Paso Robles City Council
December 2, 2025

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47 With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive. With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home.

The foregoing factors could reduce demand for and/or the calendar year absorption schedule for the residential projects within Improvement Area No. 2.

Availability of Hazard Insurance
According to the California Department of Insurance, insurance companies declined to renew 2.8 million homeowner policies in the State. Insurers have been exiting the State, refusing to write new policies in areas they consider to be at high risk, or in some cases refusing to offer coverage for high-value homes, which insurance companies generally classify as homes with a replacement cost of $750,000 or higher. Such cancellations generally have resulted in increased cost to homeowners as they obtain replacement coverage. The California FAIR Plan Association provides insurance to homeowners who cannot otherwise find insurance coverage, but policies through the FAIR Plan do not provide as much coverage as traditional homeowner’s insurance and tend to bear rates that are higher than traditional homeowner’s insurance. Though several legislative and policy revisions are circulating, neither the City nor the District can predict whether homeowner’s insurance will continue to be available to home purchasers at affordable rates. An increase in homeowner’s insurance rates or a reduction in the availability of new homeowner’s insurance policies will increase the overall cost to purchase homes and may in turn reduce the Developer’s ability to sell new homes to homeowners. Further, increases in homeowner’s insurance rates may reduce affordability and may cause homeowners to be unable or unwilling to pay the Special Taxes when due.

Limited Obligations
The Bonds and related interest are not payable from the funds of the City. Except with respect to the Special Tax Revenues, neither the credit nor the taxing power of the District or the City is pledged for the payment of principal or interest of the Bonds, and, except as provided in the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or District’s property or upon any of the City’s or District’s income, receipts or revenues, except the Special Tax Revenues and other amounts pledged under the Fiscal Agent Agreement.

Insufficiency of Special Taxes
The annual amount of Special Tax to be levied on each taxable parcel in Improvement Area No. 2 will generally be based on the development status and land use class to which a parcel of Developed Property is assigned under the Amended Rate and Method. See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” and “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Amended Rate and Method of Apportionment of Special Tax.” The Maximum Special Taxes that may be levied within Improvement Area No. 2 are at least 110% of Maximum Annual Debt Service on the Bonds. Notwithstanding that the Maximum Special Taxes that may be levied in Improvement Area No. 2 exceeds debt service due on the Bonds, the Special Taxes collected could be inadequate to make timely payment of debt service either because of nonpayment or because property becomes exempt from taxation as permitted in the Amended Rate and Method.

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48 In order to pay debt service on the Bonds, it is necessary that the Special Taxes be paid in a timely manner.

Should the Special Taxes not be paid on time, the City has established a Reserve Fund under the Fiscal Agent Agreement to pay debt service on the Series 2025 Bonds and any Reserve Parity Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Reserve Fund.” The City will covenant in the Fiscal Agent Agreement to maintain in the Reserve Fund an amount equal to the Reserve Requirement subject, however, to the limitation that the City may not levy the Special Tax in Improvement Area No. 2 in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Amended Rate and Method. In addition, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within Improvement Area No. 2 by more than 10% in any Fiscal Year. As a result, if a significant number of delinquencies occurs, the City could be unable to replenish the Reserve Fund to the Reserve Requirement. If such defaults were to continue in successive years, the Reserve Fund could be depleted and a default on the Series 2025 Bonds could occur.

The City has covenanted in the Fiscal Agent Agreement that, under certain conditions, it will institute judicial foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales” for provisions which apply in the event of such foreclosure and which the City is required to follow in the event of delinquencies in the payment of the Special Tax.

In the event that sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Series 2025 Bonds (if the Reserve Fund has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The City may adjust the future Special Tax levied on taxable parcels in Improvement Area No. 2, subject to the limitation on the maximum Special Tax, to provide an amount required to pay interest on, principal of, and redemption premiums, if any, on the Bonds, and the amount, if any, necessary to replenish the Reserve Fund to an amount equal to the Reserve Requirement and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in Improvement Area No. 2 will be at all times sufficient to pay the amounts required to be paid by the Fiscal Agent Agreement, even if the Special Tax is levied at the Maximum Special Tax rates. See “— Bankruptcy and Foreclosure” below for a discussion of potential delays in foreclosure actions.

The Amended Rate and Method governing the levy of the Special Tax permits the City Council to classify an Assessor’s Parcel as Exempt Property under the circumstances described in the Amended Rate and Method so long as such classification would not reduce the Acreage of all Taxable Property in Improvement Area No. 2 to less than 30.1 acres. See APPENDIX A — “AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” If for any reason property within Improvement Area No. 2 becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government, another public agency or a religious organization, subject to the limitations of the maximum authorized rates, the Special Tax will be reallocated to the remaining taxable properties within Improvement Area No. 2. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon the ability and willingness of the owners of such property to pay the Special Tax when due.

The Act provides that, if any property within Improvement Area No. 2 not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of land within Improvement Area No. 2 was to become owned by public agencies,

Attachment 3
49 collection of the Special Tax might become more difficult and could result in collections of the Special Tax which might not be sufficient to pay principal of and interest on the Bonds when due and a default could occur with respect to the payment of such principal and interest.

Failure to Develop Properties
Development of property within Improvement Area No. 2 may be subject to unexpected delays, disruptions and changes which may affect the willingness and ability of the Developer or any future property owner to pay the Special Taxes when due. Land development is subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with the layout and design of developments, the nature and extent of improvements, construction activity, land use, zoning, school and health requirements, as well as numerous other matters. There is always the possibility that such approvals will not be obtained or, if obtained, will not be obtained on a timely basis. Failure to obtain any such agency approval or satisfy such governmental requirements would adversely affect planned land development. Development of land in Improvement Area No. 2 is also subject to the availability of water. Finally, development of land is subject to economic considerations.

No assurance can be given that the remaining proposed development will be partially or fully completed; and for purposes of evaluating the investment quality of the Series 2025 Bonds, prospective purchasers should consider the possibility that such parcels will remain unimproved or in a mass graded condition.

Undeveloped or partially developed land is inherently less valuable than developed land and provides less security to the Owners of the Bonds should it be necessary for the City to foreclose on the property due to the nonpayment of Special Taxes. The failure to complete development of the required infrastructure for development in Improvement Area No. 2 as planned, or substantial delays in the completion of the development or the required infrastructure for the development due to litigation or other causes may reduce the value of the property within Improvement Area No. 2 and increase the length of time during which Special Taxes will be payable from undeveloped property, and may affect the willingness and ability of the owners of property within Improvement Area No. 2 to pay the Special Taxes when due.

There can be no assurance that land development operations within Improvement Area No. 2 will not be adversely affected by future deterioration of the real estate market and economic conditions or future local, State and federal governmental policies relating to real estate development, an increase in mortgage interest rates, the income tax treatment of real property ownership, or the national economy. A slowdown of the development process and the absorption rate could adversely affect land values and reduce the ability or desire of the property owners to pay the annual Special Taxes. In that event, there could be a default in the payment of principal of, and interest on, the Bonds when due.

Owners of the Bonds should assume that any event that significantly impacts the ability to develop land in Improvement Area No. 2 would cause the property values within Improvement Area No. 2 to decrease substantially from those estimated by the Appraiser and could affect the willingness and ability of the owners of land within Improvement Area No. 2 to pay the Special Taxes when due. [The City will levy Special Taxes on Undeveloped Property for Fiscal Year 2026-27 and expects to levy Special Taxes on Undeveloped Property in future fiscal years until the Special Taxes levied on Developed Property are sufficient to pay debt service on the Bonds and to fund Administrative Expenses.] Undeveloped Property is less valuable per unit of area than Developed Property, especially if there are no plans to develop such land or if there are severe restrictions on the development of such land. The Undeveloped Property also provides less security to the Owners of the Bonds should it be necessary for the City to foreclose on Undeveloped Property due to the nonpayment of the Special Taxes. Furthermore, an inability to develop the land within Improvement Area No. 2 as currently proposed will make the Owners of the Bonds dependent upon timely payment of the Special Taxes levied on Undeveloped Property. A slowdown or stoppage in the continued development of Improvement Area No. 2 could reduce the willingness and ability of the Developer, the Land Bank, or any

Attachment 3
50 successors to make Special Tax payments on Undeveloped Property and could greatly reduce the value of such property in the event it has to be foreclosed upon. See “—Property Values.” Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, are customarily billed to the properties within Improvement Area No. 2 on the ad valorem property tax bills sent to owners of such properties. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments. The District, however, is currently included in the County’s Teeter Plan and, as a result, the City expects to receive 100% of the Special Tax levy, without regard to the actual amount of collections. See “SECURITY FOR THE BONDS – Teeter Plan” and “RISK FACTORS – Teeter Plan Termination.”
See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales,” for a discussion of the provisions which apply, and procedures which the City is obligated to follow under the Fiscal Agent Agreement, in the event of delinquencies in the payment of Special Taxes. See “RISK FACTORS — FDIC/Federal Government Interests in Properties” below, for a discussion of the policy of the Federal Deposit Insurance Corporation (the “FDIC”) regarding the payment of special taxes and assessment and limitations on the City’s ability to foreclose on the lien of the Special Taxes in certain circumstances where property within Improvement Area No. 2 is owned by the federal government, agencies of the federal government, or, possibly, government sponsored enterprises such as Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”).

The City has the authority and the obligation, subject to the Act and the Maximum Special Tax rates set forth in the Amended Rate and Method, to increase the levy of Special Taxes against non-delinquent property owners in Improvement Area No. 2 in the event other owners in Improvement Area No. 2 are delinquent. Pursuant to the Amended Rate and Method and the Act, under no circumstances may the Special Tax levied against any parcel used for private residential purposes be increased as a consequence of delinquency or default by owner of any other parcel or parcels within Improvement Area No. 2 by more than 10% in any Fiscal Year. Thus, the City may not be able to increase Special Tax levies in future Fiscal Years by enough to make up for delinquencies for prior Fiscal Years. This would result in draws on the Reserve Fund, and if delinquencies continue and in the aggregate exceed the Reserve Fund balance, defaults would occur in the payment of principal and interest on the Series 2025 Bonds.

Although the City will covenant in the Fiscal Agent Agreement to commence and diligently pursue foreclosure under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales,” foreclosure delays may occur under the circumstances described under the caption “RISK FACTORS — Bankruptcy and Foreclosure.” Delinquencies may result as a consequence of many factors. See “RISK FACTORS,” generally, for a discussion of certain potential causes of delinquencies.

Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within Improvement Area No. 2. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. According to the California Department of Conservation and the California Geological Survey, the property within Improvement Area No. 2 is not located in an Alquist-Priolo Earthquake Special Study Zone and is not located in a liquefaction zone.

Additionally, all of the lots in Improvement Area No. 2 are located outside the 500-year floodplain.

Attachment 3
51 Seismic Hazard. The area encompassed by the City, like that in much of California, may be subject to unpredictable seismic activity. The County contains several fault traces and has been subject to intense warping, folding and faulting. While most of the faults within the County have not been active in recent geologic times, movement may occur along one or several of these minor faults, and movements along the major principal faults traversing the County, including the San Andreas and Nacimiento Faults. The structural trend in the area is northwest to southeast, controlled mainly by the San Andreas Fault. Numerous fault traces have been detected in the area, but most have not been active in recent geologic time (San Luis Obispo County, 1980). Active faults are those along which there has been movement within the last 11,000 years; “proven” active faults have had movement within the last 300 years. The Paso Robles area is exposed to seismic hazards from movement along several regional faults. The identified active fault zones in this area are the San Andreas, Nacimiento, Rinconada, and “Offshore Faults,” although the classification of the Rinconada Fault as active has been much disputed (Quad Consultants, 1980). Historically, most of the earthquakes detected in Paso Robles have originated from movement along the San Andreas Fault, which lies approximately 23 miles northeast of the City, near the Town of Cholame.

In the Paso Robles Area, the San Andreas Fault is identified as the primary source of potential ground shaking.

Magnitudes as high as 6.5 have been recorded twice in the past from movement along the San Andreas.

Flood Hazard. Potential hazards for Paso Robles include riverine flooding, also known as overbank flooding due to excessive rainfall, and localized flooding. Localized flooding may occur outside of recognized drainage channels or delineated floodplains due to a combination of locally heavy precipitation, increased surface runoff, and inadequate facilities for drainage and stormwater conveyance. The Paso Robles area is subject to flood hazards from the Huerhuero Creek, Dry Creek, the Salinas River floodplains, and their tributaries. This has the potential to occur in events where runoff is too great for the system, or the storm water system is disrupted by vegetation or other debris causing excess water to remain on the surface.

Fire Hazard. In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances, entire neighborhoods have been destroyed. In January 2025, multiple fires occurred across communities in Los Angeles County, including Pacific Palisades, Malibu and Altadena, some of which damaged or destroyed property in areas that were not previously considered to be at risk from such events. In August 2025, the Gifford Fire burned over 130,000 acres is San Luis Obispo and Santa Barbara counties and damaged 5 building structures. No structures in the City were damaged. While some areas were evacuated, [there were no evacuations of City residents.] In addition, other fires with smaller impact, such as the Solar Fire, Salt Fire and the Walnut Fire have occurred in areas proximate to the City. No damage, however, was done to any structures within the City due to these fires.

In March 2025, Department of Forestry and Fire Protection of the State of California (“Cal Fire”) released an updated Fire Hazard Severity Zone map for the Southern California region. The Cal Fire Hazard Severity Zone maps evaluate fire hazard, which is defined as the likelihood and expected fire behavior over a 30 to 50-year period without considering mitigation measures such as home hardening, recent wildfire or fuel reduction efforts, as opposed to risk, which is the potential damage a fire can do to the area under existing conditions, accounting for any modifications such as fuel reduction projects, defensible space, and ignition resistant building construction. Pursuant to State law, the State Fire Marshal is mandated to classify the state responsibility areas where the state has financial responsibility for wildfire protection and prevention into Fire Hazard Severity Zones classified as “Moderate,” “High” or “Very High.” For more information on Cal Fire’s Fire Hazard Severity Zone maps, see the Cal Fire website. The District is not located within a Moderate or High Fire Hazard Severity Zone as recommended by Cal Fire. [ANY MAP ADOPTION BY CITY TO COME] Improvement Area No. 2 is located within an area which the Department of Forestry and Fire Protection of the State of California has designated as a high fire hazard severity zone. No assurance can be given as to the severity or frequency of wildfires within the vicinity of or in Improvement Area No. 2.

On January 16, 2025, Governor Gavin Newsom issued Executive Order N-10-25 (the “Governor’s Order”) which suspended penalties, costs and interest on overdue property taxes (including special taxes) within certain zip codes affected by the Palisades Fire during calendar year 2025. In the event of a major fire or other

Attachment 3
52 natural disaster affecting the City or the District, a similar order affecting the City or the District could impact the collection of Special Taxes needed to make debt service payments for the Series 2025 Bonds.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in Improvement Area No. 2. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in Improvement Area No. 2 could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.

