenture; (b) no default or Event of Default may be waived without the Bond Insurer’s written consent; and (c) the Bond Insurer shall be deemed to be sole owner of the Insured Bonds under the Indenture.

ARTICLE IX

DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond or Parity Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond or Parity Bond shall cease to be entitled to the pledge of Net Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the District to the Owner of such Bond or Parity Bond under this Indenture and any Supplemental Indenture relating to such Parity Bond shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds and Parity Bonds pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the District’s general fund all money or securities held by it pursuant to this Indenture which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds and Parity Bonds. 314

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Any Outstanding Bond or Parity Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond or Parity Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expenses Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable; or (c) by depositing with the Trustee or another escrow bank appointed by the District, in trust, Federal Securities, in which the District may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expenses Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable.

If paid as provided above, then, at the election of the District, and notwithstanding that any Outstanding Bonds and Parity Bonds shall not have been surrendered for payment, all obligations of the District under this Indenture and any Supplemental Indenture with respect to such Bond or Parity Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any such Bond or Parity Bond not so surrendered and paid, all sums due thereon and except for the covenants of the District contained in Section 5.2(f) or any covenants in a Supplemental Indenture relating to compliance with the Code. Notice of such election shall be filed with the Trustee not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee.

In connection with a defeasance of Insured Bonds under clauses (b) or (c) above, there shall be provided to the District and the Bond Insurer at least three (3) Business Days prior to such defeasance the following documents, in each case in form and substance satisfactory to the Bond Insurer: (i) a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Trustee or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds and Parity Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, addressed to the Bond Insurer and the District (a “Verification Report”); (ii) an opinion of Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds or Parity Bonds being defeased have been legally defeased in accordance with this Indenture and any applicable Supplemental Indenture and that all conditions precedent to the satisfaction and discharge of this Indenture and any applicable Supplemental Indenture and the pledge of Net Taxes and other assets made under Bond Indenture and any applicable Supplemental Indenture and all covenants, agreements and other obligations of the District thereunder have been satisfied, addressed to the Bond Insurer and the District; and (iii) if applicable, an escrow agreement relating to the defeased Bonds.

The escrow agreement that is referred to in clause (iii) above shall provide that:
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(I) Any substitution of securities following the execution and delivery of the escrow agreement shall require the delivery of a Verification Report, an opinion of Bond Counsel that such substitution will not adversely affect the exclusion from gross income of the holders of the Bonds of the interest on the Bonds for federal income tax purposes and the prior written consent of the Bond Insurer, which consent will not be unreasonably withheld or delayed; (II) The District will not exercise any prior optional redemption of Insured Bonds secured by the escrow agreement or any other redemption other than mandatory sinking fund redemptions unless: (A) the right to make any such redemption has been expressly reserved in the escrow agreement and such reservation has been disclosed in detail in the official statement for the refunding bonds; and (B) as a condition to any such redemption there shall be provided to the Bond Insurer a Verification Report as to the sufficiency of escrow receipts without reinvestment to meet the escrow requirements remaining following any such redemption; and
(III) The District shall not amend the escrow agreement or enter into a forward purchase agreement or other agreement with respect to rights in the escrow without the prior written consent of the Bond Insurer.

Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the Owners of such Bonds and Parity Bonds that have been defeased under this Indenture and any Supplemental Indenture and execute and deliver to the District all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds and Parity Bonds, the Trustee shall pay over or deliver to the District any funds held by the Trustee at the time of a defeasance that are not required for the purpose of paying and discharging the principal of or interest on the Bonds and Parity Bonds when due. The Trustee shall, at the written direction of the District, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds or Parity Bonds have been defeased, in the form directed by the District, stating that the defeasance has occurred.

Notwithstanding anything to the contrary set forth herein, this Indenture shall not be discharged or terminated unless all amounts due or to become due to the Bond Insurer (including Policy Costs) have been paid in full or duly provided for, and the District’s obligation to pay such amounts shall expressly survive payment in full of the Bonds.

Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness. The District may at any time after the issuance and delivery of the Bonds hereunder issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued hereunder or under any Supplemental Indenture; provided, however, that Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. Parity Bonds may be issued subject to the following additional specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:
(a) The District shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indenture then in effect, and a certificate of the District to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding the fact that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants. 316

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(b) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for by a Supplemental Indenture duly adopted by the District which shall specify the following:
(1) the purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited, including a provision requiring the proceeds of such Parity Bonds to be applied solely for the purpose of refunding any Outstanding Bonds or Parity Bonds, including payment of all costs and the funding of all reserves incidental to or connected with such refunding;
(2) the authorized principal amount of such Parity Bonds; (3) the date and the maturity date or dates of such Parity Bonds; provided that:
(i) each maturity date shall fall on a October 1; (ii) all such Parity Bonds of like maturity shall be identical in all respects, except as to number; and (iii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates;
(4) the description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;
(5) the denominations and method of numbering of such Parity Bonds; (6) the amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds;
(7) the amount, if any, to be deposited from the proceeds of such Parity Bonds in a reserve account of the Special Tax Fund to increase the amount therein to the Reserve Requirement; (8) the form of such Parity Bonds; and
(9) such other provisions as are necessary or appropriate and not inconsistent with this Indenture.
(c) The Trustee shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the Delivery Date of such Parity Bonds by the Trustee (unless the Trustee shall accept any of such documents bearing a prior date, which it shall not be liable hereunder for so accepting):
(1) a certified copy of the Supplemental Indenture authorizing the issuance of such Parity Bonds;
(2) a written request of the District as to the delivery of such Parity Bonds; (3) an opinion of Bond Counsel to the effect that: (i) the District has the right and power under the Act to execute and deliver this Indenture and the Supplemental Indentures relating to such Parity Bonds, and this Indenture and all such Supplemental Indentures have been duly and lawfully executed and delivered by the District, are in full force and effect and are valid and binding upon the District and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of 317

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creditors’ rights); (ii) this Indenture creates the valid pledge which it purports to create of the Net Taxes and other amounts as provided in this Indenture, subject to the application thereof to the purposes and on the conditions permitted by this Indenture; and (iii) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of this Indenture and all Supplemental Indentures thereto and entitled to the benefits of this Indenture and all such Supplemental Indentures, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and this Indenture and all such Supplemental Indentures; and a further opinion of Bond Counsel to the effect that, assuming compliance by the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax-exempt basis, or the exemption from State of California personal income taxation of interest on any Outstanding Bonds and Parity Bonds theretofore issued;
(4) a certificate of the District containing such statements as may be reasonably necessary to show compliance with the requirements of this Indenture, including a statement that all requirements under this Section 9.2 have been complied with; (5) a certificate of an Independent Financial Consultant certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds; and (6) such further documents, money and securities as are required by the provisions of this Indenture and the Supplemental Indenture providing for the issuance of such Parity Bonds.

ARTICLE X

MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds. All Bonds and Parity Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond or Parity Bond purchased by the District as authorized herein and delivered to the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds and Parity Bonds, as provided by law, and, upon request of the District, furnish to the District a certificate of such destruction.

Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds or Parity Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee 318

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of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority.
(b) As to any Bond or Parity Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond or Parity Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond or Parity Bond and the interest thereon to the extent of the sum or sums to be paid.

Neither the District nor the Trustee shall be affected by any notice to the contrary.

Nothing contained in this Indenture shall be construed as limiting the Trustee or the District to such proof, it being intended that the Trustee or the District may accept any other evidence of the matters herein stated which the Trustee or the District may deem sufficient. Any request or consent of the Owner of any Bond or Parity Bond shall bind every future Owner of the same Bond or Parity Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of such request or consent.

Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds and Parity Bonds that remains unclaimed for two years after the date when such Outstanding Bonds or Parity Bonds have become due and payable, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds or Parity Bonds become due and payable, shall be repaid by the Trustee to the District (without liability for interest), as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of such Outstanding Bonds or Parity Bonds; provided, however, that, before being required to make any such payment to the District, the Trustee, at the expense of the District, shall cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds or Parity Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District. Any money held by the Trustee pursuant to this paragraph shall be held uninvested and without liability for interest.

Section 10.4. Provisions Constitute Contract. The provisions of this Indenture shall constitute a contract between the District and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California.

In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Trustee, then the District, the Trustee and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
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After the issuance and delivery of the Bonds, this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner.

Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the District from making contracts or creating bonded or other indebtedness payable from a pledge of the Net Taxes which is subordinate to the pledge hereunder, or which is payable from the general fund of the District or from taxes or any source other than the Net Taxes and other amounts pledged hereunder.

Section 10.6. Further Assurances. The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds or any Parity Bonds the rights and benefits provided in this Indenture.

Section 10.7. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture, the Bonds and any Parity Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California.

Section 10.8. Notices.
(a) Any notices required to be given to the District with respect to the Bonds or this Indenture shall be mailed, first class, postage prepaid, or personally delivered to the Finance Director of the City, 300 East Chapman Ave, Orange, California 92866, and all notices to the Trustee in its capacity as Trustee shall be mailed, first class, postage prepaid, or personally delivered to U.S. Bank Trust Company, National Association, 633 West Fifth Street, 24th Floor, Los Angeles, California 90071; Attention: Global Corporate Trust.
(b) The District will provide the Bond Insurer with all notices and other information that it is obligated to provide: (i) under the Continuing Disclosure Agreement; and (ii) to the holders of Insured Bonds or the Trustee under this Indenture. The notice address of the Bond Insurer is:
___________, __________. In each case in which notice or other communication refers to an event of default or a claim on the Policy, then a copy of such notice or other communication shall also be sent to the attention of the Bond Insurer’s General Counsel at the same address and at ________ or at Telecopier: _________ and shall be marked to indicate “URGENT MATERIAL ENCLOSED.

Section 10.9. 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, or as many of them as the District and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. Each counterpart of this Indenture may be executed and delivered by electronic means, including by electronic transmission or delivery (including electronic images of handwritten signatures delivered in .pdf file or .jpeg file format, or by any electronic signature complying with the U.S. federal ESIGN Act of 2000, including Orbit, Adobe 320

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Sign, DocuSign, or any other similar platform), each of which shall be deemed to be original signatures for all purposes and shall be effective as delivery of a manually executed original counterpart.

Section 10.10. OFAC Compliance. The District covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government, (including, the Office of Foreign Assets Control of the US Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury or other relevant sanctions authority (collectively “Sanctions”). The District covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Indenture: (a) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions; (b) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (c) in any other manner that will result in a violation of Sanctions by any person.

Section 10.11. [Insolvency. So long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations, thereunder, the following provisions apply: Any reorganization or liquidation plan with respect to the District must be acceptable to the Bond Insurer.

Each Insured Bondowner hereby appoints the Bond Insurer as its agent and attorney-in-fact with respect to the Insured Bonds and agrees that the Bond Insurer may at any time during the continuation of any Insolvency Proceeding direct all matters relating to such Insolvency Proceeding, including without limitation: (A) all matters relating to any Claim; (B) the direction of any appeal of any order relating to any Claim; (C) the posting of any surety, supersedeas or performance bond pending any such appeal; and (D) the right to vote to accept or reject any plan of adjustment. In addition, each Insured Bondowner delegates and assigns to the Bond Insurer, to the fullest extent permitted by law, the rights of each Insured Bondowner with respect to the Insured Bonds in the conduct of any Insolvency Proceeding, including, without limitation, all rights of any party to an adversary proceeding or action with respect to any court order issued in connection with any such Insolvency Proceeding.

Section 10.12. Special Provisions for Insurer Default. If an Insurer Default shall occur and be continuing, then, notwithstanding anything in this Indenture to the contrary: (a) if at any time prior to or following an Insurer Default, the Bond Insurer has made payment under the Policy, to the extent of such payment the Bond Insurer shall be treated like any other Insured Bondowner for all purposes, including giving of consents; and (b) if the Bond Insurer has not made any payment under the Policy, the Bond Insurer shall have no further consent rights until the particular Insurer Default is no longer continuing or the Bond Insurer makes a payment under the Policy, in which event, the foregoing clause (a) shall control.

Section 10.13. Bond Insurer As Third Party Beneficiary. The Bond Insurer is recognized as and shall be deemed to be a third party beneficiary of this Indenture and, so long as the Policy is in full force and effect and the Bond Insurer is not in default of its obligations, thereunder, the Bond Insurer may enforce the provisions hereof as if it were a party hereto.

Section 10.14. Payment Procedure Under the Policy. In the event that principal and/or interest due on the Insured Bonds shall be paid by the Bond Insurer pursuant to the Policy, the Insured Bonds shall remain outstanding for all purposes, not be defeased or otherwise satisfied and not be considered paid by the District, the assignment and pledge of the trust estate and all covenants, agreements and other obligations of the District to the registered owners shall continue to exist and shall run to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of such registered owners.
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In the event that on the second (2nd) Business Day prior to any Interest Payment Date, the Trustee has not received sufficient moneys to pay all principal of and interest on the Insured Bonds due on such Interest Payment Date, the Trustee shall immediately notify the Bond Insurer or its designee on the same Business Day by telephone or electronic mail, of the amount of the deficiency.

If any deficiency is made up in whole or in part prior to or on the payment date, the Trustee shall so notify the Bond Insurer or its designee.

In addition, if the Trustee has received written notice that any Insured Bondowner has been required to disgorge payments of principal of or interest on the Insured Bonds pursuant to a final, non- appealable order by a court of competent jurisdiction that such payment constitutes an avoidable preference to such holder within the meaning of any applicable bankruptcy law, then the Trustee shall notify the Bond Insurer or its designee of such fact by telephone or electronic mail, or by overnight or other delivery service as to which a delivery receipt is signed by a person authorized to accept delivery on behalf of the Bond Insurer.

