Staff Report - Waiver of City Code Section 4.04.020.C for the Agreements Pertaining to the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (Two-Thirds Vote Required) and Authorize the Issuance of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 and Related Actions — Sacramento City Council, August 23, 2022 (part 1 of 4)

City of Sacramento
City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01421 8/23/2022 Discussion Item 18.

Waiver of City Code Section 4.04.020.C for the Agreements Pertaining to the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (Two-Thirds Vote Required) and Authorize the Issuance of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 and Related Actions
File ID: 2022-01421
Location: District 4
Recommendation: 1) Pass a Motion by two-thirds vote waiving the 10-day posting requirement of City Code section 4.04.020.C for the agreements pertaining to the City of Sacramento Railyards Community Facilities District No, 2018-01 (Improvements) Special Tax Bonds, Series 2022; and 2) Adopt a Resolution authorizing the following: a) the issuance of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022; b) the execution and delivery of a Master Indenture, a First Supplemental Indenture, a Bond Purchase Contract, an Official Statement, and a Continuing Disclosure Certificate; and c) certain related actions.

Contact: Brian Wong, Debt Manager, (916) 808-5811, [email protected]; Claudia Lara, Debt Analyst (916) 808-2267, [email protected], Office of the City Treasurer Presenter: Brian Wong, Debt Manager, (916) 808-5811, [email protected], Office of the City Treasurer
Attachments:
1-Description/Analysis
2-Resolution
3-Master Indenture
4-First Supplemental Indenture
5-Bond Purchase Contract
6-Preliminary Official Statement
7-Continuing Disclosure Certificate
8-Appraisal Report prepared by BBG, Inc.
9-Appraisal Review Report prepared by IRR
City of Sacramento Page 1 of 5
File ID: 2022-01421 8/23/2022 Discussion Item 18.

Description/Analysis
Issue Detail: Passing a Motion will waive the 10-day posting requirements of City Code section

4.04.020.C for the agreements pertaining to the City of Sacramento Railyards Community Facilities District (CFD) No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the Bonds). Staff is seeking this waiver of the posting requirement because, while the plain language contained in Section 4.04.020.C applies to the contracts being approved today, unlike contracts that are typically posted prior to City Council approval, the contracts being approved today do not impact the general fund. The contracts being approved today, the Bond Purchase Contract, the Master Indenture, and the First Supplemental Indenture of the Bonds, only impact the revenue generated by special taxes levied within the boundaries of the CFD.

Adoption of the recommended resolution will authorize the issuance of the Bonds and the execution and delivery of related documents. The Bonds will be issued in an amount not to exceed $32 million, and the proceeds will be used for the following purposes:
· To finance the costs of acquisition and construction of certain authorized facilities. · To fund a debt service reserve fund to secure the repayment of the Bonds. · To pay costs of issuance.
· To fund capitalized interest through September 1, 2024.

The Bonds will be issued at a public offering through a negotiated sale and will be secured under the Master Indenture by a pledge of special taxes levied on parcels subject to the CFD special tax and lien recorded to the titles of those parcels.

Policy Considerations: City Code section 4.04.020.C requires all agreements greater than $1 million be posted on the City’s website and made available to the public at least 10 days prior to the City Council acting on agreements meeting this criterion. The City Council may waive this requirement if two-thirds of its members vote to do so.

The Bonds are being issued in accordance with the Mello-Roos Community Facilities Act of 1982 (Government Code sections 53311 through 53368.3) (the Act), the approving vote of the qualified electors with the CFD, the Master Indenture, and the First Supplemental Indenture for the Bonds.

The issuance of the Bonds is consistent with the City’s Debt-Management Policy in effect as of the date of this council report.

Economic Impacts: Not applicable.

Environmental Considerations:

California Environmental Quality Act (CEQA): The authorization to issue the Bonds, is a City of Sacramento Page 2 of 5
File ID: 2022-01421 8/23/2022 Discussion Item 18.
governmental fiscal activity that does not involve the approval of any physical development or activity that would have the potential for causing a significant effect on the environment.

Approval is not a project requiring review under the CEQA. CEQA Guidelines sections 15378 (b)(4) and 15060(c)(3).

To the extent the issuance of Bonds is considered a project, the environmental impacts from public facilities that have been, or will be, constructed with the proceeds of the Bonds have been identified and evaluated in an environmental impact report (EIR). The City prepared an original EIR that evaluated the environmental impacts of the Railyards Project (P05-097). The original Railyards Project EIR was certified by the City Council by Resolution No. 2007-0903 on December 11, 2007. Updates to the Railyards Project (P15-040) factored in material changes associated with the Railyards Specific Plan, Kaiser medical center, MLS stadium, and stormwater outfall projects. The subsequent Railyards Project EIR was certified by the City Council by Resolution No. 2016-0379 on November 10, 2016.

Sustainability: Not applicable.

Commission/Committee Action: Not applicable.

Rationale for Recommendation: The Bond Purchase Contract pertaining to the Bonds between the City of Sacramento and Stifel, Nicolaus & Co., the underwriter of the Bonds, the Master Indenture, the First Supplemental Indenture for the Bonds are each agreements expected to involve more than $1 million. Staff is seeking this waiver of the posting requirement because, while the plain language contained in City Code section 4.04.020.C applies to the contracts being approved today, unlike contracts that are typically posted prior to City Council approval, the contracts being approved today do no impact the General Fund. The contracts being approved today, the Bond Purchase Contract, the Master Indenture, and the First Supplemental Indenture of the Bonds, only impact the revenue generated by special taxes levied within the boundaries of the CFD.

Approval of the attached resolution authorizes the City Treasurer or designee to take the actions necessary for the issuance of the Bonds and the execution of the related documents. Issuing the Bonds will generate tax-exempt bond proceeds for the acquisition and construction of authorized facilities. Bond proceeds will be administered in accordance with the Acquisition-and-Shortfall Agreement (City Agreement No. 2022-0227) between the City and Downtown Railyard Venture, LLC (Developer).

Financial Considerations: While the City will issue the Bonds, neither the City’s General Fund nor any other legally available source of funds, aside from the CFD special tax levied on taxable property within the boundaries of the CFD, will have any obligation to pay or to ensure the full and timely repayment of debt service related to the Bonds.

City of Sacramento Page 3 of 5
File ID: 2022-01421 8/23/2022 Discussion Item 18.

Interest on the Bonds will be exempt from federal and state income taxes. Consistent with the Internal Revenue Service regulations for tax-exempt bonds, the weighted average life of the Bonds will not exceed 120% of the average reasonably expected economic life of the authorized facilities funded by the Bonds.

Terms of the Sale
The Bonds will be issued in an amount not to exceed $32 million to finance the acquisition and construction of certain authorized facilities. The true interest cost for the Bonds may not exceed

6.50% and is anticipated to be around 5.31% (based on current market rates as of August 8, 2022, plus an interest rate buffer of 0.50%), and the underwriter’s compensation may not exceed 1.25% of the principal amount of the Bonds. Good faith estimates of certain financial terms of the Bonds, as required by Government Code section 5852.1, are provided in the tables below.

Source of Funds:

Par Amount of Bonds 30,000,000.00
Original Issue Premium 1,037,436.80
Total Sources 31,037,436.80
Use of Funds:

Acquisition and Construction Fund 24,464,003.47
Debt Service Reserve Fund 2,342,600.00
Capitalized Interest - through September 1, 2024 3,180,833.33 Costs of Issuance
(1)
1,050,000.00
Total Uses 31,037,436.80
Source: Stifel, Nicolaus & Co., the Underwriter of the Bonds (1) Includes Underwriter's discount, bond counsel, disclosure counsel, special tax consultant, municipal advisor, and trustee fees; appraisal costs, Estimates based on market conditions as of August 8, 2022 + interest rate buffer of 0.50%.

Total
Par Amount 30,000,000.00
True Interest Cost 5.310960%
Total Interest Payments to Final Maturity 26,866,033.33 Total Debt Service to Final Maturity 56,866,033.33
Source: Stifel, Nicolaus & Co., the Underwriter of the Bonds Estimated Bond Statistics
Estimates based on market conditions as of August 8, 2022 + interest rate buffer of 0.50%.

City of Sacramento Page 4 of 5
File ID: 2022-01421 8/23/2022 Discussion Item 18.

Value-to-Lien
In accordance with the California Debt and Investment Advisory Commission’s guidelines for issuing land-secured bonds, the ratio of property values within a community facilities district to the total tax and assessment burden on the district’s parcels, the “value-to-lien ratio”, must be at least 3:1. The estimated value-to-lien ratio of taxable property of the CFD (inclusive of the Bonds and certain overlapping debt) is 4.91:1, as determined by the City’s special tax consultant, Economic & Planning Systems Inc.

Security for the Bonds
Payment of debt service of the Bonds is secured solely by special taxes on real property within the CFD and is solely the responsibility of Taxable Parcels (as defined in the Rate and Method of Apportionment for the CFD). A standard debt service reserve fund will also be established for the Bonds.

Local Business Enterprise (LBE): Not applicable.

City of Sacramento Page 5 of 5
RESOLUTION NO. 2022-
Adopted by the Sacramento City Council
August 23, 2022
Authorizing (1) the Issuance of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022; (2) the Execution And Delivery of a Master Indenture, a First Supplemental Indenture, a Bond Purchase Contract, an Official Statement, and a Continuing Disclosure Certificate in Connection with the Bonds; and (3) Certain Other Actions in Connection with the Bonds BACKGROUND:

A. Through a special, mailed-ballot election held on August 15, 2018, in the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “CFD”), the qualified electors in the CFD duly authorized the issuance of $75 million principal amount of special-tax bonds under the Mello-Roos Community Facilities Act of 1982 as amended (Government Code sections 53311 through 53368.3; the “Act”) for the purposes of financing the acquisition and construction of certain public facilities (the “Facilities”) and financing certain governmental fees for public facilities.

B. At the election, the qualified electors in the CFD also authorized the levy and collection of a special tax under the Act to be used to pay the interest on, principal of, and redemption premiums (if any) on, the bonds.

C. The Sacramento City Council (the “City Council”) has determined to authorize the issuance of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the “Series 2022 Bonds”) under the Act to finance certain of the Facilities.

D. The City desires to sell the Series 2022 Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), and the City Council has determined that a private (i.e., negotiated) sale of the Series 2022 Bonds to the Underwriter under the Act will result in a lower overall cost.

E. In furtherance of the City’s issuance of the Series 2022 Bonds, forms of the following documents have been filed with the Sacramento City Clerk (the “Clerk”) for the City Council’s consideration and approval:
 A Master Indenture between the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), providing for the issuance of special-tax bonds for the CFD in series and specifying the general terms of, and the security for, the bonds (the “Master Indenture”).
 A First Supplemental Indenture between the City and the Trustee, which supplements the Master Indenture and specifies the terms on which the Series 2022 Bonds are to be issued and secured (the “First Supplemental Indenture” and, together with the Master Indenture, the “Indenture”).

 A Bond Purchase Contract, under the terms of which, among other things, the City agrees to sell the Series 2022 Bonds to the Underwriter and the Underwriter agrees to purchase the Series 2022 Bonds (the “Bond Purchase Contract”).  A preliminary form of an Official Statement describing the Series 2022 Bonds (the “Preliminary Official Statement”).
 A Continuing Disclosure Certificate obligating the City to provide certain ongoing disclosure with respect to the Series 2022 Bonds (the “Continuing Disclosure Certificate”).

F. All acts, conditions, and things required by California law to exist, to have happened, and to have been performed before and in connection with the consummation of the financing authorized by this resolution do exist, have happened, and have been performed in regular and due time, form, and manner as required by law, and the City is now duly authorized and empowered, under each requirement of law, to authorize the execution and delivery of certain documents in order to further implement the financing in the manner and upon the terms provided in this resolution.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The statements in paragraphs A through F of the Background are true.

Section 2. The City Council hereby authorizes and approves the issuance of the Series 2022 Bonds in accordance with the Indenture in an aggregate principal amount not to exceed $32 million.

Section 3. The City Council hereby determines that the value of the real property within the CFD that will be subject to the levy of a special tax under the Act to pay debt service on the Series 2022 Bonds (based upon appraisal of the real property in the CFD made in a manner consistent with the Act and the City’s policies concerning the use of the Act) is at least three times the sum of the following: the principal amount of the Series 2022 Bonds, plus the principal amount of all other bonds outstanding that are secured by a special tax levied under the Act on property within the CFD, plus the principal amount of all other bonds outstanding that are secured by special assessments levied on property within the CFD.

Accordingly, the limitations of section 53345.8(a) of the Act have been duly satisfied.

Section 4. The City Council hereby approves the Master Indenture and authorizes and directs the Sacramento City Treasurer or his designee (the “Treasurer”) to execute and deliver it to the Trustee on the City’s behalf in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the Sacramento City Attorney or her designee (the “City Attorney”), and with approval to be conclusively evidenced by the execution and delivery of the Master Indenture.

Section 5. The City Council hereby approves the First Supplemental Indenture and its terms and conditions. The date, maturity date or dates, fixed interest rates, interest-

payment dates, forms, registration privileges, place or places of payment, denominations, terms of redemption and number of Series 2022 Bonds, and other terms of the Series 2022 Bonds are to be as provided in the First Supplemental Indenture as finally executed and delivered. (a) The Treasurer is hereby authorized and directed to execute and deliver to the Trustee, on the City’s behalf, the First Supplemental Indenture in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and with approval to be conclusively evidenced by the execution and delivery of the First Supplemental Indenture.
(b) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Trustee, on the City’s behalf, written instructions providing for the delivery of the Series 2022 Bonds to the Underwriter in accordance with the Bond Purchase Contract upon payment by the Underwriter of the purchase price of the Series 2022 Bonds (the “Instructions”).
(c) The Series 2022 Bonds are to be executed by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the Clerk, and each of the Series 2022 Bonds must be in the form set forth in, and otherwise be in accordance with, the Indenture. When the Series 2022 Bonds are so executed, the Treasurer shall deliver them to the Trustee for authentication. The Trustee is then to deliver the Series 2022 Bonds to the Underwriter in accordance with the Instructions.

Section 6. The City Council hereby approves the Bond Purchase Contract and authorizes the Treasurer to execute and deliver it to the Underwriter on the City’s behalf in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and with approval to be conclusively evidenced by the execution and delivery of the Bond Purchase Contract, all subject to the following: the true interest cost for the Series 2022 Bonds may not exceed 6.50%, and the Underwriter’s compensation may not exceed 1.25% of the principal amount of the Series 2022 Bonds.

Section 7. The City Council hereby approves the Preliminary Official Statement and authorizes the Underwriter to distribute it.
(a) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Underwriter on the City’s behalf a certificate deeming the Preliminary Official Statement, in substantially the form on file with the Clerk and with any changes the Treasurer approves in the interest of the City with the concurrence of the City Attorney, to be final within the meaning of Securities Exchange Commission Rule 15c2-12.
(b) The City Council hereby authorizes and directs the Treasurer to execute and deliver to the Underwriter, on the City’s behalf, a final form of the Official Statement describing the Series 2022 Bonds (the “Final Official Statement”) in substantially the form of the Preliminary Official Statement, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and

with approval to be conclusively evidenced by the execution and delivery of the Final Official Statement.
(c) The City Council hereby authorizes the Underwriter to distribute the Final Official Statement.

Section 8. The City Council hereby approves the Continuing Disclosure Certificate and authorizes and directs the Treasurer to execute and deliver it to the Underwriter on the City’s behalf in substantially the form on file with the Clerk, with any changes the Treasurer may require or approve with the concurrence of the City Attorney, and with approval to be conclusively evidenced by the execution and delivery of the Continuing Disclosure Certificate.

Section 9. The officers of the City, each acting alone, are hereby authorized and directed to do any and all things (including but not limited to the creation of funds required for the proper accounting and management of tax and bond proceeds) and to execute and deliver any and all documents and agreements they consider necessary or advisable to carry out, give effect to, and comply with, the terms and intent of this resolution, the Indenture, the Bond Purchase Contract, the Preliminary Official Statement, the Final Official Statement, the Continuing Disclosure Certificate, and the Series 2022 Bonds. All actions previously taken by those officers with respect to the Series 2022 Bonds are hereby ratified, confirmed, and approved.

Section 10. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California Government Code using DocuSign.

Section 11. This resolution takes effect when adopted.

OH&S
DRAFT
08/11/22
4128-4850-0016.6

MASTER INDENTURE
between the

CITY OF SACRAMENTO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Relating to the

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01 (IMPROVEMENTS)

SPECIAL TAX BONDS
Dated as of September 1, 2022

4128-4850-0016.6

MASTER INDENTURE
This Master Indenture (the “Master Inde nture”), dated as of September 1, 2022, between the City of Sacramento, a California muni cipal corporation (the “City”), and U.S. Bank Trust Company, National Association, a nationa l banking associatio n duly organized and existing under and by virtue of the laws of the United States of America and authorized to accept and execute trusts of the character herein set forth, as trustee (the “Trustee”); WITNESSETH:

WHEREAS, at an election held in the C ity of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “Community Facilities District”) on August 15, 2018, the qualified electo rs therein duly authorized the i ssuance of sevent y-five million dollars ($75,000,000) principal am ount of special tax bonds unde r the Mello-Roos Community Facilities Act of 1982, as amended (being Secti on 53311 et seq. of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto (collectively, the “Act”), for the purpose of financ ing the acquisition and constructi on of certain public facilities and financing certain governmental fees; and
WHEREAS, at the election the qualified electors in the Community Facilities District authorized the levy a nd collection of a spec ial tax under the Act to be used for the purpose of paying the interest on and principal of and redemp tion premiums, if any, on the bonds; and
WHEREAS, the City Council of the City has determined to authorize the issuance of City of Sacramento Raily ards Community Facilities Dist rict No. 2018-01 (Improvements) Special Tax Bonds (the “Bonds”) in series pur suant hereto and pursuant to one or more Supplemental Indentures and to secure the Bonds in the manner provided herein; and WHEREAS, the City has determined that all things necessary to cause the Bonds, when duly executed by the City and authentica ted by the Trustee and delivered as provided herein, to be legal and valid special tax obligations of the City enforceable in accordance with their terms, and to constitute this Master Inde nture a valid agreement for the uses and purposes herein set forth in accordance with its terms, have been done and ta ken, and the execution and delivery hereof and the execution and delivery of th e Bonds, subject to the terms hereof, have in all respects been duly authorized;
NOW, THEREFORE, THIS MASTER I NDENTURE WITNESSETH, that in order to secure the payment of the interest on a nd principal of and redemp tion premiums, if any, on all Bonds at any time issued and outstanding he reunder according to their tenor, and to secure the observance and performance of all the agre ements, conditions, covenants and terms therein and herein set forth, and to declare the conditions and terms upon and subject to which the Bonds shall be issued and received, and in consideration of the premises and of the mutual agreements and covenants contained herein and of the purchase and acceptance of the Bonds by the respective registered owners thereof from time to time, and for other valuable considerations, the receipt whereof is hereby acknow ledged, the City does hereby agree and covenant with the

2 4128-4850-0016.6

Trustee, for the benefit of the respective regist ered owners from time to time of the Bonds, as follows:

ARTICLE I

DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, all terms defined in this section shall for all purpos es hereof and of any Supplemental Indenture and of the Bonds and of any certific ate, opinion, report, request or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein:

Accountant’s Report
“Accountant’s Report” means a report signed by an Independent Certified Public Accountant.

Acquisition and Construction Fund
“Acquisition and Construction Fund” mean s the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Sp ecial Tax Bonds Acquisition and Construction Fund established pursuant to Section 2.04 (to be maintained by the Treasurer).

Act
“Act” means collectively the Mello-Roos Community Facilities Act of 1982, as amended (being Sections 53311 et seq. of the Govern ment Code of the Stat e of California), and all laws amendatory thereof or supplemental thereto.

Bond Redemption Fund
“Bond Redemption Fund” means the City of Sacramento Railyards Community Facilities District No. 2018- 01 (Improvements) Special Tax Bonds Bond Redemption Fund established pursuant to Section 5.02 (to be maintained by the Trustee).

Bond Reserve Fund
“Bond Reserve Fund” means the City of Sacramento Railyards Community Facilities District No. 2018- 01 (Improvements) Special Ta x Bonds Bond Reserve Fund established pursuant to Section 5.02 (to be maintained by the Trustee).

Bond Year
“Bond Year” means the twel ve-month period ending on September 1 of each year; provided, that the first Bond Year sh all commence on the date of the execution, authentication and initial delivery of the first Series issued hereunder.

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Bonds, Serial Bonds, Term Bonds
“Bonds” means the City of Sacramento Ra ilyards Community F acilities District No. 2018-01 (Improvements) Special Tax Bonds at any time Outstanding hereunder that are executed, authenticated and delivered in accordan ce with the provisions hereof. “Serial Bonds” means Bonds for which no Sinking Fund Account Payments are established. “Term Bonds” means Bonds which are redeemable or payable on or before their specified maturity date or dates from Sinking Fund Account Payments established for the purpose of redeeming or paying such Bonds on or before their specified maturity date or dates.

Business Day
“Business Day” means any day (other than a Saturday or a Sunday) on which the Trustee is open for business at its Principal Corporate Trust Office.

Certificate of the City
“Certificate of the City” means an inst rument in writing signed by the City Manager or the Treasurer, or by any other officer of the City duly authorized by the City Council for that purpose.

City
“City” means the City of Sacramento, a California municipal corporation.

City Council
“City Council” means the City Council of the City.

City Clerk
“City Clerk” means the City Clerk of the City.

City Manager
“City Manager” means the City Manager of the City.

Code
“Code” means the Inte rnal Revenue Code of 1986 a nd all regulations of the United States Department of the Treasury issued thereunder from ti me to time to the extent that such regulations are, at the time, applicable and in effect, and in this regard reference to any particular section of the Code shall include re ference to any successor to such section of the Code.

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Community Facilities District
“Community Facilities District” means the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements), a commu nity facilities district duly organized and existing in the City under and by virtue of the Act.

Community Facilities Fund
“Community Facilities Fund” means th e City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Sp ecial Tax Bonds Community Facilities Fund established pursuant to Section 5.02 (to be maintained by the Treasurer).

Costs of Issuance
“Costs of Issuance” means, with respect to any Series, all costs and expenses payable by or reimbursable to th e City that are related to th e authorization, sale, execution, authentication and initial delive ry of such Series, including, but not limited to, costs of preparation and reproduction of do cuments, rating agency fees, fees and charges of the Trustee (including fees and expenses of its counsel), legal fees and charges and fees and charges of other consultants and professionals, toge ther with all costs for the prep aration of the Bonds of such Series, and any other cost or expense in conn ection with the authori zation, sale, execution, authentication and initial delivery of such Series.

Costs of Issuance Fund
“Costs of Issuance Fund” means the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax B onds Costs of Issuance Fund established pursuant to Section 2.05 (to be maintained by the Trustee).

Debt Service
“Debt Service” means, for any Bond Year , the sum of (1) the interest payable during such Bond Year on all Outstanding Bonds, assuming that all Outs tanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid as scheduled at the times of and in amounts equal to the sum of all Sinking Fund Account Payments (except to the extent that such interest is to be paid fro m the proceeds of sale of any Bonds), plus (2) the principal amount of all Outstanding Serial Bonds maturing by their terms in such Bond Year, plus (3) the Sinking Fund Account Payments re quired to be deposited in the Sinking Fund Account in such Bond Year.

Event of Default
“Event of Default” means an event described as such in Section 9.01.

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Expense Fund
“Expense Fund” means the City of Sacr amento Railyards Co mmunity Facilities District No. 2018-01 (Improvements) Special Ta x Bonds Expense Fund established pursuant to Section 5.02 (to be maintained by the Treasurer).

Expenses
“Expenses” means all expenses paid or incurred by the City for the cost of planning and designing the Facilities or the facilit ies to be financed with the Fees, including the cost of environmental evaluations, and all costs associated with the determination of the amount of the Special Tax, the collection of the Special Tax and the payment of the Special Tax, together with all costs otherwise incurred in order to carry out the au thorized purposes of the Community Facilities District, and any other expenses inci dental to the acquisiti on, construction, completion and inspection of the Facilities and the facilities to be financed with the Fees; all as determined in accordance with Generally Accepted Accounting Principles.

Facilities
“Facilities” means the public facilities authorized to be acquired and constructed in and for the Community Faciliti es District under and pursuant to the Act at the special election held in the Community Facilities District on August 15, 2018.

Federal Securities
“Federal Securities” means (a) any securities now or hereafter authorized both the interest on and principal of whic h are guaranteed by the full faith and credit of the United States of America, and (b) any of the following obligat ions of federal agencies not guaranteed by the full faith and credit of the United States of Americ a: (1) participation certif icates or senior debt obligations of the Federal Home Loan Mortgage Corporation, (2 ) bonds or debentures of the Federal Home Loan Bank Board established un der the Federal Home Loan Bank Act and bonds of any federal home lo an bank established under such act , and (3) stocks, bonds, debentures, participations and other obligations of or issu ed by the Federal National Mortgage Association, the Student Loan Marketing Association, the Go vernment National Mortgage Association and the Federal Home Loan Mortgage Corporation, to the extent that such securities or obligations are eligible for the legal investment of City funds, together with a ny repurchase agreements which are secured by any of such securities or obligations that (1) have a fair market value (determined at least daily) at least equal to on e hundred two percent (102%) of the amount invested in the repurchase agreement, (2) are in the possession of the Tr ustee or a third party acting solely as custodian for the Trustee who holds a perfected first lien therein, and (3) are free from all third party claims.

Fees
“Fees” means the governmental fees authori zed to be financed with the proceeds of the Bonds at the special election held in the Community Facilities District on August 15, 2018.

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Fiscal Year
“Fiscal Year” means the twelve-month pe riod terminating on June 30 of each year, or any other annual accountin g period hereafter selected and designated by the City as its Fiscal Year in accordance with applicable law.

Fitch
“Fitch” means Fitch, Inc., a corporation duly organized and existing under and by virtue of the laws of th e State of Delaware, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer pe rform the functions of a securities rating agency, then the term “Fitch” shall be de emed to refer to any other nationally recognized securities rating agency selected by the City.

Generally Accepted Accounting Principles
“Generally Accepted Accounting Principl es” means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other ge nerally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Government al Accounting Standards Board or its successor.

Holder
“Holder” means any person who shall be the registered owner of any Outstanding Bond, as shown on the registration books maintained by the Trustee pursuant to Section 3.03.

Independent Certified Public Accountant
“Independent Certified Public Account ant” means any nationally recognized certified public accountant or firm of such accountants, appointed and paid by the City, and who, or each of whom --
(1) is in fact independent and not under the domination of the City; (2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as an officer or employee of the City, but who may be regularly retained to audit th e accounting records of and make reports thereon to the City.

Legal Investments
“Legal Investments” means any securities in which f unds of the City may be legally invested in accordance with the applicable law in effect at the time of such investment and in accordance with the then current investme nt policy of the City (as adopted by the City Council).

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MAI
“MAI” means the designation assigned by the Appraisal Institute of professionals who adhere to ethical professional practice, continuing education, and best practices and industry trends with respect to real property valuation.

Master Indenture
“Master Indenture” means this Master I ndenture, dated as of September 1, 2022, between the City and the Trust ee, entered into under and pursuan t to the Act and as may be amended and supplemented pursuant to its terms.

Maximum Annual Debt Service
“Maximum Annual Debt Service” means, as of any date of calculation, the largest Debt Service in any Bond Year during the period from the date of such calculation through the final maturity date of all Outstanding Bonds.

Mayor
“Mayor” means the Mayor of the City.

Moody’s
“Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, th en the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City.

Net Special Tax Revenues
“Net Special Tax Revenues” means the proceeds of the Special Tax, less the Priority Administrative Expenses.

Opinion of Counsel
“Opinion of Counsel” means a written opinion of coun sel (including, without limitation, counsel for the City) retained by the City.

Outstanding
“Outstanding,” when used as of any pa rticular time with reference to Bonds, means (subject to the provisions of Section 8.02) all Bonds except -- (1) Bonds cancelled and destroyed by the Tr ustee or delivered to the Trustee for cancellation and destruction;

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(2) Bonds paid or deemed to have been paid within the m eaning of Section

10.01; and
(3) Bonds in lieu of or in substitution for which other Bonds shall have been executed by the City and authenticated and delivered by the Trustee pursuant to Section

3.04. Principal Corporate Trust Office
“Principal Corporate Trust Office” means the corporate trust office of the Trustee in San Francisco, California, at which at any par ticular time its corporate trust business is being administered, except that with re spect to presentation of Bonds for registrati on, payment, redemption, transfer or exchange, such term shall mean the corporate trust operations office of the Trustee in St. Paul, Minnesota , or such other office designate d by the Trustee from time to time as its Principal Corporate Trust Office.

Priority Administrative Expenses
“Priority Administrative Expenses” means (i) for the Fiscal Year 2022-23, $35,000, and (ii) for each subsequent Fiscal Year, an amount equal to the Priority Administrative Expenses for the preceding Fiscal Year plus 3%.

Rebate Fund
“Rebate Fund” means the City of Sacram ento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds Rebate Fund established pursuant to Section 6.03 (to be maintained by the Treasurer).

Required Bond Reserve
“Required Bond Reserve” means, as of any date of calculation, the least of (a) ten percent (10%) of the principal amount of the Outstanding Bonds , or (b) Maximum Annual Debt Service, or (c) one hundred tw enty-five percent (125% ) of the average Debt Service payable hereunder in the current and in a ll future Bond Years, all as determined by the City under the Code and specified in writing to the Trustee; provided, that such requirement (or any portion thereof) may be satisfied by the provision of one or more policies of municipal bond insurance or surety bonds issued by a municipal bond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by which bank, as the case may be, have at least one rating at the time of issuance of such policy or surety bond or letter of credit equal to “A” or higher assigned by Fitch or “A” or higher a ssigned by Moody’s or “A” or higher assigned by Standard & Poor’s, in each case without regard to any numerical m odifier or plus or minus sign; and provided further, that the am ount of the Required Bond Rese rve shall not increase at any time except upon the issuance of a ne w Series of Bonds; and provided further, that, with respect to the issuance of any issue of Bonds, if the amount on deposit in the Bo nd Reserve Fund would have to be increased by an amount greater than ten percent (10%) of the stated principal amount of such issue of Bonds (or, if the issue has more than a de minimis amount of original issue discount or premium, of the issu e price of such issue of Bonds) then the Required Bond Reserve shall be such lesser amount as is determined by a deposit of such 10%.

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Series
“Series” means any series of the Bonds authorized, execute d and authenticated pursuant hereto and pursuant to one or more Su pplemental Indentures as constituting a single series and delivered on initial issuance in a si multaneous transaction pursuant to Section 2.02, and any Bonds thereafter executed, authenticated and delivered in lieu thereof or in substitution therefor pursuant to Section 3.04.

Series 2022 Bonds
“Series 2022 Bonds” means the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022.

Sinking Fund Account
“Sinking Fund Account” means the account in the Bond Redemption Fund referred to by that name established pursuant to Section 5.02.

Sinking Fund Account Payments
“Sinking Fund Account Payments” m eans the payments required by all Supplemental Indentures to be deposited in the Sinking Fund A ccount for the payment of the Term Bonds.

Special Tax
“Special Tax” means the special tax authorized to be levied and collected annually on all Taxable Land in the Community Faci lities District under and pursuant to the Act at the special election held in the Community Facilities District on August 15, 2018.

Special Tax Formula
“Special Tax Formula” means the Rate and Method of Apportio nment of Special Tax approved at the election held in the Community Facilities District on August 15, 2018.

Special Tax Fund
“Special Tax Fund” means the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds Special Tax Fund established pursuant to Section 5.01 (to be maintained by the Treasurer).

Standard & Poor’s
“Standard & Poor’s” means Standard & Poor’s Rating Services, a division of The McGraw Hill-Companies, Inc., a corporation duly organized and existing under and by virtue of the laws of the State of New York, and its successo rs or assigns, except that if such entity shall be dissolved or liquidate d or shall no longer perform the func tions of a securi ties rating agency,

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then the term “Standard & Poor’s” shall be deem ed to refer to any other nationally recognized securities rating agency selected by the City.

Supplemental Indenture
“Supplemental Indenture” means any indenture then in full force and effect that has been made and entered into by the City an d the Trustee, amendatory of or supplemental hereto; but only to the extent that such Suppl emental Indenture is sp ecifically authorized hereunder.

Tax Certificate
“Tax Certificate” means any certificate delivered upon the orig inal issuance of a Series relating to Section 148 of the Code, or any functionally similar replacement certificate.

Taxable Land
“Taxable Land” means all land within the Community Facilities District taxable under the Act in accordance with the proceedings for the authorization of the issuance of the Bonds and the levy and collection of the Special Tax.

Treasurer
“Treasurer” means the City Treasurer of the City.

Trustee
“Trustee” means U.S. Bank Trust Comp any, National Association, a national banking association duly organized and existing unde r and by virtue of the laws of the United States of America and authorized to accept and execu te trusts of the character herein set forth, at its Principal Corporate Trust Of fice, and its successors or assi gns, or any othe r bank or trust company which may at any time be substituted in its place as provided in Section 7.01.

Written Request of the City
“Written Request of the City” means an instrument in writing signed by the City Manager or the Treasurer, or by any other officer of the City duly authorized by the City Council for that purpose.

SECTION 1.02. Equal Security . In consideration of the acceptance of the Bonds by the Holders thereof, this Master Indentur e shall be deemed to be and shall constitute a contract between the City and th e Holders from time to time to secure the full and final payment of the interest on and principa l of and redemption premiums, if any, on all Bonds which may from time to time be authorize d, sold, executed, authenticated a nd delivered hereunder, subject to the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the City shall be for the equal and proportionate benefit, security and protection of all Holders without distinction, preference or priority as to security or otherwise of any Bonds over

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any other Bonds by reason of the number thereof or the time of execution, authentication or delivery thereof or otherwise for any cause whatso ever, except as expre ssly provided herein or therein.

ARTICLE II

ISSUANCE OF BONDS
SECTION 2.01. Authorization and Purpose of Bonds.
(a) The City Council has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by the Act, and the City is now authorized, pursuant to each and every requirement of the Act and hereof, to issue the Bonds in one or more Series as from time to time shall be authorized and esta blished by the City pursuant to the Act and pursuant hereto and pursuant to one or more Supplem ental Indentures, which Series shall be entitled to the benefit, protection and security hereof. The Bonds shall be designated the “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds,” together with such further appropriate particular designation added to or incorporated in the title of the Bonds of each Series as the City may determine or as shall be required by the Act, and each Bond shall bear upon its face the designati on so determined for the Series to which it belongs. Additionally, the Bonds may contain or have endorsed thereon such other descriptive provisions, specifications and wo rds not inconsistent with the provisions hereof as may be desirable or necessary to comply with custom or the rules of any securities exchange or commission or brokerage board or otherwise as may be deter mined by the City prior to the delivery thereof.
(b) The purpose for which the Bonds are to be issued is to provide funds to finance the acquisition and c onstruction of the Facilities, finance the Fees, refund any Outstanding Bonds, make deposits to the Bond Reserve Fund or otherwise provide for the satisfaction of the Required Bond Reserve, pay the Costs of Issuance, fund interest on the Bonds, pay Expenses, and pay other incide ntal expenses relating to a ny of the foregoing, as further provided herein or in any Supplemental Indenture.
(c) From and after the issuance of any Seri es, the findings and determinations of the City Council respecting such Series shall be c onclusive evidence of the existence of the facts so found and determined in any act ion or proceeding in any court in which the validity of any Bonds of such Series is at issue, and no bona fide purchaser of any Bonds of such Series shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the purchase price paid for such Series. The validity of the issuance of any Series shall not be dependent on or affected in any way by any proceedings taken by the City fo r the acquisition and construction of any Facilities or the financing of any Fees, or any contracts made by the City in connection therewith, or the failure to complete the acqui sition and construction of any Facilities or the

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financing of any Fees. The rec ital contained in the B onds that the Bonds ar e issued pursuant to the Act and pursuant hereto and pursuant to one or more Supplemental Indentures shall be conclusive evidence of their validity and of the re gularity of their initial issuance, and all Bonds shall be incontestable from and after their initial issuance, which shall be the date the definitive Bonds (or any temporary Bond exchangeable therefor) shall have been delivered to the purchaser thereof and the purchase price thereof shall have been received.

SECTION 2.02. Conditions for the Issuance of Bonds. The City may at any time issue a Series payable from the Net Special Tax Revenues as provided herein on parity with all other Series theretofore issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of any su ch Series other than the Series 2022 Bonds:
(a) The issuance of such Series shall have been authorized pursuant to the Act and pursuant hereto and shall have been provide d for by a Supplemental Indenture which shall specify the following:
(1) The purpose for which such Series is to be issued;
(2) The principal amount and designation of such Series and the denomination or denominations of the Bonds of such Series;
(3) The date, the maturity date or dates, the interest payment dates and the dates on which Sinking Fund Account Payments are due, if any, for such Series; provided, that (i) the Serial Bonds of such Series shall be payable as to principal on September 1 of each year in which principal of such Series fa lls due, and the Term Bonds of su ch Series shall be subject to mandatory redemption on September 1 of each year in which Sinking Fund Account Payments for such Series are due; (ii) the Bonds of such Series shall be payable as to interest semiannually on March 1 and September 1 of each year, except th at the first installment of interest may be payable on either March 1 or September 1 and sh all be for a period of not longer than twelve (12) months and the interest shall be payable thereafter semiannually on March 1 and September 1, (iii) all the Bonds of such Series of like maturity shall be identical in all respects, except as to number or denomination, and (iv) se rial maturities of Serial Bonds of such Series or Sinking Fund Account Payments for Term Bonds of such Series, or any combination thereof, shall be established to provide for the redemption or paymen t of the Bonds of such Series on or before their respective maturity dates;
(4) The redemption premiums and redemption terms, if any, for such Series; (5) The form of the Bonds of such Series;
(6) The amount, if any, to be deposited from the proceeds of sale of such Series in the Bond Redemption Fund, and its use to pay interest on the Bonds of such Series; (7) The amount, if any, to be deposited from the proceeds of sale of such Series in the Bond Reserve Fund; provided, that the Required Bond Reserve shall be satisfied at the time that such Series becomes Outstanding;

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(8) The amount, if any, to be deposited from the proceeds of sale of such Series in the separate account for such Series to be maintained in the Costs of Issuance Fund; and (9) Such other provisions that are appr opriate or necessary and are not inconsistent with the provisions hereof;
(b) No Event of Default hereunder or unde r any Supplemental Indenture shall have occurred and shall be then continuing;
(c) The Net Special Tax Revenues that woul d be available to the City if the Special Tax were to be levied and collected at its maximum rate and amount on all Taxable Land in the Community Facilities District during each Fiscal Year that any Bonds of such Series will be Outstanding, as shown by a written certificate of a special tax consultant selected by the City on file with the Trustee, would have produced a sum equal to at least 110% of the annual Debt Service during the Bond Year that begins in such Fiscal Year; (d) The aggregate Value-to-Lien Ratio of all Taxable Land in the Community Facilities District (exc luding the Value of any parcels of Ta xable Land then de linquent in the payment of any Special Tax) shall be at least 3:1; and
(e) The aggregate Value-to-Lien Ratio of all parcels of Taxable Land, if any, that are then classified as Undeve loped Parcels pursuant to the Sp ecial Tax Formula (excluding the Value of any such parcels of Taxable Land then delinquent in the payment of any Special Tax) shall be at least 2.5:1.

For the purposes of subparagraphs (d) and (e) of this Se ction 2.02, the term “Value” means either the current assessed valuation of a parcel of Taxable Land or the appraised value of a parcel of Taxable Land determined by an MAI appraiser, and the term “Value-to-Lien Ratio” means (x) in the case of subsection (d) of this Section 2.02, the Value of all such Taxable Land to the aggregate principal amount of all Bonds Outstanding and the Series proposed to be issued plus the aggregate principal amount of all other assessment bonds and bonds issued under the Act that is reasonably allocable to such Taxa ble Land and (y) in the cas e of subsection (e) of this Section 2.02, the Value of all such parcels of Taxable Land that ar e then classified as Undeveloped Parcels pursuant to the Special Tax Formula to th e aggregate principal amount of all Bonds Outstanding and the Series proposed to be issued that is reason ably allocable to such Taxable Land plus the aggregat e principal amount of all othe r assessment bonds and bonds issued under the Act that is reasonably allocable to such Taxable Land.

Notwithstanding subparagraphs (c), (d) and (e) of this Section 2.02, nothing contained herein shall limit the issuance of a ny Series payable from the Net Special Tax Revenues as provided herein if, after the issuance and delivery of such Series, none of the Bonds theretofore issued hereunder will be Outstandin g, and nothing contained herein shall limit the issuance of any Series payable from the Net Sp ecial Tax Revenues as provided herein if, after the issuance and delivery of such Series, the Debt Service in each Bond Year that begins after the issuance of such Series is not increased by reason of the issuance of such Series.

SECTION 2.03. Procedure for the Issuance of Bonds . At any time after the sale of any Series in accordance with the Act, such Series shall be executed by the City and shall

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be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following documents or money:
(a) An executed copy of the Supplemental I ndenture authorizing the issuance of such Series;
(b) A Written Request of the City as to the delivery of such Series; (c) An Opinion of Counsel to the effect that (i) the Supplemental Indenture has been duly executed and delivered by, and constitutes the valid and binding obligation of, the City; and (ii) the Bonds of such Series constitu te the valid and binding special tax obligations of the City;
(d) A Certificate of the City containing su ch statements as may be reasonably necessary to show compliance with the requirements of Section 2.02; (e) The proceeds of sale of such Series; and
(f) Such further documents or money as are required by the provisions of the Supplemental Indenture authorizing the issuance of such Series.

SECTION 2.04. Acquisition and Construction Fund . There is hereby established in the treasury of th e City a fund to be known as the “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Sp ecial Tax Bonds Acquisition and Construction Fund,” into which fund shall be depos ited (in a separate acc ount to be maintained therein) the amount required to be deposited therein by the provisions of each Supplemental Indenture providing for the issuance of a Series. All money in the Acquisition and Construction Fund shall be applied by the Treasurer in the manner provided by the Act for payment of costs of the acquisition and construction of the Facilities (or for making reimbursements to the City for such costs theretofore paid by it), including paymen t of costs incidental to or connected with such acquisition and constructio n; for the payment or reimbur sement of Fees; or for the repayment of funds advanced to or for the Comm unity Facilities District; provided, that any money remaining in the separate account in the Acquisition a nd Construction Fund created in connection with the issuance of su ch Series (after the completion of the payment of the costs of the acquisition and construction of the Facilities and the payment or reimbursement of Fees for which such Series was issued) shall be wit hdrawn by the Treasurer from the Acquisition and Construction Fund and deposited by the Treasurer in the Special Tax Fund.

SECTION 2.05. Costs of Issuance Fund . There is hereby established with the Trustee a fund to be known as the “City of Sacramento Ra ilyards Community Facilities District No. 2018-01 (Improvements) Special Ta x Bonds Costs of Issuance Fund,” into which fund shall be deposited (in a separate account to be maintained therein) the amount required to be deposited therein by the provision of each Supplem ental Indenture providing for the issuance of a Series. All money in the Costs of Issuance Fu nd shall be applied by the Trustee as directed in writing by the City in the manner provided by law for payment of Costs of Issuance; provided, that any money remaining in th e separate account in the Costs of Issuance Fund created in connection with the issuance of su ch Series (after the completion of the payment of the Costs of Issuance relating to such Series as specified in writing by the City to the Trustee) shall be

15 4128-4850-0016.6

withdrawn by the Trustee from the Costs of Issuance Fund and transferred to the City for deposit in the separate account in the Acquisition and Construction Fund, if any, created in connection with the issuance of such Series and, if no separate account in the Acquisition and Construction Fund was created in connection with the issuance of such Series or if the City directs the Trustee in writing to do so, shall be withdrawn by the Trustee from the Costs of Issuance Fund and deposited in the Bond Redemption Fund and, in eith er case, the separate account in the Costs of Issuance Fund created in connection with the issuance of such Series will be closed.

ARTICLE III

TERMS AND PROVISIONS OF BONDS
SECTION 3.01. Terms of Bonds.
(a) The interest on and principal of and redemption premiums, if any, on the Bonds shall be payable in lawful money of th e United States of America at the Principal Corporate Trust Office of the Tr ustee; provided that the Trustee may agree with the Holder of any Bond that such Holder may, in lieu of su rrendering the same for a new Bond, endorse on such Bond a record of partial payment of the prin cipal of such Bond in th e form set forth below (which shall be typed or printed on such Bond):

PAYMENTS ON ACCOUNT OF PRINCIPAL

Payment Date
Principal
Amount Paid
Balance of Principal
Amount Unpaid
Signature
of Holder

_________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________

The Trustee shall maintain a record of each such partial payment made in accordance with the foregoing agreement and such r ecord of the Trustee shall be conclusive.

Such partial payment shall be valid upon payment of the amount thereof to the Holder of such Bond, and the City and the Trustee shall be fully released and disc harged from all liability to the extent of such payment regardle ss of whether such endorsement shall or shall not have been made upon such Bond by the Holder thereof and re gardless of any error or omission in such endorsement.
(b) The Bonds of each Series shall be issued as fully registered Bonds in such denominations as may be authorized in the Supplemental Indenture authorizing the issuance of such Series (but not to exceed the principal amount of Bonds of such Series maturing on any one date) and shall be dated as provided in the S upplemental Indenture auth orizing the issuance of such Series and shall be numbered as determined by the City. (c) Each Bond shall bear intere st from the interest paym ent date next preceding the date of authentication thereof, unless it is authenticated on a day during the period from the

16 4128-4850-0016.6

sixteenth (16 th) day of the month next preceding an in terest payment date to such interest payment date, both dates inclusive, in which event it shall bear interest from such interest payment date, or unless it is authenticated on a day on or before the fifteenth (15 th) day of the
month next preceding the first interest payment date, in which event it shall bear interest from its date; provided, that if at the time of authenticati on of any Bond interest is then in default on any Outstanding Bonds, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds.

Payment of interest on the Bonds due on or before the maturity or prior redemption thereof shall be made only to the person whose name appears in the registration books required to be kept by the Trustee pursuant to Section 3.03 as the registered owner thereof at the close of business as of the fifteenth (15 th) day of the month next preceding each in terest payment date, such interest to be paid by check mailed by first class mail to such registered owner at hi s address as it appears on such books (except that in the case of a Ho lder of one million dollars ($1,000,000) or more in aggregate principal amount of Outstanding Bonds, payment shall be made at such Holder’s option by federal wire transfer of immediately available funds according to written instructions provided by such Holder to the Trustee at least fifteen (15) days before such interest payment date to an account in a bank or trust company or savi ngs bank that is a me mber of the Federal Reserve System and that is located in the United States of America). Payment of the principal of and redemption premiums, if a ny, on the Bonds shall be made only to the person whose name appears in the registration books required to be kept by the Trustee pursuant to Section 3.03 as the registered owner thereof, such principal and redemption premiums, if any, to be paid only on the surrender of the Bonds at the Principal Corporat e Trust Office of the Tr ustee at maturity or on redemption prior to maturity.
(d) The Bonds shall recite in substance that they are special tax obligations of the City and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from the Net Speci al Tax Revenues and the other f unds provided herein for such payment, and that the City is not obligated to pay the Bonds except from the Net Special Tax Revenues and such other funds; that the General F und of the City is not liable and the full faith and credit of the City is not pledged for the payment of the in terest on or principal of or redemption premiums, if any, on the Bonds, and that no tax or assessment other than the Special Tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the Bonds; th at the Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any of the pr operty of the City or any of its income or receipts except the Net Special Tax Revenues and such other funds; and that neither the payment of the interest on or principal of or redemption premiums, if a ny, on the Bonds is a general debt, liability or obligation of the City.

SECTION 3.02. Execution of Bonds . The Bonds shall be signed on behalf of the City by the manual or a facsimile signatu re of the Mayor and countersigned by the manual or a facsimile signature of the Ci ty Clerk. In case any officer of the City who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been delivered to the purchaser by the Trustee, such Bonds may nevertheless be delivered and issued and, upon such delivery and issuance, shall be as binding upon the City as though the officer who signed the same had continued to be such o fficer until such delivery and issuance. Also, any Bond may be signed on behalf of the City by any o fficer of the City w ho on the actual date of the execution of such Bond shall be the proper officer of the City, although on the nominal

17 4128-4850-0016.6

date of such Bond such person shall not have been such officer of the City. Only those Bonds that bear thereon a certificate of authentication executed by the Tr ustee shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evid ence that the Bonds so au thenticated have been duly authorized, sold, executed and delivered hereunder and are entitled to the benefits hereof.

SECTION 3.03. Transfer and Exchange of Bonds . The Trustee will keep at its Principal Corporate Trust Office sufficient books for the transfer and exchange of the Bonds, which books shall at all times during normal busin ess hours with reasonable prior notice be open to inspection by the City or by any Holder. Any Bond may, in accordance with its terms, be transferred or exchanged on such books by the person in whose name it is registered, in person or by his duly authorized attorney, upon payment by the Holder requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange and upon surrender of su ch Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer or exchange in a form acceptable to the Trustee.

Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the City shall execute and the Trustee shall authenticate and de liver a new Bond or Bonds of the same Series and maturity date and of authorized denomina tions for the same aggregate principal amount, except that neither the City nor the Trustee shall be required (i ) to transfer or exchange any Bonds of any Series during the fifteen-day period prior to the selection of any Bonds of such Series for redemption under Article IV, or (ii) to transfer or exchange any Bond which has been selected for redemption in whole or in part, except the unredeemed portion of such Bond selected for redemption in part, from and after the day that such Bond has been selected for redemption in whole or in part under Article IV.

The City and the Trustee may deem and tr eat the registered owner of any Bond as the absolute owner of such Bond for all purposes hereof, whether such Bond shall be overdue or not, and neither the City nor th e Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on such B ond shall be made only to the registered owner thereof at the close of business as the fifteenth (15 th) day of the month next preceding each interest payment date and paymen t of the principal of and rede mption premium, if any, on such Bond shall be made only to the registered owne r thereof, which paymen ts shall be valid and effectual to satisfy and di scharge the liability on such Bond to the extent of the sum or sums so paid.

SECTION 3.04. Mutilated, Destroyed, Stolen or Lost Bonds . In case any Bond shall become mutilated in respect of the body of such B ond or shall be believed by the Trustee to have been destroye d, stolen or lost, upon proof of ownership satisfactory to the Trustee and upon the surrender of such mutilated Bond at the Principal Corporate Trust Office of the Trustee, or upon the receipt of evidence satisfactory to the Trus tee of such destruction, theft or loss and upon receipt of indemnity satisfactory to the Trustee, and also upon payment of all expenses incurred by the City and the Trustee in the premises, the City shall execute and the Trustee shall authenticate and de liver at its Principal Corpor ate Trust Office a new Bond or Bonds of the same Series and maturity date for the same aggregate principal amount of like tenor and date and bearing such numbers and notations as the Trustee sh all determine in exchange and substitution for and upon cancellation of the mutilat ed Bond or in lieu of and in substitution for the Bond so destroyed, stolen or lost.

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If any such destroyed, stolen or lost Bond shall have ma tured or shall have been called for redemption, payment of the amount due thereon may be made by the Trustee upon receipt of like proof, indemnity and payment of expenses.

Any replacement Bonds issued pursuant to this section shall be entitled to equal and proportionate benefits with al l other Bonds issued hereunder, and the City and the Trustee shall not be required to treat both the origin al Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and the replacement Bond shall be treated as one and the same.