Hazardous Substances
The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.

Further, it is possible that liabilities may arise in the future with respect to any of the parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel that is realizable upon a delinquency and the willingness or ability of the owner of any parcel to pay the Special Tax Installments.

The value of the taxable property within Improvement Area No. 2, as set forth in the various tables in this Official Statement, does not reflect the presence of any hazardous substance or the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the property. The City has not independently verified, but is not aware, that any owner (or operator) of any of the parcels within Improvement Area No. 2 has such a current liability with respect to any such parcel. It is possible, however, that such liabilities do currently exist and that City is not aware of them.

Parity Taxes and Special Assessments
Property within Improvement Area No. 2 is subject to taxes imposed by public agencies also having jurisdiction over the land within Improvement Area No. 2. See “IMPROVEMENT AREA NO. 2 — Estimated Direct and Overlapping Indebtedness.”
The Special Taxes and any related penalties will constitute a lien against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with all special taxes and special assessments levied by the City and other agencies and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The Special Taxes have priority over all existing and future private liens imposed on the property except, possibly, for liens or security interests held by the Federal Deposit Insurance Corporation. See “RISK FACTORS — Bankruptcy and Foreclosure” below.

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53 Neither the District nor the City has control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within Improvement Area No. 2. In addition, the landowners within Improvement Area No. 2 may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad valorem taxes or assessments may have a lien on such property on a parity with the Special Taxes and could reduce the estimated value-to-lien ratios for property within Improvement Area No. 2 described in this Official Statement. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS” and “IMPROVEMENT AREA NO. 2 — Estimated Direct and Overlapping Indebtedness.”
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax even if the value of the parcel is sufficient may be affected by whether or not the owner was given due notice of the Special Tax authorization at the time the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel should the Special Tax be levied at the maximum tax rate and the risk of such a levy, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused the Notice of Special Tax Lien and Amendment to Notice of Special Tax Lien to be recorded in the Office of the Recorder for the County against each parcel in Improvement Area No. 2. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Special Tax obligation in the purchase of a property within Improvement Area No. 2 or lending of money thereon.

The Act requires the subdivider (or its agent or representative) of a subdivision to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute.

Failure by an owner of the property to comply with the above requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.

Non-Cash Payments of Special Taxes
Under the Act, the City Council, as the legislative body of the District, may reserve to itself the right and authority to allow the owner of any taxable parcel to tender a Bond in full or partial payment of any installment of the Special Taxes or the interest or penalties thereon. A Bond so tendered is to be accepted at par and credit is to be given for any interest accrued thereon to the date of the tender. Thus, if Bonds can be purchased in the secondary market at a discount, it may be to the advantage of an owner of a taxable parcel to pay the Special Taxes applicable thereto by tendering a Bond. Such a practice would decrease the cash flow available to the City to make payments with respect to other Bonds then outstanding; and, unless the practice was limited by the City, the Special Taxes paid in cash could be insufficient to pay the debt service due with respect to such other Bonds.

In order to provide some protection against the potential adverse impact on cash flows which might be caused by the tender of Bonds in payment of Special Taxes, the Fiscal Agent Agreement includes a covenant pursuant to which the City will not authorize owners of taxable parcels to satisfy Special Tax obligations by the tender of Bonds unless the City shall have first obtained a report of an Independent Financial Consultant certifying that doing so would not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on all Outstanding Bonds when due.

Payment of the Special Tax Is Not a Personal Obligation of the Owners An owner of a taxable parcel is not personally obligated to pay the Special Tax. Rather, the Special Tax is an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not

Attachment 3
54 sufficient, taking into account other liens imposed by public agencies, to secure fully the Special Tax, the City has no recourse against the owner.

Concentration of Ownership
Based on development and ownership status and the terms of the Option Agreement, as of November 1, 2025, the Developer is expected to be responsible for [__]% of the projected Fiscal Year 2026-27 Special Tax levy.

Under the Option Agreement, the Developer is responsible for the payment of all property taxes, including the Special Tax, for all of the lots within Improvement Area No. 2 that accrue during the term of the Option Agreement. Under the Option Agreement, the Developer has the option, but not the obligation, to acquire such lots from the Land Bank pursuant to the takedown schedule. Neither the Developer nor the Land Bank are under any obligation to develop the property in Improvement Area No. 2. The failure by the Developer to timely acquire lots could result in the termination of the Option Agreement. In the event that the Developer does not exercise its option to acquire lots under the Option Agreement, the Land Bank, being an investor only and not a homebuilder, would likely attempt to sell such lots to another merchant builder. In such an event, construction and sale of remaining homes and lots in Improvement Area No. 2 would likely be delayed beyond the estimated timeframes described herein.

The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in Improvement Area No. 2 to pay the Special Taxes prior to delinquency.

General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pay such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within Improvement Area No. 2, a failure by the Developer or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Failure of the Developer or any successors to pay the annual Special Taxes when due could also result in a draw on the Reserve Account of the Special Tax Fund, and ultimately a default in payments of the principal of, and interest on, the Bonds, when due. No assurance can be given that the Developer or its successors will complete the remaining intended construction and development in Improvement Area No. 2. See “— Failure to Develop Properties.”
In Fiscal Year 2025-26, all of the Special Tax levy was on property within Improvement Area No. 2 classified as Final Mapped Property. Final Mapped Property is defined in the Amended Rate and Method as all Assessor’s Parcels of Taxable Property (i) that are included in a Final Map recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) for which a building permit has not been issued on or before May 1 preceding the Fiscal Year in which the Special Tax is being levied. In the event that the Developer fails to complete the remaining intended construction and development in Improvement Area No. 2, Special Taxes will continue to be levied on Final Mapped Property owned by such entities. No assurance can be given that the Developer or any successors will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See “— Bankruptcy and Foreclosure” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.

Property Values
The value of the property within Improvement Area No. 2 is a critical factor in determining the investment quality of the Series 2025 Bonds. If a property owner is delinquent in the payment of Special Taxes, the City’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely

Attachment 3
55 impact the security underlying the Special Taxes. See “IMPROVEMENT AREA NO. 2 — Appraisal Report” and APPENDIX B — “APPRAISAL REPORT.”
The Appraisal Report assumes a value of property based upon the receipt of Series 2025 Bond proceeds in an amount based upon a 4-to-1 value to lien ratio for the Series 2025 Bonds, while the anticipated amount of Series 2025 Bond proceeds is expected to be in an amount which achieves a value to lien ratio slightly higher than 4-to-1 for the Series 2025 Bonds. See APPENDIX B — “APPRAISAL REPORT.” The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the property within Improvement Area No. 2 was not less than $39,599,000. See “IMPROVEMENT AREA NO. 2 — Appraisal Report.” The Appraisal Report indicates the Appraiser’s opinion as to the minimum market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.

The values are based on the estimated numbers of units which is subject to change.

Prospective purchasers of the Series 2025 Bonds should not assume that the taxable land within Improvement Area No. 2 could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes.

In arriving at the estimate of market value, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix B for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within Improvement Area No. 2 from the market value estimated by the Appraiser.

No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes.

See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
FDIC/Federal Government Interests in Properties
General. The ability of the City to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.

The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding.” This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within Improvement Area No. 2 but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the City wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a

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56 private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.

The City has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special Taxes within Improvement Area No. 2, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.

FDIC. In the event that any financial institution making any loan which is secured by real property within Improvement Area No. 2 is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the City to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property’s value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its property tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution’s affairs, unless abandonment of the FDIC’s interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien.

The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC-owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC’s consent.

The Policy Statement states that the FDIC generally will not pay non-ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC’s federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is exempt from Mello-Roos special taxes.

The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within Improvement Area No. 2 in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale.

Such an outcome could cause a draw on the Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the Bonds.

Teeter Plan Termination
The County has implemented its Teeter Plan as an alternate procedure for the distribution of certain property tax and assessment levies on the secured roll. Pursuant to its Teeter Plan, the County has elected to provide certain local agencies and taxing areas, including the District, with full tax and assessment levies instead of actual tax and assessment collections. In return, the County is entitled to retain all delinquent tax and assessment payments, penalties and interest. Thus, the County’s Teeter Plan may protect the Holders of the Series 2025 Bonds from the risk of delinquencies in the payment of the Special Tax. The County is entitled, however, and under certain circumstances could be required, to terminate its Teeter Plan with respect to all or part of the local agencies and taxing areas covered thereby. A termination of the Teeter Plan with respect to the District

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57 would eliminate such protection from delinquencies in the payment of the Special Tax. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS — Teeter Plan.”
Bankruptcy and Foreclosure
Bankruptcy, insolvency and other laws generally affecting creditors’ rights could adversely impact the interests of owners of the Bonds in at least two ways. First, the payment of property owners’ taxes and the ability of the City to foreclose the lien of a delinquent unpaid Special Tax pursuant to its covenant to pursue judicial foreclosure proceedings may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. See “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS—Special Taxes—Proceeds of Foreclosure Sales.” In addition, the prosecution of a foreclosure could be delayed due to many reasons, including crowded local court calendars or lengthy procedural delays.

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

Although a bankruptcy proceeding would not cause the Special Taxes to become extinguished, the amount of any Special Tax lien could be modified if the value of the property falls below the value of the lien. If the value of the property is less than the lien, such excess amount could be treated as an unsecured claim by the bankruptcy court. In addition, bankruptcy of a property owner could result in a delay in prosecuting Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of delinquent Special Tax installments and the possibility of delinquent Special Tax installments not being paid in full.

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

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

According to the court’s ruling, as administrative expenses, post-petition taxes would be paid, assuming that the debtor had sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise), it would at that time become subject to current ad valorem taxes.

The Act provides that the Special Taxes are secured by a continuing lien which is subject to the same lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a bankruptcy court would treat the lien for Special Taxes levied after the filing of a petition in bankruptcy. Glasply is controlling

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58 precedent on bankruptcy courts in the State. If the Glasply precedent was applied to the levy of the Special Taxes, the amount of Special Taxes received from parcels whose owners declare bankruptcy could be reduced.

The various legal opinions to be delivered concurrently with the delivery of the Series 2025 Bonds (including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally.

Depletion of Reserve Fund
The Reserve Fund is to be maintained at an amount equal to the Reserve Requirement. Money in said fund may be used to pay debt service on the Series 2025 Bonds in the event the proceeds of the levy and collection of the Special Tax against property in Improvement Area No. 2 are insufficient. If funds in the Reserve Fund are used to pay debt service on the Series 2025 Bonds, the funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid pursuant to the Fiscal Agent Agreement. No replenishment from the proceeds of a levy of the Special Tax, however, can occur as long as the proceeds that are collected from the levy of the Special Tax at the maximum tax rates, together with other available funds, remain insufficient to pay all such amounts. Thus, it is possible that the Reserve Fund will be depleted by its use to pay such amounts and will not be replenished by the levy of the Special Tax. There is no assurance that the amount in the Reserve Fund will, at any particular time, be sufficient to pay all such amounts or that any amounts of the Reserve Requirement used for debt service on the Series 2025 Bonds will be fully replenished from the proceeds of the levy and collection of the Special Tax.

No Acceleration Provision
The Series 2025 Bonds do not contain a provision allowing for the acceleration of the Series 2025 Bonds in the event of a payment default or other default under the Series 2025 Bonds or the Fiscal Agent Agreement or in the event interest on the Series 2025 Bonds becomes included in gross income for federal income tax purposes.

See “— Limitations on Remedies” below.

Loss of Tax Exemption
As discussed under the caption “LEGAL MATTERS — Tax Matters,” the interest on the Series 2025 Bonds could become includable in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2025 Bonds as a result of a failure of the City to comply with certain provisions of the Internal Revenue Code of 1986, as amended. Such an event of taxability would not in and of itself result in an early redemption of the Series 2025 Bonds and the Series 2025 Bonds will remain outstanding to maturity or until redeemed under the redemption provisions of the Fiscal Agent Agreement.

Current or future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Series 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest.

Legislative changes have previously been proposed in Congress, which, if enacted, would result in additional federal income tax being imposed on certain owners of tax-exempt state or local obligations, such as the Series 2025 Bonds. The introduction or enactment of any pending or future legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the Series 2025 Bonds.

Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

It is possible that subsequent to the issuance of the Series 2025 Bonds there might be federal, State, or local statutory changes (or judicial or regulatory interpretations of federal, State, or local law) that affect the

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59 federal, State, or local tax treatment of the Series 2025 Bonds or the market value of the Series 2025 Bonds.

Legislative changes have been introduced in Congress, which, if enacted, could result in additional federal income or state tax being imposed on owners of tax-exempt state or local obligations, such as the Series 2025 Bonds. The introduction or enactment of any of such changes could adversely affect the market value or liquidity of the Series 2025 Bonds. No assurance can be given that subsequent to the issuance of the Series 2025 Bonds such changes or interpretations will not occur. Before purchasing any of the Series 2025 Bonds, all potential purchasers should consult their tax advisors regarding possible statutory changes or judicial or regulatory changes or interpretations, and their collateral tax consequences relating to the Series 2025 Bonds. See “TAX MATTERS” below.

Limitations on Remedies
Remedies available to the owners of the Series 2025 Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Series 2025 Bonds or to preserve the tax-exempt status of the Series 2025 Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Series 2025 Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting generally the enforcement of creditors’ rights, by equitable principles and by the exercise of judicial discretion. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the owners of the Series 2025 Bonds.

Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Series 2025 Bonds or, if a secondary market exists, that such Series 2025 Bonds can be sold for any particular price. Although the City has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Owners of the Series 2025 Bonds on a timely basis. See “CONTINUING DISCLOSURE.” The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated.

Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances.

Such prices could be substantially different from the original purchase price.

Proposition 218
An initiative measure commonly referred to as the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Article XIIIC and Article XIIID to the California Constitution. According to the “Title and Summary” of the Initiative prepared by the California Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.” The provisions of the Initiative have not yet been interpreted by the courts, although several lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. The Initiative could potentially impact the Special Taxes available to the City to pay the principal of and interest on the Bonds as described below.

Among other things, Section 3 of Article XIII states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the Amended Rate and Method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or

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60 termination of the special tax would not interfere with the timely retirement of that debt. On July 1, 1997, a bill was signed into law by the Governor of the State enacting Government Code Section 5854, which states that:
“Section 3 of Article XIIIC of the California Constitution, as adopted at the November 5, 1996, general election, shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after that date, assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights protected by Section 10 of Article I of the United States Constitution.” Accordingly, although the matter is not free from doubt, it is likely that the Initiative has not conferred on the voters the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely retirement of the Bonds.