The Trustee shall irrevocably be designated, appointed, directed and authorized to act as attorney-in-fact for Insured Bondowners as follows:
(a) If there is a deficiency in amounts required to pay interest and/or principal on the Insured Bonds, the Trustee shall: (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer, an instrument appointing the Bond Insurer as agent and attorney-in-fact for such Insured Bondowners in any legal proceeding related to the payment and assignment to the Bond Insurer of the claims for interest on the Insured Bonds; (ii) receive as designee of the respective holders (and not as paying agent or Trustee) in accordance with the tenor of the Policy payment from the Bond Insurer with respect to the claims for interest so assigned; (iii) segregate all such payments in a separate account (the “Bond Insurer Policy Payment Account”) to only be used to make scheduled payments of principal of and interest on the Insured Bonds; and (iv) disburse the same to such respective holders; and
(b) If there is a deficiency in amounts required to pay principal of the Insured Bonds, the Trustee shall: (i) execute and deliver to the Bond Insurer, in form satisfactory to the Bond Insurer, an instrument appointing the Bond Insurer as agent and attorney-in-fact for such Insured Bondowner in any legal proceeding related to the payment of such principal and an assignment to the Bond Insurer of the Insured Bonds surrendered to the Bond Insurer; (ii) receive as designee of the respective holders (and not as paying agent or Trustee) in accordance with the tenor of the Policy payment therefor from the Bond Insurer; (iii) segregate all such payments in the Bond Insurer Policy Payment Account to only be used to make scheduled payments of principal of and interest on the Insured Bonds; and (iv) disburse the same to such holders.

The Trustee shall designate any portion of payment of principal on Insured Bonds paid by the Bond Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Insured Bonds registered to the then current holder, whether DTC or its nominee or otherwise, and shall issue a replacement Insured Bond to the Bond Insurer, registered in the name directed by the Bond Insurer, in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Trustee’s failure to so designate any payment or issue any replacement Insured Bond shall have no effect on the amount of principal or interest payable by the District on any Insured Bond or the subrogation or assignment rights of the Bond Insurer.
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Payments with respect to claims for interest on and principal of Insured Bonds disbursed by the Trustee from proceeds of the Policy shall not be considered to discharge the obligation of the District with respect to such Insured Bonds, and the Bond Insurer shall become the owner of such unpaid Insured Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of the preceding paragraphs or otherwise. Irrespective of whether any such assignment is executed and delivered, the District and the Trustee agree for the benefit of the Bond Insurer that:
(I) They recognize that to the extent the Bond Insurer makes payments directly or indirectly (e.g., by paying through the Trustee), on account of principal of or interest on the Insured Bonds, the Bond Insurer will be subrogated to the rights of such holders to receive the amount of such principal and interest from the District, with interest thereon, as provided and solely from the sources stated in this Indenture and the Bonds; and
(II) They will accordingly pay to the Bond Insurer the amount of such principal and interest, with interest thereon as provided in this Indenture and the Bonds, but only from the sources and in the manner provided therein for the payment of principal of and interest on the Insured Bonds to holders, and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and interest.

Section 10.15. Additional Payments. The District agrees unconditionally that it will pay or reimburse the Bond Insurer on demand any and all Administrative Costs and Policy Costs. For purposes of the foregoing, costs and expenses shall include a reasonable allocation of compensation and overhead attributable to the time of employees of the Bond Insurer spent in connection with the actions described in the preceding sentence. The District agrees that failure to pay any Administrative Costs and Policy Costs on a timely basis will result in the accrual of interest on the unpaid amount at the Late Payment Rate, compounded semi-annually, from the date that payment is first due to the Bond Insurer until the date that the Bond Insurer is paid in full.

Notwithstanding anything herein to the contrary, the District agrees to pay to the Bond Insurer:
(i) a sum equal to the total of all amounts paid by the Bond Insurer under the Policy (the “Bond Insurer Policy Payment”); and (ii) interest on such Bond Insurer Policy Payments from the date paid by the Bond Insurer until payment thereof in full by the District, payable to the Bond Insurer at the Late Payment Rate per annum (collectively, “Bond Insurer Reimbursement Amounts”) compounded semi-annually. Notwithstanding anything to the contrary, including without limitation the post-Event of Default application of revenue provisions, the Bond Insurer Reimbursement Amounts shall be, and the District hereby covenants and agrees that the Bond Insurer Reimbursement Amounts are, payable from and secured by a lien on and pledge of the same revenues and other collateral pledged to the Insured Bonds on a parity with debt service due on the Insured Bonds.

Section 10.16. Exercise of Rights by Bond Insurer. The rights granted to the Bond Insurer under this Indenture to request, consent to or direct any action are rights granted to the Bond Insurer in consideration of its issuance of the Policy. Any exercise by the Bond Insurer of such rights is merely an exercise of the Bond Insurer’s contractual rights and shall not be construed or deemed to be taken for the benefit, or on behalf, of the Insured Bondowners and such action does not evidence any position of the Bond Insurer, affirmative or negative, as to whether the consent of the Insured Bondowners or any other person is required in addition to the consent of the Bond Insurer. 323

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The Bond Insurer shall be entitled to pay principal or interest on the Insured Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer (as such terms are defined in the Policy), whether or not the Bond Insurer has received a claim upon the Policy.

No contract shall be entered into or any action taken by which the rights of the Bond Insurer or security for or source of payment of the Insured Bonds may be impaired or prejudiced in any material respect except upon obtaining the prior written consent of the Bond Insurer.]

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IN WITNESS WHEREOF, the District has caused this Indenture to be signed by the City Manager of the City, acting as the legislative body of the District, and attested thereto by the City Clerk of the City, and the Trustee, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.

CITY OF ORANGE COMMUNITY FACILITIES
DISTRICT NO. 06-1 (DEL RIO PUBLIC

IMPROVEMENTS)
By:

Jarad Hildenbrand,
City Manager of the City of Orange, acting as the
legislative body of City of Orange Community
Facilities District No. 06-1 (Del Rio Public
Improvements)
ATTEST:

Pamela Coleman,
City Clerk of the City of Orange,
acting as the legislative body of
City of Orange Community Facilities District No. 06-1
(Del Rio Public Improvements)

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:

Its: Authorized Officer
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EXHIBIT A
FORM OF 2026 SPECIAL TAX REFUNDING BOND
R-1 $__________

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY (AS SUCH TERM IS DEFINED IN THE INDENTURE) TO THE BOND

REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH

OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER

ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR

OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF ORANGE
CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1 (DEL RIO PUBLIC

IMPROVEMENTS)
2026 SPECIAL TAX REFUNDING BONDS

INTEREST RATE MATURITY DATE DATED DATE CUSIP
_____% October 1, 20__ _________, 2026
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _____ MILLION _____ THOUSAND DOLLARS

CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1 (DEL RIO PUBLIC IMPROVEMENTS) (the “District”) which was formed by the City of Orange (the “City”) and is situated in the County of Orange, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as such term is defined herein), to the Registered Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as such term is defined herein) next preceding the date of authentication hereof, unless: (i) the date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date (as such term is defined herein) but prior to the immediately 326

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succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above.

Interest will be paid semiannually on October 1, 2026 and each April 1 and October 1 thereafter (each, an “Interest Payment Date”), at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment.