SECTION 3.05. Temporary Bonds . Any Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery, which temporary Bonds shall be printed, lithographed or typewritte n, shall be of such denominations as may be determined by the City, shall be issued in fully registered form, shall contain such reference to any of the provisions hereof as may be appropriate and shall be executed by the City upon the same conditions and in substantia lly the same manner as the defin itive Bonds. If the City issues temporary Bonds, it will execute and furnish de finitive Bonds without delay, and thereupon the temporary Bonds may be surrende red in exchange therefor at the Principal Corporate Trust Office of the Trustee, and the Tr ustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authori zed denominations of the same Series and maturity date or dates, and until so exchanged, the temporary Bonds shall be entitled to the same benefits as definitive Bonds issued hereunder.

SECTION 3.06. Use of Depository for Bonds.
(a) Unless otherwise provided in the S upplemental Indenture delivered in connection with the issuance of a Series of Bonds, The Depository Trust Company, New York, New York, is appointed as depository for the Bonds, and the Bonds of each Series shall be initially registered in the name of “Cede & C o.,” as nominee of The Depository Trust Company, and shall be initially issued as one Bond for each of the maturities bearing interest at a particular rate of interest per annum in the principal amounts set forth in the Supplemental Indenture providing for their issuance, and registered ownership of the Bonds of such Series, or any portion thereof, may not thereafter be transferred except:
(i) To any successor of Cede & Co., as nominee of The Depository Trust Company, or its nominee, or to any substitute depository designated pursuant to clause (ii) of this section (a “substitute depository ”); provided, that any successo r of Cede & Co., as nominee of The Depository Trust Company or substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) To any substitute depository designated by the City, upon (1) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the City to substitute another depository for The Depository Trust Company (or its successor) because The Depository Trust Company or its successor (or any substitute depository or its successor) is no longer able to

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carry out its functions as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or s ubstitute depository or its successor) from its functions as depository, or (2) a determination by the City to remove The Depository Trust Company or its successor (or any substitute depos itory or its successor) from its functions as depository.
(b) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a) hereof, upon receipt of all the Bonds of any Series by the Trus tee, together with a Written Request of the City to the Trustee, a new Bond for each maturity of such Series bearing a particular rate of interest per annum shall be executed by the City and authenticated and delivered by the Trustee in the aggregate prin cipal amount of the Bonds of such Series, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such Written Reque st of the City. In th e case of any transfer pursuant to clause (iii) of subsection (a) hereof, upon receipt of all the Bonds of any Series by the Trustee, together with a Writte n Request of the City to the Tr ustee, a new Bond or Bonds for each maturity of such Series bearing a particular rate of interest per annum shall be executed by the City and authenticated and delivered by the Tr ustee in such denominations and registered in the names of such persons as are requested in su ch Written Request of the City, subject to the limitations of Section 3.03, and thereafter, the Bonds of such Series shall be transferred pursuant to Section 3.03; provided, that the Trustee shall not be required to deliver such new Bonds on a date prior to sixty (60) days after receipt of such Written Request of the City. (c) So long as any Bonds are registered in the name of Cede & Co. or its registered assigns, the City and the Trustee shall be entitled to treat the person in whose name any Bond of any Series is registered as the owner thereof for all pu rposes hereof and any applicable laws, notwithstanding any notice to the contrary received by the City or the Trustee; and the City and the Trustee shall have no responsibility for tran smitting payments to, communication with, notifying, or otherwise dealing with any beneficial owners of the Bonds of such Series, and neither the City nor the Trustee shall have any responsibility or obligation, legal or otherwise, to the beneficial owners or to any other party, including The Depository Trust Company or its successor (or substitute depositor y or its successor), except to The Depository Trust Company or its successor (o r substitute depository or its successor) as a Holder of the Bonds of such Series.
(d) So long as any Bonds are registered in the name of Cede & Co. or its registered assigns, the City and the Trustee shall cooperate with Cede & Co., as sole Holder, or its registered assigns, in effect ing payment of the interest on and principal of and redemption premiums, if any, on such Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.

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ARTICLE IV

REDEMPTION OF BONDS
SECTION 4.01. Privilege of Redemption of Bonds . Any Series subject to redemption prior to maturity pur suant to a Supplemental Indent ure shall be redeemable, upon notice being given as provided in this article, at such times, upon payment of such redemption premiums, if any, and upon such te rms (in addition to and consistent with the terms contained in this article) as may be prescrib ed in the Supplemental Indenture authorizing the issuance of such Series.

SECTION 4.02. Selection of Bonds for Redemption . Unless otherwise provided in the Supplemental Indenture providing fo r the issuance of a Series of Bonds, if less than all the Bonds of any Series are to be redeem ed at the option of the City at any one time, the City shall select the maturity date or dates of the Bonds of such Series to be redeemed, and if less than all the Bonds of any Series of any one maturity date are to be redeemed at any one time, the Trustee shall select the Bonds of such Series or the portions thereo f of such maturity date to be redeemed in integral multiples of five thousan d dollars ($5,000) in any manner that it deems appropriate. The City shall notify the Trustee in writing at least fifteen (15) days prior to the date fixed for the selection of any Bonds for redemption, and after such selection the Trustee shall promptly notify the City in writing of the numbers of the B onds selected for redemption in whole or in part.

SECTION 4.03. Notice of Redemption . The Trustee shall mail a notice of redemption pursuant to Section 11.09 to the respective Holders of all Bonds selected for redemption in whole or in part and to all securities information services selected by the City and designated to the Trustee in writing to comply with custom or the rules of any securities exchange or commission or brokerage board or otherwise as may be determined by the City in its sole discretion and to the orig inal underwriter or first purcha ser of the Bonds selected for redemption. Such notice shall stat e the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption price, the place of redemption (being the address of the Principal Corporate Tr ust Office of the Trustee), the CUSIP number (if any) of the maturity or maturiti es and, if less than all of any such maturity, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the princi pal amount thereof to be redeem ed, and shall give notice that further interest on such Bonds or the portions thereof redeemed will not accrue from and after the redemption date, and shall require that such Bonds be surrendere d at the Principal Corporate Trust Office of the Trustee for payment of the redemption price th ereof. If any Bond so chosen for redemption shall not be redeemable in whole, such notice shall also state that such Bond is to be redeemed in part only and that upon presen tation of such Bond for re demption there will be issued in lieu of the unredeemed portion of principal thereof a new Bond or Bonds of the same Series and maturity date of authorized denominations equa l in aggregate pr incipal amount to such unredeemed portion.

With respect to any notice of optional redemption or extraordinary redemption from prepayments of the Special Tax, unless, upon the giving of notice, the Bonds to be redeemed have been deemed to have been paid within the meaning of Ar ticle X of this Master

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Indenture, the notice must state that the rede mption will be conditional upon the receipt by the Trustee on or before the date fi xed for redemption of amounts suff icient to pay the principal of, and premium, if any, and interest on, the Bonds to be redeemed, and that if those amounts have not been so received the notice will be of no for ce and effect and the City will not be required to redeem the Bonds. If any such notice of redemption contains such a condition and such amounts are not so received, the redemption will not be ma de and the Trustee shall within a reasonable time thereafter give notice to the effect that the amounts were not so received and the redemption was not made, the notice to be given by the Trustee in the same manner, and to the same parties, as the notice of redemption was given. The failu re to redeem Bonds subject to a conditional redemption notice will not constitute an Event of Default.

Any notice of optional redemption or extraordinary redemption from prepayments of the Special Tax may be resc inded by written notice given to the Trustee by the City no later than five Business Days before the date specified fo r redemption. The Trus tee shall give notice of such rescission as soon thereafter as practicable in the same manner, and to the same parties, as the notice of redemption was given.

SECTION 4.04. Partial Redemption of Bonds. Upon surrender of any Bond redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the registered owner thereof at the expense of the City a new Bond or Bonds of the same Series and maturity date and of authorized denominations equal in aggregate pr incipal amount to the unredeemed portion of the Bond surrendered.

SECTION 4.05. Effect of Redemption of Bonds . If notice of redemption has been duly given as aforesaid and money for the payment of th e principal of and redemption premiums, if any, on, together w ith interest to the redemption date on, the B onds or portions thereof so called for redemption is held by the Trustee, then on the redemption date designated in such notice such Bonds or such portions thereof shal l become due and payable, and from and after the date so designated interest on the Bonds or such portions thereof so called for redemption shall cease to accrue and the Holders of such Bonds shall have no rights in respect thereof except to receive payment of the princi pal or such portions thereof and the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date.

ARTICLE V

PAYMENT OF BONDS
SECTION 5.01. Deposit of Proceeds of the Special Tax in the Special Tax Fund; Pledge of Net Special Tax Revenues and Other Amounts . The City agrees and covenants that all proceeds of the Special Tax, when and as received, will be received and held by it in trust hereunder, and will be deposited as and when r eceived in the “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Sp ecial Tax Bonds Special Tax Fund,” which fund is hereby established in the tr easury of the City and which fund the City hereby agrees and covenants to maintain with the Treasure r so long as any Bonds are Outstanding hereunder, and all such money in the Special Tax Fund shall be accounted for separately and apart from all ot her accounts, funds, money or othe r resources of the City, and

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shall be disbursed, allocated and applied solely to the uses and purposes hereinafter set forth in this article. Subject only to the provisions of this Master Indenture pe rmitting the application thereof for the purposes and on the terms and conditions set forth herein, there are hereby pledged to secure the payment of the principal of and premium, if any, and interest on the Bonds in accordance with their terms and the provisions of this Master Indenture, all of the Net Special Tax Revenues received by or on behalf of the City and any other amounts held in the Special Tax Fund, the Bond Redemption Fund, and the Bond Reserve Fund. This pledge constitutes a lien on and security interest in such assets and will attach, be perfected, and be valid and binding without any physical delivery or further act.

Notwithstanding anything to the contrary in this Master Indenture, as soon as practicable after the receipt by the City of any prepayment of the Special Tax, the Treasurer shall (i) deposit any component thereof representing the “Remaining Facilities Funding Requirement Share” (as defined in the Special Tax Formula) in the Acquisit ion and Construction Fund, (ii) deposit any component thereof representing expenses incurred by the City in connection with the prepayment (as determined pursuan t to the Special Tax Formula) in the Expense Fund, and (iii) transfer to the Trustee for deposit in the B ond Redemption Fund, any remaining amounts, for the extraordinary redemption of Bonds pursuant to the terms of any Supplem ental Indenture. The respective amounts of the deposits a nd transfers described in clauses (i), (ii) and (iii) will be determined by the Treasurer.

SECTION 5.02. Allocation of Money in the Special Tax Fund . All money in the Special Tax Fund shall be set aside by the Treasurer in the following respective funds and accounts (each of which funds and accounts the City agrees and covenants to maintain with the Treasurer or the Trustee, as the case may be, so long as any Bonds are Outstanding hereunder) in the following order of priority, and all money in each of such funds and accounts shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section, namely:
(1) City of Sacramento Railyards Co mmunity Facilities District No. 2018-01 (Improvements) Special Tax Bonds Expense Fund (maintained by the Treasurer) (Priority Administrative Expenses Deposit). Promptly after the receipt of any proceeds of the Special Tax in a Fiscal Year , the Treasurer shall, from the money in the Special Tax Fund, transfer to and deposit in the Expe nse Fund a sum equal to the Priority Administrative Expenses for such Fiscal Year.
(2) City of Sacramento Railyards Co mmunity Facilities District No. 2018-01 (Improvements) Special Tax Bonds Bond Redemp tion Fund (maintained by the Trustee).

On or before the first (1 st) day in each March and Septem ber, the Treasurer shall, from the then remaining money in the Special Tax Fund, transfer to the Trustee for deposit in the Bond Redemption Fund an amount of m oney equal to the ag gregate amount of interest becoming due and payable on a ll Outstanding Bonds on such March 1 or September 1, as the case may be , and on or before the first (1 st) day in September 1 in each year, the Treasurer shall, from the then remaining money in the Special Tax Fund, transfer to the Trustee for deposit in th e Bond Redemption Fund an amount of money equal to the aggregate amount of principal becoming due and payable on all Outstanding Serial Bonds on such September 1 plus the Sinking Fund Account Payments required to be made on such September 1 into the Sink ing Fund Account; provided, that all of the

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aforesaid payments shall be made withou t priority of any pa yment over any other payment, and in the event that the mone y in the Bond Redemption Fund on any March 1 or September 1 is not equal to the amount of interest b ecoming due on all Bonds on such date, or in the event that the money in the Bond Redemption Fund on any September 1 is not equal to the amount of principal of th e Bonds becoming due on such date plus the amount of the Sinking Fund A ccount Payments becoming due on such date, as the case may be, then such money shall be applied pro rata in such proportion as such interest and principal and Sinking Fund Account Payments b ear to each other; and provided further, that no deposit need be made into the Bond Redemption Fund if the amount of money contained therein is at least equal to the amount required by the terms of this paragraph to be deposited therein at the times and in the amounts herein provided.

All money in the Bond Redemption Fund shall be used and withdrawn by the Trustee solely to pay the in terest on the Bonds as it sh all become due and payable (including accrued interest on any Bonds purchased or redeem ed prior to maturity) plus the principal of and redemption premiums, if any, on the Bonds as they shall mature or upon the prior redemption thereo f, except that any money in the Sinking Fund Account shall be used only to purchase or redeem or retire Term Bonds a nd any money deposited in the Bond Redemption Fund from the proceeds of a Series of Bonds to be used to pay interest on that Series of Bonds shall be used only to pay interest on that Series of Bonds. (3) City of Sacramento Railyards Co mmunity Facilities District No. 2018-01 (Improvements) Special Tax Bonds Bond Reserve Fund (maintained by the Trustee). On or before the first (1 st) day in September in each year, the Treasurer shall, from the then remaining money in the Special Tax Fund, transf er to the Trustee for deposit in the Bond Reserve Fund such amount of mo ney as shall be required to restore the Bond Reserve Fund to an amount equal to the Required Bond Reserve; and for this purpose all investments in the Bond Reserve Fund shall be valued on or before September 1 of each year at the face value thereof if such investments mature within twelve (12) months from the date of valuation, or if su ch investments mature more th an twelve (12) months after the date of valuation, at the lesser of (i) the par value of such investments, or (ii) the price at which such investments ar e redeemable by th e holder at his or her option, if so redeemable, or if not so redeemable, at the less er of (i) the par value of such investments, or (ii) the market value of su ch investments; provided, that no deposit need be made into the Bond Reserve Fund if the am ount contained therein is at least equal to the Required Bond Reserve. In making any valuations hereunder, the Trustee may utilize computerized securities prici ng services that may be ava ilable to it, including those available through its regular accounting system and rely thereon.

Any money in the Bond Reserve Fund shall be used and withdrawn by the Trustee solely for the purpose of (i) paying the interest on or principal of the Bonds in the event there is insufficient money in the Bond Rede mption Fund available for this purpose; (ii) reinstating the amount available under any municipal bond insurance policy, surety bond, or letter of credit held in satisfaction of all or a porti on of the Required Bond Reserve (each a “Reserve Fund Credit Instrument”); or (i ii) retiring Bonds, in whole or in part, to the extent that the amount on deposit in the Bond Reserv e Fund exceeds the Required Bond Reserve due to a redemption or defeasance of Bonds; provided, that if as a result of

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any of the valuations require d by the first paragraph of this Secti on 5.02(2) it is determined that the amount of money in the Bond Reserve Fund exceeds the Required Bond Reserve, the Trustee shall withdraw th e amount of money representing such excess from such fund and shall deposit such amount of money in the Bond Redemption Fund. (4) Expense Fund. On September 1 in e ach year, the Treasurer shall, from the then remaining money in the Special Tax F und, transfer to and de posit in the Expense Fund a sum equal to the amount required by the City for the payment of budgeted Expenses during the twelve-month period begi nning on such date, or to reimburse the City for the payment of unbudgeted Expenses during the prior twelve-month period, in each case, to the extent such Expenses we re not already funded or reimbursed by a deposit of Priority Administrative Expenses as set out in subpara graph (1) above. All money in the Expense Fund shall be used and withdrawn by the Treasurer only for transfer to or for the account of the City to pay budgeted Expenses as herein provided, or to reimburse the City for th e payment of unbudgeted Expenses as herein provided, or, at the option of the City, to pay interest on or principal of or redemp tion premiums, if any, on the Bonds in the event that no other money is available therefor.

All money remaining in the Special Tax Fund on September 1 of each year, after transferring all of the sums required to be tran sferred therefrom on or prior to such date by the provisions of Sections 5.02(1), (2), (3) and (4), shall be withdrawn from the Special Tax Fund by the Treasurer for and deposited in the “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Ta x Bonds Community Facilities Fund,” which fund the City hereby agrees and covenants to main tain with the Treasurer so long as any Bonds are Outstanding hereunder, and all money in the Community Faci lities Fund shall be used and withdrawn by the City solely for the benefit of the Community Facilities District in accordance with the Act; provided, that the Treasurer shall not make any such withdrawal of money in the Special Tax Fund if and when (to the Treasurer’s actual knowledge) an Even t of Default is then existing hereunder.

ARTICLE VI

COVENANTS OF THE CITY
SECTION 6.01. Punctual Payment and Performance . The City will punctually pay the interest on a nd principal of and redemption pr emium, if any, to become due on every Bond issued hereunder in st rict conformity with the terms of the Act and hereof and of the Bonds, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein and in all Supplemental Indentures and in the Bonds required to be observed and performed by it.

SECTION 6.02. Against Indebtedness and Encumbrances . The City will not issue any evidences of indebtedness payabl e from the Net Special Tax Revenues except as provided herein, and will not crea te, nor permit the creation of, a ny pledge, lien, charge or other encumbrance upon any money in the Special Tax F und other than as provided herein; provided, that the City may at any time, or from time to time, issue evidences of indebtedness for any

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lawful purpose of the Community Facilities Di strict which are payabl e from any money in the Community Facilities Fund as ma y from time to time be depos ited therein (as provided in Section 5.02) so long as any paymen ts due thereunder shall be subordi nate in all respects to the use of the proceeds of the Net Special Tax Revenues as provided herein.

SECTION 6.03. Against Federal Income Taxation.
(a) The City will not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest on the Bonds pursuant to Section 103 of the Code, and specifically the City will not directly or indirectly use or make any use of the proceeds of the Bonds or any other funds of the City or take or omit to take any action that would cause the Bonds to be “arb itrage bonds” subject to federal income taxation by reason of S ection 148 of the Code or “pri vate activity bonds ” subject to federal income taxation by reason of Section 141(a) of the Code or obligations subject to federal income taxation because they ar e “federally guaranteed” as pr ovided in Section 149(b) of the Code; and to that end the City, with respect to the proceeds of the Bonds and such other funds, will comply with all requirements of such sections of the Code; pr ovided, that if the City shall obtain an opinion of nationally recognized bond counsel to the e ffect that any action required under this section is no longer required, or to th e effect that some further action is required, to maintain the exclusion from gross income of the interest on the Bonds pursuant to Section 103 of the Code, the City may rely conclusively on su ch opinion in complying with the provisions hereof. In the event that at any time the City is of the opinion that for purposes of this section it is necessary to restrict or limit the yield on th e investment of any money held by the Treasurer hereunder or otherwise the City sh all so instruct the Treasurer in writing, and the Treasurer shall take such action as may be necessary in accordance with such instructions. (b) Without limiting the generality of th e foregoing, the City will pay from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and all regulat ions of the United States Depa rtment of the Treasury issued thereunder to the extent that such regulations ar e, at the time, applicable and in effect, which obligation shall survive payment in full or defe asance of the Bonds, and to that end, there has been established and there is hereby continued in the treasury of the City a fund to be known as the “City of Sacramento Railyar ds Community Facilities Distri ct No. 2018-01 (Improvements) Special Tax Bonds Rebate Fund” to be held in trust and administered by the Treasurer. The City will comply with the provisions of each Tax Cert ificate with respect to making deposits in the Rebate Fund, and all money held in the Rebate Fund is pledge d to provide pa yments to the United States of America as provided herein an d in each Tax Certificate and no other person shall have claim to such money except as provided in each Tax Certificate. (c) In connection with the issuance of a Series of Bonds, the City may exclude the application of the covenants contained in this Section 6.03 to such Series of Bonds.

SECTION 6.04. Payment of Claims . The City will pay and discharge any and all lawful claims which, if unpaid, might become payable from the Net Special Tax Revenues or any part thereof or upon any funds in the hands of the Treasurer or the Trustee allocated to the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, or which might impair the security of the Bonds.

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SECTION 6.05. Accounting Records and Other Reports.
(a) The City will keep, or in the case of tr ansactions made by the Trustee it will cause the Trustee to keep, appr opriate accounting records in whic h complete and correct entries shall be made of all transactions relating to th e receipt, investment, disbursement, allocation and application of the proceeds of the Special Tax and of the proceeds of the Bonds, which accounting records shall at all t imes during normal business hours with reasonable prior notice be subject to the inspection of any Holder (or his representative authorized in writing). (b) The City will prepare annually not later than October 30 of each year (commencing in the year 2022) and file with the California Debt and Investment Advisory Commission by mail, postage prepaid, or any othe r method approved by the California Debt and Investment Advisory Commission all informati on required to be filed pursuant to Section 53359.5(b) of the Act. Additionally, the City w ill notify the California Debt and Investment Advisory Commission by mail, postage prepaid, or any other method approved by the California Debt and Investment Advisory Commission, within te n (10) days if the Trustee fails to pay any interest on or principal of any of the Bonds on any scheduled payment date or if funds are withdrawn from the Bond Reserve Fund to pay any interest on or principal of the Bonds.

SECTION 6.06. Protection of Security and Rights of Holders. The City will preserve and protect the security of the Bonds and the rights of the Holders and will warrant and defend their rights against all claims and demands of all persons.

SECTION 6.07. Levy and Collection of the Special Tax . The City, so long as any Bonds are Outstanding, will annually levy th e Special Tax against all Taxable Land in the Community Facilities District in accordance with the Special Ta x Formula and, subject to the limitations in the Special Tax Formula and the Act, make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Bond Redemption Fund, after making reasonable allo wances for contingencies and errors in the estimates, to yield proceeds equal to the am ounts required for complian ce with the agreements, conditions, covenants and te rms contained herein, and which in any event will be sufficient to pay the interest on and principal of and Sink ing Fund Account Paymen ts for and redemption premiums, if any, on the Bonds as they become due and payable and to replenish the Bond Reserve Fund (including reinstating the amo unt available under any Reserve Fund Credit Instrument, as contemplated by Section 5.02(3)) and to pay all current Expenses as they become due and payable in accordance with the provision s and terms hereof. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes for the County of Sacramento are collected and, exce pt as otherwise provided in Section 6.08 or by the Act, shall be subject to the same penalties and the same coll ection procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes.

SECTION 6.08. Foreclosure of Special Tax Liens . The City will annually on or before October 1 of each year review th e public records of the County of Sacramento relating to the collection of the Special Tax in order to dete rmine the amount of the Special Tax collected in the prior Fiscal Year, and (a) on the ba sis of such review the City will, not later than the succeeding December 1, institute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the payment of such Special Tax in such Fiscal Year by three

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percent (3%) or more of the total amount of the Sp ecial Tax levied in such Fiscal Year in order to enforce the lien of all such delinquent installments of such Special Tax, and will diligently prosecute and pursue such foreclos ure proceedings to judgment a nd sale, and (b) on the further basis of such review, if the City determines that the total amount so collect ed is less than ninety- five percent (95%) of the total amount of the Special Tax levied in such Fiscal Year, the City will, not later than the succeeding December 1, institute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the payment of such Special Tax in such Fiscal Year to enforce the lien of all the delinquent installments of such Special Tax, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provided, that any actions taken to enforce delinquent Special Tax liens shall be taken only consistent with Sections 53356.1 through 53356.7, both inclusive, of the Government Code of the State of California; and provided further, that the City shall not be obligated to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Y ear in which the City shall have received one hundred percent (100%) of the am ount of such installment from the County of Sacramento pursuant to the so-called “Teeter Plan.”
SECTION 6.09. Continuing Disclosure . The City will comply with and carry out all of the provisions of each continuing disclosure certificate or continuing disclosure agreement executed by the City in connection with the issuance of a Series of Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof, and notwithstanding any other provision he reof, failure of the City to comply with any continuing disclosure certificate or continuing disclosure agreemen t shall not be considered an Event of Default hereunder; provided, that a ny Holder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this section.

SECTION 6.10. Further Assurances. The City will adopt, deliver, execute, make and file any and all furthe r assurances, instruments and re solutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Holders of the rights and benefi ts provided herein, including without limita tion the filing of all financing stat ements, agreements, instruments or other documents in the forms and in the locatio ns necessary to perfect and protect, and to continue the perfection of, the pledge of the Net Special Tax Revenues provided herein to the fullest extent possible under applicable law of the State of California.

ARTICLE VII

THE TRUSTEE
SECTION 7.01. The Trustee . U.S. Bank Trust Company, National Association, at its Principal Corporate Trust Of fice, is hereby appointed Trustee for the purpose of receiving all money which the City is required to transfer to it hereunder and for applying and using such money as provided herein for the pur pose of paying the interest on and principal of and redemption premiums, if any, on the Bonds. The City agrees that it will at all times maintain a Trustee having a Principal Corporate Trust Office in San Francisco or Los Angeles, California.

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The City may remove the Trustee initia lly appointed and any successor thereto and may appoint a successor or successors thereto by an instrument in writing; provided, that any such successor shall be a bank or trust comp any doing business and having a corporate trust office in San Francisco or Los Angeles, California, having a combined capital (exclusive of borrowed capital) and surplus of at least one hundred million dollars ($100,000,000) and subject to supervision or examination by a federal or state banking author ity, and if such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the pur pose of this section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving written notice of such resignation to the City and by giving notice of such resignati on by mail pursuant to Section 11.09 to the Holders, and upon receiving such notice of resigna tion, the City shall promptly appoint a successor Trustee by an instrument in writing having the qualifications re quired hereby. Any resignation or removal of a Trustee and appointment of a su ccessor Trustee shall become effective only upon the acceptance of appointment by the successor Trustee. If within thirty (30) days after notice of the removal or resignation of the Trustee no successor Trustee sh all have been appointed by the City and shall have accepted such appointment, the removed or resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, which court may thereupon, after such notice, if any, as it may deem prop er and prescribe and as may be required by law, appoint a successor Trustee having the qualifications required hereby.

Notwithstanding anything to the contrary contained herein, any corporation or association into which the Trustee may be merged or with which it may be consolidated, or any corporation or association resul ting from any merger or consolid ation to which the Trustee shall be a party, or any corporation or association succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto.

The Trustee is hereby authorized to pay interest on the Bonds due on or before the maturity or prior redemption thereof to the Holders as their names appear at the close of business as of the fifteenth (15th) day of the month next preceding each intere st payment date on the registration books required to be kept by it pursu ant to Section 3.03 as the registered owners thereof, such interest to be paid by check mailed by first class mail to the Holders at their addresses appearing on such books (except that in the case of a Holder of one million dollars ($1,000,000) or more in principal amount of Outsta nding Bonds, payment shall be made at such Holder’s option by wire transfer of immediately available funds to an account in a bank or trust company or savings bank that is a member of th e Federal Reserve System and that is located in the United States of America acco rding to written instructions pr ovided by such Holder to the Trustee at least fifteen (15) days before such interest payment date) and to pay to the Holders the principal of and redemption pr emiums, if any, on the Bonds upon presentation and surrender of the Bonds to the Trustee at maturity or on redemption prior to maturity. The Trustee shall cancel and destroy all Bonds paid by it at maturity or on redemption prior to maturity and all Bonds surrendered to it by the City, and sh all (if requested by the City) deliver to the City a certificate of such destruction, and the Trustee shall keep accurate records of al l Bonds cancelled and destroyed by it hereunder. All money held by or on behalf of the Trustee for the payment of the interest on or principal of or redemption premiums, if any, on th e Bonds, whether at maturity or

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upon prior redemption, shall be held in trust for the account of the Holders thereof, and the Trustee shall not be required to pay Holders or the City any intere st on, or be liable to the City, the Holders or any other person for any interest earned on, any money so held.

The City shall from time to time, subject to any agreement be tween the City and the Trustee then in force, pay the Trustee compensation for its services, reimburse the Trustee for all its advances and expenditures, including but not limited to advances to and fees and expenses of independent accountants, counsel and engi neers or other experts employed by it in the exercise and performance of its rights and oblig ations hereunder, and indemnify and save the Trustee harmless against loss, expenses, costs, claims and liabilities (including without limitation those of its attorneys and agen ts) not arising from its own ne gligence or willful misconduct which it may incur in the exercise and performance of its rights and obligations hereunder, which obligation shall survive the resignation or removal of any Trustee or the defeasance of the Bonds.

SECTION 7.02. Liability of the Trustee . The recitals of facts, agreements and covenants contained herein an d in the Bonds shall be taken as statements, agreements and covenants of the City, and the Trustee does not assume any responsibility for the correctness of the same and does not make any representation as to the sufficiency or validity hereof or of the Bonds or of the Special Tax, or as to the financial or technical feasibility of the acquisition and construction of any of the Facilities, and shall not incur any responsibility in respect thereof other than in connection with the rights and obligat ions expressly assigned to or imposed upon it herein or in the Bonds, and shall not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee shall not be liable for any error of judgment made in good faith, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and no provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any liability for the performance of its duties hereunder, or in the exercise of any of its rights or powers hereunder.

The Trustee shall perform only those dutie s expressly set fort h herein, and no implied duties or obligations shall be read herein against the Trustee. The Trustee shall have no responsibility with re spect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.

SECTION 7.03. Notice to the Trustee The Trustee shall be protected in acting upon any Bond, certificate, c onsent, notice, opinion, report, request, resolution or other document or paper believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counse l, including, w ithout limitation, counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection with re spect to any action taken or suffered hereunder in good faith and in accordance therewith. The Tr ustee shall not be deemed to have knowledge of any default or Event of Default hereunder unless and until an officer at its Principal Corporate Trust Office responsible for the administration of its oblig ations hereunder shall have actual knowledge thereof or the Trustee shall have r eceived written notice ther eof at its Principal Corporate Trust Office.

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Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be established or proved prior to taking or suffering any action hereunder, such matter (unle ss other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively established or proved by a Certificate of the C ity or an Accountant’s Report, which shall be full warrant to the Trustee for any action taken or suff ered under the provisions hereof upon the faith th ereof, and on which the Trustee ma y conclusively rely, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

ARTICLE VIII

AMENDMENT OF OR SUPPLEMENT TO THE MASTER INDENTURE
SECTION 8.01. Procedure for Amendment of or Supplement to the Master Indenture.
(a) Amendment or Supplement With Consent of Holders. This Master Indenture and the rights and obligations of the City and of the Holders may be amended or supplemented at any time by the execution and deliv ery of a Supplemental Indenture by the City and the Trustee, which Supplemental Indenture shall become binding when the written consents of the Holders of a majority in aggregate princi pal amount of the Bonds then Ou tstanding, exclusive of Bonds disqualified as provided in Section 8.02, shall have been filed with the Trustee; provided, that no such amendment or supplement shall (1) extend the maturity of or reduce the interest rate on or otherwise alter or impair the obligation of the City to pay th e interest on or principal of or Sinking Fund Account Payment for or redemption premium, if any, on any Bond at the time and place and at the rate and in th e currency and from the funds provi ded herein without the express written consent of the Holder of such Bond, or (2) permit the issuance by the City of any obligations payable from the Net Special Tax Reve nues on a parity with the Bonds other than as provided herein, or jeopar dize the ability of the City to levy and collect the Special Tax, or (3) reduce the percentage of Bonds required for the written consen t to any such amendment or supplement, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto. The written consent of the Holders of a Series of Bonds may be effected (a) through a consent by the underwriter of such Series of Bonds at the time of the issuance of such Series of Bonds and (b) through a provision of a Suppl emental Indenture that deems any Holder purchasing such Series of Bonds to consent for pu rposes of this Section 8.01(a) by virtue of its purchase of such Series of Bonds.
(b) Amendment or Supplement Without Cons ent of Holders. This Master Indenture and the rights and obligations of the C ity and of the Holders may also be amended or supplemented at any time by the execution and de livery of a Supplemental Indenture by the City and the Trustee, which Supplemental Indenture shall become binding upon execution without the prior written consent of any Holders, but only for any one or more of the following purposes -- (i) To add to the agreements and cove nants required herein to be performed by the City other agreements and covenants thereafter to be performed by the City which

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shall not (in the opinion of the City) adversely affect the interests of the Holders, or to surrender any right or power rese rved herein to or conferre d herein upon the City which shall not (in the opini on of the City) materially advers ely affect the interests of the Holders;
(ii) To make such provisions for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision contained herein or in regard to questions arising hereunder which the City may deem desirable or necessary and not inconsistent herewith and which shall not (in the opinion of the City) materially adversely affect the interests of the Holders;
(iii) To authorize the issuance under the Act and hereunder of a Series and to provide the conditions and terms under which su ch Series may be issued, subject to and in accordance with the provisions of Article II;
(iv) To authorize the issuance under and subject to the Act of any refunding bonds for any of the Bonds and to provide the conditions and terms under which such refunding bonds may be issued, subject to and in accordance with the provisions of Article II;
(v) To make such additions, deletions or modifications as may be necessary or appropriate to insure compliance with Section 148(f) of the Code relating to the required rebate of excess investment earnings to the United States of America, or otherwise as may be necessary to insure the exclusion from gross income for purposes of federal income taxation of the interest on the Bonds or the exemption of such interest from State of California personal income taxes;
(vi) To make such additions, deletions or modifications as may be necessary or appropriate to maintain any then current rating on the Bonds; (vii) To permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions and provisions as may be permitted by that act or similar federal statute and which shall not (in the opinion of the City) materially adversely affect the interests of the Holders; and
(viii) For any other purpose that does not (in the opinion of the City) materially adversely affect the interests of the Holders.

SECTION 8.02. Disqualified Bonds. Bonds owned or held for the account of the City shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds pr ovided for in this article or in Article IX, a nd shall not be entitled to consent to or take any other action provided for in this article or in Article IX.

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SECTION 8.03. Endorsement or Replacement of Bonds After Amendment or Supplement. After the effective date of any action taken as here inabove provided, the City may determine that the Bonds may bear a notati on by endorsement in form approved by it as to such action, and in that cas e upon demand of the Holder of any Bond Outstanding on such effective date and presentation of his Bond for such purpose at the Principal Corporate Trust Office of the Trustee a suitable notation as to such action sha ll be made on such Bond. If the City shall so determine, new Bonds so modified as, in the opin ion of the City, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Holder of any Bond Outstanding on such effective date such new Bonds shall, upon surrender of such Outstanding Bonds, be excha nged at the Principal Corporate Trust Office of the Trustee, without cost to each Holder, for Bonds then Outstanding.

SECTION 8.04. Amendment or Supplement by Mutual Consent . The provisions of this article shall not prevent any Holder from accep ting any amendment or supplement as to any particular Bonds held by him; provided, that due notation thereof is made on such Bonds.

ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES OF HOLDERS
SECTION 9.01. Events of Default and Remedies of Holders. If one or more of the following events (herein “Events of Default”) shall happen, that is to say -- (a) if default shall be made by the City in the due and punctual payment of any interest on or principal of or Sinking Fund Acco unt Payment for any of the Bonds when and as the same shall become due and payable, whether at maturity, by proceedings for redemption or otherwise;
(b) if default shall be made by the City in the observance or performance of any of the other agreements or covena nts contained herein required to be observed or performed by it, and such default shall have c ontinued for a period of thirty (30) days after the City shall have been given notice in writing of such default by the Trustee; or (c) if the City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent ju risdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any ot her applicable law of the United States of America or any state therein, or if under the provisions of any other law for th e relief or ai d of debtors any court of competent jurisdiction shall assume custody or c ontrol of the City or of the whole or any substantial part of its property;
then in each and every such case during the con tinuance of such Event of Default the Trustee may take the following remedial steps --

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(a) by mandamus or other suit or proceeding at law or in equity to compel the City Council or the City or a ny of the officers or employees of the City to perform each and every term, provision and co venant contained in this Ma ster Indenture and in the Bonds and carry out their duties under the Act and the agreements and covenants with the Holders contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Holders; or
(c) by suit in equity upon the nonpayment of the Bonds to require the City Council or the City or its offi cers and employees to account as the trustee of an express trust.

SECTION 9.02. Application of Net Special Tax Revenues After Default. If an Event of Default shall occur and be con tinuing, all Net Special Ta x Revenues thereafter received by the City shall be immediately transf erred to the Trustee and the Trustee shall apply all Net Special Tax Revenues and any other funds thereafter received by the Trustee under any of the provisions of this Master Indenture as follows and in the following order:
(a) To the payment of any expenses necessa ry in the opinion of the Trustee to protect the interests of the Ho lders of the Bonds, including th e costs and expenses of the Trustee and the Holders in declaring such Ev ent of Default, and payment of reasonable fees and expenses of the Trustee (includi ng reasonable fees and disbursements of its counsel and other agents) incu rred in and about the performance of its powers and duties under this Master Indenture.
(b) To the payment of the prin cipal of and interest and premium, if any, then due on the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender th ereof if fully paid) subject to the provisions of this Master Indenture, as follows:

First: to the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to th e persons entitled thereto, without any discrimination or preference; and
Second: to the payment to the persons entitled thereto of the unpaid principal (including Sinking Fund Acc ount Payments) of and redemption premium, if any, on the Bonds which shall have become due, whether at maturity or by call for redemption, in the order of their due dates, with interest on the overdue principal at the rate borne by the respective Bonds, and, if the amount available shall not be sufficient to pay in full all the Bonds due on any date, together with such interest, then to th e payment thereof ratably, according to the amounts of principal of and premium, if any, due on su ch date to the persons entitled thereto, without any discrimination or preference.

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SECTION 9.03. Trustee to Represent Holders . The Trustee is hereby irrevocably appointed (and the successive re spective Holders of the Bonds, by taking and holding the same, shall be conclusi vely deemed to have so appoint ed the Trustee) as trustee and true and lawful attorney-in-fact of the Holders of the Bonds fo r the purpose of exercising and prosecuting on their behalf such rights and remedi es as may be available to such Holders under the provisions of the Bonds, this Master Indenture, the Act an d applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Holders, the Trustee in its discretion may, and upon the written request of the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Holders by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the speci fic performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee or in such Holders under this Master Indenture, the Ac t or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Net Special Tax Revenues and other amounts and assets pledged under this Master Indenture, pending such proceedings. All rights of action under this Master Indenture or the Bonds or otherwise may be prosecuted a nd enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceedi ng relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all the Holders of such Bonds , subject to the provisions of this Master Indenture.

SECTION 9.04. Holders’ Direction of Proceedings . Anything in this Master Indenture to the contra ry notwithstanding, the Holders of a majority in aggregate principal amount of the Bonds then Outstandi ng shall have the right, by an instrument or concurrent instruments in writi ng executed and delivered to th e Trustee, and upon indemnifying the Trustee to its satisfacti on therefor, to direct the me thod of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Master Indenture, and that the Trustee shall have the right to decline to follow any such direction wh ich in the opinion of the Trustee would be unjustly prejudicial to Holders not parties to such direction.

SECTION 9.05. Limitation on Holders’ Right to Sue . No Holder of any Bond shall have the right to institute any suit, ac tion or proceeding at law or in equity, for the protection or enforcement of a ny right or remedy under this Mast er Indenture, the Act or any other applicable law with respect to such Bond, unless (1) such Holder shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Holders of not less than a majority in aggregate pr incipal amount of the Bonds then Ou tstanding shall have made written request upon the Trustee to exerci se the powers hereinbe fore granted or to institute such suit, action or proceeding in its own name; (3) such Hold er or said Holders shall have tendered to the Trustee indemnity satisfactory to it against the cost s, expenses and liabilities to be incurred in

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compliance with such request; a nd (4) the Trustee shall have refu sed or omitted to comply with such request for a period of sixt y (60) days after such written re quest shall have been received by, and said tender of indemnity shall have been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Holder of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Holders of Bonds shall have any right in any manner whatever by such Holder’s or Holders’ action to affect, disturb or prejudice the s ecurity of this Master Indenture or the rights of any other Holders of Bonds, or to enforce any right unde r this Master Indenture, the Ac t or other applicable law with respect to the Bonds, except in the manner herein provided, and that all pr oceedings at law or in equity to enforce any such right shall be inst ituted, had and maintained in the manner herein provided and for the benefit and protection of a ll Holders of the Outstanding Bonds, subject to the provisions of this Master Indenture.

SECTION 9.06. Absolute Obligation of the City . Nothing in Section 9.05 or in any other provisio n of this Master Indenture, or in the Bonds, contained shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and redemption premium, if any, and in terest on the Bonds to the resp ective Holders of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Net Special Tax Revenues and other assets he rein pledged therefor, and not otherwise, or affect or impair the righ t of such Holders, whic h is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.

SECTION 9.07. Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Holders on acc ount of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Holders, then in every such case the Ci ty, the Trustee and the Holders, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the City, the Trustee and the Holders shall continue as though no such proceedings had been taken.

SECTION 9.08. Remedies Not Exclusive . No remedy herein conferred upon or reserved to the Trustee or to the Holders of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunde r or now or he reafter existing at law or in equity or otherwise.

SECTION 9.09. No Waiver of Default. No delay or omission of the Trustee or of any Holder of the Bonds to exercise any right or power ar ising upon the occurrence of any default shall impair any such right or power or sh all be construed to be a waiver of any such default or an acquiescence ther ein; and every power and remedy given by this Master Indenture to the Trustee or to the Holders of the Bonds ma y be exercised from time to time and as often as may be deemed expedient.

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ARTICLE X

DEFEASANCE
SECTION 10.01. Discharge of the Bonds.
(a) If the City shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Outstanding Bonds the interest thereon and th e principal thereof and the redemption premiums, if any, ther eon at the times and in the ma nner stipulated therein and herein, then all agreements, cove nants and other obligations of th e City to the Holders of such Bonds hereunder shall thereupon cease, terminat e and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and sa tisfaction, and the Trustee shall pay over or deliver to the City for deposit in the Community Facilities Fund all money or securities held by it pursuant hereto which are not required for the payment of the interest on and principal of and redemption premiums, if any, on such Bonds. (b) Any Outstanding Bonds shall on the maturity date or redemption date thereof be deemed to have been paid within the meanin g of and with the effect expressed in subsection (a) of this section if there shall be on deposit with the Trustee money which is sufficient to pay the interest due on such Bonds on such date and the principal and redemp tion premiums, if any, due on such Bonds on such date.
(c) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning and with th e effect expressed in subsection (a) of this section if (1) in case any of such Bonds are to be redeemed on any date prior to their maturity date, notice of redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, (2) there shall have been deposited with an escrow agent or the Trustee e ither (x) money in an amount which shall be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity dates or redemption date s thereof, as the case may be, and the principal of and redemption premiums, if any, on such Bonds on a nd prior to th e maturity dates or the redemption dates thereof, as the case may be or (y) Federal Secu rities which are not subject to redemption except by the holder th ereof prior to maturity (inc luding any Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States of America), the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with su ch escrow agent or the Trustee at the same time, shall be sufficient to pay when due the inte rest to become due on such Bonds on and prior to the maturity dates or redemption dates thereof, as the case may be, and the principal of and redemption premiums, if any, on such Bonds on and prior to the maturity dates or the redemption dates thereof, as the case may be, as evidenced by an Accountant’s Report on file with the City and the Trustee in the case of a deposit pursuant to clause (y) of this subsection, and (3) in the event such Bonds are not by thei r terms subject to redemption w ithin the next succeeding sixty (60) days, the City shall have instructed the Trustee to mail pursuant to Section 11.09 a notice to the Holders of such Bonds that the deposit required by clause (2) above has been made with such escrow agent or the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating the maturity date s or redemption dates, as the case may be, upon

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which money will be available for the payment of the principal of and redemption premiums, if any, on such Bonds.

SECTION 10.02. Unclaimed Money . Anything contained herein to the contrary notwithstanding, any m oney held by the Trustee in trus t for the payment and discharge of any of the Bonds or any interest thereon wh ich remains unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and pa yable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee on such date, or for two (2) years after the date of deposit of such money if deposited with the Trustee after the date when such Bonds or inte rest thereon became due and payable, shall be repaid by the Trustee to the City as its abso lute property free from trust for deposit in the Community Facilities Fund and fo r use in accordance with th e Act, and the Trustee shall thereupon be released and discharg ed with respect thereto and the Holders sh all look only to the City for the payment of such Bonds and interest thereon; provided, that before the Trustee shall be required to make any such repayment the City shall mail pursuant to Section 11.09 a notice to the Holders of all Outstanding Bonds that such money remains unclaimed and that after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the City for deposit in the Community Facilities Fund.

ARTICLE XI

MISCELLANEOUS
SECTION 11.01. Liability of City Limited to Net Special Tax Revenues and Certain Other Funds. Notwithstanding anything contained he rein, the City shall not be required to advance any money derived from any source of income other than the Net Special Tax Revenues and the other funds provided herein for th e payment of the interest on or principal of or redemption premiums, if any, on the Bonds.

The Bonds are special tax oblig ations of the City and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely fro m the Net Special Tax Revenues and such other funds, and the City is not obligated to pay them except from the Net Special Tax Revenues and such other funds. The Ge neral Fund of the City is not liable and the full faith and credit of the City is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, and no tax or assessment other than the Special Tax shall ever be levied or collected to pay the inte rest on or principal of or redemption premiums, if any, on the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the City or a ny of its income or receipts except the Net Special Tax Revenues and such ot her funds, and neither the paym ent of the interest on or principal of or redemption prem iums, if any, on the Bonds is a general debt, liability or obligation of the City. The Bonds do not constitu te an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or re striction, and neither the City Council nor the City nor any officer or employee thereof shall be liable for the payment of the interest on or principal of or redemption premiu ms, if any, on the Bonds otherwise than from the Net Special Tax Revenues and such other funds as provided herein.

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SECTION 11.02. Benefits of the Master Indenture Limited to Certain Parties.

Nothing contained herein, express or implied, is intended to give to any entity or person other than the City Council, the City, the Treasurer, th e Trustee and the Holder s any right, remedy or claim under or by reason hereof, and any agreement or covenant required herein to be performed by or on behalf of the City Council or the City or any officer or employee thereof shall be for the sole and exclusive benefit of the Trustee and the Holders.

SECTION 11.03. Successor is Deemed Included in All References to Predecessor. Whenever either the City Council or the City or any officer or employee thereof is named or referred to herein, such reference sh all be deemed to include the successor to the powers, duties and functions with respect to th e administration, control and management of the Community Facilities District and the Facilities that are presently vested in the City Council or the City or such officer or employee, and all agreements and covenants required herein to be performed by or on behalf of the City Council or the City or any officer or employee thereof shall bind and inure to the benef it of the respective successors thereof whether so expressed or not.

SECTION 11.04. Execution of Documents by Holders . Any declaration, request, consent or other instrument which is pe rmitted or required herein to be executed by Holders may be in one or more instruments of similar tenor, and may be executed by Holders in person or by their attorneys duly authorized in writing. The fact and date of the execution by any Holder or his attorney of any de claration, request, consent or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person si gning such declaration, request, c onsent or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness to such execution duly sworn to before such notary public or other officer. The ownership of Bonds and the amount, maturity, number and da te of holding the same shall be provided by the registration books required to be kept by the Trustee pursuant to Section 3.03.

Any declaration, request, consent or other instrument or writi ng of the Holder of any Bond shall bind all future Holders of such B ond with respect to anything done or suffered to be done by the City in good faith and in accordance therewith.

SECTION 11.05. Deposit and Investment of Money in Accounts and Funds .

All money held by the Treasurer in any fund established here in shall be deposited by the Treasurer in time or dema nd deposits in any state or nationally chartered bank or trust company, including the Trustee or its affili ates, or in any state or federal savings and loan association, and shall be secured at all times by such obligations as are required by law to the fullest extent required by law; provided, that all money in the Acquisition and Construction Fund, the Special Tax Fund and the Expense Fund may be invested by the Treasurer in Lega l Investments. All money held by the Trustee in the Bond Redemp tion Fund shall be invested by the Trustee pursuant to a Written Request of the City receive d by the Trustee at least two (2) days before making any such investment in those Legal Investments specified in such Written Request of the City that mature not later than the date on which it is estimated that such money will be required to be paid out hereunder, and all money held by the Trustee in the Bond Reserve Fund shall be invested by the Trustee pursuant to a Written Request of the City received by the Trustee at least

39 4128-4850-0016.6

two (2) days before making any such investment in those Federal Securities specified in such Written Request of the City that mature not more than five (5) years from the date of purchase by the Trustee, or the fina l maturity date of any Outstanding Bonds, whichever is earlier, and the Trustee may conclusively rely that any investment specified in su ch Written Request of the City is a Legal Investment or a Federal Security he reunder, as the case may be; provided, that in the absence of receipt of any such Written Request of the City, the Trustee shall, to the extent practicable, invest such money in units of a taxable government m oney-market portfolio composed of or secured by Federal Securities. Th e Trustee (or any of its affiliates) may act as principal or agent or as sponsor, advisor or manager in connection with the making of any investment by the Trustee hereunder and may im pose its customary charges therefor, and the Trustee shall not be responsible for any loss suffered in connecti on with any investment made in accordance herewith.

The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they o ccur, the City specifically waives receipt of such confirmations to the extent permitted by law; pr ovided, that the Trustee will furnish the City periodic cash transaction statements which shall include details for all i nvestment transactions made by the Trustee hereunder.

All interest received on any such money so deposited or invested which exceeds the requirements of the fund from which such money was deposited or invested shall (subject to the requirements of Section 6.03) be deposited in the Bond Redemption F und, and all losses on any such money so deposited or invested shall be borne by the fund from which the deposit or investment was made.

SECTION 11.06. Waiver of Personal Liability . No member of the City Council or officer or em ployee of the City shall be indivi dually or personall y liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, but nothing herein contained shall relieve any member of the City Council or officer or employee of the City from the performance of any official du ty provided hereby or by the Act or by any other applicable provisions of law.

SECTION 11.07. Acquisition of Bonds by City . All Bonds acquired by the City, whether by purchase or gift or otherwis e, shall be surrendered to the Trustee for cancellation and destruction by it.

SECTION 11.08. Content of Certificates and Reports . Every certificate or report with respect to complian ce with an agreement, condition, covenant or term provided herein shall include (a) a statemen t that the person or persons maki ng or giving such certificate or report have read such agreem ent, condition, covenant or te rm and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the opinion contained in such certificate or repo rt is based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covena nt or term has been complied with; and (d) a

40 4128-4850-0016.6

statement as to whether, in th e opinion of the signe rs, such agreement, condition, covenant or term has been complied with.

Any such certificate made or given by an officer of the City may be based, insofar as it relates to legal matters, upon a representation made in an Opinion of Counsel unless such officer knows that the representa tion with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the ex ercise of reasonable care should have known that the same was erroneous. Any such Opinion of Counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the City, upon a representation by an officer or officers of the City unless the counsel giving such Opinion of Counsel knows that the representation with resp ect to the matters upon wh ich his representation may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.

SECTION 11.09. Notice by Mail. Any notice required to be given by mail to any Holders or to any securities information services or to th e original underw riter or first purchaser of the Bonds shall be given by maili ng a copy of such notice, first class postage prepaid, to such Holders at their addresses app earing in the books required to be kept by the Trustee pursuant to the provisions of Section 3.03 or to such securities information services or to such underwriter or first purchaser not less than thir ty (30) days nor more than ninety (90) days following the action or prior to the event concerning which notice thereof is required to be given; provided, that neither failure to receive any su ch notice nor any immate rial defect contained therein shall affect the sufficien cy or validity of the proceedi ngs taken in connection with the action or the event concerning which such notice was given.