It may be possible, however, for voters or the City Council acting as the legislative body of the District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Therefore, no assurance can be given with respect to the levy of Special Taxes for Administrative Expenses. Nevertheless, to the maximum extent that the law permits it to do so, the City will covenant in the Fiscal Agent Agreement that it will not initiate proceedings under the Act to reduce the Maximum Rates on then existing Developed Property in Improvement Area No. 2 below the amounts which are necessary to provide Special Tax Revenues in an amount equal to estimated Administrative Expenses for the then current Fiscal Year plus an amount equal to one hundred ten percent (110%) of Maximum Annual Debt Service on the Outstanding Bonds. The City will also covenant in the Fiscal Agent Agreement that, in the event an initiative is adopted which purports to alter the Amended Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. No assurance, however, can be given as to the enforceability of the foregoing covenants.

The interpretation and application of Article XIIIC and Article XIIID will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. See “RISK FACTORS — Limitations on Remedies.”
Litigation with Respect to Community Facilities Districts Shapiro. With respect to the approval of the Special Taxes, on August 1, 2014, the California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997) (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. The special tax to be levied within the CCFD, however, was to be levied only on hotel properties located within the CCFD.

The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.

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61 The facts of the San Diego Decision show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The election held in Improvement Area No. 2 had no registered voters within Improvement Area No. 2 at the time of the election to authorize the Special Tax. In the San Diego Decision, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court’s holding does not apply to the Special Tax election in Improvement Area No. 2.

Horizon. The Sacramento County Superior Court had issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661). As described below, this case involved an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.

In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.

Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final ruling states that the special tax is invalid.

The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.

The Special Tax Election in the District. With respect to the San Diego Decision, the facts of the San Diego Decision show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The election held in Improvement Area No. 2 had no registered voters within Improvement Area No. 2 at the time of the election to authorize the Special Tax. In the San Diego Decision, the Court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the Court’s holding does not apply to the Special Tax election in Improvement Area No. 2. Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election. Voters in the District at the time the District was established approved the Special Tax. Based on Sections 53341 and 53359 of the Act and analysis of existing laws, regulations, rulings and court decisions, the District believes that no successful challenge to the Special Tax being levied in accordance with the Amended Rate and Method may now be brought.

IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2025 Bonds will be selected for

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62 audit by the Internal Revenue Service. It is also possible that the market value of the Series 2025 Bonds might be affected as a result of such an audit of the Series 2025 Bonds (or by an audit of similar bonds). See, “TAX MATTERS” herein.

Ballot Initiatives
Article XIII A, XIII B, XIII C and XIII D were adopted pursuant to measures qualified for the ballot pursuant to California’s constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. On March 6, 1995 in the case of Rossi v. Brown, the State Supreme Court held that an initiative can repeal a tax ordinance and prohibit the imposition of further such taxes and that the exemption from the referendum requirements does not apply to initiatives. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the County, or local districts to increase revenues or to increase appropriations or on the ability of the Developer to complete the remaining proposed development within Improvement Area No. 2.

Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds Property owners within Improvement Area No. 2 are permitted to prepay their Special Taxes at any time.

Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the Series 2025 Bonds on the Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of the prepayment. The resulting redemption of Series 2025 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Series 2025 Bonds. See the caption “THE SERIES 2025 BONDS — Redemption — Mandatory Redemption from Special Tax Prepayments.” Availability of Property and Casualty Insurance
Recently, several insurance companies have announced that they would cease accepting certain new applications in California, including all business and personal lines property and casualty insurance. Any adverse impact of the availability of homeowner’s insurance on the homeowners in Improvement Area No. 2 and the real estate market in general cannot be predicted, but it is possible that homeowner’s insurance may not be readily available to homeowners within Improvement Area No. 2 in the future, which may impact both the values of the homes within Improvement Area No. 2 and the availability of mortgages to finance the acquisition of properties within Improvement Area No. 2. The District can provide no assurances whether future changes in insurance markets may occur, and what impact, if any, these changes may have on the values of the properties within Improvement Area No. 2.

Cybersecurity
The City, like other public and private entities, relies on a large and complex technology environment to conduct its operations, and consequently faces the threat of cybersecurity incidents. Such incidents can result from unintentional events, or from deliberate attacks by unauthorized entities or individuals attempting to gain access to the City’s information technology systems to misappropriate assets or information or to cause operational disruption and damage. The City and its departments face cyber threats from time to time, including but not limited to hacking, viruses, malware, phishing, distributed denial-of-service, and other attacks on computers, networks, and systems. [ANY CYBER INCIDENTS TBD]. The City maintains cyber liability insurance through its insurance carrier.

No assurances can be given that the City’s security and operational control measures will ensure against any and all cybersecurity threats and attacks. A cybersecurity incident or breach could damage the City’s information technology systems and cause disruption to City services and operations. Although the City carries

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63 cyber liability insurance, the cost of any such disruption or remedying damage caused by future attacks could be substantial. The City will continue to assess cyber threats and protect its data and systems.

The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation, the Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Owners of the Bonds.

CONTINUING DISCLOSURE
City Continuing Disclosure
Pursuant to the City’s Continuing Disclosure Certificate, the City, on behalf of the District, will agree to provide, or cause to be provided, to the EMMA system of the Municipal Securities Rulemaking Board, which can be found on the Internet at www.emma.msrb.org, on an annual basis certain financial information and operating data concerning Improvement Area No. 2 and notice of enumerated events. This covenant is being made by the City in order to assist the Underwriter in complying with the Rule.

In the past five years, the City has complied with all disclosure covenants, except [TBD].

Developer Continuing Disclosure
To provide updated information with respect to the development within Improvement Area No. 2, the Developer will enter into a Developer Continuing Disclosure Certificate and will covenant to provide a Semiannual Report not later than June 15 and December 15 of each year, beginning June 15, 2026, until satisfaction of certain conditions set forth in the Developer Continuing Disclosure Certificate. The Semiannual Reports provided by the Developer will contain updates regarding the development within Improvement Area No. 2 as outlined in its Developer Continuing Disclosure Certificate attached as APPENDIX F. In addition to its Semiannual Reports, the Developer will agree to provide notices of certain events set forth in its Developer Continuing Disclosure Certificate.

The Developer’s obligations under its Developer Continuing Disclosure Certificate will terminate upon the earliest to occur of (a) the legal defeasance, prior redemption, or payment in full of all the Bonds; or (b) when the Developer owns property that will be developed as less than 34 single-family homes within Improvement Area No. 2.

Other than as disclosed herein, in the last five years, the Developer has not failed to comply in any material respects with its previous continuing disclosure undertakings, specifically regarding its requirement to provide developer periodic reports or to provide notice of occurrence of enumerated events; however, (i) in connection with the $16,780,000 California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Series 2020B, the Developer failed to file the initial semi-annual report by the due date of May 1, 2021, but filed a curative report on May 21, 2021; and (ii) in connection with the $5,795,000 City of Rancho Cordova Grantline 208 Community Facilities District No. 2018-1 Special Tax Bonds, Series 2021B, the Developer failed to file the initial annual report by the due date of April 1, 2022, but filed a curative report on September 21, 2022.

LEGAL MATTERS
Tax Matters
In the opinion of Best Best & Krieger LLP, Sacramento, California, subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants, the interest on the Series 2025 Bonds is excluded from gross income for federal income tax purposes, and interest on the Series 2025 Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum

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64 tax imposed on individuals and corporations; however, interest on the Series 2025 Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the Series 2025 Bonds is exempt from California personal income tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (“Tax Code”) that must be satisfied subsequent to the issuance of the Series 2025 Bonds. The City has made certain representations and covenanted to comply with each such requirement. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Series 2025 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Series 2025 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Series 2025 Bonds may adversely affect the value of, or the tax status of interest on, the Series 2025 Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events, or matters.

If the initial offering price to the public (excluding bond houses and brokers) at which a Series 2025 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Series 2025 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Series 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Series 2025 Bonds to determine taxable gain upon disposition (including sale, prepayment, or payment on maturity) of such Series 2025 Bond.

The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the Series 2025 Bonds who purchase the Series 2025 Bonds after the initial offering of a substantial amount of such maturity. Owners of such Series 2025 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Series 2025 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Series 2025 Bonds under federal individual alternative minimum taxes.

Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Series 2025 Bond (said term being the shorter of the bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the Series 2025 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Series 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates).

Amortized Series 2025 Bond premium is not deductible for federal income tax purposes. Owners of premium Series 2025 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Series 2025 Bonds.

Attachment 3
65 Current and future legislative proposals, if enacted into law, clarification of the Tax Code, or court decisions may cause interest with respect to the Series 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code, or court decisions may also affect the market price for, or marketability of, the Series 2025 Bonds. Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the Series 2025 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the City or about the effect of future changes in the Tax Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The City has covenanted, however, to comply with the requirements of the Tax Code.

A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX G.

Owners of the Series 2025 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Series 2025 Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Series 2025 Bonds other than as expressly described above.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the Series 2025 Bonds, or as to the consequences of owning or receiving interest on the Series 2025 Bonds, as of any future date. Prospective purchasers of the Series 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Legal Opinion
The legal opinion of Bond Counsel, approving the validity of the Series 2025 Bonds in substantially the form set forth as Appendix G, will be made available to the original purchaser at the time of original delivery. A copy of the legal opinion for the Series 2025 Bonds will be provided with each definitive bond. Certain legal matters will be passed upon for the City and the District by the City Attorney’s Office, and by Best Best & Krieger LLP, as Disclosure Counsel, and for the Underwriter by Anzel Galvan LLP, as counsel to the Underwriter.

Litigation
No litigation is pending or threatened concerning the validity of the Series 2025 Bonds, the pledge of Special Tax Revenues to repay the Series 2025 Bonds, the powers or authority of the City with respect to the Series 2025 Bonds, or seeking to restrain or enjoin development of the land within Improvement Area No. 2 and a certificate of the City to that effect will be furnished to the Underwriter at the time of the original delivery of the Series 2025 Bonds.

No Rating
The City has not made and does not contemplate making application to any rating agency for the assignment of a rating of the Series 2025 Bonds.

Attachment 3
66 Underwriting
The Series 2025 Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). The Underwriter has agreed to purchase the Series 2025 Bonds at a price of $__________ (being $__________ aggregate principal amount thereof, less Underwriter’s discount of $_______ and [plus/less] [net] original issue [premium/discount] of $_________). The purchase agreement relating to the Series 2025 Bonds provides that the Underwriter will purchase all of the Series 2025 Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

Under certain circumstances, the Underwriter may offer and sell the Series 2025 Bonds to certain dealers and others at prices lower or yields greater than the offering prices or yields stated on the inside cover page of this Official Statement. The offering prices or yields may be changed from time to time by the Underwriter.

The Underwriter and its affiliates comprise a full service financial institution engaged in activities which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and nonfinancial activities and services. The Underwriter and its affiliates may have provided, and may in the future provide, a variety of these services to the City and District and to persons and entities with relationships with the City and District, for which they received or will receive customary fees and expenses.

In the ordinary course of these business activities, the Underwriter and its affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the City or District (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the City or District.

The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire such assets, securities and instruments. Such investment and securities activities may involve securities and instruments of the City or District.

Municipal Advisor
The City has retained NHA Advisors, San Rafael, California, as Municipal Advisor for the sale of the Series 2025 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

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

Financial Interests
The fees being paid to the Municipal Advisor, the Underwriter, Underwriter’s Counsel, Bond Counsel and Disclosure Counsel are contingent upon the issuance and delivery of the Series 2025 Bonds. From time to time, Bond Counsel and Disclosure Counsel represent the Underwriter on matters unrelated to the Series 2025 Bonds.

Attachment 3
67 Pending Legislation
The City is not aware of any significant pending legislation which would have material adverse consequences on the Series 2025 Bonds or the ability of the City to pay the principal of and interest on the Series 2025 Bonds when due.

Additional Information
The purpose of this Official Statement is to supply information to prospective buyers of the Series 2025 Bonds. Quotations and summaries and explanations of the Series 2025 Bonds and documents contained in this Official Statement do not purport to be complete, and reference is made to such documents for full and complete statements and their provisions.

Attachment 3
68 The execution of this Official Statement by the City Manager of the City and the delivery thereof have been duly authorized by the City Council acting in its capacity as the legislative body of the District.

CITY OF EL PASO DE ROBLES, ON BEHALF OF
ITS COMMUNITY FACILITIES DISTRICT NO. 2022-
1N (OLSEN/SOUTH CHANDLER RANCHFACILITIES)
By:

City Manager

Attachment 3
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APPENDIX A

AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

Attachment 3
B-1

APPENDIX B

APPRAISAL REPORT

Attachment 3

APPENDIX C

SUPPLEMENTAL INFORMATION CONCERNING

CITY OF EL PASO DE ROBLES AND COUNTY OF SAN LUIS OBISPO The Bonds will not be secured by any pledge of ad valorem taxes or City General Fund revenues but will be payable solely from Special Taxes to levied on and collected from the owners of certain taxable land within Improvement Area No. 2. The information set forth below is included in the Official Statement for background purposes only.

General Description and Background
The City was incorporated in 1889 and operates under a Council-Manager form of government.. The City began as a natural hot springs destination, eventually growing into an agricultural economy, which has become a premier wine region in the country and a food and beverage destination. Today, the City has a population of approximately 31,000 residents. There are more than 300 wineries on 26,000 vineyard acres. Locals and visitors can still take hot springs treatments at Paso Robles Inn, Franklin Ponds and River Oaks Hot Springs Spa. The Downtown City Park remains the heart of the community, hosting events all year and surrounded by restaurants, wine tasting rooms, and small family-owned businesses. The City is looking to the future with the development of a Spaceport designation for its airport and a Tech Corridor to attract and serve technology-related businesses to the region. New housing is being built to help accommodate planned growth.

The City is located midway between Los Angeles and San Francisco and bordered by coastal Highway 1 and Highway 101. The City is 12,740 acres or 19.9 square miles. Topography of the surrounding area varies from broad coastal plains to fertile inland valleys backed up by mountain ranges to the east. The climate is equable in the coastal and valley regions.

The City is a general law city and operates under a Council/Manager form of government. The Council/Manager form of government is broadly defined as combining the political/policy leadership of elected officials with the managerial leadership of the City Manager. Residents elect the Mayor and four Councilmembers.

The Council acts as the board of directors of the municipal corporation and meets in a public forum where citizens may participate in the governmental process. Prompted by a legal challenge alleging that previous "at-large" City Councilmember election system violated the California Voting Rights Act of 2002, the City has transitioned from an at-large system of electing the City Council to a by-district election model. The City is divided into 4 voting districts, with each district represented by one City Council member from that district. The Mayor's position will remain at-large. Council Members represent the City on various regional commissions, boards, and committees.

The City Manager is appointed by the City Council and serves as the City Council’s administrative head of the City. The City Attorney is also appointed by the City Council. All other city employees are appointed by and are responsible to the City Manager.

The City maintains a website at www.prcity.com. The information presented there, however, is not part of this Official Statement, is not incorporated by reference herein and should not be relied upon in making an investment decision with respect to the Bonds.