The principal of and premium, if any, on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of the Trustee, initially U.S. Bank Trust Company, National Association (the “Trustee”). Interest on this Bond shall be paid on each Interest Payment Date by check of the Trustee mailed by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States of America, to the Registered Owner hereof appearing on the registration books maintained by the Trustee as of the close of business on the fifteenth day of the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such Registered Owner’s address as it appears on the registration books maintained by the Trustee.

Capitalized terms used herein and not defined shall have the meanings given them in the Indenture.

This Bond is one of a duly authorized issue of “City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds” (the “Bonds”) issued in the aggregate principal amount of $_________ pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of refunding the District’s outstanding 2015 Special Tax Refunding Bonds, funding a reserve account and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”) on [June 9], 2026 and a Bond Indenture dated as of July 1, 2026, by and between the District and the Trustee executed in connection therewith (the “Indenture”), and this reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and conditions. The Indenture is executed under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California.

Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this Bond are payable solely from the portion of the net annual special taxes authorized under the Act to be levied and collected within the District (the “Net Taxes”) and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any amounts for the payment hereof shall be limited to the Net Taxes pledged and collected or foreclosure proceeds received following a default in payment of the Net Taxes and other amounts deposited to the Special Tax Fund (exclusive of the Reserve Account, which shall only secure the Bonds, and the Administrative Expenses Account therein) established under the Indenture, except to the extent that other provision for payment has been made by the Legislative Body, as may be permitted by law. The District has covenanted for the benefit 327

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of the owners of the Bonds that under certain circumstances described in the Indenture it will commence and diligently pursue to completion foreclosure proceedings in the event of delinquencies of Special Tax installments levied for payment of principal and interest on the Bonds.

The Bonds with stated maturities on or after October 1, 20__ are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the District in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to redemption, by lot within each maturity in integral multiples of $5,000, on October 1, 20__ or any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.

If, during the Fiscal Year immediately preceding one of the redemption dates specified above, the District purchases Bonds, at least 45 days prior to the redemption date the District shall notify the Trustee as to the principal amount purchased and the amount of Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for the Bonds so purchased. All Bonds purchased pursuant to the Indenture will be cancelled pursuant to the Indenture.

In the event of a partial optional redemption or extraordinary redemption of the Bonds, each of the remaining Sinking Fund Payments for such Bonds, as described above, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000, as directed by the District.

The Bonds are subject to extraordinary redemption as a whole, or in part by lot, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, among maturities as directed in writing by the District, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

The District shall notify the Trustee of any extraordinary prepayment at least 45 days prior to the Interest Payment Date on which such prepayment shall occur.

Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date, provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds. 328

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This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the District and the Trustee may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary.

The Bonds are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Indenture.

This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, upon surrender and cancellation of this Bond.

Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor.

The Trustee shall not be required to register transfers or make exchanges of: (i) any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.

The rights and obligations of the District and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, to the extent and upon the terms provided in the Indenture.

THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OR OF THE

DISTRICT FOR WHICH THE CITY OR THE DISTRICT IS OBLIGATED TO LEVY OR PLEDGE,

OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE NET TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF THE

DISTRICT PAYABLE FROM THE PORTION OF THE NET TAXES AND OTHER AMOUNTS

PLEDGED UNDER THE INDENTURE BUT ARE NOT A DEBT OF THE CITY, THE STATE OF

CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION.

This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee.

IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the District, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.

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IN WITNESS WHEREOF, the District has caused this Bond to be dated as of the Dated Date, to be signed by the facsimile signature of the Mayor of the City on behalf of the District, acting as the legislative body of the District, and attested by the facsimile signature of the City Clerk of the City.

By:

Dan Slater,
Mayor of the City of Orange, acting as the
legislative body of City of Orange Community
Facilities District No. 06-1 (Del Rio Public
Improvements)
ATTEST:

Pamela Coleman,
City Clerk of the City of Orange,
acting as the legislative body of
City of Orange Community Facilities District No. 06-1
(Del Rio Public Improvements)
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[FORM OF TRUSTEE’S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-defined Indenture.

Dated: _________, 2026 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee
By:

Its: Authorized Signatory

[STATEMENT OF INSURANCE]

331

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[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto

(Name, Address, and Tax Identification or Social Security Number of Assignee) 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(s) must be guaranteed by an
eligible guarantor institution.

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.
332

4931-3311-7596/022585-0015

333
Anzel Galvan Draft 5-4-2026
$[PAR]

CITY OF ORANGE
COMMUNITY FACILITIES DISTRICT NO. 06-1
(DEL RIO PUBLIC IMPROVEMENTS)
2026 SPECIAL TAX REFUNDING BONDS

BOND PURCHASE AGREEMENT
[Closing Date]
City of Orange Community Facilities
District No. 06-1 (Del Rio Public Improvements)
300 East Chapman Avenue
Orange, California 92866
Attention: Finance Director

Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated, 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 Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) (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 the obligations imposed upon it 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 Bond Indenture, dated as of June 1, 2026 (the “Indenture”), by and between the Community Facilities District and U.S. Bank Trust Company, National Association (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 $[PAR] aggregate principal amount of City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds (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 [net] original issue premium of $__________ and less an Underwriter’s discount of $__________). The Community Facilities District acknowledges that the Underwriter will on the Closing Date, on behalf of the Community Facilities District, wire a portion of the purchase price in the amount of $___________ representing the premiums for the Policy and the Reserve Policy (as such terms are defined herein), directly to __________ (the “Insurer”).

ATTACHMENT 3
334
2 2. The Bonds. 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 Taxes and certain other funds pledged therefor 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 “State”)) (the “Community Facilities District Act”). The issuance of the Bonds has been duly authorized by the City Council of the City of Orange, California (the “City”), as the legislative body for the Community Facilities District, pursuant to a resolution adopted on [June 9, 2026] (the “Community Facilities District Resolution of Issuance”).

The proceeds of the Bonds will be used to: (i) together with other available funds, refund the outstanding City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2015 Special Tax Refunding Bonds (the “2015 Bonds”); (ii) pay the premium for a Municipal Bond Debt Service Reserve Insurance Policy (the “Reserve Policy”) to be issued concurrently with the issuance of the Bonds by the Insurer; and (iii) pay certain costs of issuance of the Bonds, including the premium for a Municipal Bond Insurance Policy (the “Policy”) insuring the Bonds maturing on October 1 of the years 20___ through 20___, inclusive, October 1, 20___ and October 1, 20___, to be issued by the Insurer concurrently with the issuance of the Bonds.

The 2015 Bonds will be refunded pursuant to an Escrow Agreement (2015 Bonds), dated as of June 1, 2026 (the “Escrow Agreement”), by and between the Community Facilities District and U.S.

Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”) and as 2015 Fiscal Agent (as such term is defined therein).