SECTION 11.10. Maintenance of Accounts and Funds . Any account or fund required herein to be establis hed and maintained by the Treas urer or the Trustee may be maintained by the Treasurer or the Trustee, as the case may be in its accounting records in its customary manner either as an account or a fu nd, and may, for the purposes of such accounting records, any audits thereof and any financial reports or statements with respect thereto, be treated either as an account or as a fund; but all su ch accounting records with respect to all such accounts and funds shall at all times be maintained by the Treasurer and the Trustee in accordance with industry standards and with due rega rd for the protection of the security of the Bonds and the rights of the Holders.

SECTION 11.11. Article and Section Headings, Gender and References. The headings or titles of the several articles and sections hereof a nd the table of contents appended hereto shall be solely for convenience of referenc e and shall not affect the construction, effect or meaning hereof, and words of any gender shall be deemed and construed to include all genders.

All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding articles, sections or subdivisio ns hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith” and “hereunder” and other words of similar import refer to this Master Indenture as a whole and not to any particular article, section or subdivision hereof.

SECTION 11.12. Partial Invalidity . If any one or more of the agreements, conditions, covenants or te rms or portions thereof required hereby to be obser ved or performed by the City or the Trust ee should be contrary to law, then such agreement or agreements, such

41 4128-4850-0016.6

condition or conditions, such covenant or covena nts or such term or terms or such portions thereof shall be null and void and shall be deem ed separable from the remaining agreements, conditions, covenants or te rms or portions thereof and shall in no way affect the validity hereof or of the Bonds; and the Holders shall retain al l the rights and benefits accorded to them under the Act or any other appli cable provisions of law. The City hereby declares th at it would have executed this Master Indenture and each and every other article , section, paragraph, subdivision, sentence, clause and phrase hereof and woul d have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more of th e articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the applic ation thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

SECTION 11.13. Execution in Counterparts; Electronic Signatures . This Master Indenture may be executed in several counterpart s, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. Each of the parties hereto agrees that the transact ion consisting of this agreemen t may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this agreement using an electronic signature, it is signing, adopting, and accepting this agreement and that signing this agreement using an electroni c signature is the legal equivalent of having placed its handwritten signature on this agreemen t on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this agreement in a usable format.

SECTION 11.14. Governing Law. This Master Indent ure shall be governed by and construed and interpreted in accordance with the laws of the State of California.

SECTION 11.15. Notices. All written notices to be given hereunder shall be given by first class mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City:

City of Sacramento
Historic City Hall
915 I Street, 3rd Floor
Sacramento, California 95814
Attention: Debt-Management Division
If to the Trustee:

U.S. Bank Trust Company, National Association
1 California Street, Suite 1000
San Francisco, CA 94111
Attention: Global Corporate Trust
SECTION 11.16. Effective Date of the Master Indenture . This Master Indenture shall take effect from and after its execution and delivery.

42 4128-4850-0016.6

IN WITNESS WHEREOF, the City of Sacramento has caused this Master Indenture to be signed in it s name by the City Treasurer, and U.S. Bank Trust Company, National Association, as Trustee, in token of its acceptance of the trusts created hereunder, has caused this Master Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the date and year first above written.

CITY OF SACRAMENTO

By_______________________________________
John P. Colville Jr., City Treasurer

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

By_______________________________________
Authorized Officer

TABLE OF CONTENTS

Page

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4128-4850-0016.6

ARTICLE I
DEFINITIONS; EQUAL SECURITY

SECTION 1.01. Definitions...................................................................................... 2 SECTION 1.02. Equal Security .............................................................................. 10

ARTICLE II

ISSUANCE OF BONDS

SECTION 2.01. Authorization and Purpose of Bonds ........................................... 11 SECTION 2.02. Conditions for the Issuance of Bonds .......................................... 12 SECTION 2.03. Procedure for the Issuance of Bonds ........................................... 13 SECTION 2.04. Acquisition a nd Construction Fund ............................................. 14 SECTION 2.05. Costs of Issuance Fund ................................................................ 14

ARTICLE III

TERMS AND PROVISIONS OF BONDS

SECTION 3.01. Terms of Bonds ............................................................................ 15 SECTION 3.02. Execution of Bonds ...................................................................... 16 SECTION 3.03. Transfer and Exchange of Bonds ................................................. 17 SECTION 3.04. Mutilated, Destroye d, Stolen or Lost Bonds ................................ 17 SECTION 3.05. Temporary Bonds ......................................................................... 18 SECTION 3.06. Use of Depository for Bonds ....................................................... 18

ARTICLE IV

REDEMPTION OF BONDS

SECTION 4.01. Privilege of Redemption of Bonds ............................................... 20 SECTION 4.02. Selection of Bonds for Redemption ............................................. 20 SECTION 4.03. Notice of Redemption .................................................................. 20 SECTION 4.04. Partial Redemption of Bonds ....................................................... 21 SECTION 4.05. Effect of Redemption of Bonds ................................................... 21

TABLE OF CONTENTS
(continued)
Page

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ARTICLE V

PAYMENT OF BONDS

SECTION 5.01. Deposit of Proceeds of the Special Tax in the Special Tax Fund ............................................................................................. 21 SECTION 5.02. Allocation of Mone y in the Special Tax Fund ............................. 22

ARTICLE VI

COVENANTS OF THE CITY

SECTION 6.01. Punctual Payment and Performance ............................................ 24 SECTION 6.02. Against Indebtedness and Encumbrances .................................... 24 SECTION 6.03. Against Fede ral Income Taxation ................................................ 25 SECTION 6.04. Payment of Claims ....................................................................... 25 SECTION 6.05. Accounting Reco rds and Other Reports ...................................... 26 SECTION 6.06. Protection of Securi ty and Rights of Holders .............................. 26 SECTION 6.07. Levy and Collecti on of the Special Tax ....................................... 26 SECTION 6.08. Foreclosure of Special Tax Liens ................................................ 26 SECTION 6.09. Continuing Disclosure ................................................................. 27 SECTION 6.10. Further Assurances....................................................................... 27

ARTICLE VII

THE TRUSTEE

SECTION 7.01. The Trustee .................................................................................. 27 SECTION 7.02. Liability of the Trustee ................................................................. 29 SECTION 7.03. Notice to the Trustee .................................................................... 29

ARTICLE VIII

AMENDMENT OF OR SUPPLEMENT TO THE MASTER INDENTURE

SECTION 8.01. Procedure for Amendment of or Supplement to the Master Indenture ...................................................................................... 30 SECTION 8.02. Disqualified Bonds....................................................................... 31 SECTION 8.03. Endorsement or Replac ement of Bonds After Amendment or Supplement .............................................................................. 32 SECTION 8.04. Amendment or Supplement by Mutual Consent .......................... 32

TABLE OF CONTENTS
(continued)
Page

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ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES OF HOLDERS

SECTION 9.01. Events of Default and Remedies of Holders ................................ 32 SECTION 9.02. Application of Net Speci al Tax Revenues After Default ............. 33 SECTION 9.03. Trustee to Represent Holders ....................................................... 34 SECTION 9.04. Holders’ Direction of Proceedings ............................................... 34 SECTION 9.05. Limitation on Ho lders’ Right to Sue ............................................ 34 SECTION 9.06. Absolute Obligation of the City ................................................... 35 SECTION 9.07. Termination of Proceedings ......................................................... 35 SECTION 9.08. Remedies Not Exclusive .............................................................. 35 SECTION 9.09. No Waiver of Default ................................................................... 35

ARTICLE X

DEFEASANCE

SECTION 10.01. Discharge of the Bonds ................................................................ 36 SECTION 10.02. Unclaimed Money ........................................................................ 37

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Liability of City Lim ited to Net Special Tax Revenues and Certain Other Funds ..................................................................... 37 SECTION 11.02. Benefits of the Master In denture Limited to Certain Parties ....... 38 SECTION 11.03. Successor is Deemed Included in All References to Predecessor .................................................................................. 38 SECTION 11.04. Execution of Documents by Holders ........................................... 38 SECTION 11.05. Deposit and I nvestment of Money in Accounts and Funds ......... 38 SECTION 11.06. Waiver of Personal Liability ........................................................ 39 SECTION 11.07. Acquisition of Bonds by City ...................................................... 39 SECTION 11.08. Content of Cert ificates and Reports ............................................. 39 SECTION 11.09. Notice by Mail ............................................................................. 40 SECTION 11.10. Maintenance of Accounts and Funds ........................................... 40 SECTION 11.11. Article and Section He adings, Gender and References ............... 40

TABLE OF CONTENTS
(continued)
Page

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SECTION 11.12. Partial Invalidity........................................................................... 40 SECTION 11.13. Execution in Counterparts ............................................................ 41 SECTION 11.14. Governing Law ............................................................................ 41 SECTION 11.15. Notices ......................................................................................... 41 SECTION 11.16. Effective Date of the Master Indenture ........................................ 41

4128-4850-0016.6

OH&S
DRAFT
07/25/22

4152-8113-0800.5

FIRST SUPPLEMENTAL INDENTURE

between the

CITY OF SACRAMENTO

and

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

Relating to the

$[PRINCIPAL AMOUNT]

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

Dated as of September 1, 2022

TABLE OF CONTENTS

Page

- i-
4152-8113-0800.5

ARTICLE I

DEFINITIONS

SECTION 1.01. Definitions...................................................................................... 2

ARTICLE II
ISSUANCE OF SERIES 2022 BONDS

SECTION 2.01. Authorization of Series 2022 Bonds .............................................. 2 SECTION 2.02. Terms of Series 2022 Bonds .......................................................... 2 SECTION 2.03. Redemption Prices of Series 2022 Bonds ...................................... 4 SECTION 2.04. Form of Series 2022 Bonds............................................................ 5 SECTION 2.05. Application of Net Proceeds of Sale of Series 2022 Bonds ........... 5

ARTICLE III

MISCELLANEOUS

SECTION 3.01. Authority for Firs t Supplemental Indenture ................................... 6 SECTION 3.02. Terms of Series 2022 Bonds Subject to the Master Indenture ........................................................................................ 6 SECTION 3.03. Execution in Counterpa rts; Electronic Signatures ......................... 6 SECTION 3.04. Effective Date of First Supplemental Indenture ............................ 6 EXHIBIT A FORM OF SERIES 2022 BONDS .......................................................... A-1

1 4152-8113-0800.5

FIRST SUPPLEMENTAL INDENTURE

This First Supplementa l Indenture (the “ First Supplemental Indenture ”), dated as of September 1, 2022, is between the CITY OF SACRAMENTO, a California municipal corporation (the “City”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing unde r and by virtue of the laws of the United States of America and authorized to accept and execu te trusts of the character herein set forth, as trustee (the “Trustee”).

BACKGROUND
A. The City and the Trustee duly executed a Master Indenture (the “ Master Indenture ”) dated as of September 1, 2022, which authorized the issuan ce of City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds (the “Bonds”) and provided for the issuance of the Bonds in series.

B. The City has determined to prescribe th e terms, conditions, and form of $[PRINCIPAL AMOUNT] aggregate principal amount of City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvement s) Special Tax Bonds, Series 2022 (the “Series 2022 Bonds”) under the Master Indenture.

C. The City has determined that all things necessary to cause the Series 2022 Bonds, when duly executed by the City and authenticated by the Trustee and delivered as provided herein, to be legal and valid sp ecial tax obligations of the C ity enforceable in accordance with their terms, and to constitute this First Supplemental Indenture a valid agreement for the uses and purposes herein set forth in ac cordance with its terms, have been done and taken, and the execution and delivery hereof and the execution and delivery of the Series 2022 Bonds, subject to the terms hereof, have in all respects been duly authorized.

NOW, THEREFORE, in order to secure the payment of the interest on and the principal of and the redemption premiums, if any, on all Series 2022 Bonds at any time issued and outstanding hereunder according to th eir tenor, and to secure the obser vance and performance of all the agreements, conditions, covenants, and terms therein and herein set forth, and to declare the conditions and terms upon and subject to which the Series 2022 Bonds will be issued and received, and in consideration of the premises and of the mutual agreements and covenants contained herein and of the purchase and acceptance of the Series 2022 Bonds by the registered owners thereof from time to time, and for other valuable considerat ions, the receipt whereof is hereby acknowledged, the City does hereby agree and covenant with the Trustee, for the benefit of the respective registered owners from time to time of the Series 2022 Bonds, as follows:

2 4152-8113-0800.5

ARTICLE I

DEFINITIONS
SECTION 1.01. Definitions.
(a) Except as otherwise provided herein, all term s defined in Section 1.01 of the Master Indenture have the same definitions in this First Supplemental Indenture that are given to them in Section 1.01 of the Master Indenture.
(b) Unless the context otherwise re quires, the terms defined in this Section 1.01(b) have the meanings set forth, and those meanings apply for all purposes of this First Supplemental Indenture, of the Master I ndenture, of the Series 2022 Bonds, and of any certificate, opinion, report, request, or ot her document mentioned herein or therein; and those meanings apply equally to both the singular and plural forms of the terms:
“First Supplemental Indenture ” means this First Supplementa l Indenture, dated as of September 1, 2022, between the City and the Trustee entered into under the Act and the Master Indenture.
“Series 2022 Bonds” means the Bonds referred to by that name authorized to be issued by the Master Indenture and Article II of this First Supplemental Indenture. “Term Series 2022 Bonds” means the Series 2022 Bonds that are Term Bonds.

ARTICLE II

ISSUANCE OF SERIES 2022 BONDS
SECTION 2.01. Authorization of Series 2022 Bonds . The City Council has reviewed all proceedings heretofore taken relative to the authorization of the Series 2022 Bonds and has found, as a result of such review, and hereby finds and determines, that all acts, conditions, and things required by law to exist, happen, and be performed precedent to and in the issuance of the Series 2022 Bonds do exist, have happened, and have been performed in due time, form, and manner as required by the Act. Accordingly, the City is now authorized, under every requirement of the Act, the Master Indenture, and this First Supplemental Indenture, to issue the Series 2022 Bonds in the form and manner provided herei n, which Series 2022 Bonds will be entitled to the benefit, protection, and security of the Act, the Master I ndenture, and this First Supplemental Indenture.

The purpose for which the Series 2022 Bonds are to be issued is to provide funds to finance the acquisition and construction of certain Facilities, make a deposit to the Bond Reserve Fund, fund interest on the Series 2022 Bonds to September 1, 2024, and pay the Costs of Issuance of the Series 2022 Bonds.

SECTION 2.02. Terms of Series 2022 Bonds.
(a) The Series 2022 Bonds will be issued in the aggregate principal amount of $[PRINCIPAL AMOUNT]; will be designated the “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022;” will be dated the

3 4152-8113-0800.5

date of the original delivery thereof; will be issued in fully registered form without coupons in denominations of $5,000 or any integral mu ltiple thereof; and will mature on the dates and in the principal amounts and bear interest (computed on a 360-day year of twelve 30- day calendar months) at the rates per annum, payable semiannually on March 1 and September 1 in each year, commencing on March 1, 2023, as follows:

Maturity Date
(September 1)

Principal Amount

Interest Rate
$ %

Sinking Fund Account Payments are hereby es tablished for the mandatory redemption and payment of the Series 2022 Bonds maturing on September 1, 20[__], which payments shall become due during the years ending on the dates and in the amounts set fo rth in the following schedule (except that if any of the Series 2022 Bonds maturing on Se ptember 1, 20[__] shall have been optionally or extraordinarily re deemed under Section 2.03 of this First Supplemental Indenture, the amounts of the Sinking Fund Account Paym ents for the Series 2022 Bonds maturing on September 1, 20[__] shall be reduc ed proportionately by the princi pal amount of all such Series 2022 Bonds so optionally or extraordinarily redeemed), namely:

Year Ending
September 1
Sinking Fund
Account Payment
$

*
___________
* Maturity

4 4152-8113-0800.5

2.03 of this First Supplemental Indenture, the amounts of the Sinking Fund Account Payments for the Series 2022 Bonds maturing on September 1, 20[__] shall be reduced proportionately by the principal amount of all such Series 2022 Bonds so optionally or extraordinarily redeemed), namely:

Year Ending
September 1
Sinking Fund
Account Payment
$

*
___________
* Maturity
All such Sinking Fund Account Payments shall be deposited in the Sinking Fund Account. All money in the Sinking Fund Account representing such Sinking Fund Account Payments shall be used and withdrawn by th e Trustee (upon receipt of a Written Request of the City) at any time for the purchase of the Term Series 2022 Bonds at public or private sale as and when and at such prices (including brokerage a nd other charges) as the City may in its discretion determine, but not to exceed the principal amount of such Term Series 2022 Bonds. All money in the Sinking Fund Account representing such Sinking Fund Account Payments on September 1 of each year during the period beginning on September 1, 20[__], and ending on September 1, 20[__], both dates inclusive, shall be used and withdrawn by the Trustee on each such Sept ember 1 for the mandatory redemption or payment of the Term Series 2022 Bonds; and th e City hereby agrees and covenants with the Holders of the Term Series 2022 Bonds to call and redeem in accordance with Article IV of the Master Indenture, or pay, the Term Series 2022 Bonds from the Sinking Fund Account Payments deposited in the Sinking Fund Account under this paragraph whenever on September 1 of any year, beginning on Se ptember 1, 20[__], there is money in the Sinking Fund Account available for such purpose.

SECTION 2.03. Redemption Prices of Series 2022 Bonds.
(a) The Series 2022 Bonds maturing on or after September 1, 20[ __], are subject to optional redemption by the City before their respective stat ed maturity dates, as a whole or in part on any date on or after September 1, 20[__], from any source of available funds other than prepayments of the Special Ta x, upon mailed notice as provided in the Master Indenture, at a redemption price equal to the principal am ount thereof to be redeemed, together with accrued interest to the date of redemption, without premium.

5 4152-8113-0800.5

(b) The Series 2022 Bonds are subject to extraord inary redemption by the City before their respective stated maturity dates, as a whole or in part on any interest-payment date, solely from prepayments of the Special Tax, upon ma iled notice as provided in the Master Indenture, at the following rede mption prices (expressed as a percentage of the principal amount of Series 2022 Bonds or portions thereof called fo r redemption), together with accrued interest to the date of redemption:

Redemption Date Redemption Price
Any interest-payment date from [March 1, 2023]
through and including March 1, 20[__]
103%
September 1, 20[__] and March 1, 20[__] 102%
September 1, 20[__] and March 1, 20[__] 101%
September 1, 20[__] and a ny interest-payment date
thereafter
100%

(c) The Term Series 2022 Bonds are subject to mandatory redemption by the City before their stated maturity date as provided in Section 2.02 hereof solely from Sinking Fund Account Payments deposited in the Sinking Fund Account, upon mailed notice as provided in the Master Indenture, at a rede mption price equal to the principal amount thereof to be redeemed, together with accrued interest th ereon to the date of redemption, without premium.

SECTION 2.04. Form of Series 2022 Bonds. The Series 2022 Bonds and the authentication and registration endorsements and th e assignment to appear thereon must be substantially in the forms set forth in Exhibit A hereto, with such variations, insertions, or omissions as are appropriate and not inconsistent herewith.

SECTION 2.05. Application of Net Proceeds of Sale of Series 2022 Bonds . The net proceeds of the sale of the Series 2022 Bonds in the amount of $[_______] (composed of $[PRINCIPAL AMOUNT].00 aggregate principal am ount of the Series 2022 Bonds, [plus/less] [net] original issue [premium/discount] of $[______], and less an underwriter’s discount of $[______]) shall be set aside and deposited or transferred by the City or the Trustee, as applicable, in the following accounts and funds (or in a tempor ary account or fund used to facilitate such transfers or deposits) in the following order:
(a) First, the City shall deposit $[______] in the Acquisition and Construction Fund. (b) Second, the Trustee shall deposit $[_____] in th e Bond Reserve Fund, which equals the Required Bond Reserve as of the date of issuance of the Series 2022 Bonds. (c) Third, the Trustee shall deposit $[_____] in the Bond Redemption Fund to be used by the Trustee to pay interest on the Series 2022 Bonds when due to and including September 1, 2024.
(d) Fourth, the Trustee shall deposit $[____] in the Costs of Issuance Fund.

6 4152-8113-0800.5

ARTICLE III

MISCELLANEOUS
SECTION 3.01. Authority for First Supplemental Indenture . This First Supplemental Indenture is executed in accordance with the Act, is supplemental to the Master Indenture, and is executed in accordance with Articles II and VIII of the Master Indenture.

SECTION 3.02. Terms of Series 2022 Bonds Subj ect to the Master Indenture . Except as expressly provided in this First Supplemental Indenture, every agreement, condition, covenant, and term in the Master Indenture applies to this First Supplemental Inde nture and to the Series 2022 Bonds with the same force and effect as if they were set forth at le ngth in this First Supplemental Indenture, with such omissions, variations, and modifications as may be appropriate to conform them to this First Supplemental Indenture.

SECTION 3.03. Execution in Counterparts; Electronic Signatures . This First Supplemental Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. Each of the parties hereto agrees that the transact ion consisting of this agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this agreement using an electronic signature, it is signing, adopting, and accepting this agreement and that signing this agreement using an electroni c signature is the legal equivalent of having placed its handwritten signature on this agreemen t on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this agreement in a usable format.

SECTION 3.04. Effective Date of First Supplemental Indenture. This First Supplemental Indenture takes effect from and after its execution and delivery. [Remainder of Page Intentionally Blank.]

7 4152-8113-0800.5

IN WITNESS WHEREOF, the City has caused this First Supplemental Indenture to be signed in its name by the City Treasurer, and U.S. Bank Trust Company, National Association, as Trustee, in token of its accep tance of the trusts created hereunder, has caused this First Supplemental Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the date and year first above written.

CITY OF SACRAMENTO

By __________________________________
John P. Colville Jr., City Treasurer

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

By _________________________________
Authorized Officer

A-1
4152-8113-0800.5

EXHIBIT A

FORM OF SERIES 2022 BONDS

Unless this Bond is presented by an authori zed representative of The Depository Trust Company, a New York corporation (“DTC”), to U.S. Bank Trust Company, National Association, for registration of transfer, excha nge, or payment, and any Bond issu ed is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such othe r entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof Cede & Co., has an interest herein.

No. ____________ $____________

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

COUNTY OF SACRAMENTO

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01 (IMPROVEMENTS) SPECIAL TAX BOND, SERIES 2022

Interest
Rate
Maturity
Date
Dated
as of CUSIP
_____% September 1, 20 __ Septembe r [__], 2022

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: DOLLARS
The City of Sacramento, a municipal corpor ation duly organized an d existing under and pursuant to the Constitution and la ws of the State of California (t he “City”), for value received hereby promises to pay (but only out of the Ne t Special Tax Revenues and certain other funds hereinafter referred to) to the registered owner set forth above on the maturity date set forth above (subject to any righ t of prior redemption hereinafter provide d for) the principal amount set forth above, together with interest th ereon from the interest payment da te next preceding the date of authentication of this Bond (unless this Bond is authenticated on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both dates inclusive, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on a day on or before the fift eenth (15th) day of the month next preceding the first interest paymen t date on the Bonds, in which even t it shall bear interest from its date) until the principal hereof shall have been paid, at the interest rate per annum set forth above (computed on a 360-day year of twelve 30-day calendar months), payable semiannually on

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March 1 and September 1 in ea ch year, commencing on March 1, 2023. The interest on and principal of and redemption premium, if any, on this Bond are payable in lawful money of the United States of America at the Principal Corporate Trust Office (as that term is defined in the Indentures hereinafter referred to, and herein the “Principal Corporate Trust Office”) of U.S. Bank Trust Company, National Association (the “Trustee”), in San Francisco, California or such other place as the Trustee shall designate. The interest on this Bond due on or before the maturity or prior redemption hereof shall be payable only to the person whose name appears in the registration books, required to be kept by the Trustee, as the re gistered owner hereof at the close of business on the fifteenth (15th) day of the month next pr eceding each interest payment date, such interest to be paid by check mailed by first class mail to such registered owner at his address as it appears on such books, except that in the case of a registered owner of one million dollars ($1,000,000) or more in aggregate principal amount of Bonds, payment shall be ma de at such owner’s option by federal wire transfer of immediately available funds according to written instructions provided by such owner to the Trustee at least fifteen (15) days before such interest payment date to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the United States of America. The principal of and redemption premium, if any, on this Bond shall be payable only to the person whose name appears in such registration books as the registered owner hereof, such principal and redemption premium, if any, to be paid only on the surrender of this Bond at the Principal Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity. All capitalized te rms used herein but not otherwise defined shall have the meanings contained in the Indentures.

This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $[PRINCIPAL AMOUNT] issued by the City of Sacramento for the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “Community Facilities District”) located in the City, designated th e “City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022” (the “Series 2022 Bonds”), under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (being Sections 53311 et seq. of the Government Code of the State of California), and all laws amendatory thereof or supplemental thereto (the “Act ”), and under and pursuan t to a Master Indent ure, dated as of September 1, 2022 (as supplemented and amended, the “Master Indenture”), between the City and the Trustee, which Master Indenture authorized the issuance in various series from time to time of “City of Sacramento Railyards Community Facilities Distri ct No. 2018-01 (Improvements) Special Tax Bonds” (the “Bonds”), and a First Supplemental Indenture supplemental thereto, dated as of September 1, 2022 (the “First Supplemental Indenture,” and together w ith the Master Indenture, the “Indentures”), between the City and the Trustee, all of like tenor and date (except for such variations, if any, as may be require d to designate varying numbers, denominations, maturities, interest rates or redemption provisions of the Series 2022 Bonds). All the Series 2022 Bonds are payable on a parity with all other Bonds issued under the Master Indenture in accordance with the terms and conditions of the Indentures (copies of which are on file at the office of the City Clerk and at the above-mentioned office of the Trustee), and reference is hereby made to the Act and to the Indentures and any and all amendments thereof and supplements thereto for a description of the terms on which the Series 2022 Bonds are issued and for the rights of the registered owners of the Series 2022 Bonds; and all the terms of the Act and the Indentures are hereby incorporated herein and constitute a contract between the City and the registered owner from time to time of this Series 2022 Bond, to all the provisions of which the registered owner of this Series 2022 Bond, by his acceptance hereof, agrees and consents; and each taker and subsequent registered owner

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hereof shall have recourse to all the provisions of the Act and the Indentures and shall be bound by all the conditions and terms thereof.

The Series 2022 Bonds are issued to provi de funds to finance the acquisition and construction of certain Facilities , make a deposit to the Bond Reserve Fund, fund interest on the Series 2022 Bonds to September 1, 2024, and pay the Costs of Issuance of the Series 2022 Bonds (as each term is defined in the Indentures) in accordance with the Indentures and are special tax obligations of the City, and the interest on and principal of a nd redemption premiums, if any, on the Series 2022 Bonds are payabl e solely from the Net Special Ta x Revenues (as that term is defined in the Indentures, and herein the “Net Special Tax Revenues”) and certain other funds as provided in the Indentures for such payment, and the City is not obligated to pay them except from the Net Special Tax Revenues and such other funds. The General Fund of the City is not liable and the full faith and credit of th e City is not pledged for the pa yment of the interest on or the principal of or the redemption premiums, if any, on the Series 2022 Bonds, and no tax or assessment other than the Special Tax (as that te rm is defined n the Indentures, and herein the “Special Tax”) shall ever be levied or collected to pay the interest on or the principal of or the redemption premiums, if any, on the Series 2022 Bonds. The Series 2022 Bonds are not secured by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the City or any of its income or receipts except the Ne t Special Tax Revenues a nd certain other funds established under the Indentures, and neither the payment of the inte rest on or the principal of or the redemption premiums, if any, on the Series 2022 Bonds is a general debt, liability or obligation of the City. Additional Bonds payable on a parity with the Series 2022 Bonds from the Net Special Tax Revenues may be issued subject to the conditions and limitations contained in the Indentures.

The Series 2022 Bonds maturing on or after September 1, 20[ __], are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20[__], from any so urce of available funds other than prepayments of the Special Tax, upon mailed notice as provided in the Indentures, at a redemption price equal to the principal amount thereof to be redeemed, together with acc rued interest to the date of redemption, without premium.

The Series 2022 Bonds are subject to extraord inary redemption by the City before their respective stated maturity dates, as a whole or in part on any interest-payment date, solely from prepayments of the Special Tax, upon mailed notice as provided in the Indentures, at the following redemption prices (expressed as a percentage of the principal amount of Series 2022 Bonds or portions thereof called for redemption), together with accrued interest to the date of redemption:

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The Series 2022 Bonds maturing on Septem ber 1, 20[__] are s ubject to mandatory redemption by the City before their stated maturity date in part on September 1 in each of the years 20[__] through 20[__], both dates inclusive, solely from Sinking Fund Account Payments deposited in the Sinking Fund Ac count (as those terms are define d in and as pr ovided in the Indentures), upon mailed notice as provided in the Indentures, at a redemption price equal to the principal amount thereof to be re deemed, together with accrued in terest thereon to the date of redemption, without premium.

If less than all the Series 2022 Bonds are to be redeemed at the option of the City at any one time, the City shall select the maturity date or dates of the Series 2022 Bonds to be redeemed, and if less than all the Series 2022 Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select the Series 2022 Bonds or portions thereof of such maturity date to be redeemed in integral multiples of five thousan d dollars ($5,000) in any manner that it deems appropriate.

Notice of redemption of any Series 2022 Bond or any portion thereof shall be mailed by first class mail not less than thirty (30) days nor more than ninety (90) days before the redemption date to the registered owner thereof and to all se curities information services selected by the City in accordance with the Indentures and to the origin al underwriter or first purchaser of the Series 2022 Bonds selected for redempti on, but neither failu re to receive any such notice nor any immaterial defect contained therein shall affect the sufficiency or validity of such proceedings for redemption. If a notice of redemption has been duly given as aforesaid and money for the payment of the principal of and redempti on premiums, if any, on, together w ith interest to the redemption date on, the Series 2022 Bonds or portions thereof so called by redemption is held by the Trustee, then this Series 2022 Bond or the portion thereof to be redeemed shall, on the redemption date designated in such notice, become due and payable at the above-des cribed redemption price; and from and after the date so designated interest on this Series 2022 Bond or the portion thereof to be redeemed shall cease to accrue and the registered owner of this Series 2022 Bond shall have no

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rights in respect hereof except to receive payment of the redemption price of this Series 2022 Bond or the portion thereof to be redeemed, and upon surrender of this Series 2022 Bond if redeemed in part only, the City shall execute and the Trustee shall authenticate and deliver to the registered owner hereof at the expense of the City a new Series 2022 Bond or new Series 2022 Bonds of the same maturity date and of authorized denominat ions equal in aggregate principal amount to the unredeemed portion of this Series 2022 Bond so surrendered.

The City has covenanted that, so long as any Series 2022 Bonds are outstanding, it will annually levy the Special Tax against all Taxable Land (as that term is defined in the Indentures) in the Community Facilities District in accordance with the Special Tax Formula (as that term is defined in the Indentures) and, s ubject to the limitations in the Special Tax Formula and the Act, make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Bond Rede mption Fund (as that term is defined in the Indentures), after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the am ounts required for compliance w ith the agreements, conditions, covenants and terms contained in the Indentures, and which in any event will be sufficient to pay the interest on and the principal of and the Si nking Fund Account Payments, if any, for and the redemption premiums, if any, on th e Series 2022 Bonds as they become due and payable and to replenish the Bond Reserve Fund established under the Indentures and to pay all current Expenses (as that term is defined in the Indentures) as they become due and payable in accordance with the provisions of the Indentures.

The Series 2022 Bonds are issuable in the form of fully registered Bonds in denominations of five thousand dollars ($5,000) or any integral multiple thereof. The regi stered owner of any Series 2022 Bond or Bonds may surrender the same (together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney) in exchange for an equal aggregate principal amount of Series 2022 Bonds of any other authorized denominations in the manner, subject to the conditions and upon payment of the charges provided in the Indentures.

The registration of this Series 2022 Bond is tr ansferable on the registration books kept by the Trustee by the registered owner hereof or by his duly authorized attorney upon surrender of this Series 2022 Bond together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney, and thereupon a new Series 2022 Bond or Series 2022 Bonds of authorized denominat ions in the same aggregate principal amount will be issued to the transferee in exchange ther efor in the manner, subj ect to the conditions and upon payment of the charges provided in the Indentures. The City and the Trustee may deem and treat the person in whose name th is Series 2022 Bond is registered as the absolute owner hereof for the purpose of receiving payment of, or on account of, the interest hereon and principal hereof and redemption premium, if any, hereon and for all other purposes.

The rights and obligations of the City and of the registered owners of the Series 2022 Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indentures, but no such amendment shall (1) extend the maturity of this Series 2022 Bond or reduce the interest rate hereon or otherwise alter or impa ir the obligation of the C ity to pay the interest hereon or the principal hereof or any Sinking F und Account Payment herefor or the redemption premium, if any, hereon at the time and place and at the rate and in the currency and from the funds

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provided herein without the express written consent of the registered owner of this Series 2022 Bond, or (2) permit the issuance by the City of any obligations payable from the Net Special Tax Revenues on a parity with the Series 2022 Bonds ot her than as provided in the Indentures, or jeopardize the ability of the City to levy and collect the Special Tax, or (3) reduce the percentage of Series 2022 Bonds required fo r the written consent to an am endment or supplement of the Indentures, or (4) modify any right s or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indentures.

The Series 2022 Bonds do not cons titute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restriction, and neither the City Council of the City nor the City nor any officer or employee thereof shall be liable for the payment of the interest on or principal of or redemption premiums, if any, on the Series 2022 Bonds otherwise than from the Net Special Tax Revenues and the other funds as provided in the Indentures.

This Series 2022 Bond shall not be entitled to any benefits under the Indentures or become valid or obligatory for any purpos e until the certificate of authentication and registration hereon endorsed shall have been signed by the Trustee.

It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this Series 2022 Bond do exist, have happened and have been performe d in due time, form an d manner as required by law and that the amount of this Series 2022 Bond, together with all other obligations of the City, does not exceed any limit prescribed by the laws of the State of California and is not in excess of the amount of Series 2022 Bonds permitted to be issued under the Indentures.

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IN WITNESS WHEREOF, the City of Sacramento has caused this Series 2022 Bond to be executed in its name and on its behalf by the manua l or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk and has caused this Series 2022 Bond to be dated September [__], 2022.

CITY OF SACRAMENTO

By _________________________________
Mayor

Countersigned:

_______________________________
City Clerk

[FORM OF CERTIFICATE OF AUTHENTICATION AND
REGISTRATION TO APPEAR ON SERIES 2022 BONDS]

This is one of the Series 2022 Bonds described in the within-mentioned Indentures which has been authenticated and registered on the date indicated below.

Date: September __, 2022
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee

By _________________________________
Authorized Signatory

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[FORM OF ASSIGNMENT TO APPEAR ON SERIES 2022 BONDS]
For value received the undersigned do(es ) hereby sell, assign and transfer unto _______________________________________________ the within Series 2022 Bond and do(es) hereby irrevocably constitute and appoint ______________________________ attorney to transfer the same on the bond register of the Tr ustee, with full power of substitution in the premises.

___________________________________
Dated: _____________________

SIGNATURE GUARANTEED BY:

__________________________________

Note: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Series 2022 Bond in every part icular, without alteration or enlargement or any change whatsoever, and the signature(s) must be guaranteed by an eligible guarantor institution.

Social Security Number, Taxpayer Identification Number or other identifying number of Assignee:
____________________

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BOND PURCHASE CONTRACT

$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01
SPECIAL TAX BONDS, SERIES 2022
[SALE DATE]
City of Sacramento
915 I Street
Sacramento, California 95814
Greetings:

Stifel, Nicolaus & Company, Inco rporated, as underwriter (the “ Underwriter”), acting not as a fiduciary or agent for you, but on beha lf of itself, offers to enter into this Bond Purchase Contract with the City of Sacramento (the “ City”) with respect to the special tax bonds captioned above (the “Bonds”) issued by the City for the City of Sacramento Railyards Community Facilities District No. 2018-01 (the “ CFD”). Upon your acceptance of this offer, this contract will be binding upon the City and the Underwriter. Terms not otherwise defined in this contract have the same meanings as set forth in the Indenture identified in Section 2(c) below.

This offer is made subject to the City’s a cceptance of this contract on or before 11:59 p.m. on the date first set forth above (the “Effective Date”). At or before the City’s acceptance of this contract, the City must cause to be delivered to the Underwriter (a) a certificate from Downtown Railyard Venture, LLC , a Delaware limited liability company (“ Railyard Venture”) in form and substance as set forth in Ex hibit I-1 to this contract, and dated as of, or prior to, the date of the Prel iminary Official Statement identi fied in section 4(b) of this contract (the “ Railyard Venture POS Certificate”); and (b) a certificate from Kaiser Foundation Hospitals, a California corporation (“Kaiser”), in form and substance as set forth in Exhibit I-2 to this contract, and dated as of, or prior to, the date of the Preliminary Official Statement identified in section 4(b) of this contract (the “Kaiser Foundation Hospitals POS Certificate”).

1. Purchase and Sale of Bonds. Relying on the representations, warranties, and covenants in this contract, th e Underwriter shall purchase from the City, and the City shall sell to the Underwriter, on the terms an d conditions set forth below, all (but not less than all) of $[_____] aggregate principal amount of the Bonds at a purchase price (the “Purchase Price”) of $[PURCHASE PRICE] (b eing an amount equal to the aggregate principal amount of $[AMOUNT] of the Bonds, [ plus/less] a [net] original issue [premium/discount] of $[AMOUNT], and less an Underwriter's discount of $[UW DISCOUNT]).

2. Authorizing Instruments. The City will issue the Bonds under— (a) the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); 82822.00014\34898319.7

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(b) the resolution of the Sacram ento City Council (the “ City Council”), adopted on [August 23, 2022], that authorizes th e issuance of the Bonds (the “ Resolution”); and
(c) a Master Indenture, dated as of [Septe mber 1, 2022], as supplemented by a First Supplemental Indenture (the “ First Supplemental Indenture”), dated as of [September 1, 2022] (collectively, the “Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

3. Terms of the Bonds. The Bonds are payable solely from special taxes levied under the Act on taxable property in the CFD (the “Special Taxes”). The Bonds will mature on the dates and in the principal amounts, will bear interest at the rates, and will be subject to redemption before maturity as set forth in Exhibit A to th is contract. The Underwriter shall make a bona fide public offering of all of the Bonds at the offering prices set forth in Exhibit A. Additional de tails related to the establishm ent of the issu e price for the Bonds are set forth in Section 20 below. The Bonds are being issued to (a) pay the cost and expense of acquisition and construction of certain public facilities required in connection with the development of property within the CFD; (b) fund a reserve fund securing the Bonds; (c) pay co sts of issuance of the Bon ds; and (d) fund capitalized interest for the Bonds through [September 1, 2024].

4. Preliminary Official Statement; Official Statement; Continuing Disclosure. (a) The City shall deliver to the Underwriter as many copies of the Official Statement relating to the Bonds, dated the Effect ive Date (as supplemented and amended from time to time, the “ Final Official Statement”), as the Underwriter may reasonably need to comply with paragraph (b)(4) of Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 (“ Rule 15c2‐12”). The City shall deliver the Final Official Statement within seven (7) business days after the Effective Date and in sufficient time to accompany any confirmation that requires payment fr om a customer. The Underwriter shall deposit the Final Official Statement with the Municipal Secu rities Rulemaking Board (the “MSRB”) using the MSRB’s Electronic Municipal Market Access system, which the Securities and Exchange Co mmission has designated as the sole repository of disclosure information for pu rposes of Rule 15c2-12, on or as soon as practicable after the Closing Date (defined in Section 7 below). The Underwriter shall deliver a copy of the Final Offici al Statement to each of its customers purchasing Bonds no later than the settlement date of the transaction. (b) The City has authorized and approved, an d hereby consents to the Underwriter’s distribution and use of, the Preliminary Of ficial Statement relating to the Bonds dated [POS DATE] (the “ Preliminary Official Statement”), and the City has authorized the execution, delivery, and distribution of the Final Official Statement. (c) In connection with the issu ance of the Bonds, and to assist the Underwriter with complying with Rule 15c2-12, the City shall execute a continuing disclosure certificate, under which the City will prov ide certain financial and operating data 82822.00014\34898319.7

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relating to the CFD as requ ired by Rule 15c2-12 (the “ Continuing Disclosure Certificate”). The form of the Continuing Disclosure Certificate will be attached as an appendix to the Preliminary Official Statement and Final Official Statement.

5. Representations and Warranties of the City. The City makes the following representations and warranties to the Underwriter as of the Effective Date:
(a) Due Organization and Authority. The CFD was duly formed and is validly existing as a community facilities district under the Act.
(b) Full Right, Power, and Authority. The City has complied with all provisions of applicable law, including the Act, in all matters relating to the adoption of the Resolution, the formation of the CFD, the incurrence of bonded indebtedness for the CFD, and the levy of the Special Taxes within the CFD. The City Council thus has the full legal right, power, and authority to adopt the Resolution, and the City has the full legal right, power, and authority—
(1) to enter into this contract, the Inde nture, and the Continuing Disclosure Certificate (collectively, the “City Documents”);
(2) to issue, sell, and deliver the Bonds;
(3) to secure the Bonds in the manner contemplated in the Indenture; and (4) to carry out and consummate on its part all other transactions contemplated by the City Documents.
(c) Authorization of Documents; Consents and Approvals. Except as may be required under blue-sky laws or other securities laws of any state, all consents or approvals the City must obtain in connection with the foregoing have been obtained, and the consents or approvals so obtained are still in full force and effect. The City Council thus has duly authorized—
(1) the execution and delivery of the Ci ty Documents and the Final Official Statement, and the execution, delivery , and due performance of the City’s obligations under the Bonds and the City Documents; and (2) the taking of any action that may be requ ired on the part of the City to carry out, give effect to, and consummate on its part the transactions contemplated by the Bonds and the City Documents.
(d) Due Adoption of Resolution and Enforceability of Documents. The Resolution has been duly adopted by the City Council and is in full force and effect; and the City Documents, when executed and delivered by the City and the other parties, will constitute legal, valid, an d binding obligations of the City, enforceable against the City in accordance with their terms, exce pt as enforceability may be limited by bankruptcy, insolvency, or other laws affecting creditors’ rights generally or by the application of equitable principles.
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(e) Enforceability of Bonds. When delivered to the Underwriter, the Bonds will have been duly authorized by the City; will have been duly executed, issued, and delivered by the City; will constitute legal, valid, and binding obligations of the City enforceable against the City in accord ance with their terms, except as enforceability may be limited by bankrupt cy, insolvency, or other laws affecting creditors’ rights generally or by the application of equitable principles; and will be entitled to the benefit of, and security afforded by, th e Resolution, the Indenture, and the Act.
(f) Preliminary and Final Official Statements.
(1) In this Section 5(f) only, “information” and “material fact” refer to information and facts that relate to the City and the CFD. They do not include, and no representation or warranty is provided with respect to, information and facts that (A) are submitted by, or on behalf of, Railyard Venture and Kaiser, or either of them, to the Unde rwriter, the City, or Disclosure Counsel; and (B) concern Railyard Venture or its affiliat es, Kaiser or its affiliates, Railyard Venture’s or its affiliates’ property ownership or proposed development of the property within the CFD, Kaiser’s or its affiliates’ property ownership or proposed development of the property within the CFD, Railyard Venture’s or its affiliates’ financing plans for carrying out that development, or Kaiser’s or its affiliates’ financing plans for carrying out that development. (2) The information in the Preliminary Offici al Statement is true in all material respects as of the date of the Prel iminary Official Statement, and the information in the Final Official Statement will be true in all material respects as of the Effective Date and the Cl osing Date. The Preliminary Official Statement does not as of its date, and the Final Official Statement will not as of the Effective Date and the Closing Da te, contain any untrue or misleading statement of a material fact relating to the City or the CFD or omit to state any material fact relating to the City or the CFD necessary to make the statements therein, in the light of the circumst ances under which they were made, not misleading.
(g) Supplements or Amendments to Official Statement. The City shall promptly notify the Underwriter in writing if, at any time before the earlier of (1) the City’s receipt of the Underwriter’s notice that the Final Official Statement is no longer required to be delivered under Rule 15c2-12, or (2 ) the Closing Date (defined in Section 7 below), any event occurs that is known to the City officers participating in the issuance of the Bonds and that might caus e the Final Official Statement, as then amended or supplemented, to include an untrue statement of a material fact or to omit to state any material fact necessary to make the statements therein, in light of the circumstances under which th ey were made, no t misleading. Any information the City supplies for inclusion in any amendments or supplements to the Final Official Statement must not cont ain any untrue statement of a material 82822.00014\34898319.7

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fact or 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. (h) No Conflicts. To the City’s actual knowledge as of the Effective Date, the adoption of the Resolution, the issuance of the Bonds, the execution and delivery of the City Documents, the consummation of the tr ansactions on the part of the City contemplated herein or ther ein, and the City’s compli ance with the provisions hereof or thereof will not conf lict with, or constitute on the City’s part a violation of, or a breach of or default under, any of the following in a way that would have a material adverse effect on the City’s ab ility to perform its obligations under the Bonds and the City Documents:
(1) A material indenture, mortgage, commi tment, note, or other agreement or instrument to which the City is a party or by which it is bound. (2) A provision of the Act or the California Constitution. (3) An existing law, rule, re gulation, ordinance, judgme nt, order, or decree to which the City (or the members of the City Council or any of the City’s officers in their capacities as such) is subject.
(i) No Defaults. The City has never been in default at any time as to principal of, or interest on, any obligation it has issued where the default might have an adverse effect on the City’s ability to consummate the transactions described in the Bonds and the City Documents, except as specifically disclosed in Final Official Statement; and, except as specifically disclosed in the Final Official Statement, the City has not entered into any agreement or arrangement of any kind that might give rise to any lien or encumbrance on any of the Special Taxes.
(j) No Litigation. To the actual knowledge of the Sacramento City Attorney’s Office as of the Effective Date, except as is spec ifically disclosed in the Final Official Statement, the City has not been served with process in, and has not been overtly threatened with, any action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, public board, or public body— (1) that questions in any way the powers of the City Council in connection with the issuance of the Bonds;
(2) that questions in any way the validity of any proceeding taken by the City Council in connection with the issuance of the Bonds;
(3) in which an unfavorable decision, ruling, or finding is likely to have a material adverse effect on the City’s financia l condition or on the transactions described in this contract;
(4) that is likely to adversely affect the validity or enforceability of the Resolution, the Bonds, or the City Documents; or
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(5) that questions in any way the status of the Bonds under California’s tax laws or tax regulations.
(k) Certificates of the City. Any certificate that is signed by a City official and delivered to the Underwriter in conne ction with the transactions contemplated by this contract will be deemed a representati on and warranty by the City to the Underwriter as to the truth of the statements in the certificate. (l) Security for the Bonds. Debt service on the Bonds wi ll be paid solely from the Special Taxes the City receives under th e Indenture and the moneys in certain funds and accounts established thereunder.
(m) Levy of Special Taxes. The Special Taxes have been and will be levied in accordance with the Rate and Method of Apportionment of Special Tax relating to the CFD and are secured by a lien on the properties within the CFD on which they are levied. (n) Pledge of Special Taxes. The Indenture creates a valid pledge of, and first lien upon, the Special Taxes deposited thereunder and the moneys in certain funds and accounts established thereunder, subject in all cases to the provisions of the Indenture permitting the application ther eof for the purposes and on the terms and conditions set forth therein.
(o) Prior Continuing Disclosure Undertakings. Except as disclosed in the Final Official Statement, the City has complied in all material respects with previous undertakings under Rule 15c2-12.
(p) Prior Assessment and Special Tax Liens. Except as disclosed in the Final Official Statement, to the City’s current and actu al knowledge there are no entities with outstanding assessment liens or special ta x liens against any of the properties within the CFD.

6. Blue Sky. The City shall cooperate with the Unde rwriter (at the Underwriter’s cost) in qualifying the Bonds for offer and sale under the securities or blue-sky laws of such jurisdictions of the United States as the Underwriter may reasonably request, except that the City is not required to consent to suit or to service of process in, or to qualify to do business in, any jurisdiction. The City co nsents to the Underwri ter’s use of the City Documents, the Preliminary Official Statem ent, and the Final Official Statement for complying with such securities or blue-sky laws.

7. Closing.
(a) At 9:00 a.m. (Sacramento time) on [CLOSING DATE], or at such other time or date as the City and the Underw riter may agree on (the “Closing Date”), the City shall deliver or cause to be delivered to the Underwriter the Bonds in definitive form, duly executed by the City’s authorized of ficers and authenticated by the Trustee, together with the other documents identi fied in Section 7(b) below, and the Underwriter shall accept the delivery and pay the Purchase Price of the Bonds by making a wire transfer in federal funds payable to the order of the Trustee. 82822.00014\34898319.7

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(b) The activities relating to the final exec ution and delivery of the Bonds and the payment therefor and the deli very of the resolutions, certificates, opinions, and other instruments as described in Section 9 of this contract will occur at the offices of Orrick, Herrington & Sutcliffe LLP (“Bond Counsel”). The payment for the Bonds and simultaneous delivery of the Bonds to the Underwriter is the “ Closing.” The Bonds must be delivered as fully register ed Bonds initially in denominations of $5,000 each and any integral multiple thereof. The Bonds must be registered in the name of Cede & Co., as nominee of The Depository Trust Company, and must be made available for checking by the Underw riter at such place as the Underwriter and the Trustee agree at least twenty-four (24) hours before the Closing.