As one of the original 27 counties in the State and the fifteenth largest county in the State, the County encompasses 3,300 square miles and 100 miles of coastline midway between the metropolitan areas of San Francisco and Los Angeles. The County borders the Pacific Ocean to the west, Monterey County to the north, Santa Barbara County to the south, and Kern County to the east. The Santa Lucia Range dominates the western half of the County with the Los Padres National Forest located in the south central part of the County. San Luis Obispo County has many recreational areas and tourist attractions including the nationally known Hearst Castle in San Simeon. The County government is a general law form of government governed by a five-member elected Board of Supervisors each serving overlapping four-year terms.

Attachment 3
Population
The following sets forth the City, the County and the State population estimates as of January 1, for the years 2021 to 2025.

CITY OF EL PASO DE ROBLES, SAN LUIS OBISPO COUNTY AND STATE OF CALIFORNIA Estimated Population
Year
(January 1)
City of
Paso Robles
San Luis Obispo
County
State of
California
2021 31,456 279,100 39,369,530
2022 30,948 280,111 39,179,680
2023 30,799 280,206 39,228,444
2024 30,988 279,568 39,420,663
2025 31,061 279,337 39,529,101
___________________
Source: State of California Department of Finance, Demographic Research Unit with 2020 Benchmark.

Commerce
A summary of historic taxable sales within the City for the years 2020 through 2024 is shown in the following table.

CITY OF EL PASO DE ROBLES
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions Retail and Food Service Stores Total All Outlets
Number of
Outlets
Taxable
Transactions
Number of
Outlets
Taxable
Transactions
2020 1,065 $673,895,270 1,921 $851,788,770
2021 931 827,047,755 1,737 1,058,134,022
2022 927 874,111,954 1,745 1,148,163,847
2023 897 851,923,817 1,713 1,115,352,873
2024 877 822,641,261 1,709 1,098,211,144
___________________
Source: California Department of Tax and Fee Administration.

Attachment 3
A summary of historic taxable sales within the County for the years 2020-2024 is shown in the following table.

COUNTY OF SAN LUIS OBISPO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in thousands)(1)
Retail and Food Service Stores Total All Outlets
Number of
Permits
Taxable
Transactions
Number of
Permits
Taxable
Transactions
2020 7,447 $4,005,502,018 13,332 $5,480,712,553
2021 6,569 4,803,343,899 11,956 6,695,514,613
2022 6,533 5,064,031,991 12,193 7,094,082,991
2023 6,320 4,884,514,255 11,907 6,979,933,847
2024 6,154 4,816,862,358 11,740 7,008,494,684
___________________
(1) Numbers are rounded.

Source: California Department of Tax and Fee Administration.

Attachment 3
Employment and Industry
The City is included in the San Luis Obispo-Paso Robles labor market area. The following table shows the average annual estimated numbers of wage and salary workers by industry. The table does not include proprietors, the self-employed, unpaid volunteers or family workers, domestic workers in households, and persons in labor management disputes.

SAN LUIS OBISPO-PASO ROBLES METROPOLITAN STATISTICAL AREA (San Luis Obispo County)
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
2020 2021 2022 2023 2024
Civilian Labor Force(1) 129,300 130,000 131,100 132,500 132,300 Employment 118,800 122,900 126,900 127,700 126,900
Unemployment 10,500 7,200 4,200 4,700 5,400
Unemployment Rate 8.1% 5.5% 3.2% 3.6% 4.1%
Wage and Salary Employment(2)
Mining, Logging and Construction 8,500 9,100 8,900 8,700 8,900 Manufacturing 7,300 7,900 8,200 8,500 8,500
Service Providing 93,800 97,300 101,000 101,400 99,400
Retail Trade 12,900 13,500 13,700 13,500 13,400
Trade, Transportation and Utilities 19,100 19,700 20,000 19,900 19,800 Information 1,100 1,200 1,300 1,200 1,100
Finance and Insurance 2,300 2,300 2,100 2,000 1,800
Real Estate and Rental and Leasing 1,500 1,600 1,800 1,900 1,900 Professional and Business Services 10,500 11,000 11,100 11,000 10,900 Private Education and Health Services 17,000 17,500 18,100 18,500 18,500 Leisure and Hospitality 15,400 17,400 19,500 19,900 20,500 Other Services 3,300 3,400 3,700 3,900 4,000
Federal Government 600 600 600 600 600
State Government 10,600 10,200 10,400 10,400 9,000
Local Government 12,400 12,400 12,400 12,200 11,300
Total, All Industries(3) 114,400 119,300 123,500 124,300 122,600 ___________________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers and workers on strike. The unemployment rate is calculated using unrounded data. (2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding and due to the fact that not all industries are included.

Source: State of California, Employment Development Department; March 2024 Benchmark.

Attachment 3
Major Employers
The table below shows the 10 largest employers in the City as of June 30, 2024.

CITY OF EL PASO DE ROBLES

LARGEST EMPLOYERS
(As of June 30, 2024)
Rank Employer
Number of
Employees
% of Total City
Employment

1. Paso Robles Joint Unified School District 869 4.51%

2. Firestone Walker, Inc. 286 1.48

3. City of El Paso de Robles 274 1.42

4. Walmart 231 1.20

5. Allegretto Vineyard Resort 205 1.06

6. Justin Vineyards & Winery LLC 200 1.04

7. Trelleborg Sealing Solutions Tustin, Inc. 174 0.90

8. Target 170 0.88

9. Applied Technologies 162 0.84

10. Albertson’s Food Center #314 156 0.81
TOTAL 2,727 14.14%
___________________
Source: City’s Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2024.

The table below shows the 10 largest employers in the County as of June 30, 2024.

COUNTY OF SAN LUIS OBISPO

LARGEST EMPLOYERS
(As of June 30, 2024)
Rank Name of Business Employees
% of Total County
Employment

1. County of San Luis Obispo 2,959 2.18%

2. Cal Poly Corporation 2,650 1.95

3. Department of State Hospitals-Atascadero 2,300 1.69

4. California Men’s Colony 2,000 1.47

5. California Polytechnic State University 1,912 1.41

6. Lucia Mar Unified School District 1,823 1.34

7. Pacific Gas and Electric Company 1,700 1.25

8. Tenet Health Central Coast 1,425 1.05

9. San Luis Coastal Unified School District 1,388 1.02

10. Paso Robles Joint Unified School District 1,262 0.93 TOTAL 19,419 14.29%
___________________
Source: County’s Annual Comprehensive Financial Report for fiscal year ended June 30, 2024.

Attachment 3
D-1

APPENDIX D

SUMMARY OF LEGAL DOCUMENTS
The following is a summary of certain provisions of the Fiscal Agent Agreement. This summary does not purport to be comprehensive and reference should be made to the agreement for a full and complete statement of the provisions thereof.

Attachment 3
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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE CITY
This Continuing Disclosure Certificate dated [DATE] (the “Disclosure Certificate”), is executed and delivered by the City of El Paso de Robles (the “City”), on behalf of its Community Facilities District No. 2022- 1N (Olsen/South Chandler Ranch – Facilities) (the “District”), in connection with the issuance and delivery of the $9,895,000 City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Bonds”). The City covenants as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by City, on behalf of the District, for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) of the Securities and Exchange Commission.

Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Section 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the District’s fiscal year (currently April 1 based on the District’s fiscal year end of June 30). “Beneficial Owner” shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income purposes.
“County” means the County of San Luis Obispo, California. “Disclosure Representative” shall mean the [City Treasurer], or his or her designee, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time. “Dissemination Agent” shall mean, initially, [DTA Public Finance, Inc.], or any successor Dissemination Agent designated in writing by the District and which has filed with the then current Dissemination Agent a written acceptance of such designation.
“District” shall mean City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch – Facilities).
“EMMA” shall mean the Electronic Municipal Market Access system of the MSRB. “Fiscal Agent” means U.S. Bank Trust Company, National Association or such other entity appointed by the District pursuant to the Fiscal Agent Agreement to act as the fiscal agent under the Fiscal Agent Agreement.

 Preliminary; subject to change.

Attachment 3
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“Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of [December 1, 2025], by and between the City, for and on behalf of the District, and U.S. Bank Trust Company, National Association, as fiscal agent.
“Improvement Area No. 2” means Improvement Area No. 2 of the District. “Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board and any successor entity designated under the Rule as the repository for filings made pursuant to the Rule. “Official Statement” shall mean that certain Official Statement for the Bonds dated [_______], 2025. “Owners” shall mean the registered owners of the Bonds as set forth in the registration books maintained by the Fiscal Agent.
“Repository” shall mean the MSRB or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Unless otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “State” shall mean the State of California.
“Underwriter” shall mean any underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds.

Section 3. Provision of Annual Reports.
(a) The City shall, or, if the Dissemination Agent is other than the City or District, upon written direction shall cause the Dissemination Agent to, not later than the Annual Report Date of April 1, commencing with the report due by April 1, 2026, which initial Annual Report shall consist solely of the Official Statement and audited financial statements of the City, provide to the Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. If the District’s fiscal year changes, the District shall give notice of such change in the same manner as for a Listed Event under Section 5(d). (b) In the event that the Dissemination Agent is an entity other than the City or District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the City shall provide the Annual Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the due date for an Annual Report the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City will be filing the Annual Report in compliance with subsection (a). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report.

Attachment 3
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(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send, in a timely manner, a notice to EMMA, in the form required by EMMA.
(d) If the Dissemination Agent is other than the City or District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the City certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.

Section 4. Content of Annual Reports. The District’s Annual Report shall contain or include by reference the following:
(a) Financial Statements. The audited financial statements of the City for the prior fiscal year, if any have been prepared and which, if prepared, shall be prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board; provided, however, that the City may, from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the City shall modify the basis upon which its financial statements are prepared, the City shall provide the information referenced in Section 8 below regarding such modification. If the City is preparing audited financial statements and such audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) Financial and Operating Data. The first Annual Report due by April 1, 2026 shall consist of the Official Statement and audited financial statements of the City. Thereafter, the District’s Annual Report shall contain or incorporate by reference the following:
(i) the principal amount of the Bonds outstanding as of the June 30 preceding the filing of the Annual Report;
(ii) the balance in Reserve Fund and the Reserve Requirement as of the June 30 preceding the filing of the Annual Report;
(iii) any changes to the RMA approved or submitted to the qualified electors for approval prior to the filing of the Annual Report;
(iv) an update of the estimated appraised value-to-lien ratio for Improvement Area No. 2 substantially in the form of Table 4 in the Official Statement based upon the most recent Special Tax levy preceding the date of the Annual Report and on the assessed values of property for the current fiscal year; (v) until such time that the property within Improvement Area No. 2 is no longer owned by any developer or merchant builder, an update of the largest taxpayers in Improvement Area No. 2 based upon the most recent Special Tax levy preceding the date of the Annual Report and on the assessed values of property for the current fiscal year;
(vi) the percentage of the Maximum Special Taxes levied by the District with respect to the Bonds;

Attachment 3
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(vii) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes in Improvement Area No. 2;
(viii) a statement as to whether the District participates in the Teeter Plan (as defined in the Official Statement) and, in the event that the Teeter Plan is terminated with respect to the District, a table showing the total Special Taxes levied and the total Special Taxes collected for the prior fiscal year and the total Special Taxes that, as of December 31, remain unpaid for each prior fiscal year in which Special Taxes were levied and the number of delinquent parcels in Improvement Area No. 2; and (ix) if Special Taxes are levied on Undeveloped Property, the amount of Special Taxes levied on Undeveloped Property and the amount of Special Taxes levied on Developed Property in Improvement Area No. 2 (as such terms are defined in the RMA).

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA. The City shall clearly identify each such other document so included by reference.

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

1. principal and interest payment delinquencies;

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

3. unscheduled draws on credit enhancements reflecting financial difficulties;

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

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

6. tender offers;

7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings; and

10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.

Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such

Attachment 3
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jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

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

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

3. appointment of a successor or additional paying agent or the change of the name of a paying agent;

4. nonpayment related defaults;

5. modifications to the rights of Owners of the Bonds;

6. notices of redemption;

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

8. incurrence of a financial obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect Bond holders. (c) Upon the occurrence of a Listed Event under Section 5(b) above, the City shall as soon as possible determine if such event would be material under applicable federal securities laws. (d) If the City determines that knowledge of the occurrence of a Listed Event under Section 5(b) would be material under applicable federal securities laws, the City shall file a notice of such occurrence with the Repository in a timely manner not more than 10 business days after the event. (e) For purposes of the events identified in subparagraphs (a)(10) and (b)(8), the term “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
(f) The City hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the City and that the Dissemination Agent, if other than the City or District, shall not be responsible for determining whether the City’s instructions to the Dissemination Agent under this Section 5 comply with the requirements of the Rule.

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Section 6. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds.

Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be [DTA Public Finance, Inc.] The Dissemination Agent, if other than the City or District, shall not be responsible in any manner for the content of any notice or report prepared by the City pursuant to this Disclosure Certificate. If at any time there is not any other designated Dissemination Agent, the Trustee shall be the Dissemination Agent. The Dissemination Agent may resign by providing thirty (30) days written notice to the City and the Trustee.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver is related to the provisions of Sections 3(a), 4, or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted;
(b) The undertaking hereunder, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Certificate, the City shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment related to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(a), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the formed accounting principles.

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

Section 10. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Trustee at the written direction of any Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, shall, or any Owner or Beneficial Owner of the Bonds may

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take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate, but only to the extent funds have been provided to the Trustee or the Trustee has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges of the Trustee whatsoever, including, without limitation, fees and expenses of its attorney. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the City or District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.

Section 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Certificate may be given as follows:

City: City of El Paso de Robles
1000 Spring Street
Paso Robles, CA 93446
Attn: City Manager
District: City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch)
1000 Spring Street
Paso Robles, CA 93446
Attn: City Manager
Underwriter: Stifel, Nicolaus & Company, Incorporated
[TBD]
[TBD]
Attn: Sara Brown
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notice or communications should be sent.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, District, the Trustee, the Dissemination Agent, the Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

This Disclosure Certificate is executed as of the date and year first set forth above.

CITY OF EL PASO DE ROBLES, ON BEHALF OF ITS
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH-CHANDLER RANCH - FACILITIES)
By:

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Authorized Officer

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APPENDIX F

FORM OF CONTINUING DISCLOSURE CERTIFICATE OF THE DEVELOPER This Continuing Disclosure Certificate (the “Disclosure Certificate”), dated [________], 2025, is executed and delivered by K. Hovnanian Communities, Inc., a California corporation (the “Developer”), in connection with the issuance by the City of El Paso de Robles (the “City”), on behalf of its Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (the “Community Facilities District”), of the $9,895,000 City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Bonds”). The Bonds are being issued pursuant to that certain Fiscal Agent Agreement, dated as of [December 1], 2025, by and between the City, for and on behalf of the District, and U.S. Bank Trust Company, National Association, as fiscal agent (together, the “Fiscal Agent Agreement”). The Developer covenants and agrees as follows:

WHEREAS, the Series 2025 Bonds are payable from and secured by special taxes levied on certain of the property within the Community Facilities District;
WHEREAS, the Developer is developing the property within Improvement Area No. 2 of the Community Facilities District that is described in the Official Statement as the Mirabella Project; and WHEREAS, this Disclosure Certificate is being executed and delivered by the Developer for the benefit of the owners and beneficial owners of the Series 2025 Bonds.

NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the Developer hereby agrees as follows:

Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Disclosure Certificate have the meanings herein specified. Capitalized undefined terms used herein shall have the meanings ascribed thereto in this Disclosure Certificate or the Fiscal Agent Agreement. “Affiliate” means with respect to the Developer, means any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information regarding such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Official Statement or to pay its Special Taxes on the Property (to the extent the responsibility of the Developer) prior to delinquency). For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the present possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The Land Bank is not an Affiliate of the Developer.
“Assumption Agreement” means an undertaking by a Major Owner (or Affiliate thereof) for the benefit of the holders and beneficial owners of the Bonds containing terms substantially similar to this Disclosure Certificate (as modified for such Major Owner’s development and financing plans with respect to the Community Facilities District), whereby such Major Owner or Affiliate agrees to provide Periodic Reports and notices of significant events, setting forth the information described in Sections 3 and 4 hereof, respectively, with respect to the portion of the property in the Community Facilities District owned by such Major Owner and its Affiliates and, at the option of the Developer or such Major Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 11 hereof. As set forth in Section 6(b), the sale of property to a Major Owner shall not require the execution of an Assumption Agreement if such Major Owner is already a party

 Preliminary; subject to change.

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to a continuing disclosure certificate in form and substance similar to this Disclosure Certificate with respect to the Bonds, and under which the property conveyed to such Major Owner will become subject to future SemiAnnual Reports. In addition, the conveyance of property from the Land Bank to the Developer under the Option Agreement is subject to this Disclosure Certificate and shall not require the Developer to enter into an Assumption Agreement.
“Community Facilities District” means the City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities), a community facilities district organized and existing under the laws of the State.
“Development Plan” means, with respect to a Major Owner that owns Property, the specific improvements such Major Owner intends to make, or cause to be made, in order forsuch Major Owner’s Property to be fully developed within the time frame in which such improvements are intended to be made and the estimated costs of such improvements; the Developer’s Development Plan, as of the date hereof, is described in the Official Statement under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT – The Developer and its Development Plan – Development Plan and Status.”
“Dissemination Agent” means, initially, the Developer, or any Dissemination Agent designated in writing by the Developer and which has filed with the Developer and the Community Facilities District a written acceptance of such designation.
“Financing Plan” means, with respect to a Major Owner that owns Property, the method by which such Major Owner intends to finance its Development Plan, including specific sources of funding for such Development Plan; the Developer’s Financing Plan, as of the date hereof, is described in the Official Statement under the caption “PROPERTY OWNERSHIP AND THE DEVELOPMENT – The Developer and its Development Plan – Financing Plan.” “Fiscal Agent” means U.S. Bank Trust Company, National Association, as Fiscal Agent under the Fiscal Agent Agreement, or any successor thereto as Fiscal Agent thereunder, substituted in its place as provided therein. “Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of [December] 1, 2025, by and between the Community Facilities District and U.S. Bank Trust Company National Association, as originally executed and as it may be amended or supplemented from time to time in accordance with its terms. “Land Bank” means Brookfield Holdings (Mirabella) LLC, a Delaware limited liability company, the land bank for the Developer pursuant to the Option Agreement. “Listed Events” means any of the events listed in subsection (a) of Section 4 hereof. “Major Owner” means, as of any date of determination, a Person that, together with the Person’s Affiliates, owns, or has under option or lease, 34 or more of the 173 taxable parcelsin Improvement Area No. 2 of the Community Facilities District. As of the date of this Disclosure Certificate, the Developer is a Major Owners. During the term of the Option Agreement, the Land Bank shall not be considered a Major Owner. A foreclosing creditor or bank shall not be considered a Major Owner.
“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive continuing disclosure reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (“EMMA”) website of the MSRB, currently located at http://emma.msrb.org. “Official Statement” means the Official Statement dated [___], 2025, relating to the Bonds. “Option Agreement” means that certain Option Agreement, dated August 2, 2024, by and between the Developer and the Land Bank, as amended by the First Amendment to Option Agreement dated July 22, 2025, as amended and assigned and as it may be amended from time to time.

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“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Bonds.
“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. “Planned Development Stage” means the stage of development to which the Developer intends to develop the Property, as described in the Official Statement, which is the construction of finished homes. “Property” means, as of any date of determination, (A) the real property within the boundaries of Improvement Area No. 2 of the Community Facilities District that is owned by (i) the Developer, (ii) any Affiliate of the Developer, and (iii) the Land Bank (during the term of the Option Agreement), and (B) the property in Improvement Area No. 2 of the Community Facilities District that has been conveyed by the Developer, or any Affiliate of the Developer, to a Major Owner who has not assumed the Developer’s obligations under this Disclosure Certificate under Section 6(b) that is owned by such Major Owner. Property as of any date of determination does not include real property within the boundaries of Improvement Area No. 2 of the Community Facilities District that that is exempt from the Special Taxes, is the subject of an Assumption Agreement or has been conveyed to individual homeowners. “Report Dates” mean June 1 and December 1 of any year. If, in any year, the Report Date Falls on a Saturday, Sunday, or a holiday, such Report Date shall be extended to the next following day that is not a Saturday, Sunday, or Holiday.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Second Report Date” means June 1 of each year.
“Semi-Annual Report” means any Semi-Annual Report provided by the Developer pursuant to, and as described in, Sections 2 and 3 hereof.
“Special Taxes” means special taxes of the Community Facilities District.

Section 2. Provision of Semi-Annual Reports. (a) So long as the Developer’s obligations hereunder have not been terminated pursuant to Section 6, the Developer shall, or shall cause the Dissemination Agent (if any) to, provide to the MSRB a Semi-Annual Report that is consistent with the requirements of Section 3 hereof, not later than each Report Date, commencing with June 15, 2026. If, in any year, a Report Date falls on a day that is not a Business Day, such deadline shall be extended to the next following Business Day. (b) Not later than 15 calendar days prior to the date specified in subsection (a) of this Section for the providing of the Semi-Annual Report to the MSRB, the Developer shall provide the Semi-Annual Report to the Dissemination Agent (if any) or shall provide notification to the Dissemination Agent that the Developer is preparing, or causing to be prepared, the Semi-Annual Report and the date which the Semi-Annual Report is expected to be available. If by such date, the Dissemination Agent has not received a copy of the Semi-Annual Report or notification from the Developer that the Developer intends to file the Semi-Annual Report, the Dissemination Agent shall contact the Developer to determine if the Developer is in compliance with the first sentence of this subsection (b). The SemiAnnual Report may be submitted as a single document or as separate documents comprising a package, and may incorporate by reference other information as provided in Section 3 of this Disclosure Certificate. (c) If the Developer does not provide, or does not cause the Dissemination Agent to provide, a SemiAnnual Report to the MSRB by the Report Date as required in subsection (a) above, the Developer or the Dissemination Agent shall, in a timely manner, send a notice to the MSRB. (d) The Dissemination Agent shall:
(i) Provide each Semi-Annual Report received by it to the MSRB, as provided herein; and

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(ii) To the extent the Semi-Annual Report has been furnished to it, file a report with the Developer (if the Dissemination Agent is other than the Developer), the Community Facilities District, and the Participating Underwriter certifying that such Semi-Annual Report has been provided pursuant to this Disclosure Certificate and stating the date it was provided to the MSRB.

Section 3. Content of Semi-Annual Reports. Each Semi-Annual Report shall contain or incorporate by reference the following as of a date not more than sixty (60) days prior to the applicable Report Date:
(a) The following information:
(i) A description of the progress made in the Development Plan for the Property since the date of the Official Statement or the most recent Semi-Annual Report, including a description of any significant changes in such Development Plan and the causes or rationale for such changes. (ii) To the extent not previously disclosed in a prior Semi-Annual Report, a discussion of any material change in the respective sources of funds of each Major Owner that owns Property to finance their development of the Property as disclosed in their Financing Plan, and an estimate of the remaining costs to be spent by the Developer to reach the Planned Development Stage. (iii) An update to the following table, which summarize ownership of the residential lots within Improvement Area No. 2 of the Community Facilities District as of December 1, 2025:

Status of Ownership
Information as of December 1, 2025
Owned by Developer and its Affiliates
Owned by Land Bank
Owned by Homeowners
TOTAL 173
Status of Development of Units Owned by the Developer and the Land Bank Information as of December 1, 2025
Completed Production Homes
Completed Model Homes
Homes Under Construction
Finished Pad/Lot Condition(1)
TOTAL 173
__________________________
(1)
[__] of such lots have been issued a building permit but signification construction has not yet commenced.
(vi) An update of the status of any previously reported Listed Event described in Section 4 hereof. (b) In addition to any of the information expressly required to be provided under the preceding paragraph (a) the Developer shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Major Owners that are Affiliates of each other may file a single Semi-Annual Report covering all such entities. Any or all of the items listed above may be included by specific reference to other documents that have been made available to the public on the MSRB’s website or through the Securities and Exchange Commission’s EDGAR database. The Developer shall clearly identify each such other document so included by reference.

Section 4. Reporting of Significant Events. (a) So long as the Developer’s obligations hereunder have not been terminated pursuant to Section 6, pursuant to the provisions of this Section, the Developer shall give, or cause

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to be given, notice of the occurrence of any of the following events with respect to the Property, if material under clauses (b) and (c), in a timely manner not later than ten business days after obtaining knowledge of the occurrence of the event:
(i) Any conveyance by a Major Owner of any portion of a parcel of Property owned by such Major Owner or any Affiliate of a Major Owner to an entity that is not an Affiliate of a Major Owner, the result of which conveyance is to cause such entity to become a Major Owner. (ii) Any failure of a Major Owner, or any Affiliate of a Major Owner owning any Property, to pay prior to delinquency any general property taxes or assessments with respect to such Property (to the extent the responsibility of such Major Owner or such Affiliate) that wasn’t promptly cured. (iii) Any denial or termination of credit, any denial or termination of, or default under, any line of credit or loan or any other loss of a source of funds that could have a material adverse effect on a Major Owner’s Financing Plan or Development Plan as most recently disclosed in the Official Statement or a SemiAnnual Report or on the ability of a Major Owner, or any Affiliate of a Major Owner owning any Property, to pay the Special Taxes with respect to the Property owned by such Major Owner or such Affiliate prior to delinquency (to the extent the responsibility of such Major Owner or such Affiliate). (iv) Bankruptcy, insolvency, receivership or similar event of a Major Owner or an Affiliate of a Major Owner owning any Property. For purposes of this paragraph, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for a Major Owner or an Affiliate of a Major Owner owning any Property in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of a Major Owner or an Affiliate of a Major Owner owning any Property, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of such a Major Owner or an Affiliate of a Major Owner owning any Property. (v) The sale of all or substantially all of the assets of a Major Owner or an Affiliate of a Major Owner owning any Property, to an entity that is not an Affiliate of a Major Owner or the Land Bank. (vi) Any significant amendments to land use entitlements for the Property, if material. (vii) Any previously undisclosed governmentally-imposed preconditions to commencement or continuation of development on Property, if material.
(viii) Any previously undisclosed legislative, administrative or judicial challenges to development on Property, if material.
(ix) Any changes, if material, in the alignment, design or likelihood of completion of significant public improvements affecting Property, including major thoroughfares, sewers, water conveyance systems and similar facilities.
(x) The assumption of any obligations by a Major Owner pursuant to Section 6 hereof. (xi) The termination of the Option Agreement.
(b) Whenever the Developer obtains knowledge of the occurrence of a Listed Event, the Developer shall as soon as possible determine if such event would be material under applicable federal securities laws. (c) If the Developer determines that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Developer shall, or shall cause the Dissemination Agent to, file a notice of the occurrence of such Listed Event with the MSRB, the Community Facilities District, and the Participating Underwriter within ten business days of obtaining knowledge of such occurrence.

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Section 5. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Certificate must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB.

Section 6. Duration of Reporting Obligation. (a) All the Developer’s obligations hereunder shall commence on the date hereof and terminate (except as provided in Section 11) on the earliest to occur of the following:
(i) upon the legal defeasance, prior redemption or payment in full of all the Bonds, or (ii) at such time as the Developer is no longer a Major Owner and is no longer obligated hereunder as to any other Major Owner, including the Land Bank (in the event the Option Agreement is terminated and the Land Bank is then a Major Owner that does not enter into an Assumption Agreement) pursuant to subsection (b) below, or
(iii) the date on which the Special Taxes attributable to the Property are paid or prepaid in full.

If the obligations of the Developer under this Disclosure Certificate terminate prior to the final maturity of the Bonds, the Developer shall give, or cause to be given, notice of the termination of its obligations under this Disclosure Certificate in the same manner as for a Listed Event under Section 4. (b) The Developer’s obligations hereunder shall terminate with respect to any portion of the Property on the date such portion of the Property is sold to a Person that is not a Major Owner. If any portion of the Property is sold to a Major Owner or if the Option Agreement is terminated and the Land Bank would be a Major Owner, the Developer shall remain obligated hereunder with respect to such Property unless the obligations have been assumed by the Major Owner or the Land Bank (if the Land Bank is then a Major Owner), as applicable, pursuant to an Assumption Agreement. The Developer’s obligations under this Disclosure Certificate with respect to a Major Owner or the Land Bank (if the Option Agreement is terminated and the Land Bank is then a Major Owner) that has not executed an Assumption Agreement shall terminate upon the earlier to occur of (i) the date on which the Developer’s obligations with respect to such Major Owner or the Land Bank are assumed under an Assumption Agreement entered into pursuant to this Section 6(b), or (ii) the date on which the Major Owner or the Land Bank is no longer considered a Major Owner. The Developer shall provide a copy of the executed Assumption Agreement to the Community Facilities District and the Participating Underwriter. A Major Owner, however, shall not be required to enter into an Assumption Agreement if such Major Owner is already a party to a continuing disclosure certificate in form and substance similar to this Disclosure Certificate with respect to the Bonds, and under which the property conveyed to such Major Owner will become subject to future Semi-Annual Reports. In addition, the conveyance of property from the Land Bank to the Developer under the Option Agreement is subject to this Disclosure Certificate and shall not require the Developer to enter into an Assumption Agreement.

Section 7. Dissemination Agent. The Developer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days’ written notice to the Developer. The Developer shall be responsible for paying the fees and expenses of the Dissemination Agent.

Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Developer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of subsection (a) of Section 2 hereof, Section 3 hereof or subsection (a) of Section 4 hereof, it may only be made in connection with a change in circumstances that

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arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Developer, or the type of business conducted; and
(b) The proposed amendment or waiver (i) is approved by owners of the Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of owners or beneficial owners of the Bonds.