3. Public Offering and Establishment of Issue Price.

A. The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds subject to this Section 3, 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 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 with respect to the transaction contemplated hereby: (i) the Underwriter is not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act, as amended; (ii) the primary role of the Underwriter, as an underwriter, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the Community Facilities District and the Underwriter and the Underwriter has financial and other interests that differ from those of the Community Facilities District; (iii) the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the Community Facilities District and has not assumed any advisory or fiduciary responsibility to the Community Facilities District (irrespective of whether the Underwriter has 335
3 provided other services or is currently providing other services to the Community Facilities District on other matters); (iv) 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; and (v) the Community Facilities District has consulted its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate. 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 further acknowledges and represents that it has engaged Fieldman, Rolapp & Associates, Inc., Irvine, California (the “Municipal Advisor”) as its municipal advisor within the meaning of Section 15B of the Securities Exchange Act, as amended, and will rely solely on the financial advice of the Municipal Advisor with respect to the Bonds.

B. 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 (as defined below) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form set forth in Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Community Facilities District and Bond Counsel (as such term is defined below), 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 Municipal Advisor.

C. Except as otherwise set forth in Exhibit A, the Community Facilities District will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. 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 has occurred, until either: (i) the Underwriter has sold all of the Bonds of that maturity; or (ii), the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon the 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.

D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.

Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Community Facilities District and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Community Facilities 336
4 District to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:

1. the close of the fifth (5th) business day after the sale date; or

2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the 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.

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

F. The Community Facilities District acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of 337
5 the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The 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 issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.

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

Further, for purposes of this Section:

1. “public” means any person other than an underwriter or a related party;

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 (A) 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), (B) 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 (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and

4. “sale date” means the date of execution of this Purchase Agreement by all parties.

4. The Official Statement.

A. Pursuant to the authorization of the Community Facilities District, the Underwriter has distributed copies of the Preliminary Official Statement dated [POS Date], 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 338
6 such changes as may be made thereto, with the approval of Stradling Yocca Carlson & Rauth LLP, as Bond Counsel (“Bond Counsel”), and as 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 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, dated as of June 1, 2026, by and between the Community Facilities District and Willdan Financial Services, as dissemination agent (in such capacity, the “Dissemination Agent”), relating to the Bonds, in substantially the form attached as Appendix C to the Official Statement (the “Continuing Disclosure Agreement”), the Escrow 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. This Purchase Agreement, the Indenture, the Bonds, the Escrow Agreement, and the Continuing Disclosure Agreement are collectively referred to herein as the “Community Facilities District Documents.” B. 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 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.

5. Closing. 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 Newport Beach, 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 8:30 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. The Bonds shall be made available to the Underwriter at least one (1) business day before the Closing Date for purposes of inspection.

6. 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:

A. The City is duly organized and validly existing as a general law city under the Constitution and laws of the State and has duly authorized the formation of the Community Facilities District, the incurring of bonded indebtedness thereby and other matters relating to the Community Facilities District pursuant to resolutions duly adopted by the City Council, including Resolution No. 10139, adopted on December 12, 2006 (collectively, the “Community Facilities District Formation Resolutions” and, together with the Community Facilities District Resolution of Issuance, the 339
7 “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 Ordinance No. 17-06 adopted on January 9, 2007, levying Special Tax within the Community Facilities District (the “Ordinance”), and has caused to be recorded in the real property records of the County of Orange, 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. 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 the Community Facilities District Documents, 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 Community Facilities District Documents and the Official Statement.

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 and the City Council of the City, as the legislative body of the Community Facilities District, will continue to comply with their respective covenants contained in the Community Facilities District Documents.

C. The Preliminary Official Statement was as of its date and at the date hereof, and the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement did not as of its date and at date the hereof, and the Official Statement does not and will not, at all times subsequent to the date of the Official Statement up to and including the Closing, contain any untrue statement of a material fact or omit to state a material fact that is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (other than statements pertaining to the book-entry system, and information regarding the Insurer, the Policy and the Reserve Policy, as to which no view is expressed).

D. Up to and including 25 days after the End of the Underwriting Period, 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 340
8 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, 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.

H. The Bonds are payable from the Net Taxes 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 and lien on the Net Taxes of the Community Facilities District, and in the moneys in the Special Tax Fund (exclusive of the Administrative Expenses Account), established pursuant to the Indenture, on the terms and conditions set forth in the Indenture.
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9 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.

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, and information regarding the Insurer, the Policy and the Reserve Policy, as to which no view is expressed) is true and correct in all material respects and such information does not and shall not, as of the Closing Date, 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 City, on behalf 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 Rule 15c2-12, rules of the MSRB and to meet potential customer requests for copies of the Official Statement.

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 overtly threatened in writing, 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 City or 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 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 342
10 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 Appendix C to the Official Statement. Based upon a review of its previous undertakings, and except as disclosed in the Preliminary Official Statement, the City and its related entities, including the Community Facilities District, 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.

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 City or the Community 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 6 with respect to the Community Facilities District and the City are true as of the date hereof.

7. 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 343
11 statements of the officers and other officials of the Community Facilities District and the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of its obligations to be performed hereunder at or prior to the Closing Date, and to the following additional conditions:

A. At the Closing Date, the Community Facilities District Resolutions and 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 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, 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 Community Facilities District Documents, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, 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 hereunder.

C. The information contained in the Official Statement is, as of the Closing Date and will be 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 and will not 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.

D. Between the date hereof and the time for Closing, this Purchase Agreement shall have not been terminated by the Underwriter pursuant to Section 8 hereof.

E. 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;
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12 2. The Community Facilities District Documents, each duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;

3. A certificate dated as of the Closing Date of the City Clerk to the effect that the Formation Documents have not been amended, modified or rescinded since the date of their adoption and remain in full force and effect as of the Closing Date;

4. The Community Facilities District Resolution of Issuance, together with a certificate dated as of the Closing Date of the City Clerk to the effect that such resolution is a true, correct and complete copy thereof;

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 (i) the Indenture has been duly executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery by the other parties thereto, constitutes 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, and (ii) the 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, in substantially the form attached as Appendix B 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; and
(iii) the statements contained on the cover and in the Official Statement under the captions “INTRODUCTION” (other than information under the caption “– Risk Factors,” “THE REFUNDING PLAN,” “THE BONDS,” “SECURITY FOR THE BONDS,” (except information under the caption “–Rate and Method of Apportionment of Special Taxes” as to which no opinion is expressed), “CONCLUDING INFORMATION – Tax Matters,” Appendix A – “SUMMARY CERTAIN PROVISIONS OF THE INDENTURE” and Appendix B – “FORM OF 345
13 BOND COUNSEL OPINION,” 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 Bond Counsel’s final approving opinion, are accurate in all material respects.