8. Termination Events. The Underwriter may cancel its obligations to purchase the Bonds if any of the following occurs between the Effective Date and the Closing Date:
(a) The House of Representatives or the Senate of the United States Congress, or a committee of either, has pending before it or favorably passes or recommends legislation that, if enacted, would have th e purpose or effect of imposing federal income taxation upon revenues or other income of the general character to be derived by the City or by any similar body under the Resolution, the Indenture, or the Act, or upon interest received on ob ligations of the gene ral character of the Bonds, or of causing interest on obligati ons of the general character of the Bonds to be includable in gross income for purp oses of federal income taxation, and the legislation, in the Underwriter’s opinion, materially adversely affects the market price of the Bonds.
(b) Any action or event occurs, including an y of the following, that directly or indirectly has the purpose or effect, in the Underwriter’s opinion, of materially and adversely affecting the market price of th e Bonds or the market for the Bonds; of adversely affecting the federal income-tax consequences of owning the Bonds (including causing interest on the Bonds to be included in gross income for purposes of federal income taxation); or of imposing a federal income tax upon revenues or other income of the general character to be derived by the City under the Resolution or the Indenture, or upon interest received on the Bonds or on obligations of the general character of the Bonds:
(1) A tentative decision with respect to legislation is reached by a committee of the House of Representatives or the Sena te of the United States Congress, or legislation is favorably reported or re-reported by such a committee or introduced in (by amendment or otherwise), or passed by, the House of Representatives or the Senate; or is recommended to the United States Congress for passage by the President of the United States; or is enacted. (2) A decision by a federal court (i.e., the United States Supreme Court, a United States Court of Appeals, a United States District Court, or the United States Tax Court) is rendered.
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(3) A ruling, release, order, regulation, or official statement (tentative, proposed, o r f i n a l ) b y o r o n b e h a l f o f t h e U n i t e d S t a t e s T r e a s u r y D e p a r t m e n t , t h e Internal Revenue Service, or other governmental agency is made or proposed to be made.
(c) Legislation that takes effect before the Closing is enacted or actively considered for enactment, or a decision by a federal court is rendered, the effect of which is that the Bonds are not exempt from the re gistration, qualification, or other requirements of the Securities Act of 1933 as then in effect or the Securities Exchange Act of 1934 as then in effect, or that the Resolu tion or the Indenture, as the case may be, is not exempt from the Trust Indenture Act of 1939 as then in effect.
(d) A stop order, ruling, regu lation, or official statement by the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter is issued or made or any ot her event occurs, the effect of which is that the issuance, offering, or sale of the Bonds, or the execution and delivery of the Indenture as contemplated by this contract or by the Final Official Statement, is or would be in violation of any provision of the federal securities laws, including the Securities Act of 1933 as then in effect, the Securities Exchange Act of 1934 as then in effect, or the Trust Indenture Act of 1939 as then in effect. (e) Any event occurs or any information be comes known to the Underwriter that causes the Underwriter to reasonably bel ieve that the Final Official Statement as then amended or supplemented includes an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (f) There occurs any outbreak of hostilities or any national or international calamity or crisis, including a financial crisis, the effect of which on the financial markets of the United States is such as, in the Underwriter’s reasonable judgment, would materially adversely affect the market for or market price of the Bonds. (g) There is in force a general suspension of trading on the New York Stock Exchange, the effect of which on the financial markets of the United States is such as, in the Underwriter’s reasonable judgment, would materially adversely affect the market for or market price of the Bonds.
(h) A general banking moratorium is declar ed by United States, New York, or California authorities.
(i) Any proceeding is pending or threaten ed by the Securities and Exchange Commission against the City.
(j) Additional material restrict ions not in force as of th e Effective Date are imposed upon trading in securities generally by any governmental authority or by any national securities exchange, and the restrictions adversely affect the Underwriter's ability to sell the Bonds.
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(k) The New York Stock Exchange or other national securities exchange, or any governmental authority, imposes, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not in force on the Effective Date, or increases materially those in force on the Effective Date, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter.
(l) An amendment to the United States or California Constitution is enacted or action is taken by any federal or California cour t, legislative body, regulatory body, or other authority materially adversely affect ing the tax status of the City or its property, income, or securities (or interest thereon); the validity or enforceability of the Special Taxes or the ability of the Ci ty to issue the Bonds; or the levy of any of the Special Taxes, all as contemplated by the Resolution, the Indenture, this contract, and the Final Official Statement.

9. Conditions to Closing. The Underwriter’s obligations to purchase the Bonds are subject to the City’s performance of the City’s obligations under this contract at and before the Closing, to the accuracy as of the Effective Da te and as of the time of the Closing of the City’s representations and warranties in this contract, and to the following conditions, including the delivery by the City of the docu ments identified in this Section 9 in form and substance satisfactory to the Underwriter:
(a) At the time of Closing, (1) the Final Official Statement, the Resolution, the Indenture, the Continuing Disclosure Certific ate, and this contract must be in full force and effect and must not have b een amended, modified, or supplemented except as may have been agreed to in writing by the Underwriter; and (2) the CFD must have been duly formed and there must be in full force and effect all resolutions, including the Resolution, that in Bond Counsel’s opinion are necessary in connection with the transactions contemplated by this contract. (b) The Underwriter must receive the Bonds at or before the Closing. The terms of the Bonds delivered must in a ll instances be as describe d in the Final Official Statement.
(c) At or before the Closing, the Underwriter must receive the following documents in the number of counterparts as are agreeable to the Underwriter and the City:
(1) Bond Counsel’s final approving opin ion, dated the Closing Date and substantially in the form attached as Appendix C to the Preliminary Official Statement and Final Official Statement, together with a letter addressed to the Underwriter to the effect that the Underwriter may re ly upon the opinion to the same extent as if the opinion were addressed to the Underwriter. (2) A supplemental opinion of Bond Counse l addressed to the Underwriter in substantially the form attached to this contract as Exhibit F. 82822.00014\34898319.7

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(3) One or more letters from disclosure counsel to the City, Stradling Yocca Carlson & Rauth, a Professional Corporation (“ Disclosure Counsel”), addressed to the City and the Underwriter, stating the following:
(A) without passing upon or assuming an y responsibility for the accuracy, completeness, or fairness of the st atements in the Final Official Statement, and making no representa tion that Disclosure Counsel has independently verified the accuracy, completeness, or fairness of any such statements, based upon the information made available to Disclosure Counsel in the course of Disclosure Counsel’s participation in the preparation of the Final Official Statement, nothing has come to Disclosure Counsel’s attention that would lead Disclosure Counsel to believe that the Final Official Statement, including the cover page (except for (i) the expressions of opinion, the assumptions, the projections, estimates and forecasts, the charts, the financial statements or other financial, numerical, economic, demographic or statistical data, assessed or appraised valuations, or environmental matters in the Preliminary Official Statement; (ii) any informat ion relating to CUSIP numbers; (iii) any information with respect to Th e Depository Trust Company and its book-entry system; (iv) any inform ation in the Appendices to the Preliminary Official Statement; (v ) any information incorporated by reference into the Official Statemen t; and (vi) any information with respect to the Underwriter or underw riting matters with respect to the Bonds, including information under the caption “UNDERWRITING”) c o n t a i n s a n u n t r u e s t a t e m e n t o f a m a t e r i a l f a c t o r o m i t s t o s t a t e a m a t e r i a l f a c t r e q u i r e d t o b e s t a t e d therein or necessa ry to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
(B) the Bonds are not subject to the re gistration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. (4) A letter from counsel to the Unde rwriter, Best Best & Krieger LLP (“Underwriter’s Counsel”), addressed to the Unde rwriter, in form and substance acceptable to the Underwriter.
(5) The opinion of the Sacramento City Atto rney’s Office, dated the Closing Date and addressed to the Underw riter, and in substantially the form attached to this contract as Exhibit G.
(6) The Final Official Statement executed on the City’s behalf by a duly authorized officer.
(7) A certified copy of the Resolution.
(8) Specimen Bonds.
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(9) Evidence that the City has signed Internal Revenue Service Form 8038-G and will file it with the Internal Revenue Service.
(10) Executed copies of the City Documents.
(11) A tax certificate signed by the City in form and substance satisfactory to Bond Counsel.
(12) In connection with printing and dist ribution of the Pr eliminary Official Statement, a signed certificate of the City in the form attached to this contract as Exhibit B.
(13) A closing certificate of the City, in form and substance as set forth in Exhibit C to this contract, dated as of the Closing Date.
(14) A letter of Integra Realty Resource s, Rocklin, California, independent appraisers, addressed to the City and the Underwriter, regarding its conclusions as to the appraisal report prepared by the Appraiser as stated in the Official Statement.
(15) A certificate of the special tax consulta nt to the City, Ec onomic & Planning Systems, Inc., Sacramento, California (“Special Tax Consultant”), in form and substance as set forth in Exhibit D to this contract, dated as of the Closing Date.
(16) A certificate of the Trustee, in form an d substance as set forth in Exhibit E to this contract, dated as of the Closing Date.
(17) An opinion of counsel to the Trustee, dated as of the Closing Date, in form and substance satisfactory to the Underwriter and Bond Counsel. (18) A certificate of the appraiser, BBG, Inc., Sacramento, California (“Appraiser”), in form and substance as set forth in Exhibit H to this contract, dated as of the Closing Date.
(19) A certificate of the market absorpti on consultant, RCLCO Real Estate Consulting (formerly Robert Charles Less er & Co.) of Los Angeles, California (the “Market Absorption Consultant”), in form and substance as set forth in Exhibit M to this contract, dated as of the Closing Date. (20) The Railyard Venture POS Certificate, d e l i v e r e d a s o f t h e d a t e o f t h e Preliminary Official Statement in the form of Exhibit I-1 to this contract. (21) The Kaiser Foundation Hospitals POS Cert ificate, delivered as of the date of the Preliminary Official Statement in the form of Exhibit I-2 to this contract. (22) A closing certificate of Railyard Venture, in form and substance as set forth in Exhibit J-1 to this contract, dated as of the Closing Date. 82822.00014\34898319.7

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(23) A closing certificate of Kaiser, in form and substance as set forth in Exhibit J- 2 to this contract, dated as of the Closing Date.
(24) One or more letters of counsel to Railya rd Venture, in form and substance as set forth in Exhibit K-1 to this contract, dated as of the Closing Date. (25) One or more letters of counsel to Kaiser, in form and substance as set forth in Exhibit K-2 to this contract, dated as of the Closing Date. (26) Continuing disclosure certificates exec uted by each of Railyard Venture and Kaiser, in form and substance as set fort h as Appendix G to the Final Official Statement.
(27) A Blanket Letter of Representations from the City to the Depository Trust Company, which qualifies the Bonds for delivery via the facilities of DTC. (28) Such additional legal opinions, certif icates, proceedings, instruments, and other documents as the Underwriter or Bond Counsel may reasonably request to evidence the City’s compliance with legal requirements; the truth and accuracy, as of the time of Closing, of the City’s representations in this contract; and the City’s due performance or satisfaction at or before the time of Closing of all agreements then to be performed and all conditions then to be satisfied by the City.
(d) If the City is unable to satisfy the conditions in Sections 9(a), 9(b), and 9(c) of this contract, or if the Underwriter’s obligations to purchase and accept delivery of the Bonds are terminated for any reason permitted by this contract, then this contract will terminate, and neither the Underwri ter nor the City will be under further obligation under this contra ct other than their obligations to pay expenses, as provided in Section 12 of this contract, which will continue in full force and effect.

10. Conditions to the City’s Obligations. The City’s obligations under this contract are subject to the Underwriter’s performance of its obligations under this contract and the Underwriter’s delivery of an issue price ce rtificate in form and substance reasonably satisfactory to Bond Counsel.

11. Survival of Representations, Warranties, and Agreements. All of the City’s representations, warranties, and agreements in this contract will remain operative and in full force and effect, regardless of any in vestigations made by or on behalf of the Underwriter, and will survive the Closing.

12. Expenses.
(a) The City shall pay or cause to be paid all reasonable expenses incident to the issuance of the Bonds and to the performance of its obligations under this contract, including (1) expense of delivery of the Bonds and this contract; (2) expense of printing the Preliminary Official Statemen t, the Final Official Statement, and any amendment or supplement to the Prelim inary Official Statement or the Final Official Statement; (3) fees and disbur sements of Bond Counsel, Disclosure 82822.00014\34898319.7

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Counsel, financial advisor, and other cons ultants, the Special Tax Consultant, the Appraiser and the Trustee; and (4) expenses (included in the expense component of the Underwriter’s discou nt) incurred by the Underwri ter on behalf of City’s employees which are incidental to im plementing this contract, including transaction-related meals of those employees.
(b) The Underwriter shall pay all advertising expenses in connection with the public offering of the Bonds and all other expenses it incurs in connection with its public offering and distribution of the Bonds, including the fees and expenses of Underwriter’s Counsel.

13. No Fiduciary Duty.
(a) The City and the Underwriter acknowledge and agree that— (1) the purchase and sale of the Bonds unde r this contract is an arm’s-length commercial transaction between the City and the Underwriter; (2) in connection with the purchase an d sale of the Bonds and with the discussions, undertakings, and procedur es leading up to the consummation of the purchase and sale of the Bonds under this contract, the Underwriter is and has been acting solely as principal and is not acting as the agent or fiduciary of the City;
(3) the Underwriter has not assumed a fiduciary responsibility in favor of the City with respect to (A) the offering of the Bonds contemplated by this contract or the process leading to this contract (w hether or not the Underwriter or any affiliate of the Underwriter has advised or is currently advising the City on other matters), or (B) any other obligation to the Ci ty with respect to the offering contemplated by this contract except the obligations expressly set forth in this contract; and
(4) the City and the Underwriter have cons ulted their own legal, financial, and other advisors to the extent they have deemed appropriate in connection with this transaction.
(b) This Section 13 does not limit the Underwri ter’s obligations of fair dealing under Municipal Securities Rulemaking Board Rule G-17.

14. Notices.
(a) To be effective, any notice or other co mmunication given to the City under this contract must be in writing and must be delivered to the following person at the following address:

Office of the City Treasurer
Historic City Hall
915 I Street, 3rd Floor
Sacramento, California 95814
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Attention: Debt Manager
(b) To be effective, any notice or other communication to be given to the Underwriter under this contract must be in writing and must be delivered to the following person at the following address:

Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Attention: Eileen Gallaher, Managing Director

15. Benefit. This contract is made solely for the benefit of the parties and their successors and assigns, and no other person, including any purchaser of the Bonds, will acquire or have any right under or by virtue of it.

16. Governing Law and Interpretation. This contract is to be governed by, and construed in accordance with, the laws of the State of California. All currency amounts set forth in this contract are in United States Dollars . The word “including” means “including but not limited to.”

17. Effective Date. This contract becomes effective when the City accepts it, as indicated in the City’s signature block below.

18. Counterparts. The parties may sign this contract in counterparts, each of which will be considered as an original, but all of which will constitute same instrument.

19. Severability. If a court with jurisdiction rules th at any provision of this contract is invalid, unenforceable, or contrary to law or public policy, then the parties want the court to interpret this contract as follo ws: (a) by modifying the provision to the minimum necessary to make it enforceable or, if that modification is not permitted by law, by disregarding the provision; (b) by holding that the rest of the contract will remain in effect as written; (c) by holding that the provision will remain as written in any circumstances other than those in which the provision is held to be unenforceable; and (d) by holding the entire contract unenforceable if modifying or disregarding the unenforceable provision would result in the failure of an essential purpose of this contract.

20. Establishment of Issue Price. The Underwriter agrees to ma ke an bona fide initial public offering of all of the Bonds in compliance with federal and state securities laws, at the initial offering prices set forth on Exhibit A attached hereto and incorporated herein by reference. Subject to the paragraphs below, the Underwriter may change the initial offering prices as it deems necessary in connection with the offering of the Bonds without any requirement of prior notice, and may offer and sell the Bonds to institutions at prices lower than those stated in Exhibit A.
(a) The following definitions apply only in this Section 20:
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(2) “Underwriter” means (A) any person who agrees under a written contract with the City (or with the lead un derwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (B) any person that agrees under a written co ntract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail- distribution agreement participating in the initial sale of the Bonds to the Public).
(3) A purchaser of any of the Bonds is a “Related Party” to an Underwriter if the Underwriter and the purchase r are subject, directly or indirectly, to (A) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another); (B) more than 50% common ownership of their capital interests or profit s 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 pr ofit interests of th e partnership, as applicable, if one entity is a corporatio n and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other).
(4) “Sale Date” means the date of execution of this contract by all parties. (b) The Underwriter shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at the Closing an “issue price” or similar certificate, together with the suppo rting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit L, with any modifications that be appropriate or necessary, in the reasonable judgment of the Underwriter, the City, and Bo nd Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the Public of the Bonds.

All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City’s municipal advisor, Fieldman, Rolapp & Associates, Inc. (“ Municipal Advisor”) and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor. (c) [Except as otherwise set forth in Exhibit A hereto,] the City will treat the first price at which 10% of each maturity of the Bonds (the “10% Test”) identified under the column “10% Test Used” in Exhibit L, is sold to the public as the issue price of that maturity (if different intere st rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% Test). At or promptly after the execution of this contract, the Underwriter shall report to the City the price or prices at which it has sold to the Public each maturity of Bonds. [If at that time the 10% Test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at whic h it sells the unsold Bonds of that maturity to the Public. That reporting obligation shall continue, whether or 82822.00014\34898319.7

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not the Closing Date has occurred, until th e 10% Test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the Public; provided that the Underwriter's reporting obligation after the Closing Date may be at reasonable periodic intervals.] For purposes of this Section, if Bonds mature on the same date but have differ ent interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (d) The Underwriter confirms that the Underwriter has offered the Bonds to the Public on or before the date of this contract at the offeri ng price or prices (the “ Initial Offering Price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as ot herwise set forth therein. Exhibit L also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% Test has not been satisfied and for which the City and the Unde rwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the Initial Offering Pr ice to the public of each su ch maturity as of the sale date as the issue price of that maturity (the “Hold‐The‐Offering‐Price Rule”). So long as the Hold-The-Offering-Price Rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the Initial Offering Price to the Public during the period starting on the sale date and endi ng on the earlier of the following.
(1) the close of the 5th busine ss day after the sale date; or (2) the date on which the Un derwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the Initial Offering Price to the Public.
(e) The Underwriter will advise the City promptly after the close of the 5th business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the Initial Offering Price to the Public. (f) The Underwriter hereby confirms that any selling group agreement and any third- party distribution agreement relating to the initial sale of the Bonds to the Public, together with the related pricing wire s, contains or will contain language obligating each dealer who is a member of the selling group and each broker- dealer that is a party to such retail dist ribution agreement, as applicable, to (1) report the prices at which it sells to the Public the unso ld Bonds of each maturity allotted to it until it is notified by the Underwriter that either the 10% Test has been satisfied as to the Bonds of that matu rity or all Bonds of that maturity have been sold to the Public, provided that, the reporting obligation after the Closing Date may be at reasonable periodic inte rvals; and (2) comply with the Hold-the- Offering-Price Rule, if applicable, in each case if and for so long as directed by the Underwriter.
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(g) The City acknowledges the following with respect to the Underwriter’s representation in Section 20(f):
(1) If a selling group has been created in connection with the initial sale of the Bonds to the Public, the Underwriter will rely on the agreement of each dealer who is a member of the selling group to comply with the Hold-the-Offering- Price Rule, if applicable, as set fort h in a selling group agreement and the related pricing wires.
(2) If a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the publ ic, the Underwriter will rely on the agreement of each broker-dealer that is a party to the agreement to comply with the Hold-the-Offering-P rice Rule, if applicable, as set forth in the third- party distribution agreement and the related pricing wires. (3) The Underwriter will not be liable fo r the failure of any dealer who is a member of a selling group, or of any br oker-dealer that is a party to a third- party distribution agreement, to comp ly with its corresponding agreement regarding the Hold-the-Offering-Price Rule as applicable to the Bonds. (h) The Underwriter acknowledges that sales of any Bonds to any person who is a Related Party to the Underw riter will not constitute sales to the Public for purposes of this Section 20.

(Signature Page Follows)
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STIFEL, NICOLAUS & COMPANY,

INCORPORATED

By:

Authorized Representative

Accepted and agreed to as of
the date first above written:

CITY OF SACRAMENTO

By:

John P. Colville Jr., City Treasurer

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EXHIBIT A

$________________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

MATURITY SCHEDULE AND
REDEMPTION TERMS

Maturity
(September 1)
Principal
Amount
Interest
Rate Yield
Initial
Offering
Price
10%
Test
Used
HTOP
Rule
Used
$ % %

C = Priced to the optional redemption date of [DATE], at [__]%.

T = Term bond.

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REDEMPTION TERMS

Optional Redemption. The Bonds maturing on or after September 1, 20[__], are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20[__], from any source of available funds other than prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at a redemption price equal to the principal amou nt thereof to be redeemed, together with accrued interest thereon to the date of redemption, without premium.

Extraordinary Redemption from Special Tax Prepayments. The Bonds are subject to extraordinary redemption by the City before their respective stated maturity dates, as a whole or in part on any Interest Payment Date , solely from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (expressed as a percentage of the principal amount of Bonds or portions thereof called for redemption), together with accrued interest to the date of redemption:

Redemption Dates
Redemption
Price
Any Interest Payment Date from September 1, 20[_] through and including March 1, 20[__]
103 %
September 1, 20[__], and March 1, 20[__] 102
September 1, 20[__], and March 1, 20[__] 101
September 1, [__] and any Interest Payment Date thereafter 100

Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20[__], are subject to mandatory redemption by the City be fore their stated maturi ty date in part on each September 1, as set forth in the schedu le below, solely from Sinking Fund Account Payments established under the Indenture for that purpose, upon mailed notice as provided in the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

The Bonds maturing on September 1, 20[__], ar e subject to mandatory redemption by the City before their stated maturity date in part on each September 1, as set forth in the schedule below, solely from Sinking Fund Account Payments established under the Indenture for that purpose, upon mailed notice as provided in the Indenture, at a redemption 82822.00014\34898319.7

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price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

Selection of Bonds for Redemption. If less than all of the Bonds outstanding are to be redeemed at the option of the Ci ty at any one time, the City wi ll select the maturity date or dates of the Bonds to be redeemed. If less than all of the Bonds of any one maturity date are to be redeemed at any one time, the Trustee shall select the Bonds or the portions thereof of such maturity date to be red eemed in integral multiples of $5,000 in any manner that the Trustee deems appropriate.

Notice of Redemption. When Bonds are to be redeemed under the Indenture, the Trustee shall give notice of the redemption of such Bonds. The no tice of redemption must state the date of the notice, the Bonds to be redeemed, the date of issue of the Bonds, the redemption date, the redemption price, the place of re demption (being the address of the Principal Corporate Trust Office of the Trustee), the CUSIP number (if any) of the maturity or maturities and, if less than all of any such maturity, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. The notice must further state that interest on the Bonds to be redeemed or the portions thereof will not accrue from and after the date of redemption and that all Bonds must be surrendered for redemption at the Principal Corporate Trust Office of the Trustee so designated. If any Bond chosen for redemption is not redeemable in whole, the notice must state that the Bond is to be redeemed in part only and that upon presenta tion of the Bond for redemption there will be 82822.00014\34898319.7

Bond Purchase Contract | Page A‐4

issued in lieu of the unredeemed portion of principal a new Bond or Bonds of the same series and maturity date of authorized denomination s equal in aggregate principal amount to the unredeemed portion.

At least 30 days but no more than 90 days before the redemption date, the Trustee shall mail a copy of such notice by first-class mail, po stage prepaid, to (a) the Holders of all Bonds selected for redemption at th eir addresses appearing on the register maintained by the Trustee in accordance with the Indenture, (b) to the securities information services selected by the City in accordance with the Indenture, and (c) to the Underwriter. Neither the failure to receive any such notice nor any immaterial defect in such notice will affect the sufficiency or validity of the proceedings for redemption.

Notwithstanding anything to the contrary cont ained in the Indenture, with respect to any notice of optional or extraord inary redemption of Bonds, unle ss, upon the giving of such notice, such Bonds are deemed to have been paid within the meaning of the Indenture, such notice will state that such redemption is cond itional upon the receipt by the Trustee on or prior to the date fixed for such redemption of amounts sufficient to pay the principal of, and premium, if any, and interest on, such Bonds to be redeemed, and that if such amounts are not received the notice will be of no force an d effect and the City will not be required to redeem such Bonds. In the event that any such notice of redemption contains such a condition and such amounts are not so receiv ed, the redemption will not be made and the Trustee will within a reasonable time thereafter give notice to the effect that such amounts were not so received and such redemption wa s not made, such notice to be given by the Trustee in the same manner, and to the same parties, as the notice of redemption was given.

Such failure to redeem such Bonds shall no t constitute an Event of Default under the Indenture.

Notwithstanding anything to the contrary contained in the Indenture, any notice of optional or extraordinary redemption of Bonds may be rescinded by written notice given to the Trustee by the City no later than five Bu siness Days prior to the date specified for redemption. The Trustee will give notice of such rescission as soon thereafter as practicable in the same manner, and to the same parties, as notice of such redemption was given.

Effect of Redemption. If notice of redemption is given as provided in the Indenture and the money necessary for the payment of the prin cipal of, and any redemption premiums and interest to the redemption date on, the Bonds or portions thereof so called for redemption is held by the Trustee, then on the redempti on date the Bonds called for redemption or portions thereof will become due and payable, and from and after the redemption date interest on those Bonds or such portions thereof will cease to accrue and the Holders of such Bonds shall have no rights in respect thereof except to receive payment of the principal or such portions thereof and the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date.

Capitalized terms not defined he rein shall have the same me aning set forth in the Bond Purchase Agreement dated [SALE DATE], betw een the District and Stifel, Nicolaus & Company, Incorporated (the “Agreement”).
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EXHIBIT B

$_______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE REGARDING PRELIMINARY OFFICIAL STATEMENT

I, John P. Colville Jr., Sacramento City Treasurer, hereby state and certify as follows:

1. I am the duly appointed, qualified, and acting Treasurer of the City of Sacramento (the “City”), a municipal corporation duly organize d and existing under its charter and the Constitution and laws of the State of California. As such, I am familiar with the facts herein certified and am authorized and qualified to certify those facts.

2. With respect to the above-captioned bonds, the City has deemed the Preliminary Official Statement dated [POS DATE], including the cover page and all appendices, to be final as of its date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, except for information permitted to be omitted therefrom by Rule 15c2-12.

Dated: _________________

CITY OF SACRAMENTO

By
John P. Colville Jr.

City Treasurer

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EXHIBIT C

$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CLOSING CERTIFICATE OF THE CITY OF SACRAMENTO

The undersigned hereby certifies and represents that they are the duly appointed and acting representative of the City of Sacramento (the “City”), that they are authorized to execute this certificate in connection with the issuance of the bonds identified above, and further certifies and reconfirms the following on the City’s behalf:

1. The representations and warranties of the City contained in the Bond Purchase Contract between the City and Stifel, Nicolaus & Comp any, Incorporated, dated [SALE DATE] (the “Contract”), are true in all material respects as of the date of this certificate as if made on the date of this certificate.

2. The City has complied with all agreements, covenants, and conditions to be complied with by the City under the Indenture and the Contract as of the date of this certificate.

Each capitalized term not defi ned in this certificate has th e meaning given to it in the Contract.

Dated: ___________

CITY OF SACRAMENTO

By:

John P. Colville Jr.

City Treasurer

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EXHIBIT D

$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF SPECIAL TAX CONSULTANT

The City of Sacramento has retained Ec onomic & Planning Systems, Inc. (the “Special Tax Consultant”), as a special tax consultant in co nnection with the City of Sacramento Railyards Community Facili ties District No. 2018-01 (Improvements) (the “ CFD”). The Special Tax Consultant has reviewed the rate and method of apportionment of special tax for the CFD (the “RMA”), which is set forth in Appendix A to the Official Statement (the “Official Statement”) dated [DATE], relating to the bonds identified above (the “Bonds”). The Special Tax Consultant has also reviewed the summaries and descriptions of the RMA in the Official Statement. Based upon that review, the Special Tax Consultant hereby certifies as follows:
(a) The Special Tax levied under the RMA, if levied in the maximum amounts permitted under the special tax formula set forth in the RMA on the date of this certificate, would be levied in a combined amount equal to at least 110% of the projected debt service on the Bonds and Administrative Fees and Expenses, provided that the annual debt service figures in the debt service schedules in the Official Statement, which were relied upon by Special Tax Consultant, are substantially true and correct. Although the Special Tax, if levied in the maximum am ounts under the special tax fo rmula set forth in the RMA, would be levied in an amount equal to at least 110% of th e projected debt service on the Bonds and Administrative Fees and Expenses, no representation is made herein as to actual amounts that will be collected in future years. (b) All summaries of and information with respect to the RMA in the Official Statement, all information in Tables 4 and 5 in the Offi cial Statement, and all other information provided by the Special Tax Consultant for in clusion in the Official Statement are true and correct as of the date of the Official Statement and as of the date hereof. (c) The aggregate value of all real property subject to the levy of the Special Tax in the CFD, based upon the appraisal report dated [August 5, 2022] (with a date of value of July 1, 2022) is at least three times the lien of the Bonds and overlapping community facilities district and assessment district bonds on taxable property within the CFD.

Each capitalized term not defined in this certificate has the meaning given to it in the Official Statement.

Dated: [DATE] ECONOMIC & PLANNING SYSTEMS, INC.

By:

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EXHIBIT E

$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF TRUSTEE

The undersigned hereby states and certifies th at they are an authorized officer of U.S.

Bank Trust Company, National Association, as trustee (the “ Trustee”) under that certain Master Indenture, dated as of [September 1, 2022] as supplemented by a First Supplemental Indenture dated as of [September 1, 2022] (collectively, the “ Indenture”), by and between City of Sacramento and the Trustee, relating to the above-captioned bonds (the “Bonds”).

As such, the undersigned is familiar with the following facts and is authorized and qualified to certify the following facts on behalf of the Trustee:
(1) The Trustee is duly organized and existing as a national banking association under the laws of the United States of America, havi ng the full power and authority to enter into and perform its duties under the Indenture.
(2) The Trustee has duly authorized, executed, and delivered the Indenture. (3) To the Trustee’s best knowledge after due inquiry, there is no action, suit, proceeding, or investigation at law or in equity before or by any court or governmental agency, public board, or public body (a) pending ag ainst the Trustee or threatened against the Trustee that in the Trustee’s reasonable judgment would affect the Trustee’s existence or (b) in any way contesting or affecting the validity or enforceability of the Indenture or contesting the Trustee’s powers or it s authority to enter into, and perform its obligations under, the Indenture.

Dated: [DATE] U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION,
as Trustee

By
Authorized Officer

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EXHIBIT F

SUPPLEMENTAL OPINION OF BOND COUNSEL

[DATE]

Stifel, Nicolaus & Company, Incorporated
Sacramento, California

Re: $________________ City of Sacramento Rail yards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 Ladies and Gentlemen:

This letter is addressed to you, as Underw riter, pursuant to Section 9(c)(2) of the Bond Purchase Contract, dated [SALE DATE] (the “ Contract”), between you and the City of Sacramento (the “City”), providing for the purchase of the special tax bonds captioned above (the “Bonds”). The Bonds are being issued pursuant to a Master Indenture, dated as of [September 1, 2022], as supplemented by a Fi rst Supplemental Indenture, dated as of [September 1, 2022] (collectively, the “Indenture”), by and between the City and U.S. Bank Trust Company, National Association, as trustee (the “ Trustee”). Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or, if not defined in the Indenture, in the Contract.

I n c o n n e c t i o n w i t h o u r r o l e a s b o n d c ounsel to the City, we have reviewed the Indenture; the Contract; the Cert ificate as to Arbitrage and the Use of Proceeds Certificate, each dated the date he reof (together, the “Tax Certificate”), executed by the City; opinions of counsel to the City and the Trustee; certif icates of the City, the Trustee and others; and such other documents, opinions and matters to the extent we deemed necessary to provide the opinions set forth herein.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions an d cover certain matters not di rectly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertak en to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other matters come to our attention after the date hereof. 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. We have assumed, without undertaking to veri fy, 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. We have further assumed compliance with all covenants and agreements contained in such documents. In addition, we call attention to the fact that the rights and obligations under the Bonds, the Indenture, the Tax Certificate and the Contract and their enforceability may be subject to bankruptcy, insolvency, reorganization, receivership, arrangement, fraudulent conveyance, moratorium 82822.00014\34898319.7

Bond Purchase Contract | Page F‐2

and other laws relating to or affecting credit ors’ rights, to the a pplication of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against ci ties in the State of California. We express no opinion with respect to any indemnification, contribution, liquidat ed damages, penalty (i ncluding any remedy deemed to constitute a penalty),right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non-excl usivity of remedies, waiver or severability provisions contained in the foregoing docume nts, nor do we express any opinions with respect to the state or quality of title to or interest in any assets described in or as subject to the lien of the Indenture or the accuracy or sufficiency of the description contained therein of, or the remedies available to enforce liens on, any such assets. We express no opinion with respect to the plans, specificat ions, maps, financial report or other engineering or financial details of the proceedings, or upon the amended and rest ated rate and method of apportionment of the Special Tax or the validity of the Special Tax levied upon any individual parcel. Finally, we undertake no responsibility for the accuracy, except as expressly set forth in numbered paragraph 3 below, completeness or fairness of the Official Statement, dated [SALE DATE] (the “Official Statement”), or other offering material relating to the Bonds and express no opinion relating thereto.

Based on and subject to the fo regoing, and in reliance ther eon, as of the date hereof, we are of the following opinions:

1. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exem pt from qualification pursuant to the Trust Indenture Act of 1939, as amended.

2. The Contract has been duly executed an d delivered by, and is a valid and binding agreement of, the City.

3. The statements contained in the Official Statement under the captions “THE BONDS,” “SOURCES OF PAYMENT FOR THE BONDS,” and “TAX MATTERS,” and contained in APPENDIX C – “PROPOSED FORM OF OPINION OF BOND COUNSEL” and APPENDIX E – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE,” excluding any material that may be treated as included under such captions by cross-reference or reference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Indenture, and the form and content of our final legal opinion as bond counsel to the City concerning th e validity of the Bo nds and certain other matters, dated the date hereof and addressed to the City, are accurate in all material respects.

This letter is furnished by us as bond counsel to the City. No attorney-client relationship has existed or exists between our firm and you in connection with the Bonds or b y v i r t u e o f t h i s l e t t e r . W e d i s c l a i m a n y o b l igation to update this letter. This letter is delivered to you as Underwriter of the Bonds, is solely for your benefit as such Underwriter in connection with the original issuance of th e Bonds on the date hereof, and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person. This letter is not intended to , and may not, be relied upon by owners of Bonds or by any other party to whom it is not specifically addressed. 82822.00014\34898319.7

Bond Purchase Contract | Page F‐3

Very truly yours,

ORRICK, HERRINGTON & SUTCLIFFE, LLP

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EXHIBIT G

OPINION OF THE CITY ATTORNEY

[DATE]

Stifel, Nicolaus & Company, Incorporated
Sacramento, California

Re: $_______________ City of Sacramento Railya rds Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022

Greetings:

We are legal counsel for the City of Sacramento (the “City”) in connection with the issuance and delivery of the special ta x bonds captioned above (the “ Bonds”). The Bonds are being issued under a Master Indenture, dated as of [September 1, 2022] as supplemented by a First Supplemental Indenture dated as of [September 1, 2022] (collectively, the “Indenture”), by and between the City and U.S. Bank Trust Comp any, National Association, as trustee (the “Trustee”). We are providing this opinion to yo u in connection with the Bond Purchase Contract dated [SALE DATE], between the City and Stifel, Nicolaus & Company, Incorporated (the “Contract”), which among other things provides for the purchase of the Bonds in the aggregate principal amount of $________________. Unless otherwise defined in this opinion, or unless the context otherwise requires, the capi talized terms used below have the meanings given them in the Indenture or, if not defined in the Indenture, in the Contract.

We have examined the Indenture and the Contract (collectively, the “City Documents”) and the Bonds. Based on that examination and on our examination of such other information, papers, and documents as we considered ne cessary or advisable to examine before rendering an opinion (including the State of California’s Constitution and laws and the City’s governing instruments, ordinances, and public p r o c e e d i n g s ) , w e h a v e c o n c l u d e d t h a t t h e following statements are accurate as of the date of this opinion:

1. The City is a charter city duly organized an d validly existing under its charter and the State of California’s Constitution and laws, with full right and lawful authority (a) to adopt the Resolution; (b) to sign and delive r the City Documents, the Bonds, and all related documents; (c) to perform its obli gations under the documents identified in clause (b) of this paragraph; and (d) to issue the Bonds.

2. The City of Sacramento Railyards Commu nity Facilities Di strict No. 2018-01 (Improvements) (the “CFD”) is a community facilities district duly organized and validly existing under California law, including the Mello-Roos Community Facilities Act of 1982 set out in the California Government Co de beginning with section 53311 (the “ Mello‐ Roos Act”).
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3. The City has duly and validly authorized, executed, and delivered the City Documents and the Bonds. Hence, the City Documents an d the Bonds constitute legal, valid, and binding obligations of the City, enforceable against the City in accordance with their terms, except as enforcement may be limited by—
(a) bankruptcy, insolvency, reorga nization, moratorium, or simi lar laws relating to or affecting creditors’ rights generally (including fraudulent conveyance laws); (b) general principles of equity, including concepts of materiality, reasonableness, and good faith and fair dealing;
(c) the possible unavailability of specific performance or injunctive relief, whether in a proceeding in equity or at law; or
(d) the exercise of judicial disc retion in appropriate cases or the limitations on legal remedies against public entities in California.

4. At a public meeting called and held according to law with all public notice required by law, and at which a quorum was present an d acting throughout, the Sacramento City Council (the “City Council”) duly adopted the Resolution, which is in full force and effect and has not been amended or rescinded.

5. To our actual knowledge, the City Council’ s adoption of the Resolution; the City’s execution and delivery of the City Documents, the Bonds, th e Final Official Statement, and all related documents; th e consummation of the tran sactions described in the Resolution, the City Document s, and all related documents; and the City’s compliance with the Resolution, the City Documents, the Bonds, and all related documents do not in any material way—
(a) conflict with, or constitute on the part of the City a viol ation of, or a breach of or default under, any material indenture, mortgage, commitment, note, or other agreement or instrument to which the City is a party or by which it is bound; (b) violate the City’s charter, the Mello-Roos Act, or the California Constitution; or (c) violate any law, rule, regulation, ordinance, judgment, order, or decree that applies to the City or to the members of the City Council or any of the City’s officers in his or her capacity as an officer.

6. Except as specifically disclosed in the Offi cial Statement, to ou r actual knowledge the City has not been served with process in, and has not been overtly threatened with, any action, suit, proceeding, inquiry, or investigat ion, at law or in equity, before or by any court, public board, or public body—
(a) that questions in any way th e powers of the City Council in connection with the issuance of the Bonds;
(b) that questions in any way the validity of any proceeding taken by the City Council in connection with the issuance of the Bonds;
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(c) in which an unfavorable decision, ruling, or finding is likely to have a material adverse effect on the City’s financial cond ition or on the transactions described in the Contract;
(d) that is likely to adversely affect the validi ty or enforceability of the Resolution, the Bonds, or the City Documents; or
(e) that questions in any other way the status of the Bonds under Ca lifornia’s tax laws or tax regulations.
**********
We express no opinion about the following: any indemnification or contribution provision in the City Documents; the City’s , Downtown Railyard Venture, LLC ’s, or Kaiser Foundation Hospitals’ financial capacity or lack of financial capacity; Downtown Railyard Venture, LLC ’s or Kaiser Foundation Hospitals’ development project within the CFD; and the state or federal laws that pertain to the tax-exempt status of the Bonds. The phrase “to our actual knowledge” does not imply that we have undertaken any independent inve stigation about the facts at issue, and in fact we have not done so.

Sincerely yours,
Susana Alcala Wood
City Attorney

By: ________________________________
Jeffrey L. Massey
Senior Deputy City Attorney
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Bond Purchase Contract | Page H‐1

EXHIBIT H

$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022
CERTIFICATE OF APPRAISER
BBG, Inc. of Sacramento, California (the “Appr aiser”), prepared an appraisal report of certain properties within the City of Sacramento Railyards Community Facilities District No. 2018-01 (the “CFD”), dated [August 5, 2022] (wit h a date of value of July 1, 2022) (the “Appraisal”). The Appraisal is described and summarized in, and is set out as Appendix B to the Preliminary Official Statement dated [POS DATE] (the “Preliminary Official Statement”), and the Official Statement dated [SALE DATE] (the “Final Official Statement”), relating to the bonds captioned above.

1. The Appraiser hereby certifies as follows to the best of its knowledge and belief: (a) all information with respect to the Appraisal in the Preliminary Offici al Statement and the Final Official Statement was true and correct as of the date of the Appraisal; (b) since the date of the Appraisal, nothing has come to the attention of the Appraiser that would cause the Appraiser to believe that the value of th e property appraised therein is less than the value reported in the Appraisal; provided that, acts and events may have occurred since the date of the Appraisal which could result in both positive and negative effects on market value of such property; and (c) that a further updated Appraisal has not been completed as of the date of this certificate.

2. The Appraiser hereby consents to the us e of the Appraisal in connection with the distribution and use of the Preliminary Official Statement and Final Official Statement.

Dated: [DATE]
BBG, INC.

B y :

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EXHIBIT I‐1
$____________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF DEVELOPER
(Downtown Railyard Venture, LLC )

[DATE]
In connection with the issuance, sale and delivery by the City of Sacramento (the “City”) with respect to the City of Sacramento Rail yards Community Facilities District No. 2018-01 Special Tax Bonds, Series 2022 (the “ Bonds”), and pursuant to a Bond Purchase Contract (the “Bond Purchase Contract”) to be entered into between the City and Stifel, Nicolaus & Company, Incorporated, as underwriter (the “ Underwriter”), the undersigned, in their capacity as a duly authorized officer or repr esentative of Downtown Railyard Venture, LLC, a Delaware limited liab ility company (the “ Developer”), hereby certifies, on behalf of the Developer, as follows as of the date hereof:

1. The Developer is the owner of certain property (the “Property”) located within the City of Sacramento Railyards Community Facilities District No. 2018-01 (the “District”). The undersigned is familiar with the facts here in certified and is duly authorized and qualified to execute this Certificate of De veloper (Downtown Railyard Venture, LLC ) (the “Certificate”) on behalf of the Developer and with respect to the Property.

2. Capitalized terms not defined herein have the same meaning as is set forth in the Bond Purchase Contract. As used in this Certificate, the following capitalized terms have the meanings set forth below:
(a) “Actual Knowledge of the Undersigned” means the actual (as opposed to constructive) knowledge that the individual signing this Certificate on behalf of the Developer has as of the date of this Certificate or has obtained through (1) knowledge of the matters set forth in this Certificate; or (2) a review of documents that were reasonably available to the undersigned and that the undersigned has reasonably deemed necessary for the un dersigned to obtain knowledge of the matters set forth in this Certificate. 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. The indivi dual signing this Certificate has not contacted any individuals who are no longer employed by, or associated with, the Developer.
(b) “Affiliates” means any person presently direct ly (or indirectly through one or more intermediaries) under managerial control of the Developer, and about whom information could be material to potentia l investors in their investment decision 82822.00014\34898319.7

Bond Purchase Contract | Page I-1-2

regarding the Bonds, including Sacram ento 695 L.P. For purposes of this Certificate, the term “Affiliates” shall not include Kaiser Foundation Hospitals.

3. The Developer is a limited liability company validly existing and in good standing as a limited liability company under the laws of the State of Delaware and is duly registered to transact intrastate business in the State of California and is in good standing in the State of California and has all requisite limited liability comp any right, power and authority: (i) to execute and deliver this Ce rtificate; and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement.

4. As of the date of the Preliminary Official Statement, the statemen ts contained in the Preliminary Official Statement under th e captions “INTRODUCTION – Sacramento Railyards,” “INTRODUCTION –Property Ownership and Development Status,” “SACRAMENTO RAILYARDS,” “DEVELOPMENT PLAN” (other than under the caption “—Kaiser Development Plan” for which no ce rtification is provided), and "CONTINUING DISCLOSURE – Developer Continuing Disclosure" (excluding any statements regarding any property owner or the property owne d by a property ow ner other than the Developer and any statements that cite in formation from a source other than the Developer, but including all information rega rding the project being marketed as “The AJ”) are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to st ate a material fact necessary to make the statements therein, in light of the circ umstances under which they were made, not misleading.

5. To the Actual Knowledge of th e Undersigned, the Developer is able to pay its bills as they become due and no proceedings are pe nding against the Developer (based upon service of process upon the Developer havi ng been accomplished) or, to the Actual Knowledge of the Undersigned, are threatened in writing in which the Developer or any of its Affiliates may be adjudicated as bankru pt or discharged from any or all of their respective debts or obligations, or granted an extension of time to pay their respective debts or obligations, or be a llowed to reorganize or readjust their respective debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

6. Except as set forth in the Preliminary Offici al Statement, no action, suit, proceeding, inquiry, or investigation at law or in equity , before or by any court, regulatory agency, public board or public body is pending ag ainst the Developer or any Affiliate (with proper service of process upon the Develope r or Affiliate having been accomplished) or, to the Actual Knowledge of the Undersig ned, is threatened in writing against the Developer or any Affiliate (a) to restrain or enjoin the collection of the Special Taxes or other sums pledged or to be pledged to pay the principal of and interest on the Bonds, (b) to restrain or enjoin the development or sale of the Property as described in the Preliminary Official Statement, (c) in any way contesting or affecting the validity of the Special Taxes or the District, or (d) which is reasonably likely to materially and adversely affect the Developer’s ability to develop and sell the Property as described in the Preliminary Official Statement or to pa y the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency. 82822.00014\34898319.7

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7. Except as described in the Preliminary Offici al Statement, to the Actual Knowledge of the Undersigned, there are no material loans outstanding and unpaid and no material lines of credit of the Develope r or its Affiliates that are se cured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Developer nor any of its Affiliates is currently in material de fault on any loans, lines of credit, or other obligation related to the development of th e Property (or any other project) that is reasonably likely to materia lly and adversely affect the De veloper’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 (t o the extent the responsibility of the Developer) prior to delinquency.

8. Except as expressly stated in the Prelim inary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not aware that any of the Property (a) has a current liability with respect to the pr esence of a substance classified as of the date hereof as hazardous under the fede ral Comprehensive Environmental Response, Compensation and Liability Act of 1980 or un der applicable Californ ia law, or (b) is adversely affected by the presence of endang ered or threatened species or of habitat for endangered or threatened species.

9. To the Actual Knowledge of th e Undersigned, during the la st five years, neither the Developer nor any current Affiliate has, du ring the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment, or special tax on property included within the boundaries of a community facilities district or an asse ssment district in California that (a) caused a draw on a reserve fund relating to financing throug h the community facilities district or assessment district, or (b) resulted in a foreclosure action being commenced against the Developer or its Affiliates in a court of law.

10. To the Actual Knowledge of the Undersigned, the Develope r is fully qualified by all necessary permits, licenses, and certifications to conduct its business as the business is being conducted as of the date hereof an d, except for any licenses, certificates, approvals, variances, and permits that ma y be necessary for the construction and operation of the Developer’s development project within the District as described in the Preliminary Official Statement, there is no consent, approval, authorization, or other order of, or filing with, or ce rtification by, any regulatory authority having jurisdiction over the Developer, other than those that ha ve been obtained and are in full force and effect, that is required for completion and sale, as applicable, of the development project within the District as described in the Preliminary Official Statement.

11. To the Actual Knowledge of th e Undersigned, the Developer is not in violation of any provision of, or in default under, its limi ted liability company agreement or any other relevant and material agreement, lease, or contract to which the Developer is a party or is otherwise subject, the violation of or default under which could reasonably be expected to materially and adversely affect the Developer’s ability to own and develop the Property as described in the Preliminary Official Statement or to pay Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
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12. To the Actual Knowledge of the Undersigne d, there are no claims, disputes, suits, actions, or contingent liabilities, by an d among the Developer, its Affiliates, any contractors working on the development of th e Property, or any other party, that is reasonably likely to materially and adversely affect the development of the Property as described in the Preliminary Official Statement or the payment of the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.

13. Based upon the development plans as of the date hereof, includin g but not limited to 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 titled “SPECIAL RISK FACTORS,” to the Actual Knowledge of the Undersigned, the De veloper anticipates as of the date hereof that it will have sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Taxes levied against the Property (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the District will be required to draw on the reserve fund for the bonds for payment of principal of or interest on the Bonds because of the Developer’s nonpayment of Special Taxes.

14. An appraisal of the taxable properties within the District, dated [A ugust 5, 2022] (the “Appraisal Report”), was prepared by BBG, Inc. (the “ Appraiser”). The Appraisal Report estimates the market value of the taxa ble properties within the District as of [July 1, 2022] (the “ Date of Value”), confirming the market values of the taxable property within the District are not less th an the original values set forth in the Appraisal. To Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by , the Developer to the Appr aiser and contained in the sections of the Appraisal Repo rt highlighted in yellow or ci rcled in Exhibit A attached hereto, was true and correct in all material respects as of the Date of Value.

15. A report of RCLCO Real Estate Consulting (formerly Robert Charles Lesser & Co.) of Los Angeles, California (the “M arket Absorption Consultant”) , dated May 17, 2022 (the “Absorption Report”), was prepared. To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Market Absorption Consultant and contained in the sections of th e Absorption Report highlighted in yellow or circled in Exhibit A attached hereto, was true and correct in all material respects as of the date of the Absorption Report.

16. The Developer covenants that, while the Bo nds or any refunding obligations related thereto are outstanding, the De veloper and its Affiliates that it controls will not bring any action, suit, proceeding, inquiry, or inve stigation at law or in equity before any court, regulatory agency, public board, or public body that in any way seeks to challenge or overturn the formation of the District, to challenge the adopti on of the ordinance levying special taxes within the District, to invalidate the Di strict or the Bonds, or to invalidate the special tax liens impose d under section 3115.5 of the Streets and Highways Code based on recordation of the no tices of special tax lien relating thereto.

The foregoing covenant shall not prevent th e Developer and its Affiliates in any way 82822.00014\34898319.7

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from bringing any other action, suit, proceedin g, inquiry or investigation at law or in equity, before any court, regulatory agency , public board or body, including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies co ntained in the Rate and Method of Apportionment of Special Taxes pursuant to which Special Taxes are levied, (b) an action or suit with respect to the applicat ion 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 District under the Resolution, the Indenture, the Fi rst Supplemental Indenture, any continuing disclosure certificate, or any other agreements among the Developer or its Affiliates, the City and/or the District or to which the Developer or its Affiliates is a beneficiary.

17. The Developer hereby consents to the issu ance of the Bonds and acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement.

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

19. If, between the date hereof and the Closing Date any event occurs that relates to or affects Developer, its Affiliates, the propos ed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, or contractual arrangements of the Developer or any Affiliates of which the Developer has actual knowledge that would cause the information under the sections of the Prel iminary Official Statement indicated in section 4 above (and subject to the limitations and exclusions contained in section 4 hereof) to contain an untrue statement of a ma terial fact or to omit to state a material fact necessary to make the statements ther ein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City and the Underwriter; and if, in the op inion of counsel to the City or the Underwriter, the event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City and counsel to the Underwriter.

20. The Developer shall deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of th e Bonds, in substantially the fo rm attached as Exhibit J to the Bond Purchase Contract.

21. The undersigned has reviewed the contents of this Certificate and has conferred with counsel to the Developer for the purpose of discussing the meaning of the contents of this Certificate. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but no t limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchan ge Act of 1934, as amended, may apply to the Developer and that, under some circumstances, certification as to the matters set forth in this Certificate, without a dditional disclosures or other 82822.00014\34898319.7

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action, may not fully discharg e all duties and obligations of the Developer under those securities laws.

22. Neither the undersigned nor the Developer makes any representation or warranty with regard to preparation of any document requ ired for the issuance of the Bonds or the documents' compliance with an y applicable federal or stat e law, regulation, rule or policy.

The undersigned has executed th is Certificate solely in their capacity as an authorized officer or representative of th e Developer, and they will have no personal liability arising from or relating to this Certificate. Any liabil ity arising from or relating to this Certificate may only be asserted against the Developer.

DOWNTOWN RAILYARD VENTURE, LLC ,
a Delaware limited liability company

By:

Name:

Its:
82822.00014\34898319.7

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EXHIBIT A

EXCERPTS FROM THE APPRAISAL

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EXHIBIT I‐2
$_____________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CERTIFICATE OF PROPERTY OWNER
(Kaiser Foundation Hospitals)

[DATE]

In connection with the issuance, sale and delivery by the City of Sacramento (the “City”) with respect to the City of Sacramento Rail yards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the “ Bonds”), and pursuant to a Bond Purchase Contract (the “Bond Purchase Contract”) to be entered into between the City and Stifel, Nicolaus & Company, Incorporated, as underwriter (the “ Underwriter”), the undersigned, in his or her capaci ty as a duly authorized office r or representative of Kaiser Foundation Hospitals, (the “ Property Owner”), hereby certifies, on behalf of the Property Owner, as follows as of the date hereof:

1. The undersigned is familiar with the facts he rein certified and is duly authorized and qualified to execute this certificate on behalf of the Property Owner.