In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Developer shall describe such amendment or waiver in the next Semi-Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type of financial information or operating data being presented by the Developer.

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

Section 10. Default. In the event of a failure of the Developer or the Dissemination Agent to comply with any provision of this Disclosure Certificate, the Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of outstanding Bonds, or any Owner or Beneficial Owners, may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Developer or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Developer or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance.

Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties hereunder as are specifically set forth in this Disclosure Certificate. The Dissemination Agent shall not be responsible for the form or content of any Semi-Annual Report or notice of Listed Event. The Developer agrees to indemnify and save the Dissemination Agent, and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur in the exercise or performance of its powers and duties hereunder, including the reasonable costs and expenses (including attorneys’ fees) of defending against any claim of liability, and which are not due to its negligence or its willful misconduct. The obligations of the Developer under this Section shall survive the resignation or removal of the Dissemination Agent and the termination of this Disclosure Certificate.

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Section 12. Notices. Notices should be sent in writing to the following addresses by regular, overnight, or electronic mail. The following information may be conclusively relied upon until changed in writing.

Developer: K. Hovnanian Communities, Inc.
1260 Corona Pointe Court, Suite 301
Corona, CA 92879
Attn: Adrian Peters
Email: [email protected]
City: City of El Paso de Robles
1000 Spring Street
Paso Robles, CA 93446
Attn: City Manager
Email: [email protected]
Underwriter: Stifel, Nicolaus & Company, Incorporated
[TBD]
[TBD]
Attn: Sara Brown
Email: [email protected]
SECTION 14. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Developer, the City, the District, the Dissemination Agent, the Underwriter and owners of the Bonds and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

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SECTION 15. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

K. Hovnanian Communities, Inc.,
a California corporation
By:

Name:________________________________________
Title:_________________________________________

Attachment 3
G-1

APPENDIX G

PROPOSED FORM OF BOND COUNSEL OPINION
[Closing Date]
City Council
City of El Paso de Robles
1000 Spring Street
Paso Robles, CA 93446
Re: $9,895,000 City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A Ladies and Gentlemen:

We have acted as bond counsel in connection with the issuance by the City of El Paso de Robles (the “City”), for and on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (the “District”), of $9,895,000*aggregate principal amount of the City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Bonds”). The Bonds are issued pursuant to the provisions of the MelloRoos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”), a resolution adopted by the City Council of the City on [___], 2025 (the “Resolution”), and that certain Fiscal Agent Agreement, dated as of [December] 1, 2025 (the “Agreement”), by and between the City, for and on behalf of the District and U.S.

Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”).

In such connection, we have examined the Act, the Resolution, the Agreement, the Tax Certificate related to the Bonds, and certified copies of the proceedings taken for the issuance and sale of the Bonds. As to questions of fact which are material to our opinions, we have relied upon the representations of the City contained in the Agreement, and in certificates of its authorized officers which have been delivered to us for the purpose of supplying such facts, without having undertaken to verify the accuracy of any such representations by independent investigation.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other events come to our attention after the date hereof. Accordingly, this opinion speaks only as of its date and is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter.

We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the City and District. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and

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G-2
agreements contained in the Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to ensure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Resolution, the Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases, and to the limitations on legal remedies against cities and their subordinate entities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the documents mentioned in the preceding sentence. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering materials relating to the Bonds and express no opinion with respect thereto.

Based upon the foregoing, we are of the opinion, under existing law, that:

1. The Bonds have been duly and validly authorized by the City, on behalf of the District, and are legal, valid, and binding special obligations of the District. The Bonds are secured and payable solely from sources provided therefor in the Agreement.

2. The Agreement has been duly authorized by the City, on behalf of the District, and constitutes the valid and legally binding obligation of the District enforceable against the District in accordance with its terms, as such enforcement may be limited by bankruptcy, insolvency, moratorium, transfer or conveyance or other laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases; provided, however, that we express no opinion with respect to any indemnification, contribution, choice of law or waiver provisions contained therein.

3. The Agreement creates a valid pledge of that which the Agreement purports to pledge, subject to the provisions of the Agreement, except to the extent that the enforceability of the Agreement may be limited by moratorium, bankruptcy, reorganization, fraudulent conveyance or transfer, insolvency or other laws affecting creditors’ rights generally, or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases.

4. Under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Bonds is not a specific preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations, however, interest on the Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations.

Although the interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds, or any portion thereof, may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend on the recipient’s particular tax status or other items of income or deduction. We express no opinion regarding any such consequences.

5. Interest on the Bonds is exempt from State of California personal income tax.

Respectfully submitted,

Attachment 3
H-1

APPENDIX H

INFORMATION CONCERNING DTC
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

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

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

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

Attachment 3
H-2
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

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

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

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

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

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

A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Fiscal Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Fiscal Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a bookentry credit of tendered Bonds to the Fiscal Agent’s DTC account.

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

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

THE FISCAL AGENT, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT

TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT

AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION

OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

Anzel Galvan Draft 11-20-2025 Attachment 4
$[PAR]
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2)

OF THE CITY OF EL PASO DE ROBLES
SPECIAL TAX BONDS, 2025 SERIES A

BOND PURCHASE AGREEMENT
[Pricing Date]
City of El Paso de Robles
1000 Spring Street
El Paso de Robles, California 93446
Attn: City Manager
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 the City of El Paso de Robles (the “City”), for and on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen-South Chandler Ranch - Facilities), County of San Luis Obispo, State of California (the “Community Facilities District”), which upon acceptance will be binding upon the Underwriter and the City. The agreement of the Underwriter to purchase the 2025 Bonds (as hereinafter defined) is contingent upon the City satisfying all of the obligations imposed upon it under this Purchase Agreement. This offer is made subject to the City’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 City at any time prior to the acceptance hereof by the City. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Fiscal Agent Agreement, dated as of December 1, 2025 (the “Fiscal Agent Agreement”), by and between the City, for and on behalf of the District, and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”).

1. Purchase, Sale and Delivery of the 2025 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 City and the City hereby agrees to sell to the Underwriter all (but not less than all) of the $[PAR] aggregate principal amount of Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “2025 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 2025 Bonds shall be $___________ (being 100% of the aggregate principal amount thereof, plus original issue premium of $___________ and less an Underwriter’s discount of $___________).

Attachment 4
2 2. The 2025 Bonds. The 2025 Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Special Tax Revenues and certain other funds pledged therefor as provided in, the Fiscal Agent Agreement, 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 2025 Bonds has been duly authorized by the City Council of the City (the “City Council”), as the legislative body for the Community Facilities District, pursuant to a resolution adopted on December [2], 2025, 2025 (the “Resolution of Issuance”). The proceeds of the 2025 Bonds will be used to (a) finance various public improvements needed with respect to the development within the District, (b) fund a reserve fund securing the 2025 Bonds, (c) fund a deposit to the administrative expense fund, (d) fund capitalized interest on the 2025 Bonds through ______, 20__, and (e) to pay the costs of issuance of the 2025 Bonds.

3. Public Offering and Establishment of Issue Price.

A. The Underwriter agrees to make a bona fide public offering of all of the 2025 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 2025 Bonds subject to this Section 3, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The 2025 Bonds will be offered and sold to certain dealers at prices lower than such initial offering prices.

The City hereby acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations, warranties and agreements made by the City herein, and the City 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 City herein is incorrect in any material respect.

The City knowledges 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 City and the Underwriter and the Underwriter has financial and other interests that differ from those of the City; (iii) the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the City and has not assumed any advisory or fiduciary responsibility to the City (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); (iv) the only obligations the Underwriter has to the City with respect to the transaction contemplated hereby are expressly set forth in this Purchase Agreement; and (v) the City has consulted its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate. The City 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 City further acknowledges and represents that it has engaged NHA Advisors (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 2025 Bonds.

Attachment 4
3 B. The Underwriter agrees to assist the City in establishing the issue price of the 2025 Bonds and shall execute and deliver to the City 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 B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel (as such term is defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the 2025 Bonds. All actions to be taken by the City under this section to establish the issue price of the 2025 Bonds may be taken on behalf of the City by the Municipal Advisor and any notice or report to be provided to the City may be provided to the Municipal Advisor.

C. Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the 2025 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 City the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the 2025 Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either: (i) the Underwriter has sold all of the 2025 Bonds of that maturity; or (ii), the 10% test has been satisfied as to the 2025 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 City 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 2025 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 2025 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 2025 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 2025 Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-theoffering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the 2025 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 2025 Bonds to the public at a price that is no higher than the initial offering price to the public.

Attachment 4
4 The Underwriter will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the 2025 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 2025 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 2025 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 2025 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 2025 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 2025 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 2025 Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.

F. The City acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the 2025 Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the 2025 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the 2025 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 2025 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 2025 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the 2025 Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements

Attachment 4
5 for establishing issue price of the 2025 Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the 2025 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 2025 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 City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the 2025 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 2025 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 2025 Bonds to the public);

3. a purchaser of any of the 2025 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 City, the Underwriter has distributed copies of the Preliminary Official Statement dated [POS Date], relating to the 2025 Bonds, which, together with the cover page, inside cover page and appendices thereto, as supplemented by the Supplement to Preliminary Official Statement dated [POS Date], is herein called the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the City hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the City agrees to execute a final official statement relating to the 2025 Bonds (the “Official Statement”) which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Best Best & Krieger 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 City hereby authorizes the Underwriter to use and promptly distribute, in connection with the offer and sale of the 2025 Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto. The City further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the 2025 Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Agreement date [Closing Date] (the “Continuing Disclosure Certificate”), by and between

Attachment 4
6 the City , this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement. This Purchase Agreement, the Fiscal Agent Agreement, the 2025 Bonds, the Continuing Disclosure Certificate and the hereinafter defined Acquisition 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 City will undertake pursuant to the Continuing Disclosure Certificate, in substantially the form attached as Appendix E to the Official Statement, to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.

5. Closing. Except as the Underwriter and the City may otherwise agree, the City 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 City, the documents hereinafter mentioned; and the City will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”), the 2025 Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the City and authenticated by the Fiscal Agent in the manner provided for in the Fiscal Agent Agreement 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 2025 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 2025 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 2025 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 City. The City represents, warrants and covenants to the Underwriter on behalf of itself and the Community Facilities District that:

A. The City is a general law city duly organized and validly existing under the laws of the State and has duly authorized the formation of the Community Facilities District and Improvement Area No. 2 thereof (“Improvement Area No. 2”), the incurring of bonded indebtedness thereby for Improvement Area No. 2 pursuant to resolutions duly adopted by the City Council (collectively, the “Community Facilities District Formation Resolutions” and, together with the Resolution of Issuance, the “Community Facilities District Resolutions”) and the Community Facilities District Act. The City Council, as the legislative body of the City and the Community Facilities District, has duly adopted the Community Facilities District Formation Resolutions and an ordinance of the City Council levying Special Taxes within Improvement Area No. 2 (the “Ordinance”), and has caused to be recorded in the real property records of the County of San Luis Obispo, California (the “County”), 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 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, and Improvement Area No. 2 was duly formed and is validly existing as an improvement area within the

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7 Community Facilities District under the Community Facilities District Act. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under the Community Facilities District Documents, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver the 2025 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 City has 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 City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the 2025 Bonds, the City will continue to comply with the covenants of the City contained in the Community Facilities District Documents.

C. The information in the Preliminary Official Statement and in the Official Statement relating to the City, the Community Facilities District, Improvement Area No. 2 and the 2025 Bonds (other than statements pertaining to the book-entry system, as to which no view is expressed), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.

D. Up to and including 25 days after the End of the Underwriting Period, the City 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 City 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 2025 Bonds. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the 2025 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 2025 Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.”
E. Except as described in the Preliminary Official Statement, the City 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 City 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

Attachment 4
8 performed by the City 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 City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the City of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the City 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 City of its obligations under the Community Facilities District Documents, and the performance of the conditions precedent to be performed by the City 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 2025 Bonds are payable from, and secured by a pledge of, Special Tax Revenues, as set forth in the Fiscal Agent Agreement, the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Special Taxes within Improvement Area No. 2 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 2025 Bonds when due and payable, all as provided in the Fiscal Agent Agreement. The City has covenanted to cause the Special Taxes 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 Fiscal Agent Agreement creates a valid first pledge of and lien on the Special Tax Revenues (other than the Special Tax Revenues to be deposited to the Administrative Expense Fund for each Fiscal Year pursuant to Section 3.04(B) of the Fiscal Agent Agreement) and all moneys deposited in the Special tax Fund and the Bond Fund , and the Reserve Fund.

J. Except as disclosed in the Preliminary Official Statement, there are, to the best of the City’s knowledge, no entities with outstanding assessment liens against any of the properties within Improvement Area No. 2 or which are senior to or on a parity with the Special Taxes.

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

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9 L. The Preliminary Official Statement was deemed final by a duly authorized officer of the City 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 City 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 City 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 to the best knowledge of the City threatened, in which any such Action: (i) in any way questions the existence of the City or the Community Facilities District or the titles of the officers of the City to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the 2025 Bonds or the payment or collection of Special Taxes or any amounts pledged or to be pledged to pay the principal of and interest on the 2025 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 City contemplated thereby; (iii) contests the exemption of interest on the 2025 Bonds from federal or State income taxation or contests the powers of the City which may result in any material adverse change relating to the financial condition of the City or 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 City by any officer or employee of the City authorized to do so shall be deemed a representation and warranty by the City to the Underwriter on behalf of itself and the City as to the statements made therein.

O. At or prior to the Closing, the City will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix E to the Official Statement. Based upon a review of its previous undertakings, and except as disclosed in the Preliminary Official Statement, neither the City nor the City has 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 City will apply the proceeds of the 2025 Bonds in accordance with the Fiscal Agent Agreement 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

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10 redeemed prior to maturity, the City will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Fiscal Agent Agreement.

R. Between the date of this Purchase Agreement and the date of Closing, the City 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 City 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 City hereby ratifies any prior use of and authorizes the future use by the Underwriter, in connection with the offering and sale of the 2025 Bonds, of the Preliminary Official Statement, the Official Statement, this Purchase Agreement and all information contained herein and therein, and all other documents, certificates and written statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.

The execution and delivery of this Purchase Agreement by the City shall constitute a representation by the City 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 2025 Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date, and in reliance upon the representations and covenants of the Developer contained in the certificate(s) delivered as of the Closing Date, and to the following additional conditions:

A. At the Closing Date, the Community Facilities District Resolutions 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 2025 Bonds and with the 2025 Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate.

B. At the Closing Date, except as described in the Preliminary Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a

Attachment 4
11 party or is otherwise subject or bound, and the performance of the conditions precedent to be performed hereunder will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance of the conditions precedent to be performed by the City hereunder.