7. A letter, dated the Closing Date and addressed to the Underwriter, of Disclosure Counsel, to the effect that such counsel is not passing upon and has not undertaken to determine independently or to verify the accuracy or completeness of the statements contained in the Preliminary Official Statement or in the Official Statement, and is, therefore, unable to make any representation to the Underwriter in that regard, but on the basis of its participation in conferences with representatives of the City, the City Attorney, as issuer’s counsel, Bond Counsel, Willdan Financial Services, as special tax consultant to the Community Facilities District (in such capacity, the “Special Tax Consultant”), the Municipal Advisor, representatives of the Underwriter and others, during which conferences the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, and its examination of certain documents, and, in reliance thereon and based on the information made available to it in its role as Disclosure Counsel and its understanding of applicable law, Disclosure Counsel advises the Underwriter as a matter of fact, but not opinion, that no information has come to the attention of the attorneys in the firm working on such matter which has led them to believe that the Preliminary Official Statement as of its date and the date hereof and the Official Statement as of its date and as of the Closing Date (in each case excluding therefrom the financial and statistical data, forecasts, charts, numbers, estimates, projections, assumptions and expressions of opinion included in the Preliminary Official Statement and the Official Statement, information regarding DTC and its book entry system, information regarding the Insurer, the Policy and the Reserve Policy, and the information set forth in Appendices A through G, inclusive, as to all of which no opinion is expressed) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

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) the Community Facilities District Documents have been duly authorized and executed and are in full force and effect; (iii) to the best knowledge of such representative or designee, 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;
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14 9. An opinion of the City Attorney, dated the date of Closing and addressed to the Underwriter and the Community Facilities District, substantially to the effect that:
(i) the City is a municipal corporation and general law city, duly organized and existing under the Constitution and the laws of the State of California; (ii) the Community Facilities District is duly organized and validly existing as a community facilities district under and by virtue of the Constitution and laws of the State of California;
(iii) the Community Facilities District Resolution of Issuance and the Formation Documents have been duly adopted at meetings of the City Council of the City acting as the legislative body of the Community Facilities District, which were called and held pursuant to law and with all public notice required by law and at which a 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 been modified, amended, rescinded or repealed since the respective dates of their adoption;
(iv) the Community Facilities District Documents and the Official Statement have been duly authorized, executed and delivered by the Community Facilities District; (v) except as may be stated in the Official Statement, to such counsel’s knowledge, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (proper notice or process of which has been served on the City or the Community Facilities District) or overtly threatened in writing: (a) challenging 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) challenging the validity of the Community Facilities District Documents or seeking to restrain or enjoin the repayment of the Bonds or contesting the validity of the Community Facilities District Documents or contesting the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents; or (c) questioning the right of the Community Facilities District to use Special Tax levied within the Community Facilities District for the repayment of the Bonds or 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; (vi) to such counsel’s 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 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; and (vii) to such counsel’s knowledge, the Community Facilities District is not in breach of or default under any applicable law or administrative regulation of the State or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject, which breach or default would materially adversely affect the Community Facilities District’s ability to enter into or perform its obligations under the Community Facilities District Documents. 347
15 10. Evidence of the ratings assigned to the Bonds that are described in the Official Statement.

11. A certificate dated the Closing Date from Willdan Financial Services, as Special Tax Consultant and Dissemination Agent, 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 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 payable with respect to the Bonds plus the Administrative Expenses Cap, 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 the Special Tax Consultant concerning the Special Tax 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; and (iii) the Special Tax Consultant is duly authorized to execute and deliver the Continuing Disclosure Agreement in its capacity as dissemination agent thereunder, and the Special Tax Consultant has duly executed and delivered the Continuing Disclosure Agreement;

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 U.S. Bank Trust Company, National Association (the “Bank”), as Trustee and Escrow Agent, dated the date of Closing, addressed to the Underwriter, and the Community Facilities District, to the effect that: (a) the Bank is a national banking association organized and existing under and by virtue of the laws of the United States, having the full power and being qualified to enter into and perform its duties under the Indenture and the Escrow Agreement and to authenticate and deliver the Bonds to the Underwriter; (b) the Bank is duly authorized to enter into the Indenture and the Escrow Agreement and to authenticate and deliver the Bonds to the Underwriter pursuant to the Indenture; (c) when delivered to and paid for by the Underwriter at the Closing, the Bonds will have been duly authenticated and delivered by the Bank; (d) the execution and delivery of the Indenture and the Escrow Agreement and compliance with the provisions on the Bank’s part contained therein, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, note, resolution, agreement or other instrument to which the Bank is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to any federal or state securities or blue sky laws or regulations), which conflict, breach or default would materially impair the ability of the Bank to perform its obligations under the Indenture and the Escrow Agreement, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Bank pursuant to the liens created by the Indenture and the Escrow Agreement under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and (e) to the best of the knowledge of the Bank, it has not been served with any action, suit, proceeding, inquiry or investigation in law or in equity, before or by any court, governmental agency, public board or body, nor is any such action or other proceeding threatened against the Bank, affecting the existence of the Bank, or the titles of its officers to their respective offices or seeking to prohibit, restrain, or enjoining 348
16 the execution and delivery of the Bonds or the collection of revenues to be applied to pay the principal, premium, if any, and interest with respect to the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Indenture or the Escrow Agreement, or contesting the powers of the Bank or its authority to enter into, adopt or perform its obligations under any of the foregoing to which it is a party, wherein an unfavorable decision, ruling or funding would materially adversely affect the validity or enforceability of the Indenture or the Escrow Agreement or the power and authority of the Bank to enter into and perform its duties under the Indenture and the Escrow Agreement and to authenticate and deliver the Bonds to or upon the order of the Underwriter;

14. An opinion of counsel to Bank, dated the Closing Date and addressed to the Underwriter, substantially to the effect that:
(i) the Bank is a national banking association duly organized, validly existing and in good standing under the laws of the United States having full power and authority and being qualified to enter into, accept and administer the trust created under the Indenture and the Escrow Agreement and to enter into the Indenture and the Escrow Agreement; (ii) the Indenture and the Escrow Agreement have been duly authorized, executed and delivered by the Bank and, assuming due authorization, execution and delivery by the other parties thereto, constitute the legal, valid and binding obligations of the Trustee, enforceable against the Bank in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights generally and by the application of equitable principles if equitable remedies are sought; (iii) to such counsel’s knowledge, no authorization, approval, consent, or order of any governmental agency or regulatory authority having jurisdiction over the Bank, except for such authorizations, approvals or consents previously obtained, is required for the authorization, execution and delivery by the Bank of the Indenture and the Escrow Agreement; and (iv) an authorized representative of the Trustee has duly authenticated the Bonds in accordance with the Indenture.

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. An opinion of Anzel Galvan LLP, San Francisco, California, counsel to the Underwriter, dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;

17. A copy of the Community Facilities District’s executed Blanket Letter of Representation to DTC;

18. A copy of the Blue Sky Survey dated the date of Closing with respect to the Bonds;

19. A defeasance opinion dated the date of Closing and addressed to the Underwriter substantially to the effect that (a) the Escrow Agreement has been duly executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery 349
17 by the other parties thereto, constitutes the valid and binding obligation 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; and (b) the requirements of the 2015 Fiscal Agent Agreement (as defined in the Escrow Agreement) have been satisfied with respect to the discharge of the outstanding 2015 Bonds and the pledge of the Net Taxes (as defined in the Escrow Agreement) and any other amounts held by the 2015 Fiscal Agent thereunder and all other obligations of the Community Facilities District under the 2015 Fiscal Agent Agreement with respect to the 2015 Bonds have ceased and terminated, except as expressly provided therein;

20. A verification report of [___________] with respect to the sufficiency of amounts deposited with the Escrow Agent under the Escrow Agreement to defease and redeem the outstanding 2015 Bonds in accordance with the terms of the Escrow Agreement;

21. Evidence satisfactory to the Underwriter that the Trustee has received the Policy and the Reserve Policy from the Insurer;

22. An opinion of counsel to the Insurer, dated the Closing Date, in form and substance satisfactory to the Underwriter and Bond Counsel, with respect to, among other matters, the Policy, and disclosures relating thereto in the Official Statement;

23. A certificate of the Insurer, dated the Closing Date, in form and substance satisfactory to the Underwriter and Bond Counsel, with respect to, among other matters, the Policy and the Reserve Policy, and disclosures relating thereto in the Official Statement; and

24. 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 satisfied by the Community Facilities District in connection with the transactions contemplated hereby and by the Indenture and the Official Statement.