2. Capitalized terms not defined herein have the same meaning as is set forth in the Bond Purchase Contract. As used in this certific ate, the following capitalized terms have the meanings set forth below:

(a) “Actual Knowledge of the Undersigned” means the knowledge that the individual signing this certificate on behalf of the Property Owner has as of the date of this certificate or has obtained through (1) knowledge of the matters set forth in this certificate; or (2) a review of document s that were reasonably available to the undersigned and that the undersigned ha s reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this certificate. 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 Property Owner’s current business and operations. The individual signing this certificate has not contacted any indivi duals who are no longer employed by, or associated with, the Property Owner.

(b) “Affiliates” means Kaiser Foundation Health Plan, Inc.

(c) “Property Owner Information” means all written information that concerns the Property Owner and its Affiliates, the Property, ownership of the Property, the Property Owner’s proposed development of the Property, or the Property Owner’s and its Affiliates’ financing plans for carrying out the proposed development of the Property 82822.00014\34898319.7

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and was submitted by, or at the direction of, the authorized employees of the Property Owner involved in the issuance of the Bonds to the Underwriter, the City, or Disclosure Counsel in connection with the preparation of the sections of the Preliminary Official Statement set forth in Section 5, below. Notwithstanding the foregoing, “Property Owner Information” excludes documents an d information not prepared by and over which the Property Owner has no control (e.g., the property value set out in an appraisal).

(d) “Property” means the real property in the District held in the name of the Property Owner.

3. The Property Owner is duly organized and va lidly existing under th e laws of the State of California and has all requisite right, power, and authority (a) to execute and deliver this Certificate, and (b) to develop the Property as described in the Preliminary Official Statement.

4. To the Actual Knowledge of the Undersigned, all Property Owner Information was true, complete, and correct in all material resp ects when submitted or as updated and modified and remains true, co mplete, and correct as update d and modified as of the date hereof.

5. The Property Owner’s current expectations for the development of the Property are accurately described in the Pr eliminary Official Statement. As of the date of the Preliminary Official Statement, the statemen ts contained in the Preliminary Official Statement under the caption “DEVELOP MENT PLAN—Kaiser Development Plan” (excluding any statements regarding any property owner or the property owned by a property owner other than the Property Owner and any statements that cite information from a source other than the Property Owner) are true and correct in all material respects and do 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.

6. To the Actual Knowledge of the Undersigned, no proceedings are pending (based upon service of process upon the Property Owne r or any of its Affi liates having been accomplished) or are threatened in writing in which the Property Owner or any of its A f f i l i a t e s m a y b e a d j u d i c a t e d a s b a n k r u p t o r d i s c h a r g e d f r o m a n y o r a l l o f t h e i r respective debts or obligations, or granted an extension of time to pay their respective debts or obligations, or be a llowed to reorganize or readjust their respective debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.

7. Except as set forth in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no action, suit, proceeding, inqu iry, or investigation at law or in equity, before or by any court, regulatory agency , public board or public body is pending against the Property Owner or any Affiliate (with proper service of process having been accomplished) or, is threatened in writing against the Property Owner or any Affiliate (a) to restrain or enjoin the collection of th e Special Taxes or other sums pledged or to 82822.00014\34898319.7

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be pledged to pay the principal of and interest on the Bonds, (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, or (c) which is reasonably likely to materially and adversely affect the Property Owner’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 Property Owner) prior to delinquency.

8. Except as described in the Preliminary Offici al Statement, there are no material loans outstanding and unpaid and no material line s of credit of the Property Owner or its Affiliates that are secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Property Owner nor any of its Affiliat es is currently in material default on any loans, lines of cr edit, or other obligation related to the development of the Property (or any other project) that is reasonably likely to materially and adversely affect the Property Owner’s ability to develop the Property as described in the Preliminary Official Statem ent or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of the Property Owner) prior to delinquency.

9. To the Actual Knowledge of the Undersigned, during the last five years, the Property Owner has not, during the period of its ow nership, been delinque nt to any material extent in the payment of any special assessm ent, or special tax on property included within the boundaries of a co mmunity facilities district or an assessment district in California that (a) caused a draw on a rese rve fund relating to financing through the community facilities di strict or assessment district or (b) resulted in a foreclosure action being commenced against the Property Owner or its Affiliates in a court of law.

10. Except for any licenses, cert ificates, approvals, variance s, and permits that may be necessary for the construction and operation of the Property Owner’s development project within the District as described in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there is no consent, approval, authorization, or other order of, or filing with, or certific ation by, any regulatory authority having jurisdiction over the Property Owner, other than those that have been obtained and are in full force and effect, that is required for completion of the Property Owner’s development project within the District as described in the Pr eliminary Official Statement.

11. To the Actual Knowledge of the Undersigned, the Property Owner is not in violation of any provision of, or in default under, its bylaws or any other relevant and material agreement, lease, or contract to which the Property Owner is a party or is otherwise subject, the violation of or default unde r which could reasonably be expected to materially and adversely affect the Proper ty Owner’s ability to own and develop the Property as described in the Preliminary Official Statement or to pay Special Taxes due with respect to the Property and for which the Property Owner is responsible prior to delinquency.

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12. To the Actual Knowledge of the Undersigne d, there are no claims, disputes, suits, actions, or contingent liabilities, by and among the Property Owne r, its Affiliates, any contractors working on the development of th e Property, or any other party, that is reasonably likely to materially and adversely affect the development of the Property as described in the Preliminary Official Statement or the payment of the Special Taxes due with respect to the Property (to the extent the responsibility of the Property Owner) prior to delinquency.

13. The Property Owner covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Property Owner and its Affiliates that it controls will not bring any action, suit, proceeding, inqu iry, or investigation at law or in equity before any court, regulatory agency, public board, or public body that in any way seeks to challenge or overturn the formation of th e District, to challeng e the adoption of the ordinance levying special taxes within the District, to inva lidate the District or the Bonds, 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.

14. The Property Owner shall 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 A hereto.

15. The undersigned has reviewed the contents of the Preliminary Official Statement solely with regard to the Property Owner Inform ation. The undersigned has reviewed the contents of this certificate and has confer red with counsel to the Property Owner for the purpose of discussing the meaning of the contents of this Certificate. The Property Owner 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 Property Owner and that, under some circumstances, certification as to the matters set forth in this Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the Property Owner under those securities laws.

16. Neither the undersigned nor the Property Owner makes any representation or warranty with regard to preparation of any document required for the issuance of the Bonds or the documents’ compliance with any applicable federal or state law, regulation, rule or policy.

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The undersigned has executed this Certificate as of the first date written above solely in her capacity as an authorized officer or representative of the Property Owner, and she will have no personal liability arising from or relating to this certificate. Any liability arising from or relating to this certificate may only be asserted against the Property Owner.

KAISER FOUNDATION HOSPITALS
By:

Name: Carrie Owen Plietz
Its: Regional President, Northern California
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EXHIBIT J‐1
$____________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CLOSING CERTIFICATE OF DEVELOPER
(Downtown Railyard Venture, LLC )

[DATE]

In connection with the issuance, sale and delivery by the City of Sacramento (the “City”) with respect to the City of Sacramento Rail yards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the “ Bonds”), and in accordance with the Bond Purchase Contract (the “ Bond Purchase Contract”) between the City and Stifel, Nicolaus & Company, Incorporated, as underwriter (the “ Underwriter”), the undersigned, in his or her capacity as a duly authorized of ficer or representative of Downtown Railyard Venture, LLC, a Delaware limi ted liability company (the “ Developer”), hereby certifies, on behalf of the Developer, as follows as of the date hereof:

1. The undersigned is familiar with the facts he rein certified and is duly authorized to execute this Closing Certificate of Develope r (Downtown Railyard Venture, LLC ) (the “Closing Certificate”) on behalf of the Developer.

2. The Developer has duly executed the Certificate of Developer (Downtown Railyard Venture, LLC ), dated [DATE] (the “Developer Certificate”).

3. Capitalized terms that are not defined in th is Closing Certificate have the meanings given them in the Developer Certificate.

4. To the Actual Knowledge of the Undersigned, the representations and warranties of the Developer in the Developer Cert ificate are true and correct in all material respects on and as of the date of this Closing Certificate (the “ Closing Date”), with the same effect as if made on the Closing Date, and the co venants of the Developer in the Developer Certificate have the same effect as if made on the Closing Date, except that all references in the Developer Certificate to the Preliminary Official Statement are deemed to be references to the final Official Statement dated [SALE DATE] (the “Official Statement”).

5. At any time after the date of this Closing Certificate and within twenty-five (25) days after the Closing Date, if any event occurs that relates to or affects the Developer and its Affiliates, the Property, ownership of the Property, the Developer’s proposed development of the Property, or the Develope r’s and its Affiliates’ financing plans for carrying out the proposed development of the Property, and if, as a result of that event, any statements in the Official Statement that are referenced in section 4 of the Developer Certificate (and subject to the limitations and exclusions contained in section 4 thereof) become materially untrue, then the Developer shall notify the City and the 82822.00014\34898319.7

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Underwriter immediately, except that there is no obligation to notify the Underwriter or the City as to the performance or comp letion of development of the Property as described in the Official Statement.

6. To the Actual Knowledge of the Undersigned, since the date of the Official Statement, no event has occurred that affects the statements and information in the Official Statement that are referenced in sect ion 4 of the Developer Certif icate (and subject to the limitations and exclusions cont ained in section 4 thereof) so lely as they relate to the Developer and its Affiliates, the Property, ownership of the Property, the Developer’s proposed development of the Property, or the Developer’s and its Affiliates’ financing plans for carrying out the proposed develo pment of the Property that should be disclosed in the Official Statement in order to make the statements and information in the Official Statement not misleading in any material respect.

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

DOWNTOWN RAILYARD VENTURE, LLC ,
a Delaware limited liability company

By:

Name:

Its:

82822.00014\34898319.7

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EXHIBIT J‐2
[TO BE ATTACHED AS EXHIBIT A TO EXHIBIT I‐2]
$______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

CLOSING CERTIFICATE OF PROPERTY OWNER
(KAISER FOUNDATION HOSPITALS)

[DATE]

In connection with the issuance, sale, an d delivery by the City of Sacramento, California (the “City”) with respect to the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “Dis trict”) of the bonds captioned above (the “Bonds”), and in accordance with the Bond Purchase Contract (the “Bond Purchase Contract”) between the City and Stifel, Nicola us & Company, Incorporated, as underwriter (the “Underwriter”), the undersigned, in his or her capacity as a duly authorized officer or representative of Kaiser Foundation Hospitals (the “Property Owner”), hereby certifies, on behalf of the Property Owner, as follows as of the date hereof:

1. The undersigned is familiar with the facts herein certified and is duly authorized to execute this Clos ing Certificate (the “Closing Certificate”) on behalf of the Property Owner.

2. The Property Owner has duly executed the Certificate of Kaiser Foundation Hospitals, dated __________, 2022 (the “Property Owner Certificate”).

3. Capitalized terms that are not defined in this Clos ing Certificate have the meanings given them in the Property Owner Certificate.

4. To the Actual Knowledge of the Un dersigned, the representations and warranties of the Property Owner in the Proper ty Owner Certificate are true and correct in all material respects on and as of the date of this Closing Certificate (the “Closing Date”), with the same effect as if made on the Closing Date, and the covena nts of the Property Owner in the Property Owner Certificate have the same ef fect as if made on the Closing Date, except that all references in the Property Owner Certificate to the Preliminary Official Statement are deemed to be references to the final Official Statement dated __________, 2022 (the “Official Statement”).

5. At any time after the date of this Closing Certificate and within 25 days after the Closing Date, if any event occurs that relates to or affects the Property, ownership of the Property, the Property Owner’s proposed deve lopment of the Property, or the Property Owner’s and its Affiliates’ financing plans for carrying out the proposed development of the Property, and if, as a result of that event, an y statements in the Official Statement that are 82822.00014\34898319.7

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referenced in Section 5 of the Property Ow ner Certificate (other than the excluded statements) become materially untrue, then the Property Owner shall notify the City and the Underwriter immediately, except that there is no obligation to notify the Underwriter or the City as to the performance or completion of development of the Property as described in the Official Statement.

To the Actual Knowledge of the Undersigned, since the date of the Official Statement no event has occurred that affects the statements and information in the Official Statement that are referenced in Section 5 of the Property Owner Certificate (other than the excluded statements) solely as they relate to the Prop erty, ownership of the Property, the Property Owner’s proposed development of the Property, or the Property Owner’s and its Affiliates’ financing plans for carrying out the proposed development of the Prop erty that should be disclosed in the Official Statement in order to make the statements and information in the Official Statement not misleading in any material respect.

The undersigned has executed this Closing Certificate as of the first date written above solely in her capacity as an authorized officer or representative of the Property Owner and she will have no personal liability arising from or relating to this Closing Certificate. Any liability arising from or relating to this Clos ing Certificate may only be asserted against the Property Owner.

KAISER FOUNDATION HOSPITALS
By:

Name: Carrie Owen Plietz
Its: Regional President, Northern California

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EXHIBIT K‐1

$_______________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

FORM OF DEVELOPER’S COUNSEL OPINION
(DOWNTOWN RAILYARD VENTURE, LLC )

City of Sacramento
Stifel, Nicolaus & Company, Incorporated

Re: $_____________ City of Sacramento Railyards Community Facilities District No. 2018‐01 (Improvements) Special Tax Bonds, Series 2022 Ladies and Gentlemen:

We have acted as counsel to Downtown Ra ilyard Venture, LLC, a Delaware limited liability company (the “Developer”) in connection with the issuance and sale by the City of Sacramento, on behalf of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “District”) of the bonds captioned above (the “Bonds”). This opinion is rendered pursuant to the Bond Purchase Contract dated [SALE DATE] (the “Bond Purchase Agreement”), entered into in connection ther ewith. Capitalized terms used herein without definition shall have the meanings set forth in the Bond Purchase Agreement.

In rendering the opinions set forth herein , we have reviewed and examined such documents as we have determined to be appropriate, including the following documents:

1. The Bond Purchase Agreement;

2. The Preliminary Official Statement and the final Official Statement (together, the “Official Statement”);

3. The Certificate of Developer of Downtown Railyard Venture, LLC, dated [POS DATE], and the Closing Certificate of Downto wn Railyard Venture, LLC, dated [CLOSING DATE] both as required pursuant the Bond Purchase Agreement (collectively, the “Developer Certificate”); and

4. The Continuing Disclosure Certificate of Downtown Railyard Venture, LLC dated [CLOSING DATE] (the “Developer Disclosure Certificate”).

Bond Purchase Contract | Page K‐2‐2

District Court, Eastern District of California; the United States Bankruptcy Court, Eastern District of California; and the United States Ninth Circuit Court of Appeal, conducted by Corporation Service Company (Order Da te ________, 2022 / Order Number _____________ (the “Litigation Search”), but without warranty as to the completeness and accuracy thereof due to the potential for errors or inaccuracies in the data and files ma de available from the applicable courts.

With respect to factual matters underlying our opinions herein, we have made no independent investigation or inquiry and have relied solely upon the Developer’s Certificate and the Litigation Search. We advise you that the phrase “to our knowledge,” as used herein, means that no facts have come to our attention, based upon an inquiry of attorneys in this firm who devote substantive legal attention to Developer, or as a result of our examination of the Developer’s Certificate and the Litigation Search, that indicate to us anything contrary to the statement to which the phrase relates. Except as expressly set forth above, the phrase does not mean that we have conducted any investigation or inquiry or performed any other examination or review. We have no reason to believe that any factual matters or assumptions relied upon by us are not true, correct and complete.

Our opinions herein are limited to the internal laws of the State of California and the federal laws of the United States of America. We express no opinion whatsoever with respect to the laws of any other jurisdiction and assume no responsibility for the applicability of such laws.

In rendering our opinions herein, we have assumed the following, with your approval:
(i) The genuineness and authenticity of all signatures on original documents submitted to us (other than any signatures on behalf of Developer) ; the authenticity and completeness of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; where any signature, other than any signature on behalf of Developer purports to have been made in a corporate, governmental, fiduciary or other capacity, the person who affixed such signature had the full power and authority to do so;
(ii) The due authorization, execution and delivery of the applicable agreements by the parties thereto, other than the Developer, and the legality , validity, binding effect and enforceability against such parties of their respective obligations under such agreements; (iii) The truth, accuracy and complete ness of all factual representations and warranties of all parties under the documents described in paragraphs 1 through 4, above; (iv) The constitutionality or validity of a relevant statute, rule, regulation or agency action is not in issue unless a reported decision in the State of California has specifically addressed but not resolved, or has established, its unconstitutionality or invalidity; and (v) All official public records relied upon by us are accurate and complete.

Based upon the foregoing and in reliance thereon, and based on our examination of such questions of law as we have deemed appropriate under the circumstances, and subject 82822.00014\34898319.7

Bond Purchase Contract | Page K‐2‐3

to any further assumptions, comments, exceptio ns, qualifications and limitations set forth below, as of the date hereof, it is our opinion that:

1. Developer is a limited liability compan y, duly formed, validly existing and in good standing under the laws of the State of Delaware, and has full power and authority to enter into the Developer Disclosure Certificate.

2. The Developer has duly and validly executed and delivered the Developer Disclosure Certificate, and the Developer Disclosure Certificat e constitutes the legal, valid and binding obligation of the Developer, enfo rceable against Developer in accordance with its terms.

3. To our knowledge, the execution and delivery by Developer of the Developer Disclosure Certificate and the performance of its obligations thereunder do not and will not result in a violation of any provision of, or in default under any agreement or other instrument to which Developer is a party.

4. To our knowledge, Developer is not in violation of any provision of or in default under, its organizational documents or any agreement or other instrument, violation or default under which would materially and adversely affe ct the business, properties, assets, liabilities or conditions (financial or other) of the Deve loper with respect to Developer’s ability to develop real property owned by Developer within the District.

5. To our knowledge, except as set forth in the Official Statement, there is no litigation pending against Developer (with service of process to Developer having been duly given and completed) or overtly threatened against Developer which would materially and adversely affect the validity or enforceability of the Developer Certificate, Developer’s ability to complete the development of its property as proposed in the Official Statement or to pay the Special Taxes.

6. Without having undertaken to de termine independently the accuracy, completeness or fairness of the statements co ntained in the Official Statement under the captions, “INTRODUCTION – Property Ownership and Development Status,” “SACRAMENTO RAILYARDS,” and “DEVELOPMENT PLAN” as they relate to the Develo per (except that no opinion or belief need to be expressed as to any information relating to The Depository Trust Company, or any information rela ting to CUSIP numbers, or wi th respect to any financial, statistical or engineering information, data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, assessed valuations or appraised values, or to any information which is attributable to a source other than the Developer, contained in the Official Statement), no facts came to our attention during the course of our representation of the Developer that would le ad us to believe that the information under said captions of the Official Statement re lating to the Developer and the Developer’s organizations, activities, properties and fina ncial condition, and its proposed development of the Property, contains any untrue statement of a material fact or omits any material fact necessary in order to make the statements ther ein, in the light of the circumstances under which they were made, not misleading.
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Bond Purchase Contract | Page K‐2‐4

In addition, all of our opinio ns expressed hereinabove are specifically subject to and limited by the following:
a) We express no opinion as to matters governed by any laws other than the substantive laws of California which are in effe ct as of the date here of, and we assume no obligation to modify or supplem ent this opinion with respect to changes in such laws after the date hereof.
b) As counsel to the Developer in this matter, we have not rendered financial advice to the Developer and do not represent, by this opinion or otherwise, that we have reviewed or made any assessment about, nor do we offer any opinion about, the financial condition of the Developer, past, present or future, including any financial information contained in the Developer Disc losure Certificate; nor have we reviewed the financial feasibility of this transaction or those matters which the proceeds of the Bonds will fund or any of it components and, accordingly, we offer no opinion whatsoever regarding such financial feasibility.
c) The effect of laws or court decisi ons relating to bankruptcy, insolvency, fraudulent conveyance, equitable subordination, reorganization, arrangement, moratorium or other laws or court decisions relating to or affecting creditors' rights generally. d) Limitations impose d by California or federal law or equitable principles upon the availability of the remedy of specific pe rformance of any of the remedies, covenants or other provisions of any document or agreement and upon the availability of injunctive relief or other equitable remedies.

In addition, we express no opinion as to the title of the property within the District or any entitlements, permits, approvals or other assets relating to the Developer’s development of its property as proposed in the Official Statement.

We express no opinion as to any matter other than as expressly set forth above, and, in conjunction therewith, specifically express no opinion concerning the application of or compliance with any federal securities law, including, but not limited to, the Securities Act of 1933, as amended, and the Trust Indenture Act of 1939, as amended, any state securities or “Blue Sky” law, or any federal, state or local tax law, as respecting the Bonds.

This letter is intended solely for your use in relation to the Bond Purchase Agreement and may not be reproduced or filed publicly or relied upon for any other purpose by you or for any purpose whatsoever by any other part y without the express written consent of the undersigned except that this opinion may be copied and distributed as part of a closing book of the bond transaction documents, provided th at such distribution shall not expand in any way the permitted uses of this letter.

We assume no responsibility for the effect of any fact or circumstance occurring subsequent to the date of this letter, includ ing, without limitation, legislative or other changes in the law. Further, we assume no responsibility to advise you of any facts or circumstances of which we become aware after the date hereof, regardless of whether or not 82822.00014\34898319.7

Bond Purchase Contract | Page K‐2‐5

they may affect our opinions herein. This op inion is given as of the date hereof, and we assume no obligation to update our opinions herein after the date hereof.

V e r y t r u l y y o u r s ,

H E F N E R , S T A R K & M A R O I S L L P

By:_________________________
[ N A M E ]
82822.00014\34898319.7

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EXHIBIT K‐2
$________________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

FORM OF DEVELOPER’S COUNSEL OPINION
(KAISER FOUNDATION HOSPITALS)

[DATE]

City of Sacramento
Stifel, Nicolaus & Company, Incorporated

Re: $______________ City of Sacramento Railyards Community Facilities District No. 2018‐01 (Improvements) Special Tax Bonds, Series 2022 Ladies and Gentlemen:

We have acted as counsel to Kaiser Founda tion Hospitals, a California corporation (the “Developer”) in connection with the issuance and sale by the City of Sacramento, on behalf of the City of Sacramento Railya rds Community Faciliti es District No. 2018-01 (Improvements) (the “District”) of the bonds captioned above (the “Bonds”). This opinion is rendered pursuant to the Bond Purchase Contract dated [SALE DATE] (the “ Bond Purchase Agreement”), entered into in connection ther ewith. Capitalized terms used herein without definition shall have the meanings set forth in the Bond Purchase Agreement.

In rendering the opinions set forth herein , we have reviewed and examined such documents as we have determined to be appropriate, including the following documents:

1. The Bond Purchase Agreement;

2. The Preliminary Official Statement and the final Official Statement (together, the “Official Statement”);

3. The Certificate of Developer of Kaiser Foundation Hospitals dated [POS DATE], and the Closing Certificate of Kaiser Foundati on Hospitals, dated [CLOSING DATE] both as required pursuant the Bond Purcha se Agreement (collectively, the “ Developer Certificate”); and

4. The Continuing Disclosure Certificat e of Kaiser Foundation Hospitals dated [CLOSING DATE] (the “Developer Disclosure Certificate”). 82822.00014\34898319.7

Bond Purchase Contract | Page K‐2‐2

For purposes of this opinion, the term “L itigation Search” shall mean a litigation search of Developer, pe rformed in the Superior Court of the State of California, County of Sacramento; the California Court of Appeal, Third Appellate District; the United States District Court, Eastern District of California; the United States Bankruptcy Court, Eastern District of California; and the United States Ninth Circuit Court of Appeal, conducted by Corporation Service Company (Order Da te ________, 2022 / Order Number _____________ (the “Litigation Search”), but without warranty as to the completeness and accuracy thereof due to the potential for errors or inaccuracies in the data and files ma de available from the applicable courts.

Bond Purchase Contract | Page K‐2‐3

(v) All official public records relied upon by us are accurate and complete.

Based upon the foregoing and in reliance thereon, and based on our examination of such questions of law as we have deemed appropriate under the circumstances, and subject to any further assumptions, comments, exceptio ns, qualifications and limitations set forth below, as of the date hereof, it is our opinion that:

1. Developer is a corporation, duly formed, validly existing and in good standing under the laws of the State of California, and has full power and authority to enter into the Developer Disclosure Certificate.

6. Without having undertaken to de termine independently the accuracy, completeness or fairness of the statements co ntained in the Official Statement under the captions, “INTRODUCTION – Property Ow nership and Development Status” and “DEVELOPMENT PLAN – Kaiser Development Plan” as they relate to Developer (except that no opinion or belief need to be expressed as to any informat ion relating to The Depository Trust Company, or any information relating to CUSIP numbers, or with respect to any financial, statistical or engi neering information, data or forecasts, numbers, charts, estimates, projections, assumptions or expr essions of opinion, as sessed valuations or appraised values, or to any in formation which is attributable to a source other than the Developer, contained in the Official Statement) , no facts came to our attention during the course of our representation of the Developer that would le ad us to believe that the information under said captions of the Official Statement relating to the Developer and the Developer’s organizations, activities, properties and financial condition, and its proposed 82822.00014\34898319.7

Bond Purchase Contract | Page K‐2‐4

development of the Property, contains any untrue statement of a material fact or omits any m a t e r i a l f a c t n e c e s s a r y i n o r d e r t o m a k e the statements therein, in the light of the circumstances under which they were made, not misleading.

Bond Purchase Contract | Page K‐2‐5

V e r y t r u l y y o u r s ,

[ D E V E L O P E R C O U N S E L ]

By:_________________________
[ N A M E ]

82822.00014\34898319.7

Bond Purchase Contract | Page L‐1

EXHIBIT L

$_________________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022
FORM OF ISSUE PRICE CERTIFICATE

The undersigned, Stifel, Nicolaus & Company, Incorporated ( “Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the “Bonds”).

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

2. 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.

3. 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 pricin g wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, Stifel has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold- the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the ag reement of each broker-dealer who is a party to the third-party distribution agreem ent, to comply with the hold-the-offering- price rule. Pursuant to such agreement, no Underwriter (as defined below) 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.
82822.00014\34898319.7

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4. 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-Pri ce Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with re spect 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, or (ii) the date on which Piper has sold at least 10% of such Hold-the-Offering-Price Matu rity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity. (d) Initial Offering Price means the prices or yields set forth on the inside cover page of the Issuer’s Official Statement in respect of such Bonds dated [SALE DATE]. (e) Issuer m e a n s t h e C i t y o f S a c r a m e n t o o n b e h a l f o f i t s R a i l y a r d s Community Facilities District No. 2018-01 (Improvements). (f) 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 or CUSIP identification numbers, are treated as separate maturities. (g) Public means any person (including an individual, trust, estate, partnership, association, compan y, or corporation) other than an Underwriter or a related party to an Underwriter.
(h) Related Party means any entity that shares with another entity (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ow nership by one corporat ion of another), (ii) more than 50% common ownership of their capi tal interests or profit interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of th e partnership, as applicable, if one entity is a corporation and the other entity is a partne rship (including direct ownership of the applicable stock or interests by one entity of the other). (i) 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 [SALE DATE]. (j) 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) an y person that agrees pursuant to a written contract directly or indire ctly 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 82822.00014\34898319.7

Bond Purchase Contract | Page L‐3

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 amen ded, and the Treasury Regulations thereunder. The undersigned unde rstands 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 Orrick Herringto n & Sutcliffe LLP 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.

STIFEL, NICOLAUS & COMPANY, INCORPORATED

By:
[Title]

Dated: ___________________

82822.00014\34898319.7

L-4

SCHEDULE A
TO

ISSUE PRICE CERTIFICATE

Actual Sales Information as of Closing Date

Maturity/CUSIP Coupon Date Sold
Time
Sold
Par
Amount Sale Price
10% Test
Used
HTOP
Rule Used

82822.00014\34898319.7

L-5

SCHEDULE B
TO

ISSUE PRICE CERTIFICATE

PRICING WIRES

82822.00014\34898319.7

M-1

EXHIBIT M

$__________________
CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018‐01 (IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022
CERTIFICATE OF ABSORPTION CONSULTANT
RCLCO Real Estate Consulting, Los Angeles, California (the “Absorption Consultant”), prepared a “Strategic Market Absorption Analysis Sacramento Railyards CFD” for the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “ C F D ” ) , d a t e d a s o f [ M a y 1 7 , 2 0 2 2 ] ( t h e “ A b s o r p t i o n R e p o r t ” ) . T h e A b s o r p t i o n R e p o r t i s described and summarized in, and is set out as Appendix I to the Preliminary Official Statement dated [POS DATE] (the “Preliminary Official Statement”), and the Official Statement dated [SALE DATE] (the “Final Offi cial Statement”), relating to the bonds captioned above.

1. The Absorption Consultant hereby certifies as follows to the best of its knowledge and belief: (a) all information with respect to the Absorption Report in the Preliminary Official Statement and the Final Official Statem ent was true and correct as of the date of the Absorption Report; (b) since the date of the Absorption Report, nothing has come to the attention of the Absorption Consultant that would cause the Appraiser, as defined in the Official Statement, to beli eve that the value of the property appraised therein is less than the value reported in th e Absorption Report; provided that, acts and events may have occurred since the date of the Absorption Report which could result in both positive and negative effects on market value of such property ; and (c) that a further updated Absorption Report has not been completed as of the date of this certificate.

2. The Absorption Consultant hereby consents to the use of the Absorption Report in connection with the distribution and use of the Preliminary Official Statement and Final Official Statement.

Dated: [DATE]

RCLCO REAL ESTATE CONSULTING
B y :

Stradling Yocca Carlson & Rauth
Draft dated August 16, 2022

4817-9609-0100v10/022536-0022
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

PRELIMINARY OFFICIAL STATEMENTS DATED AUGUST __, 2022
NEW ISSUE—BOOK-ENTRY-ONLY NO RATING
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, am ong other matters, the accuracy of certain representations and compliance with cer tain covenants, interest on the Bonds is exclude d from gross income for federal income ta x purposes under Section 103 of the Interna l Revenue Code of 1986 and is exempt from State of Ca lifornia personal income taxes. In the fu rther opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of the federal individual a lternative minimum tax. Bond Counsel observes that, for tax years beginning after December 31, 2022, interest on the Bonds included in adjusted finan cial statement income of certain corporation s is not excluded from the federal corpor ate alternative minimum tax. B ond Counsel expresses no opinion regarding any other tax conseque nces related to the ownership or disposition of, or the amount, accrual or receipt of interest on, the Bonds. See “TAX MATTERS” herein. $30,000,000*

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022
Dated: Delivery Date Due: September 1, as shown on the inside cover page This Official Statement de scribes bonds that are being issued by the City of Sacramento (the “City”) for the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “Dis trict”). The City of Sacram ento Railyards Community Faciliti es District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the “Bonds”) are being issued by the City to (a) pay the cost and expense of the acquisition and construction of certain public facilities required in connec tion with the development within the Dist rict; (b) fund a reserve fund securing the Bonds; (c) pay costs of issuance of the Bonds; and (d) fund capitalized interest on the Bonds through September 1, 2024.

The Bonds are authorized to be issued pursuant to the Mello-Roos Community Faciliti es Act of 1982, as amended (Section 53311 et seq . of the Government Code of the State of California), and pursuant to a Master Indenture, dated as of September 1, 2022 as supplemented by a First Supplemental Indenture, dated as of Se ptember 1, 2022, each between the City and U.S. Bank Trust Company, National Association, as trustee ( the “Trustee”) (collectively, the “Indenture”).

The Bonds are special limited obligations of the City and are payable solely from the proceeds of Net Special Tax Revenues (as defined in this Official Statement) received from the Special Tax levied on taxable parcels within the District and from certain other funds pl edged under the Indenture, all as further described in this Official Statement. The Special Tax will be levied according to the rate and metho d of apportionment approved by the City Council of the City and the qualified electors within the District. See “SOURCES OF PAYMENT FOR THE BONDS.” The Bonds are issuable in fully re gistered form and when issued will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Individual purchases of the Bonds may be made in integral multiples of $5,000 and will be in book-entry form only.

Purchasers of Bonds will not receive certif icates representing their beneficial owne rship of the Bonds but will receive credit balances on the books of their respective nominees. Interest on the Bonds will be payable semi annually on each March 1 and Septem ber 1, commencing March 1, 2 023. The Bonds will not be transferable or exchangeable except for transfer to another nominee of DTC or as otherwise described in this Official Statement. Principal of and interest on the Bonds will be paid by the Trustee to DTC for subsequent disbur sement to DTC Participants who will remit such payments to th e beneficial owners of the Bonds. See “THE BONDS — General Provisions” and APPENDIX I — “BOOK-ENTRY ONLY SYSTEM.”

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OF SACRAMENTO, THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR NET SPECIAL TAX REVENUES, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF

THE CITY BUT ARE SPECIAL LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE NET SPECIAL TAX REVENUES AND CERTAIN OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

The Bonds are subject to optional redemption, extraordinary redemption from Special Tax prepayments and mandatory sinking fund redemption prior to maturity as set forth in this Official Statement. See “THE BONDS — Redemption.”

THE BONDS ARE NOT RATED BY ANY RATING AGENCY, AND INVE STMENT IN THE BONDS INVOLVES SIGNIFICANT RISKS THAT ARE NOT APPROPRIATE FOR CERTAIN INVESTORS. CERTAI N EVENTS COULD AFFECT THE ABILITY OF THE CITY TO PAY THE PRINCIPAL OF AND INTEREST ON TH E BONDS WHEN DUE. SEE THE SECTION OF THIS OFFICIAL STATEMENT ENTITLED “SPECIAL RISK FACTORS” FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED, IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN EVALUATING THE INVESTMENT QUALITY OF THE BONDS.

This cover page contains certain informati on for general reference only. It is not in tended to be a summary of the security or terms of this issue.

Investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision.

MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are offered when, as and if issued and accepted by the Underwriter, subject to approval as to their validity by Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City, and subject to certain other conditions. Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California is serving as Disclosure Counsel to the City with respect to the Bonds. Certain legal matters will be passed on for the City by the Office of the City Attorney, for the Underwriter by Best Best & Krieger LLP, Riversid e, California, as counsel to the Underwriter, and for the Tru stee by its counsel. It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of DTC on or about September __, 2022. [STIFEL LOGO]
Dated: August __, 2022

* Preliminary, subject to change.

4817-9609-0100v10/022536-0022
$30,000,000*

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

MATURITY SCHEDULE
Base CUSIP No.†: _________

$________ Serial Bonds

Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price CUSIP No. †
$ % %

$________ Term Bonds

$________ _____% Term Bonds due September 1, 20__, Yield: ______% Price: ______ CUSIP No. † _________

$________ _____% Term Bonds due September 1, 20__, Yield: ______% Price: ______ CUSIP No.† _________

* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Asso ciation. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2022 CUSIP Global Services. All rights reserved. CUSIP® dat a herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitut e for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter or their agents or counsel assumes responsibility for the accuracy of such numbers.

4817-9609-0100v10/022536-0022

CITY OF SACRAMENTO

CITY COUNCIL
Darrell Steinberg, Mayor
Eric Guerra, Mayor Pro Tem, District 6
Angelique Ashby, Vice Mayor, District 1
Sean Loloee, District 2
Jeff Harris, District 3
Katie Valenzuela, District 4
Jay Schenirer, District 5
Rick Jennings II, District 7
Mai Vang, District 8
_______________________

ADMINISTRATIVE OFFICES
Howard Chan, City Manager
Hector Barron, Assistant City Manager
Michael Jasso, Assistant City Manager
Mario Lara, Assistant City Manager
Leyne Milstein, Assistant City Manager
John Colville, City Treasurer
Susana Alcala Wood, City Attorney
Mindy Cuppy, City Clerk
Emily Combs, Finance Director
_______________________

PROFESSIONAL SERVICES
Bond Counsel
Orrick, Herrington & Sutcliffe LLP
Disclosure Counsel
Stradling Yocca Carlson & Rauth, A Professional Corporation Municipal Advisor
Fieldman, Rolapp & Associates, Inc.

Irvine, California
Trustee
U.S. Bank Trust Company, National Association
San Francisco, California
Special Tax Consultant
Economic & Planning Systems Inc. (EPS)
Sacramento, California
Appraiser
BBG, Inc.

Walnut Creek, California
Market Absorption Consultant
RCLCO Real Estate Consulting
Los Angeles, California
Appraisal Reviewer
Integra Realty Resources
Rocklin, California

4817-9609-0100v10/022536-0022
Except where otherwise indicated, all information contained in this Official Statement has been provided by the City. No dealer, broker, salesperson or other person has been authorized by the City, the Trustee or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained in this Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City, the Trustee or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitati on of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a co ntract with the purchasers or owners of the Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described in this Offi cial Statement, are intended solely as such and are not to be construed as representations of fact. This Official Statement, including any supplement or amendment to this Official Statement, is intended to be deposited with the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org.

The information set forth in this Official Statement which has been obtained from third party sources is believed to be reliable, but such information is not guaran teed as to accuracy or completeness by the City. The information and expressions of opinion in this Official St atement are subject to change without notice, and neither the delivery of this Official Statement nor any sale ma de hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described in this Official Statement since the date of this Official Statement. A ll summaries of the Indenture or other documents are made subject to the provisions of such docu ments respectively and do not purport to be complete statements of any or all of such provisions. Reference is made by this Official Statement to such documents on file with the City for further information. While the City maintains an internet website for various purposes, none of the information on that website is incorporated by reference herein or intended to assist investors in making any investment decision or to provide any continuing information with respect to the Bonds or any other bonds or obligations of the City. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded.

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

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

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Privat e Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Excha nge Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “b udget” or other similar words. Such forward-looking statements include, but are not limited to, certain statemen ts contained in the information under the caption “THE DISTRICT” and “DEVELOPMENT PLAN.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,

UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE

OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,

PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

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

OVERALLOT OR EFFECT TRAN SACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET

PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH ST ABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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

TABLE OF CONTENTS
i
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INTRODUCTION ............................................................. 1 General .......................................................................... 1 Sacramento Railyards .................................................... 1 The District .................................................................... 3 Property Ownership and Development Status ............... 4 Forward Looking Statements ......................................... 5 Sources of Payment for the Bonds ................................. 5 Appraisal Report ............................................................ 7 Description of the Bonds ............................................... 7 Professionals Involved in the Offering .......................... 8 Continuing Disclosure ................................................... 8 Bond Holders’ Risks ...................................................... 9 Other Information .......................................................... 9 THE FINANCING PLAN ................................................. 9 Authorized Facilities and Fees....................................... 9 Estimated Sources and Uses of Funds ......................... 10 THE BONDS .................................................................. 10 General Provisions ....................................................... 10 Redemption ................................................................. 11 DEBT SERVICE SCHEDULE ....................................... 14 SOURCES OF PAYMENT FOR THE BONDS ............. 15
Limited Obligations ..................................................... 15 Special Tax .................................................................. 16 Bond Reserve Fund ..................................................... 21 Issuance of Parity Bonds ............................................. 21 Teeter Plan ................................................................... 22 SACRAMENTO RAILYARDS ...................................... 22 General Overview and History .................................... 23 The Developer ............................................................. 26 DEVELOPMENT PLAN ................................................ 27 Railyards Development Plan ....................................... 28 Entitlement Process ..................................................... 28 Environmental Matters ................................................ 37 Status of Infrastructure ................................................ 39 Infrastructure Financing Plan ...................................... 41 Vertical Development Plan .......................................... 45 Vertical Construction Projects Underway ................... 46 Near-Term Vertical Development Plans ...................... 48 Kaiser Development Plan ............................................ 50 THE DISTRICT .............................................................. 51 General Description ..................................................... 51 Description of Authorized Facilities ............................ 51 Direct and Overlapping Indebtedness .......................... 52 Market Absorption Study ............................................ 53 Property Values ........................................................... 54 Value-To-Lien Ratios .................................................. 59 Debt Service Coverage from Special Tax Revenues ... 63
Delinquency History .................................................... 63 SPECIAL RISK FACTORS ............................................ 64 Concentration of Ownership ........................................ 64 Risks of Real Estate Secured Investments Generally .. 64 Failure to Develop Properties ...................................... 65 Limited Obligations ..................................................... 66 Insufficiency of Special Tax ........................................ 66 Prevailing Wage Requirement ..................................... 67 Teeter Plan Termination .............................................. 67 COVID-19 (Coronavirus) Pandemic ........................... 68 Natural Disasters ......................................................... 68 Flood Hazard ............................................................... 69 Hazardous Substances ................................................. 69 Payment of the Special Tax is not a Personal
Obligation of the Property Owners .......................... 70 Property Values ........................................................... 70 Parity Taxes and Special Assessments ........................ 71 Disclosures to Future Purchasers ................................. 71 Special Tax Collections ............................................... 72 FDIC/Federal Government Interests in Properties ...... 72 Bankruptcy and Foreclosure ........................................ 73 No Acceleration Provision ........................................... 74 Loss of Tax Exemption ............................................... 74 Limited Secondary Market .......................................... 74 Proposition 218 ............................................................ 75 Litigation with Respect to Community Facilities
Districts .................................................................... 75 Ballot Initiatives .......................................................... 77 Limitations on Remedies ............................................. 77 Potential Early Redemption of Bonds from
Prepayments or Bond Proceeds ............................... 77 Cybersecurity ............................................................... 77 CONTINUING DISCLOSURE ...................................... 78 City Continuing Disclosure ......................................... 78 Developer Continuing Disclosure ................................ 78 TAX MATTERS ............................................................. 79 LEGAL MATTERS ........................................................ 81 ABSENCE OF LITIGATION ......................................... 81 MUNICIPAL ADVISOR ................................................ 81 NO RATING ................................................................... 81 UNDERWRITING .......................................................... 81 FINANCIAL INTERESTS ............................................. 82 PENDING LEGISLATION ............................................ 82 ADDITIONAL INFORMATION ................................... 82

APPENDIX A RATE AND METHOD OF

APPORTIONMENT OF SPECIAL
TAX .................................................... A-1 APPENDIX B APPRAI SAL REPORT ...................... B-1 APPENDIX C APPRAISAL REVIEW REPORT ...... C-1

APPENDIX D PROPOSED FORM OF OPINION OF
BOND COUNSEL ............................. D-1

APPENDIX E GENERAL INFORMATION
CONCERNING THE REGION .......... E-1

APPENDIX F SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTUREF-1

APPENDIX G FORM OF CONTINUING

DISCLOSURE CERTIFICATE OF THE
CITY ................................................... G-1

APPENDIX H FORM OF CONTINUING

DISCLOSURE CERTIFICATE OF THE
DEVELOPER ..................................... H-1
APPENDIX I BOOK-ENTRY ONLY SYSTEM ........ I-1
APPENDIX J MARKET ABSORPTION STUDY .... J-1

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[INSERT AERIAL PHOTO HERE]

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$30,000,000*

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS) SPECIAL TAX BONDS, SERIES 2022

INTRODUCTION
General
The purpose of this Official Statement, which includes the cover page, the table of contents and the appendices (collectively, the “Official Statement”), is to provide certain informat ion concerning the issuance by the City of Sacramen to (the “City”) of the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) Special Tax Bonds, Series 2022 (the “Bonds”) in the aggregate principal amount of $30,000,000
*. The proceeds of the Bonds will be used to (a) pay the cost and expense of the acquisition and construction of certain public facilities required in connection with the development within the City of Sacramento Railyards Community Facilities District No. 2018-01 (Improvements) (the “District”); (b) fund a reserve fund securing the Bonds; (c) pay costs of issuance of the Bonds; and (d) fund capitalized interest on the Bonds through September 1, 2024. See “THE FINANCING PLAN — Estimated Sources and Uses of Funds.” The Bonds are authorized to be issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq . of the Government Code of the State of California) (the “Act”), and pursuant to a Master Indenture, dated as of September 1, 2022 (the “Master Indenture”), as supplemented by a First Supplemental Indenture dated as of September 1, 2022 (the “First Supplemental Indenture” and together with the Master Indenture, the “Indenture”), each betw een the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The Bonds are secured under the Indenture by a pledge of and lien upon the Net Special Tax Revenues, which are the proceeds of the Special Tax levied on Taxable Land within the District, less the Priority Administrative Expenses (as such terms are define d in this Official Statement) and all amounts held in the Special Tax Fund, the Bond Redemption Fund and the Bond Reserve Fund, as provided in the Indenture.

See “SOURCES OF PAYMENT FOR THE BONDS.”
The Bonds are being issued and delivered pursuant to the provisions of the Act and the Indenture. The Bonds are being sold pursuant to a Bond Purchase Contract between Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) and the City. See “THE BONDS — General Provisions.” This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The sale and delivery of Bond s to potential investors is made only by means of the entire Official Statement. All capitalized terms used in this Official Statement and not defined shall have the meaning set forth in APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Definitions.”
Sacramento Railyards
General. The District encompasses a portion of the Sacramento Railyards, a 244-acre site located east of the Sacramento River and south of North B Street and immediately north of the City’s downtown Central Business District. The City’s Central Business District is the historic commercial and government center of

* Preliminary, subject to change.

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the City and includes approximately 530 city blocks of commercial and government offices and residential development. The State Capitol is located approximately one mile from the Sacramento Railyards.

For over a century, the Sacramen to Railyards was used for locomotive repairs, maintenance and manufacturing. The Sacramento Railyards was at one point in time, the largest railyards facility west of the Mississippi River and a major local employer in the City. Railyard operations on the site concluded in the late 1990s. Environmental remediation of the site was necessary in order for it to be redeveloped for other than its historic use as a railyard. Environmental remediation began in the late 1980s and has been completed to a point to allow for the planned development as described in this Official Statement. However, there remains certain additional remediation on portions of the site as well as ongoing related monitoring requirements. See “DEVELOPMENT PLAN — Envi ronmental Matters.”
On the southern border of the Sacramento Railyards is the Sacramento Valley Station, which currently serves as an intermodal station for Amtrak, Capitol Corridor (San Jose-Oakland-Sacramento-Auburn) and San Joaquin (Oakland/Sacramento-F resno-Bakersfield) rail, Sacramento Regi onal Transit District light rail and both local and intercity bus service. Amtrak and Capitol Corridor provides a direct connection into the San Francisco Bay Area and certain metropolitan areas in California’s central valley. Based on Amtrak’s statistics, in fiscal year 2018-19, the Sacramen to Valley Station had approximately 1.1 million boardings, making it the seventh busiest Amtrak station in the country and the second busiest in California at the time (compared to approximately 1.4 million boardings at the Los Angeles station). However, Amtrak experienced significant declines in ridership as a result of the COVID-19 pandem ic and it is uncertain when ridership will return to pre-pandemic levels, including through the Sacramento Valley Station.

Sacramento Railyards Entitlements and Development Plans . The current development plan for the Sacramento Railyards is to redevelop the area into a la rge transit-oriented mixed-use development to include residential, retail, office, commercial, entertainment, open space and cultural/historic uses. The street network within the Sacramento Railyards, if completed as curre ntly planned, would connect the various project areas within the Sacramento Railyards to the Central Busine ss District and the existing adjacent communities and provide direct access from the Central Business District, through the site of the Sacramento Railyards, to the edge of the Sacramento River, which borders the Sacramento Railyards on the west. In addition, design work has been complete for a larger bridge that would replace the existing I Street Bridge which was constructed in the early 1900’s (which traverses west from the Sacramento Railyards). The cost for the bridge replacement is currently estimated to be $250 million. If completed, the replacement bridge would provide vehicular, bicycle and pedestrian access across the Sacramento River in to the Sacramento Railyards, connecting West Sacramento directly with the Sacramento Railyards. Funding sources for the replacement bridge have not been secured and there is currently no timeframe for construction.

Entitlement work for the redevelopment of the Sacramento Railyards began in 2007. Certain prior owners of the property within the Sacramento Railyards completed portions of the backbone infrastructure and other improvements supporting future development of th e property within the Sacramento Railyards. In addition, the City undertook major renovations of the Sacramento Valley Station located directly to the south of the majority of the site. The Developer (as defined below) took ownership of the Sacramento Railyards property in 2015. In 2016, the City approved a series of updated planning and entitlement documents, including the Railyards Specific Plan, guiding development within the Sacramento Railyards. As currently approved, the Sacramento Railyards is entitled for the following developments, with flexibility to increase office uses while decreasing residential uses, and vice versa.  Between 6,000 to 10,000 residential units
 Between approximately 2.7 million to 3.9 million square feet of office space  Approximately 500,000 square feet of retail space
 Approximately 800,000 square feet of flexible mixed-use space  A medical campus with a hospital of approximately 700,000 square feet and medical offices of approximately 500,000 square feet

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 Approximately 500,000 square feet of historic/cultural space  1,100 hotel rooms
 Approximately 33 acres of open space
 A 25,000-seat capacity sports and entertainment stadium The Railyards Specific Plan adopted by the City separates the property within the Sacramento Railyards into five main land use areas for planning purposes as described below (certain portions of such areas are not included in the District):
 Central Shops District, which includes seven historical railyard buildings and is planned for retail and entertainment venues.
 West End District, which is planned for a medical campus, office space, residential and retail uses.
 East End District, which is planned for residential and mixed-used developments, open space and a potential sports stadium.
 Riverfront District, which is planned for restaurants, hotel, open space and residential uses.  Depot District, which includes the Union Paci fic Railroad Company’s mainline tracks and the existing Sacramento Valley Station, and is planned for a mix of hotel, residential, retail and office uses, and a new station to house the various transit providers.

The District
Overview. The District consists of an approximatel y 188-acre portion of th e approximately 244-acre Sacramento Railyards. The portions of the Sacramento Railyards that are not included in the District are (1) the property relating to two historic buildings in the Central Shops District, which is owned by the State; (2) 7
th Street, which traverses through the Sacramento Railyards from north to south; (3) the property associated with the intermodal transportation hub, wh ich includes the Sacramento Valley Station and the railroad tracks which traverse along a portion of the sout hern boundary of the District; (4) property west of Jibboom Street which runs along the Sacramento River; and (5) two lots located toward the southeast end of the Sacramento Railyards. See the map on page 62 for a depiction of the Sacramento Railyards and the property that is included in the District.

Formation Proceedings . The District was formed by the City pursuant to the Act. The Act was enacted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing areas of the State. Any local agency (as defined in the Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities, development-related fees, and services. Subject to appr oval by two-thirds of the votes cast at an election and compliance with the other provisions of the Act, a legislative body of a local agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.

Pursuant to the Act, on July 3, 2018, the City Council adopted (i) Resolution No. 2018-0274 (the “Resolution of Intention”), stating its intention to form the District and to authorize the levy of a special tax on the taxable property within the District, and (ii) Resolution No. 2018-0275, stating its intention to incur bonded indebtedness in an aggregate principal amount not to exceed $75,000,000 for the purpose of financing the acquisition, construction, expansion, improvement, or reha bilitation of certain public facilities and financing certain governmentally imposed development fees used to finance public facilities to serve the area within the District and its neighboring areas. See “THE DISTRICT — Description of Authorized Facilities.” On August 15, 2018, an election was held within the District at which the landowners eligible to vote approved the issuance of bonds for the District in an amount not to exceed $75,000, 000. A Notice of Special Tax Lien was recorded in the office of the Clerk Recorder’s office of the County of Sacramento (the “County”) on August 22, 2018 as Document No. 201808220934. On August 28, 2018, the City Council adopted

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Ordinance No. 2018-0043 (the “Ordinance”) which authorizes the levy of a special tax pursuant to the Rate and Method of Apportionment of Special Tax within the District approved at the August 15, 2018 election. On March 15, 2022, the City Council approved certain administrative revisions relating to the reallocation of taxable acreage as shown on Attachment 1 to such Rate and Method of Apportionment of Special Tax (as revised, the “Rate and Method”), a copy of which is attached hereto as APPENDIX A. To provide notice of such revisions to property owners within the District, a Notice of Amendment to Special Tax Lien was recorded in the office of the Clerk Recorder of the County of Sacramento (the “County”) on August 5, 2022 as Document No. 202208050540.