C. At the Closing Date, except as described in the Preliminary Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the performance by the City of its obligations under the 2025 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 City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the City of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the City hereunder.

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

E. Between the date hereof and the time for Closing, this Purchase Agreement shall have not been terminated by the Underwriter pursuant to Section 8 hereof.

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

1. The Official Statement, executed on behalf of the City by an authorized officer;

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;

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12 3. The Community Facilities District Resolutions and the Formation Documents, together with a certificate dated as of the Closing Date of the Clerk of the City Council to the effect that such resolutions and documents are true, correct and complete copies of the ones duly adopted by the City Council and have not been amended, modified or supplemented, except as agreed to by the Underwriter;

4. Evidence of recordation in the real property records of the County of the Notices of Special Tax Lien, in the form required by the Community Facilities District Act;

5. Specimen 2025 Bonds;

6. The approving opinion of Bond Counsel dated the Closing Date and addressed to the City in substantially the form attached as Appendix D to the Official Statement, and a reliance letter thereon addressed to the Underwriter;

7. A supplemental opinion or opinions of Bond Counsel dated the Closing Date and addressed to the Underwriter, substantially 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 City, 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 2025 Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (iii) the statements contained on the cover and in the Official Statement under the captions “INTRODUCTION – Sources of Payment for the Series 2025 Bonds,” “– Description of the Series 2025 Bonds,” “THE FINANCING PLAN,” “THE SERIES 2025 BONDS,” “SOURCES OF PAYMENT FOR THE SERIES 2025 BONDS,” “LEGAL MATTERS – Tax Matters,” Appendix D – “SUMMARY OF LEGAL DOCUMENTS” and Appendix G – “PROPOSED FORM OF 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 Fiscal Agent Agreement, the Series 2025 Bonds and Bond Counsel’s final approving opinion, are accurate in all material respects.

8. 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, Bond Counsel, Disclosure Counsel, DTA Public Finance, Inc., the NHA Advisors LLC, Integra Realty Resources, representatives of the Underwriter and others, during

Attachment 4
13 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, and the information set forth in Appendices A, B, C, D, E, F, G, and H 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;

9. A certificate dated the Closing Date and signed by an authorized representative of the City or an authorized designee, on behalf of the City to the effect that: (i) the Resolution of Issuance was duly adopted at a regular meeting of the City’s City Council held on December [2], 2025, at which a quorum was present and acting throughout, is in full force and effect as of the date hereof and has not been amended, modified or supplemented, except as agreed to by the Underwriter; (i) the representations and warranties made by the City 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; (iii) the Community Facilities District Documents have been duly authorized and executed and are in full force and effect; (iv) 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; (v) the City 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 and the Community Facilities District Documents at or prior to the Closing Date; and (vi) all information in the Official Statement relating to the City and 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;

10. An opinion of Best Best & Krieger LLP, as City Attorney, dated the date of Closing and addressed to the Underwriter, the Fiscal Agent and the City, substantially in the form attached hereto as Exhibit C;

11. A certificate dated the Closing Date of Integra Realty Resources (the “Appraiser”) substantially to the effect that (i) the assumptions made in the Appraisal Report are reasonable; (ii) the Appraisal Report fairly and accurately described, as of the stated date of value (the “Date of Value”), the market values of the properties in Improvement Area No. 2 that are subject to the Special Taxes; (iii) the Appraiser is not aware of any event or act which occurred since the Date of Value which, in its opinion, would materially and adversely affect the conclusions as to the market value of the appraised property in the Improvement Area No. 2; (iv) the Appraiser consents to the reproduction of the Appraisal Report as Appendix B to the Preliminary Official Statement and the final Official Statement, each with respect to the 2025 Bonds, and to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement; (v) the Appraisal Report complies with the Appraisal Standards for Land-Secured Financings issued by

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14 the California Debt and Investment Advisory Commission dated July, 2004; (vi) a true and correct copy of the Appraisal Report is attached as Appendix B to the Preliminary Official Statement and the Official Statement; and (vii) neither the Appraisal Report nor the information in the Preliminary Official Statement or the Official Statement referring to it contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

12. A certificate dated the Closing Date from DTA Public Finance, Inc., (the “Special Tax Consultant”), to the effect that: (i) the Special Taxes, if levied and collected in the maximum amounts permitted pursuant to the Amended Rate and Method, as of the Closing Date, would generate at least 110% of the annual debt service payable with respect to the 2025 Bonds, plus the Administrative Expenses, based on such assumptions and qualifications as shall be acceptable to the Underwriter; (ii) the statements in the Preliminary Official Statement and the Official Statement provided by the Special Tax Consultant concerning the Special Taxes and all information supplied by it for use in the Official Statement were as of the date of the Preliminary Official Statement, the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (iii) all information supplied by the Special Tax Consultant to the Appraiser is true and correct as of the date of the Preliminary Official Statement and the date of the Official Statement and as of the Closing Date, based on such assumptions as may have been supplied by it; and (iv) the information contained in the Appraisal Report with respect to taxes and tax rates applicable, and projected to be applicable, to the property in Improvement Area No. 2 is consistent with such information provided by the Special Tax Consultant to the Appraiser, which information so provided was based on information obtained by the Special Tax Consultant from the Community Facilities District, the Master Developer, the Developers and the City;

13. Certified copies of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution of the Fiscal Agent Agreement and the authentication of the 2025 Bonds;

14. A certificate of the Fiscal Agent, addressed to the Underwriter, and the City dated the Closing Date, to the effect that: (a) the Fiscal Agent 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 the Fiscal Agent Agreement and perform its duties under the Fiscal Agent Agreement and to authenticate and deliver the 2025 Bonds to the Underwriter; (b) the Fiscal Agent is duly authorized to enter into the Fiscal Agent Agreement and to authenticate and deliver the 2025 Bonds to the Underwriter pursuant to the Fiscal Agent Agreement; (c) when delivered to and paid for by the Underwriter at the Closing, the 2025 Bonds will have been duly authenticated and delivered by the Fiscal Agent; (d) the execution and delivery of the Fiscal Agent Agreement and compliance with the provisions on the Fiscal Agent’s part contained in the Fiscal Agent Agreement, 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 Fiscal Agent 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 Fiscal Agent to perform its obligations under the Fiscal Agent Agreement, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or

Attachment 4
15 other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Fiscal Agent pursuant to the lien created by the Fiscal Agent 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 Fiscal Agent Agreement; and (e) to the best of the knowledge of the Fiscal Agent, 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 Fiscal Agent, affecting the existence of the Fiscal Agent, or the titles of its officers to their respective offices or seeking to prohibit, restrain, or enjoining the execution and delivery of the Fiscal Agent Agreement, the authentication of 2025 Bonds or the collection of revenues to be applied to pay the principal, premium, if any, and interest with respect to the 2025 Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Fiscal Agent Agreement, or contesting the powers of the Fiscal Agent 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 Fiscal Agent Agreement or the power and authority of the Fiscal Agent to enter into the Fiscal Agent Agreement and perform its duties thereunder and to authenticate and deliver the 2025 Bonds to or upon the order of the Underwriter;

15. An opinion of counsel to the Fiscal Agent dated the Closing Date, addressed to the Underwriter, and the City to the effect that (i) the Fiscal Agent is national banking association duly organized, validly existing and in good standing under the laws of the United States of America with trust powers, having full power to enter into, accept and administer the trust created under the Fiscal Agent Agreement, (ii) the Fiscal Agent has all requisite corporate power, authority and legal right to execute and deliver the Fiscal Agent Agreement and, acting in its capacity as Fiscal Agent, to authenticate and deliver the 2025 Bonds, and to perform its obligations under the Fiscal Agent Agreement, and has taken all necessary corporate action to authorize the execution and delivery thereof and the performance of its obligations thereunder, (iii) the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent Assignment Agreement, and assuming the due authorization, execution and delivery and enforceability thereof by the other party thereto, the Fiscal Agent Agreement is a legal, valid and binding agreement of the Fiscal Agent, enforceable in accordance with its terms against the Fiscal Agent, (iv) to our knowledge, no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent that has not been obtained is or will be required for the execution and delivery of the Fiscal Agent Agreement by the Fiscal Agent or the consummation by the Fiscal Agent of the transactions contemplated by the Fiscal Agent Agreement, (v) to our knowledge, the execution, delivery and performance of the Fiscal Agent Agreement by the Fiscal Agent and compliance with the provisions thereof by the Fiscal Agent will not violate or cause a breach of any statute of the United States or the State of California, or any rule or regulation of any governmental authority or regulatory body of the United States or the State of California, and (vi) the 2025 Bonds have been duly authenticated and delivered by the Fiscal Agent;

16. A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the 2025 Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;

17. A Continuing Disclosure Certificate dated the Closing Date, duly executed and delivered by K. Hovnanian Communities, Inc., a California corporation (the “Developer”), substantially in the form of Appendix F to the Official Statement (the “Developer Continuing Disclosure Certificate”);

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16 18. An opinion letter of counsel to the Developer addressed to the Underwriter and the City, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel, to the effect that the Developer Continuing Disclosure Certificate has been duly executed and delivered by the Developer and constitutes the valid and binding obligation of the Developer, 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;

19. A negative assurance letter of counsel to Olsen Ranch 212, LLC, a __________ limited liability company (the “Master Developer”) addressed to the Underwriter and the City, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel;

20. A negative assurance letter of counsel to the Developer addressed to the Underwriter and the City, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel;

21. A Letter of Representations from the Master Developer dated the date of printing the Preliminary Official Statement, substantially in the form attached hereto as Exhibit D;

22. A Letter of Representations from the Developer dated the date of printing the Preliminary Official Statement, substantially in the form attached hereto as Exhibit E;

23. A Closing Certificate from the Master Developer dated the Closing Date, substantially in the form attached hereto as Exhibit F or as such Closing Certificate may be modified with the approval of the Underwriter and Disclosure Counsel;

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

25. A negative assurance letter 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;

26. A copy of the City’s executed Blanket Letter of Representation to DTC;

27. A copy of the Blue-Sky Survey with respect to the 2025 Bonds; and

28. 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 City contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Fiscal Agent Agreement and the Official Statement.

Attachment 4
17 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 City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the 2025 Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the 2025 Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the City nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the City set forth in Section 9 hereof shall continue in full force and effect.

8. Termination Events. In recognition of the desire of the City and the Underwriter to effect a successful public offering of the 2025 Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the discretion of the Underwriter by notification, in writing, to the City prior to delivery of and payment for the 2025 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 2025 Bonds, or the ability of the Underwriter to enforce contracts for the sale of the 2025 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 2025 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

Attachment 4
18 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 Securities, or the 2025 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 Fiscal Agent Agreement 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 City shall have occurred; or

6. any rating of the 2025 Bonds or the rating of any obligations of the City, for and on behalf of the Community Facilities District, payable from Special Taxes shall have been 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 City 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 2025 Bonds or the ability of the Underwriter to enforce contracts for the sale of the 2025 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 2025 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 2025 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 2025 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

Attachment 4
19 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 City and the Underwriter under this Purchase Agreement shall terminate, without further liability.

9. Expenses. Whether or not the 2025 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 City hereunder. If the 2025 Bonds are delivered by the City, the City shall pay, from the proceeds of the 2025 Bonds or from other funds of the City, 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 City, the Fiscal Agent, Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Appraiser, the Special Tax Consultant, any entity performing continuing disclosure compliance research or providing continuing disclosure compliance reports and any other experts or consultants retained by the City; (d) the charges of any rating agency with respect to the 2025 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 2025 Bonds, including but not limited to industry fees (e.g., DTC, DAC, IPREO, CUSIP and Day Loan fees) only if the City and Underwriter have previously discussed and approved the allocation of proceeds towards these fees, and meal and travel expenses of the personnel of the City, 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 2025 Bonds. The City has authorized, and does hereby authorize, the Underwriter to pay such expenses on behalf of the City from proceeds of the 2025 Bonds at Closing as further described in the closing memorandum relating to the 2025 Bonds.

B. If the 2025 Bonds are sold to the Underwriter by the City, the City shall pay out of the proceeds of the 2025 Bonds the discount of the Underwriter or the purchase price paid for the 2025 Bonds shall reflect such discount.

Except as otherwise provided in this Section 9, the Underwriter shall pay the cost, if any, of qualifying the 2025 Bonds for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the 2025 Bonds, the fees and expenses of its legal counsel, and all other expenses incurred by it in connection with its public offering and distribution of the 2025 Bonds, not described above.

10. Use of Documents. The City hereby authorizes the Underwriter to use, in connection with the public offering and sale of the 2025 Bonds, this Purchase Agreement, the Preliminary Official Statement, the Official Statement and the Community Facilities District Documents, and the information contained herein and therein.

Attachment 4
20 11. Qualification of Bonds. The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the 2025 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 City 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 City under this Purchase Agreement may be given by delivering the same in writing to the City of El Paso de Robles, 1000 Spring Street, El Paso de Robles, California 93446, Attn: City Manager; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Sara Brown.

13. Benefit. This Purchase Agreement is made solely for the benefit of the City 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 City 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 2025 Bonds hereunder; or (iii) any termination of this Purchase Agreement.

14. Survival of Representations and Warranties. The representations and warranties of the City 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 City and regardless of delivery of and payment for the 2025 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 City 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 AUTHORITY 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.

Attachment 4
21 19. Governing Law. This Purchase Agreement shall be governed by the laws of the State.
[Signature Page Follows]

Attachment 4
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 City 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 EL PASO DE ROBLES, FOR AND ON

BEHALF OF COMMUNITY FACILITIES
DISTRICT NO. 2022-1N (OLSEN/SOUTH

CHANDLER - FACILITIES) (IMPROVEMENT
AREA NO. 2) OF THE CITY OF EL PASO DE

ROBLES, COUNTY OF SAN LUIS OBISPO,

STATE OF CALIFORNIA
By:

Authorized Officer
Time of Execution: _____________ California time

Attachment 4
A-1

EXHIBIT A

MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield
Initial Offering
Price
10% Test
Used
10% Test
Satisfied
Hold-TheOfferingPrice Used
_________________
T: Term Bond.

C: Priced to optional redemption date of September 1, 20__, at __.

REDEMPTION PROVISIONS
Optional Redemption. The 2025 Bonds are subject to redemption prior to their stated maturity dates at the option of the City on September 1, 20__ or any date thereafter, in whole or in part from such maturities as selected by the City (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at a redemption price (expressed as a percentage of the principal amount of the 2025 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Redemption Dates Redemption Prices
September 1, 20__ through and including August 31, 20__ 103% September 1, 20__ through and including August 31, 20__ 102 September 1, 20__ through and including August 31, 20__ 101 September 1, 20__ and any date thereafter 100
Mandatory Redemption From Special Tax Prepayments. The 2025 Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected among maturities by the City (and by lot within any one maturity), in integral multiples of $5,000, from moneys derived by the City from Special Tax Prepayments, at redemption prices (expressed as percentages of the principal amounts of the 2025 Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:

Attachment 4
A-2
Redemption Dates Redemption Prices
Any Interest Payment Date through September 1, 20__ 103% March 1, 20__ and September 1, 20__ 102
March 1, 20__ and September 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 Special Tax Prepayments and amounts released from the Reserve Fund, and from a reserve fund established with respect to Parity Bonds, if applicable, in connection with Special Tax Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000, as directed in writing by the City.