All of the opinions, letters, certificates, instruments and other documents mentioned in this Purchase Agreement will be deemed to be in compliance with the provisions of this Purchase Agreement if, but only if, they are in form and substance satisfactory to the Underwriter. 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 9 hereof shall continue in full force and effect.

8. Termination Events. In recognition of the desire of the Community Facilities District and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall 350
18 be subject to termination in the discretion of the Underwriter by notification, in writing, to the Community Facilities District prior to delivery of and payment for the Bonds, if between the date hereof and the time of Closing, in the Underwriter’s sole and reasonable judgment any of the following events shall occur (each a “Termination Event”):

A. the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall be materially adversely affected by any of the following events:

1. legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or shall have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligations of the general character of the Bonds;

2. there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or

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 U.S.

Securities and Exchange Commission (“SEC”) or any other governmental authority having jurisdiction; or

4. legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Bonds, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or

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

6. any rating of the Bonds, any rating of the Insurer or the rating of any obligations of the Community Facilities District payable from Special Taxes shall have been 351
19 downgraded, withdrawn or placed on credit watch with negative outlook by any major credit rating agency; or
B. 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; or C. a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or
D. a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
E. 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; or
F. 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 Bonds, 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 Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939; or G. the commencement of one or more Actions.

Subject to Section 14, upon the occurrence of a Termination Event and the termination of this Purchase Agreement by the Underwriter, all obligations of the Community Facilities District and the Underwriter under this Purchase Agreement shall terminate, without further liability.

9. Expenses. Whether or not the Bonds are sold to the Underwriter as set forth herein:

A. The Underwriter shall be under no obligation to pay any expenses incident to the performance of the obligations of the Community Facilities District hereunder. If the Bonds are delivered by the Community Facilities District, the Community Facilities District shall pay, from the proceeds of the Bonds or from other funds of the Community Facilities District, the following expenses: (a) the cost of preparing, duplicating or printing, mailing and delivering the Community Facilities District Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof); (b) the cost of preparation and printing of the definitive Bonds; (c) the fees and expenses of the Community Facilities 352
20 District, the Trustee, Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Special Tax Consultant, the Dissemination Agent, any entity performing continuing disclosure compliance research or providing continuing disclosure compliance reports and any other experts or consultants retained by the Community Facilities District; (d) the charges of any rating agency with respect to the Bonds; (e) reimbursement to the Underwriter for payment of any fees and expenses reasonably incurred in connection with the initial offering, sale and delivery of the Bonds, including but not limited to industry fees (e.g., DTC, DAC, IPREO, CUSIP and Day Loan fees) only if the Community Facilities District and Underwriter have previously discussed and approved the allocation of proceeds towards these fees, and meal and travel expenses of the personnel of the Community Facilities District, but not including entertainment expenses or those to be paid by the Underwriter pursuant to the last paragraph of this Section 9, and (f) all other fees and expenses, not including entertainment expenses, reasonably incurred in connection with the preparation of the Community Facilities District Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof) and/or the initial offering, sale and delivery of the Bonds. The Community Facilities District has authorized, and does hereby authorize, the Underwriter to pay such expenses on behalf of the Community Facilities District from proceeds of the Bonds at Closing as further described in the closing memorandum relating to the Bonds.

B. If the Bonds are sold to the Underwriter by the Community Facilities District, the Community Facilities District shall pay out of the proceeds of the Bonds the discount of the Underwriter or the purchase price paid for the Bonds shall reflect such discount.

Except as otherwise provided in this Section 9, the Underwriter shall pay the cost, if any, of qualifying the Bonds for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the Bonds, the fees and expenses of its counsel, and all other expenses incurred by it in connection with its public offering and distribution of the Bonds, not described above.

10. Use of Documents. The Community Facilities District hereby authorizes the Underwriter to use, in connection with the public offering and sale of the Bonds, this Purchase Agreement, the Preliminary Official Statement, the Official Statement and the Community Facilities District Documents, and the information contained herein and therein.

11. Qualification of Bonds. The Community Facilities District will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and to provide for the continuance of such qualification; provided, however, that the Community Facilities District will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any state.

12. Notices. Any notice or other communication to be given to the Community Facilities District under this Purchase Agreement may be given by delivering the same in writing to the City at the address appearing on the first page hereof; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Sara Brown.
353
21 13. Benefit. 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. Except as otherwise expressly provided herein, all of the agreements and representations of the Community Facilities District contained in this Purchase Agreement and in any certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds hereunder; or (iii) any termination of this Purchase Agreement.

14. 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.

15. 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.

16. 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.

17. No Prior Agreements. This Purchase Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements, prior writings and representations with respect thereto.

18. Waiver of Jury Trial. THE COMMUNITY FACILITIES DISTRICT HEREBY

IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,

ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF

OR RELATING TO THIS PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

19. Governing Law. This Purchase Agreement shall be governed by the laws of the State.

[Signature Page Follows]

354

S-1

20. 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,

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

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

CITY OF ORANGE COMMUNITY FACILITIES
DISTRICT NO. 06-1 (DEL RIO PUBLIC IMPROVEMENTS)

By:

Authorized Officer

Time of Execution: _____________ California time

355
A-1

EXHIBIT A

MATURITY SCHEDULE
Maturity
(October 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used

10% Test
Met
Hold-The-
Offering-
Price Used

_________________
T: Term Bond.

C: Priced to optional redemption date of October 1, 20__, at par.

356
A-2

REDEMPTION PROVISIONS

Optional Redemption. The Bonds with stated maturities on or after October 1, 20__ are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the Community Facilities District in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to redemption, by lot within each maturity in integral multiples of $5,000, on October 1, 20__ or any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption. The Bonds maturing on October 1, 20__ (the “Term Bonds”) shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account, on October 1, 20___, and October 1, 20___, in accordance with the schedule of Sinking Fund Payments set forth below. The Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:

Term Bonds Maturing October 1, 20__
Redemption Date (October 1) Principal Amount

* Maturity.