Property Ownership and Development Status
Downtown Railyard Venture, LLC, a Delaware limited liability company (“DRV” or the “Developer”) is currently the master developer of the property in the Sacramento Railyards. The Developer acquired the Sacramento Railyards prop erty in 2015. The prior owner of the Sacramento Railyards and the Developer completed certain backbone infrastructure and the Developer is currently constructing additional backbone infrastructure within the District. While substantial backbone infrastructure remains to be completed to allow for full buildout of the District over the approximately next 20 years, the majority of infrastructure requirements remaining to be completed are those directly impacting particular parcels, allowing for phased development as market conditions warrant. The only infrastructure serving District-wide purposes that remains to be constructed in order to commence constructi on on any particular portion of the District is the storm drain outfall facility currently under construction. Further, there are no thresholds with respect to the issuance of building permits or certificates of occupanc y which are conditioned upon completion of District- wide infrastructure. Given the long-term nature of the development in the District, backbone infrastructure relating to each phase of development is planned to be constructed when necessary to obtain project approvals and to facilitate development of such phase. See “DEVELOPMENT PLAN — Status of Infrastructure.” As of July 1, 2022, the Developer owned the substantial majority of the property in the District, consisting primarily of undeveloped land with certain infrastructure in place. As of such date, the Developer had conveyed property within the District as follows:
 The AJ . A parcel of approximately 2.88 taxable acres to Sacramento 695 L.P. (a joint venture entity with an entity formed by principals of the Developer) to be developed into a six-story apartment building with 345 market-rate and affordable units and ground floor retail space. Construction of such apartmen t building is underway and is expected to be complete by the first quarter of 2023.
 Kaiser Foundation Hospitals . Eight parcels totaling approximately 17.41 gross acres (approximately 17.14 taxable acres) to Kaiser Foundation Hospitals. While the property is entitled for a medical campus, Kaiser Foundation Hospitals has not approved any plans for such development and has not provided a timeline for development. The current expectation is that any development by Kaiser Foundation Hospitals on its property in the District will not occur in the near-term, if at all.
 Wong Center . A parcel of approximately 2.658 taxable acres to the Wong Center at the Railyards L.P. (the “Wong Center”) to be developed into an affordable housing project with 150 residential units. Initial sitework and grading commenced in July 2022 and construction is expected to be complete in 2024.

As of July 1, 2022, projects within the District in the planning phase include:
 Renovation of the Central Shops (as defined herein) including an approximately 3,600-seat concert venue leased to, and to be operated by, Live Nation Entertainment.  A 1,421-stall parking garage.
 A dual flag hotel development consisting of a Marriott Residence Inn and a Tribute branded hotel, for which franchise agreements have been entered into with the Developer.

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 A 2-building office project being marketed as “The Foundry.”  A 340-unit market-rate apartment complex that the Developer expects to market as “The Telegrapher.”
 Property for an apartment project under contract to be sold to Fairfield Residential.

Efforts have been made in recent years by private investment groups to obtain an award of a Major League Soccer (“MLS”) franchise expansion team in the City with the plan to have such team housed in a new sports stadium within the Sacramento Railyards. In 2021, the lead investor of the acquisition of an MLS expansion team in the City announced that it will no longer pursue the acquisition. Since that time, there has been no indication that the City is being considered by the MLS for an expansion team and no formal arrangements have materiali zed for the award of the MLS franchise team. The Sacramento Republic FC, a professional soccer team which currently competes in the USL Championship, has announced intentions to build a soccer stadium in the Sacramen to Railyards. However, no formal approvals or arrangements are in place for the development of such stadium. Assuming the stadium project does not proceed, the Developer expects to develop the site planned for the stadium with a corporate campus, multi-family housing or other permitted uses.

See “SACRAMENTO RAILYARDS” and “DEVELOPMENT PLAN” for more detail on the plan of development within the Sacramento Railyards and the District.

Forward Looking Statements
Certain statements included or incorporated by re ference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements include, but are not limited to certain statements contained in the information under the captions “THE DISTRI CT,” “SACRAMENTO RAILYARDS,” “DEVELOPMENT PLAN” and APPENDIX B — “APPRAISAL REPORT.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVES KNOWN AND UNKNOWN RISKS,

UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS,

PERFORMANCE OR ACHIEVEMENTS DESCRIBE D TO BE MATERIALLY DIFFERENT FROM ANY

FUTURE RESULTS, PERFORMANCE OR ACHIEVEM ENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR

REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

Sources of Payment for the Bonds
General. The Bonds and any bonds issued and se cured by and payable from Net Special Tax Revenues on a parity with the Bonds (the “Parity Bonds”) are limited obligations of the City, and the interest on and principal of and redemption premiums, if any, on the Bonds and any Parity Bonds are payable solely from Net Special Tax Revenues, which are derived from the Special Tax to be levied annually against the Taxable Land in the District, or, to the extent necessary and subject to the conditions set forth in the Indenture, from the monies on deposit in the Bond Reserve Fund. As described in this Official Statement, the Special Tax will be collected along with ad valorem property taxes on the tax bills mailed by the County. Although the Special Tax constitutes a lien on the property subject to taxation in the District, it does not constitute a personal indebtedness of the owners of such property . There is no assurance that such owners will be financially able to pay the annual Special Tax or that they will pay such taxes even if they are financially able to do so.

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Limited Obligations. Except for Net Special Tax Revenues, no other revenues or taxes are pledged to the payment of the Bonds and any Parity Bonds. The Bonds and any Parity Bonds are not general obligations of the City but are special limited obligations of the City payable solely from the Net Special Tax Revenues and other amounts held under the Indenture as more fully described herein.

Special Tax. As used in this Official Statement, the terms: (1) “Special Tax” means the special tax authorized to be levied and collected annually on all Taxable Land (as defined in the Indenture) within the District under and pursuant to the Act at the specia l election held in the District; (2) “Net Special Tax Revenues” means the proceeds of the Special Tax, less the Priority Administrative Expenses; and (3) “Priority Administrative Expenses” means (i) for the Fiscal Year 2022-23, $35,000, and (ii) for each subsequent Fiscal Year, an amount equal to the Priority Administrative Expenses for the preceding Fiscal Year plus 3%. See “SOURCES OF PAYMENT FOR THE BONDS — Special Tax” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” Under the Indenture, the City will pledge to pay debt service on the Bonds and any Parity Bonds from the Net Special Tax Revenues received by the City on behalf of the District and any other amounts held in the Special Tax Fund, the Bond Redemption Fund, and the Bond Reserve Fund.

The Net Special Tax Revenues are the primary security for the repayment of the Bonds and any Parity Bonds. In the event that the Special Tax is not paid when due, the only sources of funds available to pay the debt service on the Bonds and any Parity Bonds are amounts held by the Treasurer in the Special Tax Fund and the amounts held in the Bond Reserve Fund and the Bo nd Redemption Fund held by the Trustee under the Indenture. See “SOURCES OF PAYMENT FOR THE BONDS.”
Foreclosure Covenant. The City will covenant in the Indenture to, annually on or before October 1 of each year, review the public records of the County rela ting to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and (a) on the basis of such review the City will, not later than the succeeding December 1, institute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the paym ent of such Special Tax in such Fiscal Year by three percent (3%) or more of the total amou nt of the Special Tax levied in such Fiscal Year in order to enforce the lien of all such delinquent installments of such Spec ial Tax, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale, and (b) on the further basis of such review, if the City determines that the total amount so collected is less than 95% of the total amount of the Special Tax levied in such Fiscal Year, the City will, not later than the succ eeding December 1, institute foreclosure proceedings as authorized by the Act against all parcels that are delinque nt in the payment of such Special Tax in such Fiscal Year to enforce the lien of all the delinquent installments of such Special Tax, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale in accordance with the Act.

The City is not obligated to enforce the lien of any delinquent installment of the Special Tax for any Fiscal Year in which the City has received 100% of the amount of the installment from the County under the Teeter Plan (as defined below). The District is current ly included in the County’s Teeter Plan (as defined below). See “SOURCES OF PAYMENT FOR THE BONDS — Teeter Plan” and “SPECIAL RISK FACTORS — Teeter Plan Termination.”
See “SOURCES OF PAYMENT FOR THE BONDS — Special Tax — Foreclosure Covenant ” herein and APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Covenants of the City — Foreclosure of Special Tax Liens.” There is no assurance that the Taxable Land within the District can be sold for the appraised or asse ssed values described in this Official Statement and in the Appraisal Report, or for a price sufficient to provide monies to pay the principal of and interest on the Bonds in the event of a default in payment of the Special Tax by current or future landowners within the District. See “SPECIAL RISK FACTORS — Property Values ” and APPENDIX B — “APPRAISAL REPORT.”

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NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY

OF SACRAMENTO, THE STAT E OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET

SPECIAL TAX REVENUES, NO OTHER REVE NUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY

BUT ARE SPECIAL LIMITED OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE

NET SPECIAL TAX REVENUES AND CERTAIN OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

Parity Bonds and Liens . Under the terms of the Indenture, the City may issue Parity Bonds secured by Net Special Tax Revenues on a parity with the Bond s if certain conditions are met, for the purpose of financing additional facilities and/or fees eligible to be financed by the District or for refunding the Bonds and Parity Bonds. See “SOURCES OF PAYMENT FOR TH E BONDS — Issuance of Parity Bonds.” Parity Bonds may be issued by means of a supplemental indenture and without any requirement for the consent of any Holders. See APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Conditions for the Issuance of Bonds.” The City expects that Parity Bonds will be issued to finance additional facilities and/or fees eligible to be financed by the Di strict, subject to satisfaction of the conditions under the Indenture for the issuance of such Parity Bonds.

Other taxes and/or special assessments with liens equal in priority to the continuing lien of the Special Tax have been levied and may also be levied in the future on the property within the District, which could adversely affect the ability and willingness of the landowners to pay the Special Tax when due. See “SPECIAL RISK FACTORS — Parity Taxes and Special Assessments.” Appraisal Report
An MAI appraisal (the “Appraisal Report”) of certain of the land and existing improvements within the District that are subject to the lien of the Special Tax was prepared by BBG, Inc., Walnut Creek, California (the “Appraiser”). The Appraisal Report has a date of value of July 1, 2022 (the “Date of Value”). See APPENDIX B — “APPRAISAL REPORT.” The Appraisal Report provides an estimate of market value by ownership, and an estimate of the not-less-than aggregat e value (the sum of market values by ownership), for the Taxable Land.

As of the Date of Value, the Appraiser estimates that the aggregate value of the Taxable Land (as defined in the Indenture) within the District, was not less than $152,100,000, which consists of (i) $52,000,000 for the 95.152 acres taxable acres owned by the Devel oper; (ii) $34,100,000 for the 17.14 taxable acres owned by Kaiser Foundation Hospitals; and (iii) $66,000,000 for the 2.88 taxable acres owned by Sacramento 695, L.P. The Appraiser has assigned zero value to the property owned by the Wong Center, which is planned for a 150-unit affordable housing project.

The Appraisal Report is based upon a variety of assumptions and limiting conditions that are described in APPENDIX B. The City makes no representations as to the accuracy of the Appraisal Report.

See “THE DISTRICT — Property Values” and “—Value-to-Lien Ratios.” There is no assurance that any property within the District can be sold for the estimated values set forth in the Appraisal Report or that any parcel could be sold for a price sufficient to provide moni es to pay the Special Tax for that parcel in the event of a default in payment of the Special Tax by the land owner. See “THE DISTRICT,” “SPECIAL RISK FACTORS — Property Values” and A PPENDIX B — “APPRAISAL REPORT.” Description of the Bonds
The Bonds will be issued and delivered as fully registered Bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) in integral multiples of $5,000, under the book-entry

8 4817-9609-0100v10/022536-0022
system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described in APPENDIX I. Beneficial Owners will not be entitled to receive physical delivery of the Bonds.

In the event that the book-entry-only system described herein is no longer used with respect to the Bonds, the Bonds will be registered and transferred in accordance with the Indenture. See APPENDIX I — “BOOK-ENTRY ONLY SYSTEM.”
Principal of, premium, if any, and interest on the Bonds are payable by the Trustee to DTC.

Disbursement of such payments to DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of DTC Participants. In the event that the book-entry only system is no longer used with respect to the Bo nds, the Beneficial Owners will become the registered owners of the Bonds and will be paid principal and interest by the Trustee, all as provided in the Indenture.

The Bonds are subject to optional redemption, extraordinary redemption, and mandatory sinking fund redemption as described herein. See “THE BONDS — Rede mption.” For a more complete descriptions of the Bonds and the basic documentation pursuant to which they are being sold and delivered, see “THE BONDS” and APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” Professionals Involved in the Offering
U.S. Bank Trust Company, National Association, San Francisco, California, will act as Trustee under the Indenture. Stifel, Nicolaus & Company, Incorporated is the Underwriter of the Bonds. The validity of the Bonds and certain other legal matters are subject to the approving opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the City in connection with the issuance of the Bonds. Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California is serving as Disclosure Counsel to the City with respect to the Bonds. Certain legal matters will be passed on for the City by the Office of the City Attorney, for the Underwriter by Best Best & Krieger LLP, Riverside, California, as counsel to the Underwriter and for the Trustee by its counsel. Other professional services have been performed by BBG, Inc., Walnut Creek, California, as the Appraiser, Fiel dman, Rolapp & Associates, Inc., Irvine, California as municipal advisor to the City and Economic & Planni ng Systems Inc. (EPS), Sacramento, California, as Special Tax Consultant.

For information concerning respects in which certain of the above-men tioned professionals, advisors, counsel and consultants may have a fi nancial or other interest in the o ffering of the Bonds, see “FINANCIAL INTERESTS.”
Continuing Disclosure
The City has agreed to provide, or cause to be provided, pursuant to Rule 15c2-12 adopted by the Securities and Exchange Commission (the “Rule”) certain financial information and operating data on an annual basis (the “City Reports”). The City has further agreed to provide, in a timely manner, notice of certain events with respect to the Bonds (the “Listed Events”). These covenants have been made in order to assist the Underwriter in complying with the Rule. The City Reports will be filed with the Electronic Municipal Market Access System (“EMMA”) of the Municipal Securities Rulemaking Board (the “MSRB”) available on the Internet at http://emma.msrb.org. The foregoing internet address is included for reference only, and the information on this Internet site is not a part of this Official Statement or incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on this Internet site . Notices of Listed Events will also be filed with the MSRB on EMMA. Within the last five years, the City and certain related entities have failed to comply in certain respects with prior continuing disclosure undertakings. See “CONTINUING DISCLOSURE.” The Underwriter does not consider the Developer to be an “obligated person” with respect to the Bonds for purposes of the Rule. However, to assist in the marketing of the Bonds, the Developer has agreed to provide, or cause to be provided on EMMA, updated information with respect to the development within the

9 4817-9609-0100v10/022536-0022
District (the “Developer Reports” a nd together with the City Reports, th e “Reports”), on a semiannual basis and notices of certain events.

See “CONTINUING DISCLOSURE” and APPENDIX G and APPENDIX H for a description of the specific nature of the annual reports to be filed by the City and the Developer, respectively, notices of Listed Events and the forms of the continuing disclosure undertakings pursuant to which such Reports are to be made.

Bond Holders’ Risks
Certain events could affect the ability of the City to collect the Special Tax in an amount sufficient to pay the principal of and interest on the Bonds when due. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an inve stment in the Bonds. The Bonds are not rated by any nationally recognized rating agency. The purchase of the Bonds involves significant risks, and the Bonds may not be appropriate investments for certain investors. See “SPECIAL RISK FACTORS.” Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to change.

Brief descriptions of the Bonds and the Indenture ar e included in this Offi cial Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Indenture, the Bonds and the constitution and laws of the State as well as the proceedings of the City Council, are qualified in their entirety by references to such do cuments, laws and proceedings, and with respect to the Bonds, by reference to the Indenture. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Indenture.

Copies of the Indenture, the Appraisal Report and other documents and information are available for inspection and (upon request and payment to the City of a charge for copying, mailing and handling) for delivery from the City Treasurer’s Office at 915 I Street, Historic City Hall, 3 rd Floor, Sacramento, California
95814.

THE FINANCING PLAN
Authorized Facilities and Fees
A portion of the proceeds of the Bonds will be a pplied to finance the costs of the acquisition and construction of certain facilities authorized under the Act which facilities may include without limitation, water and storm drain improvements, roadways and traffic im provements, landscaping and park improvements, in addition to other improvements authorized under the Acquisition Agreement described below. The current expectation is that the Bond proceeds will be used to acquire a storm drainage pump station and outfall facility in the District currently under construction by the Developer. See “THE DISTRICT — Description of Authorized Facilities.”

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Estimated Sources and Uses of Funds
The following table sets forth the expected sources and uses of Bond proceeds.

Sources of Funds:

Principal Amount of Bonds $
Plus/Less Net Original Issue Premium/Discount
Total Sources $
Uses of Funds:

Acquisition and Construction Fun d $
Bond Redemption Fund (1)
Costs of Issuance (2)
Bond Reserve Fun d
Total Uses $

(1) Amount represents capitalized interest on the Bonds through September 1, 2024. (2) Includes Underwriter’s Discount, Bond Counsel, Disclosure Counsel, Special Ta x Consultant, municipal advisor and Trustee fees, appraisal costs, printing costs and other issuance costs.

Source: The Underwriter.

THE BONDS
General Provisions
The Bonds will be dated as of their date of delivery and will bear interest at the rates per annum, payable semiannually on each March 1 and September 1, commencing on March 1, 2023 (each, an “Interest Payment Date”), and will mature in the amounts and on the dates, all as set forth on the inside cover page of this Official Statement.

Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months. Interest on any Bond will be payable from the Interest Payment Date next preceding the date of authentication of that Bond, unless it is authenticated on a day during the period from the 16 th day of the month next preceding an
Interest Payment Date to such Interest Payment Date, both dates inclusive, in which event it shall bear interest from such Interest Payment Date, or unless it is authenticated on a day on or before the 15 th day of the month
next preceding the first Interest Payment Date, in which event it shall bear interest from its date; provided, that if at the time of authentication of any Bond interest is then in default on any Outstanding Bonds, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Bonds.

Payment of the principal of and redemption premiums, if any, on the Bonds shall be made only to the person whose name appears in the registration books required to be kept by the Trustee pursuant to the Indenture as the registered owner thereof, such principa l and redemption premiums, if any, to be paid only on

11 4817-9609-0100v10/022536-0022
the surrender of the Bonds at the Prin cipal Corporate Trust Office of the Trustee at maturity or on redemption prior to maturity.

The Bonds will be issued as fully registered bonds without coupons and will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as securities depository of the Bonds. Ownership interests in the Bonds may be purchased in book-entry form only in denominations of $5,000 and any integral multiple thereof. So long as DTC is the securities depository all payments of principal of and interest on the Bonds will be made to DTC and will be paid to the Beneficial Owners in accordance with DTC’s procedures and the procedures of DTC’s Participants. See APPENDIX I — “BOOK-ENTRY ONLY SYSTEM.” Redemption
Optional Redemption . The Bonds maturing on or after September 1, 20__, are subject to optional redemption by the City before their respective stated maturity dates, as a whole or in part on any date on or after September 1, 20__, from any source of available funds other than prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at a redemp tion price equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the date of redemption, without premium.

Extraordinary Redemption from Special Tax Prepayments . The Bonds are subject to extraordinary redemption by the City before their respective stated maturity dates, as a whole or in part on any Interest Payment Date, solely from prepayments of the Special Tax, upon mailed notice as provided in the Indenture, at the following redemption prices (expressed as a percen tage of the principal amount of Bonds or portions thereof called for redemption), together with accrued interest to the date of redemption:

Redemption Dates Redemption
Price
%

See the caption “SPECIAL RISK FACTORS—Potential Early Redemption of Bonds from Prepayments or Bond Proceeds” for a discussion of the potential for a lower than expected yield on the Bonds as a result of a special mandatory redemption from prepayment of the Special Tax.

Mandatory Sinking Fund Redemption . The Bonds maturing on September 1, 20__, are subject to mandatory redemption by the City before their stated maturity date in part on each September 1, as set forth in the schedule below, solely from Sinking Fund Account Payments established under the Indenture for that purpose, upon mailed notice as provided in the Indenture, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

The Bonds maturing on September 1, 20__, are subject to mandatory redemption by the City before their stated maturity date in part on each September 1, as set forth in the schedule below, solely from Sinking Fund Account Payments established under the Indenture for that purpose, upon mailed notice as provided in the Indenture, at a redemption price equal to the prin cipal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, as follows:

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Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$

(maturity)

Selection of Bonds for Redemption . If less than all of the Bonds outstanding are to be redeemed at the option of the City at any one time, the City will select the maturity date or dates of the Bonds to be redeemed. If less than all of the Bonds of any one ma turity date are to be redeemed at any one time, the Trustee shall select the Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of $5,000 in any manner that the Trustee deems appropriate.

Notice of Redemption . When Bonds are to be redeemed under the Indenture the Trustee shall give notice of the redemption of such Bonds. The notice of redemption must state the date of the notice, the Bonds to be redeemed, the date of issue of the Bonds, the redemption date, the redemption price, the place of redemption (being the address of the Principal Corporat e Trust Office of the Trus tee), the CUSIP number (if any) of the maturity or maturities and, if less than all of any such maturity, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, th e respective portions of the principal amount thereof to be rede emed. The notice must further state that interest on the Bonds to be redeemed or the portions thereof will not accrue from and after the date of redemption and that all Bonds must be surrendered for redemptio n at the Principal Corporate Trust Offi ce of the Trustee for payment of the redemption price thereof. If any Bond chosen for redemption is not redeemable in whole, the notice must state that the Bond is to be redeemed in part only and that upon presentation of the Bond for redemption there will be issued in lieu of the unredeemed portion of principal a new Bond or Bonds of the same series and maturity date of authorized denominations equal in aggregate principal amount to the unredeemed portion.

At least 30 days but no more than 90 days before the redemption date, the Trustee shall mail a copy of such notice by first-class mail, postage prepaid, to (a) th e Holders of all Bonds selected for redemption at their addresses appearing on the register maintained by the Trustee in accord ance with the Indenture, (b) the securities information services selected by the City in accordance with the Indenture, and (c) the Underwriter.

Neither the failure to receive any su ch notice nor any immaterial defect in such notice will affect the sufficiency or validity of the proceedings for redemption.

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conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of amounts sufficient to pay the principal of, and premium, if any, and interest on, such Bonds to be redeemed, and that if such amounts are not received the notice will be of no fo rce and effect and the City will not be required to redeem such Bonds. In the event that any such notice of redemption contains such a condition and such amounts are not so received, the redemption will not be made and the Trustee will within a reasonable time thereafter give notice to the effect that such amounts were not so received and such redemption was not made, such notice to be given by the Trustee in the same manner, and to the same parties, as the notice of redemption was given. Such failure to redeem such Bonds shall not constitute an Event of Default under the Indenture.

Notwithstanding anything to the contrary contained in the Indenture, any notice of optional or extraordinary redemption of Bonds may be rescinded by written notice given to the Trustee by the City no later than five Business Days prior to the date specified for redemption. The Trustee will give notice of such rescission as soon thereafter as practicable in the same manner, and to the same parties, as notice of such redemption was given.

Effect of Redemption . If notice of redemption is given as provided in the Indenture and the money necessary for the payment of the principal of, and any redemption premiums and in terest to the redemption date on, the Bonds or portions thereof so called for rede mption is held by the Trustee, then on the redemption date the Bonds called for redemption or portions thereof will become due and payable, and from and after the redemption date interest on those Bonds or such portions thereof will cease to accrue and the Holders of such Bonds shall have no rights in respect thereof except to receive payment of the principal or such portions thereof and the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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DEBT SERVICE SCHEDULE
The following table presents the semi-annual debt service on the Bonds (including sinking fund redemption), assuming there are no optional or ex traordinary redemptions. See “SOURCES OF PAYMENT FOR THE BONDS” and “THE BONDS — Redemption.” Inte rest on the Bonds has been capitalized through September 1, 2024.

Date
Total
Principal Total Interest Total Debt Service
3/1/2023
9/1/2023
3/1/2024
9/1/2024
3/1/2025
9/1/2025
3/1/2026
9/1/2026
3/1/2027
9/1/2027
3/1/2028
9/1/2028
3/1/2029
9/1/2029
3/1/2030
9/1/2030
3/1/2031
9/1/2031
3/1/2032
9/1/2032
3/1/2033
9/1/2033
3/1/2034
9/1/2034
3/1/2035
9/1/2035
3/1/2036
9/1/2036
3/1/2037
9/1/2037
3/1/2038
9/1/2038
3/1/2039
9/1/2039
3/1/2040
9/1/2040
3/1/2041
9/1/2041
3/1/2042
9/1/2042
3/1/2043
9/1/2043
3/1/2044
9/1/2044

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Date
Total
Principal Total Interest Total Debt Service
3/1/2045
9/1/2045
3/1/2046
9/1/2046
3/1/2047
9/1/2047
3/1/2048
9/1/2048
3/1/2049
9/1/2049
3/1/2050
9/1/2050
3/1/2051
9/1/2051
3/1/2052
9/1/2052
Totals

Source: The Underwriter.

SOURCES OF PAYMENT FOR THE BONDS
Limited Obligations
The Bonds are payable from and secured by Net Special Tax Revenues and by amounts on deposit in the Special Tax Fund, the Bond Redemption Fund and th e Bond Reserve Fund. The Bonds are not secured by monies on deposit in the Expense Fund, the Rebate Fund or the Acquisition and Construction Fund established by the Indenture.

The Indenture defines the terms: (1) “Special Tax” to mean the special tax authorized to be levied and collected annually on all Taxable Land (as defined in the Indenture) in the District under and pursuant to the Act at the special election held in the District on August 15, 2018; (2) “Net Special Tax Revenues” to mean the proceeds of the Special Tax, less the Priority Admi nistrative Expenses; and (3) “Priority Administrative Expenses” to mean (i) for the Fiscal Year 2022-23, $35,000, and (ii) for each subsequent Fiscal Year, an amount equal to the Prio rity Administrative Expenses for the preceding Fiscal Year, plus 3%. See APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Definitions.” The City is legally authorized and has covenanted in the Indenture to cause the levy and collection of the Special Tax in an amount determined according to the Rate and Method. See “SOURCES OF PAYMENT FOR THE BONDS — Special Tax” and “SPECIAL RISK FACTORS — Proposition 218” below. The Rate and Method apportions the total amount of the Special Tax to be collected among the Taxable Land in the District. See “—Special Ta x” and APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Although the Special Tax will be levied against Taxable Land within the District, it does not constitute a personal indebtedness of the property owners. There is no assurance that the property owners will be able to pay the Special Tax or that they will pay it even if able to do so. See “SPECIAL RISK FACTORS” herein.

NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OF

SACRAMENTO, THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE NET SPECIAL TAX REVENUES,

16 4817-9609-0100v10/022536-0022
NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE

BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY BUT ARE SPECIAL LIMITED

OBLIGATIONS OF THE CITY PAYABLE SOLELY FROM THE NET SPECIAL TAX REVENUES AND

CERTAIN OTHER AMOUNTS HELD UNDER THE INDENTURE AS MORE FULLY DESCRIBED IN THIS OFFICIAL STATEMENT.

Special Tax
Authorization and Pledge . In accordance with the provisions of the Act, the City established the District on August 14, 2018, for the purpose of financing the various public improvements and governmental fees required in connection with the proposed development within the District. On August 15, 2018, an election was held within the District at which the landowners eligible to vote approved the issuance of bonds for the District in an amount not to exceed $75,000,00 0, secured by special taxes levied on taxable property within the District to finance the authorized facilities and fees. The landowners with in the District also voted to approve the Rate and Method which authorized the Special Tax to be levied to repay indebtedness of the District, including the Bonds.

The City will covenant in the Indenture, so long as any Bonds are Outstanding, to annually levy the Special Tax against all Taxable Land in the District in accordance with the Rate and Method and, subject to the limitations in the Rate and Method and the Act, make provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Bond Redemption Fund, after making reasonable allowances for contingencies and e rrors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements , conditions, covenants and terms contained in the Indenture, and which in any event will be sufficient to pay the interest on and principal of and Sinking Fund Account Payments for and redemption premiums, if any, on the Bonds as they become due and payable and to replenish the Bond Reserve Fund and to pay all current Expenses as they become due and payable in accordance with the provisions and terms of the Indenture.

The Special Tax is collected in the same manner as ad valorem property taxes for the County are collected and, except as otherwise provided in the Indenture or by the Act, is subject to the same penalties and the same collection procedure, sale, and lien priority in case of delinquency as is provided for ad valorem property taxes. See APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Under the Indenture, except as described below, all proceeds of the Special Tax are to be deposited in the Special Tax Fund, established under the Indenture and held and maintained in trust by the City Treasurer.

The City agrees in the Indenture to deposit all proceeds of the Special Tax in the Special Tax Fund when and as received and to transfer all amounts in the Special Tax Fund into the following funds in the following order of priority:
(1) to the Expense Fund in an amount equal to the Priority Administrative Expenses for the Fiscal Year,
(2) to the Bond Redemption Fund to pay debt service payments on all outstanding Bonds and any Parity Bonds,
(3) to the Bond Reserve Fund to the extent necessary to replenish the Bond Reserve Fund to the Required Bond Reserve,
(4) to the Expense Fund in an amount equal to the amount required by the City for the payment of budgeted Expenses or to reimburse the City for the payment of unbudgeted Expenses, in each case to the extent such Expenses were no t already funded or reimbursed by the deposit of Priority Administrative Expenses described in (1) above, and

17 4817-9609-0100v10/022536-0022
(5) to the Community Facilities Fund.

Notwithstanding anything to the contrary in the Indenture, as soon as practicable after the receipt by the City of any prepayment of the Special Tax, the Treasurer shall (i) deposit any component thereof representing the “Remaining Facilities Funding Requirement Share” (as defined in the Rate and Method) in the Acquisition and Construction Fund, (ii) deposit any component thereof representing expenses incurred by the City in connection with the prepayment (as determined pursuant to the Rate and Method) in the Expense Fund, and (iii) transfer to the Trustee for deposit in the Bond Redemption Fund, any remaining amounts, for the extraordinary redemption of Bonds or Parity Bonds pursuant to the terms of any Supplemental Indenture.

See APPENDIX F – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Allocation of Money in the Special Tax Fund” for additional information regarding the deposit, transfer, application, use and withdrawal of money deposited in the Special Tax Fund.

The Special Tax levied in any fiscal year may not exceed the maximum rates authorized pursuant to the Rate and Method. See APPENDIX A — “R ATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” hereto. There is no assurance that the Special Tax proceeds will, in all circumstances, be adequate to pay the principal of and interest on the Bonds when due. See the caption “ Limitation on Special Tax Levy ” below and “SPECIAL RISK FACTORS — In sufficiency of Special Tax” herein.

Rate and Method of Apportionment of Special Tax . The City is legally authorized and will covenant to cause the levy of the Special Tax in an amount dete rmined according to a methodology, i.e., the Rate and Method which the City Council and the electors within the District have approved. The Rate and Method apportions the total amount of the Special Tax to be collected among the Taxable Parcels in the District as more particularly described below.

The following is a synopsis of the provisions of the Rate and Method for the District, which should be read in conjunction with the complete text of the Rate and Method which is attached as APPENDIX A — “RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” The definitions of the capitalized terms used under this caption “— Rate and Method of Apportionment of Special Tax ” are as set forth in APPENDIX A. This section provides only a summary of the Rate and Method, and is qualified by more complete and detailed information contained in the entire Rate and Method attached as APPENDIX A.

Classification of Parcels . Each Fiscal Year, the Administrator shall cause (1) each parcel within the District to be classified as a Taxable Parcel or Tax-Ex empt Parcel, and (2) each Taxable Parcel to be classified as a Developed Parcel or an Undeveloped Parcel.

Exemptions. No Special Tax shall be levied on Assessor’s Parcels of Public Parcels and any other Parcel that in its entirety, is or is intended to be, publicly owned that is normally exempt from the levy of general ad valorem property taxes under California law, including public streets, schools, parks, public drainageways, public landscaping, wetlands, greenbelts, common areas, and public open space.

At the time the District was formed, the City has id entified the possibility of up to, but not to exceed, 5 acres of land that initially is cons idered Taxable Acreage that may become Tax-Exempt Parcels. In priority order, 5 acres of Taxable Acreage may be converted to Tax-Exempt parcels for (1) a fire station, (2) a police station, and (3) a public school site without requiring any transfers of Maximum Annual Special Tax or Prepayment of the obligation. Attachment 2 to the Rate and Method shows the adjusted Maximum Annual CFD Revenue for the Base Year if up to 5 Taxable Acres were to be converted to Tax-Exempt Parcels. In whole or in part, the City, in its sole discretion, can release this reservation to permit up to 5 acres to be converted from Taxable Acreage to Tax Exempt Parcels. The Administrator shall annually document whether any of this reservation of up to 5 Taxable Acres has been converted to one or more Tax-Exempt Parcels.

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Maximum Annual Special Tax . The Maximum Annual Special Tax rates for Fiscal Year 2019-20 are set forth in Attachment 1 to the Rate and Method (see APPENDIX A); such rates increase by two percent annually in each subsequent Fiscal Year. The Maximum Annual Special Tax rate for Fiscal Year 2022-23 is $20,510.58 per Acre. The Maximum Annual Special Tax has been assigned to each lot as shown on Attachment 1 and Map 2 of the Rate and Method, which lots correspond to the plan for subdivision of the property within the District at the time the Rate and Method was approved. In accordance with Section 4 of the Rate and Method, if a subdivision of any Assessor Parcel within the District is in a manner different than as shown in Attachment 1 and Map 2 of the Rate and Method, the Rate and Method provides for an allocation of the Maximum Annual Special Tax amongst the subdivid ed lots such that the aggregate Maximum Annual Special Tax allocated to the subdivided lots will not be less than the Maximum Annual Special Tax on the original Assessor Parcels from which such lots were subdivided. Under the Rate and Method the Maximum Annual Special Tax for condominium units is based on the building square footage of the unit in relation to the total building square footage within the same Condominium Plan.

Each Fiscal Year, the City will compute the Annual Costs, which means the total of the following after excluding any capitalized interest available to pay Debt Service that is due in the subsequent calendar year (i.e., January 1 to December 31) following the beginning of a Fiscal Year (i.e., July 1); any available earnings on, or surplus balances in, the reserve fund for the Bonds or Parity Bonds or the Special Tax fund for the District; and any other available revenues of the City that relate to the District and may be lawfully used to pay Annual Costs for such Fiscal Year: (1) Debt Service that is due in the subsequent calendar year (i.e., January 1 to December 31) foll owing the beginnin g of a Fiscal Year (i.e., July 1); (2) the amount needed to replenish the reserve fund for Bonds to the level required under any indenture for any Bonds, to the extent not included in a computation of Annual Costs in a previous Fiscal Year; (3) Administrative Expenses for the Fiscal Year; (4) to the extent permitted by the Act, the amount needed to fund (i) unpaid Special Tax delinquencies from previous Fiscal Years, to the extent not previously levied, and (ii) anticipated delinquencies for the current Fiscal Year on any Parcel which has no outstanding delinquent Special Taxes. Collections from prior delinquencies should be used to offset the amount needed for current and future delinquencies if available; and (4) Authorized Facilities funded on a Pay-As-You-Go Basis.

The City will then compute the Special Tax levy for all Taxable Parcels in accordance with the following steps:

Step 1. The Special Tax shall be levied Propor tionately on all Parcels of Developed Property up to the amount of the Annual Costs or up to 100 percent of the Maximum Special Tax for each Developed Parcel, whichever is lower.

Step 2. If additional revenue is needed after Step 1, the Special Tax shall be levied Proportionately on each Undeveloped Parcel until the revenue from the Special Tax levy in this step, when added to the levy amounts determined in Step 1, equals the Annual Costs, or up to 100 percent of the Maximum Annual Special Tax for all Undeveloped Parcels.

Step 3. Levy on each Taxable Parcel the amount calculated above.

Step 4. Prepare the Tax Collection Schedule and, unless an alternative method of collection has been selected pursuant to the Rate and Method, send it to the County Auditor- Controller requesting that it be placed on th e general, secured property tax roll for the Fiscal Year. The Tax Collection Schedule will not be sent later than the date required by the County Auditor-Controller for such inclusion.

The Administrator will make every effort to calculate the Special Tax correctly for each Parcel. It will be the burden of the taxpayer to correct any errors in determining which Parcels are subject to the tax and the Special Tax assignments.

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Annual Increases. On each July 1, the Maximum Annual Special Tax rates will be increased by an amount equal to two percent of the amount in effect for the previous Fiscal Year.

Transfer of the Maximum Annual Special Tax amongst Taxable Parcels . As Taxable Parcels are Subdivided, the Maximum Annual Special Tax (on a per Taxable Acreage basis) may become greater or less than other similar Parcels. As long as no vertical construction has occurred on Parcels proposed for a transfer of Maximum Annual Special Tax, owners of such Parcels may request that the City allow a transfer of the Maximum Annual Special Tax amongst two or more Taxable Parcels to remedy such differences between Taxable Parcels. All allowed transfers shall only occur such that there is no reduction in the Maximum Annual Special Tax Revenue of all Taxable Parcels included in such transfers and the Administrator and property owner agree to the transfer(s).

Prepayment of Annual Special Tax . The Maximum Annual Special Tax obligation for a Parcel may be prepaid in full, or in part, provided that the terms set forth under the Rate and Method are satisfied. The Prepayment Amount is calculated as specified in Sect ion 6 of the Rate and Method attached as APPENDIX A and examples of the calculation of such Prepayment Am ount are set forth in Tables 1 and 2 to the Rate and Method.

Limitation on Special Tax Levy . Pursuant to Section 53321(d) of the Government Code, the special tax levied against any Parcel for which an occupancy permit for private residential use has been issued shall not be increased as a consequence of delinquency or default by the owner of any other Parcel within the District by more than 10% above the amount that would ha ve been levied in that fiscal year had there never been any such delinquencies or defaults. As a result, it is possible that the City may not be able to increase the tax levy to the Maximum Annual Special Tax rate in all years. However, subject to the limitations on the City’s ability to levy the necessary amount of the Special Tax as imposed by Section 53321(d) of the Government Code, the City can levy the Special Tax on Undeveloped Parcels to make-up all or a portion of any shortfall in the Special Tax levy, subject to the maximum Special Tax rate on Undeveloped Parcels.

To the City’s knowledge, the appl ication of such limitation to fo r-rent apartment properties has not been subject to interpretation by the courts. A court could hold that such limitation applies, which decision could be binding on community facilities districts within the City. If such limitation were to apply, it is possible that the District may not be able to increase the tax levy to the Maximum Annual Special Tax rate on Taxable Parcels with for-rent apartments in all years. However, subject to the limitations on the District’s ability to levy the necessary amount of Special Taxes as imposed by Section 53321(d) of the Government Code, the District can levy Special Taxes up to the Maximum Annual Special Tax rates on all Taxable Property to make-up all or a portion of any shortfall in the Special Tax collections due to delinquencies.

Collection of Special Tax. The Special Tax is levied and collected by the Tax Collector of the County in the same manner and at the same time as ad valorem property taxes. The City may, however, collect the Special Tax at a different time or in a different manner if necessary to meet its financial obligations with respect to the District.

Although the Special Tax constitutes a lien on Taxable Parcels (as defined in the Rate and Method) within the District, they do not constitute a personal indebtedness of the owners of property within the District.

In addition to the obligation to pay the Special Tax, properties in the District are subject to other assessments and special taxes as set forth under Table 4 below. Th ese other special taxes and assessments are on parity with the lien for the Special Tax. Moreover, other liens for taxes and assessments could come into existence in the future in certain situations without the consent or knowledge of the City or the landowners in the District.

See “SPECIAL RISK FACTORS — Parity Taxes and Sp ecial Assessments.” There is no assurance that property owners will be financially able to pay the Sp ecial Tax or that they will pay such taxes even if financially able to do so. See “SPECIAL RISK FACTORS” below.

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Foreclosure Covenant. The proceeds of delinquent amounts of the Special Tax received following a judicial foreclosure sale of parcels within the District resulting from a landowner’s failure to pay the Special Tax when due, up to the amount of the delinquent Spec ial Tax lien, are included within the Net Special Tax Revenues pledged to the payment of principal of and interest on the Bonds under the Indenture, except any payment of the Special Tax on tax-defaulted parcels, including all delinquent and redemption penalties, fees and costs and the proceeds collected from the sale of pr operty pursuant to the for eclosure provisions of the Indenture, so long as the County has paid to the City the Special Tax levied for a tax-defaulted parcel pursuant to the Teeter Plan established by the County. See “— Teeter Plan” below.

Pursuant to Section 53356.1 of the Act, in the event of any delinquency in the payment of any Special Tax or receipt by the City of the Special Tax in an amou nt which is less than the Special Tax levied, the City Council of the City may order that the Special Tax be collected by a superior court action to foreclose the lien within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. Under the Act, the commencement of judicial foreclosure following the nonpayment of a Special Tax is not mandatory.

However, the City will covenant in the Indenture to, annually on or before October 1 of each year, review the public records of the County relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and (a) on the basis of such review the City will, not later than the succeeding December 1, institute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the payment of such Spec ial Tax in such Fiscal Year by three percent (3%) or more of the total amount of the Special Tax levied in such Fiscal Year in order to enforce the lien of all such delinquent installments of such Special Tax, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale, and (b) on the further basis of such review, if the City determines that the total amount so collected is less than 95% of the total amount of the Special Tax levied in such Fiscal Year, the City will, not later than the succeeding December 1, ins titute foreclosure proceedings as authorized by the Act against all parcels that are delinquent in the payment of such Special Tax in such Fiscal Year to enforce the lien of all the delinquent installments of such Special Tax, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale in accordance with the Act.

See APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Covenants of the City — Foreclosure of Special Tax Liens.” If foreclosure is necessary and other funds (includi ng amounts in the Bond Reserve Fund) have been exhausted, debt service payments on the Bonds could be delayed until the foreclosure proceedings have ended with the receipt of any foreclosure sale proceeds. Judi cial foreclosure actions are subject to the normal delays associated with court cases and may be further slowed by bankruptcy actions, involv ement by agencies of the federal government and other factors beyond the control of the City. See “SPECIAL RISK FACTORS — Bankruptcy and Foreclosure” herein. Moreover, no assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. See “SPECIAL RISK FACTORS — Property Values” herein. Although the Act authorizes the City to cause such an action to be commenced and diligently pursued to completion, the Act does not impose on the City any obligation to purchase or acquire any lot or parcel of property sold at a foreclosure sale if there is no other purchaser at such sale. The Act provides that, in the case of a delinquency, the Special Tax will have the same lien priority as is provided for ad valorem taxes.

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Bond Reserve Fund
In order to secure the payment of principal of and interest on the Bonds, the City is required, upon delivery of the Bonds, to deposit in the Bond Reserve Fund an amount equal to the Required Bond Reserve and thereafter to maintain in the Bond Reserve Fund an amount equal to the Required Bond Reserve. The Indenture provides that the amount to be maintained in the Bond Reserve Fund as the Required Bond Reserve shall, as of any date of calculation, equal the least of (a) 10% of the principal amount of the Outstanding Bonds and Parity Bonds, or (b) Maximum Annual Debt Service, or (c) 125% of the average Debt Service payable under the Indenture in the current and in all future Bond Years, all as determined by the City under the Internal Revenue Code of 1986 (the “Code”) and specified in wr iting to the Trustee; provided, that the Required Bond Reserve (or any portion thereof) may be satisfied by the provision of one or more policies of municipal bond insurance or surety bonds issued by a municipal bond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by which bank, as the case may be, have at least one rating at the time of issuance of such policy or surety bond or letter of credit equal to “A” or higher assigned by Fitch or “A” or higher assigned by Moody’s or “A” or higher assigned by Standard & Poor’s, in each case without regard to any numerical modifier or plus or minus sign; and provided further, that the amount of the Required Bond Reserve shall not increase at any time except up on the issuance of a new Series of Parity Bonds; and provided further, that, with respect to the issuance of any issue of Parity Bonds, if the amount on deposit in the Bond Reserve Fund would have to be increased by an amount greater than 10% of the stated principal amount of such issue of Parity Bonds (or, if the issue has more than a de minimis amount of original issue discount or premium, of the issue price of such issue of Parity Bonds) then the Required Bond Reserve shall be such lesser amount as is determined by a deposit of such 10%. As of the date of issuance of the Bonds the Required Bond Reserve will be fully funded in the amount of $____________ from a portion of the proceeds of the Bonds.

Subject to the limits on the Maximum Annual Special Tax which may be levied within the District in accordance with the Rate and Method set forth in APPENDIX A, the City will covenant to levy the Special Tax in an amount that is anticipated to be sufficient, in light of the other intended uses of the Special Tax proceeds, to maintain the balance in the Bond Reserve Fund at the Required Bond Reserve. Amounts in the Bond Reserve Fund are to be applied to (i) pay debt service on the Bonds and any Parity Bonds, to the extent other monies in the Bond Redemption Fund are insufficient therefor; (ii) reinstate the amount available under any municipal bond insurance policy, surety bond, or letter of credit which may be issued and held in satisfaction of all or a portion of the Required Bond Reserve; and (iii) retire Bonds and any Parity Bonds in whole or in part, to the extent that the amount on deposit in the Bond Reserve Fund exceeds the Required Bond Reserve due to a redemption or defeasance of Bonds or Parity Bonds. See APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDE NTURE — Allocation of Money in the Special Tax Fund.”
Issuance of Parity Bonds
The City may issue one or more series of Parity Bonds (each a “Series”), in addition to the Bonds, which shall be payable from the Net Special Tax Revenues under the Master Indenture on a parity with the Outstanding Bonds. The Parity Bonds shall be issued by means of a Supplemental Indenture and without the consent of any Holders, upon compliance with the provis ions of the Master Indenture, which include, among others, the following specific conditions:
(a) No Event of Default under the Master Indent ure or under any Supplemental Indenture shall have occurred and shall be then continuing;
(b) The Net Special Tax Revenues that would be available to the City if the Special Tax were to be levied and collected at its maximum rate and amount on all Taxable Land in the District during each Fiscal Year that any Bonds and such Parity Bonds will be Outstanding, as shown by a written certificate of a special tax consultant selected by the City on file with the Trustee, would have produced a sum equal to at least 110% of the annual Debt Service during the Bond Year that begins in such Fiscal Year;

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(c) The aggregate Value-to-Lien Ratio of all Taxable Land in the District (excluding the Value of any parcels of Taxable Land then delinquent in the payment of any Special Tax) shall be at least 3:1; and (d) The aggregate Value-to-Lien Ratio of all parc els of Taxable Land, if any, that are then classified as Undeveloped Parcels pursuant to the Rate and Method (excluding the Value of any such parcels of Taxable Land then delinquent in the payment of any Special Tax) shall be at least 2.5:1.

For the purposes of paragraphs (c) and (d) above, th e term “Value” means either the current assessed valuation of a parcel of Taxable Land or the appraise d value of a parcel of Taxable Land determined by an MAI appraiser, and the term “Value-to-Lien Ratio” means (x) in the case of paragraph (c), the ratio of the Value of all such Taxable Land to the aggregate principal amount of all Bonds and Parity Bonds Outstanding and the Parity Bonds proposed to be issued plus the aggregate principal amount of all other assessment bonds and bonds issued under the Act that is reasonably a llocable to such Taxable Land and (y) in the case of paragraph (d), the ratio of the Value of all such parcels of Taxable Land that are then classified as Undeveloped Parcels pursuant to the Rate and Method to the aggregate principal amount of all Bonds and Parity Bonds Outstanding and the Parity Bonds proposed to be issued that is reasonably allocable to such Taxable Land plus the aggregate principal amount of all other assessment bonds and bonds issued under the Act that is reasonably allocable to such Taxable Land.

Notwithstanding the provisions of the Indenture described in (b), (c) and (d) above, nothing contained in the Master Indenture shall limit the issuance of any Parity Bonds payable from the Net Special Tax Revenues as provided therein if, after the issuance and delivery of such Parity Bonds, either (i) none of the Bonds or Parity Bonds theretofore issu ed under the Indenture will be Outstanding or (ii) the Debt Service in each Bond Year that begins after the issuance of such Pa rity Bonds is not increased by reason of the issuance of such Parity Bonds.

See APPENDIX F — “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE — Conditions for the Issuance of Bonds.”
Teeter Plan
In June 1993, the Board of Supervisors of the Coun ty approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrua l basis (irrespective of actual collections) to local political subdivisions for which the County acts as the tax-levying or tax-collecting agency.

Under the Teeter Plan, the County distributes tax collections on a cash basis to taxing entities during the fiscal year and at year-end distributes 100% of any taxes delinquent as of June 30th to the taxing entities and those special assessment districts and community faci lities districts (and individual parcels within each district) that the County determines are eligible to participate in the Teeter Plan. The County may make eligibility determinations on an annual basis and may exclude a district or an individual parcel that had previously been included in the plan. The District is currently included in the County’s Teeter Plan. The County has the discretion to determine which delinquent special taxes will be paid through the Teeter Plan on a case-by-case basis. See “SPECIAL RISK FACTORS — Teeter Plan Termination.”

SACRAMENTO RAILYARDS
The following information in this section has been provided by the Developer. No assurance can be given that the proposed development of the property within the District will occur in the timeframe or in the configuration or to the density described in this Official Statement. The Bonds are secured by and payable solely from the Special Tax and amounts on deposit in certain of the funds and accounts established and maintained under the Indenture. See “SPECIAL RISK FACTORS” for a discussion of certain of the risk

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factors that should be considered in evaluating the investment quality of the Bonds. Neither the Bonds nor the Special Tax are personal obligations of the property owners within the District or any affiliate thereof and, in the event that a property owner defaults in the payment of its Special Tax, the City may proceed with judicial foreclosure, but has no direct recourse to the assets of such property owner or any affiliate thereof.

General Overview and History
Location. The District is a portion of the larger 244-acre Sacramento Railyards site located east of the Sacramento River and south of North B Street and immediately north of the City’s downtown Central Business District. The City’s Central Business District is the historic commercial and government center of the City and includes approximately 530 city blocks of commercial and government offices and residential development.

The State Capitol is located approximately one mile from the Sacramento Railyards.

On the southern border of the Sacramento Railyards is the Sacramento Valley Station, which currently serves as an intermodal station for Amtrak’s Capi tol Corridor (San Jose-Oakland-Sacramento-Auburn) and San Joaquin (Oakland/Sacramento-Fresno-Bakersfield) rout es, Sacramento Regional Transit District light rail and both local and intercity bus service. Amtrak’s Capitol Corridor route provides a direct connection into the San Francisco Bay Area and certain metropolitan areas in California’s central valley. Based on Amtrak’s statistics, in fiscal year 2018-19, the Sacramento Valley Station had approximately 1.1 million boardings, making it the seventh busiest Amtrak station in the c ountry and the second busiest in California (compared to approximately 1.4 million boardings at the Los Angeles station). However, Amtrak experienced significant declines in ridership as a result of the COVID-19 pandem ic and it is uncertain when ridership will return to pre-pandemic levels, including through the Sacramento Valley Station.