Mandatory Sinking Fund Redemption. The 2025 Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption, in part, on September 1, 20__, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:
2025 Bonds Maturing on September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Payments
†
† Maturity.

The 2025 Bonds maturing on September 1, 20__ are subject to mandatory sinking fund redemption, in part, on September 1, 20__, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, and from sinking payments as follows:
2025 Bonds Maturing on September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Payments
†
† Maturity.

The amounts in the foregoing schedules shall be reduced by the City pro rata among sinking fund redemption dates, in order to maintain substantially level Debt Service, as a result of any prior or partial optional or mandatory redemption from Special Tax Prepayments of the 2025 Bonds.

Attachment 4
B-1

EXHIBIT B
$[PAR]
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2)

OF THE CITY OF EL PASO DE ROBLES
SPECIAL TAX BONDS, 2025 SERIES A

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-offeringprice 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 Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of

Attachment 4
B-2
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 Paso Robles.
(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 [Pricing 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.

Dated: [Closing Date]

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Attachment 4
B-3

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING

PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)

Attachment 4
B-4

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)

Attachment 4
C-1

EXHIBIT C

FORM OF OPINION OF CITY ATTORNEY
[Closing Date]
City of El Paso de Robles
El Paso de Robles, California
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
U.S. Bank Trust Company, National Association,
as Fiscal Agent
Los Angeles, California
Re: $[PAR] City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A
Ladies and Gentlemen:

We serve as the City Attorney of the City of El Paso de Robles (the “City”) and have acted as such in connection with the issuance of the City, for and on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Community Facilities District”), of the abovereferenced bonds (the “Bonds”). In such capacity, we have been asked to render this opinion in connection with Section 7(F)(10) of that certain Bond Purchase Agreement, dated [Pricing Date] (the “Bond Purchase Agreement”), by and between Stifel, Nicolaus & Company, Incorporated, as underwriter, and the City, for and on behalf of the Community Facilities District, relating to the 2025 Bonds. All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Bond Purchase Agreement.

In connection with this opinion, we have reviewed and examined (i) the Fiscal Agent Agreement, (ii) the Bond Purchase Agreement, (iii) the Continuing Disclosure Certificate, (iv) the Resolution of Issuance, (v) the Preliminary Official Statement, the (vi) Official Statement, and (vii) such records, certificates and other documents as we have considered necessary or appropriate for the purposes of this opinion.

Based on the foregoing, we hereby advise you that, as of the date hereof, we are of the opinion that:
(i) the City is a general law city duly organized and existing under the laws of the State of California and has all requisite power and authority thereunder to: (a) adopt the Resolution of Issuance, and to enter into, execute, deliver and perform its covenants and agreements under the Community Facilities District Documents; (b) approve and authorize the use, execution and distribution of the Preliminary Official Statement and the Official Statement; (c) issue, sell, execute

Attachment 4
C-2
and deliver the 2025 Bonds; (d) to pledge the Special Tax Revenues as contemplated by the Fiscal Agent Agreement; and (e) to carry on its activities as currently conducted; (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 (including the Community Facilities District Act), and Improvement Area No. 2 was duly formed and is validly existing as an improvement area within the Community Facilities District under the Community Facilities District Act;
(iii) the Resolution of Issuance and the Formation Documents have been duly adopted at meetings of the City Council of the City, 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 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 City and constitute the legal, valid and binding obligations of the City enforceable against the City in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases or seeks to restrain or to enjoin the development of property within the Community Facilities District;
(v) except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City) or, to our knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of their members and officers to offices of the City; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the 2025 Bonds or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the City to enter into or perform its obligations under any of the Community Facilities District Documents or under which a determination adverse to the City or Community Facilities District would have a material adverse effect upon the financial condition or the revenues of the City or Community Facilities District, questions the right of the City to use Special Taxes for the repayment of the 2025 Bonds or affects in any manner the right or ability of the City to collect or pledge the Special Tax levied within the Community Facilities District for the repayment of any such bonds;
(vi) the execution and delivery of the 2025 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 City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the ability of the City to perform its obligations under the 2025 Bonds or the Community Facilities District Documents; (vii) all approvals, consents, authorization, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the ability of the City, to perform its obligations under the 2025 Bonds or the Community

Attachment 4
C-3
Facilities District Documents, have been obtained or made, as the case may be, and are in full force and effect;
(viii) The information contained in the Preliminary Official Statement, as of its date and as of the date hereof and the Official Statement as of its date and as of the Closing Date under the caption “LEGAL MATTERS – Litigation” does not contain any untrue statement of a material fact and does not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (ix) To our knowledge, the City 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 City is a party or is otherwise subject, which breach or default would materially adversely affect the City’s ability to enter into or perform its obligations under the Community Facilities District Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument and which would materially adversely affect the City’s ability to enter into or perform its obligations under the Community Facilities District Documents.

This letter is furnished by us as City Attorney to the City. Other than the City, no attorneyclient relationship has existed or exists between the us and the other addressees hereof in connection with the 2025 Bonds or by virtue of this letter. We disclaim any obligation to update this letter. This letter is delivered to you, is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person; provided, however, a copy may be included in the transcript of the proceedings for the 2025 Bonds. This letter is not intended to, and may not, be relied upon by owners of the 2025 Bonds.

Attachment 4
D-1

EXHIBIT D
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2)

OF THE CITY OF EL PASO DE ROBLES
SPECIAL TAX BONDS, 2025 SERIES A

LETTER OF REPRESENTATIONS OF
OLSEN RANCH 212, LLC
[POS Date]
City of El Paso de Robles
1000 Spring Street
El Paso de Robles, California 93446
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

Reference is made to the Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”), between the City of El Paso de Robles, acting on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen-South Chandler Ranch - Facilities), County of San Luis Obispo, State of California (the “Community Facilities District”), and Stifel, Nicolaus & Company, Incorporated. This Letter of Representations of Olsen Ranch 212, LLC (this “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 7(E)(21) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Olsen Ranch 212, LLC, a __________ limited liability company (the “Master Developer”), and the undersigned, on behalf of the Master Developer, further certifies as follows:

1. The Master Developer is a limited liability company duly organized and validly existing under the laws of the State of ________ and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop property in Improvement Area No. 2 (“Improvement Area No. 2”) of the Community Facilities District as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within Improvement Area No. 2 of the Community Facilities District (“Improvement Ara No. 2”) was previously held in the name of the Master Developer (the “Property”). The undersigned,

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on behalf of the Master Developer, makes the representations herein with respect to all such Property.

3. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Master Developer, its Relevant Entities,
1 the development status of the Property, the proposed development of the Property, the status of completion of backbone infrastructure for Improvement Area No. 2 and construction plans for such infrastructure remaining to be completed, the Master Developer’s financing plan, and the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Relevant Entities (including, if material to the Master Developer’s construction plan or the Master Developer’s financing plan, other loans of such Relevant Entities) as set forth under the sections of the Preliminary Official Statement captioned “INTRODUCTION – Property Ownership and Development Status,” “IMPROVEMENT AREA NO. 2 – General Description of the District and Improvement Area No. 2” and “PROPERTY OWNERSHIP AND THE DEVELOPMENT – The Developer and its Development Plan – Status of Construction” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) information which is identified as having been provided by a source other than the Master Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

4. To the Actual Knowledge of the Undersigned, 2other than as disclosed in the Preliminary Official Statement, the Master Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or

1 “Relevant Entity” means, with respect to the Developer, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of Improvement Area No. 2 and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property, or (b) such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement. “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
2 “Actual Knowledge of the Undersigned” means the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has as of the date of this Letter of Representations or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Relevant Entities as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations. Individuals who are no longer employees of the Developer and its Relevant Entities have not been contacted.

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applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.

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

6. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Master Developer, its Relevant Entities or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Master Developer’s construction of the backbone infrastructure for the property in Improvement Area No. 2 remaining to be constructed, or any other proposed development of the Property, as described in the Preliminary Official Statement.

7. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” the Master Developer presently anticipates that it will have sufficient funds to construct the backbone infrastructure for the property in Improvement Area No. 2 remaining to be constructed as described in the Preliminary Official Statement. However, neither the Master Developer nor any of its Relevant Entities are obligated to make any additional capital contribution or loan to the Master Developer at any time, and the Master Developer reserves the right to change its development plans and financing plans for the infrastructure for the property in Improvement Area No. 2 at any time without notice.

8. An appraisal of the taxable properties within Improvement Area No. 2 (the “Appraisal Report”), was prepared by Integra Realty Resources (the “Appraiser”). The Appraisal Report estimates the market value of the taxable properties within Improvement Area No. 2 as of September 8, 2025 (the “Date of Value”). To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Master Developer to the Appraiser and contained in the sections of the Appraisal Report highlighted in yellow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

9. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 3 herein (and subject to the limitations and exclusions set forth in Paragraph 3), the Master Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City, the Community Facilities District, and their officials and employees, and each Person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended (each, an “Indemnified Party” and, collectively, the “Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject under any statute or at law or in equity and shall reimburse any such Indemnified Party for any reasonable legal or other expense incurred by it in connection with investigating any such claim against it and defending any such action, insofar as and solely to the extent such losses, claims, damages, liabilities or actions, or legal or other expenses, arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission of a material fact by the Master Developer in the above-referenced information in the Preliminary Official Statement, as of its date, necessary to make the statements made by the Master Developer contained therein, in light of the circumstances under which they were made not misleading. This

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indemnity provision shall not be construed as a limitation on any other liability which the Master Developer may otherwise have to any Indemnified Party, provided that in no event shall the Master Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party.

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

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10. If between the date hereof and the Closing Date, and to the Actual Knowledge of the Undersigned, any event relating to or affecting the Master Developer, its Relevant Entities, the development status of the Property, the proposed development of the Property, the construction of the backbone infrastructure for the property in Improvement Area No. 2 remaining to be constructed as described in the Preliminary Official Statement, the Master Developer’s financing plan, and the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Relevant Entities (including, if material to the Master Developer’s construction plan plans or the Master Developer’s financing plan, other loans of such Relevant Entities) shall occur which would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 3 hereof (and subject to the limitations and exclusions contained in Paragraph 3 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Master Developer shall notify the City and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Master Developer shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City and to the Underwriter.

11. The Master Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit F to the Bond Purchase Agreement. If any event related to or affecting the Master Developer, its Relevant Entities, or the construction of backbone infrastructure for the property in Improvement Area No. 2 occurs, as a result of which it is necessary to modify the Closing Certificate, the Master Developer agrees to deliver a new Closing Certificate revised to reflect such event.

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

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The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Master Developer and he or she will have no personal liability arising from or relating to this Letter of Representations. Any liability arising from or relating to this Letter of Representations may only be asserted against the Master Developer. [INSERT SIGNATURE BLOCK]
[EXECUTION PAGE OF LETTER OF REPRESENTATIONS OF
OLSEN RANCH 212, LLC]

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EXHIBIT A
TO

LETTER OF REPRESENTATIONS OF
OLSEN RANCH 212, LLC

MASTER DEVELOPER PROVIDED INFORMATION IN APPRAISAL REPORT See attached.

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EXHIBIT E
COMMUNITY FACILITIES DISTRICT NO. 2022-1N
(OLSEN/SOUTH CHANDLER - FACILITIES)
(IMPROVEMENT AREA NO. 2)

OF THE CITY OF EL PASO DE ROBLES
SPECIAL TAX BONDS, 2025 SERIES A

LETTER OF REPRESENTATIONS OF
K. HOVNANIAN COMMUNITIES, INC.
[POS Date]
City of El Paso de Robles
1000 Spring Street
El Paso de Robles, California 93446
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:

Reference is made to the Community Facilities District No. 2022-1N (Olsen/South Chandler Ranch - Facilities) (Improvement Area No. 2) Special Tax Bonds, 2025 Series A (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”), between the City of El Paso de Robles, acting on behalf of City of Paso Robles Community Facilities District No. 2022-1N (Olsen-South Chandler Ranch - Facilities), County of San Luis Obispo, State of California (the “Community Facilities District”), and Stifel, Nicolaus & Company, Incorporated. This Letter of Representations of K. Hovnanian Communities, Inc. (this “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 7(E)(22) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.

The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of K.

Hovnanian Communities, Inc., a California corporation (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:

1. The Developer is a corporation formed, validly existing and in good standing under the laws of the State of California and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop property in Improvement Area No. 2 (“Improvement Area No. 2”) of the Community Facilities District as described in the Preliminary Official Statement.

2. As set forth in the Preliminary Official Statement, title to certain property within Improvement Area No. 2 is held in the name of the Developer (the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with respect to the Property. The

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

3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned,1is pending against any current Relevant Entity2(with proper service of process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer, or any such Relevant Entity (a) to restrain or enjoin the collection of the Special Taxes levied on the Property by the Community Facilities District (the “Special Taxes”) or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the reserve fund established under the Fiscal Agent Agreement (herein, the “Reserve Fund”)), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) in any way contesting or affecting the validity of the Special Tax, or (d) which is reasonably likely to materially and adversely affect the Developer’s ability to acquire, develop, and sell the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Relevant Entities, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, contractual arrangements of the Developer or any Relevant Entities (including, if material to the Developer’s development plan or the Developer’s financing plan, loans of such Relevant Entities) and the

1 “Actual Knowledge of the Undersigned” means the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has as of the date of this Letter of Representations or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Relevant Entities as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations.

Individuals who are no longer employees of the Developer and its Relevant Entities have not been contacted. 2 “Relevant Entity” means, with respect to the Developer, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District, Improvement Area No. 2 and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property and ability to pay its Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency, or (b) such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Tax on the Property (to the extent the responsibility of the Developer). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. The Land Bank is not a Relevant Entity of the Developer

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Developer’s compliance with its continuing disclosure undertakings as set forth under the sections of the Preliminary Official Statement captioned “INTRODUCTION – The District and Improvement Area No. 2”, “– Property Ownership and Development Status,” “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS” and “CONTINUING DISCLOSURE – Developer Continuing Disclosure” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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

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

7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Relevant Entities which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District or Improvement Area No. 2, to challenge the adoption of the ordinance of the Community Facilities District levying Special Taxes, to invalidate the Community Facilities District, Improvement Area No. 2 or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer or a Relevant Entity in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in the Amended Rate and Method, (b) an action or suit with respect to the application or use of the Special Taxes levied and collected or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Formation Documents, the Fiscal Agent Agreement, or any other agreements among the Developer, a Relevant Entity, the City and/or the Community Facilities District or to which the Developer or a Relevant Entity is a party or beneficiary.

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