Special Mandatory Redemption from Special Tax Prepayments. The Bonds are subject to extraordinary redemption as a whole, or in part by lot, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account, plus amounts transferred from the Reserve Account, among maturities as directed in writing by the Community Facilities District, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:

Redemption Date Redemption
Price
Any Interest Payment Date from (and including) October 1, 20__ through (and including) April 1, 20__
103%
October 1, 20__ and April 1, 20__ 102
October 1, 20__ and April 1, 20__ 101
October 1, 20__ and any Interest Payment Date thereafter 100

357

B-1

EXHIBIT B

$[PAR]

CITY OF ORANGE
COMMUNITY FACILITIES DISTRICT NO. 06-1
(DEL RIO PUBLIC IMPROVEMENTS)
2026 SPECIAL TAX REFUNDING BONDS

FORM OF ISSUE PRICE CERTIFICATE

The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and delivery of the above-captioned obligations (the “Bonds”).

1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated [Pricing Date], by and between Stifel, as the Underwriter (as defined below), and the Issuer (as defined below), Stifel has agreed in writing that: (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering- price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the 358
B-2

Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) Issuer means City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements).
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Closing Date]. (h) 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 third-party distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, 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. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Dated: [Closing Date]
359
Stradling Yocca Carlson & Rauth
Draft of 5/19/26
PRELIMINARY OFFICIAL STATEMENT DATED ______, 2026

4902-1224-3356v7/022585-0015
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

NEW ISSUE — BOOK-ENTRY ONLY Ratings: Insured Bonds: S&P “__” Underlying/Uninsured Bonds: S&P “__”
See the caption “CONCLUDING INFORMATION—Ratings”
In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See the caption “CONCLUDING INFORMATION—Tax Matters” with respect to tax consequences relating to the Bonds, including with respect to the alternative minimum tax imposed on certain large corporations.

COUNTY OF ORANGE STATE OF CALIFORNIA
$16,005,000
CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1
(DEL RIO PUBLIC IMPROVEMENTS)
2026 SPECIAL TAX REFUNDING BONDS
Dated: Date of Delivery Due: October 1, as shown on the inside cover page The City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2026 Special Tax Refunding Bonds (the “Bonds”) are being issued by City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) (the “District”) 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 “CFD Act”), and a Bond Indenture, dated as of July 1, 2026 (the “Indenture”), by and between the District and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), and will be secured as described herein. See the caption “SECURITY FOR THE BONDS.” The Bonds are being issued: (i) together with other available funds, to refund the outstanding City of Orange Community Facilities District No. 06-1 (Del Rio Public Improvements) 2015 Special Tax Refunding Bonds (the “2015 Bonds”); (ii) to pay the premium for a Municipal Bond Debt Service Reserve Insurance Policy for deposit in the Reserve Account to fund 50% of the initial Reserve Requirement and fund a cash deposit for the remaining 50% of the initial Reserve Requirement; and (iii) to pay certain costs of issuance of the Bonds, including the premium for an insurance policy insuring the Insured Bonds (defined below).

The Bonds will be secured by special tax liens on taxable property within the District and certain funds held by the Trustee under the Indenture. The City of Orange (the “City”) has determined that it will not obligate itself to advance funds from its treasury to cover any delinquency on the Bonds. See the caption “SECURITY FOR THE BONDS.”
The Bonds will be issued in book-entry form, initially registered in the name of Cede & Co., New York, New York, as nominee of The Depository Trust Company (“DTC”), New York, New York. Interest on the Bonds will be payable on October 1, 2026 and each April 1 and October 1 thereafter. Purchasers will not receive certificates representing their interest in the Bonds. Individual purchases of Bonds will be in principal amounts of $5,000 or in any integral multiple of $5,000. Payments of principal and interest will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, which will remit such payments to the beneficial owners of the Bonds.

The Bonds are subject to optional redemption, mandatory sinking fund redemption and extraordinary redemption from Special Tax prepayments prior to maturity as set forth herein. See the caption “THE BONDS—Redemption.”

ALL OBLIGATIONS OF THE DISTRICT UNDER THE INDENTURE AND THE BONDS ARE LIMITED OBLIGATIONS OF THE DISTRICT, PAYABLE SOLELY FROM THE NET TAXES AND THE FUNDS PLEDGED THEREFOR UNDER THE INDENTURE. 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 BONDS. EXCEPT FOR THE NET TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OR SPECIAL

OBLIGATIONS OF THE CITY NOR GENERAL OBLIGATIONS OF THE DISTRICT BUT ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM NET TAXES.

The scheduled payment of principal of and interest on the Bonds maturing on October 1 of the years 20___ through 20___,* inclusive (collectively, the “Insured Bonds”), when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Insured Bonds by [Insurer] (the “Insurer” or “[INSURER]”). The Insurer will also issue a debt service reserve insurance policy concurrently with the issuance of the Bonds to be credited to the Reserve Account for the Bonds to satisfy 50% of the initial Reserve Requirement. See “BOND INSURANCE” herein. [INSURER’S LOGO]
See the caption “SPECIAL RISK FACTORS” for a discussion of certain risk factors that should be considered in addition to the other matters set forth herein when evaluating the investment quality of the Bonds. This cover page contains certain information for general reference only. It is not a complete summary of the Bonds. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision.

MATURITY SCHEDULE
(See inside cover)
The Bonds are offered, when, as and if issued and accepted by the Underwriter, subject to approval as to their validity by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the City and the District by the City Attorney, and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Disclosure Counsel, for the Underwriter by Anzel Galvan LLP, San Francisco, California, for the Insurer by its counsel and for the Trustee by its counsel. It is anticipated that the Bonds will be available for delivery in book-entry form through the facilities of DTC on or about _________, 2026. [UNDERWRITER’S LOGO]
Dated: _______, 2026

 Preliminary, subject to change.

ATTACHMENT 4
360

4902-1224-3356v7/022585-0015
$16,005,000
CITY OF ORANGE COMMUNITY FACILITIES DISTRICT NO. 06-1
(DEL RIO PUBLIC IMPROVEMENTS)
2026 SPECIAL TAX REFUNDING BONDS

MATURITY SCHEDULE
Base CUSIP®†: ______
Maturity Date
(October 1)
Principal
Amount Interest Rate Yield Price CUSIP ®†
$ % %

$_______ ______% Term Bonds Due October 1, ______, Yield _____%, Price _____, CUSIP®† ____ $_______ ______% Term Bonds Due October 1, ______, Yield _____%, Price _____, CUSIP®† ____

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

I Insured Bond.
361

4902-1224-3356v7/022585-0015

THE CITY OF ORANGE

CITY COUNCIL
Dan Slater, Mayor
Denis Bilodeau, Mayor Pro Tem
Arianna Barrios, Council Member
Jon Dumitru, Council Member
Kathy Tavoularis, Council Member
Ana Gutierrez, Council Member
John Gyllenhammer, Council Member

OFFICIALS
Jarad Hildenbrand, City Manager
Trang Nguyen, Finance Director
Garrett Smith, City Treasurer
Nathalie Adourian, City Attorney
Pamela Coleman, City Clerk
Bond and Disclosure Counsel
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
Municipal Advisor
Fieldman, Rolapp & Associates, Inc.

Irvine, California

Orange City CouncilJune 9, 2026

Orange City Council
June 9, 2026