History. The Central Pacific Railroad (“Central Pacific”) was a rail company charted by the U.S.

Congress in 1862 to build a railroad eastward from Sacr amento to complete the we stern part of the “First Transcontinental Railroad” in North America. The Ce ntral Pacific acquired the Sacramento Railyards site from the City and subsequently developed the site for locomotive repairs, maintenance and manufacturing. In the late 1800s, a new Southern Pacific Transportation Company (“Southern Pacific”) was incorporated to act as a holding company for several then operating railroads; the Central Pacific was leased to it until 1959, when they merged. The Southern Pacific continued in oper ation until it merged with the Union Pacific Railroad Company in 1996. The Central Shops served as the principal shops of the Central Pacific and Southern Pacific systems between 1968 and 1990. Railyard operations on the site concluded in the late 1990s. Since that time, the Railyards site has been vacant and underutilized except for the two historic shops structures being used by the State Railroad Museum for maintenance and restoration of rolling stock of locomotives for museum purposes.

Environmental remediation of the site was necessary in order for it to be redeveloped for other than its historic use as a railyard. Environmental remediation began in the late 1980s and has been completed to a point to allow for the planned development as described in this Official Statement.

In 2006, S. Thomas Enterprises of Sacramento, LLC (“Thomas Enterprises”) became the owner of the Sacramento Railyards and worked with the City to obtain the entitlements necessary to redevelop the Sacramento Railyards into a high-density urban developm ent. In 2010, IA Sacramento Holdings, L.L.C. (“IA Holdings”) acquired the Sacramento Railyards from Thom as Enterprises th rough foreclosure. In September 2015, the Developer acquired the Sacramento Railyards from IA Holdings. IA Holdings maintained a residual interest in the Developer through Mainline Holdings, Inc. until 2019 when such interest was liquidated for cash consideration.

In 2016, the City Council approved updated entitlements for the Sacramento Railyards which among other changes, incorporated a medical campus and a sports stadium. The current development plan for the Sacramento Railyards is to redevelop the area into a large transit-oriented mixed-use development which is planned to include residential, retail, office, commercial, entertainment, open space and cultural/historic uses.

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Along with public transit, the street network within the Sacramento Railyards, if completed as currently planned, would connect the various project areas within the Sacramento Railyards to the Central Business District and the existing adjacent communities and provide direct access from the Central Business District, through the site of the Sacramento Railyards, to th e edge of the Sacramento River, which borders the Sacramento Railyards on the west. In addition, design work has been completed for a larger bridge that would replace the existing I Street Bridge which was constructed in the early 1900’s (which traverses west from the Sacramento Railyards). The cost for the bridge repl acement is currently estimated to be $250 million. If completed, the replacement bridge would provide vehicular, bicycle and pedestrian access across the Sacramento River into the Sacramento Railyards, conn ecting West Sacramento dir ectly with the Sacramento Railyards. Funding sources for the replacement bridge have not been secured and there is currently no timeframe for construction.

Currently, the substantial majority of the property in the District consists of undeveloped land with certain infrastructure in place. The development within the Sacramento Railyards is expected to be completed in phases and as a long-term en deavor spanning approximately two decades. See “DEVELOPMENT PLAN” for more detail on the plan of development within the Sacramento Railyards and the District. A map of the Sacramento Railyards appears on the following page.

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[INSERT REGIONAL MAP]

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The Developer
Downtown Railyard Venture, LLC, a Delaware limited liability company, was formed in July 2013 for the purpose of acquiring, owning and developing the Sacramento Railyards project, including for the purpose of constructing vertical impr ovements either on its own, or through joint venture partnerships. The Developer currently operates pursuant to a Fourth Amended and Restated Limited Liability Company Agreement of Downtown Railyard Venture, LLC among LDK DRV Manager, LLC (the “Managing Member”), a California limited liability company, Generation Railyard Land, LLC, a California limited liability company, and LDK Railyard, LLC, a California limited liability company (collectively, the “Members”). The sole member of the Manager is LDK Railyard, LLC and the sole member of LDK Railyard, LLC is LDK Ventures, LLC. The manager of Generation Railyard Land, LLC is Goldenwest Group LLC, a California limited liability company.

The five principals of LDK Ventures, LLC have over 20 years of work experience together as a real estate development team with experience in land planning, infrastructure construction, building design and construction, environmental remediation, and development of master planned communities. The paragraphs below provide the background and real estate developm ent experience of certain of the principals at LDK Ventures, LLC.

Mr. Larry Kelley is the President and Chief Executiv e Officer of the Developer, and is also President and Chief Executive Officer of Stanford Ranch I, LLC, the developer of a 3,500 acre master planned community in Rocklin, California known as Stanford Ranch. Stanford Ranch features approximately 6,000 single family lots, 2,000 multi-family units and approximately 646 acres of land dedicated to retail, office and industrial use, of which all residential units have been sold and only 10 acres of retail, office and industrial use property remain to be developed. In the Sacramento area, Mr. Larry Kelley and his partners, most of whom are included within the principals of LDK Ventures, LLC, acquired and undertook the work to remediate, finance and redevelop the McClellan Business Park, which is substantially all of the former approximately 3,000-acre McClellan Air Force Base. At present, over 9 million square feet of space is occupied or committed within the McClellan Business Park, including federal and County-retained facilities, sold property, leased buildings and ground leased property.

Mr. Larry Kelley has been involved in real estate for 40 years and has developed in excess of 3,000,000 square feet of commercial and industrial space and numerous master-planned and mixed use communities. His previous employment includes 10 year s with US Home Corporation, one of the nation’s largest homebuilders. In his capacity as President of Community Development, he was responsible for the acquisition, development and marketing of numerous master-planned communities in ten states. He also served as President of US Home Corporation’s manu factured housing operations and Vice President of Operations, responsible for all Florida housing and land op erations. His experience in real estate development also includes four years with Cook Investment Properties, a subsidiary of Cook Industries of Memphis. In that position, he was responsible for joint ventures on land, apartment, office and residential development.

Mr. Denton Kelley is the Managing Principal of the Developer and a Managing Principal of LDK Ventures, LLC. Mr. Denton Kelley is responsible for identifying and executing new real estate investment opportunities. Mr. Denton Kelley is also responsible fo r sourcing equity capital requirements for all LDK acquisition and development projects. Mr. Denton Kelley is also an owner in McClellan Business Park.

Prior to joining LDK Ventures, LLC, Mr. Denton Ke lley worked as an equity research analyst at Bessent Capital (a global macro hedge fund in New York) covering financials, real estate, health care and other diversified industry sectors. Mr. Denton Kelley worked directly with Scott Bessent, the current CIO of Soros Fund Management. Mr. Denton Kelly spent 3 years at Robertson Stephens in the Investment Banking Division where he was promoted to associate from analyst. Prior to his time at Robertson Stephens, he worked for Prentiss Properties, LLC. (an office real estate investment trust ba sed in Dallas, Texas) as an acquisition

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and development analyst and was also partly responsible for the asset management of the 2 million square feet office/industrial portfolio in the Southwestern US.

Mr. Frank Myers is a Principal and Executive Vi ce President, Chief Financial Officer for LDK Ventures, LLC. Mr. Myers is also the Chief Operat ing Officer for McClellan Bu siness Park. Mr. Myers’ responsibilities include financing, financial reporting, internal controls, financial analysis, business plan development, human resources and MIS systems for th e various LDK Ventures operations. Mr. Myers has arranged private and public financing totaling over $1 billion. Mr. Myers led the diligence efforts on the acquisition of McClellan Air Force Base. He also arranged various credit facilities to accommodate development at McClellan Business Park, the Sacramento Railyards and Stanford Ranch. This included development of the Public Facilities Financing Plans for McClellan Business Park and the Sacramento Railyards, subsequent formation of community facilities districts, tax increment agreements, and bond sales to finance portions of required infrastructure. In his role, Mr. Myers also works closely with the City, the County, and other municipal agencies to arrange public financing on various projects.

Mr. Jay Heckenlively is Principal and General Counsel for LDK Ventures, LLC and McClellan Park.

Mr. Heckenlively’s primary responsi bilities are oversight of all legal affairs, business structuring, and preparation of transactional documentation. He has more than 30 years of experience in the real estate industry as a transactional real estate attorney, specialized in the structuring of complex commercial real estate purchase and sale transactions, leasing, joint venture formation and loan transactions. To date, Mr. Heckenlively has negotiated and completed well over 500 leases for the LDK entities involving in excess of 12,000,000 square feet of leasing, and closed financing transactions with bo th public and private funds of over $1 billion in loan proceeds.

Mr. Josh Leachman is Vice President of Pr oject Development for LDK Ventures, LLC.

Mr. Leachman’s primary responsibility is implementing the transformation of The Railyards. Mr. Leachman’s work includes coordinating entitlements, community outreach, government relations, engineering and design, and both infrastructure and vertical development construc tion. Mr. Leachman received his Bachelor of Art in Economics degree from Stanford University and his Master of Business Administration degree from the University of California at Davis.

DEVELOPMENT PLAN
The following information in this section has been provided by the Developer. No assurance can be given that the proposed development of the property within the District will occur in the timeframe or in the configuration or to the density described in this Official Statement, or that the Developer, Kaiser Foundation Hospitals, Sacramento 695, L.P., the Wong Center or any owners or affiliates thereof will or will not retain ownership of its respective property within the District. Neither the Bonds nor the Special Tax represent personal obligations of any property owner within the District. The Bonds are se cured by and payable solely from the Net Special Tax Revenues and amounts on deposit in certain of the funds and accounts established and maintained under the Indenture. See “SPECIAL RISK FACTORS” for a discussion of certain of the risk factors that should be considered in evaluating the investment quality of the Bonds. Neither the Bonds nor the Special Tax are personal obligations of the property owners within the District or any affiliate thereof and, in the event that a property owner defaults in the payment of its Special Tax, the City may proceed with judicial foreclosure, but has no direct recourse to the assets of such property owner or any affiliate thereof.

Notwithstanding the Developer’s belief that it will have sufficient funds to complete its planned development in the District, no assurance can be given that sources of financing available to the Developer will be sufficient to complete the property development as currently planned. While the Developer has made internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither the Developer nor any affiliate thereof, has any legal obligation of any kind to make any such funds available or to obtain loans. If and to the extent that internal financing and other sources of funding are inadequate to pay the costs to complete the Devel oper’s planned development within

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the District and other financing by the Developer is not put into place, there could be a shortfall in the funds required to complete the proposed development by the Developer and portions of the project may not be developed.

Railyards Development Plan
The Sacramento Railyards, which includes the District, is planned for a large urban infill transit- oriented mixed-use development. The Sacramento Railyards is planned to include residential (for-sale and for- rent products), office and retail space, cultural and hi storical uses, a regional medical center and entertainment venues. Full buildout within the Sacr amento Railyards is expected to occu r over the course of approximately 20 years.

The Developer does not believe that it has experienced delays in the development within the Sacramento Railyards which are attr ibutable to the impacts of the COVID-19 pandemic. However, no assurances can be made that such development will not be subject to delays as a result of the COVID-19 pandemic or other reasons beyond the Developer or its affiliates’ control. See “SPECIAL RISK FACTORS — COVID-19 (Coronavirus) Pandemic.”
Entitlement Process
Entitlements. In November 2016, the City Council approved a series of resolutions and ordinances which together, provide for the guiding principles and entitlements for development within the Sacramento Railyards and the allowable uses within the various zo nes therein. Such approv als included four primary planning documents which provide specific guidance and permissible uses with respect to the development within the Sacramento Railyards: (1) the 2016 Sacramento Railyards Specific Plan (the “Railyards Specific Plan”); (2) the Sacramento Railyards Sp ecial Planning District (added to the City Code pursuant to Ordinance No. 2016-0045); (3 ) the Sacramento Railyards Design Guidelines (the “Design Guidelines”); and (4) the Central Shops Historic District designation (see “Railyard Specific Plan Land Use Areas — Central Shops” for a discussion of such designation). As set forth in th e Railyards Specific Plan, as amended, the Sacramento Railyards is fully entitled to be developed within the following parameters:
 Between 6,000 to 10,000 residential units
 Between approximately 2.7 million to 3.9 million square feet of office space  Approximately 500,000 square feet of retail space
 Approximately 800,000 square feet of flexible mixed-use space  A medical campus with a hospital of approximately 700,000 square feet and medical offices of approximately 500,000 square feet
 Approximately 500,000 square feet of historic/cultural space  1,100 hotel rooms
 Approximately 33 acres of open space
 A 25,000-seat capacity sports and entertainment stadium Zoning. In November 2016, the City Council adopted Ordinance Nos. 2016-0045 and 2016-0046, for the purpose of creating the S acramento Railyards Special Planning Dist rict and re-zoned the property within the Sacramento Railyards to allow for development consistent with the Railyards Specific Plan. The following summarizes the allowable uses in accordance with the current zoning within the Sacramento Railyards. The current zoning contemplates a flexible range of uses within zones, as follows:

Zoning
Allowable Uses
Limited Commercial (C-1) Park and open space facilities, recreation, institutional, educational and cultural uses, small scale retail and community markets.

General Commercial (C-2) Retail, service, office an d repair facilities and sm all wholesale stores and

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Zoning Allowable Uses
distributors and public service facilities.

General Commercial (C-3) Mixed-use residential and commercial, retail and entertainment, historic and cultural uses and public facilities.

High-Rise Residential (R-5) High density residential and ground-floor uses for neighborhood-serving office, commercial, retail or services, neighborhood parks and open space.

Hospital (H) Major medical facilities and offices and supporting medical campus uses, residential and non-residential care facilities, multi-unit dwellings and hotels.

A map of showing the current zoning within the Sacramento Railyards appears on the following page.

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Design Guidelines . The Design Guidelines provide an overall vision for the physical form and character for the redevelopment of the Sacramento Railyar ds, covering: (1) design of streets, sidewalks and parks; (2) placement and design of buildings; (3) rehabil itation of existing historic buildings and resources and site development and construction within historic district boundaries; and (4) public and private signage. The Design Guidelines provide instructions rather than prescriptive requirements, however, the City has discretion to condition project approvals on compliance with the Design Guidelines.

Railyard Specific Plan Land Use Areas . The Railyards Specific Plan adopted by the City separates the property within the Sacramento Railyards into five main land use areas for planning purposes. The zoning within each land use area, as approved, aligns with the land use concepts for each area. A map showing the land use areas appears on page 34. The following sections describe the Developer’s currently anticipated projects for the developable lots within the land use ar eas as designated in the Railyards Specific Plan. Given the long-term nature of the development within the Sacramento Railyards, the ultimate land uses as described below can be expected to change.

Central Shops. The Central Shops District is located on the southern boundary of the Sacramento Railyards and directly adjacent to the Sacr amento Valley Station. Located within the Central Shops District are seven brick buildings constructed be tween 1868 and 1917, which served as the principal locomotive repair, maintenance and manufacturing facilities of the Sacramento Railyards when it was operated by Central Pacific, and subsequently the Southern Pacific and the Union Pacific Railyard Company. Two of the seven historic buildings owned, by the State and planned as part of the California Railroad Museum, are outside the District, and are therefore not subject to the Special Tax levy.

In November 2016, the City Council adopted Ordinance Nos. 2016-0047 and 2016-0048, which listed the Central Shops District and an existing water tower located to the northeast of the buildings in the Central Shops on the Sacramento Register of Historic and Cultural Resources. Such listing means that alteration of any significant features or characteristics of the structures so listed requires City approval. The historic buildings, a turntable structure used to relo cate locomotives and railcars and the water tower are intended to be preserved, rehabilitated and reused as a destination center for the Sacramento Railyards. In line with such ordinances, the Developer expects to renovate the Central Shops District and the water tower in a manner which preserves their main features as they were originally designed.

The property within the Central Shops is zoned “General Commercial (C-3)” which allows for mixed-use residential and commercial, retail and entertainment, historic and cultural uses and public facilities. The Developer’s plan for the historic buildings located within the Central Shops area is to renovate them for use as retail, office and entertainment space with the buildings linked by common parks, open space and pedestrian paseos. See “DEVELOPMENT PLAN — Near-Term Vertical Development Plans — Central Shops District.”
West End District. The West End District is located toward the northwestern end of the District and is bounded by the Central Shops District to the south, Jibboom Street to the west and the East End District to the northeast. The West End District is primarily zoned “General Commercial (C-3)” with the exception of the property owned by Kaiser Foundation Hospitals, which is zoned “Hospital (H).” The portion of the West End District that is directly adjacent to the Central Shops District is designated in the Railyards Specific Plan and the Design Guidelines as the “Tra nsition Zone.” Within the Transition Zone, new construction is required to be designed in a manner which preserves the character of the historic Central Shops District. The Design Guidelines wi th respect to the Transition Zone include minimum spacing between new and historic structures, maximum building height restrictions and building-specific other design elements.

The Developer currently expects that the West End District will include approximately 1,700 residential units, approximately 1.7 million square feet of office and/or mixed use space, two hotels with approximately 356 aggregate room keys and a parking facility with approximately 1,421 stalls. The foregoing

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plans are based on the Developer’s current estimates and can be expected to be revised as development plans are finalized.

Within the West End District, the apartment comple x marketed as “The AJ” is under construction and is expected to be complete in the first quarter of 2023. See “—Sacramento 695 L.P. Development Plan.” The Developer has conveyed approximately 17.41 gross acres (approximately 17.14 taxable acres) within the West End District zoned for a hospital to Kaiser Foundation Hospitals. Kaiser Foundation Hospitals has not approved any plans for development of its property and has not provided a timeline for development.

The current expectation is that any development by Kaiser Foundation Hospitals on its property in the District will not occur in the near-term, if at all. See “DEVELOPMENT PLAN — Kaiser Development Plan” below).

East End District. The East End District is lo cated on the northeastern end of the Sacramento Railyards and is bounded by North B Street to the north, Railyards Boulevard to the south and the boundary of the District to the east. The area within the East End District is zoned “High-Rise Residential (R-5),” “General Commercial (C-2)” or “General Commercial (C-3),” depending on the location of the property.

The property in the East End District is currently zoned for approximately 2,200 residential units, approximately 750,000 square feet of office space and a sports stadium. Other than certain completed backbone infrastructure, the property within the East End District is currently undeveloped property. The Developer currently does not have any near-term plans for vertical improvements within the East End District.

In 2019, the MLS announced that the City had been awarded an MLS expansion team with the existing Sacramento Republic FC (a team which currently competes in the USL Championship) joining the MLS. The plan at the time was to house the MLS team in a new 25,000-seat capacity sports stadium to be constructed on the eastern portion of the East End District. In February 2021, the primary investor in the expansion team announced that it would not move forward with the acquisition of the MLS expansion team.

While interested parties have explored other avenues for investment capital, no formalized arrangements have yet materialized. Sacramento Republic FC has announced intentions to build a soccer stadium in the Sacramento Railyards. However, no formal arrangements have been reache d with respect to such option. If the sports stadium is not ultimately constructed within the Sacramento Railyards, the Developer currently expects that the property relating thereto will be instead developed with residential, office and mixed-use projects, which are permitted under the current entitlements and zoning.

Riverfront District. The Riverfr ont District is bordered by th e State-owned levee property to the west which abuts the Sacramento River, the Union Pacific Railroad tracks to the south, and the Central Shops and West End districts to the east and north. The area within the Ri verfront District is zoned “General Commercial (C-3).” Substantially all of the Riverfront Di strict is included within the District except for, the State- owned river levee property located to the west of Jibboom Street. The portion of the Riverfront District that is within the District is planned for a combination of a hotel and residential uses as well as parks and open space totaling approximately three acres. The Developer does not have any near-term plans for vertical development within the Riverfront District.

Depot District. The Depot District generally extends east from the Sacramento River along the railroad tracks, with its most southern point on I Street, but excludes several city blocks east of 5 th Street.

The Depot District includes the Sacramento Valley Sta tion and associated buildings. The portion of the Depot District for which new construction is planned is zoned “General Commercial (C-3).” Only a small portion of the Depot District is included within the District, including the lots south of the railroad tracks that are northwest of 7
th Street and G Street.

The Developer has conveyed approximately 2.658 taxable acres in the Depot District to the Wong Center to develop an apartment project with approximately 150 affordable units. In addition, the Developer has entered into an agreement to sell approx imately 2.60 acres in the Depot District to an entity

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affiliated with Fairfield Residential for a proposed mark et-rate apartment complex. Such sale is currently anticipated to close in the first half of 2023, however, there can be no assurance that such sale will close.

Other than the foregoing apartment complexes, the Developer does not have any near-term projects planned within the portion of the Depot District that is in the District.

Interstate 5 Freeway Overpass. A portion of the Interstate 5 Freeway traverses, via an overpass, through the West End Distri ct and Riverfront Di strict within the boundaries of th e District. The property underneath the overpass is expected to be developed into open space and pedestrian walkways to provide connectivity to the ri verfront. A portion of this property is not expected to be subject to the Special Tax levy.

A map of showing the locations of the foregoing planning areas appears on the following page.

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Development Agreement. In November 2016, the Developer and the City entered into an Amended and Restated Development Agreement for the Sacramento Railyards projec t (the “Development Agreement”).

The Development Agreement provides the Developer with a vested right to develop the property within the Sacramento Railyards in accordance with the Railyard s Specific Plan, the Design Guidelines and the project approvals referenced in the Development Agreement. The Development Agreement has an initial term of 20 years. The term of the Development Agreement may be extended for five years if at least 2 million square feet of nonresidential development and 4,000 residential units have been constructed as of the end of the initial 20-year term. A second extension of five years is permitted if at least 2.75 million square feet of nonresidential development and 5,000 residential units have been constructed as of the end of the first extension. The Developer’s rights with respect to the development in the Sacramento Railyards would be subject to renegotiation in the event the Development Ag reement terminates prior to the satisfaction of the foregoing development milestones.

With respect to parking, the Development Agreement provides that improved surface parking lots may be constructed within the Sacramento Railyards to (1) serv e the Central Shops District or (2) for use as part of initial phases of a phased commercial complex in which the commercial complex will include a permanent parking structure to replace the surface lots. The Development Agreement further provides that any improved surface parking lot requires a conditio nal use permit from the City and that the City may require a termination date be included in such conditional use permit. The City and the Developer are currently negotiating an amendment to the Development Agreement to address thes e parking facility requirements. The Developer has requested a conditional use permit for a surface parking lot that would serve the Central Shops District and the planned Live Nation Venue in the Paintshop (see “DEVELOPMENT PLAN — Near-Term Vertical Development Plans — Proposed Hotel Developments (West End) ”. Subject to approvals by the Planning Commission and the City Council, the City and the Developer currently expect to set the termination date in the conditional use permit for such surface parking lot fo r 2029 with a total of 1,000 temporary spaces serving the Paintshop and Central Shops.

Notwithstanding the availability of surface parki ng lots, the construction of a permanent parking garage will be necessary to serve the Central Shops, the Marriot-branded hotels and other projects within the vicinity. The inability to complete such permanent parking garage could impede the development of such projects. See “Near-Term Vertical Development Plans— Parking Garage (West End) ” for additional details with respect to the proposed parking garage.

Since the conditions of approval in the Development Agreement only allow for surface parking lots on a temporary basis, the ability to secure funding for permanent parking facilities could materially impede development after the conditional use permit for the surf ace parking lot expires (currently contemplated to occur in 2029). There can be no assurances that the Developer will be able to secure the necessary funding for permanent parking facilities.

Subdivision Map Status and Conditions of Approval . On November 10, 2016, the City Council approved the Tentative Master Parcel Map (the “Tentati ve Map”) for the Sacramento Railyards along with a set of conditions of approval for recordation of final maps (the “Conditions of Approval”). The Tentative Map subdivided the areas within the Sacramento Railyards Special Planning District into 119 lots in line with the zoning designations described above under “— Entitlements” and expires simultaneously with the Development Agreement. Final maps or lot line adju stments for the project areas within the Sacramento Railyards may be recorded in phases. Approval of each final map will be conditioned upon satisfaction of the Conditions of Approval applicable to the related project area. The complete list of Conditions of Approval is included in the Appraisal Report attached hereto as APPENDIX B, which conditions may be amended in the future by the City and the Developer.

Within the District, as of July 1, 2022, the final subdivision map had been recorded for the eight parcels owned by Kaiser Foundation Hospitals. The Ci ty issued Certificates of Compliance for lot line adjustments for the parcels relating to the apartment projects in the District developed by Sacramento 695, LP,

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and marketed as “The AJ” and the Wong Center The approval of the lot line adjustments required satisfaction of the same Conditions of Approval as if final maps were recorded for such property.

The Developer has submitted a phased final map to the City for 25 parcels within the District, north of the Union Pacific Railroad tracks and encompassing an area surrounding the Central Shops, north to Railyards Boulevard and East of 7th Street. Such map is currently under review by the City. If approved, such map will create parcels associated with each Central Shop building and the parcels related to the proposed Telegrapher, Foundry, and hotel projects described below under “DEVELOPMENT PLAN—Near-Term Vertical Development Plans— The Telegrapher (West End) ” and “— Proposed Hotel Developments (West End) .” The Developer currently expects the map to be complete and recorded by the end of 2022.

The Developer submitted a phased final map to the City in January 2022 for six parcels within the District located south of the Union Pacific Railroad tracks. Such map is currently under review by the City. If approved, such map will create six new parcels, two of which the Developer currently plans to sell to Fairfield Residential for development into a multi-family apartment project as described under “DEVELOPMENT PLAN—Near-Term Vertical Development Plans— Fairfield Residential Apartment Project (Depot District).” The Developer expects that final maps and/or certificates of compliance for lot line adjustments will be recorded for the balance of the property within the District in phases commensurate with the development of finalized plans for each portion of such property.

Affordable Housing Requirement . The City’s Mixed Income Housing Ordinance requires that proposed residential projects in excess of 100 gross acres obtain City Council approval of a “mixed income housing strategy” that demonstrates how the project pr ovides housing for a variety of income and household types consistent with the City’s Housing Element Policy. On November 10, 2016, the City Council approved the mixed income housing strategy for the Sacramento Railyards project. The mixed income housing strategy for the Sacramento Railyards project requires the construc tion of 300 affordable units as part of the first 3,000 residential units constructed and either (i) the construction of an additional 300 affordable units as part of the following 5,000 residential units construction; (ii) land dedication by the Developer to support development of not less than 300 units to be constructed by a third-pa rty developer or (iii) a combination of (i) and (ii).

Affordable units are those affordable to households with incomes that range between 40% to 60% of area median income.

As described below under “— Sacramento 695 L.P. Development Plan,” within the District, Sacramento 695, L.P. has commenced construction of a 345-unit apartment complex marketed as “The AJ.” Within The AJ, 69 units are required to be affordable units. The Developer has also conveyed one parcel of approximately 2.658 taxable acres to the Wong Center planned for an apartment project with 150 units designated for affordable housing. See “Vertical Construction Projects Underway — Wong Center Apartment (Depot District) ” for additional information with respect to the 150-unit apartment project planned by the Wong Center. The Developer expects that the developmen t within the Sacramento Railyards will continue to satisfy the affordable housing requirements under its approved mixed income housing strategy.

Parks. Under the City Code and the Development Ag reement, the Developer is required to dedicate property for parks under a formula which results in 1.75 acres of public parks per 1,000 residents. Under such formula, full development within the Sacramento Rail yards would require the dedication to the City of approximately 23.24 acres of public parks. Parks may include a variety of elements, including designated areas for specific sports; such as ba seball diamonds; playing areas for chil dren with facilities such as swing sets, tot lots; shaded and landscaped seating or recr eational areas; community gardens; walking and biking trails. Based on the current projects under developm ent or in the planning phase, no requirements for commencement of construction or delivery of parks under the Conditions of Approval have been triggered.

The Developer expects to commence construction of and deliver parks and open space commensurate with the phased commencement of vertical developments within the various portions of the Sacramento Railyards.

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Environmental Matters
Environmental Remediation. For over a century, the Sacramento Railyards was used by the Southern Pacific (and subsequently by merger, the Union Pacific Railroad Company) for locomotive repairs, maintenance and manufacturing. Activities conducted on the site included building and refurbishing of locomotives and railcars and operations of a sheet metal shop, warehouse, battery shop, forge and foundry activities, maintenance rights of way, company e quipment facilities, and other industrial uses. All manufacturing and maintenance operations within the Sacramento Railyards terminated in the mid-1990s.

Enforceable Agreement. In 1988, the Union Pacific Railroad Company (as successor by merger to the Southern Pacific) and the State Department of Health Services, as predecessor to the Department of Toxic Substances Control of the State of California (“DT SC”), entered into an “Enforceable Agreement” to investigate contaminates on and remediate the Sacram ento Railyards site. Pursuant to the Enforceable Agreement, the Union Pacific Railroad Company has been investigating and remediating soil and groundwater contamination at the Sacramento Railyards under DTSC’s oversight. Soil contamination found at the site included volatile and semi-volatile organic compounds, metals and petroleum hydrocarbons. Through various remedial action plans approved by DTSC, soil contamin ation was remediated thro ugh excavation, chemical stabilization, off-site dispos al of contaminated material s and soil, cleaning of debris /ballast and clean fill for backfill.

Land Use Covenants . With the exception of a 1.11 acre parcel at the Sacramento Railyards, soil remediation has been completed to levels that, in conjunction with two Land Use Covenant and Agreements executed in 2015 and 2019 (the “Land Use Covenants”) and the additional land use covenants described below, by and between DTSC and the Developer, are protective of all populations for planned land uses, including but not limited to, commercial, retail, industrial, hospital, school, daycare, mixed-use, residential and park use. The premise of the Land Use Covenants is that a significant majority of the area will be improved and hardscaped (concrete, asphalt a nd building improvements covering the ra w dirt surface). If, after such improvements are completed, there remains direct access to the raw dirt surface (refe rred to as “Native Soil”), the Land Use Covenants require that a top layer of environmentally compliant soil of thickness and composition approved by DTSC be maintained on the Native Soil. Any disturbance of soil requires compliance with the soils management plan (“SMP”) approved by DTSC for the Sacramento Railyards (including the District). Similarly, the Land Use Co venants require that any so il brought to the surface by excavation or other means requires compliance with the SMP and adherence with applicable federal and State law. The Land Use Covenants also prohibit the drilling for water, oil or gas or the extraction of groundwater except with approval from DTSC. With respect to soil vapors, the Land Use Covenants require that any enclosed building or structure be designed with vapor mi tigation measures to prevent vapor intrusion at a level that poses an unacceptable risk to human health or the environment. A third Land Use Covenant and Agreement executed in 2021 (“Vista Park Land Use Covenant”), by and between DTSC and the Developer, applies to the approximately 9.28 acre parcel designat ed as a public park area and provides that, with adherence to the restrictions in the Vista Park Land Use Covenant, permitted uses on the parcel are parks and open space, which includes sport activities, speaking and entertainment events, food trucks and other non- permanent food and beverage concession. As set forth in the Land Use Covenants and the Vista Park Land Use Covenant, DTSC has concluded that the areas of the Sacramento Railyards described therein, as remediated and when used in compliance with such cove nants, do not present an un acceptable risk to present and future human health or safety or the environment.

In June 2022, the Developer and DTSC executed a fourth Land Use Covenant and Agreement (“Triangle Remainder Land Use Covenant”) which cove rs approximately 2.847 acres of property located adjacent to the west of the site of the proposed Vista Park. Such land use covenant includes the restrictions in the existing Land Use Covenants described in the paragraph above.

Upon a change of ownership of any of the areas covered by any of the land use covenants with DTSC, written notice thereof must be provided to DTSC not later than 30 days after the conveyance. Furthermore,

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any change in ownership requires notice to DTSC and no activities that will disturb soil are allowed on the property without a SMP that is approved in writin g by DTSC. Any soils brought to the surface shall be managed in compliance with all applicable provisions of the existing land use covenants, any existing SMP, and other applicable provisions of State and federal law and a SMP approved in writing by DTSC. Parties associated with a SMP are responsible for associated costs of complying with such SMP.

Memorandum of Agreement . As required by the Land Use Covenants, the Vista Park Land Use Covenant and the Triangle Remainder Land Use Covenant, the Developer and DTSC have entered into a Memorandum of Agreement (“MOA”) to provide for, among other matters, establishing a process for the Developer, on behalf of the future owners of the property in the Sacramento Railyards, to (i) prepare and deliver to DTSC the annual reporting of compliance with the stated restriction within such land use covenants, and (ii) pay DTSC’s costs for monitoring, inspecting and reporting compliance with such covenants. The Developer estimates such costs to be approximately $39,000 per year. The Developer’s obligations under the MOA are expressly performed as an administrative accomm odation on behalf of the owners and any failure to perform such administrative tasks (i) does not relieve such owners from complying with the specified reporting requirements, or (ii) create any form of liability for the Developer as a result of such failure. Pursuant to the MOA, the Developer has the right and it is its intention to transfer its obligations thereunder to a master owners’ association to be formed under the Master Declaration of Covenants, Conditions and Restrictions and Easement Agreement which encumbers the Sacramento Railyards (including the District).

Union Pacific Railroad Company has ongoing obligations under the Enforceable Agreement with respect to the remediation and monitoring of groundwater contamination, soil vapor extraction, and maintenance responsibilities. Remedial actions have and are expected to continue to include groundwater and soil vapor extraction. The Union Pacific Railroad Company is responsible for the costs relating to such remediation and monitoring. This includes, but is not limited to, the Former Manufactured Gas Plant Study Area, Lagoon Groundwater Study Area, and the Central Shops Study Area (including the South Plume), in which soil vapor, and/or groundwater impacts remain and remediation is underway or have yet to be selected.

Any selected remediation will bring the area to an accep table risk for future users in accordance with the Enforceable Agreement and with DTSC’s oversight and approval. It is anticipated that a land use covenant would subsequently be put in place similar to the Land Use Covenants, the Vista Park Land Use Covenant and the Triangle Remainder Land Use Covenant relating to soil remediation covering the rest of the site.

Railyards Agreement . In addition to the Enforceable Agreem ent, the Developer, IA Sacramento Holdings, LLC and the Union Pacific Railroad Company en tered into a “Railyards Agreement” dated as of February 12, 2015 for the purpose of allocating responsibility for specified work and liability in connection with the remediation activity at the Sacramento Railyards. The Railyards Agreement provides, among other matters that: (i) the Union Pacific Railroad Company shall remain responsible for all obligations under the Enforceable Agreement (including obligations with respect to groundwater treatment, soil vapor remediation, maintenance responsibilities, and performance of and compliance with the DTSC recurring five-year review process); (ii) the Developer will be responsible for th e handling of soil that is development-related (with certain off-site disposal costs allo cated to the Union Pacific Railroad Company); (iii) the Developer is responsible for management of groundwater used for construction purposes, however, the Union Pacific Railroad Company shall be responsible for the treatment thereof; (iv) the Union Pacific Railroad Company is responsible for all soil vapor intrusion monitoring and remediation; the Developer is responsible for all passive vapor intrusion mitigation systems within all new buildings constructed after the entering into of the Railyards Agreement (estimated to cost betwee n approximately four to six dollars per square foot of land area and between approximately $5,000 to $10,000 per year for monitoring costs of each system); and (v) Union Pacific Company remains responsible for (a) all ground water remediation, and (b) soil vapor intrusion for all of the buildings existing as of the execution of the Railyards Agreement. The Railyards Agreement obligates the Developer to continue to comply or cause subsequent owners of property in the Sacramento Railyards to comply with the Developer’s obligations thereunder as described in this paragraph.

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The Land Use Covenants, the Vista Park Land Us e Covenant and the Triangle Remainder Land Use Covenant cover all of the property, with the exception of a 1.11-acre parcel, with respect to soil remediation.

The development within the S acramento Railyards as described in this Official Statement is not conditioned upon completion of the ongoing remediation with respect to groundwater and soil vapor as described above.

However, it possible that additional remediation will be necessary in the future due to new remediation orders given by DTSC or another governmental agency, the discovery of contaminants not covered by such covenants or changes in applicable regulations. Should a property owner receive an order from a government agency with respect to environmental remediation, the partie s to the Railyards Agreement have agreed that the Developer may enforce the Union Pacific Railroad Company’s obligation to undertake the remediation required by such order to the extent the responsibility thereof is the Union Pacific Railroad Company’s under the terms of the Railyards Agreement. See “SPECIAL RISK FACTORS — Hazardous Substances.” An Amended and Restated Covenant and Agreement (the “Covenant”) was recorded on the property in the Sacramento Railyards in connection with the ex ecution and delivery of the Railyards Agreement. The Covenant, among other matters: (1) recognizes the land use restrictions that are included in land use covenants recorded on the property; (2) recogn izes that there may be impacts to property owners resulting from the environmental remediation activities; (3) provides that future property owners are required to comply with land use covenants applicable to their property; and (4) provides that future property owners shall release the Union Pacific Railroad Company from liabilities and damages resulting from the effects of remediation activities.

Additional information with respect to the environmental remediation described above may be obtained from DTSC at https://www.en virostor.dtsc.ca.gov/public/profile_report?global_id=60002230. The foregoing Internet address is included for reference only, and the information on this Internet site is not a part of this Official Statement or incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on this Internet site.

The Developer is not aware of any additional contamination that requires remediation in order to develop the property in the District as described in this Official Statement. If any further contamination is discovered, the Developer expects to cooperate with DT SC, any other applicable regulatory agency and Union Pacific Railroad Company (to the extent the Railyards Agreement applies), to allow for remediation of the conditions as necessary to allow for development as described in this Official Statement.

Approval of Subsequent Environmental Impact Report . In 2007, the City Council approved the Environmental Impact Report for the Sacramento Railyards project. On November 10, 2016, the City Council adopted a resolution certifying the Subsequent Environm ental Impact Report for the Railyards Specific Plan, the medical center, the proposed sports stadium and the stormwater outfall project for the Sacramento Railyards. The City Council also adopted a mitigation monitoring plan which includes requirements relating to, among others, monitoring of structural height restrictions in certain lots to avoid alterations in public view, studies and mitigation actions to avoid or minimize impacts to native or migratory birds, fish and insects, and measures to be taken during construction to minimize dus t, noise and light pollution, and certain studies and improvements relating to the impact on transportation and traffic.

Status of Infrastructure
Prior Completed Infrastructure and Public Facilities. Prior to the Developer taking ownership of the Sacramento Railyards property in 2015, significant ba ckbone infrastructure and other improvements on and surrounding the site were completed by the prior owner as well as by the City. Such improvements were either necessary to or were expected to benefit the future development of the property within the Sacramento Railyards. Backbone infrastructure completed by the prior property owner include Railyards Boulevard, which runs most of the length of the Sacramento Railyards site from east to west, and extensions of 5 th and 6th Streets
(including overpasses) north from their prior terminus at the south end of the Sacramento Railyards, to Railyards Boulevard. The construction of the foregoing major roadways within the Sacramento Railyards also involved the installation of major water, sewer and dry utilities along such roadways.

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The City undertook renovation of and construction work on the portion of the Depot District where the Sacramento Valley Station is located. All of such improvements are located outside of the District but are expected to provide regional transportation connectivity benefiting the developments in the District. These improvements include relocation of the freight and passenger railroad tracks approximately 500 feet north of their then-existing location and construction of new passenger platforms. In addition, three tunnels were constructed under the realigned tracks to provide grade-separated access for passengers and service vehicles to the passenger platforms and direct pedestrian connection to the Sacramento Railyards site.

The total costs of the infrastructure and improvements completed by the former owner of the Sacramento Railyards and the City were approximately $369 million. Through July 1, 2022, the Developer has spent over $70 million on backbone infrastructure costs within the District.

The following summarizes the backbone infrastructure within the District or that serves the property in the District that has been completed to date (inc luding all backbone infrastructure necessary to allow for buildout within the lots owned by Kaiser Foundation Hospitals, the apartment building marketed as “The AJ” and the apartment building being developed by the Wong Center (as described below)):
 Railyards Boulevard, which traverses the length of th e District and is the main arterial street from east to west and associated water and sewer lines and dry utilities.  Realignment of the Union Pacific rail lines that run east to west through the Depot District.  Extensions of 5
th and 6 th Streets, including overpass structures that traverse the Union Pacific rail lines, from their prior termination points south of the Sacramento Railyards north to Railyards Boulevard.
 7th Street, via a tunnel which passes under the Union Pacific rail lines, from the prior termination point at the south end of the Sacramento Railyards, north to connect to Richard’s Boulevard approximately 1 mile north of the Sacramento Railyards.
 F & G Streets from 7
th to 5th Streets including water, sewer, and drainage facilities.  Sewer lines along 3 rd Street, located outside of the District, which are necessary to provide relief for sanitary sewer flows expected to be generated by development in the Sacramento Railyards and surrounding properties.
 All roadways which run along the border of the site owned by Kaiser Foundation Hospitals along with associated water, sewer, drainage, and bike facilities for those areas.

Remaining Infrastructure Needs. While substantial backbone infrastructure remains to be completed to allow for full buildout of the District over the next 20 years, the majority of remaining infrastructure requirements are those directly impacting particular parcels, allowing for phased development as market conditions warrant. The only infrast ructure serving District-wide purposes that remains to be complete is a storm drainage pump station and outfall facility (the “S torm Drain Outfall”). The Storm Drain Outfall has an estimated cost at $34 million, and includes adjacent roadways to the Storm Drain Outfall (Bercut from Summit Tunnel to Telegrapher). Through July 1, 2022, the Developer had spent approximately $18.2 million on the Storm Drain Outfall. The Storm Drain Outfall is expect ed be complete in late 2022. A temporary retention pond for drainage purposes has been completed on certain lo ts located to the north of the Central Shops. This retention pond is expected to be removed after the Storm Drain Outfall is completed and the lots on which such retention ponds are developed.

The other remaining backbone infrastructure primarily consists of the arterial roadways and associated utilities and parks. Construction of certain roadways which are necessary to serve the project areas planned for near-term development is also underway. The Deve loper estimates the total costs of such remaining infrastructure to be approximately $171.6 million (inclusive of amounts spent and to be spent in 2022), which includes the approximately $18.2 million already spent on the Storm Drain Outfall through July 1, 2022. See “— Infrastructure Financing Plan” below for a description of the Developer’s current expected sources of funding for such infrastructure.

41 4817-9609-0100v10/022536-0022
Given the long-term nature of the development within the Sacramento Railyards, the remaining backbone infrastructure is expected to be completed in phases, with the final phases currently estimated to commence construction in 2031 and to be completed in 2034.

In addition to the backbone infrastructure to be constructed by the Developer, other public service facilities such as schools, parks and public safety facilities (police and fire) will be required to serve the development within the District. The Developer currently expects that such facilities will be funded primarily through existing school district and City fee programs. The City established a specific plan area fee for the Sacramento Railyards which was originally sized to accommodate future reimbursement of any infrastructure costs not funded through other sources but has been modified so that it will fund any shortfall for these public service facilities. See “Infrastructure Financing Plan— Railyards Impact Fee” below.

Infrastructure Financing Plan
General. The Developer has identified various funding sources for a portion of the costs of the remaining backbone infrastructure necessary to allow for buildout within the Distri ct. Such sources include both private and public financing. The current estimated aggregate cost of the remaining backbone infrastructure is approximately $171.6 million. Net of private funding sources and development impact fees, the Developer has identified approximately $120.1 million in public funding sources to finance such infrastructure. However, the availability of certain of such public funding sources remain uncertain and there can be no assurances that such funding will ultimately be available.

If all of the Developer-identified public funding sources are obtained, the Developer estimates that approximately $19.4 million of funding from private sour ces (exclusive of development impact fees) will be needed to complete the necessary backbone infrastruct ure to serve the developmen t within the Sacramento Railyards, including the District. Such private sources may include land sales revenues within the Sacramento Railyards. The Sacramento Railyards is a designated “Opportunity Zone” which is an economic development tool created under the Tax Cuts and Jobs Act of 2017. Investments in Opportunity Zones through Qualified Opportunity Funds may provide tax benefits to certain i nvestors, which may increase private investor interest in the Sacramento Railyards project.

The Developer has agreed to terms for a credit facility to be provided by a division of Western Alliance Bank secured by a portion of the Developer-owned property within the District. The credit facility is expected to be a $25 million revolving loan secured by approximately 87 acres located in the northeastern portion of the District. The appraisal prepared for the purpose of securing th e credit facility has been completed and the credit facility agreement and related documents are currently being prepared. The value of the property to secure the credit facility as set forth in the appraisal prepared in connection with the credit facility is $105 million. As currently agreed to by the Developer and Western Alliance Bank, the amount of credit facility is required to remain at or below a 25% lo an to value ratio. The Developer expects to draw on the credit facility to complete infrastructure improvements within the District.

Certain details relating to the primary public funding sources is described below. There can be no assurance that such sources will ultimately be available. In providing its estimate of the market value of the property within the District, the Appraiser has taken into account certain of the funding sources discussed below and excluded others for the reasons specified in the Appraisal Report. See APPENDIX B attached hereto.

See “SPECIAL RISK FACTORS — Pr evailing Wage Requirement” for a discussion of the obligation to pay prevailing wages under the California Labor Code with respect to the projects in the Sacramento Railyards which may result from the utilization of public funding sources to fund development costs.

The following Table 1 summarizes the Developer’s estimated timing of expenditures for the remaining backbone infrastructure costs necessary to develop the property in the District. The costs shown in

42 4817-9609-0100v10/022536-0022
Table 1 are based on the Developer’s current estimates. Given that certain components of such infrastructure are not expected to commence constructio n for five to ten years, actual costs can be expected to vary from the estimates provided below and such variance could be material.

TABLE 1

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

ESTIMATED TIMING OF EXPENDITURES FOR REMAINING BACKBONE INFRASTRUCTURE Sources and Uses of Funds 2022 2023 2024 2025-2030 2031-2035 Totals Sources:

State Natural Resources Grant $ 1,800,000 $ 27,475,393 $ -- $ -- $ -- $ 29,275,393 AHSC Grant 5,000,000 10,211,696 -- -- -- 15,211,696
TIRCP Grants -- 7,650,000 -- -- -- 7,650,000
Development Impact Fees 2,000,000 -- -- -- -- 2,000,000 CFD No. 2018-01 Bonds(1) 13,500,000 11,000,000 -- -- -- 24,500,000 Stadium EIFD(2) -- -- -- 37,370,000 3,310,000 40,680,000 Park Impact Fees -- -- 2,000,000 21,068,343 7,022,781 30,091,124 Amended OPA Funds 6,300,000 -- -- -- -- 6,300,000
Developer Equity -- 3,000,000 -- 6,445,894 6,445,894 15,891,797 Total Sources $ 28,600,000 $ 59,337,089 $ 2, 000,000 $ 64,884,237 $ 16,778,675 $ 171,600,000

Uses:

Roadways $ 4,600,000 (3) $ 34,004,115 (4) $ -- $ 43,815,894 (5) $ 9,755,894 $ 92,175,902 Transit Facilities -- 6,915,674 (6) -- -- -- 6,915,674
Parks/Open Space(7) -- -- 2,000,000 21,068,343 7,022,781 30,091,124 Drainage 24,000,000 (8) 18,417,300 (9) -- -- -- 42,417,300 Total Uses $ 28,600,000 $ 59,337,089 $ 2, 000,000 $ 64,884,237 $ 16,778,675 $ 171,600,000

(1) Parity Bonds may be issued to finance additional infrastructure in accordance with the Indentur e and the Act. There is currently no estimated timeframe for the issuance of Parity Bonds. See “SOURCES OF PAYMENT FOR THE BONDS — Issuance of Parity Bonds.”
(2) The Stadium Enhanced Infrastructure Fina ncing District (EIFD) was formed to fund public infrastructure improvements that support construction of the MLS Stadium, as well as new deve lopment in the EIFD. As described herein, there are no definitive plans at this time for a MLS stadium to be constr ucted within the Sacramento Railyards and there can be no assurance that any funding will be availa ble from the EIFD if an MLS stadium is not constructed within the Sacramento Railyards. In the Appraisal Report, the Appraiser has a ssumed no funding from the EIFD will be available. See “Infrastructure Financing Plan — Stadium Enhanced Infrastructure Financing District” below. (3) Roadway costs in 2022 include approximately $1.6 million e xpected to be funded from the State Natural Resources Grant (as defined below) and approximately $3.0 million expected to be funded from the AHSC Grant (as defined below). (4) Roadway costs in 2023 include approximately $21.9 million expe cted to be funded from the State Natural Resources grant and approximately $7.5 million expected to be funded from the AHSC Grant and approximately $4.6 million TIRCP Grants (as defined below).
(5) Roadway costs in 2025-2030 include amounts expected to be fu nded from the EIFD and Developer equity. See, however, footnote 2 above and “Infrastructure Financing Plan — Stadium Enhanced Infrastructure Financing District” below. (6) Transit facilities costs in 2023 include approximately $1.2 million to be funded from the State Natural Resources Grant, approximately $2.7 million from the AHSC Grant and approximately $3 million from the TIRCP Grants. (7) Parks and open space improvements are expected to be funded from park impact fees. See “Infrastructure Financing Plan — Park Impact Fees” below.
(8) Drainage costs in 2022 include approximately $13.5 million to be funded from Bond proceeds, approximately $6.3 million previously funded from OPA (as defined below) monies , approximately $2.0 million from development impact fees, approximately $2.0 million from the AHSC Grant, and approximately $0.2 million from the State Natural Resources Grant. (9) Drainage costs in 2023 include approximate ly $7.2 million to be funded from B ond proceeds, approximately $4.4 million from the State Natural Resources Grant and approximately $3.0 million from the Developer.

Source: The Developer.

43 4817-9609-0100v10/022536-0022
California Natural Re sources State Funding . The adopted State budget for Fiscal Year 2021-22 appropriated $30 million in the portion of the State budget for the California Natural Resources Agency “for support, local assistance, or capital outlay for the rehabilitation of the Sacramento Railyards” (the “State Natural Resources Grant”) The State Natural Resources Grant is to be administered through the California Department of Parks and Recreation, a department of the California Natural Resources Agency. Such appropriation is available for encumbra nce or expenditure until June 30, 2024 . Such funding, if received, will be processed through the City and transferred to the Developer for eligible costs. The required grant agreements have been approved and executed by the State, the City and the Developer. The Developer expects to allocate such funding toward in frastructure projects within the Sacr amento Railyards and otherwise in accordance with any conditions imposed by the State. Fu nds from this grant are exp ected to be received as eligible costs are incurred. No amo unts from this grant has yet been receive d as of the date of this Official Statement, however, the Developer expects approximately $1.8 million of this grant to be received in 2022.

See Table 1 above.

Affordable Housing and Sustainable Communities Grant . An affiliated entity of the Developer has been awarded a grant of approximately $15.3 million under the State’s Affordable Housing and Sustainable Communities Program (the “AHSC Grant”). This grant requires that the Developer construct at least 69 affordable housing units affordable at 50% of area medi an income within The AJ project, which is currently under construction, as described below under “Sacramento 695 L.P. Development Plan.” Through July 1, 2022, the Developer has submitted $2.1 million of costs for reimbursement from the AHSC Grant to the State, $1.3 million of which has been received by the Developer. The $0.8 million balance of costs submitted is currently being processed for payment by the State. Additional funding under the AHSC Grant will be processed as eligible infrastructure costs are incurred.

Transit and Intercity Rail Capital Program . In 2020, the California State Transportation Agency awarded approximately $3 m illion under the State’s Tr ansit and Intercit y Rail Capital Program (the “2020 TIRCP Grant”) to fund constr uction of access routes on the northside of the Sacramento Valley Station to provide connectivity to the Railyards development. In July 2022, the California State Transportation Agency awarded approximately $49.9 million under the Transit and Intercity Rail Capital Program to fund various transit projects (the “2022 TIRCP Grant” and together with the 2020 TIRCP Grant, the “TIRCP Grants”) in and around the Sacramento Valley Statio n and certain projects within the Sacramento Railyards to facilitate further rail and bus connectivity in the Sacramento Raily ards. The projects eligible to be funded within the District from the 2022 grant generally consists of roadways, including the final connection of 5 th Street north to
B Street. The Developer estimates that the cost of the projects to be funded within the Sacramento Railyards from the 2022 TIRCP Grant to be approximately $4.7 million. The funding under the 2022 TIRCP Grant was awarded after the Date of Value and was not considered by the Appraiser in its analysis in the Appraisal Report.

Railyards Impact Fee . In 2016, the City Council approved a Sacramento Railyards Specific Plan Public Facilities Financing Plan to identify infrastructure required for buildout and potential financing mechanisms. In 2018, the City Council approved an Updated Finance Plan for the Sacramento Railyards, which, among other updates, includ ed a specific plan area fee for the Sacramento Railyards which was originally sized to accommodate future reimbursement of infrastructure costs not funded through other sources (the “Railyards Impact Fee”). Most recently in June 2022, the City Council approved the Railyards Finance Plan – 2022 Update (the “2022 Finance Plan”) which revised the amount of the Railyards Impact Fee to remove the on-site infrastructure portion of the fee (exc ept for parks and open space facilities). The on-site infrastructure costs will instead be funded through a combination of proceeds of Bonds from the District, grants, other City and regional fee programs, and internal Developer funding sources. The current Railyard Impact Fees are charged on a square foot basis for non-residential development other than hotels (ranging from $2.75 to $4.14 per square foot) and on a per unit basis for residential development (ranging from $2,447 to $3,765 per unit). The current Railyard Impact Fee for hotel developments are $1,079 per room. The Railyards Impact Fees are to be adjusted annually as specified in the 2022 Finance Plan.

44 4817-9609-0100v10/022536-0022
Community Facilities District . As described herein, approximately $24.5 million of Bond proceeds are expected to be available to fund eligible infrast ructure costs benefitting the District. The Developer expects that such funds will primaril y be used to fund a portion of the costs of the Storm Drain Outfall, which is currently under construction. To the extent available, the Developer expects that proceeds of Parity Bonds will be applied to reimburse costs expended and to fund the remaining costs - both associated with the Storm Drain Outfall in the District and any other authorized f acilities eligible to be financed by the District. See “SOURCES OF PAYMENT FOR THE BONDS— Issuance of Pa rity Bonds” for certain conditions under the Indenture which must be satisfied in order issue Parity Bonds to finance additional eligible projects.

Stadium Enhanced Infrastr ucture Financing District . In 2019, the Sacramento Stadium Area Enhanced Infrastructure Financing District (the “EIFD”) was established under State law to fund specified infrastructure improvements in the eastern portion of the Sacramento Railyards, covering the area that was planned for a new MLS stadium. The EIFD is governed by the board of the Stadium Area EIFD Public Financing Authority (the “Stadium PFA”), which consis ts of three members of the City Council and two members of the public. The EIFD is authorized to fi nance specified roadway and sewer facilities within its boundaries as approved at the time the EIFD was formed. However, the infrastructure financing plan for the EIFD adopted by the Stadiu m PFA at the time the EIFD was formed pr ovides that the EIFD was formed to fund public infrastructure improvements that support construction of the MLS stadium, as well as new development in the EIFD. As described herein, there are no definitive plans at this time for a MLS stadium to be constructed within the Sacramento Railyards. Ther efore, there can be no assurance that any funding from the EIFD will be available if the area within the EIFD is developed for uses other than a MLS stadium. In the Appraisal Report, the Appraiser assumes that no funding will be available from the EIFD.

If available, funding by the EIFD would be made available from tax increment revenues generated as a result of vertical improvements within the EIFD. The City and the Developer may enter into an agreement pursuant to which the City agrees to provide upfront fu nding to be repaid from the tax increment revenues.

However, no agreement has been reached and there can be no assurance that such upfront funding will be available.

Park Impact Fees . The City currently levies a City-wide park fee on new development. The 2022 Finance Plan estimates that park impact fees will be av ailable to fund approximately $30 million of park and park-related infrastructure costs within the District.

Owner Participation Agreement. The Sacramento Railyards was in cluded in a prior redevelopment area administered by the former Redevelopment Agency of the City of Sacramento (the “Former Agency”).

Redevelopment agencies in the State were dissolved pursuant to State legislation in January 2012. Upon dissolution, the City became the successor agency to th e Former Agency of the City of Sacramento (the “Successor Agency”). Under two owne r participation agreements with th e prior owner of the Sacramento Railyards (the “Prior OPA’s), certain tax increment fu nds of the Former Agency were committed to public infrastructure improvements within the Sacramento Raily ards. Such agreements we re assigned by the prior owner to the Developer. Under the Prior OPAs, the owner of the Sacramento Railyards would have been entitled to receive tax increment revenues through 2053 . In 2017, the estimated tax increment revenues that the owner of the Sacramento Railyards could ultimately receive was approximately $200 million. However, given that vertical construction (which would be a primary driver of tax increment revenue generation) within the Sacramento Railyards would be limited by the need for upfront funding for backbone infrastructure, in 2017, the City and the Developer entered into an amendment and termination of the Prior OPA’s (the “Amended OPA”) to set the maximum amount owed under the Prior OPAs to $60 million (with a net present value estimated at $43 million). In order to provide a source of upfront funding for eligible infrastructure within the Sacramento Railyards, un der the Amended OPA, eligible reimbursements for infrastructure will be made from the Successor Agency’s Redevelopment Pr operty Tax Trust Fund (“RPTTF”) rather than from future tax increments. The Developer monetized the $60 million income stream through a private bank financing, resulting in $36.4 million in net proceeds available for immediate use on infrastructure. As of July 1, 2022, all of the $36.4 million proceeds have be en used on eligible infrastructure projects, primarily

45 4817-9609-0100v10/022536-0022
consisting of roadway and backbone infrastructure necessary to serve the site owned by Kaiser Foundation Hospitals and sewer and drainage improvements (including the $6.3 million spent on the Storm Drain Outfall project as shown in Table 1 above).

Vertical Development Plan
As of July 1, 2022, the Developer owned the substantial majority of the property in the Sacramento Railyards consisting primarily of undeveloped land, with certain infrastructure in place. The Developer’s long-term plan is to sell portions of the property in the District to third-parties to construct the projects thereon, construct projects through joint ventures or construct th e projects on its own. Projects constructed through joint ventures or by the Developer may be held as part of the Developer’s portfolio or sold to third-parties.

As of July 1, 2022, the Developer had conveyed property to Sacramento 695 L.P. (a joint venture entity with an entity formed by principals of the Developer and USA Railyards Lot 48, Inc.) being developed into a six-story apartment building with 345 units being marketed as “The AJ” (with market-rate and affordable units). Construction of such apartment buildi ng is underway and is expected to be complete in the first quarter of 2023. In addition, as of such date, the Developer had conveyed approximately 2.658 taxable acres in the District to the Wong Center to be developed with approximately 150 affordable residential units.

The Developer has also conveyed eight parcels totaling approximately 17.41 gross acres (approximately 17.14 taxable acres) within the District to Kaiser Foundation Hospitals. See “— Kaiser Development Plan” below for a description of Kaiser Foundation Hospitals’ plans with respect to its property in the District. As of July 1, 2022, projects within the District in the planning phase include two apartment complexes, renovation of the Central Shops (as defined herein) including an approximate 3,600-seat concert venue leased to, and to be operated by, Live Nation Entertainment, a 1,421-stall parking garage, a dual flag hotel development consisting of a Marriott Residence Inn and Marriott Tribute brands, for which franchise agreements have been awarded, and a 2-building office project.

A map of the projects for which vertical construction has commenced and the near-term vertical construction projects described below under “Vertica l Construction Projects Underway” and “Near-Term Vertical Development Plans,” respectively, is shown on page 62.

The table below shows the Developer’s current estimated timing of the delivery of the various product types within the District. Full buildout of the development within the District (and the Sacramento Railyards as a whole) is expected to occur over the course of approximately 20 years. Given the long development period within the Sacramento Railyards, it is expected that such estimates will change based on, among other factors, changes in market demand and economic downturns. Changes to such estimates could therefore be material. As described in the Official Statement, ther e are currently no expectations that an MLS stadium will be developed within the S acramento Railyards. As a result, the parcels below attributed to the stadium property are expected to be used as a mix of resi dential and commercial developments based on permitted underlying land uses, and estimates of such product mix has not yet been developed. Further, in the event the medical center is not developed by Kaiser Foundation Hospitals, the related property is expected to be developed in accordance with other permitted underlying land uses.

46 4817-9609-0100v10/022536-0022
TABLE 2

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

ESTIMATED SCHEDULE FOR VERTICAL IMPROVEMENTS
Product Type Totals 2023 2024 2025 2026 2027 2028-2032 2033-2038 Central Shops (square feet) 453,018 0 94,525 45,301 91,039 121,967 100,186 0 Parking Garage (spaces) 1,421 0 0 1, 421 0 0 0 0
Medical Center (square feet)(1) 1,131,650 0 0 0 1,131,650 0 0 0 Hotels (room keys) 1,022 0 0 0 183 0 839 0
Office (square feet) 3,825,000 0 0 262,500 0 390,000 1,795,069 1,377,000 Residential (marke
t-rate) (dwelling units) 4,153 276 221 185 469 349 1,863 790 Residential (affordable) (dwelling units) 328 69 150 0 0 0 109 0 Stadium (parcels)(2) 14 0 14 0 0 0 0 0

(1) Kaiser Foundation Hospitals has not approved any plans for developmen t and has not provided a timeframe for development. In the event that Kaiser Foundation Hospitals does not develop a medical center on its property in the District, such property is expected to be developed in accordance with other permitted underlying land uses. (2) There are currently no expectations that an MLS stadium will be developed within the Sacramento Railyards. The related property is expected to be used as a mix of residential and commercial developments and estimates of such product mix has not yet been developed.

Source: The Developer.

Vertical Construction Projects Underway
The AJ (West End) . In 2020, the Developer transferred approximately 2.88 taxable acres within the District to Sacramento 695 L.P., a California limited partnership, an entity formed for the purpose of developing and managing a planned 345-unit apartment project being marketed as “The AJ.” The site of the AJ is located on the corner of 6
th Street and Railyards Boulevard. Of the 345 units, 69 are planned for affordable units with the balance planned for market-rate units. The affordable units are expected to be restricted to rents which are no more than 50% of area median income. The reside ntial units at The AJ are expected to be offered in studio, one- and two-bedroom floorplans, ranging in size from approximately 535 square feet to 1,044 square feet. The AJ is also planned to include approximately 6,000 square feet of retail space on the ground floor and a five-sto ry parking garage with 276 spaces. All backbone infrastructure including all utilities necessary to serve The AJ project has been completed. Construction of The AJ commenced in August 2020 and is currently expected to be complete in the first quarter of 2023.

The total estimated costs (including all soft and ha rd costs) to complete The AJ is approximately $126.9 million. Through July 1, 2022, approximately $74.2 million had been expended on The AJ project.

Sacramento 695 L.P. is currently operating under an Amended and Restated Limited Partnership Agreement of Sacramento 695 L.P. (the “Sacramento 695 Agreement”) among DRV AJ Ventures, LLC, a California limited liability company, USA Railyards Lo t 48, Inc., a California corporation and Riverside Charitable Corporation, a California nonprofit public be nefit corporation, as general partners, and AJ Railyard Investors QOF, L.P. and TJ Holdings QOF, LLC as limited partners.

DRV AJ Ventures, LLC, and the AJ Railyard Investors QOF, L.P. are entities formed and managed by the principals of the Developer for the purpose of ente ring into the joint venture arrangement to develop The AJ project. Together, DRV AJ Ventures, LLC, and the AJ Railyard Investors QOF, L.P. hold 80.274% interest in Sacramento 695 L.P. USA Railyards Lot 48, Inc. is an affiliated entity of USA Properties Fund, an entity specializing in multifamily management and construction. Riverside Charitable Corporation is an entity formed by USA Properties Fund to facilitate affordable housing projects. AJ Railyard Investors QOF, L.P. and TJ Holdings QOF, LLC, the limited partners are passive investment entities.

47 4817-9609-0100v10/022536-0022
Pursuant to the terms of the Sacr amento 695 Agreement, the Developer contributed the land on which The AJ is being developed to Sacramento 695, L.P. The developments costs of The AJ are being funded from a variety of sources. Given its affordable housing component, the California Debt Limit Allocation Committee qualified the project for an $85 million construction loan funded through the issuance of tax-exempt bonds by the California Housing Financing Agency (“CHFA”). The loan from CHFA to Sacramento 695 L.P. is evidenced by a note (the “CHFA Note”). The CHFA Note is secured by a deed of trust on the property on which The AJ is being constructed. The AJ project has also been allocated approximately $31 million in Federal Low Income Housing Tax Credits pursuant to Section 42 of the Internal Revenue Code (the “Tax Credits”). The balance of the costs to develop The AJ is being funded from capital contributions from DRV AJ Ventures, LLC and, if necessary, additional capital calls from the partners of Sacramento 695 L.P.

Sacramento 695 L.P. does not currently expect that additional capital calls from its partners will be required to fund the remaining development costs of The AJ. After completion of construction of The AJ, Sacramento 695 L.P. expects to refinance the CHFA Note with a conventional long-term loan.

Upon completion, Sacramento 695 L.P. expects to enter into an agreement with USA Multi-Family Management, Inc. a California corporation to manage the daily operations of The AJ. Assuming completion of The AJ occurs in the first quarter of 2023, Sacramento 695 L.P. estimates that stabilized occupancy will be reached in the first quarter of 2024. With respect to the market-rate units within The AJ, Sacramento 695 L.P. has reviewed the rental pricing assumptions in the Market Study and the Appraisal Report and believes that such pricing assumptions are reasonable.

Notwithstanding the Sacramento 695, L.P.’s belief that it will have sufficient funds to complete its planned development in the District, no assurance can be given that sources of financing available to Sacramento 695, L.P. will be sufficient to complete the property development as currently planned. While Sacramento 695, L.P. has made internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither Sacramento 695, L.P. nor any affiliate thereof, has any legal obligation of any kind to make any such funds available or to obtain loans. If and to the extent that internal financing or other sources are inadequate to pay the costs to complete Sacramento 695, L.P.’s planned development within the District and other financing by Sacramento 695, L.P. is not put into place, there could be a shortfall in the funds required to complete the proposed development by Sacramento 695, L.P. and the project may not be completed.

Wong Center Apartment (Depot District) . In June 2022, the Developer conveyed approximately

2.658 taxable acres to the Wong Center, planned for approximately 150 affordable residential apartments. The units will be offered at affordability levels ranging from 40%-60% area median income.

The estimated cost to construct th e Wong Center apartment is approx imately $56.3 million. In May 2022, the Housing Authority of the City of Sacramento (the “Housing Authority”) authorized the issuance of multifamily housing revenue notes in the maximum amount of $35 million. The proceeds of such notes are expected to be loaned to the Wong Center to constr uct the apartment complex. In addition, the Housing Authority approved a $3.5 million long-term loan to finance the costs of the apartment complex. The balance of the costs are expected to be fina nced with low income housing tax credits which have been awarded by the California Tax Credit Allocation Committee, private loans and internal funding.

Wong Center at the Railyard, L.P. (previously define d as the “Wong Center”) is an entity formed and managed by Mutual Housing of California (“Mutual”) for the purpose of developing the Wong Center apartment project. Mutual is an entity that specializes in affordable housing construction and management.

Mutual partnered with private investors to secure tax credit and related financing necessary to acquire the site and initiate construction of the Wong Center project. Th e Wong Center and Mutual are not affiliated with the Developer.

48 4817-9609-0100v10/022536-0022
Initial grading and site work of the Wong Center apartment project began in July 2022. The Developer currently estimates that the Wong Center project will be complete in approximately July 2024.

After construction is complete, the Wong Center apartment project is expected to be managed by Mutual.

Near-Term Vertical Development Plans
There are several near-term projects planned within the District as described below in planning stages and no assurances can be made that such projects will ultimately be developed.

Central Shops District. As described above, the Central Shops District is anchored by the distinctive, historic brick buildings constructed between 1868 and 1917, which once served as the principal locomotive repair, maintenance and manufacturing facilities of the Sacramento Railyards when it was an actively operating railyard.

The five Central Shop buildings in the District total approximately 247,832 square feet of interior floor space. Renovation of the historic buildings in the Central Shops is expected to involve foundation work, remediation of the building shells, interior construction and finishing, installation of utilities and site work. As of July 1, 2022, the Developer estimates that the total costs to renovate the five Central Shop buildings located within the District to be approximately $49.4 million allocated as follows:

TABLE 3

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

COST ESTIMATES FOR CENTRAL SHOPS RENOVATION
Building Description
Square Footage
Estimated Cost to
Renovate
Car Machine Shop 27,670 $ 8,960,000
Planing Mill 62,965 14,850,000
Car Shop #3 68,434 7,380,000
Blacksmith Shop 27,738 9,396,000
Paint Shop 61,025
8,850,000
Total 247,832 $49,436,000

Source: The Developer.

The Developer expects to finance the costs to renovate the Central Shops primarily from internal funding and private investment. The Developer expects that the renovation and tenant improvements for the Central Shops will be eligible to receive a 20% tax credit under the Federal Historic Preservation Tax Incentives Program, and a 20% tax credit under the Calif ornia State Historic Tax Credit program each in the amount of approximately $20,000,000, as well as ta x credits under the federa l New Market Tax Credit Program in the amount of approximatel y $10,000,000, each of which if recei ved, would offset a portion of the renovation and tenant improvement costs. However, no assurances can be made that such tax credits will be received.

Table 3 above does not include the cost of tenant improvements. The Developer expects to fund tenant improvement costs from additional equity contributions.

The first of the five buildings described above that is planned for renovation is the Paint Shop. The Developer expects to complete renovation thereof in 2023 and expects to fund the co sts from internal funding, private investment, Historic and New Market tax credits and traditional construction financing. Financing plans to fund the remaining renovation costs have not been finalized.

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Live Nation Lease . The Developer and Live Nation Entertainment have entered into a lease (the “Live Nation Lease”) for approximately 47,000 square feet within the Paint Shop for use as a live performance entertainment venue with sellable capacity of approximately 3,600 seats. The Paint Shop is planned to be the primary gateway and focal point for the Central Shops District. Live Nation Entertainment is an American global entertainment company that is publicly traded on the New York Stock Exchange under the ticker “LYV.”
The Live Nation Lease has a term of 30 years with an option to extend the term for five additional years. The Live Nation Lease includes certain conditions which must be satisfied prior to the parties being obligated to perform thereunder including, but not limited to, approval by the parties thereto of the financing plan for construction of the improvements within the rented space and certain common areas within the Central Shops District, approval by the City of such improvement plans, and other approvals typically needed for the operation of live entertainment venues. In the event such conditions precedent are not satisfied, the Developer and Live Nation Entertainment may terminate the Live Nation Lease. The Developer has submitted design drawings for the improvements to the City.

Other Historic Cent ral Shops Buildings . The Developer has entered into an exclusive negotiation agreement with Q-Factor, the developers of creative office space in historic structures with projects branded as “Industry” creative offices. Q-Factor has developed projects in Denver, Detroit, Bozeman, and Salt Lake City.

The agreement with Q-Factor covers the development of the Car Machine Shop, Planing Mill, Car Shop #3, Blacksmith Shop and lot 9B. The plan for these buildings is development in the “Industry” style to provide a place making, flexible, creative office and mixed-use environment that can accommodate a variety of tenants.

Central Shops Public Placemaking . The Developer plans to construct certain improvements to the gateway structure located within the Central Shops Distri ct which allows for pedestrian and bicycle access to the adjacent Sacramento Valley Station. The estimated cost of such improvements is $3 million and the State has awarded the 2020 TIRCP Grant of $3 million for such costs. There are approximately 7.56 acres of parks, open space and pedestrian paseos planned within the Centra l Shops District, the costs of which are included in Table 3 above.

Parking Garage (West End) . The Developer plans to construct a parking garage with approximately 1,421 stalls on Lot 17 of the Sacramento Railyard’s Tentative Map, which is located on the southeast corner of 5 th Street and Stevens Street. The parking garage is proposed to be an 8-story, concrete modular building with partially open walls. The Developer has engaged Clark Pacific as the general contractor to design and construct the garage and currently estimates commencing construction in 2024 with an 18-month construction period. The Developer estimates the cost to complete the parking garage to be approximately $53.8 million.

The Developer has not yet secured financing for the costs to construct the parking garage and there can be no assurances that the parking garage will be built within the Developer’s currently estimated timeframe. See “DEVELOPMENT PLAN — En titlement Process — Development Agreement ” above for certain matters relating to parking requirements for the Sacramento Railyards.

The Foundry (West End) . The Developer is in the planning phase for an office project being marketed as “The Foundry.” The Foundry has received discretionary entitlements and is planned for two five-story buildings with approximately 290,000 square feet and ground floor retail. The Developer currently estimates commencing construction in 2024. However, the Developer does not expect to commence construction until tenants for approximately 35-50% of the leasable space have been located.

Proposed Hotel Developments (West End). Immediately north of the Paint Shop are the sites planned for a dual branded hotel development. The Developer has been awarded franchise agreements from Marriott International for a Residence Inn and a Marriott Tribute brand hotel. Th ese hotels are expected to share common back of house facilities and ar e expected to be located on approx imately 1.53 acres. The agreement with Marriott International has a construction commencement date in 2023. As of July 1, 2022, no design plans have yet been submitted to the City with respect to the planned hotels.

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The Developer is currently negotiating with two potential hotel development partners for construction and operation of the proposed hotels. Each of the deve lopment partners is currently conducting diligence and preparing proposals for consideration by the Developer. No assurances can be made that such partnerships will materialize.

The Telegrapher (West End) . The Developer is currently in the design phase of a 340-unit market- rate apartment project marketed as “The Telegrapher” to be located across 6th Street from The AJ project. The Telegrapher is planned to include two buildings between five to seven stories. The Developer currently estimates construction commencing on this project in th e second quarter of 2023. As of July 1, 2022, the Developer has submitted a second round of site plan and design review documents to the City. The Developer is in discussions with potential equity investors. No formal agreements for private investments are in place for The Telegrapher project and no assurances can be made that such private investments will be secured.

Fairfield Residential Apartment Project (Depot District) . The Developer has entered into an agreement for the sale of a 2.60-acre parcel to Fairfield Residential, a large multi-family housing developer.

The parcel is located on the northwestern corner of 7
th Street and G Street. The currently agreed to terms has a sales price of $13.5 million ($120 per square foot) with a 75-day due diligence period. The closing of the sale is to follow completion of the City’s site plan and design review approval process for a multi-family apartment project proposed for the site, which is currently estimated to occur in the first half of 2023. If the sale closes, the Developer expects to use proceeds of the sale on infrastructure costs within the District.

Kaiser Development Plan
General. Kaiser Permanente is the trade name for the integrated health care delivery system that delivers health care services through an integrated system of health plans, hospitals and physician groups that are related through parent/subsidiary or contractual relationships or common boards of directors and senior management operating as the Kaiser Permanente Medical Care Program. Kaiser Permanente consists of the following: (1) Kaiser Foundation Hospitals and its subsidiaries, (2) Kaiser Foundation Health Plan, Inc. and its subsidiaries, and (3) independent medical groups and several other entities. Kaiser Foundation Hospitals and its subsidiaries and Kaiser Foundation Health Plan, Inc. and its subsidiaries are collectively referred to herein as “Kaiser.” As of December 31, 2021, Kaiser ha d approximately 12.5 milli on members and operated 39 hospitals and 734 medical offices. In 2021, Kais er reported operating revenues of approximately $93.1 billion, operating income of approximately $611 million, and net income of approximately $8.1 billion.

Kaiser Foundation Hospitals derives its funding primarily from the operations of the Kaiser Foundation Health Plan, Inc.

Development and Financing Plan . In January 2019, the Developer conveyed eight parcels totaling approximately 17.41 gross acres (approximately 17.14 taxa ble acres) within the District to Kaiser Foundation Hospitals for a purchase price of the property of $33,370 ,000. Kaiser Foundation Hospitals plans to develop a medical center on the property (the “Kaiser Project”) to replace an existing hospital located approximately 10 miles from the District. The site of the Kaiser Project is located on the north side of Railyards Boulevard, between Bercut Drive and 5
th Street. The streets to acce ss the site and all utilities necessary to serve the site are complete. The property is currently in an undeveloped condition. Kaiser Foundation Hospitals is responsible for the construction of all on-site infrastructure. Hospital construction in California requires approval by a number of regulatory agencies, including the Department of Health Care Access and Information (formerly the Office of Statewide Health Planning and Development), and hospitals must also be surveyed and licensed to operate by the California Department of Public Health. Additionally, the budget, scope, and schedule for the Kaiser Project is subject to internal Kaiser Foundation Hospitals approval, including approval by its board of directors. Kaiser currently plans to st art construction on the Kaiser Project once all necessary approvals are obtained and planning, space programming and design is completed. Kaiser plans to complete construction of the Kaiser Project in compliance with applicable State law regarding seismic safety.

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Like many health care providers, Kaiser plans for and evaluates utilization of its capital facilities on a continuing basis as part of its overall strategic planning and development process. This includes reviewing the use, compatibility, business and financial viability of its facilities and business operations, and from time to time Kaiser may change its plans with regard to the use, disposition or divesture of its facilities, other assets or business operations. No assurance can be given that any plans related to the Kaiser Project will remain as described in this Official Statement or that they would not change in the future. Additionally, no assurance can be given that all approvals, including approval by the board of Kaiser Foundation Hospitals, will be given for the Kaiser Project. If the Kaiser Project is appr oved, notwithstanding Kaiser Foundation Hospitals’ belief that it will have sufficient funds to complete the Kaiser Project, no assurance can be given that sources of financing available to Kaiser Foundation Hospitals will be sufficient to complete the Kaiser Project as currently planned. While Kaiser Foundation Hospitals has made internal financing available in the past, there can be no assurance whatsoever of its willingness or ability to do so in the future. Neither Kaiser Foundation Hospitals nor any affiliate thereof has any legal obligation of any kind to make any such funds available or to obtain loans. If and to the extent that internal funds or other financing sources are inadequate to pay the costs to complete the Kaiser Project and other financing by Kaiser Foundation Hospitals is not put into place, there could be a shortfall in the funds required to complete the Kaiser Project and the Kaiser Project may not be developed.

THE DISTRICT
General Description
The District encompasses approximately 188-acres su bdivided into 119 lots within the Sacramento Railyards recorded tentative map. Of those 119 lots, 98 are subject to the Special Tax under the Rate and Method and 21 are exempt from the Special Tax. The prop erty in the District that is exempt from the Special Tax consists of parcels relating to a storm drain, street s and property planned for future streets and property planned for parks and open space.

Portions of the Sacram ento Railyards which are not included in the District consist of the following:
(1) the property relating to two historic buildings in the Central Shops District, which is owned by the State; (2) 7
th Street, which traverses through the Sacramento Railyards from north to south; (3) the property associated with the intermodal transportation hub, wh ich includes the Sacramento Valley Station and the railroad tracks which traverse along a portion of the sout hern boundary of the District; (4) property west of Jibboom Street which runs along the Sacramento River; and (5) two lots located toward the southeast end of the Sacramento Railyards. See the map on page 62 for a depiction of the Sacramento Railyards and the property that is included in the District.

Water and sewer service to the property is provided by the City. Electricity is supplied by Sacramento Municipal Utilities District and natural gas is supplied by Pacific Gas & Electric.

Description of Authorized Facilities
Acquisition Agreement . The City and the Developer are parties to an Acquisition and Shortfall Agreement, dated as of March 15, 2022 (the “Acquis ition Agreement”), which provides, among other things, the means by which the Developer will construct the facili ties to be acquired with the proceeds of the Bonds pursuant to certain requirements contained in the Acquisition Agreement, and which provides guidelines pursuant to which the City may acquire completed segments of the facilities with the proceeds of the Bonds.

The Acquisition Agreement pertains to the acquisitio n of the public infrastructure constructed to serve development within the District.

Facilities. A portion of the proceeds from the sale of the Bonds will be deposited in the Acquisition and Construction Fund under the Indenture and used to pay for the costs of facilities authorized to be financed for the District in accordance with the terms of the In denture and the Acquisition Agreement. As more fully

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detailed in the Acquisition Agreement, costs of such f acilities, consist of backbone infrastructure, including without limitation water and storm drain improvements, roadways and traffic improvements, landscaping and park improvements, in addition to other improvements authorized under the Acquisition Agreement. The current expectation is that the proceeds of the Bonds will be used primarily to reimburse the Developer for the costs of the Storm Drain Outfall that is currently under construction. However, such proceeds may instead be applied to finance any other facilities authorized to be financed for the District in accordance with the terms of the Indenture and the Acquisition Agreement.

The costs of the facilities and fees required for deve lopment within the District in excess of available proceeds from the sale of the Bonds are expected to be paid for by and other public sources and private funding to be obtained by the Developer. See “THE FINANCING PLAN — Estimated Sources And Uses Of Funds.” See “DEVELOPMENT PLAN — Infrastructure Financing Plan” for a description of the infrastructure required to be constructed by the Developer in order to complete development within the District.

Direct and Overlapping Indebtedness
The ability of an owner of land within the Distri ct to pay the Special Tax could be affected by the existence of other taxes and assessments imposed upon the property. These other taxes and assessments consist of the direct and overlapping debt in the District and are set forth in Table 4 below (the “Debt Report”).

The Debt Report sets forth those entities that have issued debt other than general obligation bonds supported by ad valorem taxes. Table 4 does not include entities that only levy or assess fees, charges or special taxes for purposes other than supporting debt. The Debt Report includes the principal amount of the Bonds in addition to the District’s allocable share of any outstanding communi ty facilities district and assessment district bonds.

The Debt Report has been derived from data assembled and reported to the City by California Municipal Statistics, Inc. as of March 1, 2022. Neither the City nor the Underwriter have independently verified the information in the Debt Report and do not guarantee its completeness or accuracy.

TABLE 4

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

OVERLAPPING DEBT SUMMARY
Overlapping District
Percent
Applicable
Total
Outstanding
Bonded Debt
Los Rios Community College District General Obligation Bonds 0.024% $ 120,620 Twin Rivers Unified School District General Obligation Bonds 0.030 42,984 Sacramento Unified School District General Obligation Bonds 0.126 617,537 Sacramento Area Flood Control District Consolidated Capital Assessment District No. 2 Bonds 0.062 192,823
City of Sacramento CFD No. 2018-01 Special Tax Bonds 100.000 30,000,000 * Total $ 30,973,964

Total Appraised Value(1): $ 152,100,000*
Appraised Value-to-Lien Ratio 4.91:1*

* Preliminary, subject to change.
(1) Based on the Appraisal Report.

Source: California Municipal Statistics, Inc.; Appraiser; Underwriter.

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Market Absorption Study
Projected Absorption Schedules . In order to provide an independent estimate of the absorption schedule of the property within the District, the City engaged RCLCO Real Estate Consulting (formerly Robert Charles Lesser & Co.) of Los Angeles, California (the “Market Absorption Consultant”). The Market Absorption Consultant performed a comprehensive analys is of the product mix characteristics as well as the macroeconomic and microeconomic factors that the Mark et Absorption Consultant expects to influence the pricing and absorption of the forthcoming products within the District.

The “Strategic Market Absorption Analysis Sacram ento Railyards CFD” dated as of May 17, 2022 (the “Market Report”) is attached hereto as APPENDIX J. The Market Report assumes, among other matters, that (1) the redeveloped Sacramento Railyards would offer a master-planned product with a mixed-use environment; (2) the building within the Central Shops that the Developer plans to renovate for lease to Live Nation, would be delivered; (3) without delivery of an MLS stadium and a Kaiser Foundation Hospitals medical campus, the Sacramento Railyards will still attr act one or more users, such as a corporate campus, government building, hospital or entertainment venue; (4) investment into future infrastructure projects, such as the replacement of the I Street bridge, will be made as necessary, assuming funding is available; and (5) the Sacramento Valley Station will develop into a multi-m odal transportation hub for the region. The Market Report considered the effects of the COVID-19 pandemic , however, the Market Report did not forecast future downturns and recoveries as part of its projections. There is no assurance that such assumptions made in the Market Report will occur. A deviation from such assumptions could materially impact the Market Absorption Consultant’s estimated pricing and absorption schedule for the various product types planned within the District.

Based on the Market Absorption Consultant’s analysis of trends relating to regional growth, supply and demand of the various product types planned within the District, observations of other large urban infill projects in the nation, and the central location and master-planned nature of the Sacramento Railyards project, the Market Report provided the estimated pricing for the various planned product types in the District and the estimated ability and timeframe for the market to absorb the planned product types within the District. The following table shows the Market Absorption Consultant’s estimated supportable pricing for the various product types planned within the District under the scenarios presented.

Land Use
Typical
Building Scale
Typical
Unit Size Current (1) 2025(2) 2030(3) 2040(4)
Residential - Renter Occupied(5) 200 – 400 units 750 sq. ft. $2.87/ sq. ft. $3.09/ sq. ft. $3.13/ sq. ft. $3.22/ sq. ft.

Residential - Owner-Occupied(6) 40 units 1,375 sq. ft. $390/ sq. ft. $440/ sq. ft. $515/ sq. ft. $570/ sq. ft.

Office 250,000 sq. ft. N/A $3.25/sq. ft. $3.60/sq. ft. $3.75/sq. ft. $3.75/sq. ft.

Retail(7) Varies N/A $2.35/sq. ft. $2.75/sq . ft. $2.95/sq. ft. $3.05/sq. ft.

Hotel 200 keys N/A $190/nigh t $220/nigh t $250/nigh t $270/nigh t

(1) Assumes buildings delivered at present day without additional improvements. (2) Assumes first buildings within the Sacramento Railyards start to deliver. (3) Assumes critical mass of retail has been completed. (4) Assumes the project area is largely developed.
(5) Assumes a mix of 88% market-rate and 12% affordable housing for renter-occupied units. (6) Pricing reflects weighted average of multifamily condominiums. (7) Reflects triple-net leases and average for anchor and non-anchor tenants.

Source: Market Absorption Consultant.

The Market Report provided the estimated ability and timeframe for the market to absorb the planned product types within the District under three scenarios: (1) baseline, which assumes that the sports stadium to house a MLS team and the medical campus planned by Kaiser Foundation Hospitals do not deliver, however, the Sacramento Railyards captures its fair share of demand for various land uses in the area; (2) upside, which assumes that the medical campus planned by Kaiser Foundation Hospitals delivers as planned and/or additional anchor uses were to open in the initial ph ases of development, and the Sacramento Railyards would

54 4817-9609-0100v10/022536-0022
be a greater focal point of urban growth in downtown Sacramento; and (3) downsi de, which assumes that the sports stadium to house a MLS team and the medical ca mpus planned by Kaiser Foundation Hospitals are not delivered and also that other elements of the develo pment program do not materialize as quickly as would otherwise be expected.

The following table summarizes the estimated absorption for the different products planned within the Sacramento Railyards under the downside, baseline and upside scenarios as described in the Market Report.

Estimated Final Absorption Year
Product Type
“Downside”
Scenario
“Baseline”
Scenario
“Upside”
Scenario
Residential
Renter Occupied 2044 2041 2039
Owner Occupied 2050 2047 2045

Commercial
Office 2048 2046 2039
Retail 2050 2050 2050

Hotel
(1) 2043 2040 2036

(1) Represents year in which it is estimated that sufficient demand for 1,100 hotel keys will be reached.

Source: Market Absorption Consultant.

Initial Draft Market Report. In 2021, the City engaged the Market Absorption Consultant to provide the estimated ability and timeframe for the market to absorb the planned product types within the District in connection with the issuance of special tax bonds for th e District. A draft market report was prepared which used, as a baseline scenario, the assumption that Kais er Foundation Hospitals’ project and the MLS stadium would deliver in full between 2024 and 2028. Due to revised projections with respect to the planned development within the District, including, but not limited to, the uncertainty with respect to the timing and scope of Kaiser Foundation Hospitals’ project and the currently remote possibility for an MLS stadium in the District, the City engaged the Market Absorption Consultant to revise its assumptions and projections, which are now set forth in the Market Study.

A complete copy of the Market Study is attached hereto as APPENDIX J.

Property Values
Assessed Value. The estimated assessed value of the property within the District, as shown on the County’s assessment roll for Fiscal Y ear 2022-23, is approximately $74,365,043. The assessed value of the property within the District represents the secured assessed valuation established by the County Assessor.

Assessed values do not necessarily re present market values. Article X IIIA of the California Constitution (Proposition 13) defines “full cash value” to mean “the Co unty assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment,” subject to exemptions in certain circumstances of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per y ear in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. There can be no assurance that the asse ssed valuations of the properties within the District accurately reflect their respective market values, and the future fair market values of those properties may be lower than their current assessed valuations.

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Table 5 below sets forth historical assessed values of the property within the District for the current and past four Fiscal Years.

TABLE 5

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

HISTORICAL ASSESSED VALUES
Fiscal Year
Ending
Secured
Assessed Value
Percent
Change
2019 $18,869,743 --
2020 19,247,124 2.0%
2021 51,764,454 168.9
2022 55,822,199 7.8
2023 74,365,043 33.2

Source: Sacramento County Assessor’s Office; Economic & Planning Systems Inc. (EPS).

Appraisal. As described above, due to Article XIIIA of the Ca lifornia Constitution, a property’s assessed value is not necessarily indicative of its market value. In order to provide information with respect to the value of certain of the property within the District , the City engaged BBG, Inc., the Appraiser, to prepare the Appraisal Report. The Appraiser has an “MAI” desi gnation from the Appraisal Institute and has prepared numerous appraisals in connection with the sale of land-secured municipal bonds. The Appraiser was selected by the City and currently has no material relationships with the City or the owners of the land within the District other than the relationship represented by the engagement to prepare the Appraisal Report. See “— Prior Draft Appraisal and Engagements of Appraiser” below.

The City instructed the Appraiser to prepare its anal ysis and report in conformity with City-approved guidelines and the Appraisal Standards for Land Secured Financings published in 1994 and revised in 2004 by the California Debt and Investment Advisory Commission (the “CDIAC Guidelines”). A copy of the Appraisal Report is included as APPENDIX B — “APPRAISAL REPORT.” The purpose of the Appraisal Report was to estimate the market value by ownership of certain of the property within the District that is subject to the Special Tax lien. Market value was estimated by ownership, and the sum of the market values by ownership represented an aggregate value (which is not equivalent to the market value of the appraised properties as a whole).

Subject to the contingencies, assumptions and limiting conditions set forth in the Appraisal Report, the Appraiser concluded that, as of the Date of Value, the aggregate value of the property within the District, was not-less-than $152,100,000 (which consists of (i) $52,000,000 for the 95.152 taxable acres owned by the Developer; (ii) $34,100,000 for the 17.14 taxable acres owned by Kaiser Foundation Hospitals; and (iii) $66,000,000 for the 2.88 taxable acres owned by Sacramento 695, L.P.). The Appraiser has assigned zero value to the property owned by the Wong Center, which is planned for a 150-unit affordable housing project, as described below.

Table 6 below shows the appraised value of the various parcels in the District owned by the Developer, Kaiser Foundation Hospitals, Sacramento 695, L.P. and the Wong Center as set forth in the Appraisal Report as of the Date of Value. See “DEVELOPMENT PLAN.”

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TABLE 6

CITY OF SACRAMENTO
RAILYARDS COMMUNITY FACILITIES DISTRICT NO. 2018-01
(IMPROVEMENTS)

SUMMARY OF APPRAISED VALUES
(AS OF JULY 1, 2022)
Owner(1) No. of Taxable Acres Appraised Value(2)
Developer 95.152 $ 52,000,000
Kaiser Foundation Hospitals 17.140 34,100,000
Sacramento 695, L.P. 2.880 66,000,000
Wong Center
(3) 2.658 0
Total 117.830 $ 152,100,000

(1) Reflects ownership information as set forth in the Appraisal Report. See “DEVELOPMENT PLAN.” (2) Reflects appraised value of property as set forth in the Appraisal Report. See “INTRODUCTION — Appraisal Report” and “APPENDIX B — Appraisal Report.”
(3) The property owned by the Wong Center is planned for a 150-unit affordable housing apartment project. See “Wong Center Property” below for a description of the methodology used by the Appraiser to arrive at the appraised value of such property.

Source: Appraiser.

Reference is made to APPENDIX B for a complete list of the assumptions and limiting conditions and a full discussion of the appraisal methodology and the basis for the Appraiser’s opinions. In the event that any of the contingencies, assumptions and limiting conditions are not actually realized, the value of the appraised property within the District may be less than the amount reported in the Appraisal Report. In any case, there can be no assurance that any portion of the property within the District would actually sell for the amount indicated by the Appraisal Report.

The Appraisal Report indicates the Appraiser’s opinion as to the market value of the appraised property in the District as of the Date of Value and under the conditions specified in the Appraisal Report. 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.

It is a condition precedent to the issuance of the Bonds that the Appraiser deliver to the City a certification to the effect that nothing has come to the attention of the Appraiser subsequent to the date of the Appraisal Report that would cause the Appraiser to believe that the value of the Taxable Land in the District is less than the value of the District reported in the Appraisal Report. However, the Appraiser notes that acts and events may have occurred since the date of the Appraisal Report which could result in both positive and negative effects on market value within the District.

The Appraisal used the following valuation methods with respect to the property within the District:

Developer-Owned Property: To arrive at a conclusion of estimated value for the property in the District owned by the Developer, the Appraiser (1) undert ook separate analyses of property located to the east and west of 7 th Street due primarily to the fact that the property to the east of 7 th Street will likely be held by the Developer for an extended period of time (i.e. that such property will develop later than other areas in the District); (2) given the uniqueness of the property, undertook a separate analysis of the property associated with the Central Shops; and (3) analyzed the overall value impact of the cost to construct the proposed parking garage on Lot 17, which the Appraiser considers a critical piece of infrastructure to achieve buildout in the District. Each of such analyses are described belo w. See the Appraisal Report attached hereto as APPENDIX B.

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With respect to the approximately 95.152 taxable acreage owned by the Developer (other than the approximately 9.37 taxable acres associated with the Central Shops, which are described below), the Appraiser undertook separate analyses for the property located to the west and to the east of 7 th Street, which traverses the Sacramento Railyards site generally from the southern to the northern boundary. The property located east of 7 th Street generally consists of the property th at was designated for the proposed MLS stadium (approximately 36 gross acres). The property located to the west of 7 th Street consists of the balance of the property in the District owned by the Developer (approximately 56.5 net acres excluding the property relating to the Central Shops).

With respect to the property located to the west of 7 th Street owned by the Developer (other than the approximately 9.37 taxable acres associated with the Central Shops, which is described below), the Appraiser used the sales comparison approach and a subdivision development method based on the categories of product types planned for the Developer-owned property (e.g. office and retail, multi-family and hotel) to arrive at finished lot values. The finished lot values were then adjusted based on factors such as location, size and estimated densities. The Appraiser applied a land residual analysis and discounted cash flow to account for the potential revenue from the sale of lots, the expected absorption period, development costs for infrastructure costs, holding and sales costs as well as profit expectati ons of a buyer for the property. The land value of the parking garage was separately analyzed as described below.

With respect to the property located to the east of 7
th Street, the Appraiser used a sales comparison
method (using large commercial land sales) and a discounted cashflow analysis which took into account the likelihood that such property will be held by the Developer for an extended period of time (i.e. that such property will develop later than other areas in the District).

With respect to the property within the Central Shops owned by the Developer, given the uniqueness of the property, the Appraiser did not use a sales comparison approach but instead used an income capitalization approach and land residual analysis.

A structured 1,421 space parking garage is planned for Lot 17 in the District. Given that the parking garage is necessary to serve several of the proposed projects in the District (e.g. the Central Shops, the Marriot- branded hotels and other projects within the vicinity), the Appraiser considers the parking garage to be critical infrastructure. The Appraise r estimated the value of the proposed parking garage to determine the positive or negative value impact on the Developer-owned property. In their analysis, the Appraiser incorporated extraordinary assumptions including: (1) the quality and design of the parking garage will be similar to what was provided from the preliminary plans, as described in the Appraisal Report, (2) the timing of the development of the parking garage is consistent with the schedule estimated, as described in the Appraisal Report, (3) the total construction cost of the parking garage is consistent with estimates provide, as described in the Appraisal Report and (4) the eventual sale of the parking garage assumes the Developer would executed parking leases running with title to accommodate the projects dependent on the parking garage.

To value the proposed parking garage, the Appraiser applied a discounted cash flow using the following assumptions (1) planning, design and the securing of financing for the parking garage will be complete in 2024; (2) construction of the parking garage will take 18 months; (3) construction of the parking garage will be complete and stabilization will be achieved in mid-2029; and (4) that the Developer would sell the parking garage after it achieves stabilization. Based on the foregoing assumptions, and others described in more detail in the Appraisal Report, the Appraiser estimate d that the impact of the required parking garage to be negative $6,200,000 as of the Date of Value of the Appraisal Report. This amount was deducted from the overall appraised value on a bulk sale value basis of the Developer-owned property. Certain information utilized by the Appraiser for the foregoing analyses of the demand drivers for the parking garage and the estimated revenues and expenses associated with operating the parking garage were provided by the City’s Parking Services Division, which operates City-o wned parking facilities. See “DEVELOPMENT PLAN — Entitlement Process — Development Agreement ” and “Near-Term Vertical Development Plans — Parking Garage (West End)” for more information with respect to the proposed parking garage.

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The Appraiser used the projected absorption schedules in the Market Study for purposes of the discounted cash flow analysis. The Appraiser reviewed the three scenarios in the Market Study (downside, baseline and upside) and concluded that the baseline and downside scenarios were reasonable. For purposes of the discounted cash flow analysis for the properties planned for commercial and hotel development, the Appraiser utilized an average of the baseline and downs ide scenarios. For purpos es of the discounted cash flow analysis for the properties planned for residential development, the Appraiser used the baseline scenario.

Based on the values arrived by performing the discounted cash flow analysis under the foregoing scenarios, the Appraiser concluded an estimated value for the Developer-owned property of $52,000,000 (which accounts for the negative value impact of the cost of the required parking garage described above).

Kaiser Foundation Hospitals Property. To value the approximately 17.14 taxable acres within the District owned by Kaiser Foundation Hospitals, the Appraiser used a sales comparison approach with adjustments, among others, based on factors such as location and size. Based on such approach, the Appraiser estimated the value of the property owned by Kaiser Foundation Hospitals to be $34,100,000. Kaiser Foundation Hospitals purchased such property from the Developer in 2019 for $33,370,000.

Sacramento 695, L.P. Property. To value the property owned by Sacramento 695, L.P., which consists of an approximately 2.88-acre site with c onstruction of an apartment building having commenced thereon, the Appraiser used an average of valuations determined through a property residual discounted cash flow and the build-up method. Under the property residual discounted cash flow, the Appraiser estimated a lease-up period of six quarters, with stabilized occupanc y to occur in the third quarter of 2024 (six quarters following the estimated completion in the first quarter of 2023) to arrive at an estimated value. The Appraiser then deducted the estimated remaining construction costs of $52,651,076, a 15% deduction for contingencies and 20% profit of the remaining construction costs. The foregoing deductions were allocated to the three quarters through completion in the first quarter of 2023. Using the property residual discounted cash flow method, the Appraiser arrived at an estimated rounded value of $64,000,000.

The Appraiser also applied a build-up method to es timate the value of property owned by Sacramento 695, L.P. The build-up method estimates the land value and adds construction costs expended and deducts the encumbrance due to the 69 units which are planned to be affordable housing units. The build-up approach is generally applied applicable the improvements being appraised are relatively new and represent the highest and best use of the land or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties. The Appraiser estimated the land value of $9,660,000 based on an estimate of $28,000 per unit as described in the Appraisal Report. The Appraiser added to the land value, $74,243,230 of costs spent to date on constructing The AJ. The Appraiser deducted $15,207,436 as the net operating income loss due to the 69 affordable housing units with restricted rent using a capitalization rate of

4.5%. Using such approach, the Appraiser estimated the value of the property owned by Sacramento 695, L.P. within the District to be $68,700,000.

The Appraiser gave equal weight to the property residual discounted cash flow method and the build- up method to value The AJ and averaged the estimated values derived from the two approaches. Based on the average values derived from the two approaches, the Appraiser arrived at an estimated value for The AJ of $66,000,000.

Wong Center Property. To value the property owned by the Wong Center, which consists of an approximately 2.7 acre site with initial sitework and grading having commenced thereon, the Appraiser applied a land residual valuation method. The Appraiser estimated the net operating income and at stabilized occupancy based on the restricted rent amounts and, like the valuation of The AJ, used a capitalization rate of

4.5%. The Appraiser deducted estimated construction costs (based on estimated costs of $375,000 per unit), provided a credit for the federal tax credits allocated to the Wong Center project of approximately $21.3 million (awarded by the California Tax Credit Allocation Committee) and deducted $5,625,000 as estimated profit. The resulting estimated value was negative $14.6 million and as a result the Appraiser allocated zero value to the Wong Center property.

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Appraisal Reviewer. The City engaged Integra Realty Resources, Rocklin, California (the “Appraisal Reviewer”), to: (i) review the Appraisal Report to provide an opinion as to the completeness, accuracy, adequacy, relevance and reasonableness of salient aspects of the Appraisal Report; and (ii) to provide an assessment of the Appraisal Report’s compliance with certain standards of the Uniform Standards of Professional Appraisal Practice (“USPAP”) and the CDIAC Guidelines. In a report dated August 12, 2022, the Appraisal Reviewer stated that it was their opinion th at the Appraisal Report is in compliance with such USPAP standards as well as the CDIAC Guidelines. In addition, the Appraisal Reviewer’s report stated that the market value opinions of the property as set forth in the Appraisal Report are consistent with relevant market conditions and the market data presented in th e Appraisal Report as of the Date of Value. The Appraisal Reviewer did not inspect the appraised proper ties in connection with its review of the Appraisal Report.

Prior Draft Appraisal and Engagements of Appraiser . In 2021, the City engaged the Appraiser to appraise the property in the District in connection with the issuance of special tax bonds for the District. A draft appraisal was prepared but was not finalized. Th e appraised value stated in such draft appraisal was $115,600,000. Due to revised projections with respect to the planned development within the District, including, but not limited to, the uncertainty with respect to the timing and scope of Kaiser Foundation Hospitals’ project and the currently remote possibility for an MLS stadium in the District, the City engaged the Appraiser to produce the Appraisal Report. In addition, since the prior draft appraisal, development of The AJ project has progressed, which is reflected in the estimated market value in the Appraisal Report. Due to the aforementioned changed circumstances, investors should not rely on the estimated value set forth in the prior draft appraisal.

The Appraiser was previously engaged by a principal of the Developer to appraise certain property within the Sacramento Railyards for a purpose unrelated to the Bonds or the District. The Appraiser does not have any current ongoing engagements with the Developer or any of its principals.

Value-To-Lien Ratios
Based on the principal amount of the Bonds, the estimated appraised value-to-lien ratio within the District, including all Taxable Land as of the Date of Value is approximately 4.91-to-1 *. This ratio includes
other land-secured debt and overlapping general obligation bonds within the District. See “— Direct and Overlapping Indebtedness” above.

Sacramento City CouncilAugust 23, 2022

Sacramento City Council
August 23, 2022